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The Pentagon is spending $4.3 billion to modernize its health records

July 30, 2015, 6:05 PM UTC
Shelves with medical records and health files
It's time to go digital.
Reza Estakhrian—Getty Images

The Pentagon is ready to modernize its health-records system–and it’s a massive job. The highly-coveted $4.3 billion project was awarded Wednesday to a team led by Leidos Holdings (LDOS) and Cerner (CERN).

The group will transfer records of 9.6 million military workers from a patchwork of places that still includes paper files into one digital warehouse, reports the Wall Street Journal.

The project is the biggest federal IT initiative since the launch, and it’s attracted high-level concerns given the botched rollout of the website in 2013. Many are also disappointed that the Pentagon is using a corporation’s proprietary software rather than a more-widely accessible and upgradeable Internet-based system.

The Pentagon opted for this approach because officials said working with a commercial health IT company is more affordable. There were six bids submitted for the project and the competition allowed the Defense Department to negotiate the lifetime cost of the project to under $9 billion from a starting estimate of $11 billion, the Pentagon’s chief buyer told the Journal.

Read more about the contract at the Wall Street Journal.