Analysts: ITT moves up the value chain with FAA win

ITT Corp. staked a claim as a major systems integrator when it captured the Federal Aviation Administration's contract for a satellite communications system. The company bested Lockheed Martin Corp. and Raytheon Co. for the $207 million contract, which with options could be worth $1.86 billion through 2025.

"ITT is moving up the value chain," said Philip Finnegan, director of corporate analysis at Teal Group Corp., a business intelligence company in Fairfax, Va. "It's doing increasingly complex tasks, and that's the sort of thing that [contractors] are aspiring to now. This is a key win for ITT."

FAA's Automatic Dependent Surveillance?Broadcast (ADS-B) project "is clearly an enormous win for ITT," said Warren Suss, president of Suss Consulting Inc. "It speaks very well of the way the company did their homework and their long-term relationship with the FAA."

ITT put together a strong team of boutique companies with capabilities in areas such as radar interfaces and other unique technical requirements, Suss said. That team probably made the difference for ITT.

"Sometimes in larger companies, they get a little process-heavy in the way they approach these deals," Suss said. "They check all the boxes, but they miss the soul, the heart of what it takes to win. And so I think in this particular case, it speaks very well of at least this part of ITT."

The new contract is the cornerstone of FAA's Next Generation Air Transportation System, said Glen Dyer, deputy director and program manager at ITT.

ITT must have the ground-tracking infrastructure operable nationwide by 2013, and all aircraft must be equipped with the new technology by 2020. Many planes already have compatible Global Positioning System devices that transmit air-to-air data for pilots in the area, Dyer said.

ITT will be responsible through September 2025 for the overall systems integration and engineering of ADS-B, giving the overall contract a potential value of $1.86 billion.

ITT's team includes AT&T, Thales, WSI, Science Applications International Corp., PricewaterhouseCoopers, Aerospace Engineering, Sunhillo, Comsearch, Mission Critical Solutions, Pragmatics, Washington Consulting Group, Aviation Communication and Surveillance Systems, NCR, L-3 Avionics Systems and Sandia Aerospace.

"What we're building on the ground is a network of ground radios tied in through a telecommunications network being provisioned by AT&T to central data collection facilities, where we process the data for delivery to the FAA at the FAA facilities for air traffic control," Dyer said. "As you can see, there are no requirements to launch satellites."

According to FAA, ADS-B will be nearly 10 times more accurate than radar. It will let controllers and pilots know the precise location of aircraft, which should result in more direct flight routes, better use of airspace, fewer delays and improved safety.

The other two components of the NextGen program are DataCom, which will allow pilots to more easily communicate with one another, and Systemwide Information Management, to facilitate information sharing and collaboration within the aviation industry.

Dyer said ITT will also bid on those contracts when they are announced. "We're excited about the modernization. We think it's absolutely required."

Spokespeople for Lockheed Martin and Raytheon gave indications that both contractors will seriously consider competing for future NextGen contracts. l

Associate Editor David Hubler can be reached at dhubler@1105govinfo.com.