Hewlett-Packard Beats CSC for $3.5 Billion Navy Deal

Thursday, 27 Jun 2013 05:28 PM


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Hewlett-Packard Co. won a contract valued at as much as $3.5 billion to run the U.S. Navy’s communications network, the largest information-technology project in the federal government.

The agreement calls for managing the Navy’s 800,000-user intranet through 2018, the Defense Department said in an announcement Thursday.

The Navy selected HP’s team over a group of contractors that included Computer Sciences Corp. and Harris Corp.

Palo Alto, California-based Hewlett-Packard has operated the Navy’s network since 2008, receiving $1 billion for the work in the 12 months ended Sept. 30, according to data compiled by Bloomberg. It is HP’s biggest U.S. government contract, according to the data.

Hewlett-Packard’s team for the so-called Next Generation Enterprise Network includes Lockheed Martin Corp., International Business Machines Corp., AT&T Inc. and Northrop Grumman Corp.

The team led by Falls Church, Virginia-based CSC and Melbourne, Florida-based Harris also includes General Dynamics Corp., Verizon Communications Inc. and Dell Inc.

The Navy on June 24 fired Captain Shawn Hendricks, the officer who had been leading the competition, citing the results of an inquiry into an “improper relationship.”

A Navy official who asked not to be identified discussing the matter said the relationship was with a female contractor, without providing the name of her employer.

Hendricks’s dismissal “was in no way related to any contracting decisions with the programs he oversaw” and there “was no compromise of procurement-sensitive information,” Sarah Flaherty, a Navy spokeswoman, said in an e-mail.

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