NEXT GENERATION 

ENTERPRISE 

NETWORK

Navy Implementing 

Revised Approach, but 

Improvement Needed 

in Mitigating Risks

Report to Congressional Requesters

September 2012

GAO-12-956

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-956, a report to 

congressional requesters 

September 2012

NEXT GENERATION ENTERPRISE NETWORK

Navy Implementing Revised Approach, but 

Improvement Needed in Mitigating Risks

Why GAO Did This Study

DON, a component of the Department 

of Defense (Defense), is replacing its 

existing network system with NGEN. 

Capabilities for the new system include

secure transport of voice and data, 

data storage, and e-mail, at a cost of 

about $38 billion through fiscal year 

2024. In March 2011, GAO reported 

that the approach for acquiring NGEN 

was not grounded in a reliable analysis 

of alternatives, the execution of NGEN 

was not based on a reliable schedule, 

and acquisition decisions were not 

always performance- and risk-based. 

GAO recommended that Defense, 

among other things, reconsider its

approach. The department has not yet

fully implemented GAO’s 

recommendations but revised its 

approach to include acquiring certain 

NGEN services simultaneously instead 

of staggering their implementation. 

GAO was asked to review the revised 

approach to determine (1) the extent to 

which DON’s selected approach to 

acquire NGEN is the most cost 

effective and (2) the current status of 

and plans for acquiring NGEN. To do 

this, GAO reviewed analyses 

supporting the cost effectiveness of the 

acquisition approach, the program’s 

revised acquisition strategy, integrated 

master schedule, key milestone 

decisions, and other relevant 

documents. 

What GAO Recommends

GAO is recommending that Defense

develop comprehensive risk mitigation 

plans for program-wide risks. In its 

comments, Defense concurred with 

GAO’s recommendation and noted that 

it will continue to build on efforts to 

improve NGEN risk mitigation.

What GAO Found

While the Department of the Navy (DON) has revised its acquisition approach for 

its new network system, the Next Generation Enterprise Network (NGEN), it still 

has not shown that it has selected the most cost-effective approach for acquiring 

NGEN capabilities. Cost effectiveness is shown by comparing life-cycle costs 

and quantifiable and nonquantifiable benefits among alternatives, which can be 

accomplished by conducting a thorough analysis of alternatives. GAO previously 

identified weaknesses with the NGEN analysis of alternatives related to cost 

estimates and analysis of operational effectiveness and made associated 

recommendations. However, DON did not revisit the analysis of alternatives to 

address the weaknesses previously identified, nor did it conduct any other 

analysis that would show whether its revised approach is the most cost effective. 

For example, while DON developed a draft economic analysis in February 2012, 

the analysis assessed only the status quo and revised approach, and not other 

alternatives. As a result, GAO remains concerned with the analysis measuring 

NGEN cost effectiveness and DON does not know whether its revised approach 

for acquiring NGEN is the most cost effective. 

Even though DON lacks assurance that it is pursuing the most cost-effective 

approach to acquiring NGEN capabilities, it has moved forward with 

implementing its revised approach. For example, the agency has completed

activities to support the acquisition and transition to NGEN, prepared plans and 

analyses required for program initiation, and conducted oversight reviews to 

support the release of the request for proposals for transport and enterprise 

services (secure data and e-mail services, among other things). However, the 

program’s schedule for acquiring NGEN capabilities has been delayed, thus

making it more likely that DON will not be able to fully transition by the end of the 

continuity of services contract in April 2014. For example, the release of the 

request for proposals was delayed, and upcoming milestones, such as contract

award and program initiation, have slipped (see table for major delays). Program 

officials attributed the delays to the need for additional planning and to revisions 

to the request for proposals. Compounding this situation is that identified risks 

are not being adequately mitigated. For example, not all mitigation plans are 

comprehensive because they do not always include all the elements of an 

effective plan (e.g., identification of resources needed) nor do they always 

contain the current status of the mitigation actions. According to program 

officials, weaknesses in these mitigation plans were due, in part, to the lack of a 

priority in establishing and maintaining comprehensive and current mitigation 

plans. As a result, the program faces an increased probability that transition from 

its existing system to NGEN will face further delays and cost overruns. 

Major Delays 

Milestone Status Delay

Transport services request for proposals release Completed 17 months

Enterprise services request for proposals release Completed 9 months

Program initiation Not yet occurred 15 months 

Transport services contract award Not yet occurred 14 months

Enterprise services contract award Not yet occurred 6 months

Source: GAO analysis of DON data.

View GAO-12-956. For more information, 

contact Valerie C. Melvin at (202) 512-6304 or 

melvinv@gao.gov. 
Page i GAO-12-956 Next Generation Enterprise Network 

Letter 1 

Background 2

DON Has Not Reevaluated Alternatives to Ensure It Is Pursuing the 

Most Cost-Effective NGEN Acquisition Approach 13

DON Is Proceeding with the NGEN Acquisition, but Is 

Experiencing Schedule Delays and Not Adequately Mitigating 

Risks 15

Conclusions 21

Recommendation for Executive Action 22

Agency Comments 22

Appendix I Objectives, Scope, and Methodology 24

Appendix II Comments from the Department of Defense 26

Appendix III GAO Contact and Staff Acknowledgments 28

Tables

Table 1: Key Purpose of Each DON Gate Review 6

Table 2: Summary and Comparison of the Four Alternatives in the 

NGEN AOA 7

Table 3: Comparison of Previous and Current Plans for Acquiring 

Segments 11

Table 4: Remaining Key NGEN Program Activities 17

Table 5: NGEN Program Critical Risks, as of July 2012 20

Figure

Figure 1: NGEN Major Milestone Delays 18

Contents
Page ii GAO-12-956 Next Generation Enterprise Network 

Abbreviations

AOA analysis of alternatives

Defense Department of Defense 

DON Department of the Navy

IT information technology

MAIS Major Automated Information System 

Marine Corps United States Marine Corps 

NGEN Next Generation Enterprise Network

NMCI Navy Marine Corps Intranet 

USN United States Navy 

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Page 1 GAO-12-956 Next Generation Enterprise Network 

United States Government Accountability Office 

Washington, DC 20548

September 19, 2012

Honorable Susan M. Collins

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

Honorable Claire McCaskill

Chair

Subcommittee on Contracting Oversight

Committee on Homeland Security and Governmental Affairs

United States Senate

The Department of the Navy’s (DON) Next Generation Enterprise 

Network (NGEN) program is expected to replace and improve information 

technology (IT) services provided by the Navy Marine Corps Intranet 

(NMCI), which currently provides about 382,000 computer workstations to 

approximately 700,000 users across 2,500 United States Navy (USN) and 

United States Marine Corps (Marine Corps) locations around the world. 

