Cost of Raytheon's STARS System Could Reach $2 Billion

The price tag for Raytheon Co.'s troubled STARS air traffic control system could reach $2 billion ? more than double the original contract of about $950 million.

Ken Mead, the inspector general for the Transportation Department, told a House panel March 14 that STARS' cost already has reached $1.4 billion, and he "wouldn't be surprised if it [comes out] in the neighborhood of $1.75 billion to $2 billion."

Mead testified before the House Transportation and Infrastructure subcommittee on aviation, where lawmakers examined the status of the Standard Terminal Automation Replacement System contract, awarded in 1996 to Raytheon of Lexington, Mass. STARS will automate air traffic control functions controlling planes as they approach airports.

Subcommittee chairman Rep. John Mica, R-Fla., criticized both the contractor and the Federal Aviation Administration, which oversees air traffic control in the United States.

"The FAA has had a horrible record on its [modernization] efforts," he said.

The hearing came against a backdrop of heated competition between Raytheon and Lockheed Martin Corp., Bethesda, Md.

Lockheed Martin submitted an unsolicited bid March 13 to end the STARS contract with Raytheon and replace it with Lockheed Martin's own Common ARTS system. Common ARTS was originally intended as an interim solution until STARS was up and running, but one which Lockheed's Don Antonucci, president of the company's Air Traffic Management unit, said could meet the FAA's long-term needs.

Steven Zaidman, associate administrator for research and acquisitions at the FAA, told Mica and other subcommittee members that while STARS had been off track, he believes the project is now under control and close to realization.

"In my opinion [either] of the two systems will get the job done," Zaidman said, but "it's like spending several years in a rowboat. We don't want to change boats now."

Under questioning by Mica, Zaidman promised there would be a detailed schedule of milestones for STARS released in June.

"We'll schedule a hearing for the first week in June, then," Mica said.

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