Navy Next-Gen Enterprise Network Headed For Disaster

After a decade of operating the world’s largest intranet with a single contractor in charge, the U.S. Navy has decided to replace it with something more fashionable. It plans to unbundle the functions required to sustain the network and hold a series of competitions each year to see who can offer the best deal, with the Navy itself overseeing the integration of suppliers and services. In theory, the new approach will provide greater functionality and flexibility to users, of whom there are 700,000. In practice, the new approach is an operational and budgetary disaster in the making.

The future system the Navy is pursuing is called the Next Generation Enterprise Network, or NGEN. It would replace the existing Navy-Marine Corps Intranet that provides an array of information resources to uniform and civilian personnel in the sea services, including command links to warfighters. The existing system has been in place for ten years, and during that time ideas have evolved about how the joint force should acquire and sustain complex systems. The preferred model right now is continuous competition, a concept that works well in commodity markets but has seldom been attempted in the procurement of federal networks.

It’s not that the current intranet isn’t working. It enjoys high user satisfaction ratings and has proven nearly impervious to intrusion by hackers and spies. But the Navy doesn’t like turning over so much control to an outside company — in this case, Hewlett-Packard — so it has jumped on the in-sourcing bandwagon by moving to take direct control of the system. There’s good reason to suspect it isn’t up to the job, but even if it were the continuous-competition approach will make its job much harder. By dis-integrating a single contractor team into several more narrowly-defined groups of vendors, it will introduce seams and discontinuities into the system that must frequently be adjudicated — seams that are the doorways intruders typically use to penetrate a network. And by demanding frequent competitions, it nearly guarantees suppliers will not be willing to offer the Navy their best technology and prices. Why would a company stretch to win a narrow-gauge contract that might disappear after a year?

The acquisition strategy the Navy favors for NGEN hasn’t worked anywhere that it has been tried. It’s the kind of innovative-sounding approach that you would expect from bureaucrats who have spent no time in the private sector. People in the business world understand that companies are more willing to take risks when contracts are big and costs can be amortized over many years. So limiting the scope and duration of contracts reduces the incentives contractors have to offer a good deal. Having lots of teams with lots of seams also diminishes accountability when security breaches occur, not to mention complicating the challenge of implementing fixes fast. The Navy brushed aside complaints from the Government Accountability Office about the way in which the acquisition strategy was selected, even though GAO raised the possibility that billions of dollars might be wasted.

But wasting money isn’t the worst thing about the NGEN concept. What’s really worrisome is that the Navy is likely to impair its entire warfighting system by trying to command a globally deployed fleet through a weak and vulnerable network. After spending decades developing a force posture in which each system is the best of its kind ever built, the service now proposes to implement an information backbone that enemies will find much easier to compromise — a balkanized network that may break down or be disrupted at moments when many lives are on the line. If the Navy can’t point to a single instance where the business model it is pursuing for managing the future flow of sensitive information has worked, what does that tell us about the likely outcome of the NGEN experiment?