Rival Appeals After Court Dismisses Lawsuit Challenging Award Of VA Contract To Cerner

Oct 24, 2017

Kansas City-based Cerner Corp. was awarded a contract by the U.S. Department of Veteran Affairs that was challenged by a rival.
Credit Elana Gordon / KCUR 89.3

A company that challenged the no-bid contract awarded to Cerner Corp. to update the electronic health records system of the U.S. Department of Veteran Affairs is appealing the dismissal of its lawsuit.

CliniComp International Inc. of San Diego on Monday filed a notice of appeal after the U.S. Court of Federal Claims in Washington, D.C., last week threw out its lawsuit on jurisdictional grounds.

Because many of the documents in the case are sealed, including the court’s orders, the precise reasons for the case’s dismissal were not made public.

The VA awarded the contract to Kansas City-based Cerner in June without competitive bidding under a “public interest” exception to federal contracting regulations. The value of the contract is unknown, but it’s thought to be in the hundreds of millions of dollars.

VA Secretary Dr. David Shulkin explained the sole source award by saying the Defense Department and VA, which use different electronic health records systems, needed to use the same system.

The VA’s current system is decades old. The contract with Cerner calls for it to replace that system with the same platform it’s putting in place at the Department of Defense after it won a $4 billion-plus contract with the department in 2015.

CliniComp filed its lawsuit in August, alleging the VA abused its discretion and failed to conduct adequate market research before awarding the contract to Cerner. 

Cerner is the largest private employer in the Kansas City area, with around 13,000 full-time, local employees, according to the Kansas City Business Journal. It has about 25,000 employees worldwide.

The company's headquarters are in North Kansas City, Missouri. It's currently building a $4.5 billion complex on the site of the old Bannister Mall in Kansas City and it also has a large office campus in western Wyandotte County, Kansas. 

Dan Margolies is a senior reporter and editor for KCUR. You can reach him on Twitter @DanMargolies.