$10B VA-Oracle EHRM contract will soon run out of funds and time, documents show
The Department of Veterans Affairs has proposed expanding its contract with Oracle Cerner for electronic health modernization because it will soon run out of money, a contract update posted Tuesday shows.
VA would be increasing the overall contract ceiling, already at a staggering near $10 billion, and extending the potential period of performance by three years due to the “unanticipated complexity of the effort,” contracting documents said.
“Due to unanticipated complexities in deploying this system, extensive site-specific customizations, as well as the other factors … VA has reached the current contract ceiling sooner than originally planned,” the documents said. “VA anticipates using the remaining ceiling by the first quarter of fiscal year 2027 and thus requires an increase.”
While the new ceiling value is redacted in the documents, they did say the estimated value is “based on historical work executed to date, the standard deployment model, and all other requirements necessary to deploy and sustain the EHR under the approved accelerated deployment schedule, which is required to meet VA requirements and Veteran’s needs.”
The VA said “technical glitches impacting use of the system,” training issues, clinical gaps or functionality errors “with potential impact on patient safety,” and COVID-19 restrictions on on-site deployment delayed the modernization, and it cannot be fully accomplished in the remaining time.
“Deployments have been delayed until rework was completed in order to meet all of VA’s requirements, maximize user adoption, and reduce medical center concerns,” the documents said. “Apart from the 36 sites scheduled to go live from August 2026 through January 2028, the remaining 120 sites cannot be completed within the existing IDIQ PoP and ceiling.”
While the EHRM effort started in 2017 and the contract was renegotiated in 2023, this contract currently provides for ordering only through May 2028. The documents said the proposed contract modification would add three one-year firm-fixed-price optional ordering periods, allowing for the contract to extend to May 16, 2031.
“As of July 2026, VA successfully deployed to 14 sites and developed a standard deployment model that greatly increases the likelihood of successful outcomes in future deployments,” it said.
The VA did try to look for products other than Oracle last month, it said, which included Epic, Veradigm, Athenahealth and Meditech, but concluded “no other source than Oracle can meet all of VA’s requirements for an EHR system and associated support.”
The agency said delaying completion of this project by starting over with a provider other than Oracle would negatively impact VA’s ability to timely provide veteran care.
The modification would not make any changes to the nature of the work, the documents said. The contract includes the enterprise EHR system, training, testing, deployment, sustainment and other requirements.
“My biggest problem right now is I have executive directors calling me up and saying, ‘can we move up on the list?’” VA Secretary Doug Collins told the House Appropriations Subcommittee on Military Construction, Veterans Affairs and Related Agencies in a May budget hearing. “This is key for them, not only to do their work internally, but also their community care aspects and talking to other VA hospitals.”
While not included in the continuing resolution passed by the Senate over the weekend, the House-passed fiscal 2027 Military Construction and Veterans Affairs appropriations bill would give $3.4 million for EHRM.
“Building upon the Trump Administration’s successful deployment of VA’s new electronic health record system at several VA facilities, VA and Oracle Health agreed earlier this month to renew their collaboration,” VA spokesperson Quinn Slaven said in an emailed statement to FedScoop.
Oracle did not respond to a request for comment by the time of publication.
This story was updated Aug. 12, 2026, with comments from a VA spokesperson.
