While it hopes to break even in the end, EDS’s massive $8 billion Navy Marine Corps Intranet (NMCI) project has lost a lot of money thus far.
According to Stan Gibson of eWeek (see EDS Swabs the Decks of NMCI Mess), EDS has been losing up to $800 million annually on the project that is due to complete in 2007…
No turnaround at Electronic Data Systems Corp. would be possible without first clearing away the wreckage of by far the worst deal in the company's history: the Navy Marine Corps Intranet contract.
Signed in 2000, the $7 billion contract for the world's largest intranet was costing EDS $800 million annually at its low point. It has taken several years to stem the losses, but this year EDS is looking for a positive cash flow of about $150 million.
"This was a going-out-of-business strategy," Mike Koehler, who is in charge of the NMCI contract at EDS, said in an interview here last month. Even though the contract is gradually becoming cash-flow-positive, EDS CEO Michael Jordan said it's unlikely the contract will turn a profit over its life span. "Three billion [dollars] has been dissipated. We won't get all of it back, but we will get a good percentage," said
The NMCI overhaul went hand in hand with other cleanup chores carried out by
What a dog of a project. Notwithstanding the numbers, the latest D.C. lobbying scandal isn’t going to exactly boost project team morale either (see Scandal rocks world’s biggest intranet ).I can’t wait to see the complete case study on this intranet when its complete… it better be good - $8 billion good!
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