FAA to sole-source WAAS to Hughes

The Federal Aviation Administration hopes to avoid major delays in the development of its Global Positioning System-based navigation program by negotiating a contract on a sole-source basis with Hughes Aircraft Co., just days after ending the original deal with Wilcox Electric.

Hughes, a subcontractor to Wilcox, will assume management responsibilities for the Wide-Area Augmentation System (WAAS) under a new firm-fixed-price, incentive-focused contract. The FAA had hoped to have a contract signed by the end of last week.

By continuing the 8-month-old program with Hughes rather than recompeting the pact, the FAA expects to save "as much as a year in time and a substantial amount of money, maybe tens of millions of dollars," said George Donohue, associate administrator for research and acquisitions at the FAA.

As part of the new deal, the FAA also plans to eliminate the requirement for new satellite capacity from ComSat Corp. Instead, the FAA will get that capacity by extending existing contracts with ComSat, Donohue said.

The FAA announced the new strategy last Monday, after canceling the Wilcox contract on the preceding Friday. Wilcox lost the contract after failing to address the FAA's concerns about the prime's management performance, the agency said [FCW, April 29].

Wilcox is still assessing its legal options, the company said in a statement. However, barring any legal action, Wilcox most likely hopes to continue a role in the WAAS program, according to Donohue and an industry source familiar with the program.

Wilcox lost the contract in a "termination for convenience," which does not assign fault to either party and which helps pave the way for Wilcox to rejoin the team, the industry source said.

In contrast with its assessment of Wilcox's management capabilities, the FAA still recognizes the technical and financial viability of Wilcox's original WAAS proposal, Donohue said.

It made sense to go with Hughes, the subcontractor responsible for software development, because of its good performance on the software-intensive program, Donohue said.

During the last eight months, "Hughes did everything we expected them to do," he said, and Hughes' software design for WAAS has already been accepted.

Some of Hughes' key personnel working on WAAS also worked on the company's $1 billion Peace Shield air defense system in the Royal Kingdom of Saudi Arabia. Under a similarly structured incentive contract, Hughes delivered that system last October, more than six months ahead of schedule.

Hughes declined to comment.

The FAA entered sole-source negotiations for the new contract as a "best of business" decision under the agency's recently enacted acquisition management system.

Actually, the FAA could have taken the same action under existing federal acquisition regulations, Donohue said. The original contract was terminated under the old regulations based on specific terms of the contract.

However, the flexibility of the new system—which is allowing the FAA to recover quickly from the termination—emboldened the agency to pull out of the old contract, Donohue said.

In the old procurement environment, "I don't think we would have done it," he said. "Although you can say [the new acquisition system] did not affect this decision, practically, I would say it did."