The National Contract Management Association (NCMA) awarded a Space and Naval Warfare System Command (SPAWAR) contracting team the Innovation in Contracting Award for implementing a performance-based licensing structure.
Matt Hudson and his team are being recognized for their work on the Defense Healthcare Management System Modernization (DHMSM) program, which provides for the acquisition of commercial electronic health record (EHR) inpatient and outpatient solutions. The contract's management solution encompasses an innovative software licensing approach that drastically simplifies the administrative burden on the government.
Mr. Hudson has over 10 years of experience in IT acquisition, both in government and the private sector, and joined SPAWAR in 2010. His time at SPAWAR has seen him work on high visibility acquisitions such as SPAWAR Systems Center Atlantic’s Pillars and 8(a) Incubator. He responded in writing to questions in late April.
Q: Can you talk about the process that you used and the organizations that you worked with to determine the best contract type for the electronic health record?
A: My philosophy has always been that to get the best procurement outcomes you need to arm yourself with as much information as you possibly can. I believe this applies whether you’re working in government, the private sector, or just shopping for yourself. In many ways, I think it was a bonus that I had no healthcare sector experience coming into this project because I knew right from the start that I would have to put in a lot of hard work asking questions to familiarize myself with the community.
I think this groundwork played a big role in us being successful. We took a hard look very early on at how we could learn from some of the more visible failures in government IT acquisitions, the pain points the legacy end-users were experiencing, trends in the health IT industry, and lessons learned from other healthcare systems who recently implemented new EHRs. We wanted to develop a strategy that was different from the ones that get recycled over and over and produced the same sub-optimal results.
The other very important part of our process was a very robust and constant feedback loop. We publicly posted more than three draft requests for proposals, we held multiple industry days, posted numerous requests for information, and held several “red team/blue team” events throughout the development. These engagements included senior government leadership, both inside and out of the Department of Defense, senior executives from the private sector, clinical end-users and technical subject matter experts. It resulted in thousands of questions and comments that allowed us to refine our thinking and develop our contracting strategy.
Q: Can you discuss the composition of your team; did you have any medical professionals on your team?
A: The DHMSM Program Office is organized fairly typically for a large program office and includes functional departments for each critical area (e.g., deployment, contracts, engineering, testing, etc.). The program appointed a chief medical information officer (MIO), a physician, and his department includes medical and dental professionals from a broad swath of clinical specialties.
Our program executive officer and program manager recognized the importance of closely aligning the contracting officer, the chief medical information officer and the technical experts and made these roles central to every engagement within the program office and with external communities. The acquisition, requirements and technical triad within the program office was seamless, spoke with one voice and listened with one set of ears. This played a major role in our success by enabling the program to act in a very agile way to overcome emerging hurdles. We wouldn’t have been able to hit our very aggressive schedule without this alignment.
Q: Can you explain the contract terms and its advantages?
A: The contract is set up to cover the entire lifecycle of services and solutions necessary to modernize DoD’s EHR systems from the design of a replacement system, the deployment of the system and the initial sustainment of the system. The contract itself is almost a “system of systems” in that it has contract terms that are specific to each portion of the lifecycle. As a result, it contains virtually every contract type and addresses most of the contracting issues you’d typically encounter throughout the lifecycle of a major program.
As I spoke about before, we wanted to learn from the mistakes and best practices of organizations that have done this work. We wanted to make sure that the contract had redundant ways for us to adapt as we go. We included provisions that allowed us to easily transition to other service providers, to plug in other modular software components, etc.
Our enterprise licensing terms require our software provider to deliver any new commercial products as part of our original licensing arrangement. Among other things, this will help us maintain a “quasi-competitive” environment, which we hope will help us control lifecycle costs. These terms also help minimize “DoD uniqueness,” which allows us to better take advantage of future changes in the marketplace and be more agile in how quickly we adopt new technologies.
Q: Can you describe the functions the EHR software performs?
The EHR system is expected to unify and increase accessibility of integrated, evidenced-based healthcare delivery and decision-making. The EHR system will support the availability of longitudinal medical records for 9.6 million DoD beneficiaries and approximately 153,000 Military Health System personnel globally. The EHR system will enable the application of standardized workflows, integrated healthcare delivery and data standards for improved and secure electronic exchange of medical and patient data between the DoD and its external partners, including the Department of Veterans Affairs (VA), and other federal and private sector healthcare providers.
Q: Your team was recognized with an Innovation in Contracting Award for its work. Has this type of contract ever been used before in the Defense Department? Can it be used in other software acquisition programs?
A: The team was recognized specifically for our use of performance-based enterprise licensing approaches. DoD has tried several times to implement enterprise strategies for software licenses that focused on providing a single vehicle or source for a particular piece of software. We’ve built upon that and taken it a step farther by requiring our contractor to deliver us a completed enterprise solution, shifting the responsibility of procuring, managing, tracking and maintaining the individual pieces of software to the contractor.
Our outcome is a working EHR solution, and as long as that is delivered, the rest of the licensing process will be transparent to the government. I believe other acquisition programs could utilize a similar strategy in the right circumstances, particularly if they can define a singular overarching outcome as we did.
Q: What is your team’s next project? Will your team continue to work on the electronic health record contract?
A: I am still assigned to the DHMSM Program Office and am working on the EHR contract as the program works hard to achieve its initial operating capability. I am currently the only SPAWAR asset assigned to the contracts team, and I am currently working with my Defense Health Agency counterparts to transition the contracting functions into their organization. The team we are building will continue on beyond the transition.
Q: Do you have any lessons learned or advice to share with other contracting teams?
A: I think contracting is like most things in life: The key to success is the hard work you do in preparation. The time and energy spent doing the groundwork to understand as much as you possibly can going into an acquisition has a huge pay-off as you move through the process.
I’d also say you have to be willing to try new things and to really think critically and tailor your approach to each acquisition. This means you have to be willing to have some failures. This is where the preparation comes in; it allows you to be agile in recovering when things don’t work.
Finally, I would say you have to make sure that you don’t let the arcane processes and rules of our profession drive your strategies. Make sure that good outcomes are the focal point of your strategy and layer in the processes and rules as appropriate. It’s easy and comfortable to just focus on filling out forms and lose sight of what you’re actually trying to accomplish.
Q: Is there anything else that you would like to discuss?
A: I just wanted to say this has been an incredibly collaborative process inside and outside the DoD, but I wanted to specifically thank the folks within SPAWAR Contracts who have contributed their time and effort above and beyond their own jobs to give us advice, provide us an independent set of eyes, as well as my predecessors in the DHMSM procurement contracting office role, who got us started on a successful path and got me involved in the program.
Kara McDermott, of the Space and Naval Warfare Systems Command Public Affairs office, facilitated the interview with Matt Hudson.