DoD Buzz

Pentagon Awards $9 Billion Deal for Electronic Health Records


The U.S. Defense Department on Wednesday awarded one of the biggest health information-technology contracts in history to Leidos Inc.

The agreement, announced at 5 p.m. in Washington, D.C., is designed to digitize the military’s medical record system for troops, their families and retirees. It’s valued at $4.3 billion over a decade and potentially worth nearly $9 billion over 18 years, officials said.

To highlight the significance of the work, Frank Kendall, the department’s top acquisition official, said he has spent more time on this program than any other -- even the F-35 Joint Strike Fighter, the Pentagon’s most expensive weapons system.

“This date represents an important step in the acquisition of a modern health care system for DoD,” he said during a conference call with reporters earlier in the day. “It’s not the final step by any means. We have a lot of work ahead of us.”

Leidos, based in Reston, Virginia, beat out two other finalists in part by offering a more cost-effective bid, officials said. The government contract is the largest of its kind since the one that led to the 2013 creation of the website to register individuals for health care policies under Obamacare.

The contract will modernize how the Pentagon provides care to some 9.5 million military members, families and retirees in part by installing new IT equipment and software to better share patient information with the Veterans Affairs Department and private providers, officials said.

While the military has used electronic health records for years, many troops who deployed to warzones such as Afghanistan and Iraq had trouble accessing their medical history from base to base and resorted to storing the information on portable computer disks such as thumb drives. In other cases, they carried around paper records in manila folders.

“That will be a thing of the past,” Jonathan Woodson, a doctor and assistant secretary of defense for health affairs, pledged during the conference call.

Yet getting the new system up and running across the Pentagon’s 55 military hospitals and 600 clinics will take years. The plan is to begin installing the technology at eight locations in the Pacific Northwest, then expand to the rest of the sites over six or seven years, Kendall said. The names of the initial locations weren’t immediately available.

Leidos partnered with Cerner Corp., a publicly traded health IT supplier based in Kansas City, Missouri, and Accenture Plc to bid for the work. Other finalist teams included Epic Systems Corp. and Allscripts Healthcare Solutions Inc.

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