EDS lands multibillion-dollar military intranet bid

Electronic Data Systems will build the U.S. Navy and Marine Corps an international intranet in a deal valued at a whopping $6.9 billion.

Earlier this month, EDS was awarded the eight-year contract to build the Navy-Marines Corps Intranet (NMCI), which is slated to be up and running by June 2003. EDS will deploy and manage the network.

The NMCI will provide data, video and voice communications services to link shore units, establishing a standard information system for the Department of the Navy, of which the Marine Corps is a part. The intranet will provide increased security, accessibility from anywhere in the world and interoperability with the networks of other military services, Navy Secretary Richard Danzig says.

The network will link 300 Naval and Marine bases and onshore Department of the Navy sites that span the U.S., Iceland, Puerto Rico, Guam and Guantanamo Bay, Cuba.

The Navy spends about $1.4 billion annually to maintain and operate its shore-based command data networks, but Danzig estimates the Navy could reduce that cost to about $1.2 billion annually under the contract.

EDS will be responsible for meeting security and quality-of-service requirements, training personnel, and maintaining and operating the network infrastructure that will support about 360,000 users. There are incentives written into the contract that will be rewarded if EDS exceeds the requirements, although the company will also be penalized if it falls below the requirements, a Navy spokeswoman says.

EDS is building the network with technology partners including Raytheon, WorldCom and WamNet. Raytheon is supplying security equipment and expertise, while WorldCom and WamNet are providing network services.

Each Naval and Marine office will be connected to NMCI locally over WamNet IP facilities, says Dick Brown, CEO at EDS. EDS is using WorldCom's Very High Performance Backbone Network Service (vBNS+) to connect each base to the NMCI. The vBNS+ is an IP service that runs over WorldCom's ATM and frame relay networks in addition to WorldCom's UUNET Internet network.

The Navy also requires that EDS subcontract at least 35% of the work to small businesses and those owned by minorities and women. EDS says at least 40% of the work will be subcontracted to such firms.

The contract can be extended for an additional three years that would cost another $2 billion. EDS beat Computer Sciences, IBM and General Dynamics for the contract.

Johnston is a correspondent with IDG News Service's Washington bureau. Network World Senior Editor Denise Pappalardo contributed to this story.

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