1 February 2017

The U.S. Navy Is Headed Into Rough Seas With Its Computer Network

Loren Thompson , 

I write about national security, especially its business dimensions. 

Opinions expressed by Forbes Contributors are their own. 

Way back in the year 2000, before Facebook even existed, the U.S. Navy launched the biggest IT consolidation and outsourcing initiative in federal history. It integrated the fragmented networks and information services of 28 different commands into a single system called the Navy-Marine Corps Intranet. After some initial growing pains, it evolved into the biggest intranet (private network) in the world, with 700,000 shore-based users at 2,500 sites using a quarter-million devices.

The current system works very well, delivering high reliability, diverse services and end-to-end security through a resilient network that the government owns but private contractors operate. Because it is always available, the Navy and its sister service the Marine Corps have come to rely heavily on their intranet to conduct operations. If it were compromised, many of the critical missions performed by the sea services would be impaired.

However, the Navy has decided that it might be able to save money by carving up the system into four segments in which contractor teams would compete separately for work. Its theory is that it can get greater innovation and pricing power by maximizing competition, eliminating the need for a single overarching integrator that makes sure all the pieces mesh seamlessly.

The Navy’s Next Generation Enterprise Network may be headed into heavy seas if it doesn’t rethink the course it is on.(U.S. Navy Photo by Photographer’s Mate 3rd Class William H. Ramsey/RELEASED)

This theory is wrong. It is a recipe for instability that violates basic principles of common sense. The problem isn’t the goals that the Navy is trying to achieve, which focus on delivering secure, state-of-the-art functionality to operators. The problem is that there is no apparent connection between the goals the service seeks to achieve, and the strategy it has embraced for getting there.

The new, segmented system is called the Next Generation Enterprise Network, or NGEN. With the existing intranet already supporting over two-thirds of all Navy information services, it is crucial that whatever replaces it deliver world-class reliability, versatility and security. Any degradation in the cadence or continuity of the existing system could have fatal consequences for warfighters.

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And yet, it is nearly certain that NGEN will increase the risk of such degradation. Think about how it would be structured: four different concentrations of activity, each being competed and recompeted frequently, with no integrator other than a Navy management team in which program managers typically rotate out after three-year tours. There would be endless churn among the players and inevitable discontinuities where the various segments intersect.

The Navy says the reason it is pursuing this approach is to get the best price for services while keeping abreast of the latest commercial IT technology. Fair enough, but when contractor awards may be for as little as three years followed by a series of one-year options to continue, how much incentive will contractors have to invest or innovate? Best price in this context translates into relatively thin margins; when you combine thin margins with short contract durations, the logical contractor response is to spend as little money as possible.

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