Leidos awarded $36.6M for MHS Genesis deployment, impacting military healthcare facilities in Texas
Contract Overview
Contract Amount: $36,563,512 ($36.6M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2020-10-01
End Date: 2023-12-30
Contract Duration: 1,185 days
Daily Burn Rate: $30.9K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: DEPLOYMENT SERVICES REQUIRED TO DEPLOY MHS GENESIS TO MILITARY TREATMENT FACILITIES PRIMARILY LOCATED IN TEXAS.
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $36.6 million to LEIDOS, INC. for work described as: DEPLOYMENT SERVICES REQUIRED TO DEPLOY MHS GENESIS TO MILITARY TREATMENT FACILITIES PRIMARILY LOCATED IN TEXAS. Key points: 1. Contract value represents a significant investment in modernizing military health IT infrastructure. 2. Full and open competition suggests a robust market for these specialized IT deployment services. 3. Fixed Price Incentive contract type aims to balance cost control with performance incentives. 4. Deployment services are critical for the successful rollout of the MHS Genesis electronic health record system. 5. The contract's duration of nearly four years indicates a complex and extensive deployment process. 6. Focus on Texas facilities highlights a concentrated regional impact for this healthcare IT initiative.
Value Assessment
Rating: good
The contract value of $36.6 million for deployment services appears reasonable given the scope of deploying a major electronic health record system across multiple military treatment facilities. Benchmarking against similar large-scale IT system deployments within the federal government suggests that costs are generally in line with industry expectations for such complex projects. The fixed-price incentive structure, while potentially leading to variations, is designed to encourage efficiency and performance, which can contribute to value for money if managed effectively.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, allowing the government to solicit proposals from a wide range of qualified contractors. This approach is intended to drive innovation and ensure that the government receives the best possible technical solutions and pricing.
Taxpayer Impact: Full and open competition typically benefits taxpayers by promoting a more competitive bidding process, which can lead to lower prices and higher quality services. It ensures that public funds are used efficiently by leveraging the broadest possible market.
Public Impact
Military treatment facilities primarily located in Texas will benefit from the deployment of the MHS Genesis system. The services delivered are crucial for the successful implementation of a modern electronic health record system for military personnel and their families. The geographic impact is concentrated in Texas, affecting healthcare operations and potentially patient care delivery within that region. Workforce implications may include the need for specialized IT personnel for deployment and training, both within the military and potentially for contractor support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if incentive targets are not met or if unforeseen technical challenges arise during deployment.
- Dependence on contractor performance for timely and effective system rollout, which could impact healthcare operations if delayed.
- The complexity of integrating a new EHR system across diverse military healthcare settings presents inherent technical and logistical risks.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process that likely yielded favorable terms.
- Fixed Price Incentive contract type incentivizes contractor performance and cost control.
- The contract supports a critical modernization effort for military healthcare, aiming to improve patient care and data management.
Sector Analysis
The contract falls within the Computer Systems Design Services sector, a vital component of the broader IT services industry. This sector is characterized by its role in designing, developing, and implementing complex software and hardware solutions for organizations. The market size for federal IT services is substantial, with agencies continually investing in modernization and digital transformation. This specific contract aligns with the government's ongoing efforts to upgrade its healthcare IT infrastructure, a trend seen across many public and private sector healthcare providers.
Small Business Impact
The provided data indicates that small business participation (sb) was false and there was no specific small business set-aside (ss) for this contract. This suggests that the procurement was not specifically targeted towards small businesses, and the prime contractor, Leidos, Inc., is a large corporation. While there are no direct set-aside implications, large prime contractors are often required to meet subcontracting goals with small businesses. The absence of explicit small business set-aside information means the direct impact on the small business ecosystem for this specific contract is likely limited, though subcontracting opportunities may exist.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Health Agency (DHA) through its contracting officers and program managers. Accountability measures are built into the Fixed Price Incentive contract type, which links contractor payment to performance and cost targets. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- MHS Genesis EHR System
- Department of Defense IT Modernization Programs
- Military Healthcare IT Infrastructure
- Federal Health IT Contracts
- Computer Systems Design Services Contracts
Risk Flags
- Potential for schedule delays impacting healthcare operations.
- Risk of cost overruns despite incentive structure.
- Challenges in user adoption and training across diverse military personnel.
- Cybersecurity risks associated with a large-scale health IT system.
Tags
it-services, computer-systems-design, defense, defense-health-agency, delivery-order, fixed-price-incentive, full-and-open-competition, texas, healthcare-it, mhs-genesis, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $36.6 million to LEIDOS, INC.. DEPLOYMENT SERVICES REQUIRED TO DEPLOY MHS GENESIS TO MILITARY TREATMENT FACILITIES PRIMARILY LOCATED IN TEXAS.
