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  1.    #1  
    Seems like HP may have inherited a bucket-of-worms. HP Holds Navy Network ‘Hostage’ for $3.3 Billion. The opening paragraph:
    Quote Originally Posted by Wired
    Someday, somehow, the U.S. Navy would like to run its networks — maybe even own its computers again. After 10 years and nearly $10 billion, many sailors are tired of leasing their PCs, and relying on a private contractor to operate most of their data systems. Troops are sick of getting stuck with inboxes that hold 150 times less than a Gmail account, and local networks that go down for days while Microsoft Office 2007 gets installed … in 2010. But the Navy just can’t quit its tangled relationship with Hewlett-Packard. The admirals and the firm recently signed another $3.3 billion no-bid contract that begins Oct. 1st. It’s a final, five-year deal, both sides promise, to let the Navy gently wean itself from its reliance on HP. But that’s what they said the last time, and the time before that.
  2. #2  
    wow -- sure sounds as though the Navy swallowed a tapeworm.

    Clearly the original deal was idiotically constructed -- I just don't see why they can't break it with cause -- since the contract is obviously not being maintained or performed appropriately.

    That its being renewed implies that EDS has so ensnared its clutches into the Navy's IT that they lack the knowledge to escape them.
    Last edited by BARYE; 09/01/2010 at 03:45 AM.
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  3. #3  
    partial digest of the article:


    HP Holds Navy Network ‘Hostage’ for $3.3 Billion
    By Noah Shachtman August 31, 2010

    Someday, somehow, the U.S. Navy would like to run its networks — maybe even own its computers again. After 10 years and nearly $10 billion, many sailors are tired of leasing their PCs, and relying on a private contractor to operate most of their data systems. Troops are sick of getting stuck with inboxes that hold 150 times less than a Gmail account, and local networks that go down for days while Microsoft Office 2007 gets installed … in 2010. But the Navy just can’t quit its tangled relationship with Hewlett-Packard. The admirals and the firm recently signed another $3.3 billion no-bid contract that begins Oct. 1st. It’s a final, five-year deal, both sides promise, to let the Navy gently wean itself from its reliance on HP. But that’s what they said the last time, and the time before that...

    Just to make sure its core networks keep running – to make sure marines and sailors can keep e-mailing each other on Oct. 1st — the Navy is paying Hewlett Packard $1.788 billion. (Booz Allen Hamilton, another outside contractor, handled the negotiations with Hewlett-Packard for the military.) The service will spend another $1.6 billion to buy from HP the equipment troops have worked on for years, and to license the network diagrams and configuration documents, so that the Navy can begin to plan for a future in which they’re not utterly reliant on HP for their most basic communications. In essence, the Navy is paying to look at the blueprints to the network it has been using for a decade...

    ... “We basically had two recourses: pay, or send in the Marines.”

    The initial idea behind the project, called the Navy Marine Corps Intranet, was to combine a hodgepodge of 15,000 different systems into a single, manageable network. A single IT company, Electronic Data Systems, would own all the gear – from the routers to the servers to the mice – and operate it all for the Navy. That way, the sailors wouldn’t need to count on the military’s Paleolithic purchasing system for their tech. And they’d get the benefit of a proven sysadmin who was smarter, faster, more efficient and more flexible than any lumbering government bureaucracy. Original cost: $4.1 billion for five years.

    Since then, NMCI has grown to become the second largest network in the world, trailing only the internet itself. More than 700,000 sailors, marines and civilians on nearly 400,000 computers in 620 locations throughout the United States, Japan and Cuba are connected. NMCI’s 4,100 servers handle more than 2.3 petabytes of data. And, in some ways, the project has to be counted as a success: All those old networks have been merged into one, and that one centrally-controlled network is far easier to operate and secure than the tangled messes you find in most military commands.

    But the flexibility the Navy hoped for? Well, let’s just say NMCI operates with all the agility and responsiveness you’d expect from a centrally-managed, self-policing monopoly...

    ...HP — which acquired Electronic Data Systems and its Navy contract in 2008 — still operates under performance metrics set a decade ago. A typical workstation on the network costs the Navy $2,490.72 per year. That includes an e-mail inbox with a 50-MB capacity (Gmail’s: 7,500 MB), and 700 MB of network storage (compared to Evernote’s unlimited, free plan). Anything above that is extra.

    A year’s use of a “high-end graphics” workstation sets the Navy back $4,085.64. Extra applications on a laptop or desktop computer can run anywhere from $1,006.68 to $4,026.72 annually. A classified Ethernet port — $9,300 to $28,800 per year, depending on where it’s located.

    What’s more, HP isn’t required to take security measures like hard disk encryption, threat heuristics, and network access control that are common today, but were exotic in 2000. “Anti-spam services” runs the Navy $2.7 million per year under the contract. Cleaning up a “data spillage” – classified information that got placed an unclassified network – costs $11,800 per incident. In 2008, the Navy paid about $5 million to wipe the data from 432 compromised computers. That’s “almost 10 times the cost of simply destroying the affected machines and replacing them with new ones...

    ...once the Navy started counting on an outside contractor to keep its information flowing, the harder it became to part ways – despite the complaints from the troops and from independent auditors...

    ...Then there was the question of intellectual property. HP owned all of NMCI’s designs. Without that information, the Navy couldn’t really begin to plan for the Navy’s Next Generation Enterprise Network, or NGEN. (The new network had to be based on the old one, after all.) Which meant the military needed yet another agreement with Hewlett-Packard if they ever hoped to separate from the company. “Without access to the infrastructure and technical data associated with NMCI, we can’t hold an open competition,”...
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  4. Honis's Avatar
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    #4  
    It surprises me that the Navy would even agree to a contract where they wouldn't own the product (network) at the end in the first place.

    With all the ship, plane, etc contracts the Navy owns the product and all work done under that contract. It's to prevent a company like Lockheed from upping the price on the next 30 F-35s an unreasonable amount. The reason Lockheed wouldn't do that is the Navy would gather up all the blueprints, software, etc. and ask if anyone else (Northrup, Boeing, etc.) would like to make some planes (and money). (Just an example, not knocking Lockheed and it's inability to keep a schedule...) It also gives the Navy some reassurance that the plane can be produced regardless of the financial status of the contracted company. An example would be if the commercial branch of Boeing tanked dragging its military branch into bankruptcy and closure (usually only a problem with smaller companies not behemoths like Boeing, Lockheed, Northup).

    I see the latest contract is more of what I would expect from the USG.
    I'm a man, but I can change, if I have to, I guess.
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  5. #5  
    Quote Originally Posted by Honis View Post
    It surprises me that the Navy would even agree to a contract where they wouldn't own the product (network) at the end in the first place.

    With all the ship, plane, etc contracts the Navy owns the product and all work done under that contract. It's to prevent a company like Lockheed from upping the price on the next 30 F-35s an unreasonable amount. The reason Lockheed wouldn't do that is the Navy would gather up all the blueprints, software, etc. and ask if anyone else (Northrup, Boeing, etc.) would like to make some planes (and money). (Just an example, not knocking Lockheed and it's inability to keep a schedule...) It also gives the Navy some reassurance that the plane can be produced regardless of the financial status of the contracted company. An example would be if the commercial branch of Boeing tanked dragging its military branch into bankruptcy and closure (usually only a problem with smaller companies not behemoths like Boeing, Lockheed, Northup).

    I see the latest contract is more of what I would expect from the USG.
    not completely true. inorder to get China to buy a couple of $trillion in bonds last year, the navy had to give them part of their fleet and agree to a 99 year lease back from the Chinese. (of course, that's just a joke)...

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