Information Technology:

DOD Needs to Ensure That Navy Marine Corps Intranet Program Is Meeting Goals and Satisfying Customers

GAO-07-51: Published: Dec 8, 2006. Publicly Released: Dec 8, 2006.

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The Navy Marine Corps Intranet (NMCI) is a 10-year, $9.3 billion information technology services program. Through a performance-based contract, the Navy is buying network (intranet), application, and other hardware and software services at a fixed price per unit (or "seat") to support about 550 sites. GAO prepared this report under the Comptroller General's authority as part of a continued effort to assist Congress and reviewed (1) whether the program is meeting its strategic goals, (2) the extent to which the contractor is meeting service level agreements, (3) whether customers are satisfied with the program, and (4) what is being done to improve customer satisfaction. To accomplish this, GAO reviewed key program and contract performance management-related plans, measures, and data and interviewed NMCI program and contractor officials, as well as NMCI customers at shipyards and air depots.

NMCI has not met its two strategic goals--to provide information superiority and to foster innovation via interoperability and shared services. Navy developed a performance plan in 2000 to measure and report progress towards these goals, but did not implement it because the program was more focused on deploying seats and measuring contractor performance against contractually specified incentives than determining whether the strategic mission outcomes used to justify the program were met. GAO's analysis of available performance data, however, showed that the Navy had met only 3 of 20 performance targets (15 percent) associated with the program's goals and nine related performance categories. By not implementing its performance plan, the Navy has invested, and risks continuing to invest heavily, in a program that is not subject to effective performance management and has yet to produce expected results. GAO's analysis also showed that the contractor's satisfaction of NMCI service level agreements (contractually specified performance expectations) has been mixed. Since September 2004, while a significant percentage of agreements have been met for all types of seats, others have not consistently been met, and still others have generally not been met. Navy measurement of agreement satisfaction shows that performance needed to receive contractual incentive payments for the most recent 5-month period was attained for about 55 to 59 percent of all eligible seats, which represents a significant drop from the previous 9-month period. GAO's analysis and the Navy's measurement of agreement satisfaction illustrate the need for effective performance management, to include examining agreement satisfaction from multiple perspectives to target needed corrective actions and program changes. GAO analysis further showed that NMCI's three customer groups (end users, commanders, and network operators) vary in their satisfaction with the program. More specifically, end user satisfaction surveys indicated that the percent of end users that met the Navy's definition of a satisfied user has remained consistently below the target of 85 percent (latest survey results categorize 74 percent as satisfied). Given that the Navy's definition of the term "satisfied" includes many marginally satisfied and arguably somewhat dissatisfied users, this percentage represents the best case depiction of end user satisfaction. Survey responses from the other two customer groups show that both were not satisfied. GAO interviews with customers at shipyards and air depots also revealed dissatisfaction with NMCI. Without satisfied customers, the Navy will be challenged in meeting program goals. To improve customer satisfaction, the Navy identified various initiatives that it described as completed, under way, or planned. However, the initiatives are not being guided by a documented plan(s), thus limiting their potential effectiveness. This means that after investing about 6 years and $3.7 billion, NMCI has yet to meet expectations, and whether it will is still unclear.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Department of Navy (DON) has launched its Next Generation Enterprise Network (NGEN) program to replace the NMCI program. To bridge the time frame between the end of the NMCI contract, in September 2010, and the full transition to NGEN, planned for March 2014, the department entered into a continuity of services contract with the NMCI services provider. Meanwhile, the department has taken steps to improve NMCI performance management and better inform NMCI investment decision-making that are consistent with our recommendation. Specifically, (1) in March 2009, the Assistant Secretary of the Navy (Research, Development, and Acquisition) approved ten goals for the NMCI contract, which include increased Navy and Marine Corps command and control of network operations and access to NMCI assets, (2) the NMCI program manager implemented an Enterprise Performance Management Database in an effort to better manage program performance and better understand the extent to which each NMCI service level agreement is being met, (3) DON increased its focus on measuring and disclosing program performance, as evidenced by its annual reporting of NMCI performance in its budget submissions to DOD and OMB and in the President's Budget submitted to Congress, and (4) the program office submits a quarterly assessment of NMCI to the Program Executive Officer - Enterprise Information Systems that identifies customer satisfaction objectives, measurements and progress, as outlined in the performance management database, and is made available to other decision makers as requested.

    Recommendation: To improve NMCI performance management and better inform investment decision making, the Secretary of Defense should direct the Secretary of the Navy to ensure that the NMCI program adopts robust performance management practices that, at a minimum, include (1) evaluating and appropriately adjusting the original plan for measuring achievement of strategic program goals and provides for its implementation in a manner that treats such measurement as a program priority; (2) expanding its range of activities to measure and understand service level agreement performance to provide increased visibility into performance relative to each agreement; (3) sharing the NMCI performance results with DOD, Office of Management and Budget, and congressional decision makers as part of the program's annual budget submissions; and (4) reexamining the focus, scope, and transparency of its customer satisfaction activities to ensure that areas of dissatisfaction described in this report are regularly disclosed to the aforementioned decision makers and that customer satisfaction improvement efforts are effectively planned and managed.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: In July 2010, the Department of the Navy (DON) entered into a continuity of services contract with the NMCI contractor while it launches its Next Generation Enterprise Network (NGEN) program. In addition to providing continuity of network services, the contract includes transition of services and transfer of NMCI infrastructure and intellectual property to DON, as NGEN contractors are to require use of the NMCI infrastructure and access to processes, procedures and technical data. Consistent with our recommendation, DON has taken steps to ensure that lessons learned in the NMCI program are used in implementing NGEN. Specifically, DON has established the NGEN Senior Integration Board, which is led by the Deputy Assistant Secretary of the Navy (Research, Development, and Acquisition) and includes key DON entities such as the NMCI program, to identify and resolve issues in order to facilitate a successful transition from NMCI to NGEN.

    Recommendation: The Secretary of Defense should direct the Secretary of the Navy, in collaboration with the various Navy entities involved in overseeing, managing, and employing NMCI, to take appropriate steps to ensure that the findings in this report and the outcomes from implementing the above recommendations are used in considering and implementing warranted changes to the NMCI's scope and approach.

    Agency Affected: Department of Defense


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