DOT awards $36.5M contract for air traffic control services to Midwest Air Traffic Control Service Inc

Contract Overview

Contract Amount: $36,538,020 ($36.5M)

Contractor: Midwest AIR Traffic Control Service Inc

Awarding Agency: Department of Transportation

Start Date: 2024-11-26

End Date: 2032-01-31

Contract Duration: 2,622 days

Daily Burn Rate: $13.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: THE FCT CONTRACT ENCOMPASSES THE SCOPE OF ATC SERVICES AND ASSOCIATED SUPPORT SERVICES REQUIRED FOR THE DAY-TO-DAY OPERATION OF FCTS AS DEFINED IN THE STATEMENT OF WORK (SOW).

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20591

State: District of Columbia Government Spending

Plain-Language Summary

Department of Transportation obligated $36.5 million to MIDWEST AIR TRAFFIC CONTROL SERVICE INC for work described as: THE FCT CONTRACT ENCOMPASSES THE SCOPE OF ATC SERVICES AND ASSOCIATED SUPPORT SERVICES REQUIRED FOR THE DAY-TO-DAY OPERATION OF FCTS AS DEFINED IN THE STATEMENT OF WORK (SOW). Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a definitive contract with a firm fixed price, providing cost certainty. 3. The duration of the contract is over 6 years, indicating a long-term need for these services. 4. The contract is for air traffic control services, a critical function for national safety and efficiency. 5. The awardee, Midwest Air Traffic Control Service Inc., is a key provider in this specialized sector. 6. The contract is managed by the Federal Aviation Administration, a key agency within the Department of Transportation.

Value Assessment

Rating: good

The contract value of $36.5 million over approximately 6.5 years averages to about $5.6 million annually. Benchmarking this against similar air traffic control service contracts is challenging without more specific service details. However, the firm fixed-price structure suggests that the government has negotiated a set price, which can be advantageous if the contractor can deliver efficiently. The number of bidders (4) provides some basis for comparison, but a deeper dive into the bids received would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. Four bids were received, which suggests a reasonable level of competition for this specialized service. The open competition process is designed to foster price discovery and ensure that the government receives competitive pricing. The fact that multiple entities were willing and able to bid on this contract implies a healthy market for air traffic control services.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the best possible price for essential air traffic control services. The open competition increases the likelihood that the awarded price reflects market value and avoids potential overpayment.

Public Impact

The primary beneficiaries are the flying public and the aviation industry, who rely on safe and efficient air traffic control. Essential air traffic control services will be maintained, ensuring the smooth operation of air travel. The geographic impact is likely national, given the scope of air traffic control operations overseen by the FAA. The contract supports jobs within the air traffic control sector, potentially including pilots, controllers, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen operational challenges arise, despite the fixed-price nature.
Dependence on a single contractor for a critical national infrastructure service.
Risk of service disruption if the contractor faces financial or operational difficulties.

Positive Signals

Firm fixed-price contract provides budget certainty for the government.
Awarded through full and open competition, indicating a competitive market.
Long-term contract duration suggests a stable and reliable service provision.

Sector Analysis

The air traffic control (ATC) sector is a highly specialized and critical component of the national infrastructure, overseen by the Federal Aviation Administration (FAA). This contract falls within the broader aerospace and defense services industry. The market for ATC services is characterized by high barriers to entry due to stringent regulatory requirements, specialized technology, and the need for highly trained personnel. Spending in this sector is consistently high due to the essential nature of air safety and efficiency. Comparable spending benchmarks would typically involve other large-scale FAA contracts for air traffic management systems and services.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false) or specific subcontracting goals mentioned in the provided data (sb: false). Therefore, the primary focus is on large business participation. While this contract may not directly benefit small businesses through set-asides, large prime contractors often engage small businesses as subcontractors for specialized support services. The absence of explicit small business provisions means that the impact on the small business ecosystem will depend on the prime contractor's subcontracting strategy.

Oversight & Accountability

Oversight for this contract will be primarily managed by the Federal Aviation Administration (FAA), a division of the Department of Transportation. The FAA is responsible for ensuring that the contractor meets all performance requirements outlined in the Statement of Work (SOW). Accountability measures are embedded within the firm fixed-price contract structure, which incentivizes the contractor to manage costs effectively. Transparency is generally maintained through contract award databases and public reporting, although specific performance metrics may not always be publicly disclosed. Inspector General jurisdiction would typically fall under the Department of Transportation's Office of Inspector General for audits and investigations.

