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HP Inks $784M Services Deal with VA

HP Wednesday said it has secured a ten-year IT services contract worth $784 million with the Department of Veterans Affairs (VA) to support and maintain its VistA health information systems.

The Palo Alto, Calif. systems vendor, which last week announced an expansion to its ten-year, $3 billion contract with Proctor & Gamble, will take responsibility for the hardware and software used in VistA, which ensures that patients' health care data is piped reliably across the VA's 21 networks.

The Veterans Health Administration (VHA) has 6.8 million enrolled patients and operates 170 medical centers throughout the U.S., Puerto Rico and the Philippines.

HP said in a public statement that an unprecedented growth in medical system workload has reinforced the VA's need for an "adaptive environment that facilitates the seamless flow and availability of critical data across its networks."

Ralph Lipizzi, vice president of services in HP's Public Sector, said HP views the contract, which builds on a partnership with the VA that goes back 20 years, as validation of its Adaptive Enterprise strategy for helping enterprises link their business needs with IT infrastructure to produce fast results.

"This is about allowing customers to take investments they've already had and helping them evolve to future states," Lipizzi said. "[With Adaptive Enterprise] customers don't have to do a forklift upgrade for their infrastructure."

Using custom software modules, the VistA system keeps records for over 100 clinical and administrative offices, automatically retrieving them from a database. With HP's Adaptive Enterprise infrastructure, the idea is that VistA should benefit from a more self-managing approach to corralling information.

For HP, this latest government contract win is a coup over other systems vendors such as IBM and Sun Microsystems.

All three competitors place great importance on landing such contracts, which range in the tens of millions to a few billion dollars, because most of the deals are long-term, and there are only so many of them, Lipizzi said. The vendors' services divisions rely on such hefty contracts to help bolster the companies' bottom lines.

Just last week, HP upgraded its $3 billion outsourcing deal with Proctor & Gamble to transition P&G's accounts payable operations to HP Services. The deal was another victory for HP, which said it was chosen after a competitive process that included major, albeit unnamed, business process outsourcing (BPO) and IT service providers.