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TRICARE Contract Settlement Favors DoD, Patients

American Forces Press Service

WASHINGTON, Jan. 6, 1999 – Settlement of a disputed contract for the delivery of military health care in the northeastern United States favors DoD and military health care beneficiaries, TRICARE officials announced Dec. 28.

The TRICARE contractor for DoD Health Services Region 1 (TRICARE Northeast) agreed to settle a losing bidder's protest of the contract award.

Officials at the TRICARE Management Activity here said the agreement avoids possible increases in contract prices resulting from inflation, which could have raised patient costs as well. It also minimizes the disruption to military families and their TRICARE health care providers by avoiding a potential change of contractors before the current contract expires in 2003.

Sierra Military Health Services Inc. won the contract in September 1997 to provide health care to TRICARE-eligible persons in all or parts of 13 northeastern states and the Washington area. A competing bidder, Foundation Health Federal Services Inc., protested the award of the five- year, $1.2 billion contract to Sierra.

Foundation claimed DoD didn't adequately disclose the weights given to the factors used to evaluate the competing bids. The General Accounting Office upheld Foundation's protest in February 1998. GAO recommended DoD reopen negotiations, advise bidders of the relative importance of the significant evaluation factors and request new "best- and-final" offers from bidders.

While GAO considered a DoD request to rethink its protest decision, Sierra and Foundation began discussions to resolve the protest. The discussions led to the settlement agreement, under which Foundation will drop its challenge.

Visit the TRICARE Northeast Web site at http://tricare.osd.mil/regionalinfo/list.cfm?RegionID=1, or call (888) 999-5195 for general information. For more information about TRICARE, visit the Military Health System Web site at http://www.tricare.osd.mil. (From a TRICARE Management Activity news release)

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