FAA regroups after protest is upheld

The Federal Aviation Administration is pondering its options after being told it jumped the gun in deciding to award an air traffic modernization contract potentially worth $1 billion without putting it out for bid.

The FAA Office of Dispute Resolution for Acquisition upheld a protest by Raytheon Co. against the agency's decision in February to award a sole-source contract to Lockheed Martin Corp. for its En Route Automation Modernization (ERAM) program.

Raytheon's protest charged that the FAA wasn't justified in circumventing competition based on the requirements spelled out in the Acquisition Management System, the modified version of federal procurement regulations defined by the agency and approved by Congress. The FAA put together AMS in 1996 with hopes of keeping its modernization proj.ects from becoming mired in procurement red tape.

But in this case, the award announcement was premature, said Stephen Daniels, chairman of the General Services Administration's Board of Contract Appeals, who served as special master on the case. "The FAA is currently not in a position to make any decision as to an award of a contract for [ERAM]," he wrote.

Anthony Palladino, director of the Office of Dispute Resolution for Acquisition, ordered the ERAM product team to retract its February announcement (which it did on June 19) and proceed with the procurement in compliance with AMS.

The FAA wants to complete the modernization by 2008. FAA spokeswoman Tammy Jones said being able to move quickly was one factor in the decision to award Lockheed a sole-source contract.