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Despite the recent fanfare surrounding what the U.S. Navy called a successful test and evaluation phase of its US$6.9 billion Navy/Marine Corps Intranet (N/MCI) program, significant technical problems and delays could result in a major setback in the program as early as this summer, according to internal memos obtained by Computerworld.

The N/MCI program, which is designed to replace dozens of disparate Navy and Marine Corps computer networks with a centrally managed setup operated by a single contractor, Electronic Data Systems Inc., was due to have 160,000 seats in place by this summer. However, an internal e-mail from EDS's program director for Navy Operating Forces said the program is likely to have 60,000 seats in place by the end of the year.

Adding to the problems, Susan Keen, CIO at Naval Air Systems Command (NAVAIR) in Patuxent River, Md., the first Navy command scheduled to switch to N/MCI-based IT services, has ordered a stop to deployment until all of the problems are fixed.

Meanwhile, to stave off a flurry of criticism from Navy units stemming from the lack of legacy application integration, remote access failures and security-related delays, officials from the Navy and EDS last month discussed a plan that would skirt required preinstallation security certification in favor of meeting an accelerated deployment plan. One official characterized the plan as a "scorched-earth seat rollout" designed to install as many seats as possible without waiting for the necessary security evaluations to be approved.

"We have agreed with [Navy/Marine Corps Intranet director Rear Adm. Charles] Munns and the Navy that ruthlessly rolling seats is the only way for N/MCI to survive and prosper," wrote Mike Hatcher, EDS's N/MCI program director for Navy Operating Forces, in an April 25 e-mail. "To do that, we've proposed to the Navy, and I believe they will accept, that we be given blanket authorization to connect our sites to N/MCI without the need for incessant scanning and awaiting [interim authority to operate] letters," wrote Hatcher. Interim Authority to Operate, or IATO letters, grant N/MCI sites the ability to operate by certifying that they can do so with a manageable level of security risk as set forth by U.S. Defense Department policy.

"So instead of ... standing by for days or weeks awaiting approval to connect -- we connect immediately," wrote Hatcher.

Rick Rosenberg, EDS's program executive for N/MCI, characterized the language used in Hatcher's e-mail as nothing more than "a rallying cry for the troops" and said the program was never and is not now in jeopardy of failing. Rosenberg also denied that EDS is deploying any N/MCI systems without Navy authorization or security assurances.

Congress has repeatedly expressed concerns about the high cost of N/MCI and its potential impact on the Navy's ability to carry out or fund future operations, as well as the loss of federal jobs as IT work moves to a single vendor. Any problems, therefore, are unlikely to go unnoticed on Capitol Hill, experts said.

Plano, Texas-based EDS was awarded the contract in October 2000 to replace an estimated 200 Navy and Marine Corps networks with a single network owned and operated by EDS. When fully rolled out in 2005, the N/MCI will represent one of the largest outsourcing contracts in government history, covering an estimated 411,000 desktops.

Capt. Chris Christopher, deputy director for plans and oversight of the N/MCI program, said any applications that don't pass security evaluations or that don't run on Windows 2000 will be installed on kiosks that are not connected to the N/MCI network. However, that has forced some users to rely on two separate computers to do their jobs, Christopher said. "The legacy applications [challenge] is something the Navy did not understand when it started the N/MCI effort," said Christopher.

In an internal memorandum dated May 6, only days after the conclusion of the so-called successful test and evaluation phase, George Kalnasy Jr., the N/MCI transition manager for the NAVAIR, outlined four major technical problems that have led Keen, the CIO at NAVAIR, to stop deployment until all of the problems are fixed.

"It has been painful for the NAVAIR folks who have built and delivered successful IT capabilities to the Navy," wrote Kalnasy, adding that "inoperative functionalities" have made N/MCI "ineffective."

According to a source at NAVAIR, which is one of the major testbeds for N/MCI, two-thirds of the organization's users are being forced to use two computers to access N/MCI and various legacy applications.

Although Rosenberg said most of the NAVAIR problems have been fixed, the Navy's Christopher acknowledged that NAVAIR "has proved to be a real technical challenge."

A source on Capitol Hill, who requested anonymity, said the memos raise significant concerns about the program, adding the Hatcher e-mail is being reviewed by a professional staff member of the House Armed Services Committee for possible violations of federal regulations. "The N/MCI program is important to Navy transformation efforts, but there is no excuse for not running the program properly," the source said.

Hatcher, in the e-mail, said the program's current deployment schedule would probably only result in 60,000 seats being deployed this year, "which if left unchanged would spell an end to the N/MCI program by summertime." As a result, a plan was hatched to accelerate N/MCI server farm deployment and infrastructure upgrades to support "not less than 160,000" N/MCI users, according to the e-mail. "Any obstacle that gets in the way will be crushed. No more IATO delays."

An IT industry lobbyist who has followed the N/MCI program closely and regularly meets with lawmakers on Capitol Hill to discuss the program, said the contents of the e-mail are not surprising given the significant investment EDS has made in the contract.

EDS "had fallen so far behind due to the testing delays as well as with the increasing number of [legacy] applications found that their financial situation was very rocky," the source said. "It is essential for their business case to see these seats roll out as soon as possible. The delays were killing this contract."