Cerner’s Huge Department of Defense Contract Win
Sean O’Reilly: So, I understand that both
of these companies, and a lot of these guys, they have big business not only with private
hospital chains, but also the federal government and the Department of Defense and stuff. Kristine Harjes: Yeah, the Department of Defense
contract, that’s a really interesting story. So, this was– O’Reilly: Not a small customer, obviously. Harjes: Yeah (laughs). On the heels of a 2012
story where the VA made headlines– O’Reilly: Oh my gosh, that! Harjes: Do you remember that?
O’Reilly: Yeah! Harjes: So, for those that aren’t familiar
with the story, basically, the Veteran’s Benefits Administration office building in North Carolina
nearly collapsed under the weight of all of its paper files. O’Reilly: They still had computers from the
1980s or something. (laughs) Harjes: Yeah! According to these reports,
one floor had totally overflowed, and you had stacks and stacks of paper going up to
the cabinet, and falling out of boxes– O’Reilly: You’re talking about physical files! Harjes: Yeah, yeah!
O’Reilly: Oh my gosh! Harjes: You have actual paper files! And there
was such a backlog, just, for people waiting to get more information, and they just weren’t
online at all. So, the floor almost collapsed. O’Reilly: Wow! Harjes: So, the Department of Defense decides,
“Okay … ” O’Reilly: “Maybe we should use computers!”
(laughs) Harjes: “Maybe we should modernize a little
bit.” So, there was a huge battle between a bunch of companies that are in this space,
and it ultimately ended up being that Cerner, a combination of Cerner and Leidos and Accenture,
they beat out a partnership between Epic and IBM, and they also beat out a couple of others
competitors to win this $11 billion contract. Which, interestingly, it was originally anticipated
to be $11 billion, but was whittled down to $9 billion, which is the effect of competition.
But, going forward, these things, they don’t get cheaper. These contracts only expand.
So, this is a huge deal. O’Reilly: Right, and once you’re in on the
federal government, you’re in. (laughs) Harjes: Yeah, this is definitely a long term