Navy extends NMCI pact

The Navy has awarded EDS a $3.1 billion extension of the Navy Marine Corps Intranet (NMCI) contract designed to connect 500,000 Navy and Marine personnel worldwide.

The Navy awarded EDS the NMCI deal in 2000 at an estimated value of $9 billion. An EDS spokesman said that as of the end of 2005 the company had recorded revenues of $3.3 billion from the contract and spent roughly $3 billion to deploy the hardware and software needed to support the enterprisewide system.

NMCI had a rocky start, with a slower than planned rollout and end-user complaints, but Rear Adm. James B. Godwin, the Navy’s program executive officer for enterprise information systems, said the contract extension marks “positive momentum” for the project.

The NMCI extension preserves the 15 percent seat price reduction locked in during the first phase of the contract, which Godwin said ensures “affordability of seat price” through 2010.

Delores M. Etter, assistant secretary of the Navy for research, development and acquisition, said she agreed with Godwin that the contract extension was “in the best interests of the Navy. NMCI has become a vital part of our day-to-day naval operations and I felt it critically important that we not lose connectivity for our users, particularly at a critical time in the global war on terrorism.”

Mike Jordan, chairman of EDS, said “the extension of the NMCI contract represents a significant achievement for EDS. Through the strong relationship between EDS and the Department of the Navy, we have been able to craft a contract extension 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 said it has already cut more than 1,000 network sites in the United States along with 290,000 seats to NMCI.

The company said NMCI has “significantly enhanced the protection of the Navy’s IT infrastructure through stringent, enterprisewide security measures.”

EDS said NMCI stopped 20 million unauthorized access attempts in 2005 and trapped, quarantined and disinfected 70,000 viruses.

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