U.S. Department of Defense: Cerner-Led Team Awarded $4.3 Billion Electronic Health Record Contract

The U.S. Department of Defense has awarded a team led by Cerner, Leidos, and Accenture a $4.3 billion, ten-year contract to modernize its Armed Forces Health Longitudinal Technology Application electronic health record system for 9.5 million active military members and retirees, according to reporting by the Washington Post.  The contract can be extended for a total of 18 years, at a total cost of approximately $9 billion.  Other bids for the lucrative contract were submitted by teams led by Epic, IBM, and Impact Advisors; and another led by Allscripts, Hewlett-Packard, and Computer Sciences.  Another team led by PricewaterhouseCoopers, Google, General Dynamics Information Technology, DSS, and MedSphere also had been competing for the contract.

The contract was awarded after efforts to update and integrate the Department of Defense’s EHR system with the Veterans Administration’s open source VistA EHR system were abandoned in 2013.    Critics have noted that the federal government’s award (and taxpayer cost) for such a large contract to develop yet another proprietary, commercial EHR is contrary to its efforts to promote interoperability in an already crowded commercial EHR market.   For example, the Center for New American Security had called for the Department of Defense to issue the contract for an open-source product rather than another proprietary one.

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