NGEN contract expected by March

Strategic report

Navy personnel on Arleigh Burke-class guided-missile destroyer USS Milius discuss blueprints for the Consolidated Afloat Networks and Enterprise Services program.

The Navy expects to award a contract this year for the shore-based portion of the service’s future computing environment.

More than 100 companies expressed interest in Next Generation Enterprise Network (NGEN). Proposals from the companies that decided to bid were received in August, and awards are expected to be made in May, said Ed Austin, spokesman for the Navy’s Program Executive Office for Enterprise Information Systems (PEO-EIS), which is managing the NGEN program.

The award originally was scheduled for February, but the complexities of the requirements made it necessary to delay the award date to ensure a complete and thorough review of offerors' bids, Austin said. He said Navy officials would not discuss details of the contracting process while those proposals are under consideration.

Under the five-year contract, which is expected to be valued at between $4.5 billion and $5.4 billion, winning contractors would help run the infrastructure and network services, such as e-mail, security encryption, help-desk support and data services.

The initial increment of the program is expected to cost $38 billion through fiscal 2024.

NGEN is designed to replace the existing Navy-Marine Corps Intranet (NMCI), which provides secure IT services for more than 700,000 users at 2,500 Navy and Marine Corps bases worldwide. NMCI is the largest enterprise network in the Defense Department and the largest corporate intranet in the world after the Internet itself.

NGEN is being developed in tandem with a new shipboard system, the Consolidated Afloat Networks and Enterprise Services (CANES), as part of the Navy’s plan to have an integrated computing environment in place by 2016.

The NGEN system would change the operational environment for the Navy’s IT services from the current contractor-owned and -operated network to a government-owned network that will be operated by contractors for the Navy and by government personnel for the Marine Corps.

NMCI is operated by Hewlett Packard Enterprise Services under a $3.4 billion continuity of services contract that runs through April 2014 – a month after NGEN is expected to become operational – and includes transition services and the transfer of NMCI infrastructure and intellectual property to the Navy.

In September, the Government Accountability Office (GAO) issued a report that raised concerns about the transition to NGEN, saying the Navy’s approach to implementing the program had caused delays and risked higher-than-necessary costs. Of particular concern was the possibility that NGEN would not be operational before the contract for NMCI services runs out, putting at risk a smooth transition from one system to another.

“Without a well-defined schedule … and adequate risk mitigation, [the Navy] cannot ensure that needed NGEN capabilities will be in place in time to ensure that services will continue to operate when the incumbent is scheduled to shut down its services,” the GAO report said.

The report recommended that the Navy develop new strategies to limit the risks identified by the GAO. Referring to the Navy’s written response included in the report, Austin said the service has taken steps to address the GAO’s concerns.

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