Navy Has Cut $2 Billion from its IT . . . and is Looking for More

Published: June 05, 2013


At a recent industry event, Navy CIO Terry Halvorson said that the Navy has already cut $2 billion of the $8 billion they spend on IT each year . . . and they’re looking for at least a billion more. Other Navy IT officials also noted some of their recent efforts and challenges that Navy and Marine Corps IT have undergone – some of which may have repercussions years into the future.

This budget trimming trend is nothing new for the Navy. Several years ago, when we hosted then-Navy CIO Robert J. Carey at one of our industry events, I noted that their IT budget request at the time was declining over time. Carey said that this is what he was going for – to gain efficiencies through IT and then returning the dollars back to the department for the core mission. In a previous post I looked at the Navy’s IT budget request for FY 2014 along with some historical perspective on their IT budget.  
But the drive to trim their IT budget is not the only story in Navy IT.  There’s much to consider of late, including the following:
  • Marine Corps Takes Back its NetOps – After more than a decade of outsourcing their network operations to Hewlett Packard (and EDS before them) under the Navy Marine Corps Intranet (NMCI) program, the USMC is parting ways with HP and their Navy brethren, opting for a government-owned and government-operated (Go-Go) approach going forward. It’s been a gradual transition in preparation for the switch as the services have bought back the infrastructure over the last several years, according to a media account.
  • NGEN Award Delayed – The Navy’s $4.5 billion Next-Generation Enterprise Network contract, the follow-on to NMCI, has been delayed beyond the projected May 31 award date and pushed to late June because the Navy has “re-entered into discussions” with bidders, as reported last week.
  • Sequestration is Curbing CANES – The Common Afloat Networks and Enterprise Services (CANES) program seeks to modernize/replace and standardize the Navy’s afloat networks aboard 192 ships by the end of the decade. But Rear Adm. Bill Leigher says that sequestration is rocking the boat while the program is still in its preliminary fielding phase, resulting in only 8 of the 15 planned installations being completed this year, according to his recent comments. Such delays will continue to saddle naval vessels with their current patchwork of legacy infrastructure and software.
  • Jump-starting JIE – Looking at what has been planned for consolidating the Marine Corps’ networks, BGen. Kevin Nally, the Marine Corps' CIO, thinks the DoD should use their approach as the model for achieving the Defense Department's Joint Information Environment (JIE). According to Nally, after two years of effort on JIE the DoD is largely still at the planning stage and there’s no specific budgeting for the effort over the next few years. The Marine Corps' plan for its own network unification is more mature so he has taken it to the DoD CIO Teri Takai and U.S. Cyber Command Commander Keith Alexander to suggest that the Marine approach should be used as the basis for JIE.  
  • The Cost of Shared Services – Nally went on to say that the Marines Corps is migrating 9 of its programs out of DISA computing centers into its own cloud computing environment – the Marine Corps Enterprise Information Technology Services (MCEITS) – because they consider DISA’s rates to be too high. The Marines also are forgoing DISA's enterprise email services offering, saying they can handle their own email for almost half of the DISA rate. The debate of the economy of DISA’s services is nothing new and diverging opinions abound. What the debate seems to drive home is the need for a common understanding of costs and the value associated with those costs.
  • Continued Consolidation of Enterprise Software Licensing – In addition to cutting costs through efficiencies in areas like mobile devices and wireless services, Halvorsen raised the expectation that they are looking beyond their consolidation of Microsoft enterprise software licenses for two further license consolidation initiatives later this year. The Navy is also initiating a Defense-wide enterprise software agreement yet to be announced.
Take-away: IT Processes are Key
Beyond the chosen technical approaches and acquired solutions, these elements speak to the broader issue of the processes that are used to acquire and implement IT . . . and these processes can be a source of savings if done properly. That has been a major theme at the Navy for the past few years. Buying in a de-centralized way can introduce significant waste, as we’re seeing in the consolidation of software licensing and mobility solutions.  
Improving the modernization planning and implementation process for ships in dock under CANES could lead to reduced down time for key Naval vessels. With sequestration potentially delaying progress by 50%, any way to recoup the time that assets remain off-line could be integral to minimizing those impacts.
Even though the Marine Corps has moved to internally manage their networks, the transition to that point did not happen overnight. It took years of contractor help to get there. Surely, there some positive “lessons learned” in that story that could benefit other agencies. Will the USMC’s move away from NMCI and NGEN spur other federal moves to a Go-Go approach? Only time will tell.
Finally, the DoD’s pursuit of the JIE is a huge effort. The Marine Corps approach that Nally is advocating may have some legs. Often, there’s something to be said for tackling big changes by starting small and re-using proven approaches.