We last analyzed Accenture Federal Services (Accenture) in our July 2022 blog to examine its portfolio changes, M&A activity and evaluation trends. Now, the company is making waves yet again with the acquisition of Cognosante. Keep reading to understand these new changes to the business! Is the whole greater than the sum of its parts?
What does Cognosante bring to Accenture?
Accenture Federal announced its intent to acquire Cognosante, a provider of digital transformation and cloud modernization solutions, in April 2024. The acquisition officially closed in May 2024, adding technology expertise and experience in federal health, defense, intelligence and civilian agencies. With the acquisition, Accenture is creating a new federal health portfolio, led by Cognosante President Eliot Harris. Cognosante adds more than 1,500 people to AFS’s more than 14,000-person workforce.
Figure 1 – Cognosante’s prime federal portfolio between FY2019 and FY2023, in millions of actual spend (vs. ceiling and potential values). Source: sam.gov
Cognosante’s customer portfolio is heavily centered around providing digital transformation services to federal health customers, like the U.S. Department of Veterans Affairs (VA) and Centers for Medicare and Medicaid Services (CMS). It’s important to note that VA and CMS both fall within Accenture’s top 10 federal customer list (sixth and tenth, respectively) and are currently growing accounts, demonstrating the importance of these agencies within Accenture’s portfolio and their motivation behind wanting to increase market share in these areas and gain greater customer access.
Further, Cognosante adds access to new agency-specific contract vehicles, including the VA Transformation Twenty-One Total Technology Next Generation 2 (T4NG2), Veterans Health Administration Integrated Healthcare Transformation (VHA IHT), and CMS Strategic Partners Acquisition Readiness Contract (SPARC). Accenture was on the previous iteration of T4NG and did not win a seat on T4NG2.
Cognosante Contracts of Interest
- U.S. Department of Veterans Affairs (VA), Cloud Operations and Migration Services (COMS) – In August 2023, Cognosante was awarded the second iteration of the five-year, $189 million VA COMS task order under T4NG, an effort to implement and maintain the multi-vendor VA Enterprise Cloud (VAEC). Cognosante deploys, maintains and manages management tools and supports VA as they migrate over 350 applications to the VAEC, including instances of Veteran Health Administration’s (VHA) electronic health record system (VistA). Cognosante also helps establish DevSecOps models to assist in organizational transformation. Cognosante began supporting this work in 2018.
- U.S. Department of Veterans Affairs (VA), Community Care Referrals and Authorization (CCRA) Program – In September 2022, Cognosante was awarded the third iteration of the five-year, $200 million CCRA program. Under the contract, Cognosante provides development and support services. Under the original contract, Cognosante implemented a web-based referral and authorization management system to standardize VA’s aging community care referral processes. The portal has processed over 16 million referrals, averaging over 500,000 per month.
- U.S. Department of Veterans Affairs (VA), VA Time and Attendance System (VATAS) Operations and Maintenance (O&M) – In July 2019, Cognosante was awarded a five-year, $53 million T4NG task order to provide software development and ongoing sustainment of VATAS for approximately 500,000 employee timesheets per payroll period, along with a hosting environment and web environment to support VATAS training modules.
- U.S. Department of Health and Human Services (HHS), Centers for Medicare and Medicaid Services (CMS), Enrollment Resolution & Reconciliation Data Reporting – In November 2021, Cognosante was awarded the five-year, $200 million Enrollment Resolution & Reconciliation, Form 1095-A data reporting contract. Form 1095-A provides consumers with information about their health coverage during the prior year so they can file their federal income taxes, reconcile any advance payments of the premium tax credit (APTC) received, and claim the premium tax credit (PTC).
Recent Wins from Accenture Federal Services
In addition to gaining a new federal health portfolio through Cognosante, Accenture has recently picked up wins in cybersecurity, cloud modernization and Internet of Things (IoT). These include:
- U.S. Department of the Navy, Naval Information Warfare Systems Command (NAVWAR), Program Executive Office Command, Control, Communications, Computers & Intelligence (PEO C4I), Program Manager, Warfare Cybersecurity, SHARKCAGE– In May 2024, Accenture was awarded a 10-year, $789 million contract to support global U.S. Navy maritime forces with conducting unified cybersecurity operations across the SHARKCAGE environment, the Navy’s shared set of systems built to protect a single, common, continuous security perimeter. Accenture performs design, architecture, testing, production, delivery, installation support, and integrated logistics support.
- U.S. Department of the Army, Enterprise Application Modernization and Migration (EAMM) – In May 2024, Accenture was awarded a three-year, $127 million contract to use its cloud migration and modernization approach to perform large-scale application assessments, migrations, and modernizations to the cloud.
- U.S. Department of the Air Force, Air Force Sustainment Center (AFSC), AFSC Technology Hosting Environment for NextGen Automation (ATHENA) – In September 2023, Accenture was awarded a five-year, $25 million contract to modernize operations for the AFSC including each of the three Air Logistics Complexes (ALCs) at Tinker Air Force Base, Robins Air Force Base, and Hill Air Force Base. Accenture is leveraging cloud, edge computing, and the Industrial Internet of Things (IIoT) to create a new IIoT enterprise platform for ATHENA, which is central to the Air Force’s plan to create a “digital depot”, and ultimately modernize AFSC operations.
Launching New Capabilities in Cyber, Cloud and AI
Accenture has also invested in new capabilities within the last year to bolster cyber, cloud and AI services specifically for U.S. federal agencies. In October 2023, Accenture and Google Public Sector launched a Cybersecurity Center of Excellence powered by Mandiant, Accenture Federal Services’ full spectrum cybersecurity services, to help U.S. federal agencies rapidly detect and respond to cyberattacks. Accenture is also introducing Google Cloud’s Security AI Workbench and generative AI capabilities into its integrated cybersecurity services to help federal agencies detect threats sooner and respond more quickly.
In March 2024, Accenture partnered with Microsoft to launch a Cloud Modernization and Migration Factory on Microsoft Azure Government to meet the security standards required for those operating across the national security space. The Factory will streamline the onboarding of remote federal sites to “air gapped” Azure Government Secret and Top Secret classified clouds to enable the highest level of security and protection for the nation’s most sensitive data.
In April 2024, Accenture and Google Public Sector partnered again to launch a Data & Artificial Intelligence Center of Excellence to support federal agencies with modernizing citizen services with solutions purpose-fit for federal agencies, including Google Cloud generative AI technologies. The Data & AI CoE supports sensitive and classified workloads, while meeting regulatory compliance needs through secure data management platforms and assets.
The FedSavvy Strategies Takeaway
- Accenture’s acquisition of Cognosante helps launch the company’s new federal health sector, backed by a portfolio of modernization contracts across VA and CMS.
- The acquisition notably provides access to the T4NG2 contract vehicle, giving admission to a range of IT and health IT opportunities serving the VA. This is significant because acquiring Cognosante buys their way back onto the vehicle with a business that does very well in the VA, allowing Accenture to protect its VA market share.
- The addition of health customer focused Cognosante complements the recent wins made by Accenture in the defense space, as the company has picked up cybersecurity and cloud wins across the Navy, Army and Air Force.
- These wins follow recent investments in new Centers of Excellence focused on cyber and AI, and a Cloud Modernization and Migration Factory, which all provide specialized expertise to national security customers and classified data.
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