FAA Awards $122M Contract for Oceanic HF Voice Communication to ARINC Inc

Contract Overview

Contract Amount: $122,390,982 ($122.4M)

Contractor: Arinc Incorporated

Awarding Agency: Department of Transportation

Start Date: 2023-08-14

End Date: 2029-08-14

Contract Duration: 2,192 days

Daily Burn Rate: $55.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROVIDE MANDATORY OCEANIC HIGH FREQUENCY (HF) VOICE COMMUNICATION TO FLIGHT OPERATIONS IN FAA OCEANIC AIRSPACE.

Place of Performance

Location: ANNAPOLIS, ANNE ARUNDEL County, MARYLAND, 21401

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $122.4 million to ARINC INCORPORATED for work described as: PROVIDE MANDATORY OCEANIC HIGH FREQUENCY (HF) VOICE COMMUNICATION TO FLIGHT OPERATIONS IN FAA OCEANIC AIRSPACE. Key points: 1. ARINC Inc. secured a $122.4 million contract for essential oceanic high-frequency voice communication services. 2. The contract is a sole-source award, raising questions about competition and potential price discovery. 3. This service is critical for flight operations in FAA oceanic airspace, ensuring safety and communication. 4. The firm-fixed-price contract spans over five years, with a total duration of 2192 days.

Value Assessment

Rating: questionable

The contract value of $122.4 million over five years appears high given the lack of competition. Benchmarking against similar communication service contracts is difficult without more data on scope and service levels.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition may result in the government paying a premium for these essential communication services.

Public Impact

Ensures critical voice communication for aircraft in remote oceanic airspace. Supports the safety and efficiency of international flight operations. Provides a vital link for air traffic control in areas without other communication methods.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing due to sole-source award
Long contract duration

Positive Signals

Essential service for aviation safety
Established provider with existing infrastructure

Sector Analysis

This contract falls under Engineering Services (NAICS 541330) and relates to specialized communication infrastructure for the aviation sector. Spending benchmarks for similar sole-source communication contracts are difficult to ascertain without further details.

Small Business Impact

The contract was not awarded to a small business, and there is no indication of subcontracting opportunities for small businesses in the provided data.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value and that the necessity for a non-competitive award is well-documented.

Related Government Programs

Engineering Services
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

Sole-source award limits competition
Potential for inflated costs
Dependence on a single provider
Long contract duration may not reflect evolving technology needs

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $122.4 million to ARINC INCORPORATED. PROVIDE MANDATORY OCEANIC HIGH FREQUENCY (HF) VOICE COMMUNICATION TO FLIGHT OPERATIONS IN FAA OCEANIC AIRSPACE.

Who is the contractor on this award?

The obligated recipient is ARINC INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $122.4 million.

What is the period of performance?

Start: 2023-08-14. End: 2029-08-14.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of available alternatives. Without specific documentation, it's difficult to assess the validity of the sole-source determination. Steps to ensure fair pricing in such cases often include detailed cost analysis, comparison to historical pricing, and negotiation with the sole provider, but the effectiveness of these measures is unknown here.

What are the risks associated with relying on a single provider for such a critical communication service?

The primary risk is the potential for service disruptions if the sole provider experiences technical issues or financial instability. Additionally, the lack of competition can lead to inflated costs over the contract's lifespan. Dependence on one vendor also reduces leverage for negotiating favorable terms or driving innovation.

How does the effectiveness of this high-frequency voice communication system compare to alternative or emerging communication technologies in oceanic airspace?

High-frequency voice communication has been a long-standing technology for oceanic airspace due to its long-range capabilities. However, its effectiveness can be limited by atmospheric conditions, leading to variable signal quality. Emerging technologies like satellite-based communication (e.g., CPDLC) offer greater reliability and data capabilities, though HF remains a critical backup and primary voice channel in many areas.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2551 RIVA RD, ANNAPOLIS, MD, 21401

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $273,719,000

Exercised Options: $122,390,982

Current Obligation: $122,390,982

Actual Outlays: $97,701,552

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline