Navy Awards $1.75 Billion IT Contracts

The U.S. Navy has awarded Lockheed Martin and Northrup Grumman contracts that, combined, could total $1.75 billion to build an ambitious new IP network.

Northrop Grumman Space & Mission Systems has been awarded an initial $17.4 million and Lockheed Martin MS2 Tactical Systems an initial $15 million to build the Navy's Consolidated Afloat Networks and Enterprises Services project.

CANES, in the works for some time, aims to replace legacy systems and outdated computers with a modern, common IP network across Navy ships and onshore operations centers. Virtualization and cloud computing are among the technologies the Navy wants to utilize for CANES.

The Northrop Grumman contract could total $775.3 billion if all of its options are exercised, while Lockheed Martin could collect $936.9 billion in the deal.

Work by both companies is expected to be completed in San Diego by April 2011, but could continue until September 2014, according to the Navy.

The Navy is expected to name a single prime contractor on the project next year.

Northrop Grumman's CANES team includes IBM, as well as a host of small businesses -- Charleston, S.C.-based Atlas Technologies; San Diego firms Beatty and Company Computing, Juno Technologies, and Syzygy Technologies; and San Jose, Calif.-based CenterBeam.

Lockheed Martin's CANES team includes General Dynamics, ViaSat, Harris, and American Systems.

BAE Systems and Boeing also bid for the CANES contracts. The Navy received offers via the Commerce Business Daily's Federal Business Opportunities Web site, and the SPAWAR e-Commerce Central Web site.