Pentagon Rethinking Its Decision on $65.1 Billion Tricare Management Contract

The Defense Department is reconsidering its decision to award a $65.1 billion contract to run Tricare's West Region to a different company than the one that currently manages it.

Officials with Health Net Federal Services told Military.com on Monday that they had received "positive news" that the DoD is reevaluating the award of the next-generation Tricare West Region contract to TriWest Health Alliance. Health Net Federal Services currently runs the health care system for the DoD in the region.

They said they were informed Feb. 6 that the DoD has decided to reevaluate the TriWest decision, announced in December, and make a "new award decision."

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It is unclear how the delay will affect the timeline for the new contracts, which were scheduled to start in 2024, or whether the $70.8 billion contract award for the East Region to Humana Military Services, also announced in December, is affected.

DoD officials did not respond to a request for comment by publication.

Health Net Federal Services filed a protest Jan. 17 against the DoD decision to award the contract to TriWest. The Government Accountability Office was set to review the protest and announce its decision by April.

But late Thursday, the GAO posted that it had dismissed the request for a review.

In a statement provided to Military.com, Kenneth Patton, managing associate general counsel for procurement law at the GAO, said the protest was dismissed because the DoD "elected to take corrective action to address concerns in the procurement."

News of the DoD's decision was first reported by Military Times.

The Tricare health program provides private health care treatment, referrals, customer service, claims processing and other support services to roughly 9.6 million military beneficiaries, including active-duty personnel, some members of the Reserve and National Guard, military retirees and family members.

Under the next-generation contracts, known as the T-5 Managed Support Contracts, the West Region is set to expand by roughly 1.5 million beneficiaries, with those stationed or residing in Arkansas, Illinois, Louisiana, Oklahoma, Texas and Wisconsin shifting from the East to the West Region.

Officials with Health Net said Monday that the company "supports the DoD's decision to take this corrective action."

"HNFS is proud to serve military families under the current Tricare contract throughout 2023 and into 2024," the company said in a statement.

Officials with TriWest did not respond to a request for comment. TriWest managed the contract from 1996 to 2013 and currently runs the Department of Veterans Affairs' Community Care Network in the western United States and Hawaii.

-- Patricia Kime can be reached at Patricia.Kime@Military.com. Follow her on Twitter @patriciakime

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