The Department of Veterans Affairs is looking to accelerate the rollout of its new Electronic Health Record. But it will have fewer contractors to complete that work.

The VA recently cut ties with several companies supporting EHR modernization, as part of a mass cancellation of contracts. Documents obtained by Federal News Network show the VA terminated contracts for at least six companies supporting the rollout of a new EHR from Cerner and its parent company, Oracle.

All six of the companies are service-disabled, veteran-owned small businesses. According to the documents, the contracts are labeled “terminate for convenience,” which allows the VA to unilaterally rescind them.

A source familiar with the situation at the VA told Federal News Network that cuts to EHR modernization demonstrate a “communication breakdown” between VA leaders, advisors from the Department of Government Efficiency (DOGE) and lawmakers who oversee the VA.

“Congress and DOGE are not in sync together, as far as what cuts are being made, especially when it comes to the EHRM program,” the source said, adding that some lawmakers are calling on the VA to justify its cuts to EHR support.

The VA announced plans to cut 875 of its contracts in February, but later pared that list down to 585 canceled contracts. The department said the termination of these contracts “will not negatively affect veteran care, benefits or services, and will help VA better focus on its core mission: providing the best possible care and services to veterans, their families, caregivers and survivors.”

Amid these cuts, the department hasn’t made any recent changes to the multi-billion-dollar EHR contract it holds with Cerner and Oracle.

The VA  is walking back the termination of some EHR support contracts. But the source told Federal News Network many of the affected companies already laid off staff, and that eliminating contractor employees will a “domino effect” on EHR modernization.

“For every FTE in government, there’s maybe two, three, even four support resources that are assisting. The government is just there for decision-making. The groundwork, and all the other work, is being done by this contract support team. Right now, they’re just trying to do damage control,” the source said. “It’s inevitable, I hate to say this, but when this impacts a veteran, and somebody loses their life, that’s when the fire alarm is going to ring.”

EHR rollouts have largely been on hold since April 2023, when the department began a “reset” period to address persistent problems with the system. But VA Secretary Doug Collins told lawmakers during his confirmation hearing he’s looking to accelerate that timeline.

The VA is looking to launch the new EHR at four sites in Michigan by mid-2026. The VA recently added another nine sites to its EHR deployments in 2026. The department expects to complete all deployments as soon as 2031.+

The VA signed the EHR modernization contract with Cerner in May 2018, and first launched the new system at a medical center in Spokane, Washington in October 2020.

VA’s inspector general reported last year that the new VA EHR has seen 826 “major performance incidents” — including outages, performance degradations and incomplete functionality — since that first go-live.

The IG office has linked the new EHR’s problems to instances of patient harm. In some cases, lawmakers have attributed those problems to the deaths of patients.

Even if the VA’s new 2026 deployment schedule goes smoothly, the Government Accountability Office says 94% of all its medical centers will still be using its legacy EHR system, VistA, eight years into the EHR modernization contract.

The source familiar with the situation at the VA said the department began terminating some VA EHR support contracts the day after members of the House VA Committee held a Feb. 24 hearing on the project.

“It’s a bit alarming that on Monday they had a congressional hearing, they talk about a four-year accelerated deployment plan. And on Tuesday afternoon, DOGE, along with the VA, is cutting all those contract positions for the support of VA,” the source said. “They made these cuts, knowing there’s going to be an impact on deployment and patient safety.”

During that hearing, Neil Evans, the acting program executive director of VA’s EHR Modernization Integration Office, told lawmakers that 24 employees from his office were recently fired amid governmentwide staff cuts, or took the Office of Personnel Management’s “deferred resignation” offer. VA’s EHR modernization office has about 250 total employees.

A congressional staffer raised concerns the VA is accelerating its EHR deployment timeline with fewer employees and contractors to support the project.

“It doesn’t make sense to accelerate deployment and then cut the people and the contracts that will help you with that acceleration. So to me, that’s a math problem that doesn’t add up,” the staffer said.

The congressional staffer said he’s heard directly from vendors that had VA contracts canceled — including those supporting EHR modernization. The staffer said that he VA reinstated some canceled contracts, but others remain terminated.

