FAA Modernizes Voice Systems for $85.8M, Replacing TDM with IP Technology

Contract Overview

Contract Amount: $85,858,905 ($85.9M)

Contractor: Rohde & Schwarz USA, Inc.

Awarding Agency: Department of Transportation

Start Date: 2025-05-12

End Date: 2026-03-31

Contract Duration: 323 days

Daily Burn Rate: $265.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: PROJECT LIFT VCS LETTER CONTRACT FOR MODERNIZATION OF FAA VOICE SWITCHED IN THE NAS WHICH INCLUDES REPLACEMENT OF VOICE SYSTEMS DEPENDENT ON TDM TECHNOLOGY TO SYSTEMS THAT ARE IP CAPABLE.

Place of Performance

Location: COLUMBIA, HOWARD County, MARYLAND, 21046

State: Maryland Government Spending

Plain-Language Summary

Department of Transportation obligated $85.9 million to ROHDE & SCHWARZ USA, INC. for work described as: PROJECT LIFT VCS LETTER CONTRACT FOR MODERNIZATION OF FAA VOICE SWITCHED IN THE NAS WHICH INCLUDES REPLACEMENT OF VOICE SYSTEMS DEPENDENT ON TDM TECHNOLOGY TO SYSTEMS THAT ARE IP CAPABLE. Key points: 1. Significant investment in modernizing critical FAA voice communication infrastructure. 2. Sole-source award to ROHDE & SCHWARZ USA, INC. raises questions about competition. 3. Potential risks associated with technology transition and vendor lock-in. 4. Focus on IP capability aligns with broader government IT modernization trends.

Value Assessment

Rating: questionable

The contract value of $85.8M for modernization appears substantial. Benchmarking against similar large-scale telecommunications infrastructure upgrades is difficult without more detailed scope, but the lack of competition warrants scrutiny.

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 for this significant contract may result in a higher cost to taxpayers than if multiple vendors had vied for the work.

Public Impact

Ensures continued and improved air traffic control communication reliability. Modernization supports future integration of advanced aviation technologies. Potential for enhanced system security and performance with IP-based solutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for cost overruns due to sole-source nature

Positive Signals

Critical infrastructure upgrade
Modernization to IP capability
Ensures operational continuity

Sector Analysis

This contract falls within the telecommunications equipment manufacturing sector, specifically for voice systems. Spending benchmarks for similar large-scale government IT modernization projects vary widely based on scope and technology.

Small Business Impact

The contract was awarded to ROHDE & SCHWARZ USA, INC., a large business. There is no indication of subcontracting opportunities for small businesses in the provided data.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight to ensure fair pricing and effective execution. The FAA should document the justification for the sole-source procurement thoroughly.

Related Government Programs

Telephone Apparatus Manufacturing
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

Sole-source award limits competition and price discovery.
Potential for higher costs due to lack of competitive pressure.
Risk of vendor lock-in with a single provider.
Dependency on a single vendor for critical infrastructure.
Complexity of technology transition could lead to delays or cost overruns.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $85.9 million to ROHDE & SCHWARZ USA, INC.. PROJECT LIFT VCS LETTER CONTRACT FOR MODERNIZATION OF FAA VOICE SWITCHED IN THE NAS WHICH INCLUDES REPLACEMENT OF VOICE SYSTEMS DEPENDENT ON TDM TECHNOLOGY TO SYSTEMS THAT ARE IP CAPABLE.

Who is the contractor on this award?

The obligated recipient is ROHDE & SCHWARZ USA, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $85.9 million.

What is the period of performance?

Start: 2025-05-12. End: 2026-03-31.

What is the specific justification for awarding this contract on a sole-source basis, and were any market research efforts conducted to identify potential competitors?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without detailed documentation, it's difficult to assess if sufficient market research was performed to ensure no other qualified vendors could meet the FAA's requirements for this critical modernization.

How will the FAA ensure cost-effectiveness and prevent potential overruns given the absence of competitive bidding for this $85.8M contract?

The FAA must implement stringent cost controls, detailed performance metrics, and regular progress reviews. Independent cost analysis and benchmarking against similar projects, where possible, will be crucial. Transparency in reporting expenditures and adherence to the contract's time and materials basis will be key.

What are the key performance indicators (KPIs) for this modernization project, and how will their achievement be measured to ensure the effectiveness of the new IP-capable systems?

Key performance indicators should focus on system uptime, latency, data throughput, security compliance, and successful integration with existing air traffic management systems. The FAA should establish clear, measurable targets for each KPI and conduct rigorous testing and validation throughout the project lifecycle.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Telephone Apparatus Manufacturing

Product/Service Code: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 6821 BENJAMIN FRANKLIN DR, COLUMBIA, MD, 21046

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

Financial Breakdown

Contract Ceiling: $246,377,099

Exercised Options: $85,858,905

Current Obligation: $85,858,905

Actual Outlays: $31,506,553

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline