Leidos awarded $29.5M for MHS Genesis EHR deployment in National Capital Region
Contract Overview
Contract Amount: $29,473,460 ($29.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2022-03-11
End Date: 2026-07-28
Contract Duration: 1,600 days
Daily Burn Rate: $18.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: SITE DEPLOYMENT ACTIVITIES TO IMPLEMENT THE MHS GENESIS ELECTRONIC HEALTH RECORD SOLUTION IN THE NATIONAL CAPITAL REGION.
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $29.5 million to LEIDOS, INC. for work described as: SITE DEPLOYMENT ACTIVITIES TO IMPLEMENT THE MHS GENESIS ELECTRONIC HEALTH RECORD SOLUTION IN THE NATIONAL CAPITAL REGION. Key points: 1. Contract focuses on critical health record system implementation. 2. Full and open competition suggests a competitive bidding process. 3. Fixed Price Incentive contract type aims to balance cost and performance. 4. Long performance period (over 4 years) indicates a substantial project. 5. Contractor Leidos has a significant presence in government IT services. 6. Deployment in the National Capital Region impacts a key military health hub.
Value Assessment
Rating: good
The contract value of $29.5 million for implementing an Electronic Health Record (EHR) system across a specific region appears reasonable given the complexity and scale of such projects. Benchmarking against similar EHR deployments in large healthcare systems suggests that costs can range significantly, but this figure falls within a plausible spectrum. The fixed-price incentive structure allows for potential cost savings if performance targets are met, which is a positive indicator for value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The specific number of bidders is not provided, but the method of competition suggests a robust process.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value through a wide range of proposals and potentially lower prices due to market forces.
Public Impact
Military personnel and beneficiaries in the National Capital Region will benefit from an upgraded and integrated electronic health record system. The project delivers essential IT services for the modernization of healthcare delivery within the Department of Defense. Geographic impact is concentrated in Virginia, Maryland, and the District of Columbia, serving a significant portion of the military population. The successful implementation will support healthcare providers with improved access to patient information, potentially enhancing care quality and efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if performance incentives are not met or if scope creep occurs.
- Dependence on a single contractor for a critical system implementation carries inherent risks.
- Integration challenges with existing legacy systems could lead to delays or increased costs.
Positive Signals
- Award to an established contractor with experience in large-scale IT deployments.
- Use of a fixed-price incentive contract structure can align contractor and government interests.
- Full and open competition suggests a thorough vetting of potential solutions and providers.
Sector Analysis
This contract falls within the Computer Systems Design Services sector, a critical component of the broader IT services market. The market for EHR implementation and support is substantial, driven by ongoing digitization efforts across government and private healthcare. This specific contract addresses the modernization of a key military health system, aligning with broader trends in health IT modernization and data integration.
Small Business Impact
The contract was not specifically set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary focus was on securing the best solution through open competition, rather than prioritizing small business participation through set-asides.
Oversight & Accountability
Oversight for this contract will likely be managed by the Defense Health Agency (DHA) and potentially the Department of Defense's Inspector General, especially concerning performance, cost, and adherence to contract terms. Transparency is expected through contract award databases and reporting requirements. Accountability measures are embedded within the fixed-price incentive structure, linking contractor performance to financial outcomes.
Related Government Programs
- MHS Genesis EHR System
- Department of Defense IT Modernization Programs
- Healthcare IT Services
- Electronic Health Records Implementation
Risk Flags
- Potential for scope creep
- Integration complexity
- User adoption challenges
- Cybersecurity risks
Tags
it, defense, healthcare, computer-systems-design-services, full-and-open-competition, delivery-order, fixed-price-incentive, national-capital-region, leidos-inc, defense-health-agency, large-contract, multi-year
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.5 million to LEIDOS, INC.. SITE DEPLOYMENT ACTIVITIES TO IMPLEMENT THE MHS GENESIS ELECTRONIC HEALTH RECORD SOLUTION IN THE NATIONAL CAPITAL REGION.
