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CHIPS Articles: The U.S. Navy Successfully Accelerates Move to NGEN Contract

The U.S. Navy Successfully Accelerates Move to NGEN Contract
Migration will save about $20 million per month
By Sharon Anderson, CHIPS Senior Editor - April-June 2014
There is a good news story in Department of the Navy information technology: Navy Marine Corps Intranet (NMCI) services will be available under the Next Generation Enterprise Network (NGEN) contract by September, cutting 88 days from the transition schedule, and positioning the Navy to save about $20 million per month.

Capt. Michael N. Abreu, program manager of the Naval Enterprise Networks (NEN) Program Office (PMW 205), called the savings under NGEN, “real, no-kidding savings for the taxpayer.” The captain and Bill Toti, vice president and account executive for the U.S. Navy and Marine Corps Accounts for HP Enterprise Services, shared critical elements of the NGEN contract with reporters on April 4.

The DON awarded the NGEN contract on June 27, 2013. The contract represents the next phase of NMCI services, providing continued IT operational support to Sailors and Marines. The transition of NMCI services to the NGEN contract officially started Nov. 22, 2013.

The $3.5 billion NGEN contract, which saves the department $1 billion over the Five-Year Defense Plan (FYDP), is the follow-on to current NMCI Continuity of Services Contract (CoSC). The new contract transitions the NMCI to a government-owned/contractor-operated (GO/CO) model.

NMCI Environment

Execution of the NGEN contract was delayed due to protests filed after the contract was awarded, requiring a new transition timeline to be worked out, Abreu said.

According to Abreu, the NGEN contract allows a 400-day transition period, but because of actions taken by the Navy and HP, the new timeline knocks off about three months from the 400 day-period.

Taking command and control over the massive NMCI turned out to be more complicated than anticipated.

First, the DON had to purchase the intellectual property rights from HP to understand the complexity of operating a network the size and scope of NMCI. Second, the department had to purchase the entire NMCI infrastructure that has been owned by HP under the network’s original contractor-owned/contractor-operated (CO/CO) model. The Navy has nearly completed the purchase in a series of payments and has already begun to exercise command and control of the network, although HP handles all day-to-day operations.

Because the NMCI is one of the largest intranets in the world, with about 400,000 seats and 800,000 users, Toti explained there are no out-of-the-box instructions for securely operating an intranet of its size and complexity.

The NMCI is not simply a federation of networks cobbled to work together, Toti said, it is a secure, integrated network.

"When you scale something up to this size, things don't work out of the box," Toti said. "We have to teach Microsoft about how their Exchange servers work when you have a million users. We have to teach Cisco about how their routers and switches work when you connect as many devices as we have. It isn't merely a matter of trying to bring people into the government engineering space that have done this kind of thing before, because nobody has done this before. That means the Navy needs to develop skills on the government side that they didn't even have before they outsourced the network. And that requires time."

Although the CoSC lasted longer than originally planned, its three-year execution allowed the Navy the time to train personnel to operate a network, as complex as the NMCI, Abreu said. But instruction just wasn’t technical; personnel had to learn how to operate the network in accordance with DoD rules and standards, including in accordance with U.S. Cyber Command security directives.

Despite the difficulties both the DON and HP worked very hard to shorten the transition timeline, Abreu said, and achieved success through engineering discipline and rigor.

"There are two key enablers to that: One is that the incumbent won the competition, and we had built the RFP based on a non-incumbent winning," he said. "So when we were able to talk to HP once the protest was lifted, we immediately started asking them what they could to do accelerate the transition internally. They did that. The other piece was an awful lot of hard work and planning since we started in November. We've had to work constantly as a team to plan how we're going to execute this transition on an earlier timeline."

Toti said transitioning the ownership of the network's IT assets from HP to the DON turns upside down a lot of the fundamental rules that have governed how the NMCI has been running for the past 14 years.

"It requires things like asset management to be done in accordance with law and DoD standards," Toti said. "I can turn a purchase order around for a subcontract in a couple days, but the government can't because of federal acquisition regulations. So processes have to change. If you tried to operate this by the same rules the company did when you're operating under rules the company was not constrained by, it wouldn't work. Things have to change. It requires a new coordinate set."

