Navy puts $5B NGEN focus on users, savings

The Navy’s top sailor in charge of the $5.4 billion Next Generation Enterprise Network project has one overriding goal in moving the huge contract forward: Don’t screw it up for users.

“I don’t want the customer impacted by anything we might do,” said Capt. Shawn Hendricks, program manager for the Naval Enterprise Networks program office.

In other words, when NGEN takes over for the Navy-Marine Corps Intranet, its 800,000 users, including the secretary of the Navy, should see no difference in service quality or capabilities, he said.

Proposals are due July 18, and an award is expected in February 2013.

The Navy spends about $1 billion a year on NMCI, which technically expired in 2010 but continues through a continuity of service contract. The NCMI contract is held by Hewlett-Packard Co.

HP is leading one team pursing NGEN and Harris Corp. and Computer Sciences Corp. are leading a second. So far they are the only announced bidders.

In a media briefing, Hendricks fielded a variety of questions about the procurement including the number of contracts to be awarded, the prospect of a protest, the role of cloud computing, and the role of small business.

In addition to making sure the transition from NMCI to NGEN is seamless, Hendricks said that cost reduction is a paramount goal, but he didn’t have an estimate of how much the Navy expects to save.

Hendricks has lowered for the estimated value of the contract from $10 billion to a range of $4.5 billion to $5.398 billion over five years.

There are no option years beyond the five years as the contract is structured as a one-year contract with four one-year options.

The bids will be evaluated on a lowest price/technically acceptable criteria because all of the services under NGEN are commercially available and can be provided by multiple companies. “We saw no place where the government would be willing to pay a premium,” he said.

Hendricks also made it clear that the contract allows services to be taken away from the prime contractor and put out for a competitive bid on the open market. There are 38 services listed in the contract and “almost everything is severable,” he said.

The reason for the structure is to allow the Navy to adopt new technologies such as cloud computing and to find more cost savings during the life of the contract, Hendricks said.

One of the lessons learned from NMCI, which was a contractor-owned-contractor operated network, is that the Navy has little insight into the costs of specific pieces of the network.

The example Hendricks used was email. “I can’t tell you what email costs because it is part of the overall service. It is just one service among many,” he said.

He likened NMCI to the picture on the cover a puzzle box; you can’t see the seams between the pieces. But with NGEN, the Navy wants to see the seams so it can have the option to pull out a particular piece and put it out for a competitive bid, he said.

“We’ll be able to drive change and get savings,” Hendricks said.

NGEN has two parts, one for enterprise services – everything that touches the end user – and one for transport services – the infrastructure portion. The RFP gives bidders the choice of submitting proposals separating for each part or a combined response.

Hendricks said the Navy has no preference if one team wins both or if different teams win each portion. “We are just looking for the best price and the most technically acceptable offer,” he said.

He also said that the Navy is prepared for a protest. “I’d love it if there wasn’t one, but you can’t prevent that,” he said.

Instead, his team is following a three-part strategy: Tell contractors what the Navy is going to do; do what you’ve told them you are going to do; and document everything, he said.

“That’s the best way to avoid a protest that gets sustained,” Hendricks said.

Hendricks voice choked with emotion at the end of his briefing when he talked about the team that has spent the last 18 months writing the RFP.

“This has been hard,” he said. “We’ve spent 18 months fighting just about everybody to get this on the street.”

Compared to satellites and weapon systems, buying IT is “mundane,” Hendricks said. “But it is hard and meaningful and this team did all the work and this is my way of saying thank you.”