The Navy Marine Corps Intranet contract comes to an end September 2010. Although details about NMCI’s replacement remain unclear, the Navy has indicated that it will take a more active role in the ownership of its successor, the Next-Generation Enterprise Network (NGEN).

NMCI, the $9.9 billion information technology seat management contract awarded in 2000 to EDS — now a division of Hewlett-Packard — was a colossus even amid a decade’s worth of massive Defense Department outsourcing to the private sector.

With NMCI, the Navy gave EDS a mandate to supply IT services to 700,000 onshore users, mostly in the United States, governing the contract by measuring the contractor’s performance.

It was a hands-off approach, and the contractor shouldered the burden of rationalizing a continent’s worth of disparate networks and unequal technology maturity levels into a centralized whole.

But as information assurance and the threat of cyber warfare (see Page 14) become more prevalent concerns, the Navy’s NGEN program office is examining ways to improve the service’s control over the network. The Navy estimates it will have an acquisition strategy for NGEN no later than the early summer, and the service is still far from issuing implementation details.

Despite the ambiguity enshrouding NGEN, one sentiment is clear: NGEN won’t be an NMCI clone. NMCI’s results have been mixed, with user satisfaction levels rising in the last couple of years.

Bumper stickers declaring that “NMCI Sucks” don’t appear as popular as they once were, and blogs and forums detailing user unhappiness are quieter. At least, no one has recently repeated one blogger’s Nov. 30, 2006, assertion that NMCI is an al Qaeda plot to cripple the Navy.

Anonymous authors of the blog, “,” grudgingly admit NMCI has improved. In an e-mail message, they wrote that the contract is now tolerable but added that “we are succeeding in spite of NMCI, not because of it.” In December 2006, the Government Accountability Office lambasted NMCI for having “yet to produce expected results,” and the contract has recently showed signs of aging awkwardly in an era of network-centric operations.

At the time of NMCI’s creation, the Navy thought it could separate commandand- control functions from administrative IT, said Patricia Tracey, an EDS vice president and retired Navy admiral who works on the company’s NGEN strategy.

That proved to be untrue as command-and-control messages increasingly depend on IT networks. The emergence of cybersecurity as a warfare domain also disproved that idea.

With the NMCI model, “we don’t have sufficient command and control of our shore networks,” said Rear Adm. David Simpson, director of Navy networks and deputy chief of Naval operations for communications networks.

“With NMCI, the operations relationship is through a program manager to the vendor, and that doesn’t provide the direct support and supporting relationships that commanders in the naval operations environment expect and deserve,” Simpson added.

As a result, the Navy is constructing a new acquisition approach that promises to give the government more operational control.

Even EDS officials say NMCI went too far in the direction of outsourcing.

Oversight is an inherently governmental function, Tracey said. “We believe that NMCI put some of that responsibility on the contractor that should have been retained on the Navy/Marine side,” she said.


During a Sept. 8, 2008, industry briefing, the Navy gave details about what it called a segmented approach to NGEN. The service identified eight self-contained functional areas of network management. The Navy won’t award a separate contract for each of the eight functions, but there’s no inherent reason why the hardware and software vendor must also provide help-desk services, Simpson said. “We are working through a process of determining if there is a smart grouping that would suggest a number of segments or a single segment covering all those functions. That trade space is still out there,” he added.

To date, the largest proposed division of functional areas into segments amounts to five separate contracts, Simpson said.

“Their segmentation strategy is pretty much aligned to the way in which industry is aligned,” Tracey said. It’s a way for the Navy to win back control over its networks and vendors, analysts said.

“They want to limit the number of years that these contracts are awarded for and also compete them among a larger number of contractors,” said Alex Rossini, a senior analyst of federal operations at market analysis firm Input.

Congressional dissatisfaction with private-sector companies taking a lead systems integration role in military projects would have caused the Navy to change its procurement approach anyway, said Alan Chvotkin, executive vice president of the Professional Services Council, a contractor association.

Reflecting unhappiness caused by delays in the Army Future Combat Systems effort, the 2008 Defense Authorization bill put a halt to deals whereby vendors oversee projects and decide what equipment the project needs — which is the way NCMI operates.

Segmentation is not without its challenges.

For one, the Navy lacks in-house staff to effectively be its own lead systems integrator, said Warren Suss, president of Suss Consulting, a consulting firm based in Jenkintown, Pa. “It’s going to need to bring in some pretty sophisticated skill areas that will allow the government to do what it used to outsource,” he said.

