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Research Questions

  1. What is the best alternative for the modernization of the information systems for the Naval Operational Supply System?
  2. What is the ability of existing commercial and government software solutions to meet the Navy's requirements for the future operational supply system?
  3. What are the costs and risks associated with procuring and sustaining a future operational supply system?

The U.S. Navy operates a 276-vessel battle force, in which each vessel requires a number of supplies for the care and feeding of the crew, the maintenance of the ship, shore-based operations, and operational effectiveness. The Navy uses 16 core information systems to help it manage afloat supply operations for the force. It has indicated that its disparate, antiquated systems have reliability, supportability, maintainability, and affordability problems. Other issues identified relate to the inability to have enterprise visibility into supply operations, cybersecurity demands, and challenges associated with meeting Financial Independent Auditability Review goals. To address these capability gaps in the existing portfolio of systems and to assist in modernizing them, the Department of the Navy asked the RAND Corporation to help in conducting an Analysis of Alternatives (AoA) of its future operational supply, food service, and retail operations capability, known as the Naval Operational Supply System. The study team relied on a series of qualitative and quantitative methods to evaluate the effectiveness, costs, and risks of proposed alternatives within a six-month period of performance.

Key Findings

Commercial-off-the-shelf software is the best choice for going forward

  • The AoA specified four alternative areas — Status Quo, Commercial-Off-the-Shelf (COTS), Government-Off-the-Shelf (GOTS), and Hybrid (some combination of the other three) — and examined nine possible alternative options.
  • The Navy has several viable options, with Alternatives 3 (COTS), 8 (Hybrid Optimize Commercial with Status Quo of Food Service Management and Retail Operations Management systems), and 9 (Hybrid Forward Compatible Commercial) offering the best performance and the lowest cost, schedule, and performance risks. Within the COTS alternative, there are many potential providers.
  • The risk-adjusted cost estimates for the COTS alternatives (3, 8, and 9) vary significantly. The higher estimates are nearly twice the cost of the lower estimates, with a spread of more than $200 million. This cost range reflects risk and the variety of integrators and vendors available.


  • The Navy should move forward with COTS, with a preference for Alternative 9 (Hybrid Forward Compatible Commercial).
  • The Navy has options to manage the risks of choosing any alternative. For example, the Navy can minimize risk by prototyping. Furthermore, ensuring that the requirements are achievable without significant customization can also minimize risk.
  • The Navy should become more agile and mitigate the large number of detailed requirements through prioritization and contractual flexibility that enables the Navy, software provider, and integrator to agree on requirements changes. Ten thousand detailed-level requirements, with many of those functional in nature and lacking specification of quality attributes, could be problematic. Burdensome numbers of requirements and lack of specificity in quality attributes were two reasons why a previous attempt to modernize naval supply had problems staying on budget and schedule and, ultimately, failed.

This research was sponsored by the Navy's Program Manager, Warfare 150, and conducted within the Acquisition and Technology Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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