The government picked a company with little experience working with the Federal Aviation Administration called Peraton to oversee the roughly $31.5 billion overhaul of the outdated air traffic control system.
Transportation Secretary Sean Duffy said Thursday evening that Peraton was chosen in the hope that its innovative approach will make it possible to complete the upgrades within the next three years before the end of President Donald Trump’s term in office ends. Peraton was chosen over Parsons Corp., which does have extensive experience with FAA contracts.
“Working together, we are going to build on the incredible progress we’ve already made and deliver a state-of-the-art air traffic control system that the American traveling public — and our hard-working air traffic controllers — deserve,” Duffy said in the announcement.
Here’s what to know about the modernization project and the company hired to oversee it:
A $12.5 billion down payment on the project
Earlier this year, Congress approved $12.5 billion as a down payment on the project after technical problems twice knocked out the radar for air traffic controllers managing planes around Newark Liberty International Airport. This year began with the worst American aviation disaster in years when an airliner collided with an Army helicopter over Washington D.C., killing 67 people.
Duffy has said he’ll need roughly $20 billion more to complete the upgrade.
This effort to upgrade the technology controllers use is on a much more aggressive timeline than the previous NextGen effort that began shortly after the turn of the century and failed to deliver all the benefits it promised even after an investment of $36 billion. The Biden administration had estimated that upgrading the system might take more than a decade.
The FAA hasn’t yet released the details of how much Peraton will be paid for this contract, but the agency said it includes incentives to reward good performance and penalties for shortcomings.
Upgrades needed to avoid delays and prepare for drones and flying taxis
The technical problems that disrupted flights at the Newark airport in the spring demonstrated just how fragile the nation’s aging air traffic control system is. And Duffy has said those kind of technical failures in a system that too often still relies on copper wires and floppy discs could happen anywhere unless the system is upgraded.
Hundreds of flights were canceled or delayed in Newark. After the radar outages, the facility in Philadelphia that controls the flights in and out of Newark had a half dozen controllers go on leave, which forced the reductions in flights.
The number of flights across the country each day that the FAA has to safely manage is expected to continue growing in the years ahead. And drones will continue to proliferate across the country as flying taxis start to take to the air.
Everyone agrees that the air traffic control system must be modernized to be able to handle those future demands.
Ambitious timeline for the upgrades
John Rose, chief risk adviser for global travel management company ALTOUR, said the three-year timeline is “extremely aggressive” but partially realistic. He said it’s plausible for the FAA to build the foundation for a modern air traffic control network in its tight timeline, with more advanced capabilities layered on later.
“You need to build the base before you can have all the bells and whistles,” he said. “If the project gets to the core structure in three years, I think we’ve accomplished the mission.”
He likened it to an iPhone where once you have a robust base system you can upgrade the software like when the phone gets an iOS update. “If they build the infrastructure, then as things change from a technology capability, it’s almost like a plug and play,” he said.
Air Traffic Control Association President and CEO Stephen Creamer represents the companies that make the gear that Peraton and the FAA will use to complete the upgrades. He said it helps that the new system won’t have to be built from scratch.
“The technology that’s needed in the system is not cutting edge technology. It’s been tested and trialed all over the world in various places. We know what the capabilities of it are. We know what the risks of those installations are in a way that we wouldn’t know if we were trying to do it and be the first one out of the gate,” Creamer said.
Why is this contract needed?
Duffy said that putting a private company in charge should help this project get done more quickly, and Peraton’s expertise with complex technical systems and artificial intelligence will help.
Peraton has said the fact that it doesn’t have a history of work at the FAA might actually help because it won’t be biased to working with the same companies that have failed in the past.
And after all the cuts to the federal workforce Trump made this year and the early retirements. Creamer said that FAA needs the help to complete this project because it no longer has the staff to do it.
The expectation is that Peraton will be able to award contracts to other companies more quickly than FAA would be able to because it won’t be limited by the same process. That does introduce the possibility that mistakes could be made, but Creamer said “I think there’s plenty of checks and balances in the administrative system to ensure that there’s not gonna be substantial waste or fraud or abuse.”
Peraton has worked on other government tech upgrades
Peraton has worked on multibillion-dollar technology contracts for the Department of Homeland Security, the U.S. Special Operations Command and the National Park Service along with the military and other agencies.
The company is owned by Veritas Capital private equity firm, so it doesn’t have shareholders. Its board of advisers is full of an assortment of former military and intelligence officials. A Peraton spokesman said the company was too busy getting started on the contract to do any interviews Friday, but its CEO Steve Schorer promised in a statement that his team is committed to completing this project.
“Our highly-skilled, dedicated, and talented team of engineers, technologists, and mission experts stands ready to hit the ground running to deliver a system Americans can count on — one that is more secure, more reliable, and a model for the world to follow,” Schorer said.
The company’s political action committee donated a quarter-million dollars to politicians last year with a little over half of that going to Republicans, according to www.opensecrets.org.
Improvements already underway
Duffy said that the FAA has already been working on making improvements and more than one-third of the old copper wires that air traffic controllers were relying on have been replaced with fiber optic lines or other modern connections.
But some of the advancements like installing new systems to help controllers keep track of planes on the ground at 44 airports began during the last administration.
And significant work remains ahead to install more than 27,600 new radios and 612 new radar systems. The old connections still need to upgraded at thousands of additional facilities, and six new air traffic control centers are scheduled to be built.
