The Pentagon Is One Step Closer To Awarding a New $11 Billion Health Records Deal

The Defense Department has narrowed down the contenders competing for its massive Healthcare Management System Modernization contract,potentially worth up to $11 billion over a decade. 

According to a Feb. 19 presolicitation notice, DOD’s procurement team has established a “competitive range” for the DHMSM contract, leaving only bids from three teams remaining.

DHMSM Procurement Contracting Officer Matt Hudson confirmed to Nextgov the Pentagon has set a range that eliminates some teams; however, he could not confirm which “due to the sensitive nature of the acquisition process.”

However, multiple sources with knowledge of the competitive range confirm that three bidding teams -- Computer Sciences Corp., partnered with HP and EHR developer Allscripts; Leidos and Accenture Federal; and IBM and Epic Systems -- fall within the competitive range.

IBM confirmed its position within DOD’s competitive range. When reached by Nextgov, officials from Computer Sciences Corp. and Leidos declined to comment.

PricewaterhouseCoopers, which partnered with Google, General Dynamics Information Technology, DSS Inc. and MedSphere, confirmed its bid was outside the competitive range.

“PwC remains committed to helping support the health and well-being of our troops and their families," said Scott McIntyre, U.S. public sector leader for PricewaterhouseCoopers. "We will continue to work closely with the Defense Department in any capacity that serves those goals."

Sources said a fifth bidder, InterSystems, also failed to make the competitive range cutoff. Calls to InterSystem were not returned immediately.

DOD’s procurement team has been evaluating bids on the contract since October 2014 following a yearlong preparation by the Pentagon that included a series of industry days and back-and-forth dialogue. The Pentagon aims to replace its current health records systems, the Armed Forces Health Longitudinal Application, with a commercial electronic health records system to cover its 10 million beneficiaries.

DOD is one of the largest health care providers in the county, on par with the Department of Veterans Affairs and private sector giants like Kaiser Permanente.

However, its current health records system has been plagued by problems of interoperability with commercial systems -- a major sticking point, considering almost half of its beneficiaries seek care outside the DOD network.

With a competitive range set, the Pentagon is on pace to award the DHMSM contract by June 2015.