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CHICAGO — The state has denied a protest filed by a major software company over a multimillion-dollar contract granted to a rival firm for a new electronic records system at the University of Illinois medical center in Chicago.

Cerner Corp. filed a protest with the state's Chief Procurement Office for Higher Education over the $62 million, seven-year contract awarded Sept. 7 to Epic Systems Corp., claiming the bidding process was unfair and tainted by a possible conflict of interest.

The Integrated Information Infrastructure project, or "3i," will update and unify the 20-year-old electronic medical records and billing systems at UI Health.

The state's Jan. 12 ruling clears the way for the university to move ahead with the project, but the protest pushed the schedule back about three months, Mike Zenn, chief financial officer for UI Health, told UI trustees Wednesday.

"I think our organization is quite excited about this undertaking and what it means to our improving viability in the future," said Zenn, who is expected to be approved as the hospital's CEO today.

In a seven-page protest filed in late September, Cerner argued that its bid was $1.5 million lower than Epic's, at $60.5 million, and included all implementation costs, whereas Epic's didn't. It suggested the total price could rise substantially if Epic won the contract, based on the UI's own estimates for the broader project.

Cerner also said it was unfairly denied a chance to demonstrate its product; Epic was the only bidder asked to provide a demonstration.

And it said Impact Advisors — the Naperville firm previously hired by UI Health to evaluate its IT needs — could benefit if Epic received the contract because it has worked closely with that firm on the implementation of similar projects.

But in his ruling, chief procurement officer Ben Bagby appeared persuaded by the university's response and said Epic met the bidding requirements.

The UI said the contract was awarded through a Request for Proposals, rather than a strict competitive bidding process, so proposals were evaluated on technical merit first, then pricing. Cerner didn't meet the threshold to be considered for a presentation and finished behind Epic in overall scoring despite its lower price, the UI said.

Bagby said Cerner did not show any errors in that scoring.

"Cerner simply did not submit a proposal that showed its technical qualifications at the minimum level required," he wrote.

Bagby also said Epic met the UI's requirements on price, noting that the university asked only for costs associated with the vendor's software implementation, not additional aspects of the project.

And he said Cerner had provided no evidence of a conflict, "just speculation."

Reporter/Columnist

Julie Wurth is a reporter covering the University of Illinois at The News-Gazette. Her email is jwurth@news-gazette.com, and you can follow her on Twitter (@jawurth).