As envisioned, NGEN is to provide secure data and IT services, such as 

data storage, e-mail, and video teleconferencing, and its capabilities are 

to be incrementally acquired through multiple providers. The first 

increment is planned to provide comparable NMCI capabilities, as well as 

enhanced information assurance and increased government control over 

network operations. This increment is expected to be fully operational by 

March 2014 and is estimated to cost approximately $38 billion through 

fiscal year 2024.

In March 2011, we reported weaknesses in DON’s NGEN acquisition, 

noting, for example, that its approach for acquiring the network 

capabilities was not grounded in a reliable analysis of alternatives (AOA).1

 

1

GAO, Information Technology: Better Informed Decision Making Needed on Navy’s Next 

Generation Enterprise Network Acquisition,

As a result, we recommended, among other things, that the department 

conduct an interim review to reconsider the acquisition approach. DON 

subsequently reported that it had made changes to the NGEN acquisition 

approach.

GAO-11-150 (Washington, D.C.: Mar. 11, 

2011).

 
 

Page 2 GAO-12-956 Next Generation Enterprise Network 

At your request, we conducted a study of DON’s revised approach for the 

NGEN acquisition. Our specific objectives were to determine (1) the 

extent to which DON’s selected approach to acquire NGEN is the most 

cost effective and (2) the current status of and plans for this acquisition.

To determine the extent to which the selected acquisition approach is the 

most cost effective, we reviewed DON documentation describing the cost 

effectiveness of the acquisition approach, including the draft economic 

analysis and other analyses supporting specific acquisition approach 

changes. In addition, we interviewed cognizant DON and Office of the 

Secretary of Defense officials about the use of these analyses in 

acquisition decision making to ensure that NGEN capabilities are 

acquired in the most cost-effective manner.

To determine the current status of and plans for acquiring NGEN, we 

analyzed the program’s revised acquisition approach, integrated master 

schedule, performance assessments, risk reports, and executive 

acquisition decision briefings and meeting minutes, among other things. 

We also discussed progress made on NGEN acquisition efforts with DON 

program officials. Additional details on our objectives, scope, and 

methodology are discussed in appendix I.

We conducted this performance audit from November 2011 to September

2012 in accordance with generally accepted government auditing

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

DON is a major component of Department of Defense (Defense), and 

consists of USN and Marine Corps service components. It is a large and 

complex organization, whose primary mission is to organize, train, 

maintain, and equip combat-ready naval forces capable of winning wars, 

deterring aggression from foes, preserving freedom of the seas, and 

promoting peace and security for the nation. To support this mission, 

DON performs a variety of interrelated and interdependent IT-dependent 

functions. In fiscal year 2012, DON’s IT budget was approximately $7.8 

billion for 841 investments. NGEN, with a budget of $1.7 billion in fiscal 

year 2012, is one such system investment.

Background
 

Page 3 GAO-12-956 Next Generation Enterprise Network 

NGEN is to replace and improve the enterprise network and services 

provided by NMCI, which were delivered through a DON-wide network 

services contract with a single service provider (Hewlett Packard 

Enterprise Services) that ended in September 2010.2 To bridge the time 

between the end of the NMCI contract and the full transition to the first 

increment of NGEN, DON awarded a $3.4 billion continuity of services 

contract3

When implemented, NGEN is to provide secure data and IT services, 

such as data storage, e-mail, and video teleconferencing to USN and the 

Marine Corps. It is also intended to provide the foundation for DON’s 

future Naval Networking Environment.

to Hewlett Packard Enterprise Services, which is scheduled to 

run from October 2010 through April 2014. In addition to providing 

continuity of network services, the contract includes transition services 

and the transfer of NMCI infrastructure and intellectual property to DON.

4

While NGEN’s first increment capabilities are not expected to differ from 

those of NMCI, the operational environment for the network is expected to 

change—from the contractor-owned and contractor-operated model 

previously used by both services to a government-owned and contractoroperated model for USN and to a government-owned and governmentThe network is to be developed 

incrementally, with the first increment expected to inherit the same 

architecture and design, and provide the same capabilities and services 

as does NMCI. In addition, NGEN is to provide increased DON control 

over network operations and additional mandatory information assurance 

capabilities to meet new Defense security requirements and the 

implementation of an independent security validation function. Future 

increments of the network have yet to be defined.

 

2

NMCI was composed of transport infrastructure such as cables, routers, and switches; 

end-user equipment such as computers, monitors, and keyboards; and software. It 

provided, among other things, data storage, e-mail, transport of voice and data, and video 

teleconferencing.

3

In August 2012, DON issued a sole source modification notice to increase the contract 

ceiling to $5.5 billion. According to DON officials, the increase is needed because 

additional funds will be necessary to maintain NMCI services through the transition to 

NGEN. Officials stated that the modification had not yet been approved.

4

The Naval Networking Environment is to be an iterative set of integrated, phased 

programs that share a common enterprise architecture and standards. It includes NGEN 

and the Consolidated Afloat Networks and Enterprise Services program, among others, 

and is to be in place by 2016.

Overview of NGEN
 

Page 4 GAO-12-956 Next Generation Enterprise Network 

operated model for the Marine Corps. In particular, USN plans to have 

ownership and oversight of network operations while it relies on

contractors to execute and provide NGEN services. The Marine Corps 

also plans to have ownership and oversight of network operations, but will 

serve as its own service provider and obtain supplemental contractor 

support as needed. The different operational models are intended to allow 

USN and Marine Corps to operate their respective domains in the manner 

best suited to support their different mission needs.

To manage the acquisition and deployment of NGEN, DON established a 

program management office within the Program Executive Office for 

Enterprise Information Systems. In February 2011, DON merged the 

NGEN program management office with the NMCI program management 

office to form the Naval Enterprise Networks program management office. 

This office manages the program’s cost, schedule, and performance and 

is responsible for ensuring that the program meets its objectives. In 

addition, various Defense and DON organizations share program 

oversight and review responsibilities. These key entities include the

• Under Secretary of Defense for Acquisition, Technology, and 

Logistics. Serves as the Milestone Decision Authority, which is the 

individual designated with overall responsibility for the program, to 

include approving the program to proceed through its acquisition cycle 

on the basis of, for example, the acquisition strategy, an 

independently evaluated economic analysis, and the acquisition 

program baseline. The Milestone Decision Authority is accountable for 

cost, schedule, and performance reporting, including reporting to 

Congress.

• Assistant Secretary of the Navy, Research, Development, and 

Acquisition. Serves as DON’s acquisition oversight organization for 

the program, to include implementation of Under Secretary of Defense 

for Acquisition, Technology, and Logistics policies and procedures. 

Determines when all key milestones are ready to be submitted to the 

Milestone Decision Authority.

