The FAA has selected a team headed by Lockheed Martin to provide services now offered by the agency’s Automated Flight Service Stations.
The five-year contract, with an option for five more years, is estimated at $1.9 billion. FAA officials say turning AFSS duties over to Lockheed Martin will save $2.2 billion over the next 10 years.
Lockheed Martin will install new technology and upgrade facilities to improve efficiency of the Flight Service Stations, according to Linda Gooden, president, Lockheed Martin Information Technology. The combination of new technology and “planned organizational efficiency improvements” will result in 38 of the current 58 FSS sites closing in the next two years.
The FAA selected Lockheed Martin, based in Bethesda, Maryland, for its “demonstrated ability to deliver high-quality safety and services and technical excellence at a competitive cost while providing a seamless transition to new operations.” Lockheed Martin will operate the FSS under continued FAA oversight to the agency’s “strict safety and service requirements,” FAA officials said.
About 2,500 FAA employees now provide services, such as weather briefings, in-flight radio communications, flight planning and search-and-rescue support, at 58 automated flight service stations in the contiguous 48 states, Hawaii and Puerto Rico. Three flight service stations in Alaska were not included in the bidding process.
Studies by the FAA and the Department of Transportation’s Inspector General identified significant potential cost savings by contracting out the FSS duties. FAA spending on flight service operations was about $500 million in fiscal year 2003. Only $60 million was offset by federal fuel taxes collected from general aviation, FAA officials note. Additionally, they said, many automated flight service stations contain outdated equipment, are in need of upgraded technology and are housed in deteriorating buildings.
In December 2003, the FAA formally announced that the flight service stations met the criteria for competitive sourcing and that it would conduct a competition under the Office of Management and Budget’s Circular A-76 guidelines for an improved way to provide flight service operations. This is the largest public-private job competition in the government’s history.
The FAA evaluated five competing service providers, including a partnership of FAA employees and Harris Corp., on the best value to the government. The FAA required each bidder to demonstrate savings of almost $1 billion over 10 years.
It is rare for an outside company to win public-private competitions. In-house employees retained more than 90% of jobs that went out for bid in 2004 and 89% of jobs in 2003, according to OMB statistics.
Lockheed Martin will assume operations in October of this year. Consolidation of the 58 current flight service stations will begin in April 2006 and is expected to result in just 20 stations by the end of March 2007.
Lockheed will offer flight service specialists jobs for at least three years at pay similar to what they received from the government, according to FAA officials.
“We know that a modernization of this magnitude can be difficult for employees,” Gooden said. “Lockheed Martin has developed a comprehensive plan to provide opportunities for all AFSS employees while ensuring Flight Service Stations continue to provide seamless service to the aviation community during this transition.”
Those who lose their jobs will have “preferential” treatment for job openings elsewhere in the FAA’s air traffic control organization, FAA officials said. That includes allowing some FSS employees to apply for air traffic control jobs even if they are older than 31, the age limit for ATC recruits.