Even with those reinstatements, the staffer said the VA’s plans to cancel hundreds of contracts far exceed the number of contracts it would normally terminate in a year.

“To mass-cancel this many in one day or one or two days is highly, highly unusual. It’s unheard of. There’s way more things that you would normally do, if you wanted to fix a contract,” the staffer said.

‘Foundational’ EHR contract work rolled back

One contractor, who requested anonymity to speak candidly about the matter, told Federal News Network that the VA initially canceled his company’s contracts supporting EHR modernization, but eventually reinstated a small portion of them.

The contractor’s EHR contracts focus on ensuring interoperability between the VA and Defense Department, which are both moving to the same Oracle-Cerner EHR. DoD completed its EHR migration last year.

“The work that we were doing is foundational to everything that the VA wants to do, from an EHR standpoint,” the contractor said.

The company’s work also ensures interoperability with VA’s legacy EHR  and health records from private health care systems.

“When the VA sends a veteran into the community to be treated, generally, the only thing that they get back from the community is a bill. And they want to get all that treatment information back from the community, to make sure that they maintain a complete patient record of the treatment that’s been provided to the veteran inside the VA or outside,” the contractor said.

VA officials told House lawmakers last year that given delays with the Oracle-Cerner EHR rollout, the department may need to rely on its legacy EHR for another five-to-10 years — if not longer.

“As they’re implementing the new Oracle-Cerner project, VistA still has to run and be capable to be able to manage patient records, until they get to the point where they’ve implemented that software everywhere in the VA, which has been really super slow,” the contractor said.

The contractor estimates the department reinstated about 40% of his company’s EHR integration work, but he said that workload probably isn’t enough for his company to keep doing business with the VA in the long term.

“If it doesn’t grow from what it is right now, it will likely cost us more money to keep that work, than it will for us to continue to do it. It keeps the lights on for now, but it likely won’t be enough that we will survive,” he said.

Canceling or downsizing this work doesn’t give the VA much of an opportunity to rely on other contractors. According to the contractor, Cerner has voiced concerns about canceling these support contracts.

“They were a pretty loud voice saying, ‘You really need to keep these guys around, because we can’t do this work.’ There was some discussion that they would just turn that [work] over to Cerner, but Cerner said, ‘There’s no money for this in our contract, and we don’t have the resources to do it anyway.’”

Beyond EHR modernization, the VA is also canceling contracts that impact a wide range of services.

The VA contractor said the department also terminated contracts that impact its compliance with the Health Insurance Portability and Accountability Act (HIPAA). Under HIPAA, any organization that shares health care information must have an agreement in place that defines how they’re going to share information and how they’re going to protect it.

“With that contract gone, right this minute, the VA has no way to manage the HIPAA compliance of the information coming and going from the VA right now,” the contractor said.

In an email obtained by Federal News Network, career officials recently asked VA senior leaders and DOGE advisors to reconsider the termination of another contract, “due to the criticality of the services, which provides VA with the ability to test digital products with veterans before they are deployed.”

“The request was denied,” the email states.

‘We likely will not go back to government work’

Even as the VA works to reinstate some contracts, the EHR support contractor told Federal News Network he’s pivoting his company away from doing business with the federal government.

“This will probably be the push that pushes me out of the public sector and into the private sector. We likely will not go back to government work. If the work comes back — and I don’t know that it ever will —  it’s going to be eight or 10 months down the road, or a year. And most of us won’t be here to be able to go after it,” he said.

The contractor said the canceled contracts led to subject-matter experts with medical degrees and PhDs seeking work elsewhere.

“When you kill those contracts, that knowledge base of people gets released. There’s only a handful of people in the world who are capable of doing that work, and none of them work at the VA. They want to be independent, and they want to do work for the VA, but they don’t want to be a VA employee,” he said. “All these small businesses that lost their contracts, they don’t have the resources to retain the subject-matter experts that they had in the first place. And all those people will go out into the wild. The big businesses will go and scoop up all those people that had to be released by the small businesses. The small businesses will not probably be able to survive.”

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