GAO gives Navy go-ahead on intranet

A General Accounting Office report has given the go-ahead to the Navy's

planned $16 billion Navy/Marine Corps Intranet contract, sources on Capitol

Hill said.

The report, which GAO may release by the end of the month, analyzes the Navy's financial and business case for N/MCI. GAO has not committed to publishing a full report on its analysis. But the findings, coupled with planned meetings between the Navy and members of Congress, are a critical step in the Navy's acquisition of N/MCI services. Language inserted into the Defense authorization bill prohibits the Navy from spending any funds unless Congress' concerns about the N/MCI long-term funding plan are met.

Sources had indicated that the N/MCI contract could be awarded as early

as Sept. 8. However, Rep. Herbert Bateman (R-Va.), chairman of the House

Armed Services Committee's Military Readiness Subcommittee, had asked Navy

officials not to award the contract until he and other members of Congress

could meet with them. That meeting — to discuss the Navy's final business

case analysis and the GAO report - was to follow Congress' holiday recess,

but it has not taken place, a spokesman for Bateman said.

Congress requested the GAO report after a March 8 hearing during which Bateman

and other members of Congress lambasted the Navy for moving ahead aggressively

on N/MCI without involving Congress in the funding process.

GAO planned to complete the report by Aug. 25 and has not yet released it

to the public. "We're running a little late," a GAO spokeswoman said.

Although nobody outside the Navy or Congress has seen the report, an industry

source said the "Navy was pleased" with the results. The Navy, which has

received a summary of the report's findings, declined to comment.

A spokesperson for the Navy said draft press releases are being prepared

for a contract award in the next few weeks.

However, Navy and industry sources told FCW that they still think the contract

could be awarded as early as Sept. 8 after the markets close on Wall Street.

Even a Saturday award on Sept. 9 wouldn't be a surprise, said one industry

source.

A recent N/MCI transition briefing given Aug. 17 by Bonnie Bowes, the Naval

Air Systems Command's transition manager, listed the award date as Sept.

9. Navair will be the first Navy organization to switch to N/MCI.

According to the briefing, Navair's legal team is reviewing a draft clause

that will enable Navair's existing contractors to purchase IT services through

the N/MCI contractor. The target date for approval of the clause is Sept.

18.

Predictions of what vendor will be the winner of the megadeal are already

flowing. "My money is on CSC," a member of the transition team at Navair

said, referring to Computer Sciences Corp. "They had the best team during

due diligence — asked all the right questions, brought the right people

with them, etc.... Now they've formed an alliance with three small businesses

presently supporting Navair in the IT arena and have all the resumes they

need to staff the operation from the word "Go.' "

Other contractors vying for the deal include Electronic Data Systems Corp.,

General Dynamics Corp. and IBM Corp.