Green light for Cerner on $10 billion VA contract

WASHINGTON, D.C. – Cerner now has the go-ahead for a multibillion-dollar no-bid contract to update the U.S. Department of Veterans Affairs’ health records system, after nearly a year of waiting.

The Trump administration had chosen Cerner for the VA contract in June 2017 and cited benefits of having the same system as the Defense Department.

That nod from then-VA Secretary David Shulkin came before the government and Cerner had negotiated a price. Analysts have since evaluated the contract as worth $10 billion in revenue over 10 years to Cerner.

“This is one of the largest IT contracts in the federal government, with a ceiling of $10 billion over 10 years,” said Veterans Affairs Acting Secretary Robert Wilkie (pictured). “And with a contract of that size, you can understand why former Secretary Shulkin and I took some extra time to do our due diligence and make sure the contract does what the president wanted.”

Wilkie said that “without doubt” the contract will “do right by both veterans and taxpayers.”

Cerner, based in North Kansas City, won the VA contract without going through a normal bidding process because it was part of the team that won bidding for the larger defense contract.

However, the Defense Department system’s early operations ran into snags at a few pilot locations.

Officials at Cerner and Leidos Health, which is the leading partner on the Department of Defense project, characterized problems as similar to those on large commercial projects and said the pilot programs were designed to ferret them out to be fixed.

In his announcement, Wilkie said Veterans Affairs is “collaborating closely” with the Defense Department sites using their new system “to ensure lessons learned” will be shared throughout both networks of health care operations.

Cerner, in its own statement, said the contract would allow it to provide “seamless care” across the VA and Defense Department networks as well as beyond.

“We expect this program to be a positive catalyst for interoperability across the public and private healthcare sectors, and we look forward to moving quickly with organizations across the industry to deliver on the promise of this mission,” Cerner’s statement said.

In a blog, Cerner CEO Brent Shafer said Veterans Affairs would benefit financially from the new system’s ability to connect beyond VA centers, given advances in technology and “the cost of maintaining expensive, decentralized systems” that he said was unsustainable.

U.S. Sen. Jerry Moran, a Kansas Republican on the Senate’s Veterans Affairs Committee, said the system would improve healthcare for veterans.

“I applaud the VA for choosing to fully integrate the health records for our nation’s heroes through Cerner’s EHR system, which will ease the transition to civilian life for our veterans and reduce the unnecessary burdens they face when it comes to receiving care,” Moran said in a statement.