VA seeks to extend its Oracle health record contract through 2031

The Department of Veterans Affairs is looking to extend its contract with Oracle for an additional three years to finalize its electronic health record modernization project, according to a SAM.gov notice that was published Tuesday. 

VA initially contracted with Cerner in 2018 to modernize its legacy health record system. Oracle subsequently acquired Cerner in 2022 and rebranded the new unit as Oracle Health.

The EHR modernization project is part of a broader government effort to implement a single, interoperable federal EHR across several agencies like the Defense Department, Coast Guard and National Oceanic and Atmospheric Administration.

While the other agencies have largely completed deployments of the new software, VA has faced numerous challenges since it first went live with the new EHR system at the Mann-Grandstaff VA Medical Center in Spokane, Washington, in 2020.

Issues with the software and clinician use of the system — which included adverse patient safety outcomes — ultimately led VA to renegotiate its contract with Oracle in May 2023. The revised contract includes additional accountability measures and changes the terms of the deal from an additional five-year term to five one-year terms.

Under the proposed extension, the current agreement between VA and Oracle would be modified to consist of an additional three one-year optional ordering periods.

That would potentially extend the contract through May 16, 2031. The current deal is set to expire in May 2028. Agency officials have said they are hoping to complete deployments of the new EHR software at every VA medical facility by 2031.

“Specifically, this modification will increase the overall contract ceiling and extend the Period of Performance,” the notice says. “This action is necessary to continue [electronic health record modernization] deployment activities and associated support services until all VA Medical Centers (VAMCs) and related facilities have fully transitioned to the EHR system.”

The notice adds that “the intended sole source for this firm fixed price modification is Oracle Health Government Services, Inc.”

Although accompanying documents attached to the notice say “this modification will increase the total contract ceiling value from $9,996,557,385.06,” both the proposed increase and new total contract ceiling are redacted.

The announcement comes as VA, under the leadership of Secretary Doug Collins, has prioritized completing the large-scale EHR modernization project after it was slowed for years by safety and usability challenges.

VA paused most new deployments of the EHR system in April 2023 to address the host of issues plaguing its implementation across VA’s network of 164 medical facilities. At the time the agency initiated its “reset period,” the software had only been deployed at five sites.

At the end of the Biden administration in December 2024, VA announced plans to resume rollouts of the system at four Michigan-based medical sites in mid-2026. Collins subsequently moved to scale up the number of go-lives in 2026 by adding nine medical facilities to VA’s 2026 deployment schedule.

VA has successfully deployed the new software at eight medical facilities so far this year, with plans to go live at three more sites on Aug. 22 and then two more on Oct. 24. 

Collins told lawmakers in May that, under his leadership, the EHR rollout resumption push has been “phenomenal.”