VA awards $110.5M contract for national dialysis EHR software, citing sole-source justification

Contract Overview

Contract Amount: $110,510 ($110.5K)

Contractor: Document Storage Systems, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-06-27

End Date: 2027-06-26

Contract Duration: 1,094 days

Daily Burn Rate: $101/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: NATIONAL DIALYSIS EHR SOFTWARE SOLUTION

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19104

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $110,510.14 to DOCUMENT STORAGE SYSTEMS, INC. for work described as: NATIONAL DIALYSIS EHR SOFTWARE SOLUTION Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price efficiencies. 2. The fixed-price contract structure aims to control costs over its duration. 3. The duration of the contract is over three years, indicating a long-term need. 4. The award is for computer systems design services, a critical area for healthcare IT. 5. The Department of Veterans Affairs is the primary agency involved. 6. The contract is not set aside for small businesses, suggesting larger prime contractors are expected.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of Electronic Health Record (EHR) software for dialysis. Without competitive bids, it's difficult to assess if the $110.5 million price represents optimal value for money. The firm fixed-price structure provides cost certainty but doesn't inherently guarantee the best price. Comparisons to similar, competitively procured EHR systems would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The justification for this approach is not detailed in the provided data, but it typically implies that only one vendor could provide the required specialized services or that a competitive process was deemed impractical or not in the government's best interest. The lack of competition limits the government's ability to explore alternative solutions and potentially achieve lower prices through bidding.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in negotiating favorable terms and pricing.

Public Impact

Veterans requiring dialysis services will benefit from an integrated and potentially improved EHR system. The contract supports the delivery of critical healthcare IT infrastructure for the VA. The geographic impact is national, covering all VA facilities that provide dialysis care. This contract will likely impact IT professionals and healthcare support staff within the VA and potentially the contractor's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Lack of competition may reduce incentives for innovation and service improvement.
Dependence on a single vendor for critical national healthcare IT infrastructure poses a risk.

Positive Signals

Firm fixed-price contract provides cost certainty for the VA.
Focus on a national solution suggests an effort to standardize and improve care delivery.
The contract duration indicates a commitment to a stable, long-term solution for veterans' needs.

Sector Analysis

The healthcare IT sector is characterized by specialized software solutions, including Electronic Health Records (EHRs). This contract falls within the Computer Systems Design Services category, focusing on the development and implementation of critical healthcare management software. The market for EHR systems is substantial, with significant government spending directed towards modernizing health IT infrastructure to improve patient care and operational efficiency. The VA's investment in a national dialysis EHR solution aligns with broader trends in healthcare digitalization.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary contractor is likely a larger entity capable of delivering complex IT solutions. The absence of small business set-asides means that opportunities for smaller firms to participate in this specific contract are limited, potentially impacting the broader small business ecosystem in this specialized IT niche.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs, likely through its contracting officers and program managers. Accountability measures are embedded within the firm fixed-price contract terms, which obligate the contractor to deliver specific services by a certain date. Transparency may be limited due to the sole-source nature of the award, but contract details and performance reports are typically subject to federal procurement regulations and potential Inspector General reviews if performance issues arise.

Related Government Programs

VA EHR Modernization Program
Federal Health IT Spending
Healthcare IT Services Contracts
Veterans Health Administration IT Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $110,510.14 to DOCUMENT STORAGE SYSTEMS, INC.. NATIONAL DIALYSIS EHR SOFTWARE SOLUTION

Who is the contractor on this award?

The obligated recipient is DOCUMENT STORAGE SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $110,510.14.

What is the period of performance?

Start: 2024-06-27. End: 2027-06-26.

What is the track record of DOCUMENT STORAGE SYSTEMS, INC. with the Department of Veterans Affairs and in providing EHR solutions?

Information regarding DOCUMENT STORAGE SYSTEMS, INC.'s specific track record with the Department of Veterans Affairs (VA) and their experience in providing Electronic Health Record (EHR) solutions is not detailed in the provided data. To assess their capabilities and past performance, a review of their contract history with the VA, including any previous EHR-related awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes would be necessary. Without this specific historical data, it is difficult to gauge their reliability and expertise in delivering a national dialysis EHR software solution.

How does the $110.5 million cost compare to similar national EHR system procurements by other federal agencies or large healthcare providers?

Direct comparison of the $110.5 million cost for this VA dialysis EHR software to similar national EHR system procurements is challenging without more specific details on the scope, features, and duration of comparable systems. EHR implementations are highly variable in cost depending on factors like the number of users, modules included, integration requirements, and the level of customization. However, large-scale EHR deployments can range from tens of millions to hundreds of millions of dollars. The sole-source nature of this award means a direct price benchmark against competitive bids is unavailable, making it difficult to definitively state if this represents a superior or inferior value proposition compared to potentially competed alternatives.

What are the primary risks associated with a sole-source award for a critical national healthcare IT system like this?

The primary risks associated with a sole-source award for a critical national healthcare IT system include a lack of price competition, which can lead to higher costs for the government and taxpayers. It also reduces the incentive for the sole provider to innovate or improve services aggressively, as there are no direct competitors vying for the business. Furthermore, reliance on a single vendor creates a significant dependency; any issues with the vendor's financial stability, technical capabilities, or willingness to perform could severely disrupt essential healthcare services for veterans. Vendor lock-in is another risk, making it difficult and costly to switch providers in the future.

What specific performance metrics or service level agreements (SLAs) are likely included in this contract to ensure effective delivery of the dialysis EHR software?

While specific performance metrics and Service Level Agreements (SLAs) are not detailed in the provided data, firm fixed-price contracts for critical IT systems typically include robust performance expectations. These would likely encompass aspects such as system uptime and availability (e.g., 99.9% availability), data security and compliance with HIPAA regulations, response times for technical support and issue resolution, data accuracy and integrity, and successful integration with existing VA IT infrastructure. The contract would also likely define requirements for software updates, maintenance, and potentially user training and system enhancements over its three-year duration.

What is the historical spending pattern for dialysis-related IT solutions or EHR systems within the Department of Veterans Affairs?

Historical spending patterns for dialysis-related IT solutions or EHR systems within the Department of Veterans Affairs (VA) are not provided in the current data. To analyze this, one would need to examine past VA procurements for similar systems, including any previous contracts for dialysis-specific EHR modules or broader EHR implementations that included dialysis functionalities. Understanding the VA's historical investment in this area, including the number of contracts, their values, and whether they were competitively or sole-sourced, would provide context for the current $110.5 million award and help identify trends or significant shifts in spending.

What are the implications of the 'Computer Systems Design Services' NAICS code (541512) for the scope and nature of this contract?

The North American Industry Classification System (NAICS) code 541512, 'Computer Systems Design Services,' indicates that this contract is primarily for services related to designing, developing, and implementing computer systems. For this VA dialysis EHR software contract, this means the scope likely includes the analysis of the VA's needs, the design of the EHR system architecture, software development or customization, system integration, testing, and potentially deployment and ongoing support. It suggests a focus on creating or adapting a system to meet the specific requirements of managing dialysis patient data and care within the VA's complex IT environment, rather than simply purchasing off-the-shelf software.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12575 US HIGHWAY 1, JUNO BEACH, FL, 33408

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $151,902

Exercised Options: $110,510

Current Obligation: $110,510

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10A22D0003

IDV Type: IDC

Timeline