Comments: "Performance-Based" Contracting Bringing Change

An industry observer that Flt Tech Online considers a well-informed expert notes that as traditional FAA procurements evolve into a new "performance-based" model, it could be unsettling.  Wishing to be identified only as Spectator, here are his (or her) comments:

"Traditionally, major FAA procurements have proceeded by issuing detailed specifications, qualifying bidders, requesting offers and selecting the winner.  But the new "performance-based" concept promises to change that, with the forthcoming nationwide ADS-B (automatic dependent surveillance-broadcast) contract - said to be valued around $1.5 billion - setting the pace.  Here, bidders will finance the manufacture, installation, operation and maintenance of some 500 ADS-B ground stations of their own design, with the primary FAA requirement being essentially the provision of certifiable signal handling, for a service fee.

The ground stations were generally assumed to be dual frequency units, capable of processing ADS-B signals from the FAA developed, 978 MHz, general aviation (GA) Universal Access Transponder (UAT) and from the internationally standardized 1090 MHz ES (extended squitter) airline equipment, and "translating" each to the other, to allow all pilots to see all local traffic.  The three potential bidders - Lockheed Martin, ITT and Raytheon - were, however, invited to offer innovative design approaches.

At the recent Maastricht ATC Conference, Raytheon revealed it had proposed that GA drop UAT and adopt 1090 MHz, permitting worldwide GA access to ADS-B (UAT is unique to the NAS), and also facilitating removal of GA's legacy Mode-A/C transponders.  As well, UAT's unique weather uplinks would be replaced by free XM Radio satellite broadcasts. Only single frequency ground stations would be required, which non-Raytheon sources suggest could save FAA over $200 million.

In the two weeks between Maastricht and FAA's Joint Resources Council (JRC) "down select" of final bidders, speculation was rife over whether Raytheon's proposal was non-compliant, since it deviated markedly from what most understood to be FAA's desired configuration, or whether its potential savings were an irresistible "innovation"  On February 23, JRC down selected all three bidders.

Speculation now follows three directions.  If Raytheon won, would Lockheed Martin and ITT protest? Or have they time to incorporate Raytheon-like approaches in their final offers, due around late April/early May? Or might they petition FAA to postpone its planned March RFO, to allow development of alternative competitive bids?  Traditional contracting was never like this."

From Spectator.

Editor's Note: Spectator is an independent observer of the civil aviation scene, based on his military, airline and industry experience in both North America and Europe. FTO expects to occasionally publish his viewpoints on different topics and, as with all our material, welcomes reader comments.

03-02-2007.

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