DOD awards massive EHR modernization contract of up to 10 years, $9 billion

Initial two-year contract is worth $4.3 billion

The Department of Defense (DOD) on Wednesday announced that electronic health record (EHR) vendor Cerner, Leidos—a government systems integrator—and Accenture Federal have been awarded its EHR modernization contract.

DOD officials say the system will be deployed at about 1,000 sites in the United States and abroad, including DOD's 55 hospitals and more than 600 clinics.


In 2013, DOD and Department of Veterans Affairs officials announced that it would no longer work toward creating a joint integrated EHR system, and instead focus on making their current EHR systems more interoperable.

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DOD then solicited bids to modernize its EHR system, and several groups submitted competing proposals.

Contract details

The initial two-year contract is worth $4.3 billion. There are two additional three-year option periods and a potential two-year award term, which could bring the contract period to 10 years. In a release, Frank Kendall—undersecretary of defense for acquisition, technology and logistics—said the total contract value is now estimated to be $9 billion.

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Christopher Miller, the Defense Healthcare Management Systems program executive officer, says the new EHR system will replace up to 50 legacy systems, each of which has its own transition plan.

Therefore, officials say the system will be implemented over six or seven years. Officials say they will begin deploying and testing the system at eight military facilities in the Pacific Northwest, which are expected to be up and running by the end of 2016 (Bowman, FierceEMR, 7/29; Conn, Modern Healthcare, 7/29; DOD release, 7/29).

How to understand interoperability—our industry's most overlooked problem


You've heard about health insurance. You've heard about medical errors. But have you heard about interoperability? It could be costing the health care industry as much as $30 billion per year.

So what is it?


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