Lower costs forecast under NMCI

Cipriano's NMCI briefing

Under the Navy Marine Corps Intranet outsourcing deal, Navy officials estimate that initial annual costs per user will be more than $400 less than what the Navy pays currently for video and data services.

The Navy is spending about $3,851 annually per user, according to Joseph Cipriano, the Navy Department's program executive officer for information technology. Under the NMCI contract with Electronic Data Systems Corp., the Navy will spend an average of $3,412 per "seat," Cipriano said.

Cipriano's briefing materials, delivered last month and posted at the {http://www.don-imit.navy.mil} Navy Department chief information officer's Web site, didn't specify how Navy officials figured the average costs.

Under scenarios that would pay EDS the maximum amount of money for meeting service-level agreement incentives, the cost to the Navy would be $3,812 per user, he said.

After fiscal 2005, the average NMCI cost per user would be about $3,000, according to Cipriano. The Atlantic Fleet plans to pay $4,734 per ashore NMCI user, with the Office of the Chief of Naval Operations planning to spend $4,571 per seat. The Pacific Fleet would spend $4,229 per user, according to Cipriano.

The Naval Reserve Forces should have the lowest NMCI costs, paying $2,458 per year for each user on average, according to Cipriano.

Cipriano's figures did not include the Marine Corps.

These figures compare with the $8,000 to $12,000 annually that Gartner Inc. consultants claim major corporations spent on IT per user a few years ago.

It's difficult for many government organizations to determine how much they spend on IT because they use operations and maintenance funds as well as procurement dollars to pay for products and services. It's also difficult to account for employee time when personnel informally provide help-desk support.

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