The Navy issued a long-awaited award on Wednesday for the full-rate production of the ship-based IT network known as CANES under a $2.5-billion contract arrangement designed to force five contractors to continuously compete for the work.

The five companies are incumbent Northrop Grumman [NOC], General Dynamics [GD], BAE Systems, and smaller firms Global Technical Systems and Serco. Seven bids were submitted to Space and Warfare Systems Command (SPAWAR), the Navy’s San Diego-based acquisition command for the Consolidated Afloat Network and Enterprise Services system. The two losing entrants were not identified.

U.S. Navy photo
U.S. Navy photo

Northrop Grumman has been providing CANES in low-rate production since it won the LRIP contract over Lockheed Martin [LMT] in February 2012. Now, Northrop Grumman will have to compete with other companies to keep producing CANES throughout the full-production phase.

The Navy plans to install CANES in 180 ships, submarines and shore operation centers. CANES will remain based on Northrop Grumman’s design, but SPAWAR said it will be updated over time to incorporate new technology and lessons learned through testing and operational experience.

Because the Navy controls the data rights on CANES, it owns the Northrop Grumman design and can share it with other companies and hold the competitions meant to drive down cost.

Under the contract, each of the five firms will produce one CANES system for installation on an Arleigh Burke-class (DDG-51) destroyer. After that, each firm will have to compete for additional orders as the Navy identifies and solicits the work through competitive task orders under an indefinite-delivery, indefinite-quantity contract period extending to 2022. 

“For the next eight years, the Navy will leverage the best of industry and government expertise to meet the challenges of developing and delivering multiple CANES hardware and software baselines in the most affordable means available,” SPAWAR said.

CANES is designed to eliminate multiple legacy information technology systems by effectively merging stand-alone networks for command, control, computers, communications, and intelligence (C4I) systems into a common, interoperable  shipboard computing environment.

“The operating systems that exist today on some of those legacy networks are not sustainable,” Rear Adm. Christian Becker, the program executive officer for C4I at SPAWAR, said. “CANES allows us to deploy current operating systems and then upgrade or stay current with future changes to those operating systems in a more cost effective and timely way.”

CANES is also meant to strengthen network infrastructure, improve security, and reduce hardware space, and streamline costs by decreasing manpower and operations and sustainment workloads through the use of common equipment, training and logistics.

SPAWAR issued the request for full-rate production proposals from industry 14 months ago and had been expected to award the contract in March. At the time, SPAWAR listed Lockheed Martin, Raytheon [RTN], Computer Sciences Corporation [CSC] and Boeing [BA], among others, as prospective bidders. Raytheon, CSC and Boeing, however, said they did not submit a bid.

CANES is a cornerstone of the Navy’s push to move toward more open architecture systems designed for easier upgrades while lowering total ownership costs, and to quickly counter emerging cyber or security threats.

Northrop Grumman was contracted to build more than two dozen CANES systems under LRIP, and some have already been installed on Arleigh Burke destroyers.

Initial operational test and evaluation (IOT&E) began earlier this month aboard the USS Higgins (DDG-76) ahead of decision to fully deploy CANES next year. CANES installations have been completed on nine destroyers, and it’s being integrated on three aircraft carriers, one amphibious assault ship, eight more destroyers, a landing dock ship and one cruiser, according to SPAWAR.