You are most likely under different rules if this is being done by the Navy.
Specific to your post by way of example:
Compliance to the NEC:2008 with exceptions is required by Indiana under Indiana Administrative Code (IAC) 675-IAC-17 rule 1.8; Otherwise there would be no NEC issue in Indiana.
Requirement to upgrade existing work to current code exists only under local (i.e. County) codes. Here I believe the rules are as follows:
(A) When up to 40% of the existing work is being replaced then only the new work must be compliant with current code.
(B) When 40% or more of the existing work is being replaced then all the existing work must be compliant with current code.
(C) When minor repairs are being performed, such as replacing an outlet, then like may be replaced with like components.
All the above A,B,C subject to interpretation by the AHJ.