$2 Billion Lures Trio of Teams to FAA Bid

By Nick Wakeman, Staff WriterTeams chasing the lucrative but complex Federal Aviation Administration Telecommunications Infrastructure contract are rounding into form as the contract passes another milestone and moves closer to the competition phase.Harris Corp. of Melbourne, Fla., Lockheed Martin Corp. of Bethesda, Md., and MCI WorldCom Inc. of Clinton, Miss., are leading teams that are vying for a contract worth $2 billion over 10 years to manage the FAA's myriad telecommunications networks. The contract, known by the initials FTI, is expected to be awarded by the end of the year.AT&T Corp. of Basking Ridge, N.J., was pursuing the contract as a prime, but now has joined forces with Lockheed Martin. Lockheed Martin's team also includes CACI International Inc. of Arlington, Va., Communication Systems Technology Inc. of Columbia, Md., and Seta Corp. of McLean, Va.Harris' team includes Bell Atlantic Corp. of New York, BellSouth Corp. of Atlanta, GTE Corp. of Irving, Texas, Raytheon Co. of Lexington, Mass., SBC Communications Inc. of San Antonio, Sprint Corp. of Westwood, Kan., and US West Inc. of Denver.MCI WorldCom has not released the list of its teammates yet, but company officials said they expect to name the team by mid-April.Qwest Communications International Inc. of Denver also considered fielding a team, but sources said the company decided not to pursue the contract.On March 17, the contract passed an important milestone when the agency released its draft screening information request, or SIR, which lays out the FAA's thinking to date on the contract.The contract has drawn the attention of the some heavy hitters in the systems integration and telecommunications world because of the size and scope of the work, industry officials said. Under the deal, the FAA wants to roll together several existing but separate telecommunications networks into an integrated network."This is a true systems integration job when you look at all the systems that are being pulled together," said Ken Geiselhart, capture manager for FTI for Lockheed Martin.MCI WorldCom officials, however, define the project as a "network integration project," said Roland Fritz, director of Transportation Department and FAA programs for MCI WorldCom. "This is very different than traditional systems integration work," he said.The disparate telecommunications networks now employed by the FAA use ground-based lines, satellite communications, wireless and radio. The systems connect more than 5,000 facilities across the United States. The FAA uses the systems for voice communications among pilots and air traffic controllers and moving data, such as flight plans, radar images and weather reports.The companies chasing the contract got a better idea how the agency plans to reach its ambitious goals in the March 17 draft SIR. The FAA uses its own procurement regulations, but a SIR is similar to a request for proposals under regular acquisition rules.The FAA wants a contract based on service level agreements, where it pays a set fee for an agreed-upon level of service, rather than a traditional contract of buying telecommunications circuits, company officials said.Agency officials would not comment on more specifics of the contract."I think what they are trying to do is find a compromise model between a total outsourcing contract and having to validate every circuit themselves," said Robert Coulson, business development manager for Harris Government Communication Systems Division. He is the FTI pursuit manager for Harris. "It is just not possible for the government to engineer every single circuit," he said.Under a more traditional telecommunications model, FAA would do its own network engineering and then lease telecommunications circuits from a contractor, Geiselhart said.The FAA's approach is designed to put pressure on the prime contractor to find the best way to use the capacity of the telecommunications networks. "When you are just buying circuits, there is no incentive to optimize," Geiselhart said.How the networks are optimized will be left up to the winning contractor, Fritz said.MCI WorldCom has the most at stake in the competition, because it holds the incumbent contract for the Leased Interfacility National Airspace System Communications System, known as LINCS, which accounts for about 60 percent of the FTI system. LINCS carries air traffic control communications."But we are not behaving like a complacent incumbent," Fritz said.The FAA contract is part of a growing trend within government to develop large contracts to integrate voice, video and data telecommunications, said Dan Nodes, an analyst with the market research company Input Inc. of Vienna, Va.The Defense Department is using a similar approach with its Defense Information Systems Network contracts, and the General Services Administration's FTS 2001 contracts can be used to integrate various telecommunications services, Nodes said.The approach has the ability to save the FAA money over the long term through better use of its telecommunications networks, he said.In the cover letter to the SIR, FAA Contracting Officer Sue Handy writes that the agency wants the pricing structure to "mirror commercial prices." The agency also emphasizes that the pricing structure should not be driven by selling more services."Rather, a structure that includes performance incentives for network optimization, efficient provisioning of services and cost savings to the government," she said.The FTI contract will be performance-based so if service levels are not met, the government will receive price credits. The FAA also is putting a high priority on the contractor's ability to bring on new technologies.The bidding contractors have until April 17 to comment on the draft SIR.XXXSPLITXXX-AT&T Corp.CACI International Inc.Communication Systems Technology Inc.Seta Corp.Bell Atlantic Corp.BellSouth Corp.GTE Corp.Raytheon Co.SBC Communications Inc.Sprint Corp.US West Inc.To Be Announced