FAA awards $44M for Common Terminal Digitizers, with Telephonics Corp. securing the contract

Contract Overview

Contract Amount: $44,001,874 ($44.0M)

Contractor: Telephonics Corporation

Awarding Agency: Department of Transportation

Start Date: 2014-08-26

End Date: 2024-03-31

Contract Duration: 3,505 days

Daily Burn Rate: $12.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Transportation

Official Description: COMMON TERMINAL DIGITIZER (CTD)

Place of Performance

Location: FARMINGDALE, SUFFOLK County, NEW YORK, 11735

State: New York Government Spending

Plain-Language Summary

Department of Transportation obligated $44.0 million to TELEPHONICS CORPORATION for work described as: COMMON TERMINAL DIGITIZER (CTD) Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration is extensive, spanning over 9 years, which may impact long-term value. 3. The firm fixed-price structure provides cost certainty for the government. 4. Telephonics Corporation, the sole awardee, has a history with this type of equipment. 5. The contract falls under the 'Transportation Equipment and Supplies' category, indicating specialized procurement. 6. The award was made by the Federal Aviation Administration, a key agency within the Department of Transportation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The firm fixed-price nature helps control costs, but the long duration could lead to price escalations if market conditions change significantly. The total award amount of $44 million over nearly a decade suggests a moderate annual spend, which needs to be assessed against the criticality and technological relevance of the Common Terminal Digitizer (CTD) system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The presence of 3 bids suggests a degree of competition, though the specific number of bidders does not inherently guarantee the best possible price. The agency's decision to proceed with a single awardee implies that Telephonics Corporation's offer was deemed the most advantageous.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. However, the ultimate value depends on the number and quality of bids received and the government's negotiation strategy.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, receiving critical equipment for air traffic control operations. The Common Terminal Digitizer (CTD) system is essential for modernizing air traffic management, enhancing safety and efficiency. The contract supports the FAA's ongoing efforts to upgrade its technological infrastructure across various air traffic control facilities. The geographic impact is national, as the CTD system is deployed at air traffic control centers throughout the United States. The contract likely supports specialized technical jobs within Telephonics Corporation and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 9 years) could lead to obsolescence or missed opportunities for better pricing through future competition.
Lack of detailed performance metrics in the provided data makes it difficult to assess the true value-for-money beyond the price.
Reliance on a single contractor for a critical system over an extended period could pose supply chain or support risks.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, indicating a structured procurement process.
The contract supports a critical national infrastructure system (air traffic control).

Sector Analysis

This contract falls within the broader 'Transportation Equipment and Supplies' sector, specifically focusing on avionics and air traffic control technology. The market for such specialized electronic systems is often characterized by a limited number of highly capable manufacturers due to stringent performance and certification requirements. Spending in this area is driven by the need for continuous modernization of air traffic management systems to ensure safety, efficiency, and capacity in the National Airspace System (NAS). Comparable spending benchmarks would typically involve other contracts for radar systems, communication equipment, and navigation aids within the aviation industry.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. Given the specialized nature of the Common Terminal Digitizer (CTD) and the prime contractor, Telephonics Corporation, it is possible that larger, specialized firms are involved. Further analysis would be needed to determine the extent of small business participation, either directly or through subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Federal Aviation Administration (FAA), likely through its contracting officers and program managers. Accountability measures would be embedded in the contract terms, including delivery schedules, performance standards, and payment milestones. Transparency is generally facilitated through contract award databases like FPDS, where basic information is publicly available. The Department of Transportation's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Air Traffic Control Systems Modernization
Avionics Procurement
National Airspace System (NAS) Modernization
Federal Aviation Administration Procurement

Risk Flags

Long contract duration
Single awardee for critical system

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $44.0 million to TELEPHONICS CORPORATION. COMMON TERMINAL DIGITIZER (CTD)

Who is the contractor on this award?

The obligated recipient is TELEPHONICS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $44.0 million.

What is the period of performance?

Start: 2014-08-26. End: 2024-03-31.

What is the historical spending pattern for Common Terminal Digitizers (CTD) by the FAA?

