DOT awards $385K for oceanic HF voice comms to SITA, extending service through 2028

Contract Overview

Contract Amount: $385,089 ($385.1K)

Contractor: Sita Information Networking Computing USA Inc

Awarding Agency: Department of Transportation

Start Date: 2021-09-02

End Date: 2028-09-24

Contract Duration: 2,579 days

Daily Burn Rate: $149/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: INCREMENTAL FUNDING: CONTINUE TO PROVIDE MANDATORY OCEANIC HIGH FREQUENCY (HF) VOICE COMMUNICATION TO FLIGHT OPERATIONS IN FAA OCEANIC AIRSPACE.

Place of Performance

Location: ATLANTA, COBB County, GEORGIA, 30339

State: Georgia Government Spending

Plain-Language Summary

Department of Transportation obligated $385,088.56 to SITA INFORMATION NETWORKING COMPUTING USA INC for work described as: INCREMENTAL FUNDING: CONTINUE TO PROVIDE MANDATORY OCEANIC HIGH FREQUENCY (HF) VOICE COMMUNICATION TO FLIGHT OPERATIONS IN FAA OCEANIC AIRSPACE. Key points: 1. Contract ensures critical communication infrastructure for flight operations in oceanic airspace. 2. Long-term contract duration suggests a stable, ongoing need for these services. 3. Fixed-price contract type helps manage cost certainty for the government. 4. Sole provider for a niche service may limit competitive pressure on pricing. 5. Performance context is vital to ensure continued reliability of essential flight communications.

Value Assessment

Rating: fair

The contract value of $385,088.56 over approximately 7 years appears reasonable for specialized, mission-critical communication services. However, without specific benchmarks for oceanic HF voice communication systems, a definitive value-for-money assessment is challenging. The fixed-price nature provides cost predictability, but the lack of multiple bids raises questions about whether the most competitive pricing was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, only two bids were received, which is a relatively low number for a full competition. This suggests that the market for this specific service may be limited, or that other potential bidders did not find the opportunity compelling enough to participate.

Taxpayer Impact: While full and open competition was utilized, the low number of bids may have limited the downward pressure on pricing, potentially resulting in a slightly higher cost to taxpayers than if more robust competition had been present.

Public Impact

Benefits flight operations by ensuring reliable communication in oceanic airspace. Supports the safety and efficiency of air traffic control. Impacts airlines and pilots operating in areas without traditional communication infrastructure. Maintains essential services for the Federal Aviation Administration (FAA).

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bids) may indicate a lack of market dynamism or potential for price overruns if the sole provider faces increased costs.
Dependence on a single contractor for a critical service introduces supply chain and operational risks.
The long contract duration could lead to vendor lock-in, making future transitions more complex and costly.

Positive Signals

The contract is fixed-price, providing cost certainty for the government.
Full and open competition was sought, demonstrating an effort to engage the market.
The service is essential for maintaining safe and efficient air traffic control in oceanic regions.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically related to telecommunications and IT infrastructure supporting aviation. The market for specialized oceanic communication systems is likely concentrated among a few key providers due to the technical expertise and infrastructure required. Comparable spending benchmarks would typically be found within other FAA or international aviation authority contracts for similar communication services.

Small Business Impact

The contract data does not indicate any specific small business set-aside provisions. Given the specialized nature of oceanic high-frequency voice communication, it is likely that larger, established telecommunications companies are the primary participants in this market. Subcontracting opportunities for small businesses are not explicitly detailed but could potentially exist in areas like maintenance or support if utilized by the prime contractor.

Oversight & Accountability

Oversight of this contract would primarily fall under the Federal Aviation Administration (FAA), a division of the Department of Transportation. Accountability measures are typically managed through contract performance reviews, service level agreements, and adherence to the fixed-price terms. Transparency is facilitated by the contract award process and public availability of contract data, though detailed operational performance metrics may not be publicly disclosed.

Related Government Programs

FAA Air Traffic Control Communications
Aviation Safety and Infrastructure Programs
Global Aeronautical Communications Systems

Risk Flags

Limited competition may impact price.
Reliance on a single vendor for critical infrastructure.
Potential for vendor lock-in due to long contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $385,088.56 to SITA INFORMATION NETWORKING COMPUTING USA INC. INCREMENTAL FUNDING: CONTINUE TO PROVIDE MANDATORY OCEANIC HIGH FREQUENCY (HF) VOICE COMMUNICATION TO FLIGHT OPERATIONS IN FAA OCEANIC AIRSPACE.

