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FCW : July 30, 2016
The Defense Department is paying more than anticipated for data hosting under its electronic health record contract. A sole-source add-on to the contract will task Cerner, the health IT vendor on Leidos’ winning team, with data-hosting services through the fourth quarter of 2017 to the tune of $73.7 million. DOD officials had initially estimated that commercial data hosting for the Defense Healthcare Management System Modernization (DHMSM) push would cost roughly $50 million over 10 years. DOD might re-compete the hosting service as early as next year. The hike won’t increase the $4.3 billion ceiling value of the deal, according to contract- ing documents, and Pentagon officials say the significantly higher costs are warranted. Leidos declined FCW’s request for comment. The EHR provider’s proprietary stockpile of clinical data helps deliver the advanced analytical capabilities that DOD officials want. Cerner will not connect that data to outside data centers, and Pentagon officials cannot force them to do so, according to paper- work submitted to justify the contract’s add-on. Further, Cerner systems offer more than 99 percent uptime, a substantial improvement on the minimum 98.5 percent availability that DOD stipulated in its initial contracting documents, a Defense Healthcare Management Sys- tems spokesperson said in a July 7 call with reporters. “When we’re talking about clinical data, that availability can be the dif- ference between life and death,” the spokesperson added. In addition, despite the significantly higher cost of Cerner hosting, it is with- in 10 percent of what it would have cost to host data through the Defense Infor- mation Systems Agency, an approach that had been part of the initial plan. The data-hosting modification was first announced in December 2015. The information about the costs involved comes months after the Pentagon rejected objections from IBM, Comput- er Sciences Corp., Amazon and General Dynamics. The DOD spokesperson emphasized that the Cerner modification only lasts through next year, and the Pentagon could open up the hosting portion of the contract for bids in July 2017. The spokesperson said the Penta- gon would not try to force Cerner to accept outside hosting, but the company could change its mind or the market- place could provide a better solution for clinical analytics. Having Cerner handle data hosting during DHMSM’s initial operating phase will allow the Pentagon to evaluate its functionality, the spokesperson said. “What makes sense to us right now may not make sense to us in a couple of years,” the spokesperson added, citing the value of keeping options open as technology evolves in the coming years. “We feel very secure [that] this is abso- lutely the best solution for us now.” The spokesperson said work is on track for the first phase of DHMSM functionality, dubbed Military Health System Genesis, to launch in the Pacific Northwest in December. — Zach Noble OMB nominee looks to IT modernization inventory items must migrate from Networx contracts to GSA’s Enterprise Infrastructure Solutions vehicle 7 million July 30, 2016 FCW.COM 11 Pentagon raises payout in DHMSM hosting deal GAO doesn’t trust census financials President Barack Obama’s pick to serve as deputy director for manage- ment at the Office of Management and Budget told a Senate panel that if confirmed, he would continue to push IT cost savings and efficiency while laying the groundwork for a smooth transition to the next administration. Andrew Mayock, currently a senior adviser at OMB, was nominated in December 2015 to replace David Mader, who is serving in an acting capacity. In a June 28 confirmation hearing before the Senate Homeland Security and Governmental Affairs Committee, Mayock said he planned to build on the lessons learned during the Obama administration regarding best practices for IT, hiring and management so the next administration — regardless of political party — would not have to start from the beginning. He also said OMB officials play a significant role in improving manage- ment of IT investments, on which the federal government spends about $80 billion a year. Mayock said the con- solidation of data centers — an effort flagged as “high risk” by the Govern- ment Accountability Office — and the delivery of smarter IT could save bil- lions and are top priorities on the presi- dent’s management agenda. “To date, we’ve delivered $3.8 billion in savings” thanks to the support of GAO and Con- gress, he said. “And about half of that savings is through the data center consolidation.” When asked what Congress could do to fuel progress on IT modernization and cybersecurity, Mayock cited continued funding of IT investments and the U.S. Digital Service team and passing the Cyber- security National Action Plan. Furthermore, approving the pro- posed $3.1 billion IT Modernization Fund would “attack the really horri- ble problem of legacy systems in the federal government, which are both a cyberthreat and a huge hurdle for government modernizing and provid- ing modern services to our citizens and our businesses,” Mayock said. — Chase Gunter Andrew Mayock 0730fcw_003-012.indd 11 7/13/16 11:49 AM
July 15, 2016
August 15, 2016