Can anyone unseat HP and NGEN?
By the time Hewlett-Packard’s Next Generation Enterprise Network contract expires in 2018, the company will have been managing the Navy’s IT infrastructure for nearly 20 years. And if you factor in delays to the recompete and a protest or two, it’s conceivable that HP could easily top the 20-year mark.
With a hold on a contract like that for that long, it really raises the question of how feasible unseating HP will be.
The Navy kicked off the recompete process for the $3.4 billion NGEN contract held by HP when it released a request for information last week. NGEN replaced the Navy-Marine Corps Intranet contract that EDS won in 1999. EDS was later acquired by HP.
The original NMCI contract was worth $9.3 billion over 10 years. In 2010, the Navy awarded a $3.4 billion contract to HP to continue its services until the NGEN contract was awarded. After some very rough early years that nearly bankrupted EDS, the contract is now a lucrative one.
NGEN was competed as a lowest price, technical acceptable contract, and HP beat a team lead by Computer Sciences Corp. and Harris Corp.
It was a tight competition, but still, can anyone be expected to unseat HP if they’ve been there for 20-plus years?
In reading the RFI, I think the Navy sees the challenge of creating a competitive procurement.
They have a 50-page questionnaire that includes questions about cybersecurity, end-user services, enterprise services and so on.
They also are very interested in information about how cloud technologies such as infrastructure, platform and software as a service offerings. The RFI is sending a clear message that the Navy will use traditional network and infrastructure support as well as cloud-based offerings. It wants to use a broad range of solutions.
This makes me wonder if the Navy will seriously consider acting as its own integrator and break up NGEN into several contracts. Could they get more innovation and cost savings with more of a decentralized approach?
It is too early to predict, of course. A second RFI is already in the works, and the Navy seems to be following the model set in recent years by the General Services Administration and is planning a lot of outreach to industry and lots of dialogue before a solicitation hits the streets.
But if they want competition, lower pricing, and innovation, breaking it up might be the way to go. A series of small competitions might draw a larger group of competitors.
HP would still have a tremendous advantage with its footprint in the service and domain expertise, but the competition could be much more intense.
We’ll have to watch this one develop.
Posted by Nick Wakeman on Sep 21, 2015 at 9:30 AM