SAAB SENSIS CORPORATION's $217.9M contract for air traffic control systems awarded by FAA

Contract Overview

Contract Amount: $217,887,897 ($217.9M)

Contractor: Saab Sensis Corporation

Awarding Agency: Department of Transportation

Start Date: 2003-10-11

End Date: 2022-12-31

Contract Duration: 7,021 days

Daily Burn Rate: $31.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: DAFIS UDO RECONSTRUCT W/O ADVANCE

Place of Performance

Location: EAST SYRACUSE, ONONDAGA County, NEW YORK, 13057

State: New York Government Spending

Plain-Language Summary

Department of Transportation obligated $217.9 million to SAAB SENSIS CORPORATION for work described as: DAFIS UDO RECONSTRUCT W/O ADVANCE Key points: 1. Contract value represents significant investment in national air traffic modernization. 2. Long duration suggests a critical, long-term need for these systems. 3. Awarded under full and open competition, indicating broad market engagement. 4. Cost Plus Incentive Fee structure aims to align contractor performance with government objectives. 5. Focus on search, detection, and navigation systems highlights safety and efficiency priorities. 6. Contractor's extensive performance period implies a stable, established relationship. 7. Geographic location in New York may indicate a specific operational hub or manufacturing base.

Value Assessment

Rating: good

The contract's total value of $217.9 million over its extended period suggests a substantial investment. Benchmarking this against similar large-scale procurements for air traffic control systems is challenging without more specific system details. However, the Cost Plus Incentive Fee (CPIF) pricing structure, while common for complex development and sustainment, requires careful monitoring to ensure costs remain reasonable and performance incentives are effectively driving value. The long duration and multiple modifications indicate a potentially evolving scope, which necessitates ongoing scrutiny of cost growth and justification.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of three bids indicates a competitive landscape, which is generally favorable for price discovery and achieving market-based pricing. The government's ability to solicit proposals from the broadest possible range of qualified contractors typically leads to better innovation and more cost-effective solutions.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for competitive pricing and ensures that the government is not limited to a single provider, thereby avoiding potential price gouging.

Public Impact

Enhances the safety and efficiency of the National Airspace System. Supports the Federal Aviation Administration's mission to regulate and oversee civil aviation. Benefits commercial airlines, cargo carriers, and general aviation by improving air traffic management. Impacts the workforce through potential employment in system development, manufacturing, installation, and maintenance. Contributes to the modernization of critical national infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if not rigorously managed.
Long contract duration (over 19 years including extensions) may indicate scope creep or evolving requirements that could impact final cost.
Dependence on a single contractor for critical air traffic control systems raises concerns about long-term vendor viability and potential supply chain risks.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should drive value.
Cost Plus Incentive Fee structure incentivizes contractor performance and cost control.
Long-term contract indicates a stable and reliable solution for a critical national need.
Contractor's sustained performance over nearly two decades suggests a proven track record and deep expertise in the domain.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a critical component of the aerospace and defense industry. This sector is characterized by high technological complexity, stringent regulatory requirements, and significant R&D investment. The market size for air traffic management systems is substantial, driven by global demand for air travel and the need for modernization of aging infrastructure. SAAB SENSIS CORPORATION operates in a specialized niche within this sector, providing advanced solutions for air traffic control and surveillance.

Small Business Impact

There is no indication that this contract included specific small business set-asides. Given the nature and scale of the systems involved in air traffic control, it is likely that the prime contractor, SAAB SENSIS CORPORATION, would subcontract portions of the work. Analysis of subcontracting plans would be necessary to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Federal Aviation Administration (FAA), a component of the Department of Transportation. The FAA is responsible for managing the contract, monitoring performance, and ensuring compliance with terms and conditions. The Cost Plus Incentive Fee structure implies performance metrics and targets that are subject to review. Transparency is facilitated through contract awards databases, but detailed operational oversight and accountability measures are internal to the agency. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

FAA Next Generation Air Transportation System (NextGen)
Air Traffic Control Systems Modernization
Aviation Surveillance and Navigation Equipment
Defense and Aerospace Manufacturing Contracts

Risk Flags

Long contract duration may indicate potential for scope creep or evolving requirements.
Cost Plus Incentive Fee contracts require diligent oversight to manage costs effectively.
Dependence on specific technology could pose risks if not updated or maintained.
Potential for vendor lock-in with critical infrastructure systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $217.9 million to SAAB SENSIS CORPORATION. DAFIS UDO RECONSTRUCT W/O ADVANCE

Who is the contractor on this award?

The obligated recipient is SAAB SENSIS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $217.9 million.

What is the period of performance?

Start: 2003-10-11. End: 2022-12-31.

