DOD gearing up for EHR cloud migration with Leidos expected to score big contract extension

Challenges with maintaining its massive electronic health record system on-prem have prompted Pentagon plans to move to a cloud-based solution and award a high-dollar sole source contract to Leidos to continue on as a systems integrator for the program.

MHS GENESIS — billed as the first all-in-one EHR system covering the entire Defense Department and one of the largest such systems in the world — reached full deployment in March after an extensive rollout. But officials say change is already needed.

“Maintaining the current on-premises enclave has been challenging due to the sheer size of the system, the continued need to expand the hardware and software footprint to stay ahead of database growth, long lead times to procure expansion hardware, the need for duplicative hardware to support Continuity of Operations/Disaster Recovery (COOP/DR), and the need for touch labor required to physically execute updates. Modernization of the MHS GENESIS architecture, that is, moving from an on-premises solution to a cloud solution, has become necessary to maintain the system within the current contractual performance parameters, keep ahead of the database growth, and provide improved scalability, resilience, reliability, and cyber security,” according to a notice of intent posted Oct. 18 on Sam.gov.

The effort will come amid a broader push by the DOD to modernize its IT and embrace cloud capabilities across its many components.

The decision to move MHS GENESIS to the cloud is shaping up to benefit Leidos, the incumbent system integrator for the program. After conducting what officials called “extensive” market research to inform its acquisition strategy, the department now plans to award Leidos a sole-source IDIQ contract with an estimated value of $1.131 billion for a three-year effort, plus a “transition option” for an additional nine months and $263.34 million. The Defense Health Agency intends to award the contract no later than July 28, 2025, according to the notice. The contract statement of intent was completed by DHA on behalf of the program executive office for defense healthcare management systems (PEO-DHMS).

Industry feedback “underscored the [program management office’s] concerns about the high-risk nature of transitioning the systems integrator role to a different contractor immediately following full deployment,” officials wrote.

The program executive office has “decided that, before being able to openly compete the role of systems integrator, it is necessary to migrate to the cloud and to create documentation with respect to its processes and procedures and system internal configurations to adequately address and resolve potential vulnerabilities,” according to the notice of intent. “In the best interest of the Government, Leidos, Inc, the incumbent of the current contract, will be afforded the opportunity to continue to provide … support services.”

Services will include procuring and managing software licenses for the suite of commercial-off-the-shelf products that comprise the MHS GENESIS system of systems on-prem and in the cloud; providing all the hosting services; connecting and maintaining all software products that comprise MHS GENESIS to ensure smooth interaction and data flow; and enabling new capabilities, among others.

MHS GENESIS was built on top of Oracle Cerner’s EHR software, the same system that the Department of Veterans Affairs has chosen to modernize its sprawling health records network. With both departments using the same core technology, the systems are meant to be interoperable when service members retire and transition to veteran status. However, the VA’s staggered rollout of its EHR has faced massive challenges — which have been attributed to veterans not receiving timely and adequate care, and in some rare cases ultimately dying — and has been on hold since 2023.

Leidos declined to provide additional comment about the DOD’s notice of intent. A company spokesperson referred DefenseScoop to a previous press release from March regarding the achievement of full deployment of MHS GENESIS.