Department of the Navy, Program Executive Office for Enterprise 

Information Systems. Oversees a portfolio of large-scale projects 

and programs designed to enable common business processes and 

provide standard capabilities. Reviews the acquisition strategy, 

economic analysis, and the acquisition program baseline prior to 

approval by the Milestone Decision Authority.

Oversight and Acquisition 

Processes for NGEN
 

Page 5 GAO-12-956 Next Generation Enterprise Network 

• Department of the Navy Chief Information Officer. Supports DON’s 

planning, programming, budgeting, and execution processes by 

ensuring that the program has achievable and executable goals and 

conforms to financial management regulations and to DON, Defense, 

and federal IT policies in several areas (e.g., security, architecture, 

and investment management). Works closely with the program office 

during milestone review assessments.

NGEN is designated as a Major Automated Information System (MAIS)5

and is subject to both the Office of the Secretary of Defense’s and DON’s 

MAIS acquisition policy and guidance,6

In May 2010, the Under Secretary of Defense for Acquisition, Technology, 

and Logistics authorized the NGEN program to enter the defense 

acquisition system at production and deployment. NGEN was approved to 

enter at this later phase because the technology was considered mature 

and already operational under NMCI. Prior to entering the production and 

deployment phase, a milestone C review must be held to review the 

capability production document and the test and evaluation master plan, 

among other things, and to authorize limited deployment to support 

operational testing. The purpose of the phase is to achieve an operational 

capability that satisfies the mission needs and is verified through 

independent operational test and evaluation, and to implement the 

which require the program to 

comply with defense acquisition system requirements. The defense 

acquisition system consists of five key program life-cycle phases and 

three related milestone decision points: (1) materiel solution analysis, (2) 

technology development (milestone A held prior to entering this phase), 

(3) engineering and manufacturing development (milestone B held prior to 

entering this phase), (4) production and deployment (milestone C held 

prior to entering this phase), and (5) operations and support. The 

Milestone Decision Authority is to review the initial capabilities document, 

which defines operational goals and needed capabilities, and authorize 

the phase in which a MAIS program is to enter the defense acquisition 

system.

 

5

Defense uses acquisition categories, where programs of increasing dollar value and 

management interest are subject to increasing levels of oversight. MAIS programs are the 

highest level category for automated information systems.

6

Department of Defense Instruction 5000.02, Operation of the Defense Acquisition 

System (Dec. 8, 2008), and Secretary of the Navy Instruction 5000.2E, Implementation 

and Operation of the Defense Acquisition System and the Joint Capabilities Integration 

and Development System (Sept. 1, 2011).
 

Page 6 GAO-12-956 Next Generation Enterprise Network 

system at all applicable locations. At milestone C, the NGEN program is 

planned to be initiated and the acquisition program baseline to be 

approved, establishing the cost, schedule, and performance thresholds 

and objectives for the program. On approval of milestone C, DON will 

proceed with award of the NGEN contracts for the transport and 

enterprise services segments.

In addition to the defense acquisition system requirements, DON 

guidance and policy require all MAIS programs to go through a “twopass/six-gate” acquisition review process.7

Table 1: Key Purpose of Each DON Gate Review

The first pass, which consists 

of gates 1 through 3, is focused on requirements development and 

validation and is led by the Chief of Naval Operations or the Commandant 

of the Marine Corps. The second pass, which consists of gates 4 through 

6, is focused on developing and delivering a solution via systems 

engineering and acquisition and is led by the Assistant Secretary of the 

Navy (Research, Development and Acquisition). In addition to meeting 

specific criteria for passing a given gate and proceeding to the next gate, 

all gate reviews are to consider program health (i.e., satisfactory cost and 

schedule performance, known risks, and budget adequacy) in deciding 

whether to proceed. Table 1 lists the key purpose of each gate review.

Gate Purpose

1 Approve the initial capabilities document and validate AOA guidance and 

assumptions.

2 Review the AOA and approve the preferred alternatives resulting from it.

3 Authorize the capability development document, which defines the system’s key 

performance parameters and includes information necessary to develop an 

affordable system or system increment.

4 Approve the system design specification, which specifies the system 

requirements.

5 Approve release of a request for proposals.

6 Assess overall program health through multiple reviews, following award of a 

contract and satisfactory completion of an integrated baseline reviewa

 

7

Secretary of the Navy Instruction 5000.2E. 

and 

approve the capability production document and program health prior to and after 

milestone C and the full deployment decision review. Sufficiency (sustainment) 

reviews focus on system performance and comparing actual performance and 

cost data to estimates.
 

Page 7 GAO-12-956 Next Generation Enterprise Network 

Source: GAO analysis of DON documentation.

a

An integrated baseline review is performed to obtain stakeholder agreement on a contractor’s 

performance measurement baseline, which represents the cumulative value of planned work and 

serves as the baseline against which variances are calculated. 

In March 2011,8

Table 2: Summary and Comparison of the Four Alternatives in the NGEN AOA

we evaluated DON’s AOA for NGEN, which had 

examined four acquisition alternatives. All of the alternatives were 

assumed to deliver the same NMCI capabilities and the technology 

considered for each alternative was assumed to be substantially the 

same. As a result, DON officials stated that the AOA was not intended to 

be a traditional analysis to determine a system solution, but rather was an 

analysis of alternative acquisition approaches. The primary differences 

among the alternatives related to how NGEN was to be acquired, 

managed, and operated. Specifically, the alternatives varied in terms of 

the number of contracts to be awarded and in the scope of government 

versus contractor responsibilities. Table 2 provides a description and 

comparison of each alternative that was examined in the AOA.

Alternative Description

Contractual 

relationships

Fiscal years 2011 to 

2015 estimated cost 

(in billions)

Relative 

risk

Alternative 1 

(status quo)

A recompete of the NMCI contract as a commercial item under 

Federal Acquisition Regulation Part 12, in which the contractor 

was to be responsible for end-to-end integration of services and 

control of the network.

3 $10.3 Least

Alternative 2 

(enhanced 

status quo)

A single contract similar to NMCI but as a noncommercial item 

with contract terms and conditions that were to address known 

NMCI deficienciesa

3 

and give the agency more control. The 

contractor was to be responsible for end-to-end integration of 

services and the government would control the network.

$10.8 More 

Alternative 3 

variant 

(segmentedb

Multiple contracts with different vendors, using the same 

negotiated approach as alternative 2. The government was to be 

responsible for end-to-end integration of services and control of 

approach) the network.

10 $10.8 Greater

Alternative 3 

(segmentedb A greater number of contracts than alternative 3 variant. The government was to be responsible for end-to-end integration of 

approach) services and control of the network.

15 $10.7 Greatest

Source: NGEN Analysis of Alternatives report, Center for Naval Analyses, April 2009.

 

8

GAO-11-150. 

Prior GAO Review 

Identified Weaknesses in 

DON’s Approach for 

Acquiring NGEN
 

Page 8 GAO-12-956 Next Generation Enterprise Network 

a

See, for example, GAO, Information Technology: DOD Needs to Ensure That Navy Marine Corps 

Intranet Program Is Meeting Goals and Satisfying Customers, GAO-07-51 (Washington, D.C.: Dec. 8, 

2006), for information on NMCI deficiencies. 

b

A segment represents an allocation of IT services, functions, tools, and roles and responsibilities 

associated with end-to-end service delivery. Segmentation of the network creates interfaces, which 

DON refers to as “seams,” among the different contractors and government entities that must be 

managed effectively to ensure successful delivery and continuity of services. 

However, we reported that the approach pursued by DON did not match 

any of the alternatives assessed in the AOA, and it was riskier and 

potentially costlier than the alternatives assessed because it included a 

higher number of contractual relationships. In particular, the chosen 

approach was one that included more contracts, a different segmentation 

scheme, and a different transition timeline than any of the alternatives 

that had been assessed. We also reported that DON’s November 2009 

risk-adjusted preliminary program life-cycle cost estimate for the 

approach for fiscal years 2011 through 2015 showed that this approach 

would cost at least an estimated $4.7 billion more than the alternatives 

assessed in the AOA.9

Given our findings, we recommended that Defense reconsider the 

acquisition approach based on a meaningful analysis of all viable 

alternative acquisition approaches. The department did not fully concur 

with our recommendation and stated that it had concluded that DON’s 

AOA was sufficient and that the analysis had been approved by the Office 

of the Secretary of Defense, Cost Assessment and Program Evaluation. 

The department added that it would complete an economic analysis for 

milestone C, which would include a follow-on independent cost estimate 

Moreover, DON had not analyzed the impact of 

these differences in terms of how they compared to the original 

alternatives. Further, we identified key weaknesses in the cost estimates 

and operational effectiveness analysis included in the NGEN AOA. 

Specifically, we reported that, while the AOA cost estimates were 

substantially well documented, they were not substantially accurate, and 

they were neither comprehensive nor credible. Additionally, we reported 

that, while the AOA identified program capabilities and goals, it did not 

sufficiently assess the alternatives’ ability to satisfy the capabilities and 

goals.

 

9

According to program documentation, the November 2009 risk-adjusted preliminary 

program life-cycle cost estimate of approximately $50 billion was developed when 

program definition was still evolving and program documentation was very recent or did 

not exist. The NGEN life-cycle cost estimate has since been refined and is now 

approximately $38 billion through fiscal year 2024.
 

Page 9 GAO-12-956 Next Generation Enterprise Network 

and an updated determination of the most cost-effective solution. 

However, in response, we pointed out that DON planned to assess only 

the status quo and the current approach in the economic analysis, not 

other alternatives such as those that had been included in the AOA, and 

we maintained that without a meaningful analysis of alternatives, the 

department would be unable to determine the most cost-effective 

solution.

We also reported that DON’s schedule for NGEN did not adequately 

satisfy key schedule estimating best practices by, for example, 

establishing the critical path (the sequence of activities that, if delayed, 

impacts the planned completion date of the project) and assigning 

resources to all work activities. Because it did not satisfy these practices, 

the schedule did not provide a reliable basis for program execution. 

According to program officials, schedule estimating had been constrained 

by staffing limitations. However, these weaknesses contributed to delays 

in the completion of NGEN events and milestones, including multiple 

major acquisition reviews and program plans. Accordingly, we 

recommended that Defense ensure that the NGEN schedule substantially 

reflect key schedule estimating practices. The department partially agreed 

with our recommendation.

Additionally, we reported that NGEN acquisition decisions were not 

always performance- and risk-based. In particular, senior executives had 

approved the program’s continuing progress in the face of known 

performance shortfalls and risks. For example, in November 2009, the 

program was approved at a key acquisition review despite the lack of 

defined requirements, which officials recognized as a risk that would 

impact the completion of other key documents, such as the test plan. 

According to DON officials, the decision to proceed was based on their 

view that they had sufficiently mitigated known risks and issues. We 

recommended that the department ensure future NGEN acquisition 

reviews and decisions fully reflect the state of the program’s performance 

and its exposure to risks. The department agreed with our 

recommendation.
 

Page 10 GAO-12-956 Next Generation Enterprise Network 

Subsequent to the issuance of our March 2011 report,10

 

10

DON 

reconsidered and made certain changes to the NGEN acquisition 

approach. Specifically, in April 2012, the Office of the Secretary of 

Defense approved NGEN acquisition approach changes that were 

intended to support program executability and reduce program risk for 

USN. Like the original approach, the revised approach emphasized 

segmentation of the network, with the same five segments that had been 

defined in the previous acquisition approach: the two primary segments 

are enterprise services and transport services and the remaining three 

segments are end user hardware; enterprise software licenses; and 

verification, validation, and reporting (see table 3 for details on these 

segments). Further, each segment is expected to be delivered by either a 

contractor or government provider, with multiple competitive awards. 

However, DON made changes to how certain NGEN segments are to be 

acquired and transitioned. For example, it plans to solicit transport and 

enterprise services using a single request for proposals and has said it 

may award a combined contract for both segments; in addition, it plans to 

transition both segments to the new provider(s) simultaneously instead of 

staggering their implementation. According to DON officials, these 

changes were made primarily because the transport and enterprise 

services segments were integrally related under NMCI, so acquiring them 

simultaneously would potentially reduce labor costs and administrative 

burden, and reduce risk. Another change is that USN is expected to 

acquire end user hardware as a service from the enterprise services 

contractor rather than purchase the equipment and provide it as 

government-furnished property to the contractor. According to program 

officials, this change was made to mitigate a critical NGEN risk that the 

program may not be fully funded if end user hardware must be purchased 

in fiscal year 2014 and, in the long term, procuring the end user hardware 

as a service is not more expensive than government-purchased 

equipment. As an additional change to the acquisition approach, USN is 

no longer expected to award a contract for the verification, validation, and 

reporting segment because it now has an internal entity—the Tenth Fleet 

Cyber Command—that is to perform this function. Table 3 summarizes 

the previous and current plans for acquiring NGEN.

GAO-11-150. 

DON Revised the NGEN 

Acquisition Approach
 

Page 11 GAO-12-956 Next Generation Enterprise Network 

Table 3: Comparison of Previous and Current Plans for Acquiring Segments

NGEN 

segment Purpose of segment Previous acquisition approach Revised acquisition approach

Enterprise 

services 

Provide the enterprise service desk, seat 

services supporting end user devices, 

and data center services such as storage 

and e-mail, along with hardware and 

software specific to enterprise services 

that are not covered under the end user 

hardware and enterprise software 

licenses segments.

Award contract for enterprise 

services and transition to new 

provider separately from other 

segments, for both USN and 

Marine Corps.

