Cerner wins $50.7 million DoD data hosting contract as competitors lose appeals

Company was awarded the military's EHR contract last year, and the vendor requires that it host the data used in its system.
By Bill Siwicki
03:05 PM

Health IT giant Cerner Corp. has scored a $50.7 million data hosting contract from U.S. Department of Defense as part of its Defense Healthcare Management Systems Modernization, according to official documents. The DoD last year awarded Cerner and partner Leidos the $4.3 billion contract to deploy the new electronic health record for the U.S. military worldwide.

Cerner won the contract over the objections of, Computer Sciences Corp., General Dynamics and IBM Corp., which appealed the decision and lost their case, documents showed. The DoD said that Cerner had made it clear to the government that the comapany does not allow connections to its managed services by any other commercial entity. In fact, Cerner's restrictions made it impossible for the Defense Department EHR's data to be hosted even by the DoD itself.

[Also: DoD awards Cerner, Leidos, Accenture EHR contract]

Cerner's EHR system also includes historical data, anonymized information from healthcare provider organizations that use the company's EHR and from the vendor's analytical models based on years of research and development. Had the DoD opted for a different company to host data, it would not have been able to use the Cerner historical data in conjunction with military EHR data and would have had to deal with a separate data setting, adding costs to the project, Pentagon officials said.

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The competing vendors' objections weren't all specified, but according to a report from FCW, one vendor had suggested the DoD could compel Cerner to share its data/modeling functions with a third-party hosting company. Another bidder suggested replacing Cerner's analytics modules with those from another vendor. But DoD said that would lead to cost redundancies.

Some of these same vendors, such as IBM and CSC, competed for the initial DHMSM contract in 2015 and didn't protest the initial award to Leidos/Cerner.

Cerner's suite of healthcare information systems will replace the DoD's legacy health IT system in its 55 hospitals and more than 350 clinics, as well as in ships, submarines and other military locations.

In addition to Leidos, Cerner also aligned with Accenture, Henry Schein and a number of small business partners to serve the Military Health System and its 9.6 million beneficiaries. Intermountain Healthcare is also a strategic partner providing clinical governance of solutions and workflow.

Jessica Davis contributed to this report.

Twitter: @SiwickiHealthIT