Bid Protests Stop Clock on $3.5 Billion Navy Network Contract

This story has been updated. 

Computer Sciences Corp. and Harris Corp. filed protests with the Government Accountability Office Monday against the Navy’s award of its Next-Generation Enterprise Network contract to HP Enterprise Services.

The deal – valued at $3.5 billion over five years -- 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.

During a media briefing following the June 27 award, Sean Stackley, assistant secretary of the Navy for research, development and acquisition, said HP came in with a lower price than the other bidder on the contract, Computer Sciences Corp. CSC had partnered with Harris on its bid.

Warren Suss, president of Suss Consulting, said he was not surprised by the protests, as both CSC and Harris “invested a lot of money in their bids. Companies now build in a protest as part of their ‘win’ strategy.”

The Navy wants to switch to NGEN by April 2014. HP and predecessor EDS have operated the Navy Marine Corps Intranet since 2000, under a $10 billion contract followed by a continuity of services contract valued at $6.9 billion if it runs through September 2014.

GAO said it would decide the CSC and Harris protests by Oct. 23, adding three months to the timetable for the transition. A delay in the transition due to the protests would give the Navy grounds to extend the continuity of services contract beyond next September if needed, Suss said.

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 Dell, General Dynamics and Verizon, in addition to Harris.

A spokesman for HP Enterprise Services said in an emailed statement, "The NGEN solicitation and evaluation process was rigorous and thorough. HPES has every confidence in the Navy’s evaluation and selection of HPES to continue to meet the Navy’s IT services needs."

CSC and Harris declined to comment on their protests.