Medicare awards up to $15 billion for data centers

Oleksiy Mark/

CMS move is part of a governmentwide push to reform IT spending.

The Centers for Medicare and Medicaid Services has awarded a handful of contracts to manage its data center operations that could add up to $15 billion within 10 years.

The contacts with Accenture Federal Services, HP Enterprise Services, IBM, Lockheed Martin and other vendors are part of what CMS calls a virtual data center operation. It’s aimed at keeping the agency’s data operations dispersed so it’s not overly reliant on a single vendor while still operating in a unified way.

The indefinite-delivery-indefinite-quantity contracts are for one year with nine option years. The ceiling for the entire contract with all option years is $15 billion. CMS first began the solicitation process in August 2011.

The virtual data center initiative is part of a governmentwide push to transition to more efficient information technology hosting, which includes consolidating traditional data centers and moving more government operations into public and private computer clouds.

Officials expect to save $5 billion through consolidating and updating federal data centers and to ultimately save $5 billion annually by moving government computing to the cloud.

(Image via Oleksiy Mark/