The U.S. Defense Department said the reason it extended the contract value for its EHR overhaul by $1.1 billion was to assist in EHR standardization across the Coast Guard and the Veterans Affairs Department.
Leidos is facilitating the Defense Department's contract with Cerner, the same EHR vendor the VA selected for its EHR modernization project. Because the VA hired Cerner as its prime contractor, the Pentagon said it had to extend Leidos' work order to include EHR standardization, according to a justification and approval notice the agency posted July 24.
"Contracting with anyone else [other than Leidos] to work with Cerner would create significant redundancies, inefficiencies and other issues," the contract states.
The additional funds also cover the cost of adding the Coast Guard to the Defense Department's contract. Other costs, such as the list of "as a service" requirements, were taken out of the Defense Department's contract since the VA included them in its agreement.
Allscripts and CACI International challenged the Pentagon's sole-source selection of Leidos for the contract extension. However, their challenges were rejected since the government did not want to bring in another EHR vendor.