Government Computer News
Navy, EDS avert NMCI divorce at least for now
Under new deal, contractor to manage the network until 2010
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After studying the issue closely I agree with the NMCI program manager that the decision to exercise the option early was in the best interests of the Navy.”
—Navy’s Delores M. Etter
—Navy’s Delores M. Etter
The two sides recently resolved long-standing claims over the Navy-Marine Corps Intranet program, with the Navy agreeing to fork over $100 million to settle the contract dispute and move forward with the $3.1 billion program extension that keeps EDS at the helm of NMCI until 2010.
The company initially had sought more than $780 million from the Navy in unanticipated costs—largely what it lost on the Pentagon IT reconstitution after Sept. 11, 2001, and the expenses associated with reducing legacy applications and maintaining dual desktops, according to Lt. John Gay, a Navy spokesman.
But on March 24, ending widespread speculation, the two sides announced they had reached agreement on the future of the consolidated voice, video and data network, which is now valued at nearly $12 billion and will link more than 500,000 sailors and Marines at roughly 1,000 sites across the country and the Far East.
“After studying the issue closely, I agree with the NMCI program manager that the decision to exercise the option early was in the best interests of the Navy,” said Delores M. Etter, assistant secretary of the Navy for research, development and acquisition.
Michael Jordan, EDS’ chairman and CEO, called the extension a “significant achievement for EDS” that “ensures the long-term success of the Navy and Marine Corps’ mission while providing one of the most secure private network platforms in the world.”
EDS agreed to continue its 15 percent discount per computer workstation, making assurance enhancements and refreshing technology. Also included in the terms of the agreement are revised transition plans, which include buying back equipment and infrastructure at the end of the contract, Gay said.
The Navy had not released a public copy of the contract extension at press time.
The original seven-year NMCI contract ends in October 2007, and for more than a year the Navy had been mulling its options. Last June, the Navy announced it was conducting a business case analysis to determine whether to extend the three option years to EDS or to recompete the contract, opening it up for other companies to submit bids.
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