EDS wins contract to build, run Navy intranet

EDS wins contract to build, run Navy intranet

By Tony Lee Orr
GCN Staff

Oct. 6 ' Electronic Data Systems Corp. has won a $6 billion, five-year contract to build and run the much-heralded Navy Marine Corps Intranet, Navy officials announced today.

One of the remaining companies in the bid'CSC of El Segundo, Calif.; General Dynamics Corp of Falls Church, Va.; or IBM'also won the right to take over the contract should EDS be unable to perform for any reason, Navy Secretary Richard Danzig said. Navy officials declined to release the name of the runner-up for the contract that would be worth as much as $9 billion if the contract's three option years are exercised.

If Navy officials choose to exercise each option to add to the contract , the deal could be worth as much as $16 billion, officials said. Some observers have dubbed NMCI the biggest outsourcing deal in government history. About 35 percent of the work will be done by subcontractors.

'We need to stop trying to create it ourselves and move to buying it like we do our electricity,' Danzig said of the Navy and Marine Corps global network services. The Navy has faced several delays in awarding the contract for NMCI, in part because of repeated questioning by Congress.

The Navy itself will be the first user of NMCI components; the Marine Corps won't hook up until 2003, officials said during a Pentagon briefing this afternoon.

In addition to wiring the Navy with a common system, the new intranet will help the service manage computer security, Danzig said, because security specialists can monitor and manage one central system rather than riding shotgun over hundreds of disparate networks.

The contract will basically sell the Navy's existing intranet infrastructure to EDS, which will own and operate it, Danzig said.

The move will pare down the Navy's more than 200 significant networks to one, said Joseph R. Cipriano, the Navy's program executive officer for information technology and IT enterprise acquisition manager.

Danzig said the move to outsource the Navy's intranet is the right thing to do because it will ensure interoperability and allow the service to improve information assurance. NMCI will also let the Navy refresh its technology more frequently and less expensively, and it will help the Navy meet mandates of the Information Technology Management Reform Act, Danzig said.

The Navy now spends roughly $1.6 billion a year on information services and communications, Danzig said. The system will save money through central procurement and management, he said.

EDS will initially concentrate its efforts on the Naval Air Systems Command, taking over NAVAIR's network and transitioning it to the new system, Cipriano said. Once that work is complete, the project will be evaluated for three months. Should everything go as the Navy hopes, the Naval Sea Systems Command will come online in April or May 2001, he said.

NAVAIR asked to be first to go online with the new intranet because it needed to award a number of technology contracts soon, Danzig said.

The Marine Corps now spends roughly $190 million per year running and maintaining its own intranet, said Gen. James L. Jones, commandant of the Corps. When the Marines join the system in 2003, those funds will be used to pay for the link, he said.

More than 1,900 Navy employees now operate and maintain about 360,000 desktop PCs and associated networks, Danzig said. Most individuals in those positions will be shifted to other jobs, but some 300 civilian employees will be offered jobs with EDS, he said.

'Technology workers are a valuable commodity,' said Navy chief information officer Dan Porter. Technology workers within the service will be assigned other duties that, while still high-tech, are more aligned with the Navy's primary duties, he said.

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