A government watchdog agency is cautioning the Navy not to spend more on a plan to deploy an extensive new enterprise network and consider alternatives before moving full steam ahead.
The Navy has already spent $432 million as of September 2010 on the Next Generation Enterprise Network (NGEN), a more flexible, scalable, and modern data, voice, data storage, and email network to replace the legacy Navy Marines Corps Intranet (NMCI). The Department of the Navy (DoN) is overseeing the project, which is expected to cost $50 billion through 2025.
A new report (PDF) by the Government Accountability Office (GAO) has found that the Navy does not have a reliable schedule for the project, nor has it considered acquisition alternatives that could cost about $4.7 billion less than the current plan and could be a less risky option for the project.
Based on these observations, the agency is recommending that the Navy stop any further spending on the project until it conducts a review of the current schedule to ensure it can be executed successfully, according to the report.
"At a minimum, this review should ensure that DON pursues the most advantageous acquisition approach, as evidenced by a meaningful analysis of all viable alternative acquisition approaches, to include for each alternative reliably derived cost estimates and metrics-based operational effectiveness analyses," the GAO said.
The GAO criticized the Navy for faulty cost estimations for alternatives because they were not "substantially accurate, and they were neither comprehensive nor credible."
Moreover, as the acquisition and execution schedule for NGEN stands now, only two of four subschedules reviewed by the GAO "adequately satisfied" any of nine practices associated with reliable scheduling for the project, according to the report. The agency also is concerned that if NGEN is executed as currently planned, key parts of the project will fail.
Hewlett Packard Enterprise Services is the main contractor currently working on transitioning NMCI resources to NGEN; HP also was the service provider for NMCI. The Navy awarded the vendor a $3.7 billion continuity of services contract in July 2010 for these services, which are expected to continue through April 2014.
NMCI was the Navy's first comprehensive enterprise network, but the system had design flaws and has not been particularly scalable. The Navy aims for NGEN to be a more flexible, secure, and adaptable network.
In response to the GAO report, the Navy said it will conduct the project schedule review requested by the GAO, but that it does not agree that the analysis of alternative acquisition strategies for NGEN was insufficient.
The Navy also intends to perform an economic analysis and independent cost estimate for the project for the next milestone review scheduled for August, according to the GAO.
What the Navy has not so far agreed to do is re-evaluate whether the current plan for NGEN is the best and most cost-effective approach, according to the GAO, which considers the Navy's response only partially addressing its recommendation to thoroughly review the project before spending more money on it.