GAO dismisses protest over huge TRICARE contract

Monday - 7/2/2012, 5:42pm EDT

The Government Accountability Office has turned back a protest over a multibillion dollar contract to administer part of the military's TRICARE health insurance system, the losing bidder said Monday.

Phoenix-based TriWest Healthcare Alliance petitioned GAO in March following the Defense Department's award of the $20.6 billion, six-year contract to rival UnitedHealth Military and Veterans Services. The Comptroller General's decision was not publicly released as of Monday afternoon, but TriWest officials said they had been notified of the rejection.

"Given our 16-year long commitment to providing access to care for military families across the West Region, we are extremely disappointed by the GAO's findings regarding our protest," company President and CEO David J. McIntyre, Jr. said in a statement. "We will be discussing this decision with our company's owners and the counsel who represent us, and will, in turn, be making a decision on what, if any, action we will take in response to the GAO's denial of our protest."

TriWest is the incumbent managed-care contractor serving military members, retirees and their families in 21 western states that make up one of three regions in the TRICARE system. The DoD contract is the firm's only source of revenue.

The GAO decision is the latest chapter in a topsy-turvy series of awards and protests over the military's latest round of TRICARE contracts known as T-3. DoD initially awarded all three T-3 contracts in July 2009, and in each case, losing bidders filed protests. TriWest was the initial recipient of the 2009 award, but DoD pulled back its decision after UnitedHealth filed an agency-level protest. The Pentagon then reawarded the contract to UnitedHealth in March.

Meanwhile in the South region, UnitedHealth was the initial winner of T-3, but lost the contract after a successful protest by Humana, which is now providing services to military beneficiaries in that region.

As for TRICARE North, Health Net Federal is now providing services after a successful protest and subsequent reaward of the contract. The initial winner had been Aetna.

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