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VA Cerner Implementation Contract Likely to Top Out at $10B

Documents from the CliniComp case against VA reveal key details of the Cerner implementation deal.

Cerner EHR

Source: Thinkstock

By Kate Monica

- VA will likely dole out $10 billion for the Cerner implementation contract, according recently unsealed documents in the CliniComp case against the federal agency.

Judge Lydia Kay Griggsby of the Court of Federal Claims ruled CliniComp lacked the experience with a contract of the size and scope of the VA’s planned EHR system and could therefore not have credibly competed with Cerner for the multi-billion dollar contract.

CliniComp sued the federal government in August for allowing VA to award its EHR contract to Cerner in June without a competitive bidding process. The health IT company claimed the federal agency violated the Competition in Contracting Act of 1978 by offering a sole-source contract to Cerner for its EHR replacement of the homegrown VistA.

The federal judge dismissed the lawsuit in October. Contained within the decision – under seal until recently — was previously unknown information about the Cerner VA contract negotiation.

A declaration of a VA contracting officer included in court documents showed VA intends to award Cerner the EHR contract “sometime in November 2017, no sooner than November 9.”

A source from VA told FCW that the contract will likely be signed after Veteran’s Day, but Cerner and VA have settled on a price for the implementation amounting to somewhere around $10 billion. Previously, FCW had estimated the contract would be signed for between $16 billion and $18 billion.

The contract won’t be signed until a deal is reached in Congress with appropriators to ensure the correct amount of money is placed into the appropriate accounts in time for payment. Shulkin has been in meetings with appropriators throughout the week to work through final details.

Contracting officer Matthew Truex works with VA’s Technology Acquisition Center and stated in court records that the first VA care site will go live with Cerner’s EHR at the Veterans Integrated Service Network 20 in the northwest. The Veterans Integrated Service Network 20 includes care sites in Oregon, Washington, Idaho, and Alaska.

Initial task orders on the Cerner contract will be issued in early 2018. The rollout schedule will match the schedule for the DoD’s MHS Genesis launch, which recently completed its fourth successful EHR implementation at Madigan Army Medical Center in Tacoma, Washington. The implementation marked the completion of the Initial Operational Capability deployment for key military sites across the Pacific Northwest.

The cost of the VA Cerner EHR system is lower than expected because VA plans to track DoD rollouts and implement its own Cerner system where there are already IT experts on location to assist with the implementation and train medical staff. 

Leidos is leading the DoD EHR modernization effort with Cerner as a subcontractor. In a November 2 earnings call, Leidos CEO Roger Krone stated conversations will begin with likely subcontractors on the Cerner VA deal once the contract is negotiated and closed.

While Judge Lydia Kay Griggsby ruled against CliniComp in its lawsuit against Cerner, she did not explicitly rule out any future challenges to the VA contract with Cerner by other, more qualified health IT companies.

"The Court notes, however, that there is less evidence in the administrative record to specifically support the Secretary’s decision to award the subject contract to Cerner," Griggsby wrote.

"The administrative record does not provide any other information to explain why the Secretary selected Cerner to perform this contract,” she continued.

The Cerner VA contract may be contested by other health IT companies once the contract is signed. 

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