Navy awards $1.4 billion hardware contract

HPI Federal won the Navy's NGEN-R contract, the first piece of the newly divided IT contract for the Navy and Marines.

U.S. Navy Photo by Mass Communications Specialist 2nd Class Joshua J. Wahl

The Navy awarded the hardware portion of its NGEN-R contract to HPI Federal on Oct. 8. The award is the first of two big awards made on contracts that divided the Navy's massive Next Generation Enterprise Network vehicle into hardware and services portions.

HPI Federal, a subsidiary of HP Inc., beat out two other bidders on the nine-year, $1.4 billion ceiling contract to supply computers and other devices to at least 400,000 Navy and Marine Corps users. The initial three-year base period is valued at $358 million, followed by six one-year options.

"The award of the NGEN-R [end-user hardware] contract is the culmination of several years of hard work towards moving from a single service contract to a multi-sourced contract model," Capt. Ben McNeal, program manager for the Naval Enterprise Networks Program Office, said in a statement.

The Navy expects to award the second NGEN-R contract covering services, integration and transport in early 2020. That contract is expected to be far larger than the hardware contract, with an estimated ceiling of $3 billion.

Perspecta, the incumbent on the unified NGEN vehicle, is bidding for the services portion of the new contract. Leidos and General Dynamics are also reportedly seeking the services contract.

Perspecta's overall deal on the current iteration of NGEN expires at the close of fiscal year 2020, but it could be extended to the end of calendar year 2020.

Ross Wilkers of Washington Technology contributed reporting to this article.