Navy adjusts terms of intranet deal
- By Dan Verton
- Apr 17, 2000
The Navy held a closed-door meeting last week with officials from the four
potential prime contractors vying for the Navy's $16 billion intranet contract
to map out what sources on Capitol Hill say could be a major change to the
The Navy called the meeting about its Navy/Marine Corps Intranet (N/MCI)
contract because of "political considerations," according to a source on
the House Appropriations Committee.
The committee does not approve of how the Navy has designed the procurement
and has "concerns that the Navy has not done the homework it needed to do
and patently rejects the Navy's view of the rules as they apply to a procurement
of this size," the source said.
Scheduled for award in June, the N/MCI deal has come under fire from
members of Congress who are concerned that the Navy is pushing ahead with
what would amount to the largest networking contract in government without
adding any new money to its fiscal 2001 budget request. If the Navy is successful
in pushing the contract through Congress, N/MCI will link 360,000 users — far fewer than the original estimate of 700,000 — under a single network
But lawmakers have criticized the service for not yet conducting a business-case
analysis and not producing proof that the contract will comply with federal
The Navy had not commented on the results of the meeting by press time.
An industry source said Congress is concerned that some of the money earmarked
for N/MCI is not coming out of operations and maintenance accounts, as the
Navy contends, but out of base acquisition accounts, potentially drawing
money from nontechnology-related projects. The source said an amendment
may be drafted to allay Congress' concerns.
Another source on the Hill, who spoke on the condition of anonymity,
said the Navy may conduct a smaller N/MCI pilot project first. "The Appropriations
Committee is not likely to stand in the wings if the Navy doesn't make an
appropriate choice here," the source said.
Insiders on the Hill say Appropriations Committee staff member David
Norquist is leading the N/MCI congressional oversight push. Sources say
Norquist is a respected member of the appropriations staff who does not
oppose N/MCI but is keeping a close watch on how the Navy plans to proceed
with the procurement.
Olga Grkavac, executive vice president of the Information Technology
Association of America's Enterprise Solutions Division, said it would be
"tragic" if Congress introduces a major obstacle to the contract at this
stage of the procurement.
An industry source estimated that the four potential primes have spent
about $10 million so far on the project.