$10 billion Navy intranet deal under scrutiny

The chairman of the House Military Readiness Subcommittee wants to delay

the start of the Navy's $10 billion intranet project until Congress gets

more information about its costs.

In a letter to Navy Secretary Richard Danzig, Rep. Herbert Bateman (R-Va.)

complained that the Navy is moving ahead with the Navy/Marine Corps Intranet

(N/MCI) even though the service has not completed a cost-benefit or business

case analysis.

"Initiatives of this proportion need a complete financial analysis and a

thorough discussion and resolution to policy issues. The Navy has done neither,"

Bateman said in his letter dated Feb. 4.

The Navy has scheduled presentations this week and next at its San Diego

facilities by the four corporations that are vying for the contract — Electronic

Data Systems Corp. (EDS), Computer Sciences Corp., IBM Corp. and General

Dynamics Corp. The winner will own, operate and maintain a single data,

voice and video communications system for the Navy and the Marine Corps.

But Bateman's letter warning that the Navy may be moving too fast could

dampen plans to award the contract in June.

"Programs and initiatives of such large proportions must be analyzed and

reviewed thoroughly. For this reason, I request that you delay the acquisition

and implementation until it...is included in the future budget request and

receives the proper level of congressional oversight," Bateman said.

A spokesman for a senior Republican on the House subcommittee said pockets

of resistance to the five-year contract remain throughout the Navy and the

Marine Corps.

"There are some within the Navy and Marine Corps who are happy with their

current systems, and they are concerned that funding for the N/MCI is going

to come out of their legacy systems," the spokesman said. "People don't

want to give up that legacy funding."

The N/MCI is designed to serve 700,000 Navy and Marine Corps users. It would

connect to deployed vessels and units through the Information Technology

for the 21st Century project, which would connect bases with ships using

commercial networks. Naval and Marine bases overseas also would hook into

the intranet, with installation and upgrades covered by other contracts.

"EDS believes the Navy has a very well thought out plan to both implement

and manage the Navy/Marine intranet project," said Elizabeth Smith, senior

vice president for sales at EDS. "We believe the project will result in

significant cost savings."

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