NMCI slowdown causes layoffs

Electronic Data Systems Corp. has laid off 10 percent of the staff working on the Navy Marine Corps Intranet contract following a lengthy debate between Navy and Defense Department officials over how thoroughly the system should be tested.

The NMCI Information Strike Force —a conglomeration of NMCI contractors led by EDS —has cut about 300 jobs, EDS spokesman Chris Grey said. The layoffs, which officials expect will only be temporary, affect both EDS and its subcontractors.

The job cuts come in the wake of discussions between Navy and Pentagon officials over how rigid the testing schedule should be. Those discussions resulted in an agreement signed this month to reduce the number of seats EDS can roll out in coming months. EDS currently controls about 42,000 seats of the Navy's approximately 360,000 seats.

The agreement seeks to move the $6.9 billion effort to outsource the Navy and Marine Corps network infrastructure toward a timetable driven by specific events, said Ron Turner, the Navy's deputy chief information officer. For example, the next significant milestone comes this winter, when EDS will complete a customer test and evaluation at NMCI's first four sites. Once DOD reviews those tests, the Navy will be able to roll out an additional 100,000 seats, Turner said.

Because of the shift, the agreement can now extend through the life of the NMCI contract, said Bill Curtis, director of the DOD CIO's investment and acquisition directorate. The NMCI contract has built-in incentives that push the Navy and EDS to advance as quickly as possible, he said. The agreement enables DOD to review the tests of that system —including some independent reviews —as the work proceeds.

"It's all very logically linked," Turner said.

The layoffs were spurred largely by the fact that the legislation giving the Navy the go-ahead for NMCI also included a Sept. 30 deadline for the Pentagon to assess the program and determine its future. Under the new agreement, that determination will not take place until sometime this winter.

"I'm confident we now have an agreement we can work with," Curtis said.

The cuts are seen as a short-term measure. "Those staffing levels were appropriate to meet the original rollout schedule," Grey said. The NMCI Information Strike Force plans to increase staffing in the near future once NMCI clears this winter's milestone, he added.

Grey said EDS has tried to reassign the affected people elsewhere within the company and has asked subcontractors to do the same where possible.

The cuts were determined before the Sept. 11 terrorist attack on the Pentagon, Grey noted. The work needed to repair the Pentagon could shrink the number of people laid off, although EDS officials did not know to what extent.

Lawmakers still must approve the testing agreement.

About the Author

Christopher J. Dorobek is the co-anchor of Federal News Radio’s afternoon drive program, The Daily Debrief with Chris Dorobek and Amy Morris, and the founder, publisher and editor of the DorobekInsider.com, a leading blog for the Federal IT community.

Dorobek joined Federal News Radio in 2008 with 16 years of experience covering government issues with an emphasis on government information technology. Prior to joining Federal News Radio, Dorobek was editor-in-chief of Federal Computer Week, the leading news magazine for government IT decision-makers and the flagship of the 1105 Government Information Group portfolio of publications. As editor-in-chief, Dorobek served as a member of the senior leadership team at 1105 Government Information Group, providing daily editorial direction and management for FCW magazine, FCW.com, Government Health IT and its other editorial products.

Dorobek joined FCW in 2001 as a senior reporter and assumed increasing responsibilities, becoming managing editor and executive editor before being named editor-in-chief in 2006. Prior to joining FCW, Dorobek was a technology reporter at PlanetGov.com, one of the first online community centers for current and former government employees. He also spent five years at Government Computer News, another leading industry publication, covering a variety of federal IT-related issues.

Dorobek is a frequent speaker on issues involving the government IT industry, and has appeared as a frequent contributor to NewsChannel 8’s Federal News Today program. He began his career as a reporter at the Foster’s Daily Democrat, a daily newspaper in Dover, N.H. He is a graduate of the University of Southern California. He lives in Washington, DC.


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