Perspecta gets second NGEN extension

Perspecta has received a second extension on its contract for broad IT services and products to the Navy and Marine Corps on top of the previous modification awarded in September.

This latest $485 million award announced Friday extends the current Next Generation Enterprise Network contract for another eight months to May 31, 2020.

The September extension was a one-year, $787.3 million modification that pushed performance out to Sept. 30, 2019. A justification-and-approval notice the Navy issued in February authorized a 23-month extension on NGEN to that date as the branch moves forward on the current two-fold recompete of the contract.

During both Perspecta’s May investor day presentation and a June interview with WT, CEO Mac Curtis indicated that extension to May 2020 was a very real possibility. All the extensions added up push Perspecta's on NGEN to 20 years, during which its predecessor companies won the original Navy-Marine Corps Intranet contract and the current iteration.

Continuing the work also stands to give Perspecta more time and energy for integration activities given the company’s launch in June out of the three-way merger of DXC Technology’s federal business with Vencore and KeyPoint Government Solutions. Government services companies can find winning recompetes difficult in the midst of integration activities after a large merger or acquisition.

The Navy has broken up the NGEN recompete into two separate contracts: one of at least $3 billion for broad services and systems integration work to maintain the Navy-Marine Corps global IT network, and a separate $250 million award for end-user hardware.

Both final solicitations are out. Proposals for the services track are due by Jan. 10, 2019 with an award currently scheduled for June 30, 2019 while bids for the hardware portion are due by Dec. 5 of this year. That timeline indicates Perspecta should receive another extension on NGEN on top of the other two the company has received so far.

For NGEN’s services portion, Perspecta will have to fend off a pair of rival teams led by Leidos and General Dynamics, which is inheriting CSRA’s pursuit of the contract after their April combination closed.

Whomever wins the NGEN services track gains a major foothold in defense IT modernization given the increases in spending and focus on upgrading aging technology systems, particularly those used by the military.

NGEN’s hardware track has not seen any company or team of contractors other than Perspecta publicly indicate their interest in that portion unlike the services competition. Perspecta signaled it would also pursue the hardware piece when that solicitation came out in September.