EHR Vendor CliniComp Sues Govt. over VA/Cerner “Non-Competitive” Bidding Process

Aug. 23, 2017
CliniComp International is suing the government, attesting that the VA improperly awarded its EHR upgrade contract to Cerner Corp. without a competitive bidding process, according to reports.

CliniComp International, a San Diego-based electronic health record (EHR) vendor, is suing the government, attesting that the Department of Veterans Affairs (VA) improperly awarded its EHR upgrade contract to Cerner Corp. without a competitive bidding process, according to reports.

According to a Law360 report this week, CliniComp has been providing EHR systems to the Department of Defense (DoD) and some VA healthcare facilities since 2009. The vendor said on its complaint to the U.S. Court of Federal Claims that the VA violated the Competition in Contracting Act of 1978 by awarding a sole-source contract to Cerner for the VA’s EHR system upgrade. CliniComp told the court that David Shulkin, M.D., the VA secretary, “has enough time to conduct a competitive bidding process and that any lack of time is the VA’s own fault.”

In June, Shulkin announced that the VA will replace its aging EHR system, called VistA, by adopting the same platform as the U.S. Department of Defense, a Cerner EHR system. In a written statement announcing the decision to replace VistA with the same Cerner platform being used by the DoD, Shulkin said that the need to be interoperable with DoD drove the decision to move to a Cerner EHR system. The Defense Department awarded a multi-billion dollar EHR contract in 2015 to Leidos and Cerner.

The House Appropriations Committee cleared the fiscal year 2018 Military Construction and Veterans Affairs Appropriations bill in late June, which included $65 million for the modernization of the VA EHR system—for year one alone.

Back in June when the contract was publicly announced, Shulkin said “it would be a sole-source deal, justified by using a public interest exception to the presumption of competition that normally applies to federal contracts,” according to a Law360 report at the time.

What’s more, in a Nextgov report at the time of the deal, Shulkin credited President Donald Trump’s “mandate to do things differently” as a reason for deciding to sole-source the EHR contract. According to that report, the VA secretary also said that the recently-created White House Office of American Innovation acted in an advisory capacity on the matter, though Shulkin insisted the contract was fully his decision.

Soon after the contract was awarded this summer, Shulkin noted that for the DoD deal, the entire EHR acquisition process, starting from requirements generation until contract award, took approximately 26 months. But the VA secretary assured Congress in a June hearing that it would take six to eight months to negotiate a five- to 10-year contract with Cerner.

As such, in its complaint, CliniComp pointed out, per the Law360 report, that “In the six or eight months to negotiate a sole source contract with Cerner, the VA could hold an accelerated full and open competition for the next generation [system]. Since the next generation [system] is high-risk and because multiple award development contracts are a proven means to reduce risks, the failure of Secretary Shulkin’s decision to consider prudent risk reduction renders the sole-source decision [unreasonable].”

CliniComp further said it has 30 years of EHR system management and “virtually zero downtime” since 1983. It currently provides its system for 61 DoD locations and since 2009 has been selected to provide it at more than 40 VA healthcare facilities, it said, according to the report.

The company also said that the government is required to conduct market research to figure out if there are available items that might meet its needs or could be adapted to meet its needs. If it had, it would’ve learned that the VA has one and that it’s run by CliniComp.

According to the report, “CliniComp wants the court to require a competitive bidding process and to pause execution of the contract while its complaint is litigated, because neither the government nor Cerner will be harmed by an injunction, while it will be hurt if the contract moves forward.”

Where it goes from here remains to be seen, but a report from KCUR in Kansas City, where Cerner is based, noted that a spokesperson at the Department of Justice’s Office of Public Affairs said that “the government made its initial court appearance in a sealed proceeding and that the court has issued a scheduling order for the case.”

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