Is there a fatal flaw in the Navy's NGEN decision?

Harris Corp. and Computer Sciences Corp. feel they’ve been wronged. The Navy should have picked them for the $3.5 billion Next Generation Enterprise Network contract, and not Hewlett-Packard Co.

As a result, they’ve filed protests with the Government Accountability Office. Work has stopped on the transition from the Navy-Marine Corps Intranet to NGEN. HP, by the way, is the incumbent on NMCI.

It was a hot piece of news Monday afternoon and Tuesday morning. It demands a follow-up, but we aren’t going to get anything more than speculation because everyone is being very tight-lipped.

The key question in my mind is: what grounds are Harris and CSC citing in their protest?

Because it is a lowest price, technically acceptable contract, protest options may be limited. It would be difficult, I would think, to attack the technically acceptable side of that equation because everyone is bidding commercial technology.

Arguing price also could be a challenge, unless there is such a wide disparity in the prices bid that Harris and CSC could argue that the government is at risk because HP is under bidding.

Here is one thing on price I do know: NMCI has been worth about $1 billion a year. Under NGEN, HP says it can run the network for $700,000 a year, prompting the Navy to proclaim it will save $1 billion over the life of the five-year contract.

That doesn’t sound too far-fetched to me, but I’m not an expert. HP does have a new team versus NMCI, so perhaps they squeezed more pricing concessions out of their partners. The technology world is much different today than when NMCI was let in 2000.

I’ve asked Harris and CSC for comment on the protest, specifically on the grounds they are citing. I’ve also asked for a copy of the protest, even a redacted copy.

Both requests have been shot down with no comments, but I’ll keep trying.

The Navy also offered up a short comment that they had been notified of the protest and “will respond to the Government Accountability Office in accordance with the rules of the GAO.”

Bill Toti, HP Enterprise Services vice president and account executive of Navy and Marine Corps accounts [in other words, the guy responsible for NGEN at HP], said in a statement that he wouldn’t speculate on why the contract was protested.

“The NGEN solicitation and evaluation process was rigorous and thorough,” he said. “HPES has every confidence in the Navy’s evaluation and selection of HPES to continue to meet the Navy’s IT services needs.”

While work cannot go forward under NGEN, HP continues to operate NMCI through a continuity of services contract that has been used to extend NMCI after it expired in 2010.

Ironically, Harris is part of the NMCI team, and continues to support HP under that contract. For the new contract, it decided to strike out on its own and team with CSC.

One last bit of speculation. When I look at the short time frame between the debriefs and the filing of the protests, I wonder if CSC and Harris have found some sort of fatal flaw in the Navy decision. That might be a bit of a leap on my part, but it’s what’s on my mind.

We’ll keep tracking this protest. You’ll be the first to know if anything new breaks.