Surveillance and Broadcast Services

1. Surveillance and Broadcast Services NCMA World Conference: Flying High with the FAA Acquisition Session #705 By: Steve Manley Date: April 8, 2009

2. Agenda Overview Background ADS-B Acquisition Strategy Performance Based Acquisitions Contract Provisions Lessons Learned Summary

3. Overview • The FAA is on the forefront of major changes to the Air Traffic Control (ATC) System • The system has evolved over the years as a result of increased traffic

4. Overview • The FAA currently faces technical and contracting challenges to meet future demands as air traffic continues to increase

5. Overview: FAA AMS • The FAA Acquisition Management System (AMS) was implemented in June 1997 in response to forecasted acquisition needs • The Federal Acquisition Regulation (FAR) does not apply to the FAA • Goal of streamlining the acquisition process • Create framework for informed and innovative decision making • Delegation of authority to the appropriate level • Empowerment of a fully qualified workforce • Increase use of guidelines in place of detailed policy • Enlightened management

6. Overview • The Automatic Dependent Surveillance – Broadcast (ADS-B) contract is an example of an innovative approach to meet FAA current challenges

7. Overview: ITT Contract • The ADS-B contract was competitively awarded to ITT Corporation of McLean, VA in August 2007 • Performance Based Services Acquisition • Vendor owns and maintains equipment • Vendor delivers data for use by pilots and FAA air traffic controllers • $1.8B value with 18 year period of performance, if all options are exercised • High Visibility Program • Congressional and Office of Management and Budget (OMB) interest • FAA Administrator personally involved • All elements of the FAA are engaged (Safety, Security, Regulatory)

8. Overview: ITT Contract (Cont.) • Contains unique contract provisions • Wide industry and airline interest • 16 month acquisition lead-time including requirements determination • Highly motivated vendor • Vendor will install 794 radio stations across the National Airspace System (NAS) • Contractor is a partner in reducing FAA costs and accelerating aviation community interest • No protest of award

9. Installation (Hardee, FL)

10. Installation (Sebastian Airport)

11. Installation (Key West) SV168-01 Key West (Beach TV) Radio Cabinet on Platform SV168-01 Key West (Beach TV) Radio Cabinet Installed on Platform Note: The Key West site is in a flood plain, so a raised structure was required SV168-01 Key West (Beach TV) Antenna Array

12. Performance Based Services Acquisition References • OMB Memorandum for Chief Acquisition Officers and Senior Procurement Executives; July 21, 2006 • Seven Steps to Performance Based Acquisition: • http://www.acqnet.gov/comp/seven_steps/introduction.html

13. Background • U.S. air traffic controllers handle the most flights per day of any country in the world • FAA controls the largest airspace in the world • The existing Air Traffic Control System is reaching its maximum capacity to handle air traffic effectively and will be unable to handle projected increases in air traffic

14. United States Controlled Airspace

15. Background • The current system: • Contributes to delays • Uses the airspace inefficiently • Increases airline operational costs in terms of fuel and time

16. Background • The requirement for ATC modernization is international • Europe, Australia, Canada and others are developing new ATC capabilities • Other countries, such as Jamaica, Indonesia and Thailand are also buying ADS-B equipment from vendors • Countries have an interest in working together to ‘harmonize’ improvements in air traffic control to enable international travel

17. Background • The FAA has established the Next Generation Air Transportation System (NextGen) program to meet the ATC needs of the future • Automatic Dependent Surveillance – Broadcast is the foundation of the FAA NextGen program

18. Automatic Dependent Surveillance - Broadcast (ADS-B) • Automatic • Periodically transmits information with no pilot or operator input required • Dependent • Position and velocity vector are derived from the Global Positioning System (GPS) • Surveillance - • A method of determining position of aircraft, vehicles, or other asset • Broadcast • Transmitted information available to anyone with the appropriate receiving equipment

19. Widespread Support for NextGen Exists • The Wall Street Journal • Modernizing the outdated U.S. air traffic control system should be a top priority for industry regulators and members, lawmakers said at a hearing on Wednesday on the Federal Aviation Administration’s long-running modernization project known as “NextGen.” • Senate Commerce Committee Chairman John D Rockefeller IV, D-W.Va., expressed frustration with the lack of progress on NextGen, which some estimate could cost $20 billion before wrapping up in 2025. “I’m losing patience,” said Rockefeller. “I’m sick of it.” • Industry executives who testified at the hearing urged Congress to accelerate the pace of the project, saying the nation’s air traffic control system is outdated and inefficient, producing delays that frustrate travelers and impose hefty costs on airlines and the environment.