Potentially award a combined contract 

with transport services and solicit the 

contract using a single request for 

proposals with transport services and 

transition to new provider 

simultaneously with transport services, 

for both USN and Marine Corps.

Transport 

services 

Provide for the operation and 

sustainment of the transport 

infrastructure, associated services, and 

level-of-effort support for those services. 

It includes technology refresh of cable 

plant, routers, and switches; some 

leasehold improvements; and moveable 

infrastructure associated with local 

network operations.

Award contract for transport 

services and transition to new 

provider separately from other 

segments for both USN and 

Marine Corps.

Potentially award a combined contract 

with enterprise services and solicit the 

contract using a single request for 

proposals with enterprise services and 

transition to a new provider 

simultaneously with enterprise services, 

for both USN and Marine Corps.

End user 

hardware

Provide end user equipment such as 

computers, monitors, and keyboards. 

Award contracts for end user 

hardware with DON ownership of 

equipment, for both USN and 

Marine Corps. 

USN will acquire end user hardware as 

a service from the enterprise services 

contractor. While it may purchase the 

initial end user hardware and provide it 

as government-furnished property to the 

enterprise services contractor, it will 

acquire end user hardware as a service 

from the contractor once the initial 

equipment requires technology refresh.

No change for Marine Corps from 

previous approach. 

Enterprise 

software 

licenses

Provide software licenses to meet DONwide requirements. Award contract for end user 

software licenses for both USN 

and Marine Corps.

No change from previous approach.

Verification, 

validation, 

and reporting

Provide independent third-party security 

assessments of NMCI and NGEN to 

support all DON networks within the 

naval network environment.

Award contract for independent 

security assessment services for 

USN.

Marine Corps will perform its own 

security function.

USN will perform its own security 

function.

No change for Marine Corps from 

previous approach.

Source: GAO analysis of DON data.

DON’s planned transition from NMCI’s contractor-owned and contractoroperated model to NGEN’s government-owned and contractor-operated 

model for USN and government-owned and operated model for the 

Marine Corps includes establishing government control over network 

operations and transferring responsibility for network services from the 

incumbent provider to new service providers (contractor or government) 

in phases. DON is working to establish government control before award 
 

Page 12 GAO-12-956 Next Generation Enterprise Network 

of the transport and enterprise services contract(s) to help reduce risk 

during the transition to new provider(s). Specifically, it has defined early 

transition activities as discrete efforts that are intended to establish 

government management capabilities, allow for greater participation in 

operational decisions, and help expedite the transition time. In addition, 

USN plans to demonstrate that it has the people, processes, and tools in 

place to execute command and control and governance in a segmented 

environment without service degradation through a series of four 

government readiness reviews. Government readiness review 0 is 

planned to assess general government readiness prior to milestone C, 

including determining whether USN has clearly defined the operating 

model and whether the program office is ready to manage and execute 

the transition with an acceptable level of risk. Government readiness 

review 1 is planned to assess readiness after milestone C and prior to 

award of the transport and enterprise services contract(s) to integrate IT 

service management capabilities. Government readiness reviews 2 and 3 

are planned to assess readiness after contract award to transition 

remaining aspects, such as network and security operation centers.11

Further, USN and Marine Corps have identified two transition completion 

milestones—initial transition complete and final transition complete. DON 

is working towards ensuring that all of these transition milestones are met 

by the end of the continuity of services contract in April 2014.

 

11In addition to the government readiness reviews, USN plans to conduct a series of 

accompanying reviews with the contractor(s) to validate contractor readiness to transition.
 

Page 13 GAO-12-956 Next Generation Enterprise Network 

According to cost estimating and acquisition guidance,12 cost 

effectiveness is shown by a comparative analysis of all life-cycle costs 

and quantifiable and nonquantifiable benefits among the competing 

alternatives. Such an analysis should be used to examine viable 

alternatives to inform acquisition decision making on the most promising 

solution, without assuming a specific means of achieving the desired 

result. For example, an AOA is initiated to examine potential solutions 

with the goal of identifying the most promising option and can 

subsequently be updated, as needed, to refine the proposed solution and 

reaffirm the rationale in terms of cost effectiveness.13

Even after having revised its acquisition approach, DON has not yet 

shown that it is pursuing the most cost-effective approach for acquiring 

NGEN capabilities because it did not revisit the AOA to address the 

weaknesses we previously identified,

Additionally, an 

economic analysis assesses net costs and benefits of the proposed 

solution relative to the status quo and can identify and examine additional 

alternatives that are considered feasible methods of satisfying the 

objective.

14

Additionally, while DON developed a draft economic analysis for NGEN in 

February 2012, the analysis assesses only the status quo (i.e., NMCI) 

and the current acquisition approach for NGEN. As was the concern 

noted in our previous report, this analysis does not show whether DON’s 

nor did it conduct any other 

analysis that would show that the current approach is the most cost 

effective. Officials told us they believe the approach they are now 

pursuing remains consistent with the AOA we previously assessed. 

However, the revised approach DON is now pursuing was not one of the 

alternatives assessed because it differs from the AOA alternatives in 

terms of transition timeline, segmentation scheme, and potentially the 

number of contracts and the AOA still contains the issues we identified in 

our previous report.

 

12GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009); 

Defense Acquisition University, Defense Acquisition Guidebook (accessed January 10, 

2012). 

13Defense Acquisition Guidebook and DON Acquisition and Capabilities Guidebook (May 

2012).

14GAO-11-150. 

DON Has Not 

Reevaluated 

Alternatives to Ensure 

It Is Pursuing the 

Most Cost-Effective 

NGEN Acquisition 

Approach
 

Page 14 GAO-12-956 Next Generation Enterprise Network 

approach is the most cost-effective solution. Further, according to 

program officials, the draft economic analysis is to be refined and updated 

based on a revised service cost position,15

DON also developed analyses to support changes to its acquisition 

approach by examining whether a specific change to a particular segment 

would be more cost effective. For example, DON examined whether it 

should release one request for proposals instead of two for the transport 

and enterprise services segments. Additionally, USN examined whether it 

should acquire existing end user hardware owned by the incumbent and 

provide it to the enterprise services contractor as government-furnished 

property or acquire the end user hardware from the enterprise services 

contractor as a service. However, because these analyses focus on 

specific changes, they do not provide an understanding of whether DON’s 

overall acquisition approach is the most cost effective. Without a 

meaningful analysis of acquisition alternatives, DON does not know 

whether its approach for acquiring NGEN capabilities and meeting NGEN 

goals is the most cost effective among other viable alternatives.

and is not expected to be final 

until the acquisition program baseline is to be approved and about 3 

months before the planned time frame for awarding the primary NGEN 

contracts for transport and enterprise services, and thus, would be limited 

in its ability to inform decision makers on the best NGEN approach to 

pursue. Program officials agreed that the final economic analysis would 

not be able to show the most cost-effective solution; they stated that the 

economic analysis is being prepared because it is a required document 

for program initiation (milestone C review).

