In May, the U.S. Navy released a massive, 1,100 page request for proposals (RFP) for the Next Generation Enterprise Network (NGEN) IT program. NGEN will provide secure data and information technology services, such as data storage, email, and video-teleconferencing for around 700,000 users at 2,500 Navy and Marine Corps locations around the world. The new program is designed to replace the current Navy-Marine Corps Intranet (NMCI) as well as serve as the bridge to a futuristic Naval Networking Environment. A contract award is expected early next year on the first five-year, $5 billion increment of NGEN. The total cost for NGEN is estimated to be approximately $50 billion through fiscal year 2025.<\/p>\n
So far, so good. Except the Navy chose a contracting and management approach for the RFP that raises serious questions regarding the ability of both the government and the winning contractor team to achieve NGEN\u2019s objectives and price targets. The Navy was unhappy with the NMCI contract because the system was managed by a single contractor team that included a number of proprietary elements in the overall architecture. The Navy allegedly complained that it did not have sufficient visibility into the costs of individual services and that NMCI constituted a closed architecture which did not allow for the rapid integration of new and cheaper technologies.<\/p>\n
The new RFP divides the overall work into two major parts, enterprise services and infrastructure, and 38 services. There are two huge contractor teams competing for this prize; both could win a portion of the overall effort with work on the individual services competed as task orders. Even more daring, the Navy has the option to take work away from the contractor team and put it out for competitive bid. Were this not enough change and uncertainty to inject in the process, the Navy will serve as the overall program manager, a job it hasn\u2019t done for more than a dozen years.<\/p>\n
The NGEN proposal also reflects many of the themes in the Department of Defense\u2019s (DoD) current acquisition reform strategy. According to the responsible Navy Program Office, the paramount goal of the new program is cost savings. Not only is NGEN being bid as a firm-fixed-price contract but the award will be made on the basis of a standard called \u201clow-price technically acceptable\u201d (LPTA) proposal. The Navy\u2019s argument for this approach is that everything they are asking for is readily available commercially so price should be the determining factor in awarding the contract. I have previously written here on the potential pitfalls associated with the LPTA standard as it will affect the overall health and capabilities of defense IT companies as well as the consequences for the government customer. When this standard is used for a massive, global, military system with its unique security and response requirements the risks grow.<\/p>\n