Leidos awarded $359M for MHS Genesis EHR, impacting military healthcare operations and enterprise sustainment
Contract Overview
Contract Amount: $359,148,584 ($359.1M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2022-07-29
End Date: 2023-07-28
Contract Duration: 364 days
Daily Burn Rate: $986.7K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: ENTERPRISE ACTIVITIES FOR THE MHS GENESIS ELECTRONIC HEALTH RECORD INCLUDING PROGRAM MANAGEMENT, ENTERPRISE SUSTAINMENT, OPERATIONAL MANAGEMENT SOLUTIONS, AND LICENSE MAINTENANCE.
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $359.1 million to LEIDOS, INC. for work described as: ENTERPRISE ACTIVITIES FOR THE MHS GENESIS ELECTRONIC HEALTH RECORD INCLUDING PROGRAM MANAGEMENT, ENTERPRISE SUSTAINMENT, OPERATIONAL MANAGEMENT SOLUTIONS, AND LICENSE MAINTENANCE. Key points: 1. Contract focuses on critical enterprise activities for the MHS Genesis Electronic Health Record system. 2. Includes program management, sustainment, operational solutions, and license maintenance, indicating comprehensive support. 3. The firm-fixed-price structure aims to control costs for the Department of Defense. 4. Full and open competition suggests a robust bidding process, potentially leading to competitive pricing. 5. This award is a significant component of the broader MHS Genesis modernization effort. 6. Performance period of one year with potential for future task orders. 7. The contract value represents a substantial investment in maintaining and operating a key military health IT system.
Value Assessment
Rating: good
The contract value of $359.15 million for a one-year period for enterprise activities related to the MHS Genesis EHR appears to be within a reasonable range for such a large-scale, critical IT system. Benchmarking against similar large federal IT system sustainment contracts would provide further context, but the scope of services including program management, sustainment, and operational management suggests a comprehensive and necessary investment. The firm-fixed-price contract type helps to establish a clear cost ceiling for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the open competition is a positive signal for price discovery and value for the government.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and innovative solutions, ensuring that government funds are used efficiently for essential services like military healthcare IT.
Public Impact
Benefits military personnel, veterans, and their families by ensuring the continuity and effectiveness of the MHS Genesis Electronic Health Record system. Delivers essential services including program management, enterprise sustainment, operational management solutions, and license maintenance for a critical healthcare IT infrastructure. Geographic impact is nationwide, supporting all users of the MHS Genesis system within the Department of Defense. Workforce implications include support for IT professionals involved in managing, maintaining, and operating the EHR system.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep if not managed tightly given the broad enterprise activities.
- Dependence on contractor for critical system sustainment requires robust performance monitoring.
- Cybersecurity risks associated with managing a large-scale health IT system.
- Ensuring seamless integration with other military health systems.
- Potential for vendor lock-in if future requirements are heavily tied to this specific contractor's expertise.
Positive Signals
- Awarded under full and open competition, suggesting a competitive process.
- Firm-fixed-price contract type provides cost certainty for the government.
- Focus on enterprise sustainment indicates a commitment to long-term system viability.
- Contract covers essential program management and operational support.
- Leidos has a significant track record in large-scale IT services for government clients.
Sector Analysis
The IT services sector, particularly within government contracting, is highly competitive. This contract falls under computer systems design services, a segment focused on the development, implementation, and management of complex IT systems. The MHS Genesis EHR is a flagship program for the Department of Defense, representing a substantial investment in modernizing military healthcare. Comparable spending benchmarks would likely involve other large-scale federal EHR implementations or major IT infrastructure sustainment contracts, which often run into hundreds of millions of dollars annually.
Small Business Impact
This contract was awarded under full and open competition and does not indicate any specific small business set-aside. While the prime contractor, Leidos, Inc., is a large business, there is no explicit information provided regarding subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether Leidos incorporates small businesses into its subcontracting strategy for this effort.
Oversight & Accountability
Oversight for this contract would primarily reside with the Defense Health Agency (DHA) and the Department of Defense. Accountability measures are typically embedded within the contract's performance work statement (PWS), including defined deliverables, service level agreements (SLAs), and reporting requirements. Transparency is facilitated through contract award announcements and public contract databases. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.
Related Government Programs
- MHS Genesis EHR Program
- Department of Defense IT Modernization Initiatives
- Federal Electronic Health Record Systems
- Defense Health Agency IT Services
- Large-Scale IT System Sustainment Contracts
Risk Flags
- Potential for cost overruns if scope is not tightly managed.