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 $29.5 million.
What is the period of performance?
Start: 2022-03-11. End: 2026-07-28.
What is Leidos' track record with large-scale federal IT system implementations, particularly in healthcare?
Leidos, Inc. has a substantial track record in executing large-scale federal IT projects, including significant work within the healthcare sector. They have been involved in various aspects of IT modernization for government agencies, including the Department of Defense. Their experience encompasses system integration, software development, and deployment of complex solutions. While specific details on past EHR implementations of this exact scale are not detailed here, their general portfolio suggests a capacity for managing such endeavors. Past performance reviews and contract awards from agencies like the DHA, CMS, and other federal bodies would provide a more granular understanding of their success rates, on-time delivery, and budget adherence in similar complex projects.
How does the $29.5 million contract value compare to similar MHS Genesis deployments or other large EHR implementations?
The $29.5 million contract value for the National Capital Region (NCR) deployment of MHS Genesis appears to be within a reasonable range for a project of this scope and complexity. Large-scale EHR implementations, especially within federal agencies, are inherently expensive due to the need for robust security, extensive customization, integration with legacy systems, and comprehensive training. For instance, other federal or large private healthcare systems have seen EHR implementation costs ranging from tens of millions to hundreds of millions of dollars, depending on the size of the user base, the number of facilities, and the specific functionalities required. The NCR deployment covers a critical hub, and the value reflects the significant effort involved in site activities, system configuration, and user support over the contract's duration.
What are the primary risks associated with this contract, and how are they being mitigated?
The primary risks associated with this contract include potential cost overruns due to the fixed-price incentive structure, which can escalate if performance targets are missed or if unforeseen issues arise. There's also the risk of implementation delays, integration challenges with existing military health IT infrastructure, and user adoption hurdles. Mitigation strategies likely include the detailed performance metrics tied to the incentive portion of the contract, rigorous project management by both Leidos and the Defense Health Agency, phased deployment to manage complexity, and comprehensive training programs for end-users. The long performance period also allows for iterative adjustments and problem-solving throughout the deployment lifecycle.
How effective is the fixed-price incentive (FPI) contract type in ensuring value for money for this EHR deployment?
The Fixed-Price Incentive (FPI) contract type is designed to provide value for money by aligning the contractor's financial interests with the government's objectives. In an FPI contract, the final price is determined by the contractor's performance against agreed-upon targets, typically related to cost, schedule, or performance. If the contractor achieves or exceeds these targets, they may receive a higher profit, but there's usually a ceiling price. Conversely, if targets are missed, their profit is reduced. For this MHS Genesis deployment, the FPI structure incentivizes Leidos to manage costs effectively and meet performance milestones related to the site deployment activities. This can lead to better cost control and a higher likelihood of achieving the desired system functionality and operational readiness, thus enhancing value for taxpayers.
What is the historical spending pattern for similar IT modernization or EHR implementation contracts within the Department of Defense?
Historical spending on IT modernization and EHR implementation within the Department of Defense (DoD) has been substantial, reflecting the scale and complexity of its operations. The MHS Genesis program itself represents a significant investment, aiming to replace disparate legacy systems with a unified platform across the entire military health system. Previous contracts for similar large-scale IT projects within the DoD have often been in the tens to hundreds of millions of dollars, spread over multiple years. Spending patterns are characterized by long-term commitments, often involving multiple contract vehicles and task orders to address various phases of implementation, sustainment, and upgrades. The focus has increasingly been on interoperability, cybersecurity, and leveraging modern technologies to improve healthcare delivery and readiness.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
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: $29,473,460
Exercised Options: $29,473,460
Current Obligation: $29,473,460
Subaward Activity
Number of Subawards: 9
Total Subaward Amount: $8,729,636
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: 2022-03-11
Current End Date: 2026-07-28
Potential End Date: 2026-07-28 00:00:00
Last Modified: 2025-10-20
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