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CHIPS Articles: Next Generation Enterprise Network Contract Enables Greater Innovation and Advanced Technology

Next Generation Enterprise Network Contract Enables Greater Innovation and Advanced Technology
NGEN Provides Cost Transparency and Will Save $1 Billion over Five-Year Contract Life
By Sharon Anderson - July-September 2013
The Department of the Navy took another historic step in providing secure, reliable enterprise services for DON personnel June 27 with the award of the Next Generation Enterprise Network contract. The Honorable Sean J. Stackley, Assistant Secretary of the Navy for Research, Development and Acquisition, in a discussion with reporters, said the department spent a lot of time “hammering out the requirements” for the system.

“We were looking for affordability; we were looking for the ability to bring innovation to the system, the ability to move the system as technology moved forward. A very important aspect of the system, we were looking for greater command and control of the network. We were also looking for the opportunity to continuously compete going forward. That led to the NGEN strategy,” Mr. Stackley said.

The NGEN contract phase of the Navy Marine Corps Intranet services represents a migration from many of the key aspects of the original contract awarded in 2000. More than 10 years ago, NMCI made history when the DON consolidated thousands of networks into one that was built, owned, controlled and managed by prime contractor Hewlett-Packard Enterprise Systems. It was a bold undertaking, and after some initial growing pains, NMCI proved to be a secure centralized network, with standard technologies and government oversight. As NMCI enters the NGEN contract phase of services, it remains one of the largest intranets in the world with 800,000 users and 400,000 workstations.

Even with the success of the NMCI, the DON came to realize there were some things about it the department wanted to change.

“If you look back to when the NMCI contract was established, the vision then was that this was an administrative network and we just lashed a bunch of networks into one big administrative network. But it became very apparent over time that it was not an administrative network, it is a tactical network. That’s why it was very critical that the services (Navy and Marine Corps) be able to take over command and control of the network — which was one of the underpinnings of the NGEN strategy,” Mr. Stackley said.

“First we were going to need to procure the hardware, the infrastructure. The DON needed to be able to own that in order to be able to compete the services that we’re going to provide across the network,” Mr. Stackley said. “We spent a lot of time working with industry, cast a wide net. It brought industry surveys looking for best practices, looking for the best ideas out there. We arrived at what we refer to as a segmented approach — got away from the big monolithic network and broke it up into segments. Each of these are broken into what we refer to as indefinite delivery/indefinite quantity items inside the contract. Going forward, what we’re providing is services that rely upon the network that the DON owns.”

The acquisition strategy allowed for multiple ways of bidding in two separate IT segments — enterprise services and transport services. There are 35 contract line items or services. Two teams bid, and the DON received a total of seven offers. The winning team for both segments is led by HP, which won on the basis of the terms the DON established from the beginning of the source selection: lowest-price-technically-acceptable or LPTA. The services are broken up by capability and are modeled after the IT Service Management industry standard, ITIL, or Information Technology Infrastructure Library, known as ITILv3. This framework clearly defines the enterprise-level IT management policies, standards, processes, roles and responsibilities required to inform and guide IT acquisition programs and service management activities.

Mr. Stackley said both teams submitted offers that met the Navy's technical standards, and HP won strictly on the basis of price.

The prime contractor is required to subcontract at least 35 percent of its work to small businesses which will contribute to the innovation and affordability that the DON looked for in the new contract model.

Mr. Victor Gavin, Program Executive Officer for Enterprise Information Systems, said the LPTA approach is critical to ensuring a competitive environment moving forward. “We plan on maintaining that competitive environment, through our continued segmented approach, that is part of the innovation around this acquisition. But most importantly, the NGEN contract is vitally important to ensure the continued delivery of IT services to our 800,000 users, 400,000 workstations, and 2,500 locations across the continental United States, Japan and Hawaii.”

