DOD Health Affairs awards Lot IV of D/SIDDOMS II

The Defense Department Health Affairs office late last week awarded contracts to Planned Systems International Inc. (PSI) and Puma Systems Inc. under a potential $500 million program that seeks to replace the agency's home-grown computer systems with off-the-shelf products.

The awards fall under Health Affairs' $4 billion Defense Medical Information System/Systems Integration, Design, Development, Operations and Maintenance Services (D/SIDDOMS) II program. The awards comprise Lot IV of D/SIDDOMS II, which has four lots in all.

Last year, DOD awarded Lot III contracts, valued at $2.5 billion, to supply systems and services to replace or enhance aging DOD medical computer systems, such as DOD medical logistics systems. DOD also awarded Lot II last year, which has an estimated value of $400 million, for technical analysis and support, including the integration of systems and subsystems as well as software integration engineering.

Under the Lot IV contracts, PSI and Puma will search for commercial off-the-shelf products that can fulfill DOD health care agencies' requirements for updating, replacing or creating computer systems. Health Affairs uses computer systems for a host of functions, including tracking medical supplies and managing military patients' records.

Eric Christoph, vice president for Puma, said his company will focus heavily on finding products offered by small businesses. "There are a lot of really good technologies coming from small companies," he said. But he added that those companies often put together "horrible" bids when chasing federal work.

Puma bid about $194 million on the five-year project, and PSI bid $181 million, according to sources familiar with D/SIDDOMS II. Randy Koran, director of Health Affairs' acquisition management office in the Washington, D.C., area, said the agency has allowed itself to spend up to $500 million on Lot IV of D/SIDDOMS II.

PSI and Puma are small businesses. DOD had set aside Lot IV awards for small businesses.