 

15The service cost position is DON’s first official cost estimate for NGEN, reflecting total 

life-cycle NGEN costs of about $38 billion through fiscal year 2024, and was developed by 

reconciling the NGEN program life-cycle cost estimate with an independent cost estimate 

developed by the Naval Center for Cost Analysis.
 

Page 15 GAO-12-956 Next Generation Enterprise Network 

Notwithstanding the lack of assurance that it is pursuing the most costeffective acquisition, DON nonetheless has moved forward with its 

revised approach for acquiring NGEN. In this regard, the department has 

undertaken activities to support its acquisition and transition to NGEN, 

prepared plans and analyses required for program initiation at milestone 

C, and conducted oversight reviews to support the release of the request 

for proposals for transport and enterprise services. However, the 

program’s schedule for acquiring NGEN capabilities has been delayed, 

resulting in a compressed timeline for transitioning to the new network 

and increased risks associated with transitioning to the new network 

before the end of the continuity of services contract. Compounding this 

situation is the fact that identified risks that can further impact schedule 

delays are not being adequately mitigated.

DON has undertaken activities to support its acquisition and transition to 

NGEN, prepared plans and analyses required for program initiation at 

milestone C, and conducted oversight reviews to support the release of 

the request for proposals for transport and enterprise services. 

Specifically,

• As of December 2011, DON had completed early transition activities, 

such as developing IT service management strategies, processes, 

procedures, and tools to serve as the overarching governance 

framework for delivering NGEN capabilities; analyzing and validating 

the current NMCI infrastructure inventory; and conducting job task 

analyses and assessing learning tools for contractor technical 

representatives. Additionally, the Marine Corps assumed control of 

the NMCI infrastructure currently supporting its operations and 

awarded the Marine Corps Common Hardware Suite contract to 

procure NGEN end user hardware in May 2012. Also in May 2012, 

DON reached agreement on the first of 12 planned enterprise 

software license agreements. Further, the department released NGEN 

documents and technical data to industry to ensure all competitors 

have full access to NMCI technical data and to reduce the potential for 

a protest. DON also released multiple requests for information and 

solicited input from industry on a draft request for proposals in order to 

better understand the capabilities of the current IT marketplace with 

respect to NGEN requirements. Finally, DON released the request for 

proposals for transport and enterprise services in May 2012. 

• DON has also prepared several plans and analyses required for 

program initiation at milestone C, when the acquisition program 

DON Is Proceeding 

with the NGEN 

Acquisition, but Is 

Experiencing 

Schedule Delays and 

Not Adequately 

Mitigating Risks

Execution of the NGEN 

Program Is Proceeding, 

but Major Milestones Have 

Slipped
 

Page 16 GAO-12-956 Next Generation Enterprise Network 

baseline is to be approved. In particular, in October 2011, DON 

approved the cost analysis requirements description, which defines 

the programmatic and technical features of NGEN increment 1 and 

serves as the basis for estimating program costs. Additionally, the 

Naval Center for Cost Analysis developed the service cost position, 

which was based on the reconciliation of a completed program lifecycle cost estimate and an independent cost estimate. DON also 

approved the systems engineering plan and the test and evaluation 

master plan, which describes the overall test and evaluation strategy 

for how the network’s capabilities will be assessed. Subsequently, in 

November 2011, the program office developed the capability 

production document, which clarified and solidified the capabilities for 

NGEN increment 1 and became the primary source requirements 

document for the program. Finally, the revised acquisition strategy, 

which was required prior to release of the transport and enterprise 

services request for proposals, was approved in April 2012.

• According to Defense and DON policy, acquisition programs must 

proceed through a series of gate and milestone reviews (as described 

earlier in this report in table 1). Since our prior report,16 DON has 

conducted two gate reviews and an Office of the Secretary of 

Defense-level decision review to support the release of the request for 

proposals for transport and enterprise services. In particular, in 

October 2011, it completed an acquisition gate review to endorse the 

NGEN increment 1 capability production document. Subsequently, 

DON conducted a second NGEN acquisition gate review in January 

2012 to approve the transport and enterprise services request for 

proposals, during which it reviewed the current status and health of 

the program including the key activities remaining to release the 

request for proposals. Subsequently, in April 2012, the Office of the 

Secretary of Defense, Milestone Decision Authority, reviewed the 

NGEN program to approve the updated acquisition strategy and 

authorize the release of the transport and enterprise services request 

for proposals.

While DON has made progress on these efforts to acquire and transition 

to NGEN, key program activities remain to be completed. For example, 

 

16We previously reported in March 2011 that DON had completed gates 1 through 4 and 

conducted a gate 5 review in October 2010 of its transport services request for proposals 

but had not yet exited the gate because approval to proceed was conditional based on 

satisfactory completion of open action items (GAO-11-150).
 

Page 17 GAO-12-956 Next Generation Enterprise Network 

DON will need to demonstrate that it is prepared to execute control and 

governance of the network through four government readiness reviews; 

baseline the program by establishing cost, schedule, and performance 

thresholds and objectives; award the primary NGEN contract(s); and 

transition to the new NGEN provider(s). Table 4 lists planned completion 

dates for these remaining key activities.

Table 4: Remaining Key NGEN Program Activities

Activity Planned date

Government readiness review 0 September 2012

Gate 6 (sufficiency) review October 2012

Milestone C review (NGEN program initiation) November 2012

Government readiness review 1 December 2012

Award of transport and enterprise services contract(s) February 2013

Government readiness review 2 April 2013

USN initial transition complete May 2013

Finalization of software licensing agreements June 2013 a

Marine Corps final transition complete June 2013

Government readiness review 3 July 2013

USN final transition complete March 2014

Source: DON data.

a

DON plans to enter into 12 enterprise software license agreements and this date represents 

finalization of the last agreement. 

However, a number of acquisition activities are facing schedule delays, 

even though the incumbent is scheduled to end service delivery in April 

2014. Specifically, while the request for proposals for transport and 

enterprise services was issued, as we previously stated, it was delayed 

by 17 months and 9 months, respectively, resulting in current delays in 

NGEN program milestones, including the dates for conducting the 

milestone C review and awarding the contract(s) for transport and 

enterprise services. Additionally, the schedule for assessing USN’s 

readiness to transition (i.e., government readiness reviews) is tied to 

milestone C review and contract award, meaning that they are expected 

to occur a certain number of days before or after their associated event; 

thus, the government readiness reviews would also be impacted by 

delays in milestone C and contract award. Moreover, these delays have 

compressed the timeline for and increased the risks associated with 

transitioning to the new network before the end of the continuity of 

services contract. For example, the date for USN’s initial transition from 

the current service provider to the new service provider(s) has slipped by 
 

Page 18 GAO-12-956 Next Generation Enterprise Network 

5 months and final transition is scheduled for March 2014, thus 

compressing the period for shutting down network services with the 

incumbent and transitioning them to the new NGEN contractor(s) by 

about 5 months. Further, USN has identified a number of factors that 

could impact transition and increase the risk that NGEN may not be 

completed on time and may experience cost overruns, such as proposals 

not meeting NGEN requirements and lack of coordination among 

contractors and the government in operating the network.

