FAA to limit STARS, switch to shorter, fixed-price contracts

The Federal Aviation Administration wants to change its long-term cost-plus modernization contracts to shorter-term fixed-price agreements, starting with its new Standard Terminal Automation Replacement System color air traffic displays, administrator Marion Blakey told lawmakers today.

The agency also said it would implement a smaller initial rollout of STARS than it previously planned.

FAA will use fixed-price contracts to increase its ability to hold contractors accountable for their performance and to reduce costs. The agency's fiscal 2005 budget is $350 million less than last year's budget. Under cost-plus contracts, the government carries the burden of higher costs; under fixed-price agreements, the contractor absorbs the expenses.

Many modernization contracts are essentially research and development projects, making it difficult to predict costs, especially over 10 years, Blakey said. 'We are going to chunk these projects into stages, on firm-fixed contracts, so we don't get in over our heads as things change,' she said.

STARS uses an open architecture intended to let it expand and adapt to new requirements. The agency can alter system configurations to meet changes in airspace and runway modifications. It integrates data from 16 sensors to track aircraft more precisely.

FAA's air traffic modernization systems acquisitions have been seriously over budget and behind schedule. Cost-plus contracts are a major cause, Transportation Department inspector general Kenneth Mead told the Senate Appropriations Subcommittee on Transportation, Treasury and General Government.

'FAA has not been accustomed to operating within this type of environment, and changing the organizational culture to reflect that focus will be a challenge,' Mead said.

FAA made its first move Tuesday to limit its acquisition and deployment of STARS by implementing a phased rollout. In the first phase, STARS will be deployed at 50 locations'the oldest sites in most need of new technology'through 2007. The system is already in operation at 19 sites under the first-phase rollout. The agency originally planned to deploy the system at 73 sites, but it has suspended plans to roll out STARS at 23 airports not included in the first phase.

FAA is also developing a business case, which the IG will review, to complete its terminal modernization program. Mead praised FAA's decision, saying, 'That single move will change a lot.'

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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