This story has been updated.
Late Thursday, the Navy awarded HP Enterprise Services its Next-Generation Enterprise Network contract, valued at $3.5 billion over five years. It will replace the current Navy Marine Corps Intranet contract next year.
NGEN will serve 800,000 Navy and Marine users located in the United States, but not overseas.
The Navy will maintain hands-on management of NGEN with sailors in control. That’s a sea change from how the service handled the Navy-Marine Corps Intranet, where HP and its predecessor company, Electronic Data Systems, ran the network under a contract valued at $10 billion when it was awarded in 2000.
Sean Stackley, assistant secretary of the Navy for Research, Development and Acquisition, said at a media briefing that HP came in with a lower price than the other bidder on the contract, Computer Sciences Corp. In May 2012, the Navy estimated NGEN would cost between $4.5 billion and $5.4 billion over five years.
Stackley said the winning NGEN bid represents a savings to the Navy and Marines of $1 billion over the life of the contract, but did not break down the savings.
Victor Gavin, the Navy’s program executive officer for Enterprise Information Systems, said the U.S. Fleet Cyber Command, headquartered at Ft. Meade, Md., will operate the Navy portion of the network. The Marine Corps took over management of its portion of the NMCI network on June 1, through its Marine Corps Network Operations and Security Center, in anticipation of the transition to the NGEN contract.
Radm. Diane Webber said NGEN will provide better command and control of the network by Navy personnel than NMCI.
Marilyn Crouther, senior vice president and general manager of U.S. Public Sector for HP Enterprise Services, said, “we know the technology, we know what it takes to operate this massive and highly complex IT environment, and we now embrace the opportunity to help build a better enterprise network.”
Heather Williams, a CSC spokeswoman said, “while this is not the outcome CSC hoped for, we’re proud of our team and the next generation technology solutions we put forth.”
HP partnered with AT&T Government Solutions, IBM Global Business Services Federal, Lockheed Martin Services and Northrop Grumman Systems Corp. on its NGEN bid. CSC teamed with Harris, Dell, General Dynamics and Verizon.
Correction: The original version of this article said NGEN would serve 900,000 users. The correct figure is 800,000. The article has been updated to correct the error.