DOT's $657M Future Flight Services contract to Leidos, Inc. awarded for air traffic control services
Contract Overview
Contract Amount: $656,901,181 ($656.9M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Transportation
Start Date: 2019-11-26
End Date: 2034-11-30
Contract Duration: 5,483 days
Daily Burn Rate: $119.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Transportation
Official Description: FUTURE FLIGHT SERVICES PROGRAM
Place of Performance
Location: ASHBURN, LOUDOUN County, VIRGINIA, 20146
State: Virginia Government Spending
Plain-Language Summary
Department of Transportation obligated $656.9 million to LEIDOS, INC. for work described as: FUTURE FLIGHT SERVICES PROGRAM Key points: 1. Contract value represents a significant investment in modernizing air traffic control infrastructure. 2. The award to a single large business raises questions about small business participation. 3. Long contract duration (over 15 years) suggests a need for sustained performance and adaptability. 4. The firm-fixed-price structure aims to transfer risk to the contractor. 5. Competition level is high, indicating potential for competitive pricing. 6. Performance context is critical given the safety-sensitive nature of air traffic control.
Value Assessment
Rating: good
The contract's value of $656.9 million over its potential 15-year lifespan suggests a substantial investment. Benchmarking this against similar air traffic control modernization efforts is challenging due to the unique scope of the Future Flight Services Program. However, the firm-fixed-price contract type indicates that the government has negotiated a set price, which can be advantageous if the contractor can deliver efficiently. The long duration implies potential for economies of scale and contractor investment in specialized capabilities.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The fact that it is a definitive contract awarded to a single entity suggests that after a competitive process, Leidos, Inc. was selected as the best value provider.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it drives down prices through market forces and encourages innovation from a wider pool of potential contractors.
Public Impact
Benefits the Federal Aviation Administration (FAA) by providing essential air traffic control services. Enhances the safety and efficiency of the National Airspace System. Supports the modernization of air traffic management technologies and procedures. Impacts the aviation industry by ensuring reliable operational support. Workforce implications may include the need for specialized technical personnel to manage and operate the systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for contractor lock-in due to the long contract duration and specialized nature of services.
- Risk of cost overruns if unforeseen technical challenges arise, despite the fixed-price structure.
- Limited visibility into the specific performance metrics and quality assurance processes without further detail.
- Dependence on a single large contractor could limit future flexibility in service provision.
Positive Signals
- Awarded through full and open competition, suggesting a robust selection process.
- Firm-fixed-price contract type shifts performance risk to the contractor.
- Long-term nature allows for strategic planning and investment in technology.
- Contractor (Leidos, Inc.) has a significant presence in government contracting, implying experience.
Sector Analysis
The aviation services sector is critical for national infrastructure, encompassing air traffic management, airport operations, and flight support. The Federal Aviation Administration (FAA) is a major procurer within this sector, investing heavily in technology and services to ensure airspace safety and efficiency. This contract for Future Flight Services Program falls within the air traffic control sub-sector, which is undergoing significant technological evolution towards NextGen air traffic management. Spending in this area is often characterized by long-term investments in complex systems and services.
Small Business Impact
The contract was awarded to Leidos, Inc., a large business, and there is no indication of a small business set-aside. This suggests that small businesses may not have been the primary focus for the prime contract award. However, there is potential for subcontracting opportunities for small businesses to provide specialized services or components under the prime contract. The extent of small business participation will depend on the subcontracting plan negotiated with Leidos, Inc.
Oversight & Accountability
Oversight for this contract would primarily fall under the Federal Aviation Administration (FAA), a division of the Department of Transportation. The contract's long duration and critical nature necessitate robust oversight mechanisms to ensure performance, compliance, and value for money. Accountability measures would likely include regular performance reviews, milestone tracking, and adherence to the firm-fixed-price agreement. Transparency would be enhanced through contract reporting requirements and potential audits by the DOT Inspector General.
Related Government Programs
- Next Generation Air Transportation System (NextGen)
- Air Traffic Control Modernization Programs
- Aviation Systems Engineering Support
- Federal Aviation Administration Operations
Risk Flags
- Long contract duration may lead to technological obsolescence.
- Potential for contractor performance degradation over time.
- Limited visibility into specific performance metrics and quality assurance.
- Dependence on a single large contractor could reduce future flexibility.
