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The 10-year, $9.3 billion Navy-Marine Corps Intranet project has not met its key strategic goals, because officials never implemented a plan developed in 2000 to measure and report on progress toward achieving them, the Government Accountability Office reported Friday.

The Navy has met just three of 20 performance targets it has set for the program, GAO auditors said in the report (GAO-07-51).

"By not implementing its performance plan, the Navy has invested, and risks continuing to invest heavily, in a program that is not subject to effective performance management and has yet to produce expected results," auditors said.

NMCI, which provides information technology services to more than 650,000 users at hundreds of sites, is the largest corporate intranet in the world, according to the Defense Department. It has consolidated more than 1,000 previously existing IT systems.

Pentagon officials generally concurred with the recommendations included in GAO's report, but challenged some of its conclusions and defended the overall management of the NMCI project.

"While NMCI's performance has been far from perfect, it has steadily improved over time," wrote John R. Landon, deputy assistant secretary of Defense in charge of IT acquisition, in a response to the GAO report. The program, he said, "can best be characterized as a strategic success that has endured some tactical difficulties along the way."

Navy officials set two strategic goals for NMCI: providing information superiority and fostering innovation through interoperable networks. They set up a plan to measure progress on meeting these goals, but never put it into effect, GAO found. Instead, the Navy has focused on defining and measuring the progress of the program's contractor, EDS, toward meeting specified targets to roll out the system to users.

In October 2000, the Navy set a goal of having between 412,000 and 416,000 individual "seats" on the NMCI network by fiscal 2004. As of June 2006, a little more than 300,000 seats were operational.

GAO also found that the percentage of end users of NMCI who say they are satisfied with its performance has consistently fallen short of a target of 85 percent. Moreover, the auditors said, since the Navy defines satisfaction as an average score of 5.5 or higher on a 10-point scale, its overall figures on those who say they are happy with NMCI "include users that are at best marginally satisfied and arguably somewhat dissatisfied."

Defense officials defended their statistical standards, saying they were "based on industry practice."

GAO reported that officials at Navy shipyards and air depots expressed various concerns about NMCI during interviews with auditors. At all five sites auditors visited, officials noted they were continuing to rely on old systems designed to be replaced by NMCI for various functions.