Politics & Government

Aetna's military contract bid had improprieties, says GAO

Federal investigators said they have found improprieties in the bidding process that helped insurance giant Aetna land a $16 billion military health contract at the expense of Rancho Cordova-based Health Net Federal Services.

In particular, the Government Accountability Office said Tuesday, Aetna hired the former chief of staff of the Pentagon's TRICARE management agency, who might have furnished the company with proprietary information that helped it win the contract.

The GAO's findings do not automatically set aside the decision to award the TRICARE contract to Aetna. But the GAO recommended that the Pentagon "conduct a new evaluation of the offerers' proposals," including "a thorough review regarding the scope of the former (TRICARE) employee's access to nonpublic proprietary information."

Molly Tuttle, a spokeswoman for Health Net Federal Services, said, "These findings seemed very strong."

The GAO announcement was undoubtedly a welcome development for the 900 Health Net employees in Rancho Cordova whose jobs were in jeopardy because of the loss of the TRICARE contract.

Aetna officials could not be reached for comment.

Earlier this year, the Pentagon announced it was dropping Health Net in favor of Aetna to handle one of three regional health contracts totaling $55.5 billion and covering 9.4 million military personnel, retirees and their families.

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