Government gives corporation no-bid contract. Corporation gives government a higher bill.
American healthcare IT vendor Cerner has considerably raised the price of the upcoming data center that is set to play a crucial part in the US Department of Defense’s electronic health record modernization efforts.
Instead of the previously-agreed $50.7 million over ten years, the facility will now cost $73.7 million over two-and-a-half years, with the DoD saying that it may reopen bids for the contract afterwards. DoD spokesman David Norley told Politico that the increase is partly due to more reliable data access and heavier data-processing needs.
Department of Spending
After Cerner, Leidos and Accenture won the $4.3 billion Defense Healthcare Management Systems Modernization contract in July 2015, the DoD controversially gave Cerner the no-bid data center hosting contract. Cerner took the job after it claimed it couldn’t do analytics for the Pentagon unless it also ran the servers.
In a document filed by the Space & Naval Warfare Systems Command (SPAWAR), the company said: “Direct access to proprietary Cerner data, which is only available as a managed service within Cerner-owned and operated data centers, is required to enable the full functionality of the DHMSM EHR.
”Therefore, no vendor other than Cerner, as a member of the Leidos team, can satisfy the requirement.”
The filing reveals that CSC Government Solutions, IBM, Amazon Web Services and General Dynamics all attempted to bid for the data center contract, even offering “technical solutions utilizing a variety of methods to connect the DHMSM EHR back to the Cerner proprietary data, while utilizing appropriate safeguards. The methods include the use of secure protocols, encryption, virtual private clouds, etc.”
In response, the government said it “does not fundamentally dispute any of the technical assertions in the responses, and, in fact, considers some of them to have technical merit in that the solution described would be viable if access to Cerner data could be obtained.”
But despite this view, in the end DoD said it had no choice but to go with Cerner: “Cerner does not allow third-party access and will not enter discussions with the Government to procure the necessary rights to grant third-party access.”