Raytheon Protest of FAA-Lockheed Contract Upheld

The Federal Aviation Administration has been told to rethink its decision to award a sole-source contract to Lockheed Martin Corp. to modernize the FAA's en route traffic control system.

The FAA's dispute resolution office said the agency had not adequately justified its decision to award the En Route Automation Modernization contract to Lockheed Martin without a competition.

Raytheon Co. in February protested the FAA's plan to give Bethesda, Md.-based Lockheed Martin the contract, saying that its extensive experience in this area of air traffic control qualified the company to compete for the ERAM program.

The ruling requires the FAA either to provide better justification for the sole-source award to Lockheed Martin or undergo a competitive bidding process.

The 10-year ERAM contract, reportedly worth several hundred million dollars, would upgrade the software and hardware used to control high-altitude airline traffic at the FAA's 20 en route air traffic control centers.

The contract had not yet been awarded to Lockheed Martin; the FAA only announced its intention to make the award at an unspecified time.

News of the decision by the FAA dispute resolution office, based on a recommendation from a General Services Administration board judge who reviewed Raytheon's complaint, was released June 19.

"Raytheon endorses the FAA's decision to retract the planned ERAM sole-source contract which was first announced in February," said Steve Teel, vice president for business development, Raytheon Command, Control, Communication and Information Systems in Lexington, Mass.

"We believe that our previous experience with the modern open architecture air traffic management system offers the potential for a significant benefit," Teel said. "Our systems are operating successfully in some of the most complex airspace environments in the world. We believe that adopting our system to the U.S. environment offers a low-cost, low-risk and timely solution."

FAA spokesperson Tammy Jones said the agency's Office of Dispute Resolution for Acquisition handed down its decision June 15.

Reading a prepared statement, Jones said: "In keeping with the recommendation of the General Services Board of Contract Appeals judge and the decision of the FAA's Office of Dispute Resolution for Acquisition, the FAA will further define its requirements before deciding on its future acquisition strategy for the ERAM program. The FAA will proceed with the ERAM procurement. The specific actions and dates are still to be determined."

Jones said the definition of requirements refers to the agency more extensively stating what it wants the ERAM system to do and what the contractor should provide.

Lockheed Martin was subdued in its reaction, though company spokesman Hugh Burns said they were surprised that a statement was released.

"We were not expecting an announcement yesterday of any kind," Burns said.

"We support the FAA, we think we have a good solution, we can do a good job for them," Burns said. "We're the major supplier for the FAA, and we're prepared to respond to their strategic plan whatever way they want to do it."

The FAA said in a statement it will further define the requirements of the ERAM program before deciding how it will proceed in its acquisition plans.