HP in potential $3.4 billion U.S. Navy network deal

WASHINGTON (Reuters) - HP Enterprise Services, a unit of HP HPQ.N, has won a deal for continued U.S. Navy information technology support worth up to $3.4 billion if all options are exercised, the U.S. Defense Department said Thursday.

The initial award was $27 million for work to be performed in Herndon, Virginia, and expected to be completed by September 30, the Pentagon’s daily contract digest said.

The work involves the Navy/Marine Corps Intranet, described as the world’s largest internal computer network, serving more than 700,000 sailors, Marines and civilians in the United States and Japan.

If all options are exercised, work could continue until July 2015, the announcement said.

Work performed during the option periods will be performed at roughly 2,500 locations including bases, camps, posts, stations, offices and single-seat storefronts in the continental United States, Alaska, Hawaii, Japan, Puerto Rico and Guantanamo Bay, Cuba, it said.

HP Enterprises is the former Electronic Data Systems (EDS). It was acquired by HP after it won the Navy’s first such intranet contract in October 2000. The work involved consolidating nearly 6,000 networks.

The Defense Department said the new deal was not competitively procured. HP Enterprise Services, LLC, is the owner/operator of the NMCI network and is the only source that can satisfy the Navy’s requirement for continuity of information technology services, it said.

HP said it would help the Navy transition to a “Next Generation Enterprise Network” without disrupting services or security.

Reporting by Jim Wolf; Editing by Gary Hill