Story updated Wednesday at 4 p.m. Eastern
The Defense Department has eliminated PricewaterhouseCoopers and its bid partners from contention for a 10-year multibillion-dollar contract to modernize its electronic health-record system.
The consultancy acknowledged in a statement that its bid is out of the running. The consulting firm last month created a buzz by name-dropping Google as a partner on its proposal to build the new Defense Department EHR system on the open-source code for the Veterans Affairs Department's VistA system. The bid team also included EHR vendors DSS and MedSphere, and systems integrator General Dynamics Information Technology.
That appears to leave three teams: one led by Epic Systems Corp. and IBM; a partnership among Allscripts, Hewlett-Packard and Computer Sciences Corp.; and an alliance formed by Cerner, Leidos and Accenture. Representatives for each of the remaining bids declined to comment, although IBM and Epic did confirm their bid is still alive. The Defense Department did not respond to requests for comment.
The government posted a change notice to its request for proposals late last week noting that officials had established a competitive range for the contract. PwC's bid was outside that range. A Defense official testifying before the House Appropriations Committee last year reportedly said the cost over the life of the contract could be as high as $11 billion. A spokeswoman for the department said the number was likely to be "nowhere near $11 billion."
The decision will surely disappoint fans of VistA, which they argue has a superior performance record and a cheaper price. A report issued by defense think tank Center for a New American Security warned against selecting a “closed and proprietary” system.
One of the report's co-authors, former VA chief technology officer Peter Levin, said in an interview at the time that the large vendors' systems are “notorious for their lack of interoperability and lack of choice.”
Levin isn't alone in that opinion. University of Pennsylvania sociologist Ross Koppel, who studies EHRs, said that the decision reflects the Defense Department's long-standing attitude of “not wanting to acknowledge the good work of the VA and not acknowledging their system was so horrible.”
The Defense Department is expected to award the contract this summer.
This story was updated to reflect that the Defense Department disputes the $11 billion figure used to describe the potential value of the contract.
Follow Darius Tahir on Twitter: @dariustahir