Navy C2

U.S. Fleet Cyber Command/U.S. 10th Fleet and its subordinate commands, such as Naval Network Warfare Command and Navy Cyber Defense Operations Command, exercise command and control for the NMCI. The Navy also has the option to issue HP a “Government-Directed Action” which requires an immediate response by HP to cybersecurity threats, according to Toti.

The new infrastructure and services model is designed to increase government operational control of the network, but will also give the Navy better insight into costs and efficiencies.

With the new ability to understand services and pricing, the Navy was able to see about $20 million in monthly savings compared to the older contracts.

Sea Change in Contracting

As the NMCI evolved, Abreu said, the Navy started thinking of the network as a weapons system, not simply as the infrastructure that supported the Navy's business operations. As such, the DON recognized the government needed more command and control over the overall health of the network and more innovative thinking to reduce costs and increase operational efficiencies.

Abreu explained that he spent a year at Google learning from it and other companies how they operate big data networks. Lessons learned were assembled and the department had an ongoing discussion with industry groups to develop a new business model to operate the NMCI. One of the takeaways was that the government needed to own the NMCI infrastructure.

“If you think of the NMCI as analogous to a weapons program, a ship, [for example] that the Navy owns and maintains, in that sense the NMCI is no different [than other weapons systems],” Abreu said.

By acquiring the NMCI network infrastructure and having HP provide enterprise services, the Navy strengthens its capabilities significantly, according to Toti. Owning the network, he said, allows the Navy to make more strategic decisions regarding the equipment, while allowing HP to manage routine services.

The Navy is already making better informed decisions, according to Abreu, and will be using the ITIL model, the industry standard, to manage NMCI assets and technology refresh.

The Navy is also sharing its lessons learned with other government agencies, such as the Department of Justice and others to further inculcate government efficiencies, according to Abreu.

The U.S. Marine Corps has already transitioned under the CoSC to a new governance model, government-owned/government-operated (GO/GO), and although the Marine Corps refers to its network as the Marine Corps Enterprise Network (MCEN), the network is supported under the CoSC and soon to be NGEN contract, Abreu explained.

Business Case Analysis

The Defense Department is setting up an enterprise IT architecture and enterprise services that are intended to serve the entire DoD. One such initiative is the Joint Information Environment (JIE) that all the military services are supposed to share in for enterprise services, such as data centers, email and transport services, all of which the NGEN contract provides and the Navy already owns.

The Navy and Marine Corps are working on a business case analysis to determine whether moving to DoD enterprise services will yield cost savings for the DON, Abreu said.

Abreu said he thinks the Navy is ahead of the other services in moving toward a joint IT architecture. He said the NGEN contract allows the Navy the flexibility to contract for email or any of the other 30-plus enterprise services offered under NGEN, something it couldn’t do under the legacy NMCI contract.

An NGEN key business strategy allows the DON to re-compete services if it believes it can get a better price for a given service from a different vendor. But Abreu said he can't yet determine when individual services competitions will begin.

The User Experience

Migration to the NGEN contract will be seamless to the fleet, Abreu said. While there will be some changes, such as changes to the online tool to order enterprise services and in IT support, there is an ongoing discussion with fleet information officers and Navy IT managers so they understand any modifications in the NGEN contract.

Abreu said the [NEN] program office will continue to strive to maintain NMCI availability and enhance user productivity at the right cost. The Navy will also continue pilots, such as the Hosted Virtual Desktop (HVD) and mobility with handheld devices, he said.

“The important thing to remember is that the network [NMCI] is not static, it is always evolving, always improving. [For example] bandwidth requirements have exploded in the last few months,” Abreu said.

The NGEN contract includes a base year and four, one-year options which, if exercised, will have a potential cumulative contract value of about $3.5. Work will be performed at nearly 2,500 Navy and Marine Corps locations throughout the continental U.S., Hawaii and Japan, from major bases to single-user sites. If all of the options are exercised, the work will continue through 2018. Based on historical budget data for the same services, the NGEN contract saves the DON approximately $1 billion over the five-year life of the contract.

PEO EIS Public Affairs Office
(703) 604-4380

Capt. Michael N. Abreu, program manager of the Naval Enterprise Networks (NEN) Program Office (PMW 205).
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