Program officials attributed these schedule delays to the department’s 

need to conduct more detailed planning before issuing the transport and 

enterprise services request for proposals and for addressing industry 

comments on the draft request for proposals to reduce the potential of a 

bid protest. Figure 1 illustrates the delays in major NGEN milestones.

Figure 1: NGEN Major Milestone Delays

Notes: The schedules, considered to be informal baseline schedules, have been used to manage the 

overall scope of work to be conducted within the program. An official baseline schedule is expected to 

be approved as part of the acquisition program baseline at milestone C. 

Delays were rounded to the nearest month. 

a

According to Marine Corps officials, new criteria for the initial and final transition complete milestones 

resulted in new dates for planned completion in the April 2012 schedule. 
 

Page 19 GAO-12-956 Next Generation Enterprise Network 

Our prior report highlighted the significance of DON not having a reliable 

schedule for executing NGEN and its contribution to delays in key 

program milestones.17 The lack of a reliable schedule, as we previously 

noted, and the continuing delays in DON’s efforts to complete the network 

transition as planned, raise concerns that it will be unable to complete the 

transition within the time frames of the current continuity of services 

contract. As a result, ensuring that the NGEN schedule substantially 

reflects the key estimating practices, as we discussed and recommended 

in our previous report, continues to be a vital step for DON to take.

According to industry best practices,18

NGEN program-wide and project-specific risks are managed by different 

offices, with the program office identifying and tracking program-wide 

risks—those that affect the overall NGEN program. In accordance with 

best practices, the NGEN program identifies and analyzes program-wide 

risks, by assigning a severity rating to risks, tracking these risks in a 

database, and planning response strategies for each risk in the database. 

In addition, NGEN program officials escalate these risks by reviewing and 

evaluating these risks during monthly program risk management board 

meetings. As of July 2012, the program office had identified eight 

an effective risk management 

process identifies potential problems before they occur, so that riskhandling activities may be planned and invoked, as needed, across the 

life of the product and project in order to mitigate adverse impacts on 

achieving objectives. Key activities of a comprehensive risk management 

process include (1) identifying and analyzing risks, (2) escalating key 

risks to the attention of senior management, and (3) developing risk 

mitigation plans and milestones for key mitigation deliverables. In 

particular, effective plans for risk mitigation should be developed for the 

most important risks to the project, which includes a period of 

performance, identification of resources needed, and responsible parties. 

In addition, the status of each risk should be monitored periodically to 

determine whether established thresholds have been exceeded and risk 

mitigation plans should be implemented as appropriate to ensure that 

systems will operate as intended.

 

17GAO-11-150. 

18Carnegie Mellon Software Engineering Institute, Capability Maturity Model® Integration 

for Services (CMMI-SVC), version 1.3 (November 2010).

Program Risk Mitigation 

Plans Have Not Been Fully 

Defined
 

Page 20 GAO-12-956 Next Generation Enterprise Network 

program risks that it considered critical (moderate- or high-level risks) and 

that could result in schedule delays and cost increases. These risks 

included potential delays in transition from the incumbent to the new 

service provider(s) and in contract award for the transport and enterprise 

services, as well as the potential lack of coordination among contractors 

and the government in operating the network. Table 5 describes the 

program-identified critical risks for NGEN as of July 2012.

Table 5: NGEN Program Critical Risks, as of July 2012

Program-identified critical risk Program risk description from program documentation

Programidentified 

risk level

NGEN service request tool The current tools for ordering requests for services are not prepared within the 

NGEN environment. If the development of a functional NGEN ordering tool is not 

complete in time to support the NGEN transition, then ordering will rely on errorprone manual processes. Without automated ordering, service delivery will 

degrade and staffing costs to perform ordering will increase significantly.

High

Transition delays for USN Significant delays could impact the ability to transition from the incumbent to the 

new service provider(s) before the continuity of services contract performance 

period ends in April 2014. If USN does not fully transition in time, it will have to 

extend the continuity of services contract, resulting in cost increases and additional 

schedule delays.

High

Seam management Roles and relationships among segments and government functions have not been 

defined or agreed on. If these seams are not accurately identified and 

characterized, DON will not be able to manage them effectively and the transition 

will take longer.

High

Purchase of end user hardware for 

USN

The NGEN program will not be fully funded if end user hardware must be 

purchased in fiscal year 2014 for approximately $150 million.

Moderate

Delayed transport and enterprise 

contract(s) award

A day-to-day slip in completing the final transition will be realized if award of 

transport and enterprise service contract(s) is delayed.

Moderate

Systems engineering Service performance may degrade, systems integration costs may increase, and 

time to resolve engineering issues may increase if the program is unable to 

execute design authority and problem management.

Moderate

Service offering descriptions Service availability and performance will degrade if DON cannot effectively 

manage the level of service quality and direct the resources in support of service 

delivery.

Moderate

Potential protest is sustained A protest against any of the NGEN contract awards may impact the schedule for 

transition completion by as much as 6 months, resulting in an extension of the 

continuity of services contract.

Moderate

Source: DON data.

While DON is working to mitigate seven of the eight program risks, its 

mitigation plans did not always include all the elements of an effective 

plan (e.g., identification of resources needed, responsible parties, and 

period of performance). Specifically, the reported mitigation strategies did 

not fully identify the resources needed, such as the staff and funds, nor 
 

Page 21 GAO-12-956 Next Generation Enterprise Network 

fully identify organizations that are responsible and accountable for 

accomplishing risk mitigation activities. Additionally, while five of the 

seven mitigation plans had activities with planned completion dates, most 

did not include an estimated start date; thus, the plans did not fully define 

the period of performance to ensure that the mitigation activities are being 

implemented appropriately. Moreover, three of the seven plans did not 

identify the status of activities for which completion dates had already 

occurred. In particular, to mitigate the risk of potential lack of coordination 

among contractors and the government in operating the network, DON 

was to develop, implement, and automate key processes by February 15, 

2012. However, the plan does not reflect whether this activity has been 

completed or, otherwise discuss its status.

Additionally, two of the seven plans did not fully reflect the current status 

of the program. For example, to mitigate transition risks, DON officials 

identified that the enterprise and transport services contract(s) must be 

awarded no later than December 2012 in order to ensure continuous 

network availability during the transition from the continuity of services 

contract to the NGEN contract(s). However, the current mitigation plan 

does not document this milestone or reflect the current status of the 

program, which now plans to award the contract(s) in February 2013.