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $36.6 million.
What is the period of performance?
Start: 2020-10-01. End: 2023-12-30.
What is the track record of Leidos, Inc. in deploying large-scale IT systems for the federal government, particularly in the healthcare sector?
Leidos, Inc. has a significant track record in providing IT services and solutions to the federal government, including extensive experience within the Department of Defense and the healthcare sector. They have been involved in numerous large-scale system integrations and deployments. Notably, Leidos is a major contractor for the MHS Genesis program itself, indicating deep familiarity with the system's architecture and deployment challenges. Their past performance on similar complex IT projects, such as enterprise resource planning (ERP) systems or other health information technology initiatives, would be a key factor in their selection for this contract. Assessing their historical performance on cost, schedule, and quality for comparable projects is crucial for understanding the risk associated with this specific deployment.
How does the awarded amount of $36.6 million compare to the estimated costs or budgets for similar MHS Genesis deployment phases or other large federal EHR implementations?
Comparing the $36.6 million award to similar federal EHR implementations requires careful consideration of scope, duration, and specific services. The MHS Genesis program is one of the largest federal IT healthcare initiatives, aiming to replace multiple legacy systems across the DoD, VA, and Coast Guard. While specific phase costs are often not publicly detailed, the overall program is valued in the billions. For context, other large federal EHR projects, like the VA's Oracle Cerner implementation, have faced significant cost escalations. The $36.6 million for deployment services in Texas, over nearly four years, suggests a substantial investment per facility or per user. Benchmarking against industry averages for EHR deployment services, which can range from tens to hundreds of millions depending on scale, indicates this award is significant but potentially within the expected range for a large military healthcare region.
What are the primary risks associated with deploying the MHS Genesis system in military treatment facilities, and how does this contract structure attempt to mitigate them?
Key risks in deploying MHS Genesis include technical integration challenges with existing military infrastructure, data migration complexities, user adoption and training hurdles, cybersecurity vulnerabilities, and potential disruptions to patient care during the transition. The Fixed Price Incentive (FPI) contract structure aims to mitigate cost and performance risks. The 'fixed price' element provides a baseline cost target, while the 'incentive' component allows for adjustments based on achieving specific performance metrics (e.g., schedule, quality, system uptime) and cost targets. This encourages Leidos to manage the deployment efficiently and effectively to earn maximum profit, aligning their goals with the government's. However, the inherent complexity of military healthcare IT means risks remain, and robust oversight is critical.
What is the expected impact of this MHS Genesis deployment on the effectiveness and efficiency of healthcare delivery within the targeted Texas military facilities?
The successful deployment of MHS Genesis is expected to significantly enhance the effectiveness and efficiency of healthcare delivery. By consolidating patient data into a single, integrated electronic health record, clinicians will have a more comprehensive view of patient history, leading to better-informed clinical decisions and improved care coordination. This can reduce medical errors, streamline workflows, and improve patient safety. For military treatment facilities in Texas, this means enhanced readiness support, as medical personnel will have access to standardized, up-to-date health information, crucial for deploying forces. Efficiency gains are anticipated through reduced administrative burden, improved scheduling, and streamlined billing processes, ultimately allowing healthcare providers to focus more on patient care.
How has federal spending on IT modernization for healthcare, specifically within the Department of Defense, trended in recent years, and does this contract align with those trends?
Federal spending on IT modernization for healthcare, particularly within the Department of Defense, has been on a significant upward trend for over a decade. Agencies like the DoD and VA have prioritized the upgrade of legacy health IT systems to improve interoperability, data security, and clinical decision support. The MHS Genesis program is a cornerstone of this modernization strategy. Spending in this area reflects a broader government-wide push towards digital transformation and improved data management. This $36.6 million contract for MHS Genesis deployment is a direct manifestation of these ongoing trends, representing a substantial, albeit specific, investment within the larger DoD healthcare IT modernization portfolio. It aligns with the strategic goals of enhancing military readiness and providing better healthcare outcomes through advanced technology.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $36,563,512
Exercised Options: $36,563,512
Current Obligation: $36,563,512
Subaward Activity
Number of Subawards: 31
Total Subaward Amount: $27,894,395
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003915D0044
IDV Type: IDC
Timeline
Start Date: 2020-10-01
Current End Date: 2023-12-30
Potential End Date: 2023-12-30 00:00:00
Last Modified: 2025-01-10
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