GAO Looks at Navy-Marines Intranet in 2006: Afloat or Awash?

On October 6, 2000, the US Navy awarded a 5-year contract for Navy Marine Corps Intranet (NMCI) services to EDS for an estimated 412,000 – 416,000 seats and minimum value of $4.1 billion. The original contract also included a 3-year option for an additional $2.8 billion in services, bringing the potential total contract value to $6.9 billion. Extensions and restructuring have made it a 10-year, $9.3 billion information technology services program. Through a contract that contains numerous performance-based incentives, the Navy is buying network (intranet), application, and other hardware and software services at a fixed price per end user (“seat”) to support about 550 sites. As a form of perspective, for FY 2006 the US Navy’s IT budget was about $5.8 billion, which included funding for the development, operation, and maintenance of Navy-owned IT systems, as well as funding for contractor-provided IT services and programs like NMCI. The US Government Accountability Office has issued a number of reports during NMCI’s lifetime, some of which have been helpful in refocusing the program. The 2003 report “DOD Needs to Leverage Lessons Learned from Its Outsourcing Projects (GAO-03-371),” which looked at leading commercial outsourcing practices and noted discrepancies, is a good example. Their […]