20. Widespread Support for NextGen Exists • Port Authority of New York and New Jersey • We urge Congress and the Administration to implement NextGen at our nation’s airports, starting with the nation’s most congested airspace, such as the New York metropolitan region. • An antiquated air traffic control system that is dependent on ground-based radar technology is threatening the efficiency of our airports and stifling economic growth. The Federal Aviation Administration’s Next Generation Air Transportation System – called NextGen – will alleviate delays at the nation’s most congested and delay-prone airports, but it is years away from full implementation.

21. Widespread Support for NextGen Exists • Federal Computer Week • The Federal Aviation Administration has advanced its Next Generation Air Transportation System (NextGen), which would improve management of traffic with automated computer and satellite systems, a senior FAA senior official has said.  • Under NextGen, the FAA said it is transforming its ground-based air traffic control system to a satellite-based system, named the Automatic Dependent Surveillance-Broadcast (ADS-B), which would let airline pilots have the capability to take on more of their own air traffic activities.  • “Air traffic controllers would eventually manage airline traffic more than control it,” Vicki Cox, the FAA's senior vice president of NextGen and operations planning, said March 4 at an industry event sponsored by IAC.

22. Current Air Traffic Control System • Ground based radar system • “Radar” stands for “Radio Detection and Ranging” • 1940s technology • Aircraft position is determined by azimuth, range, and altitude • Aircraft have to be widely separated due to position inaccuracies • Controller Screens are updated based on the rotation of the radar every 5 to 14 seconds • 5 seconds = 3 mile separation • 14 seconds = 5 miles • No radar coverage in Gulf of Mexico or portions of Alaska • Pilots have no instrumented situational awareness of other aircraft in the area • Costly to install and maintain

23. ADS-B System • Multiple Components • GPS Satellites – DoD Control • Aircraft Avionics – Airlines • FAA rulemaking in process to mandate equipage by 2020 • Rule anticipated to be issued April 2010 • Avionics standards are set by RTCA • Ground Based ADS-B System – FAA (ITT Services Contract) • Interface to FAA automation systems – FAA • Aircraft position based on GPS satellite information • Precise latitude and longitude • Aircraft transmits data to ground based ADS-B system

24. ADS-B System (Cont.) • Ground based system transmits data to FAA controllers • Ground based system transmits data to aircraft in area • Enables pilot ability to see other aircraft in the vicinity • Potential of decreasing accidents • Situational awareness of other traffic • Pilot also receives weather data

25. ADS-B System (Cont.) • Screens update once per second • Enables closer separation • Enables other applications • In trail procedures • Continuous Descent Arrivals • Merging and Spacing procedures • Parallel runway landings • Closer aircraft separation • Less control by controllers – more pilot control • Provides coverage in Alaska and Gulf of Mexico For more information, please visit www.adsb.gov

26. ADS-B Ground Infrastructure - System Architecture Ashburn, VA

27. ADS-B Acquisition Strategy CONOPS, ISP, and FPR Approved, May 2006 SIR, Week of November 20, 2006 SIR Responses, January 17, 2007 Final Investment Decision (Segment 1), June 2006 Initial Investment Decision, September 2005 Downselect, February 15, 2007 RFI, September 2006 Enhanced Surveillance Capability Mission Needs Statement #326, May 2001 Final Investment Decision (Segment 2), February 2007 RFO, March 2007 Final Investment Decision (Remainder Segment 1 & 2), August 2007 Contract Award, August 2007 In Service Decision, September 2010 CONOPS = Concept of Operations; ISP = Integrated Safety Plan; FPR = Final Program Requirements; RFI = Request for Information; SIR = Screening Information Request; RFO = Request for Offer

28. ADS-B Acquisition Strategy • Previously fielded prototype ADS-B ground stations in Alaska and portions of the Continental U.S. • Lacked design and configuration management • Lacked information for National Deployment of an integrated system • Development incomplete with regard to radio requirements • Program Office initially presented with a functional design specification • Prescriptive in nature • Potential requirements creep due to ambiguities

29. ADS-B Acquisition Strategy • Selection of Specification Type • Pressure to award contract and field system as fast as possible • Uncertainty existed surrounding use of traditional acquisition approach • Desire to exploit different design and approaches

