UPDATE: The VA is facing two major obstacles to a new EHR implementation with Cerner. The first obstacle, a skinny FY18 funding bill known as the Make America Secure Appropriations Act for DOD-funding, includes a provision which limits full IT-funding to the VA until it can explain, among other issues: its sole-source solicitation to Cerner, how the DOD platform can be replicated, and a strategic implementation plan.

The second obstacle, reported on August 24th, is a lawsuit from EHR vendor CliniComp, after the VA first rejected CliniComp’s protest against the sole-source contract with Cerner. CliniComp argues that Shulkin’s “public interest” justification for the sole-source, no-bid contract is inadequate and seeks an injunction on any award to Cerner. EZGovOpps will continue to monitor the status of this procurement. 

Today, June 5th, Department of Veterans Affairs (VA) Secretary Dr. David J. Shulkin announced a plan to move forward with the procurement of a modernized Electronic Health Records (EHR) system outside of normal “full & open competition” procurement methods, with the intent of obtaining the new Department of Defense (DOD) “MHS GENESIS” EHR platform, as a means to expedite the procurement process and ensure compatibility with DOD health records. Of course, this effort to avoid any complications in a normal procurement process comes after the struggles by DOD to finalize MHS GENESIS, which included a 26-month period between the start of the procurement and awards, and added costs by the winning contractors.

The Announcement

Dr. Shulkin stated in his announcement that public interest in better serving and protecting the Veteran community presented an urgent need for him to sign a Determination and Findings form which allows for a direct solicitation to Cerner Corporation for the EHR system now-installed for DOD. In Shulkin’s logic, the 26-month open-bid procurement process that DOD followed to procure the Cerner system would be too long for such an urgent upgrade, and VA should be allowed to directly procure the system from Cerner in a “no-bid” procedure.

Cerner was awarded the $4.3 billion indefinite-delivery/indefinite-quantity (IDIQ) health IT contract in partnership with Leidos and Accenture Federal Services, beating out competitors including Epic Systems. The new system would replace legacy systems including the Armed Forces Health Longitudinal Technology Application (AHLTA) and the Composite Health Care System (CHCS), which was developed by Science Applications International Corporation based on a derivative of the current (yet decades-old) Veterans Information Systems and Technology Architecture (VISTA) at the VA.

While Cerner quickly made progress in the first test deployment of the new EHR system to bases in the Pacific Northwest, rumors of delays in implementing the DOD-wide system have spread as late as last week, but with a target date for Department-wide deployment still set for 2022. Cerner had already gained no-bid contracts for the GENESIS project after winning the original award, stating that added costs for a proprietary datacenter would cost $50 million over 10 years. Cerner then raised that estimate to $75 million over 2.5 years, which the Pentagon then sought to cap. Including the $4.3 billion IDIQ, DOD estimates that the EHR modernization effort will cost a total of $9 billion, which could pay for itself in the future, as legacy systems support continues “eating” 95% of the military health IT budget in their current form.

This is a very early start in the newly-announced no-bid solicitation process for what could be very lucrative deal for Cerner. As evidenced by the DOD implementation, this is guaranteed to be a long-term effort for a new VA EHR system. IT modernization is already on track to make a procurement splash in 2018, and other Federal efforts focused on health IT at NITAAC and GSA continue to expand.

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Published on June 5, 2017