After NMCI, lawmakers bar use of buying vehicle at DOD

After NMCI, lawmakers bar use of buying vehicle at DOD

BY TONY LEE ORR | GCN STAFF

The Navy's novel contracting approach on the multibillion dollar Navy-Marine Corps Intranet project sparked Congress to make it difficult for other Defense Department agencies to use the technique.

After the Navy attempted an end run around Congress by choosing a multiyear services contract to buy the services needed for NMCI, lawmakers responsible for the department's fiscal 2001 appropriations bill changed the rules for using such contracting vehicles.

NMCI, which could be worth up to $16 billion to Electronic Data Systems Corp. over eight years, is the Navy's plan to outsource its internal communications systems. EDS will wire the service with common platforms and manage the systems under what EDS has dubbed the government's largest outsourcing deal.


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size="2" color="#FF0000">'We knew that when money gets tight, modernization gets put aside,' and the funding is reprogrammed, the Navy's Joseph R. Cipriano says.

Lawmakers got nervous when they realized the Navy was preparing to spend billions without legislative oversight of its plans, said Joseph R. Cipriano, the Navy's program executive officer for information technology and IT acquisition manager.

The Navy never sought new funding for NMCI but reapportioned funds already allocated.

But Congress delivered a nearly fatal roundhouse to the intranet plan last May by including language in the 2001 Defense authorization bill to withhold money for the program until at least two months after the Navy delivered studies and contractual assurances.

Lawmakers on the House Armed Services Committee used their power over future budgets to lure Navy brass to meetings to discuss NMCI, said Chip Mather of Acquisition Solutions Inc. of Chantilly, Va. Mather, who has studied the NMCI deal, said he used a similar approach to buy technology as an Air Force acquisition executive in 1982.

On Capitol Hill, committee members chastised the service and demanded a laundry list of items detailing how the plan would succeed. They asked the Navy for a business case analysis and details on how NMCI would comply with the IT Management Reform Act. The clause in the DOD authorization bill ensured that the Navy would deliver the goods before spending any money on what lawmakers deemed a controversial plan.

The NMCI procurement slowed to a crawl while the Navy did its homework [GCN, June 19, 2000, Page 6].

Eventually, Congress waved NMCI through. But lawmakers included language in Section 8008 of the final Defense appropriations bill that made it easier for them to baby-sit future DOD multiyear contract gambits. Now, when any DOD agency wants to spend more than $20 million per year on a multiyear contact or embark on a new one worth more than $500 million, it must first seek approval from the House and Senate defense committees.

Multiservices talk

It was Penny Rebinkoff, legal counsel in the Navy's IT Office and a member of the NMCI team, who first brought up the idea of using the multiservices contract, said Lt. Jane Alexander, a Navy spokeswoman. Rebinkoff declined to talk to GCN for this article.

Previously, the Navy had only used that contracting vehicle for recurring charges such as utilities, Cipriano said.

Before NMCI jelled, Cipriano said, it was a collection of disparate Navy systems needs, each requiring a piece of the service's limited IT budget.

The Navy needed to improve its connectivity and upgrade its infrastructure, but officials feared that using a requirements contract or similar contracting vehicle would kick off a long budget battle with Congress that would eventually result in the service buying obsolete systems, Cipriano said.

Most of the Navy's senior officers agreed that maintaining solid technology should become a recurring cost. 'But we knew that when money gets tight, modernization gets put aside,' and the funding is reprogrammed, Cipriano said.

By May 1999, the service's wish list had grown long. During a meeting at the Center for Naval Analysis in Arlington, Va., representatives from commands across the Navy and Marine Corps pondered the service's IT vision.

Some officials thought industry would capitalize the hard costs if the Navy promised to buy services long term, he said. The plan would get the Navy both the services and equipment it wanted without having to pony the money up front.

Buying into the logic that IT resembled utility services as an ongoing expenditure, Cipriano opted to use Rebinkoff's suggestion to create a services contract for NMCI under 10USC.2306G of the federal code.

Focus groups compiled lists of common services the Navy wanted, emphasizing requirements that would likely satisfy most users by incorporating many platforms already in use throughout the service.
Other Navy teams studied the requirements should a military action require a fast increase in services. Users wrote essays describing their jobs, and engineers studied the user reports to create technical specifications.

Cipriano also went on the road, visiting organizations where vendors were already providing IT to 100,000 or more users.

Technical requests

All of that information ended up in the request for quotes, he said.

Called to the Hill, Navy officers began lobbying lawmakers for approval, reminding House Armed Services members how fast technology becomes outdated while the government moseys through the procurement process. For instance, one Navy captain briefed lawmakers 47 times.

During the nine months that officials struggled to gain congressional approval for the program, vendors three times upgraded the technology the Navy had chosen for NMCI, Cipriano said.

Ultimately, by adding what he called a strategic pause to the procurement process, lawmakers became confident enough in NMCI to sign off on it, Cipriano said.

After initial work on NMCI is completed, the contract calls for a three-month hiatus from further installations while everyone makes certain the systems are working as expected. The pause also gives the Navy time to test the system and make changes before continuing the rollout, Cipriano said.

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