- Dependence on contractor for critical healthcare IT operations.
- Cybersecurity vulnerabilities in large-scale health IT systems.
- Ensuring adequate user adoption and satisfaction across diverse military settings.
Tags
it-services, defense, health-it, ehr, enterprise-sustainment, program-management, full-and-open-competition, firm-fixed-price, department-of-defense, defense-health-agency, leidos, mhs-genesis
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $359.1 million to LEIDOS, INC.. ENTERPRISE ACTIVITIES FOR THE MHS GENESIS ELECTRONIC HEALTH RECORD INCLUDING PROGRAM MANAGEMENT, ENTERPRISE SUSTAINMENT, OPERATIONAL MANAGEMENT SOLUTIONS, AND LICENSE MAINTENANCE.
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $359.1 million.
What is the period of performance?
Start: 2022-07-29. End: 2023-07-28.
What is Leidos's track record with large-scale federal IT system sustainment and EHR implementations?
Leidos, Inc. has a substantial track record in providing IT services to the federal government, including extensive experience with large-scale system integration, sustainment, and modernization efforts. They have been a key player in various complex IT programs across multiple agencies. While specific details on their involvement with other federal EHR systems beyond MHS Genesis are not detailed here, their general expertise in managing and sustaining critical IT infrastructure for government clients is well-established. Their history suggests a capacity to handle the scope and complexity required for the MHS Genesis enterprise activities, though performance on specific EHR programs would require deeper investigation.
How does the $359 million award compare to previous spending on MHS Genesis enterprise activities?
The provided data indicates this award of $359.15 million covers a one-year period for enterprise activities. To compare this to previous spending, one would need historical data on MHS Genesis sustainment and program management costs. Without that historical context, it's difficult to definitively state if this represents an increase, decrease, or stable level of investment. However, given the ongoing nature of EHR system sustainment and the maturity of the MHS Genesis program, this figure likely reflects the ongoing operational costs associated with maintaining a complex, nationwide healthcare IT system.
What are the primary risks associated with the sustainment and operational management of the MHS Genesis EHR?
The primary risks associated with the sustainment and operational management of the MHS Genesis EHR include cybersecurity threats targeting sensitive patient data, potential system downtime or performance degradation impacting clinical operations, challenges in integrating with evolving military health systems, and the risk of technical obsolescence if not continuously updated. Furthermore, ensuring consistent user adoption and satisfaction across diverse military healthcare settings presents an ongoing challenge. Dependence on contractor performance for critical functions also introduces risk if not managed with robust oversight and performance metrics.
How effective is the firm-fixed-price contract type in managing costs for this type of IT service?
The firm-fixed-price (FFP) contract type is generally effective in managing costs for IT services when the scope of work is well-defined and unlikely to change significantly. For sustainment and operational management activities like those covered in this contract, where the requirements are relatively stable, FFP provides cost certainty for the government by establishing a ceiling price. This shifts the risk of cost overruns to the contractor. However, if unforeseen technical issues or significant scope changes arise, an FFP contract can be less flexible than other types, potentially leading to change order negotiations or disputes if not carefully managed.
What is the expected impact of this contract on the overall modernization of the Military Health System's IT infrastructure?
This contract is crucial for the ongoing modernization of the Military Health System's IT infrastructure by ensuring the stable and effective operation of its core Electronic Health Record system, MHS Genesis. By covering program management, sustainment, and operational management, it allows the DHA to focus on further enhancements, integrations, and the rollout of new functionalities. The continuity provided by this contract is foundational, enabling the system to support clinical care and data management effectively, which is a prerequisite for broader IT modernization efforts within the MHS.
Are there any specific performance metrics or KPIs mentioned for this contract that indicate success?
The provided data does not detail specific performance metrics or Key Performance Indicators (KPIs) for this contract. Typically, such metrics would be outlined in the Performance Work Statement (PWS) and would cover areas like system uptime, response times for support, data accuracy, security compliance, and user satisfaction. The effectiveness of the contractor's performance would be measured against these defined standards, which are essential for ensuring the government receives the value expected from the $359 million investment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $359,148,584
Exercised Options: $359,148,584
Current Obligation: $359,148,584
Actual Outlays: $126,608,388
Subaward Activity
Number of Subawards: 37
Total Subaward Amount: $267,496,891
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003915D0044
IDV Type: IDC
Timeline
Start Date: 2022-07-29
Current End Date: 2023-07-28
Potential End Date: 2023-07-28 00:00:00
Last Modified: 2025-02-25
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