Navy hires private company to create integrated computer system for $9 billion

Friday, October 6th 2000, 12:00 am
By: News On 6

WASHINGTON (AP) _ The Navy is taking the military into a new era of the Information Age by tying hundreds of separate Navy and Marine Corps computer networks into a single, seamless system of voice, video and data services that officials said will be less vulnerable to cyberattacks ashore and at sea.

The Navy said it would announce Friday the winner of the service contract, valued at up to $9 billion over eight years. The four finalists were General Dynamics Corp., IBM Corp., EDS and Computer Sciences Corp.

Navy Secretary Richard Danzig called it the largest such contract ever awarded by the government.

The new information system, known as an intranet, is seen by the Defense Department _ whose thousands of computer networks are the largest and most far-flung in the world _ as a model for the military as a whole. Achieving greater integration of its computer systems is one of the Pentagon's top priorities.

The Navy's contractor will be responsible for providing, operating and maintaining all the computers, network servers and other elements of the system. Danzig likened the arrangement to contracting for electricity; instead of owning the generators, the Navy will simply buy the service _ in this case ``connectivity.''

Having one contractor provide all the services will mean enormous economies of scale, he said. It also will make it easier and less costly to incorporate new technologies as they emerge in the private sector.

``If we tried to do this ourselves, we would wind up losing pace with technology,'' Gen. James Jones, the Marine Corps commandant, told a Pentagon news conference before the contract award announcement. The Marine Corps is included in the system because it is part of the Department of the Navy.

The Navy and Marine Corps intranet would allow, for example, an aircraft maintenance worker in Japan to pinpoint the availability of a plane part anywhere in the Navy or Marine Corps system or contact the part manufacturer with the click of a button. The movement of intelligence information critical in wartime would be more efficient, officials said, and defenses against cyberattack would be stronger.

``This is a banner event for us,'' Adm. Vernon Clark, the chief of naval operations, told reporters. ``It will revolutionize the way the Navy does things.''

Rudy de Leon, the deputy secretary of defense, said this was a bold step forward for privatization.

``It gets the government out of the business of owning and operating information technology systems, and instead transfers that function to a fee-for-service contract with private industry,'' de Leon said.

Danzig said his department is the first federal entity to create an organization-wide intranet, and he said the billions invested over the coming decade will pay off in increased efficiencies and information security for computer operations affecting everything from personnel management to warfighting.

Danzig said that although the contract will cost $1.2 billion a year for five years _ plus another $1 billion a year in each of three additional option years _ the Navy will actually be saving money by having the work done by a private company. He estimated that maintaining the existing Navy and Marine Corps computer networks is now costing $1.6 billion a year, or $400 million a year more than the contract will cost.

Some of the savings will be used to buy more sophisticated encryption systems to improve the security of the computer system, Danzig said, and the means of monitoring activity on the computers will be improved.

Danzig said some Navy civilian workers who are information system specialists will have to take new jobs. He said they number in the hundreds; a Navy report to Congress in June said 1,938 people would be affected and that 329 of them would face ``involuntary separation,'' which is military lingo for layoffs.

Some in Congress have questioned whether the change will cost too many jobs among the Navy Department civilians who maintain the existing computer networks, but Danzig said Friday that he believes he has allayed these concerns.