Changes afoot for Navy's intranet deal

The Navy held a closed-door meeting Wednesday with officials from the four

potential prime contractors vying for ownership of the $16 billion Navy/Marine

Corps Intranet contract to map out what sources on Capitol Hill say could

be a "major change" to the contract.

A source on the House Appropriations Committee said the Navy called the

meeting because of "political considerations" because the committee does

not approve of the procurement in its current form. The committee has "concerns

that the Navy has not done the homework it needed to do and patently rejects

the Navy's view of the rules as they apply to a procurement of this size,"

the source said.

Scheduled for award in June, the N/MCI deal has come under fire from members

of Congress who are concerned that the Navy is pushing ahead with what would

amount to the largest networking contract in government without requesting

any new money in its fiscal 2001 budget request.

Lawmakers have also questioned the Navy's overall contracting process, lambasting

the service for dragging its feet on a business case analysis and not producing

proof that the contract will comply with federal regulations, such as the

Clinger-Cohen Act.

Although the Navy would not comment on the results of the meeting at press

time, an industry source said Congress is concerned that some of the money

earmarked for N/MCI is not coming out of operations and maintenance accounts,

as the Navy contends, but out of base acquisition accounts, potentially

drawing money from nontechnology-related projects. The source also said

an amendment may be drafted to allay Congress' concerns.

Another source on the Hill said the Navy has a good chance of being able

to move forward on time with N/MCI if it opts to conduct a smaller pilot

project first. "The appropriations committee is not likely to stand in the

wings if the Navy doesn't make an appropriate choice here," the source said.