Contract award came as a surprise

Electronic Data Systems Corp., along with three other big integrators'Computer Sciences Corp., IBM Corp. and General Dynamics Corp.'spent months in 1999 and 2000 wooing the Navy for the opportunity to build NMCI. In the end, it would be the proposal from EDS, based in Plano, Texas, that would most impress the service.

By most accounts, EDS came in as the lowest bidder. Adding to the attractiveness of its proposal, the company had already built a wide area network, something none of the other bidders had, giving EDS a decisive advantage, according to an EDS executive close to the program.

Still, as the company with the most visible seat management practice, Computer Sciences Corp. was widely favored by industry analysts to win.

Sources say that the day the Navy planned to make the announcement of its choice to build and manage the massive intranet, CSC rented out a reception hall and cracked open the champagne bottles in celebratory mode.

EDS, however, had no such preparations in order.

When the Navy accepted EDS' proposal, presenting the company with a $6.9 billion contract'which has since grown to $8.8 billion'stunned yet euphoric executives had to send a staffer to a Vienna, Va., liquor store to buy champagne at the last minute, sources say.

EDS' win surprised not only the company, but also the other bidding contractors and the larger government contracting community.

But the Navy stood by its decision, citing the competitive price tag EDS offered to pare down several hundred Navy and Marine Corps networks to a single, enterprisewide system.

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