A team ofÂ Leidos (NYSE: LDOS), healthcare technology makerÂ CernerÂ (Nasdaq: CERN) andÂ AccentureÂ (NYSE: ACN) has beaten two other industry teamsÂ for theÂ Defense Department‘s multi-year, multibillion dollarÂ contract to integrate a commercial electronic health records systemÂ across the Military Health System.
DoDÂ said WednesdayÂ the contract has a $4, 336, 822, 777Â ceiling valueÂ over the initial two-year ordering period with twoÂ three-year option periods and another potential two-year award term that would bring the total ordering period to 10 years.
A subsequent report by DoD News quotes Frank Kendall, Pentagon acquisition chief, as saying DoD’s latest figures estimate the cost of the new system to be around $9 billion over 18 years.
NextGov first reported the award at 3:32 p.m. Eastern time and Leidos’ stock jumpedÂ 7 percent between then andÂ 3:45 before it closed at a 5-percent increase for the dayÂ toÂ $40.40, which Bloomberg News saysÂ is the company’sÂ largest one-day increase since Dec. 3, 2014.
Cerner closed up 7 percent toÂ $73.40 and its stockÂ also spiked after Nextgov’s report ofÂ theÂ Defense Healthcare Management SystemÂ Modernization program award surfaced.
DoD narrowed the DHMSM competition to three teamsÂ in February with bids from a group of Epic SystemsÂ andÂ IBM (NYSE: IBM); andÂ a consortium of Allscripts, Computer Sciences Corp. (NYSE: CSC)Â and Hewlett-Packard (NYSE: HPQ).
AÂ fourthÂ proposal from a team ofÂ PwC, DSS, Â General Dynamics (NYSE: GD)Â Google (Nasdaq: GOOG) and Medsphere was eliminated during that downselect portion of the DHMSM competition.
Six offers were submitted in total to the Pentagon for the contract, DoD said.
The Pentagon aims to have an initial replacement fielding complete at eight locations in the Pacific Northwest region by the end of next year and cover all military service branches, DoD News reports.
Kendall saidÂ the PentagonÂ wants theÂ EHR system to cover close to 9.5Â million beneficiariesÂ and 205, 000 care providers once fully functional, according to DoD News.
Dr. Jonathan Woodson, assistantÂ defense secretary forÂ health affairs, told House lawmakersÂ inÂ February 2014 the Pentagon wants to achieve full functionality of the system by 2023.
DHMSM is intended as the replacement setup for the Pentagon’s Armed Forces Health Longitudinal Technology Application, inpatient Composite Health Care System and most components of the Theater Medical Information Program-Joint.
The Military Health System encompassesÂ 1, 230 locations in 16 countries, 55 inpatient hospitals and medical centers, 352 ambulatory care clinics and more than 300 expeditionary care clinics.