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Cerner Wins Multibillion-Dollar Contract From Pentagon

Elana Gordon
Cerner's headquarters in North Kansas City.

Cerner Corp. on Wednesday landed what’s thought to be one of the biggest health information technology contracts ever awarded.

The Washington Post reported that the 10-year contract for the U.S. Defense Department’s Military Health System was worth $4.3 billion. Bloomberg Business said the contract was valued at as much as $9 billion through 2033.

Cerner beat out archrival Epic Systems for the contract, which calls for Cerner and its partners to upgrade health records for 9.5 million people at more than 50 hospitals and hundreds of clinics in the United States and abroad.

A spokeswoman for Cerner, Angela Vogen, said in an email that it would be “inappropriate” for the company to discuss specifics of the contract. She said that the Cerner team “stands ready to lean forward with the DoD to implement a world class electronic health records system.”

Cerner teamed up with Leidos, Accenture Federal Services and Intermountain Healthcare on the bid. The Cerner team was one of six teams that originally submitted proposals. Earlier this year, the Defense Department narrowed the list down to three.

Cerner has about 16,000 employees worldwide and is the fastest growing company in Kansas City. The company posted sales of $3.4 billion last year.

An article on the Department of Defense’s website said Cerner and its partners will begin fielding the system at eight Pacific Northwest locations late next year. Ultimately, it said, it will be fielded at more than 1,000 locations worldwide.

The cost over 18 years was originally pegged at $11 billion, but Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall said in the article that new estimates put it at below $9 billion.

Dan Margolies, editor of the Heartland Health Monitor team, is based at KCUR.

Dan Margolies has been a reporter for the Kansas City Business Journal, The Kansas City Star, and KCUR Public Radio. He retired as a reporter in December 2022 after a 37-year journalism career.
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