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TRICARE Disputes to Continue as TriWest to Protest UnitedHealth’s Win

by: Matthew Potter
March 27, 2012

Category: Business Line, Companies, Contract Awards, Department of Defense, Events, GAO, logistics, medicine, Protest, Services, UnitedHealth | RSS 2.0

Earlier this month the U.S. Department of Defense decided to award the TRICARE West management contract to UnitedHealth Group (UNH). This was the culmination of almost two years of effort to award this very large contract. Previous attempts to award the nearly $20 billion contract were protested by the loser as TriWest Health Alliance the incumbent and UnitedHealth attempted to win the contract.

TRICARE is the main medical insurance program for the U.S. military. It covers active duty members, their dependents, retirees and some Reservists and National Guard members. Under TRICARE personnel utilize civil providers as well as military medical facilities and the companies with the contracts manage the execution of their benefits. The U.S. is divided into regions and different contracts are awarded to various contractors to operate them. TriWest had been formed to do the West contract and has had it until the latest round of contracts in 2009.

Now only ten days after the announcement of the award to UnitedHealth after two rounds of protest TriWest is saying it will file a protest against this latest decision. In their press release the company states that this is due to concerns that the “contract is the result of a flawed and unfair process.” Specifically they believe that due to their lower price the contest should be re-evaluated.

The normal process for the protest is that it will be reviewed by the Service awarding, then may go to the Government Accountability Organization (GAO) and ultimately to the Federal Courts if a party is not satisfied. The result of the review could be denying the protest allowing UnitedHealth to keep the contract, a direction to redo the source selection, a new contest or in rare cases the award is overturned and given to the protester. Protests normally are allowed 100 days. During the protest the new contract cannot be executed so UnitedHealth’s effort will be placed on hold.

The contract is the majority of TriWest’s business. The near term health of the company requires them to keep it. They have little to lose by protesting this award.

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