Navy intranet hits money snag

The Navy can't afford the Navy/Marine Corps Intranet without sacrificing

funds earmarked for critical operations, senior Navy commanders told top

Navy brass last week.

Senior admirals met behind closed doors with Navy chief information

officer Dan Porter, the vice chief of naval operations, Adm. Donald Pilling,

and other N/MCI officials to discuss how the Navy will pay for its $16 billion

intranet proposal.

The Navy officials met to figure out the percentage of the Navy's total

annual information technology budget requirements that would be included

under N/MCI and how much money is actually available for the project.

Navy officials could not be reached for comment.

According to a senior Navy official present at the negotiations, Navy

and Marine Corps commands determined that the intranet project would require

$2.1 billion each year, which is much higher than the $1.52 billion originally

estimated.

Even worse, the Navy has only identified about $800 million in available

funding, the official said. Likewise, the Marine Corps identified roughly

$460 million in requirements but could only come up with $200 million to

pay for them, said the official.

"The message sent to [Pilling] was that N/MCI is the greatest thing

since sliced bread, but we're not sure we can afford sliced bread," the

official said. "The delta between how much is needed and what the Navy can

pay was significant."

N/MCI would replace a hodgepodge of 24 Navy and Marine Corps networks

with a seamless network owned and operated by a single contractor. The Navy

argues that it needs the intranet to prepare for network-centric warfare

and to beef up information security on its computers.

The discussion focused on ways the Navy could reduce the total cost per

seat under N/MCI — including using thin clients, delaying the use of optional

contract line items and even installing a scaled-down version of the contract

that would offer only network access and not hardware.

Still, the senior group of admirals, particularly Adm. Vern Clark, commander

in chief of the Atlantic Fleet, told the Navy that it was "unacceptable"

to ask commanders to cut money from their operating forces to pay for N/MCI,

according to the official present at the meeting.

But the source added that "at no time did the vice chief say that the

[Navy commanders] are going to have to fork over more money." Rather, it

is more likely that N/MCI officials will be told to "go back to the drawing

board."

The all-day meeting came days after Congress dealt N/MCI a life-threatening

blow with language in the 2001 Defense authorization bill that withholds

money for the program until at least two months after the Navy can produce

a laundry list of studies and contractual assurances to Congress.

The Navy planned to award the N/MCI contract in early June. However,

sources said that the additional loops that the Navy must now jump through

could delay the contract until after the November elections.

David Litchfield, director of N/MCI services within the Navy's office of

the CIO, said the Navy has a team "working full-time on how [the Navy is]

going to measure N/MCI [performance] and return on investment." Litchfield,

who spoke last week at Federal Sources Inc.'s Outlook 2001 conference in

Falls Church, Va., declined to comment on the specifics of the Navy's approach

to responding to the language in the Defense bill.

But "if we get too fancy about how we are measuring ourselves, we could

be walking into a swamp," Litchfield said. Although the Navy has amended

the N/MCI contract 10 times since December, Litchfield said the plan remains

the same as initially envisioned.

"We have not changed our strategy for getting to contract or how we

are going to pay for it," he said.