Further, according to program documentation, a mitigation plan was 

required and was being updated for the service offering descriptions risk; 

however, according to other program documentation, the plan to mitigate 

service offering descriptions is still under development, even though it has 

been identified as a program risk since August 2011. According to 

program officials, weaknesses in these mitigation plans were due, in part, 

to the lack of a priority in establishing and maintaining comprehensive 

and current plans.

Several of the risks identified are significant to ensure that NGEN 

transition occurs as planned and within the estimated costs. Therefore it 

is essential to ensure that for a given risk, techniques and methods will be 

invoked to avoid, reduce, and control the probability of occurrence.

Even though DON does not know whether it is pursuing the most costeffective approach to acquiring NGEN capabilities, it has proceeded to 

implement its revised acquisition approach, completed various plans and 

analyses including the first official program life-cycle cost estimate, and 

held oversight reviews to support the issuance of the request for 

proposals for the two primary NGEN segments. While these steps have 

Conclusions
 

Page 22 GAO-12-956 Next Generation Enterprise Network 

been taken, DON faces delays in upcoming milestones, which have 

resulted in a compressed transition timeline and increased risks 

associated with transitioning to the new network before the end of the 

continuity of services contract. Compounding this are weaknesses in 

DON’s risk mitigation efforts that could further impact schedule delays 

and result in cost increases. Without a well-defined schedule, as we 

previously reported, and adequate risk mitigation, DON cannot ensure 

that needed NGEN capabilities will be in place in time to ensure that 

services will continue to operate when the incumbent is scheduled to shut 

down its services.

To strengthen risk mitigation activities for the NGEN program, we 

recommend that the Secretary of Defense direct the Secretary of the 

Navy to develop comprehensive mitigation plans and strategies for 

program-wide critical risks that identify the mitigation period of 

performance, resources needed, and responsible parties, and that fully 

reflect the current status of the program.

The Department of Defense provided written comments on a draft of this 

report, signed by the Deputy Assistant Secretary of Defense (C3 and 

Cyber), and reprinted in appendix II. In its comments, the department 

agreed with our recommendation and noted that the program office will 

continue to build on efforts to improve NGEN’s risk management and 

mitigation process. For example, the department stated that it plans to 

increase the speed at which NGEN risk management board action items 

are closed.

We are sending copies of this report to the appropriate congressional 

committees; the Director, Office of Management and Budget; the 

Congressional Budget Office; the Secretary of Defense; and the 

Secretary of the Navy. In addition, the report is available at no charge on 

the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-6304 or melvinv@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

Recommendation for 

Executive Action

Agency Comments
 

Page 23 GAO-12-956 Next Generation Enterprise Network 

page of this report. GAO staff who made major contributions to this report 

are listed in appendix III.

Valerie C. Melvin

Director, Information Management and Technology Resources Issues
Appendix I: Objectives, Scope, and 

Methodology

Page 24 GAO-12-956 Next Generation Enterprise Network 

Our objectives were to determine (1) the extent to which the Department 

of the Navy’s (DON) selected approach to acquiring the Next Generation 

Enterprise Network (NGEN) is the most cost effective and (2) the current 

status of and plans for acquiring NGEN.

To determine the extent to which DON’s approach to acquiring NGEN is 

the most cost effective, we reviewed our prior work evaluating the NGEN 

analysis of alternatives1 and analyzed current documentation that DON 

had completed to describe and justify the cost effectiveness of its 

acquisition approach. These included the draft economic analysis and 

analyses to support specific acquisition approach changes. We assessed 

DON’s supporting analyses against relevant Department of Defense 

guidance and our Cost Estimating and Assessment Guide.

2

To determine the current status of and plans for acquiring NGEN, we 

analyzed the revised NGEN acquisition strategy, integrated master 

schedule, program performance assessments, risk reports, transport and 

enterprise services request for proposals, planned system requirements, 

cost estimates, draft operational readiness plan, and executive acquisition 

decision briefings and meeting minutes, among other things. We also 

reviewed these documents to determine how the program had changed 

since our prior review of NGEN.

In this regard, 

we evaluated the purpose and use of these analyses in examining viable 

alternatives to inform acquisition decision making on the most costeffective solution. We also interviewed cognizant DON program officials 

and Office of the Secretary of Defense Cost Assessment and Program 

Evaluation officials about the use of these analyses in acquisition decision 

making.

3

 

1

GAO, Information Technology: Better Informed Decision Making Needed on Navy’s Next 

Generation Enterprise Network Acquisition, 

To assess the status of risk 

management for the NGEN program initiative, we compared the risk 

management plans and supporting documentation against leading 

practices, such as Carnegie Mellon Software Engineering Institute’s 

GAO-11-150 (Washington, D.C.: Mar. 11, 

2011). 

2

GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009); 

Defense Acquisition University, Defense Acquisition Guidebook (accessed January 10, 

2012); and DON Acquisition and Capabilities Guidebook (May 2012).

3

GAO-11-150. 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 25 GAO-12-956 Next Generation Enterprise Network 

Capability Maturity Model® Integration for Services,4

We conducted this performance audit from November 2011 to September

2012 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

to determine 

whether such practices had been specified in the plans. Further, we 

interviewed relevant DON program officials and Office of the Secretary of 

Defense Cost Assessment and Program Evaluation officials to clarify 

information in documents we reviewed and to more fully understand the 

program’s progress to acquire NGEN. To assess the reliability of the data 

that we used to support the findings in this report, we reviewed relevant 

program documentation to substantiate evidence obtained through 

interviews with agency officials. We determined that the data used in this 

report are sufficiently reliable. We have also made appropriate attribution 

indicating the sources of the data used.

 

4

Carnegie Mellon Software Engineering Institute, Capability Maturity Model® Integration 

for Services (CMMI-SVC), version 1.3 (November 2010).
Appendix II: Comments from the Department 

of Defense

Page 26 GAO-12-956 Next Generation Enterprise Network 

Appendix II: Comments from the Department 

of Defense
Appendix II: Comments from the Department 

of Defense

Page 27 GAO-12-956 Next Generation Enterprise Network 
Appendix III: GAO Contact and Staff 

Acknowledgments 

Page 28 GAO-12-956 Next Generation Enterprise Network 

Valerie C. Melvin, (202) 512-6304, or melvinv@gao.gov

In addition to the individual named above, key contributors to this report 

were Eric Winter (assistant director), Nabajyoti Barkakati, Harold Brumm, 

Neil Doherty, Nancy Glover, Madhav Panwar, Jeanne Sung, and Niti 

Tandon.

Appendix III: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments

(310977)
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