Who is the contractor on this award?

The obligated recipient is SITA INFORMATION NETWORKING COMPUTING USA INC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $385,088.56.

What is the period of performance?

Start: 2021-09-02. End: 2028-09-24.

What is the historical spending pattern for oceanic HF voice communication services by the FAA?

Historical spending data for this specific service is not directly available in the provided snippet. However, the current contract's duration (2021-2028) and value suggest a consistent need and likely prior contracts for similar services. To understand historical patterns, one would need to analyze FAA procurement records for 'oceanic communication,' 'HF voice,' or related terms over several fiscal years. This would reveal trends in contract values, durations, and awarded vendors, helping to contextualize the current $385,088.56 award and identify any significant increases or decreases in spending over time. It's also important to note if this service has been consistently provided by the same vendor or if there have been changes in contractors, which could indicate shifts in market competition or service providers.

How does the pricing of this contract compare to similar services provided by other agencies or internationally?

A direct price comparison is difficult without access to specific benchmark data for oceanic High Frequency (HF) voice communication services. These services are highly specialized, requiring significant infrastructure and regulatory compliance, which can lead to unique pricing structures. The current contract is a fixed-price definitive contract valued at $385,088.56 over approximately seven years. To benchmark, one would need to identify contracts from other aviation authorities (e.g., EASA, ICAO member states) or other US agencies (e.g., NOAA, military branches) that procure similar niche communication services. Factors like geographic coverage, bandwidth, uptime guarantees, and included support services would need to be standardized for a meaningful comparison. The limited number of bidders (two) also suggests that market competition might not be driving prices down to the lowest possible level, making external benchmarking even more crucial.

What are the key performance indicators (KPIs) for this contract, and how is SITA performing against them?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. Typically, for communication services, KPIs would include metrics such as voice quality, uptime/availability (e.g., 99.99%), latency, response times for service requests, and adherence to security protocols. Performance against these KPIs would be monitored by the Federal Aviation Administration (FAA) contracting officer's representative (COR). SITA's performance would be evaluated through regular reporting, service level agreement (SLA) adherence, and potentially user feedback from flight operations personnel. Without access to the contract's statement of work (SOW) and performance reports, it's impossible to assess SITA's current performance against these unstated KPIs.

What is the risk associated with having a single primary vendor, SITA, for such a critical communication service?

The primary risk associated with relying on a single vendor, SITA Information Networking Computing USA Inc., for critical oceanic High Frequency (HF) voice communication is vendor dependency. This dependency creates vulnerabilities related to service disruptions, price increases, and potential lack of innovation. If SITA experiences technical failures, cyberattacks, or financial instability, it could directly impact flight safety and operations in oceanic airspace. Furthermore, with limited competition (only two bids received), SITA may have significant leverage in future negotiations, potentially leading to higher costs for the FAA. The long contract duration also increases the risk of vendor lock-in, making it difficult and costly to switch providers if performance degrades or better alternatives emerge. Mitigation strategies often involve robust Service Level Agreements (SLAs), contingency planning, and regular market surveillance.

How does this contract align with the FAA's broader strategy for modernizing air traffic management systems?

This contract, focused on maintaining existing High Frequency (HF) voice communication, represents a component of the FAA's broader air traffic management (ATM) modernization efforts, albeit one that supports legacy systems. While the FAA is actively pursuing advanced technologies like NextGen (e.g., satellite-based communication, data-centric systems), reliable legacy systems like HF voice remain critical, especially in areas where newer technologies are not yet fully deployed or as a backup. This contract ensures continuity of essential services during the transition period. The FAA's strategy likely involves a phased approach, maintaining operational integrity of current systems while incrementally introducing and integrating more advanced capabilities. Therefore, this contract ensures that fundamental communication needs are met, preventing disruptions that could hinder the overall modernization timeline.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3100 CUMBERLAND BLVD STE 900, ATLANTA, GA, 30339

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $1,084,735

Exercised Options: $385,089

Current Obligation: $385,089

Actual Outlays: $333,052

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline