The $728 million gamble

Navy's NMCI Options

Continue the strategic pause: Allows full testing of NMCI, but the Navy would have to pay Electronic Data Systems Corp. $728 million in fiscal 2002. If the pause continues, some portion of those funds would be wasted.

Lift the pause: No additional cost or schedule risks beyond those inherent in the project, according to officials at the Center for Naval Analyses.

Limit the pause: NMCI could proceed to some degree while testing continues. The risks to NMCI's schedule depend on the size and timing of the second funding allocation, according to CNA officials.

Terminate the contract: EDS would be entitled to recover up to $84.5 million in additional costs, and it is likely that the vendor would seek to recover all of its costs to date, more than $1 billion. The Navy would also face more costs to rebuild its existing infrastructure.