What is the historical spending trend for this specific contract and similar contracts awarded by the FAA?

The provided data indicates a total award value of $217,887,896.98 for this contract, spanning from October 11, 2003, to December 31, 2022, with 3 modifications and a duration of 7021 days. This long duration and the presence of modifications suggest a history of sustained spending and potential scope adjustments over nearly two decades. To assess historical spending trends, one would need to examine the individual award amounts and modification values over the contract's lifecycle. Comparing this to similar contracts requires identifying other FAA procurements for air traffic control systems, radar, navigation aids, or surveillance equipment, and analyzing their award values, durations, and modification histories. This would reveal whether SAAB SENSIS CORPORATION's contract represents a typical investment level or an outlier within the FAA's spending patterns for such critical infrastructure.

How does the pricing structure (Cost Plus Incentive Fee) compare to industry standards for similar technology procurements?

The Cost Plus Incentive Fee (CPIF) structure is common for complex, high-risk, or developmental procurements where precise cost and performance targets are difficult to establish upfront. In the aerospace and defense sector, particularly for systems involving advanced technology like air traffic control, CPIF is often employed to incentivize the contractor to control costs while meeting performance specifications. Compared to fixed-price contracts, CPIF offers more flexibility but requires robust government oversight to prevent cost overruns. Industry standards often see a mix of contract types, with fixed-price preferred for well-defined requirements and cost-reimbursement types like CPIF used when uncertainty is high. The effectiveness of CPIF hinges on well-defined performance metrics and realistic target costs, ensuring that incentives align with government objectives and taxpayer interests.

What is SAAB SENSIS CORPORATION's track record with the FAA and other government agencies regarding performance and delivery?

SAAB SENSIS CORPORATION, as a significant player in the aerospace and defense industry, likely has a substantial track record with the FAA and other government entities. The fact that this contract, initially awarded in 2003, was extended to 2022 suggests a history of satisfactory performance or critical need that warranted continued engagement. A comprehensive assessment would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract terminations, and the successful delivery of systems under previous agreements. Examining their portfolio of contracts across agencies like the Department of Defense or other aviation authorities would provide a broader picture of their reliability, technical capabilities, and ability to meet stringent government requirements.

What are the key performance indicators (KPIs) associated with this contract, and how has SAAB SENSIS CORPORATION performed against them?

Specific Key Performance Indicators (KPIs) for this contract are not publicly detailed in the provided data. However, for air traffic control systems, typical KPIs would likely include system uptime/availability, reliability (Mean Time Between Failures - MTBF), accuracy of detection and navigation, latency in data processing and transmission, and successful integration with existing air traffic management infrastructure. The Cost Plus Incentive Fee (CPIF) structure implies that performance targets related to cost, schedule, and technical objectives were established. SAAB SENSIS CORPORATION's performance against these KPIs would be monitored by the FAA. Evidence of contract modifications, extensions, and the sustained award value suggests that the contractor has likely met or exceeded many of these critical performance benchmarks, though a detailed review of FAA performance reports would be necessary for a definitive assessment.

What is the potential impact of technological obsolescence on this contract, given its long duration?

Given the contract's long duration, spanning nearly two decades, the potential for technological obsolescence is a significant consideration. Air traffic control technology evolves rapidly, driven by advancements in computing, sensors, communication, and software. If the contract primarily focused on procuring and sustaining older technologies, there's a risk that the systems may become outdated, less efficient, or harder to maintain as components become obsolete. Conversely, if the contract included provisions for technology refresh, upgrades, or adaptation to newer standards (like those associated with the FAA's NextGen initiative), then obsolescence risk might be mitigated. The FAA's procurement strategy would need to balance the need for proven, reliable systems with the imperative to adopt and integrate emerging technologies to maintain a state-of-the-art air traffic management system.

How does the geographic location of the award (New York) influence the contract's scope or execution?

The contract indicates 'ST': 'NY' (New York) as the state of the awardee. This could imply several things: the primary manufacturing facility for SAAB SENSIS CORPORATION is located in New York, the contract's administrative hub is there, or it relates to specific air traffic control systems or installations within the New York region, which is a highly trafficked airspace. If it pertains to specific regional installations, it could involve upgrades or maintenance for airports like JFK, LaGuardia, or Newark, or air route traffic control centers serving the area. The geographic indicator doesn't necessarily limit the contract's national scope but might point to a key operational or logistical center for the contractor's activities related to this award.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Saab Aktiebolag (UEI: 354001059)

Address: 1700 DELL AVE, CAMPBELL, CA, 95008

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $3,983,107,913

Exercised Options: $392,948,354

Current Obligation: $217,887,897

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline