WHAT YOU NEED TO KNOW
- VA increased its Oracle EHR contract ceiling from roughly $10 billion to approximately $27 billion.
- Seven Senate Democrats demanded documents and detailed explanations from Oracle by Oct. 23.
- The House committee voted 19 to 0 to subpoena Oracle leaders after the company declined to attend a hearing.
- VA estimates deployment and sustainment could cost about $48 billion, though the estimate was not independently assessed.
- VA had not fully implemented 14 of the GAO’s 18 EHR modernization recommendations as of August.
Congressional pressure is mounting on Oracle after the Department of Veterans Affairs raised the ceiling on its electronic health record modernization contract by roughly $17 billion.
Lawmakers are demanding documents and explanations after VA officials failed to provide specific reasoning during a September hearing.
Sen. Richard Blumenthal, D-Conn., the ranking member of the Senate Veterans’ Affairs Committee, joined six other committee Democrats in sending a Sept. 23 letter to Oracle Executive Chairman Larry Ellison and CEO Mike Sicilia. Oracle was given until Oct. 23 to respond.
The demand followed VA’s decision to increase the Oracle EHR contract ceiling from roughly $10 billion to approximately $27 billion.
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That sharp jump has drawn scrutiny over what changed and where the additional money could go.
During a Sept. 2 House Veterans’ Affairs Committee hearing, lawmakers repeatedly pressed VA officials to identify what drove the additional $17 billion. The answers did little to clear the fog surrounding the expanded contract.
VA Deputy Secretary Paul Lawrence said the department estimated the cost of completing deployment through 2031 and asked Oracle for a proposal. VA’s acquisition team then negotiated the contract, according to Lawrence.
Lawrence said he did not participate in those negotiations and could not explain the specific basis for Oracle’s proposal.
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He also could not tell lawmakers how much VA negotiated from Oracle’s request or identify the specific factors behind the additional costs.
When lawmakers asked where the $17 billion would go, Lawrence said the entire amount was not necessarily going to Oracle. The statement left Congress without a detailed accounting of the increase it was examining.
Oracle initially accepted an invitation to appear at the Sept. 2 hearing but later declined to attend. The House committee subsequently voted 19 to 0 to subpoena Ellison and Sicilia to testify.
The Senate Democrats said they support the House subpoenas and expect Oracle to comply.
They also asked Senate Veterans’ Affairs Committee Chairman Jerry Moran, R-Kan., to hold a full committee hearing on the modernization program’s costs, delays and patient safety concerns.
Lawmakers are asking Oracle to provide documents and analyses supporting the increased ceiling. Their request includes a complete itemization of the “unanticipated complexities” cited as the basis for the additional costs.
The senators also want Oracle to explain what has changed since 2022. At that time, Sicilia told the Senate Veterans’ Affairs Committee that Oracle was committed to delivering the VA system without exceeding the contracted $10 billion cost and would correct problems at Oracle’s expense.
Oracle is also being asked to describe its role in helping VA address 14 outstanding Government Accountability Office recommendations that remain not fully implemented. Those recommendations concern the department’s troubled EHR modernization effort.
The lawmakers requested documentation involving cybersecurity performance measures.
They also want to know what Oracle has implemented or plans to implement after the GAO found that the program lacked adequate cyber performance measures.
The $27 billion contract ceiling is separate from VA’s broader estimate for the program’s total lifecycle cost. Lawrence told House lawmakers that VA expects deployment through 2031 to cost about $37 billion, with roughly another $11 billion needed for sustainment.
That calculation puts the estimated total at about $48 billion. Under questioning, Lawrence acknowledged that the figure was not based on an independent assessment.
The GAO told lawmakers that VA had not supplied an updated cost estimate or enough detailed documentation for the watchdog to determine whether the department’s plans followed best practices. As of August, VA had fully implemented four of the GAO’s 18 EHR modernization recommendations.
Fourteen recommendations remained not fully implemented, including 12 designated as priority recommendations.
With billions added to the contract ceiling and major recommendations still outstanding, Congress is now looking directly to Oracle for the answers VA officials could not provide.
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