The U.S. Department of Defense is taking a second look at the North Region Managed Care Support contract award.

The U.S. Government Accountability Office has sustained a protest filed by an unsuccessful bidder in connection with a Defense Department decision to award the contract to a unit of Aetna Inc., Hartford, (NYSE:AET).

The contract includes an initial 10-month “base period” and 5 1-year “option periods.”

The new contract period is set to start in April 2010.

A unit of Health Net Inc., Woodland Hills, Calif., is the incumbent carrier in the North region, which includes “the District of Columbia and the states of Connecticut, Delaware, Illinois, Indiana, Iowa (Rock Island Arsenal area only); Kentucky (except the Fort Campbell area); Maine, Maryland, Massachusetts, Michigan, Missouri (St. Louis area only); New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, and Wisconsin.”

In the North region, the value of the base period and a 1-year option period would be about $2.8 billion, and the potential total value of the contract would be $17 billion, officials say.

The Defense Department is reviewing the GAO’s recommendations and deciding how to proceed, Aetna says.

“Aetna Government Health Plans is extremely proud of the strong proposal we submitted to the Department of Defense,” says Susan Peters, president of Aetna’s Aetna Government Health Plans unit. “We will continue to cooperate with the Department of Defense as it considers the GAO’s recommendations. We stand ready to serve our nation’s military personnel and their families in the North region, and help them access the best possible health care.”