NGEN GAO Contract Challenge Hurts Implementation

November 6, 2013
By Robert K. Ackerman
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Program delays are not the only consequence facing the Navy and the winning bidder.

The delay in implementing the U.S. Navy’s Next Generation Enterprise Network (NGEN) caused by the contract challenge to the Government Accountability Office (GAO) has affected more than just the transition time frame. The network transition will cost more for the Navy because of lost funding opportunities.

The Navy lost the ability to use funds in fiscal year 2013, because the protest was not resolved until a month into fiscal year 2014. So, all the transition costs will have to be borne on funds in fiscal years 2014 and 2015. Fiscal year 2013 funds earmarked for NGEN could not be applied to the transition because of the stop-work order imposed with the challenge.

And, because the Navy lost the ability to end the 400-day NGEN transition in fiscal year 2014, it also lost the opportunity to enable large-scale NGEN-related savings in 2014. Any savings will be realized in fiscal year 2015.

“It has not been helpful,” says Bill Toti, vice president and account executive, U.S. Navy and Marine Corps Accounts, HP Enterprise Services, of the contract challenge. Key Navy personnel transitioned, and the company had to divert resources to keep people fully employed. Bringing them back into the program and recalibrating the effort back to the July cutoff point is a challenge. “It’s not efficient to shut down and start up like this,” Toti states. “Anytime you play with efficiencies of processes, you lose something. This has been a bad thing for us and the Navy.”

While HP and its consortium partners were pleased with the GAO decision, they did not have any warning that the decision would be handed down on October 31. The government shutdown delayed the decision past its original October 23 deadline, but the sudden announcement did not allow the contract winners to ramp up to begin operation. “We’re starting from a cold start. We had no time to warm up,” Toti points out.

“You don’t just lose 100 days worth of productivity,” he continues. “You lose a lot more than just the gap period of activity.”

Because of the delay, the Navy must establish new milestone dates for the consortium. Those new dates may come within a few days, Toti offers, and they will be key to successful program implementation.

“Making sure that we don’t miss a step over the next 400 days—which is the transition time—is really important,” Toti emphasizes. “Getting the proper governance and processes established up front to make sure we’re making the right decisions in the right order is going to be crucial to our success—and it will be more a shared success than in the past.

“Getting the right teamwork in place to ensure that we’re collectively successful is going to be a huge challenge as we move forward,” he declares.

Read the full GAO report dismissing the protest:,B-408546.3#mt=e-report

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