Up to $55.5B in TRICARE Contracts Nothing to Sneeze At

In July 2009, the US Department of Defense’s TRICARE Management Activity (TMA), which provides health care coverage to 9.4 million active duty military family members, military retirees and their eligible family members, issued a number of regional management contract. Under the regional TRICARE MCS services contracts, the companies provide the US military with management of healthcare provider networks and referrals, medical management, enrollment, claims processing, customer service and access to data, among other requirements. The companies will serve as intermediaries between the U.S. military personnel and the U.S. military’s medical care system, similar to the role of a healthcare insurance provider in the private sector.

The size of the covered TRICARE population ensures that these will not be small contracts. The 2009 contracts covered up to $55.5 billion in US regional managed care support (MCS) services, from 3 companies: TriWest Healthcare Alliance Corp. in Phoenix, AZ for the West, Aetna Government Health Plans in Hartford, CT for the North, and UnitedHealth Military & Veterans Services in Minnetonka, MN for the South.

Every single “winner” subsequently lost, after GAO protests were filed. The protests have finally sorted themselves out, and final winners have been declared, but at the price of years of delay…

Peru’s Next-Generation Air Defenses

POPRAD/ GROM

In March 2012, Peru announced the winner of its competition to upgrade its air defenses. The country’s air defense needs are most sharply focused on the relatively narrow border with Chile, but the country does have borders with Ecuador, Colombia, and Brazil, and has facilities it may wish to protect. Mobile and portable systems have been a priority for Peru, and their current architecture relies on a combination of upgraded SA-3/S-125 medium range missiles, Russian/Chinese derivatives of the very short range SA-16/18 man-portable missile, and guns.

Russian and Chinese firms competed for the deal, but the winner of its $140 million competition was the TRIAD consortium of Poland’s Bumar, Israel’s RAFAEL, and Northrop Grumman from the USA.

Rapid Fire March 21, 2012: GAO JSF BFF

• In advance of a more thorough review, the GAO(Government Accountability Office) published a report listing the various ways the JSF program is late and over budget:

“Cost overruns on the first four annual procurement contracts total more than $1 billion and aircraft deliveries are on average more than one year late. Officials said the government’s share of the cost growth is $672 million; this adds about $11 million on average to the price of each of the 63 aircraft under those contracts.”

• These GAO reports will be read closely in Senate where some are not convinced the F-35B should have been taken off probation. Meanwhile Air Force Secretary Michael Donley told the Senate Armed Services Committee (SASC) there was “no more money to put against contract overruns or problems” with the JSF program.