Navy mandates major changes to NMCI

"When NMCI is fully operational, there is no doubt in my mind that NMCI is the right way to go. I'm confident we will get there."

Marine Corps Lt. Gen. Edward Hanlon Jr.

Service-level agreements slashed to better manage EDS project

NEW ORLEANS ? EDS Corp.'s embattled Navy-Marine Corps Intranet project is undergoing significant changes to improve its management and operation. But despite the criticism leveled at EDS by Congress and its customers on the $8.8 billion program, Navy brass remain committed to it.

"When NMCI is fully operational, there is no doubt in my mind that NMCI is the right way to go, and I'm confident we will get there," said Marine Corps Lt. Gen. Edward Hanlon Jr.

Hanlon, commanding general of the Marine Corps Combat Development Command and deputy commandant for combat development, spoke last month at the 2004 NMCI Industry Symposium, where Navy leaders outlined several changes to the program. Hanlon's command is one of the largest that NMCI will serve.

Navy officials said they are reducing the number of service-level agreements that the Navy uses to measure contractor performance and offer incentives for good service. They also are making modifications that will let EDS accept orders for enterprise application hosting services.

The program also will delay rolling out a new laboratory that would be used to test vendor software for compatibility with the network.

But Hanlon also sharply criticized EDS, saying the company was not adequately prepared to implement the contract. Overall, the program has not gone well, he said.

"Whether it was due to not understanding the process or lack of internal oversight, [NMCI] has been rocky and problematic," Hanlon said.

The transition of Marine Corps operating forces to NMCI has been delayed, he said. Also, network services are not always available for users as they cut over to the intranet, and progress has been slow in acquiring new services.

"Suffice it to say, the current rate takes far too long to reach objectives, and to all in this room, this is unacceptable," Hanlon said.

"We appreciate his candor," said Kevin Clarke, an EDS spokesman. "The reason we hold this symposium is to help us solve the challenges that are there."

In discussing numerous problems with the project, such as slow performance because of security measures and flagging user satisfaction, Navy Secretary Gordon England said Navy leaders are committed to moving forward on what he calls "the largest single network in the world."

NMCI will have more than 360,000 users on its integrated voice, video and data portal. The second largest network, run by IBM Corp., has 319,000 users, followed by that of the U.K. government, which outsources 100,000 computer seats. EDS won the NMCI contract in October 2000.
"Only the Internet itself has more users than NMCI," England said.

Noting that EDS has suffered financially as a result of the project, England applauded the company's perseverance on NMCI. Rear Adm. Charles Munns, who recently departed as NMCI director, said officials are working hard to improve the portal.
"This has not been a perfect process," England said.

Still, it's already considerably better than the way IT was managed before in the Navy, he said.

Just five years ago, the Navy had 28 separate commands that budgeted and managed their own IT systems autonomously. The Navy had no accounting of how much money it spent on IT products and services. Today, IT expenditures are bundled into the monthly computer seat cost the Navy pays for NMCI.

By trimming the number of service-level agreements, Navy officials hope to improve the program's management.

When the contract was signed, the Navy established 240 performance criteria in about 30 categories that EDS had to meet, Munns said.

"Our lesson was 240 was too many," he said.

Capt. Chris Christopher, deputy director for future operations, communications and business initiatives for the NMCI program office, said he didn't know what the NMCI office's target for service-level agreements would be, but he called the process "evolutionary."

Allowing EDS to accept orders for application hosting also is expected to help eliminate thousands of LANs and legacy servers that are individually managed and controlled and are not interoperable. As the legacy networks are phased out, applications compatible with NMCI's Microsoft Windows 2000 operating system will be migrated to the new portal.

The application hosting services include server and network management, security and storage services, and hardware and software support services. Under the app-hosting project, applications will be moved to data centers.

"The application hosting initiative is the first step in enabling the Navy to revolutionize its business practices," added Mike Koehler, EDS enterprise client executive, who oversees the NMCI project.

One measure to improve NMCI's operation has been pushed back. The Navy postponed opening its Product Evaluation Center at the Space and Naval Warfare IT Center in New Orleans until at least the fall. Earlier this year, the service said it would open the center this month.

The extension will let the Navy finish operational testing on a prototype and release a request for proposals for a vendor to operate the center. The Navy will use the share-in-savings technique for the process, which will let the service share savings with the vendor chosen to run the lab, Christopher said.

The Navy will publish the standards that a product needs to meet to pass NMCI compatibility testing, and the procedures for submitting software to the center, on its Web site at

The Navy also will require every vendor that wants a software product tested for compatibility with NMCI to pay the costs of the tests, which could run anywhere from $10,000 to $40,000 per application, Christopher said.

"We can't afford to test every software product," he said. "We're shifting the cost from the government to industry."

Despite NMCI's problems, Navy officials said there is no turning back on the program to revamp and modernize their IT operations.

"We are not there yet, but we really have no choice but to get there," Hanlon said.

Dawn Onley is a staff writer and Matt McLaughlin is an assistant managing editor at Government Computer News. E-mail them at donley@ and

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