By David Perera
Feb 04, 2009
Defense Systems
NGEN will break from the total outsource model
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, “NMCIstinks.com,” 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.
A SEGMENT OF THE ACTION
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.
DOES PERFORMANCE BASED REALLY PERFORM?
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