Analyzing historical spending on CTDs requires accessing detailed procurement data over multiple fiscal years. While this specific contract award is for $44 million over its lifespan, understanding the FAA's broader investment in CTD technology would involve looking at previous awards, sole-source procurements, and sustainment contracts. The FAA has been engaged in modernizing its air traffic control systems for decades, with CTDs being a component of that evolution. Without access to a comprehensive historical database filtered for CTD-related procurements, it's difficult to establish a precise spending trend. However, it's reasonable to assume that spending fluctuates based on technological refresh cycles, system upgrades, and the phasing out of older equipment. The current award suggests a continued investment in this technology.

How does the per-unit cost of the CTD compare to market rates or similar government contracts?

Determining the per-unit cost benchmark for the Common Terminal Digitizer (CTD) is complex without knowing the exact quantity of units procured under this $44 million contract and the specific model or configuration of each unit. The provided data does not break down the award by quantity or unit price. Furthermore, 'market rates' for highly specialized, government-certified avionics like CTDs are not readily available in public commercial markets. Government contracts often include specific technical requirements and support services that differentiate them from commercial off-the-shelf products. To assess value, one would need to compare this contract's unit price (if calculable) against other FAA CTD procurements or similar government contracts for air traffic control hardware, considering factors like technological specifications, warranty, and support.

What is Telephonics Corporation's track record with the FAA and similar contracts?

Telephonics Corporation has a history of providing systems and services to the Department of Defense and other government agencies, including the FAA. Their expertise often lies in areas such as radar, communication, and surveillance systems. For the FAA, Telephonics has previously been involved in contracts related to air traffic management and surveillance technologies. A thorough review of their contract history with the FAA would reveal the number of awards, their value, performance ratings, and any past issues or successes. This specific contract for Common Terminal Digitizers builds upon their established presence in the aviation technology sector, suggesting a level of trust and proven capability recognized by the FAA.

What are the potential risks associated with a single awardee for such a critical system over a long period?

Awarding a critical system like the Common Terminal Digitizer (CTD) to a single entity, Telephonics Corporation, for an extended period (over 9 years) presents several potential risks. Firstly, there's a risk of vendor lock-in, where the FAA becomes heavily reliant on Telephonics, potentially limiting future flexibility or negotiation leverage. Secondly, over such a long timeframe, technological advancements might occur, and the contracted system could become outdated, requiring costly upgrades or replacements. Thirdly, if Telephonics faces financial difficulties, production issues, or changes in its business strategy, it could disrupt the supply chain or support for the CTDs. Finally, reduced competition over the contract's life could potentially lead to less incentive for Telephonics to maintain optimal pricing or service levels compared to a more competitive environment.

How does this contract contribute to the overall modernization goals of the National Airspace System (NAS)?

This contract for Common Terminal Digitizers (CTDs) directly supports the National Airspace System (NAS) modernization goals by providing essential technology for air traffic management. The CTD is a component that likely enhances the processing and display of surveillance data, contributing to improved situational awareness for air traffic controllers. Modernization efforts within the NAS aim to increase capacity, improve safety, enhance efficiency, and reduce environmental impact. By ensuring the availability and functionality of critical hardware like the CTD, the FAA can better implement advanced surveillance techniques, integrate new communication systems, and ultimately manage air traffic more effectively in an increasingly complex airspace. This procurement represents a tangible investment in the technological backbone required for a Next Generation Air Transportation System.

Industry Classification

NAICS: Wholesale Trade › Machinery, Equipment, and Supplies Merchant Wholesalers › Transportation Equipment and Supplies (except Motor Vehicle) Merchant Wholesalers

Product/Service Code: AEROSPACE CRAFT LAUNCHING, LANDING, GROUND HANDLING AND SERVICING EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: TTM Technologies, Inc.

Address: 815 BROADHOLLOW RD, FARMINGDALE, NY, 11735

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

Financial Breakdown

Contract Ceiling: $68,620,405

Exercised Options: $44,001,874

Current Obligation: $44,001,874

Actual Outlays: $3,727,394

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $85,149

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline