The Defense Health Agency is starting to unwind Leidos' role as the single company standing between the government and the technology vendors behind MHS Genesis, the military's electronic health record, and the companies that sell those components are next in line for direct deals. DHA has finalized a bridge contract with Leidos that carries a $317.9 million ceiling, Washington Technology reported, citing the Pentagon's Tuesday awards digest. The deal, announced this week, runs through the end of January 2028 and covers system reintegration, software licensing and hosting services.
The contract does not extend Leidos' position so much as set a schedule for shrinking it. According to Washington Technology, DHA said the bridge will gradually reduce in scope until the end date and is intended to help facilitate transitions to other service providers, while also aiding the establishment of direct relationships with MHS Genesis' solution providers.
What the $317.9M Bridge Buys
HigherGov, which reviewed the agency's notices, describes the award as a sole-source, firm-fixed-price contract. The stated period of performance runs from July 29, 2026, through Jan. 28, 2028, with work performed in Reston, Virginia. HigherGov reports that DHA awarded the bridge on Sept. 28, 2026, after announcing its intent to negotiate with Leidos as the sole source. The award date and the stated start of performance both predate this week's public announcement.
The work falls into three buckets. The first is integration: Leidos will continue connecting and maintaining the software components and interfaces that let MHS Genesis exchange data across its clinical systems. HigherGov says the agency's bridge notice describes that work as spanning system engineering, testing, cybersecurity, database administration and technical optimization.
The second is software licensing. Leidos currently manages enterprise software licenses under the existing arrangement, and DHA plans to move certain licenses and subscriptions into direct agreements with their providers.
The third is hosting, across on-premises and cloud environments. HigherGov reports that the notice says Oracle cloud hosting will remain under the bridge until a direct government relationship can be established. Oracle Health provides the main health record for MHS Genesis, according to Washington Technology.
Leidos will also document sustainment procedures, system configurations and interfaces so incoming contractors can take over without interrupting operations. HigherGov reports that, according to the agency's sole-source justification, "Leidos’ scope will decrease during the first 12 months as those transfers proceed."
Why DHA Is Retiring the Lead Systems Integrator Model
DHA first detailed its plans to shift away from the lead systems integrator model for MHS Genesis in June, Washington Technology reported. At that point the agency eyed a series of extensions to Leidos as part of the process, which it envisioned completing in the summer of 2027. The finalized bridge now stretches the contract end date to early 2028, with the scope tapering along the way.
Under the new approach, the agency plans to contract for separate capabilities and deal directly with solution providers instead of routing everything through one integrator, according to HigherGov. The bridge is meant to preserve operational continuity while DHA defines those requirements, transfers licenses and hosting responsibilities, and brings additional contractors into the MHS Genesis environment.
Washington Technology reported that DHA is also looking to enter direct contracts with Philips North America, American Well Corp., Henry Schein and Solventum Health Information Systems, in addition to Oracle Health's role as provider of the main health record.
How Big Is the System Leidos Is Handing Off?
The sole-source justification, as summarized by HigherGov, describes MHS Genesis as a platform with 12 major subsystems, more than 81 interfaces and over 1,000 endpoints, processing at least 20 million messages a day. It serves more than 191,000 users and 9.6 million beneficiaries. The system combines inpatient, outpatient and dental records and supports care across military treatment facilities worldwide and federal partners.
That scale helps explain why DHA chose a sole-source bridge rather than an abrupt cutover. HigherGov reports the agency cited Leidos' knowledge of MHS Genesis development, integration and sustainment as central to maintaining service during the handoff. HigherGov also cites a Defense Healthcare Management Systems fact sheet saying deployment is complete, which shifts the program's emphasis toward operating and improving the system rather than fielding it.
Leidos' involvement dates to July 2015, when the Leidos Partnership for Defense Health won the award to implement MHS Genesis. That competitively awarded contract had an announced value of $4.3 billion, according to a Government Accountability Office review cited by HigherGov. The bridge follows that long-running deployment and support work, but HigherGov notes it is structured around transferring responsibilities away from Leidos.
What It Means for Contractors
For Leidos, the bridge locks in up to $317.9 million of work through January 2028, but on a declining curve. The company's job is now partly to document itself out of the integrator seat, handing configurations, interface details and sustainment procedures to whoever comes next.
For the component vendors Washington Technology named, Philips North America, American Well, Henry Schein and Solventum Health Information Systems, the shift points toward direct contract relationships with DHA. HigherGov reports that Leidos currently manages enterprise software licenses, and DHA plans to move certain licenses and subscriptions into direct agreements. Oracle remains the anchor: its cloud hosting stays under the bridge until the government sets up a direct relationship, so that agreement is one of the critical-path items to watch.
For integrators and IT services firms that were never part of the Leidos Partnership for Defense Health team, the more important signal is DHA's plan to buy discrete capabilities separately. The agency is preparing to assign pieces of integration, sustainment and hosting work to other contractors, and HigherGov reports that the bridge includes technical collaboration and knowledge transfer as new vendors come aboard. Firms with health IT, interface engineering, cybersecurity or hosting experience on large clinical systems should watch for follow-on solicitations as DHA defines those requirements before the bridge runs out in January 2028.
The timeline is tight. With Leidos' scope set to shrink during the first 12 months of the bridge and the period of performance ending in January 2028, DHA would need replacement arrangements in place well before the bridge expires. Contract details for the bridge, which HigherGov lists under HT003826DE014, are expected to become available on HigherGov in approximately 90 days, after the government formally discloses the award.
