The Navy intends to issue a final request for proposals for its massive Next Generation Enterprise Network, (NGEN) program by December, a date the program’s manager said is a “hard stop.”
“The time to compete this is now,” said Capt. Shawn Hendricks, who heads the Naval Enterprise Networks program office and manages the NGEN program. “We need to award a new contract because it’s the right thing to do. We need to demonstrate that we can compete this network as and when we decide it’s right.”
NGEN, the follow-on to the present-day Navy Marine Corps Intranet (NMCI), will change very little about the physical makeup of the Navy’s IT systems, at least in the near term. Its primary purpose is to restore Navy Department ownership to what is currently the federal government’s largest outsourced technology program.
Under NMCI, a single vendor, Hewlett Packard, owns and operates the entire 700,000-user network. The initial 10-year NMCI contract expired last year, and HP is operating the enterprise under a continuity of services contract that expires in 2014.
The department intends to award NGEN as indefinite delivery indefinite quantity contracts for a base period of one year, followed by four option years, Hendricks told a gathering of several hundred contractors at an NGEN industry day Thursday. Vendors will be responsible for operating 38 separate network services for the Navy.
Hendricks said gaining government control over the network and segmenting it into smaller contracted services was critical to letting the Navy get visibility into where it’s spending its IT dollars. The service then will be able to recompete individual elements of NGEN if and when it decides it needs to, he said.
“Right now, I’m in a position where I have to compete everything all at once,” Hendricks said in a roundtable with reporters. “I’m going to get out of that business, and be in a position where I can compete what I want when I need to. We had to start somewhere, so we’re starting now.”
The Navy portion of NGEN will be government-owned, but contractor-operated. By contrast, the Marine Corps will both own and operate its portion of NGEN. The Marines already have procured all the network infrastructure they will need, Hendricks said.
Although vendors will operate 38 separate services, there will not be 38 prime contracts awarded next year. The department will make only two main awards-and possibly only one, Hendricks said. The final request for proposals will include performance of work statements involving transport services and enterprise services. Interested vendors will be able to bid on one or the other, both, or make a pitch that involves operating both transport and enterprise services under a single contract.
The Navy then will decide which arrangement is in the government’s best interest, and make the awards accordingly, Hendricks said.
He brushed aside suggestions that awarding a contract to one prime vendor amounted to the same sole-source method the Navy used for the original NMCI.
“What if awarding one contract saved millions of dollars? How much would having two contracts be worth? That’s the discussion we’re having,” he said. “We will receive bids for two contracts. I can promise you that. There will be an opportunity to present something that’s a combination of the two. If A plus B is much, much greater than B, I’m going to present that to leadership. They’ll have the data. But it doesn’t change the segmentation. It doesn’t change my ability to understand where the seams are so that in the future, if I decide performance is lacking in some area, I can pull it out and compete just that. I can’t do that today.”
Besides the two primary awards, the department is considering awarding an end-user hardware-as-a-service contract, in which a vendor would be paid to continually provide updated PCs and other devices. No decision has been made on whether to take that approach.
However many awards are ultimately made, Hendricks said they will be on the basis of lowest price technically acceptable (LPTA). The Navy will set what he described as a very high bar for technical capability and levels of service. Any vendors who cross that threshold will be evaluated solely on the price they offer.
“It’s the most precious network in the department of the Navy, but it’s made up of the same stuff that makes up corporate networks,” he said. “And there are companies out there that do this for a living. More than one. The distinguishing characteristics are hard to define, and we believe that making it an LPTA gives us an opportunity to get the right guy in.”
Each week, Defense Reporter Jared Serbu speaks one-on-one and in depth with the people responsible for managing the inner workings of the federal government's largest department, and those who know it best. Subscribe to the latest episode on PodcastOne or iTunes.