Tags
transportation, federal-aviation-administration, air-traffic-control, definitive-contract, large-contract, full-and-open-competition, firm-fixed-price, leidos-inc, virginia, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Transportation awarded $656.9 million to LEIDOS, INC.. FUTURE FLIGHT SERVICES PROGRAM
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Transportation (Federal Aviation Administration).
What is the total obligated amount?
The obligated amount is $656.9 million.
What is the period of performance?
Start: 2019-11-26. End: 2034-11-30.
What is the historical spending pattern for similar air traffic control services by the FAA?
Historical spending on air traffic control services by the FAA has been substantial, reflecting the continuous need for modernization and operational support. While specific figures for comparable contracts are not readily available without deeper analysis, the FAA consistently allocates significant portions of its budget to maintaining and upgrading the National Airspace System. This includes investments in radar systems, communication technologies, automation, and personnel. The Future Flight Services Program contract, valued at approximately $657 million over its potential 15-year lifespan, represents a significant, long-term commitment that aligns with the agency's ongoing efforts to enhance safety, efficiency, and capacity through technological advancements like NextGen.
How does the firm-fixed-price contract type mitigate risk for the government?
The firm-fixed-price (FFP) contract type is designed to transfer a significant portion of performance risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of the actual costs incurred. This means that if Leidos, Inc. experiences cost overruns due to unforeseen technical challenges, labor increases, or material price hikes, the additional expenses will be absorbed by the contractor, not the government. This structure incentivizes the contractor to manage costs efficiently and perform the work within the agreed-upon budget, providing cost certainty for the FAA.
What are the potential performance risks associated with a 15-year contract for air traffic control services?
A 15-year contract for air traffic control services presents several potential performance risks. Technological obsolescence is a major concern; systems and software developed early in the contract may become outdated long before its conclusion, requiring costly upgrades or replacements. Contractor performance degradation over such a long period is also a risk, potentially due to changes in key personnel, loss of institutional knowledge, or shifting business priorities. Furthermore, the complexity of air traffic control systems means that integration issues between different components or with evolving external systems could arise. Ensuring sustained innovation and adaptability from the contractor throughout the contract's duration will be critical for mitigating these risks.
What is Leidos, Inc.'s track record in providing similar aviation or air traffic control services?
Leidos, Inc. has a substantial track record in providing complex technology solutions and services to government agencies, including significant work within the aviation sector. They have been involved in various aspects of air traffic management modernization, often supporting initiatives like the FAA's NextGen program. Their experience typically encompasses systems engineering, integration, software development, and operational support for large-scale government IT and infrastructure projects. While specific details of their past performance on contracts directly analogous to the entirety of the Future Flight Services Program would require a deeper dive into contract databases, their established presence and broad capabilities suggest a capacity to undertake such a demanding undertaking.
How does the competition level impact the value for money in this contract?
The contract was awarded under 'full and open competition,' which generally enhances value for money. This means that multiple bidders were likely encouraged to submit proposals, leading to a more competitive pricing environment. The FAA could select the offer that presented the best combination of technical merit and cost. A competitive process typically drives down prices as contractors strive to win the award by offering the most attractive terms. The fact that Leidos, Inc. was ultimately selected suggests they provided the most advantageous offer among the competing proposals, implying a favorable outcome for taxpayers in terms of price discovery and overall value.
What are the implications of awarding this contract to a single large business for small business participation?
Awarding a contract of this magnitude to a single large business like Leidos, Inc. can have mixed implications for small businesses. On one hand, it may limit direct prime contracting opportunities for small businesses in this specific procurement. However, large prime contractors are often required to meet small business subcontracting goals as part of their contract. This can create significant subcontracting opportunities for small businesses to provide specialized services, components, or support. The success of small businesses in participating will depend on the specific subcontracting plan negotiated with Leidos, Inc. and the agency's oversight to ensure these goals are met.
Industry Classification
NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Air Traffic Control
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 700 N FREDERICK AVE STE 110, GAITHERSBURG, MD, 20879
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,075,697,171
Exercised Options: $656,901,181
Current Obligation: $656,901,181
Actual Outlays: $598,298,318
Subaward Activity
Number of Subawards: 264
Total Subaward Amount: $80,823,198
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-11-26
Current End Date: 2034-11-30
Potential End Date: 2034-11-30 00:00:00
Last Modified: 2026-03-26
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