Navy's strategy for the $50B NGEN program is too risky, auditors say

GAO says stop funding NGEN until more analysis is completed

The Government Accountability Office wants the Navy to drop anchor on its massive follow-on to the Navy Marine Corps Intranet contract.

GAO said the Navy needs to review and consider all alternative acquisition approaches to the massive Next Generation Enterprise Network program, which by some estimates will be worth $50 billion through 2025.

In its new report, GAO found that the Navy did not sufficiently analyze alternate acquisition strategies because the options contained weaknesses and did not match the program’s current acquisition approach. The report notes that the cost estimates for the alternatives were not accurate and were “neither comprehensive nor credible.”

Related story

Navy readies NGEN for prime time

GAO also indicated that the Navy’s NGEN acquisition strategy is not one of the alternatives assessed in the analysis and is riskier and potentially more expensive because it contains a large number of contractual relationships.

Other weaknesses cited in the report include a lack of a reliable schedule for the program. According to GAO, those weaknesses have already contributed to delays in program milestones. GAO noted that during the review, the Navy took steps to address some but not all of those weaknesses.

“Collectively, these weaknesses mean that [the Navy] does not have a sufficient basis for knowing that it is pursuing the best approach for acquiring NGEN capabilities and that the program’s cost and schedule performance is unlikely to track to estimates,” the report states.

GAO has recommended that the Defense Department limit additional funding for NGEN until it conducts a review to reconsider the program’s acquisition strategy. In commenting on the report, DOD officials said they did not agree with the recommendations.

NGEN is meant to replace the Navy Marine Corps Intranet, a program that had its own history of cost and technology issues. The Navy had already spent $432 million on NGEN as of September 2010, reports InformationWeek. The program, which is intended to provide increased and scalable capabilities such as secure transport for voice and data, information storage, and e-mail, is expected to cost $50 billion through 2025.

Hewlett-Packard Co. is the incumbent contractor on NMCI, thanks to its acquisition of EDS Corp.

Reader Comments

Wed, Sep 14, 2011

Read the latest on NGEN plans: "New twist in U.S. Navy-Marine Corps network plan"
By Jim Hodges
September 01, 2011
The U.S. Navy is leaving the door open to awarding a single contract for development of its Next Generation Enterprise Network, or NGEN, which would be a departure from its plan to divvy up the work into as many as five discrete parts.
"The change means that the incumbent networking contractor, Hewlett-Packard, will have a shot at retaining its prime contractor role as the Navy shifts to the new work" I wonder how much money has been spent on the 5-years of planning efforts by the Navy to get to the point where they have decided that, yes, it may really make some sense to minimize the complexity of managing what is now a national asset -- a secure, well operating Intranet. All that wasted money would come in handy now.

Thu, Mar 17, 2011

Why does each service need their own IT universe? Regionalize and common-service it DoD-wide. Do one five-state or so area, debug it, and then stand up multiple interlinked iterations of it. NIH and rice-bowling is one big reason DoD IT is so absurdly expensive and prone to interoperability problems. Everyone has gotta do it THEIR way.

Wed, Mar 16, 2011

Another single award to the low cost bidder could mean more NMCI difficulties for Navy/USMC. The last competition was decided by the Navy Comptroller to make up for budget shortfalls and not for the best value for the service and the taxpayer.

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