Members of Congress are piqued with the Defense Department now that a watchdog agency has concluded the Pentagon erred in awarding two regional Tricare service contracts worth $4.3 billion.
In a recent hearing before the House Appropriations national security subcommittee, Rep. John Murtha (D-Pa.), the panel's senior Democrat, criticized the Pentagon's Tricare bidding process.
"This is very disruptive when these contracts are let out and then overturned," Murtha said. "I hope we would work on how we do contracts."
The General Accounting Office, responding to protests by losing contractors, agreed the two Tricare contracts covering 19 states were unfair to other bidders. While the GAO doesn't have power to overturn federal department contracts, agencies usually abide by its decisions.
The Pentagon said it has asked for the GAO to reconsider its decision and has not ordered the contractors to stop work.
One of the contracts, worth $3.1 billion over five years, went to Anthem Alliance for Health, Indianapolis. Anthem would cover 1 million military retirees, their dependents and the dependents of active-duty personnel in 10 mid-Atlantic and Midwestern states. That contract is scheduled to start May 1.
The other, worth $1.2 billion over five years for covering 615,000 military beneficiaries in the Northeast, was awarded to Sierra Military Health Services of Baltimore, a subsidiary of Las Vegas-based Sierra Health Services. That contract begins June 1.
A Pentagon official said the GAO's report claims the Defense Department failed to tell bidders how important it would consider different components of the bidders' proposals as it evaluated the entire proposal.
The official, who spoke on condition of anonymity, said the Defense Department's evaluation procedures in awarding the contract to Anthem were identical to the previous five awards. But the GAO had never questioned those procedures in the protests of the earlier contract awards.
Responding to Murtha, another official, Edward Martin, the Defense Department's acting assistant secretary for health affairs, said the GAO review was done by a hearing officer who hadn't been part of any of the earlier contract reviews.