Mr. Gavin praised the PEO EIS team, PMW 205 Naval Enterprise Networks Program Office, as well as partner organizations for their support: the DON Chief Information Officer; resource sponsor, Deputy Chief of Naval Operations for Information Dominance (OPNAV N2-N6); Command, Control, Communications and Computers (C4) Marine Corps; technical and contracting authorities Space and Naval Warfare Systems Command (SPAWAR) and Marine Corps Systems Command (MARCORSYSCOM) who had integral roles; U.S. Fleet Cyber Command/U.S.10th Fleet; Navy Cyber Forces; and Naval Network Warfare Command.

Ms. Barbara Hoffman, DON Principal Deputy Chief Information Officer, said the DON CIO is very excited about the NGEN contract.

“It provides the DON with the flexibility it needs to separate out enterprise services, such as email, from the previous bundled solution,” she said. “It’s providing us that transparency of cost that we need. It is deconstructing the network into segments and services that will provide us increased opportunities for competition at the appropriate level for either the segment or the service that we so choose, and providing the Department of Navy with best value enterprise network delivery.

“As well, it also will enable both current and emerging IT capabilities. It supports the very flexible competitive nature that the Department of Navy needs, and it is the DON’s crucial path to move towards JIE, the DoD’s Joint Information Environment,” Ms. Hoffman said.

It is not going to be a single step from NMCI to NGEN; the transition period will likely take up to 13 months. The NMCI contract officially expired in 2010, and the DON awarded a continuity of services contract (CoSC) to commence early transition activities.

"You cannot underestimate how difficult it is to make the transition from a contractor-owned, contractor-operated, 400,000-seat network, to a government-owned, hybrid network," Mr. Stackley said. "Now that we're there, we have a far greater flexibility to compete services on that network."

Under NGEN, the Navy and Marine Corps will own the infrastructure and intellectual property; they will exercise full command and control of the network. For the Marine Corps, much of the transition has already occurred. The Marine Corps officially transitioned June 1 to a fully government-owned and operated network. Marines and civilian Marines will operate the network with HP playing a supporting role, said Brig. Gen. Kevin J. Nally, Director C4 and Deputy CIO for the Marine Corps. “Our Marines and our civilian Marines will be working side-by-side with the HPES contractors as contractor support of us. So we will be able to set the priorities daily on what we think needs to be done, and we’ll work closely with HP like we have for the last couple of years and accomplish the mission,” he said.

“We’ll be utilizing the NGEN contracts to obtain contracted personnel support for enterprise services, transport services, and our end-user desktop touch labor. We are government-owned, government-operated with contractor support. This allows the Marine Corps greater flexibility and cost savings. Now we have the option to leverage the NGEN contract items to supplement our USMC services on what we call our Marine Corps Enterprise Network.

“The Marine Corps will essentially manage a regionally organized and operated [MCEN] giving greater control to the regional commanders,” Brig. Gen. Nally said. “This enables flexibility that the commanders wanted, that the Marine Corps requires, while allowing adherence to JIE standards and directives.

“The Marine Corps bought labor. We didn’t buy a system or services. Now we have the ability to drive it in a competitive resource-constrained environment to meet our mission requirements, better support interoperability, rapidly adapt emerging cyber security, cyber standards and adhere quickly to JIE standards and JIE tactics, techniques and procedures,” Brig. Gen. Nally said.

The Navy will also exercise full authority and complete command and control of the network.

Rear Adm. Diane Webber, Deputy Commander, FCC/10th Fleet said, “NGEN for Navy represents an opportunity for us to move from a contractor-owned and contractor-operated network to a government-owned and contractor-operated environment. In making that transition we believe we gain the necessary authorities for increased command and control, improved situational awareness, and the ability to maneuver the network in accordance with the operational commander’s intent.”

FCC/10th Fleet will operate the network with information systems technicians (ITs) and HP contractors doing most of the hands-on work, Rear Adm. Webber said. Governance and configuration management control and high-level decisions will be made by FCC.

In preparation for the transition, the Navy expanded its network operational command and control workforce more than a year ago to exercise greater control as part of the transition.

