Bidders on FAA FTI Deal Demonstrate Convergence

The Federal Aviation Administration is in the homestretch on its multibillion-dollar telecommunications infrastructure contract, and now the challenge may be how to evaluate bids from contractors with significantly different areas of expertise. FTI, as the contract is known, is a 10-year, $2 billion program to replace the FAA's telecommunications systems with a single, integrated communications network. The contract has options that could extend it for 15 years. An award is expected in October. The winner will be called on to integrate communications systems for the FAA's two major elements: air traffic control services and administrative services.FTI will support about 48,000 users in 7,000 locations and will have 20,000 different connections or circuits, said Stephen Dash, manager of the acquisition management division for telecommunications at FAA. "It's a huge telecommunications enterprise that has, in a way, evolved over the years," he said. "All those users in both of those domains have been supplied with a significant number of subnetworks and other networks." The three bidders chasing the contract are very different from each other: Harris Corp. of Melbourne, Fla., a systems integrator specializing in communications systems; Lockheed Martin Corp. of Bethesda, Md., a systems integrator focused primarily on aerospace and defense; and WorldCom Inc. of Clinton, Miss., a national telecommunications provider branching into systems integration. The contractors submitted their cost proposals in May."With FTI, the government is trying to create a playing field which enables the clash of the titans," said Warren Suss, president of Suss Consulting Inc., Jenkintown, Pa., an industry research and consulting firm. "The government intentionally worked on establishing an RFP that would allow both the integrators as well as the carriers to compete head to head." Chip Mather, a principal with Acquisition Solutions Inc. of Chantilly, Va., said he likes this approach because it gives the FAA a variety of solutions to choose from. "It is significantly easier to recognize a good idea than to invent it," said Mather, whose firm specializes in helping agencies implement acquisition reform best practices. Each company believes it has the right combination of internal resources and external alliances to provide the FAA with the best long-term solution. "We have a very long legacy with communications networks with the FAA," said John O'Sullivan, Harris' program director for FTI. "Certainly, we have all the knowledge and wherewithal to pull this together." For example, Harris holds a 15-year contract for the agency's Voice Switching & Control System program, a distributed communications and control system for air traffic controllers to manage air-to-ground and ground-to-ground calls. The system is installed in all 21 of the FAA's Air Route Traffic Control Centers. Harris' team on FTI has an emphasis on telecommunications, including Sprint Communications Corp., BellSouth Corp., Qwest Communications International Inc., SBC Communications Inc. and Verizon Communications Inc. "I would claim we have five of the seven largest telecom providers in the U.S.," O'Sullivan said. By comparison, WorldCom sees FTI primarily as a telecommunications contract, with itself providing much of the requisite services. "Harris is not a telecommunications company, so they need to establish relationships," said Mike Serbousek, WorldCom's vice president for services to several federal agencies, including the Transportation Department. "We see the regional Bell operating companies as strategic suppliers." WorldCom already works closely with the regional Bell companies and buys billions of dollars of services from them, he said. "We don't need to have them as teaming partners, because we already have them," he said.WorldCom has concentrated its teaming arrangements on the systems integration side, linking up with Science Applications International Corp. and Crown Consulting Inc., among others. "We picked SAIC for several things. They're our security provider, which is a major part of [FTI]," Serbousek said. "That's a very hot issue in government right now, a very controversial issue, so we recognized we wanted to have a very strong security partner." WorldCom chose Crown for its experience working with the FAA to provide training and transition planning, Serbousek said. Then there are strategic suppliers the company uses in other areas, including in its existing contracts with the agency. Since 1992, WorldCom has provided telecom services for air traffic controllers, he said. The most significant of WorldCom's contracts is the Leased Interfacility National Airspace Communications System, known as LINCS. The contract will expire in 2002, but the FAA is negotiating with the company on a bridge contract that will continue LINCS services through the transition over to FTI. The third competitor in this race, aerospace and defense giant Lockheed Martin, brings decades of experience working on a host of complex FAA systems, such as air traffic control. Lockheed Martin officials contend that FTI is a contract for systems integration rather than telecommunications. The project, said Jack Clemons, senior vice president of strategic programs and the company's FTI "capture" executive, is really about a partnership with industry to provide the FAA with modern technology and services that will help put into place the infrastructure for the National Airspace 4.0 plan. The plan will revamp completely air traffic control, runways and use of agency resources over the next decade. "If it was simply telecom, don't dial 1-800-Lockheed Martin," Clemons said. Lockheed Martin's team is comprised of giants and specialists in the telecommunications and systems integration industry, including AT&T Corp., CACI International Inc., ARINC Inc., Motorola Inc., Alcatel, Cisco Systems Inc., Jerry Thompson Associates, SETA Corp., National Aviation Research Institute and Aviation Concepts. The $64,000 question is how to compare these apples and oranges. "How do you compare a company basically in the business of providing communications over lines it owns [against] companies that are not in the business of owning any infrastructure and makes use of external assets?" Suss said. Federal telecom contracts have turned into price shootouts, he said, treating the services they provide as commodities. Evaluating these proposals is more tricky, because it will be hard to come up with a meaningful, uniform standard to apply to each bidder. The FAA's Dash said price is an issue because the agency is "looking for a price structure that would manage our costs and, at the same time, ... allows us to contractually adjust to downward pressure." The key to FTI will be how well the bidders build in flexibility. "Planning for uncertainty is a central theme of FTI," Dash said. "It's very different than what's come before."