Navy IT Modernization Programs Come Under Scrutiny

The Department of the Navy (DON) is working to modernize many of its legacy enterprise IT systems, with mixed results.

In a recent assessment of nearly two dozen Department of Defense (DoD) IT business programs, the U.S. Government Accountability Office (GAO) called out several Navy IT modernization programs for being over budget, behind schedule, or both.

In the review, GAO assessed 21 DoD IT business programs, which accounted for $9.1B in IT spending from fiscal year (FY) 2022 through 2024. Of the total reported cost across the 3 years, $6.4B (70%) was for operations and maintenance (O&M) the systems and $2.7B (30%) was for new development and modernization.

The Navy Enterprise Resource Planning (ERP) is the second largest program by dollars among the 21 IT programs the GAO reviewed, second only to the Department of Defense Healthcare Management System Modernization (DHMSM) program. Navy ERP accounted for over $1.4B (15%) of the $9.1B in IT spending across FY 2022-2024.

Cost and Schedule Overruns

Of the 21 total DoD IT programs in the GAO assessment, 15 reported cost and/or schedule changes since January 2022. Seven of these are Navy IT programs.

Below are the seven Navy IT programs noted by GAO, along with their FY 2025 budget requests, dollar and percentage change from FY 2024 (in parentheses), and GAO’s findings regarding program costs and schedules.

• Navy Enterprise Resource Planning (ERP): $616M (+33M, +6%) – Cost increases, but no schedule changes.
• Naval - Maintenance, Repair, and Overhaul: $211M (+$136M, +179%) – Cost increases and schedule delays.
• Navy Personnel and Pay: $164M (+$10M, +7%) – Cost increases and schedule delays.
• Global Combat Support System-Marine Corps/Logistics Chain Management: $131M (+$11M, +10%) – Cost increases, but no schedule changes.
• Navy Maritime Maintenance Enterprise Solution: $123M (+$6M, +5%) – Cost increases and schedule delays.
• Navy Electronic Procurement System: $60M (+$30M, +101%) – Cost increases and schedule delays.
• NAVAIR Aviation Logistics Environment: $51M (-$4M, -8%) – Cost increases, but no schedule changes.

These seven programs account for nearly $1.4B (22%) of the Navy’s $6.1B unclassified IT budget for FY 2025.

Navy’s IT Modernization Plans

The Navy has been working to update and synchronize their enterprise IT modernization vision and initiatives. In early FY 2024, the DON released their Navy Blueprint for a Modern Enterprise Information Ecosystem, a plan to drive enterprise IT investments, implementations and modernization initiatives.

According to Jennifer Edgin, Assistant Deputy Chief of Naval Operations for Information Warfare (N2N6B), in comments she made at the annual Navy WEST conference in February, the Blueprint will help guide the Navy’s design goals and reference architectures as it modernizes its IT systems. The goal is to move from a host of interconnected systems to a capability platform model that will facilitate Combined Joint All-Domain Command and Control (CJADC2) construct the entire DoD is pursuing. The Blueprint should also help the Navy create a business model leading to a set of ROI metrics. All of this may help get these large enterprise IT programs back within disciplined cost and schedule constraints.