The Department of Defense awarded Philips (NYSE:PHG) Healthcare Informatics an $88.5 million-ceiling value, firm-fixed-price contract for the supply of a digital imaging network-picture archive system. In so doing, it made progress on a project that's been in the works for 16 years.

In 1997, the DoD first issued requirements for what was then designated the "Digital Imaging Network-Picture Archiving and Communications System." At the time, DIN-PACS was described as "an open systems network of digital devices designed for the effective acquisition, transmission, display and management of diagnostic imaging studies." In essence, it would digitize X-Ray and MRI scans and put them in a form that could be easily transmitted from doctor-to-doctor electronically. DIN-PACS would be made interoperable with not just civilian hospitals in the U.S., but designed based on two truly international standards, Digital Imaging and Communications in Medicine (DICOM) and Health Level 7 (HL7).

Philips' work on the project is expected to be initially completed by June 2, 2015, however, this contract contains the possibility of a two-year option period, and an additional one-year option period, being tacked on after that date.