VA awards $300M to Oracle Health for EHRM System Optimization through 2026

Contract Overview

Contract Amount: $299,999,849 ($300.0M)

Contractor: Oracle Health Government Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-30

End Date: 2026-12-25

Contract Duration: 816 days

Daily Burn Rate: $367.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OPTIMIZATION OF THE EHRM SYSTEM

Place of Performance

Location: KANSAS CITY, WYANDOTTE County, KANSAS, 66111

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $300.0 million to ORACLE HEALTH GOVERNMENT SERVICES, INC. for work described as: OPTIMIZATION OF THE EHRM SYSTEM Key points: 1. Significant investment in critical healthcare IT infrastructure. 2. Sole-source award to Oracle Health raises competition concerns. 3. Potential for cost overruns or suboptimal pricing due to lack of competition. 4. Focus on system optimization suggests ongoing need for IT services in healthcare.

Value Assessment

Rating: questionable

The contract value of $299.9M over approximately 2.7 years suggests a substantial investment. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar EHRM optimization services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning no other vendors were considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this large contract could result in taxpayers paying more than necessary for EHRM system optimization.

Public Impact

Impacts the healthcare experience for millions of veterans relying on the EHRM system. Ensures continued operation and potential improvements to a vital national healthcare IT system. Highlights the government's reliance on specific vendors for complex IT solutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value

Positive Signals

Focus on system optimization
Long-term contract duration

Sector Analysis

The Department of Veterans Affairs is a major spender in the IT sector, particularly for healthcare systems. Benchmarks for similar EHRM optimization contracts are difficult to establish due to the specialized nature and often sole-source awards.

Small Business Impact

This contract was not awarded to small businesses, indicating a focus on large, established IT providers for this critical system. Opportunities for small businesses in this specific EHRM optimization effort appear limited.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the contractor is delivering value and that pricing remains reasonable throughout the contract term. Transparency in performance metrics will be crucial.

Related Government Programs

Computer Systems Design Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award limits competition and price discovery.
Potential for overpayment due to lack of competitive bidding.
Reliance on a single vendor for a critical system poses a risk.
Contract duration extends potential for cost escalation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $300.0 million to ORACLE HEALTH GOVERNMENT SERVICES, INC.. OPTIMIZATION OF THE EHRM SYSTEM

Who is the contractor on this award?

The obligated recipient is ORACLE HEALTH GOVERNMENT SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $300.0 million.

What is the period of performance?

Start: 2024-09-30. End: 2026-12-25.

What specific performance metrics will be used to evaluate the success of the EHRM system optimization?

The contract should clearly define key performance indicators (KPIs) related to system uptime, data integrity, user satisfaction, and the successful implementation of new features or efficiencies. Regular reporting against these metrics will be essential for oversight and to ensure the contractor is meeting objectives and justifying the significant investment.

What is the justification for the sole-source award, and were alternatives explored?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. The VA must provide a detailed rationale, demonstrating that extensive market research was conducted and that no other vendor could meet the specific requirements of optimizing the existing EHRM system effectively.

How will the VA ensure cost-effectiveness and prevent potential price creep over the contract's duration?

Given the sole-source nature, robust cost controls and continuous price analysis are critical. The VA should implement mechanisms for regular review of contractor costs, benchmark against industry standards where possible, and negotiate firm fixed-price elements or cost ceilings to mitigate the risk of uncontrolled spending.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Oracle Health Government Services Inc.

Address: 10200 ABILITIES WAY, KANSAS CITY, KS, 66111

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $299,999,849

Exercised Options: $299,999,849

Current Obligation: $299,999,849

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10B18D5000

IDV Type: IDC

Timeline