Vendor lawsuit alleges VA contract award to Cerner violates law

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CliniComp International, a San Diego-based electronic health record vendor, has filed a legal complaint in the U.S. Court of Federal Claims attempting to prevent the Department of Veterans Affairs from awarding a sole source contract to Cerner to replace the VA’s legacy EHR.

According to CliniComp’s court filing, the company is seeking “declaratory and injunctive relief” to stop the VA from “violating the Competition in Contracting Act (CICA) of 1978.” In addition, the document calls the VA’s decision to make the no-bid award to Cerner “arbitrary, capricious” and “an abuse of discretion” that violates CICA and federal acquisition regulations.

“Full and open competition is in the public interest,” states the lawsuit.

In early June, VA announced that it plans to replace its decades-old Veterans Health Information Systems and Technology Architecture (VistA) with the same Cerner Millennium EHR that the Department of Defense is currently rolling out to military sites in the Pacific Northwest.

Also See: VA picks Cerner to replace legacy EHR system

As a health IT vendor for both the DoD and VA, CliniComp sees itself as a “prospective offeror with a direct economic interest” in the VA’s EHR procurement that is currently capable of meeting the agency’s requirements, while Cerner’s system is not. Further, the company’s lawsuit contends that it filed a formal protest with the VA in June that the agency denied earlier this month.

“Nobody disputes the health of veterans needs to be a top priority, and the systems need to be as modern as possible, but to achieve that we need a fair and transparent process when it comes to VA contracts—one that was missing in this case,” said Chris Haudenschild, CEO of CliniComp, in a written statement.

“It is especially regrettable there was no competition because we know the transition is expected to take a decade, and cost tens of billions of dollars, yet the VA did no due diligence before moving forward,” added Haudenschild. “With the health of our veterans, and with this much time and money at stake, our veterans expect and deserve much better.”

VA officials were not immediately available for comment.

However, when Secretary David Shulkin announced in June his intention to award Cerner a no-bid contract to the replace the VA’s legacy VistA system, he said that—because of the “urgency and the critical nature” of the decision—the agency had “decided that there is a public interest exception to the requirement for full and open competition in this technology acquisition.”

But, CliniComp’s legal complaint charges that Shulkin’s use of the public interest exception to CICA lacks a rational basis. The document also contends that the “urgency that is compelling Secretary Shulkin to award a sole source contract to Cerner is a consequence of the VA’s lack of advance planning.”

Nonetheless, Shulkin in June claimed that he exercised his authority as head of the VA and “signed what is known as a ‘Determination and Findings’ or D&F,” which he described as a “special form of written approval by an authorized official that is required by statute or regulation as a prerequisite to taking certain contract actions.” Using the D&F, the Secretary insisted that he had the legal right to “issue a solicitation directly to Cerner Corporation for the acquisition.”

A Cerner spokesperson declined to comment on the court case and instead referred the matter to the Department of Justice’s Office of Public Affairs.

“We are aware of the complaint and made our initial appearance before the court in a sealed status conference yesterday afternoon,” said DOJ spokeswoman Nicole Navas Oxman. “The court has issued a scheduling order.”

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