Related Government Programs

Air Traffic Control Systems
Aviation Safety and Security
National Airspace System Modernization
Federal Aviation Administration Operations

Risk Flags

Critical Infrastructure Service
Long-Term Contract
Firm Fixed Price
Full and Open Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $36.5 million to MIDWEST AIR TRAFFIC CONTROL SERVICE INC. THE FCT CONTRACT ENCOMPASSES THE SCOPE OF ATC SERVICES AND ASSOCIATED SUPPORT SERVICES REQUIRED FOR THE DAY-TO-DAY OPERATION OF FCTS AS DEFINED IN THE STATEMENT OF WORK (SOW).

Who is the contractor on this award?

The obligated recipient is MIDWEST AIR TRAFFIC CONTROL SERVICE INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $36.5 million.

What is the period of performance?

Start: 2024-11-26. End: 2032-01-31.

What is the track record of Midwest Air Traffic Control Service Inc. in performing similar federal contracts?

Midwest Air Traffic Control Service Inc. has a history of performing contracts related to air traffic control services. While the provided data does not detail specific past performance metrics or contract values, its selection as the awardee for this significant definitive contract suggests a positive assessment of its capabilities by the Federal Aviation Administration. To fully assess their track record, a review of their past performance evaluations on federal contract databases, such as the Federal Procurement Data System (FPDS) or SAM.gov, would be necessary. This would reveal details on their on-time delivery, quality of service, and adherence to contract terms in previous engagements, providing a clearer picture of their reliability and expertise in managing complex air traffic control operations.

How does the awarded price compare to market rates for similar air traffic control services?

The awarded contract value of $36.5 million over approximately 6.5 years equates to an average annual cost of roughly $5.6 million. Benchmarking this against market rates for air traffic control services is complex due to the specialized nature of the work and the varying scope of services offered by different providers. Factors such as the specific technologies used, the volume of air traffic managed, and the geographic location significantly influence pricing. Without detailed service level agreements and operational data for comparable contracts, a precise market rate comparison is difficult. However, the fact that the contract was awarded through full and open competition with four bidders suggests that the price achieved is likely competitive within the specialized market for these essential aviation services.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential service disruptions if the contractor faces operational or financial challenges, and the inherent risk of relying on a single entity for a critical national infrastructure function. Mitigation strategies are embedded within the contract's structure. The firm fixed-price nature incentivizes the contractor to manage costs and maintain service quality to avoid penalties or contract termination. The Federal Aviation Administration (FAA) will provide oversight, monitoring performance against the Statement of Work (SOW) and ensuring compliance with safety and operational standards. Furthermore, the long-term duration (over 6 years) suggests a stable relationship, but the FAA likely has contingency plans in place for unforeseen events, such as contractor default or major service interruptions, to ensure continuity of air traffic control operations.

How effective is the competition level in ensuring value for taxpayer money?

The contract was awarded under full and open competition, with four bids received. This level of competition is generally considered effective in ensuring value for taxpayer money. Open competition allows multiple qualified vendors to propose their services, fostering a price-discovery process that drives down costs and encourages innovation. The presence of four bidders indicates a reasonably competitive market for these specialized air traffic control services. This competitive pressure encourages the winning contractor, Midwest Air Traffic Control Service Inc., to offer efficient services at a fair price to maintain profitability and secure future contracts. The firm fixed-price structure further enhances value by capping the government's financial exposure.

What is the historical spending pattern for air traffic control services by the FAA?

Historical spending patterns for air traffic control services by the FAA are substantial, reflecting the critical and continuous nature of these operations. The FAA consistently invests billions of dollars annually in managing the National Airspace System, which includes personnel, technology, and services like those contracted here. This $36.5 million contract over 6.5 years represents a portion of that ongoing investment. Analyzing historical FAA spending data would reveal trends in contract values, types of services procured, and the number of contractors involved. Such analysis would likely show a steady demand for ATC services, with periodic increases for modernization efforts or expansions in air traffic volume. This specific contract appears to be a standard procurement for ongoing operational support.

What are the implications of this contract for the broader aviation industry?

This contract has significant implications for the broader aviation industry by ensuring the continued safe and efficient operation of the National Airspace System (NAS). Reliable air traffic control is fundamental to flight scheduling, safety, and overall air travel capacity. By awarding this contract to Midwest Air Traffic Control Service Inc., the FAA is maintaining a critical piece of aviation infrastructure. This stability benefits airlines through predictable operations, reduces delays, and supports the economic activity generated by air travel. Furthermore, the contract reinforces the specialized market for air traffic control services, potentially influencing investment and development in related technologies and training within the aviation sector.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Air Traffic Control

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: 693KA7-23-R-00003

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7300 W 129TH ST, OVERLAND PARK, KS, 66213

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

Financial Breakdown

Contract Ceiling: $145,408,786

Exercised Options: $36,538,020

Current Obligation: $36,538,020

Actual Outlays: $21,873,961

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline