Financial system retooled for NMCI

Navy NMCI office

The Navy is working to adapt the Defense Department's financial management system for new practices under the $6.9 billion Navy Marine Corps Intranet contract.

Under the NMCI contract, the Navy will pay the first tier of small-business subcontractors directly rather than having them paid through the prime contractor, Electronic Data Systems Corp.

This direct payment practice will ensure that the many small businesses on the EDS-led Information Strike Force team are paid quickly, said Joan Benning, lead administrative contracting officer for NMCI.

The Navy has never tried this type of payment before, and the Defense Finance and Accounting Service's financial system does not provide a way to pay subcontractors directly.

The Navy is working with DFAS to adapt the system so that the direct payments can go through, Benning said Tuesday at the Performance Based Service Contracting conference in Washington, D.C.

When reviewing the NMCI contract last year, members of Congress requested that the first-tier small businesses be paid directly. However, EDS will evaluate the subcontractors' performance to determine whether they meet the Navy's service-level agreements, Benning said.

The first 50,000 seats under NMCI have started the transfer to the Information Strike Force. Starting in May, the Navy will test and evaluate the success of that handover, said Joseph Cipriano, the Navy's program executive officer for information technology.

Once that evaluation is done, the Navy will push to roll out the contract to the rest of the service with a final target deadline of October 2003, he said.