CMS awards $1.9 billion enterprise data centers contract

The Centers for Medicare and Medicaid Services awarded a contract worth up to $1.9 billion over 10 years for the agency's new enterprise data centers to EDS Corp., IBM Corp. and Companion Data Services LLC, a subsidiary of BlueCross BlueShield of South Carolina. The enterprise data centers are the hub of the CMS IT infrastructure modernization for the next decade.

The three contractors will compete for data center task orders through the indefinite-delivery, indefinite-quantity vehicle. The contract has a three-year base period and seven one-year options.

All CMS software applications and hosting operations for Medicare, Medicaid and the state children's health insurance program, or SCHIP, will transition to the new data centers over the next five years, said CMS, an agency of the Health and Human Services Department.

Most data centers currently handle specific applications or business processes or are not under CMS' direct control. CMS plans to consolidate 22 data centers into four, separated geographically but acting as one enterprise center.

The enterprise data centers will help CMS handle its increasing amounts of health care processing. Agency officials also expect the centers will further standardize the implementation of policy changes, establish better control of IT processes and procedures and reduce CMS system security risk. CMS estimates that the enterprise data centers will reduce costs by more than $45 million annually.

The data center at CMS headquarters in Baltimore will eventually become a test and validation environment for the production operation housed at the enterprise data centers.

The three vendors already provide services for CMS:

  • EDS is CMS' largest provider of data center operations and claims processing. It maintains the Medicare Part B Standard System, which processes over 800 million outpatient claims annually. EDS also provides fraud, waste and abuse detection.


  • IBM holds contracts for CMS' Healthcare Integrated General Ledger Accounting System, Medicare Claims Data Center 1, Common Working File redesign, Medicare Statistical Information System/National Medicare Utilization Database, and Risk Adjustment System projects.


  • Companion Data Services' parent, BlueCross BlueShield of South Carolina, provides Medicare claims processing for outpatient, hospital, medical-equipment, rural health clinics, home health and hospice services in many states.


About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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