Industry Giants Ready Bids For Massive Intranet Deal

By Nick Wakeman, Staff Writer



Mega teams led by Computer Sciences Corp., Electronic Data Systems Corp., General Dynamics Corp. and IBM Corp., are putting the final touches on their bids for the colossal Navy-Marine Corps Intranet contract.

Proposals are due Jan. 31 for the effort that is estimated to be worth $10 billion over eight years. A contract is expected to be awarded in the May-June time frame.

The winning contractor must build and maintain a network that will connect desktop computers at Navy and Marine Corps installations around the continental United States and Hawaii. Its team will be responsible for secure voice, video and data networking, desktop computers, hardware, software, services and training for more than 400,000 seats or computer users.

Navy officials have called the contract the best approach for bringing in new technology quickly and keeping pace with technology.

"We are no longer going to build and own infrastructure. Rather, we are going to specify and buy a service," Joseph Cipriano, the Navy's program executive officer for information technology, told Washington Technology late last year.

"This is similar to seat management, but with this the Navy is taking a real enterprisewide approach," said Rick Rosenburg, senior vice president and chief operating officer for the federal government division of Plano, Texas-based EDS.

"Besides being very large, this is a significant change in the way the government buys services and we want to be involved in that," said Gregg Goble, vice president of the Navy-Marine Corps Intranet program for IBM.

With that in mind, the four bidders are amassing teams with expertise in areas such as telecommunications, networking, security and desktop services for what will be the government's largest seat management contract.

On the EDS team are MCI WorldCom Inc. of Clinton, Miss., Raytheon Co. of Lexington, Mass., and several small businesses, Rosenburg said.

General Dynamics of Falls Church, Va., will field a team with Compuware Corp. of Farmington Hills, Mich., Harris Corp. of Melbourne, Fla., PricewaterhouseCoopers of New York, Sprint Corp. of Westwood, Kan., Unisys Corp. of Blue Bell, Pa., and Wang Government Services Inc. of McLean, Va. Several smaller players are also on the team, said Kendell Pease, vice president of corporate communications for General Dynamics.

Armonk, N.Y.-based IBM is enlisting the help of AT&T Corp. of Basking Ridge, N.J., BAE Systems-North America of Arlington, Va., BellSouth Corp. of Atlanta, Litton-PRC Inc. of McLean, Va., Lockheed Martin Corp. of Bethesda, Md., Lucent Technologies Inc. of Murray Hill, N.J., and SBA Communications Corp. of Boca Raton, Fla.

Computer Sciences Corp. of El Segundo, Calif., is still in the process of forming its team and declines to comment on the contract, said Matt Guilfoyle, a company spokesman.

For General Dynamics, the Navy-Marine Corps Intranet contract is one of the first opportunities for the Information Systems and Technology division to flex its muscles.

"We have sculpted this unit to be able to bid on projects like this," Pease said.

The unit, which is expected to hit about $2.5 billion in 2000 revenue, up from nearly $2 billion in 1999, was formed through a series of acquisitions over the past two years. The largest and most recent acquisition was a $1 billion deal in September 1999 to pick up three units of GTE Corp. of Irving, Texas.

General Dynamics' approach to the contract is to leverage its customer knowledge with the commercial expertise of its teammates, especially Sprint and Wang, Pease said.

With the Navy and Marine Corps outsourcing the management and maintenance of the networks to a single contractor, "what they are really trying to do is buy a service," EDS' Rosenburg said.

"We think this is the right approach, because it will allow them and [the winning contractor] to take advantage of economies of scale," he said.

EDS already provides similar types of desktop computer services to 1.8 million computer users, including the government of Australia, the United Kingdom's Inland Revenue Service (its version of the Internal Revenue Service) and several commercial customers, Rosenburg said.

IBM went through a restructuring of its own computer networks several years ago that is similar to what the Navy and Marine Corps are considering, Goble said.

"We had several silos [of networks that could not communicate], and we consolidated data centers and organizations to make a more collaborative environment. We think we can apply some of those lessons learned to this project," he said.

While industry officials with companies preparing to bid on the project sang the praises of the Navy and Marine Corps' approach to the project, others in industry have called it overly ambitious.

Rather than bring the entire Navy and Marine Corps under a single networking and desktop services contract at one time, the branches should have started with one or two installations, said Chip Mather, president of Acquisitions Solutions Inc. of Chantilly, Va., a consulting service that helps the government implement new procurement policies.

"It is better to start small and get a proof of concept, and then roll it out to other installations," Mather said in an interview. Trying to do something as complicated as seat management across an entire large organization can be risky, Mather said. Value: $10 billion

Proposals Due: Jan. 31

Award expected: May-June

Services: Winning contractor must provide secure voice, video and data networking, desktop computers, hardware, software, services and training for more than 400,000 seats or computer users.

Timetable: Basic services should be up and running for all users by the end of 2001; full service should be in place by the end of 2002.Electronic Data Systems Corp.

   MCI WorldCom

   Raytheon Co.

General Dynamics Corp.

   Compuware Corp.

   Harris Corp.

   PricewaterhouseCoopers

   Sprint Corp.

   Unisys Corp

   Wang Government Services Inc.

IBM Corp.

   AT&T Corp.

   BellSouth Corp.

   BAE Systems-North America

   Litton-PRC Inc.

   Lockheed Martin Corp.

   Lucent Technologies Inc.

   SBA Communications Corp.

Computer Sciences Corp.

   Teammates to be announced