30. ADS-B Acquisition Strategy

31. ADS-B Acquisition Strategy: Specification Alternatives • Performed tradeoff analysis between specification alternatives • Performance Based Service Acquisition chosen • Changed functional / design specification into performance based specification • Identified potential life cycle savings of $600M by performing a Performance Based Services Acquisition

32. Performance Based Service Acquisition Benefits • Focus on intended results, not processes to obtain results • Increased likelihood of meeting needs • Rely on vendor expertise, knowledge, and existing assets in developing solution • Technical community argued vendor would need help in understanding requirement • Better value and enhanced performance • Less performance risk

33. Performance Based Service Acquisition Benefits (Cont.) • Specification defines performance standards – no specific design criteria • Contractor flexibility in proposing solution • Better competition – able to draw in other capabilities • Contractor buy-in and shared interests • Shared Incentives permit innovation and cost effectiveness • Less likelihood of a successful protest

34. Performance Based Services Acquisition Process • Establish the integrated team • All FAA disciplines totally engaged • Describe the problem that needs solving • Provide industry with information early in the process • Transparency & collaboration with industry

35. Performance Based Services Acquisition Process • Develop a statement of objectives (SOO) • Issue Statement of Objectives to vendors • Identify SOO constraints • Included safety and security concerns • Vendors respond with solution – Performance Work Statement (PWS) • Decide how to measure and manage performance • Select the right contractor • Manage Performance • Metrics • Reviews • Incentives/disincentives

36. “Rather than micromanaging the details of how contractors operate, the government must set the standards, set the results, and give the contractor the freedom to achieve it in the best way” – George W. Bush – June 9, 2000

37. ADS-B Acquisition History

38. ADS-B Acquisition History: Industry Days

39. ADS-B Acquisition History

40. ADS-B Acquisition History: Downselection Evaluation Criteria • Technical • Provide data for sample coverage volume • System Performance • Availability • Service Monitoring and Maintenance

41. ADS-B Acquisition History: Downselection Evaluation Criteria • Business • FAA interested in inputs to reduce cost and increase return on investment • In accordance with OMB Circular A-94 “Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs” an FAA business model was created which incorporated the expected benefits and costs to society • The business model indicated that a return on investment would not be realized until 2030 • Although not a superior business case, FAA recognized the need to improve the existing infrastructure • Downselect SIR Business Case Evaluation Criteria: • Lower Service Cost • Increase Benefits • Innovations to lower cost of service, improve return on investment, and accelerate benefits

42. ADS-B Acquisition History: Downselection Evaluation Criteria • Program Organization • Past Performance • Cost • ROM cost for non-recurring and recurring costs

43. ADS-B Acquisition History

44. ADS-B Acquisition History • Vendor choice of base and option periods of performance within funding and legal constraints • Allowed vendors to manage cash flow • Options give FAA opportunity to review vendor performance and possibly not exercise follow-on options • Vendor flexibility in proposing incentive cost share provisions • Provided indication of how much “skin” vendor had in the game • Vendor allowed to propose performance incentives

45. SIR RFO Evaluation Criteria • Technical • System Performance • Architecture and Design • Coverage Analysis • Interfaces • Weather Services • System Enhancements • Maintainability, Availability and Service Monitoring • Test, Safety, and Security

46. SIR RFO Evaluation Criteria • Business • Business Model • Ideas for accelerating benefits in the NAS and improving the ADS-B program return on investment • Lower Service Cost • Vendor costs • FAA Costs – Integration into Automation • Avionics Cost • Reduce cost to aviation community • FAA Cost Savings • Outside scope of contract – backup capability • User Benefits • Efficiency • Safety

47. SIR RFO Evaluation Criteria • Business (Cont.) • Program Control • Integrated Performance Management system – Earned Value • Integrated Master Schedule • Cost • Evaluated based on reasonableness, realism, and correlation (intertwining) with the proposed technical and business approach

48. SIR RFO Evaluation Timeline

49. SIR RFO Evaluation • Evaluation Team Composition • Technical • Non-voting lead • Subject Matter Experts available to brief teams • Business • Cost  • Evaluation emphasis: • Effectiveness of the vendor approach • Risk associated with the approach • Realism of cost • High cost, high risk, and low effectiveness was the least desirable combination

50. SIR RFO Evaluation • Team leads met to assess intertwining of technical, business, and cost areas • Discovered some inconsistencies between technical and cost areas   • Award recommendation presented to the Source Selection Official • Contract awarded August 2007