Navy set to award multibillion dollar intranet contract

klunney@govexec.com

The Navy hopes to award its multibillion dollar intranet contract next week, a spokeswoman for NAVAIR said Friday.

The Navy/Marine Corps Intranet (NMCI) contract award was slated to coincide with the start of fiscal 2001-Oct. 1-but Congress' failure to pass key spending bills for next year's budget before its Rosh Hoshana recess is delaying the announcement, said Elleen Kane, a spokeswoman for the Naval Air Systems Command (NAVAIR). NAVAIR is responsible for the Navy's aircraft maintenance and will be the first organization within the department to implement NMCI.

Kane said the Navy is ready to move forward with the contract as soon as it is awarded.

Four industry bidders-Computer Sciences Corp., Electronic Data Systems Corp., General Dynamics Corp., and IBM Corp.-are vying for the initial five-year contract, which comes with a $10 billion price tag. After five years, the Navy can extend the contract for three more years.

The latest holdup is one in a series of delays that have plagued NMCI from the beginning. The department was planning to award the intranet contract in June, but criticism from Congress, the General Accounting Office, unions, and some Navy officials over Navy's lack of a business case plan and inadequate risk assessment slowed the project's momentum.

In late June, the Navy submitted responses to questions-ranging from the Navy's funding proposals to personnel strategy-from lawmakers, which Congress had sixty days to review. The General Accounting Office (GAO) completed its report on NMCI earlier this month, and briefed the Hill on its findings. A GAO spokesman said the agency does not plan on releasing a written report.

Congress has sent only two completed fiscal year 2001 spending bills to the president for his signature, the Defense and Military Construction measures.

The House fiscal 2001 defense authorizaton bill requires a thorough financial and policy analysis of NMCI before the project moves forward. The provision prohibits the Secretary of the Navy from using funds for the project in fiscal 2001 until Congress receives documentation justifying the effort.

The Senate Armed Services Committee inserted language in its version of the fiscal 2001 defense authorization bill cautioning the Navy to comply with existing acquisition regulations in completing the project. An amendment to S. 2549 calls for a phased implementation of NMCI, allowing only 15 percent of the total number of work stations to be part of the program in fiscal 2001. All shipyards and depots are barred from joining the intranet until a year after the project is underway.

The Navy did not specifically include the NMCI initiative in its fiscal 2000 and 2001 requests for funding. Ron Turner, deputy chief information officer for the Navy, has said that all of the money for the project would come out of the Navy's IT budget and whatever base operating fund the agency receives for it in the future.

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