Final solicitation for Navy's NGEN services recompete hits the street

The Navy has posted the final solicitation for the services portion of its much-anticipated, multibillion dollar NGEN contract to help run and upgrade the branch’s IT networks also used by the Marine Corps.

In an update posted Thursday on FedBizOpps, the Navy has given parties interested in this piece of the Next Generation Enterprise Network-Recompete contract a response deadline of 2 p.m. Eastern time on Jan. 10, 2019.

The Service Management, Integration and Transport track of NGEN-R will have a possible eight-year term with five base years and three individual option years after that. NGEN-R has a separate End User Hardware piece for which the Navy posted that final request for proposals on Sept. 18 with a due date of Nov. 19.

The services portion has a potential value of $3.5 billion, while the hardware piece is valued at $250 million by Deltek over a three-year base period and six individual option years.

Through a series of mergers and acquisitions, Perspecta is the prime on the overall NGEN effort dating back to 2000 through its predecessor companies, one of which won the current iteration of the program in 2013. NGEN-R is the third version of the contract to run the global IT network of the Navy and Marine Corps.

Perspecta launched in June through the three-way merger of DXC Technology’s U.S. public sector business with Vencore and KeyPoint Government Solutions.

In early September, Perspecta received a one-year, $787 million extension on the current NGEN contract as the Navy prepared to release both final requests for proposals. NGEN is the largest contract of Perspecta, who is pursuing both the services and hardware tracks as a prime.

“Perspecta offers a fresh and uniquely innovative approach to what the Navy and Marine Corps need now and in the future. Only Perspecta can accelerate the Navy and Marine Corps to IT modernization, getting there faster and more efficiently, without missing a beat on operating the network,” CEO Mac Curtis said in a statement.

To defend its incumbency, Perspecta will have to fend off a pair of challengers in teams led by Leidos and General Dynamics for the so-called “SMIT” portion, which analysts are closely watching and see as the larger of the two NGEN-R pieces.

That portion covers networking, software core build, service desk, cybersecurity and systems integration services to support the Navy Marine Corps Intranet with 700,000 users at 2,500 sites around the world.

Given the size and scope of the NGEN-R services track, it is seen as a prime vehicle for the winner to gain a large foothold in IT modernization and tout their ability to undertake that kind of work on a large scale given increases in spending for defense and upgrades to aging technology infrastructures.

The Navy is competing the overall NGEN-R procurement on a best value basis as opposed to the current contract that was a lowest price, technically acceptable award.

Leidos is partnering with IBM, Unisys and Verizon to pursue the services track. Perspecta is leading a team with AT&T in the fold.

Prior to its acquisition by GD, CSRA threw its hat into the ring for the NGEN-R services track and told us before the deal was announced that their team would form “as the acquisition matures.”

“(General Dynamics IT) is excited to offer our next-generation capabilities and extend our legacy supporting the Navy through the NGEN contract," said Leigh Palmer, senior vice president of GDIT's defense division.

All team leaders also have undertaken large M&A activity to add scale and see those moves as helping bolster their position for the NGEN-R effort. Leidos combined with Lockheed Martin’s former IS&GS services business two years ago, while GD's IT services arm closed the buy of CSRA in April and Perspecta opened for business in June.

The extension Perspecta received in September stands to give them extra time to integrate the company, while Leidos is past its integration of IS&GS.

Leidos and IS&GS "came together and brought us a scale that on their own they didn't have," Leidos Senior Vice President Dan Voce told WT in March.

“We’ve built a team with the expertise to provide the right capabilities, scale, and past performance experience for the NGEN bid," Leidos' defense group president Gerry Fasano said in a statement.

"Combined, Leidos, IBM, Unisys, and Verizon bring commercial best practices through research and development and innovation, leveraging our respective leadership in artificial intelligence and machine learning, technology, and security all of which are essential to providing a smooth transition to a future system that will achieve the Navy's critical mission.”

GD-CSRA should be fully integrated by the time NGEN-R awards come next year.

NGEN’s predecessor contract known as Navy Marine Corps Intranet went first to Electronic Data Systems in 2000. Hewlett-Packard acquired EDS in 2008. HP split in 2015 into two companies, one of which became Hewlett Packard Enterprise and inherited the successor NGEN contract.

HPE then spun off and merged its services business with Computer Sciences Corp. in 2017 to form DXC, which then helped form Perspecta in June through that complex three-way transaction.

(EDITOR'S NOTE: This story was updated Oct. 19 with additional comment from Leidos)