Another delay for $5B Navy NGEN

The Navy has pushed back the award date for the $5 billion NMCI replacement, but let's hope it's to make the best decision.

It’s tempting to be a little snarky about the Navy’s announcement that it is pushing back the award date of the Next Generation Enterprise Network contract from February to May.

“Due to the complexities of the NGEN requirements, we are changing our contract award estimate in order to ensure a complete and thorough review of offerors’ bids,” said Ed Austin, spokesman for the Navy Program Executive Office for Enterprise Information Systems, in a statement.

NGEN is a five-year, $5 billion contract that will replace the Navy-Marine Corps Intranet contract, first won by EDS in 2000. NMCI was supposed to expire in 2010, but continues on through a continuity of operations contract.

At one time, it nearly destroyed EDS, and helped weaken the company to the point that Hewlett-Packard Co. could acquire EDS. Today, the contract is an important and lucrative one. The original NMCI contract brought in $9.3 billion to HP, and the continuity contract is worth another $3.4 billion through July 2015.
No word on whether this latest delay will add more dollars to that total.

HP is leading one team in the bidding for the contract, and Computer Sciences Corp. and Harris are leading a second team.

The delay shouldn’t be a surprise, given that the Navy had to extend NMCI by five years (through 2015). They have some wiggle room and NGEN is complex; after all, there are 800,000 users.

But the Navy also has been clear that this is a low-price, technically acceptable competition, which you would think would make the evaluation easier.

In May, Capt. Shawn Hendricks, program manager for the Naval Enterprise Networks program office, said 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.

My uneducated guess is that the Navy is taking the extra time in an effort to make the best decision. What little time I’ve spent with Hendricks leaves me with little doubt about how seriously he takes this competition. He teared up at the May briefing when talking about the team who wrote the request for proposals.

I hope they are also trying to protest-proof their decision, and putting significant effort into how they will explain to the loser why they lost.

So, for today, I’ll save my snarkiness and hope that the Navy will make wise use the extra three months.

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