“The workforce changes occurred at the global and regional levels at critical network operational facilities and will improve network warfighting reliability, adaptability, security, governance and mission capability,” Rear Adm. Webber said. “First and foremost, our Navy NGEN is about generating the outcomes we want as a warfighting organization.”

Each of the officials said in the short term, users will see no difference in network capabilities or performance. The Marine Corps did make an immediate change in customer service, said Brig. Gen. Nally.

“The only difference we’ve seen in the last 27 days is ... If an individual needs assistance, then we send Marines, civilian IT or HP people in to go put eyes on and see if they can fix it. The Commandant’s guidance to me several years ago was I want every Marine, private through general officer, to have the same service that I personally get. And that’s the perception right now in the Marine Corps, that that’s starting to happen,” the general said.

NGEN will continue to evolve and mature driven by industry standards and modernization. Right now the Navy is moving toward a secure cloud architecture, according to Mr. Gavin.

“The government always has the right to incorporate, change and modify the direction of the network. We fully plan to do that,” Mr. Gavin said. “Additionally the contract offers the contractor an opportunity under a shared savings clause to propose innovative ways to drive down the cost curve and provide newer technologies at a lower cost. In doing so, the government has agreed to share savings associated with those changes with the contractor. So we believe that incentive will also continue to keep us innovative and current.”

Mr. Gavin explained that at any time the department chooses, any of the 35 services can be re-competed. “Obviously, on the [option] year is the best time to do that.”

Anyone can bid on any of the segments, including the Defense Information Systems Agency.

“We currently have a very good partnership with DISA right now … And we see ourselves continuing that partnership with DISA. We will use whatever technologies that DISA has available, as long as they remain technically feasible and cost-wise. The cost piece is very important to us. So we welcome DISA competing in a competitive environment,” Mr. Gavin said.

Ms. Hoffman agreed.

“DISA does have a lot of good capabilities, and as long as they are competitively-priced, they will be considered as we move forward in any sort of competition of any segment,” she said.

Contract performance and user satisfaction will be measured in much the same way as under the previous contracts through a combination of user surveys, metrics and service level agreements, according to officials.

The NGEN contract includes four, one-year options which, if exercised, would bring the evaluated contract cumulative value to $3,454,735,513. Work will be performed at nearly 2,500 Navy and Marine Corps locations worldwide, from major bases to single-user sites, and work is expected to be completed in June 2014. If the options are exercised, the work will continue through June 2018. Based on historical budget data for the same services, the NGEN contract saves the DON more than $1 billion over the five-year life of the contract, Mr. Stackley said.

The HPES NGEN team includes AT&T Government Solutions, Inc., Vienna, Va.; International Business Machines Global Business Services Federal, Bethesda, Md.; Lockheed Martin Services, Inc., Gaithersburg, Md.; and Northrop Grumman Systems Corp., McLean, Va.

Mr. Stackley closed with a final emphasis on the value of the NGEN competition. “One of the things we achieved was extraordinary competition. The teams that formed were two very strong teams, and they both submitted very competitive bids. That was to the greater good of the Department of the Navy,” he said. “And we talk about affordability, but this contract is achieving greater than a billion dollars of savings for the Department of the Navy. In this fiscal environment that’s as critical as it gets.”

For more information about NGEN and the NGEN team
FCC/10th Fleet –
SPAWAR Twitter -, or Facebook - spaceandnavalwarfaresystemscommand

The Honorable Sean J. Stackley, Assistant Secretary of the Navy for Research, Development and Acquisition
Victor Gavin, Program Executive Officer for Enterprise Information Systems
Barbara Hoffman, DON Principal Deputy Chief Information Officer
Brig. Gen. Kevin J. Nally, Director C4 and Deputy CIO for the Marine Corps
Rear Adm. Diane Webber, Deputy Commander, U.S. Fleet Cyber Command/U.S.10th Fleet
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