Also, the more segments it creates, the harder integration will become, Suss added.

The Navy should keep cybersecurity as an independently contracted function because the service would gain the benefit of an independent view on its network defense, Chvotkin said. But he also warned against too much segmentation. “The more hands you have in it, the greater the integration and coordination responsibilities,” he said.

“There are some things you can’t divide.” The Navy said it will apply a management framework called the Information Technology Infrastructure Library (ITIL) to keep the interfaces between functional areas well connected.

“We’ve spoken to chief information officers from several large corporations that have successfully balanced an insource/outsource segmentation and really believe that there’s an industry best practice out there,” Simpson said.

ITIL is a registered trademark of the United Kingdom’s Office of Government Commerce and has roots in management theories percolating for decades throughout the business world.


Simpson said the Navy’s approach to NGEN shouldn’t be construed as an indictment of NMCI. The contract “greatly improved upon the situation that occurred prior to NMCI, where we did not have the ability to generate capabilities or changes in our network environment,” he said. The service and EDS worked to make problem tracking more dynamic, creating an Enterprise Performance Management Database to identify issues before they became major headaches.

“We are very pleased with the benefits that have accrued,” Simpson said.

For its part, EDS points out that costs per seat have decreased, and the company refreshes 10,000 to 15,000 desktops per month. “It’s a big network, and it actually runs the day-to-day Navy business within the continental U.S.,” said Kevin Durkin, EDS vice president for NMCI account management. When the Navy planned for NMCI during the late 1990s, “there was such a disparity in users with what type of equipment they had that the Navy wanted everyone on the same basic baseline, and they’ve accomplished that.”

Suss also said new thinking for NGEN is mostly a result of the growing role of IT in warfare, though he added that NMCI’s history raises the question of whether massive outsourcing can be adequately responsive to changing technologies.

“It’s difficult to create a contract that will give you the flexibility and give you the control,” Suss said. “To some degree, it’s a vote of no confidence in large performance-based outsourcing.” Input’s Rossini said the term “performance- based” seems to have disappeared from the Navy’s lexicon.

“I have never heard the words ‘performance-based contracting’ from a Navy official in the last couple years,” he said. “All they keep saying is they want more, or far more, command and control over what’s happening.” EDS disagreed that performance-based contracting is discredited.

“The issue of the contract wasn’t so much ‘does performance- based work or not,’ it was the cultural changes for the Navy, for EDS, to understand what the Navy wanted to accomplish and actually getting it in place,” Durkin said.

Simpson said it’s premature to speculate whether NGEN will include performance-based aspects, while Tracey said it’s likely.

One specific criticism of performance-based contracting is that acquiring new technology not specified in the contract — and there is plenty of technology now available not imagined a decade ago — can be an unwieldy process because it requires a contract modification.

Critics also wonder how agile the network can be in real time when contractual parameters govern operations.

“The contracting office does not get in the middle of the operational side of it,” Tracey said. “There are some things that have to go to the contracting office because things do cost money, but that’s not been the case in the last couple of years from a network posture standpoint,” she added.

Durkin said the primary constraint on new technology is the need for security certification and accreditation. “Modification to the contract is not an odd thing, it happens daily on NMCI — and if not daily, weekly,” he said.


Don’t expect major technology changes from NMCI in the first iteration of NGEN, Simpson said. Although a Navy Department strategy document titled “Naval Networking Environment (NNE)~2016” envisions a future network of constant connectivity ashore and afloat for the Navy and Marine Corps, the first NGEN implementation will mostly continue NMCI’s work.

“The only thing programmed in NGEN right now is the replacement of those seat services that are currently provided for NMCI and the legacy networks that we are continuing to reduce,” he said.

However, Navy officials said they’re not waiting for 2010 or 2016 to make improvements.

Steps toward a service-oriented architecture — in which standardized interfaces mediate data transactions — are already under way, as is greater compatibility among ashore and afloat networks, they said.

For example, a common directory lookup service that encompasses both ashore and afloat domains is now in the works, said Rob Wolborsky, head of the Navy tactical networks program office at the Program Executive Office for Command, Control, Communications, Computers and Intelligence in San Diego.

Navy officials realize that IT links to land-based operations centers and logistics bases are an important part of maritime power projection, Simpson said.

The service doesn’t look at IT the way it did in the late 1990s, which was mostly as a utility akin to electricity. “It’s just too important to warfighting now not to be able to recognize that cyberspace is a mission area and requires a military approach,” he said.