Government Contracts & Investigations

FAA Announces Audit of Its Award Practices for Major Acquisition Program Contracts

By | March 2, 2019

In order to operate, maintain, and modernize the National Airspace System (NAS), the Federal Aviation Administration (FAA) relies on an expansive portfolio of capital assets. Acquisition plays a key role in supporting FAA’s mission to operate the NAS and modernize air traffic control through implementation of the Next Generation Air Transportation System (NextGen). The NextGen program not only involves the FAA’s expenditure of Federal funds for system-wide changes and improvements, but it also requires airlines to invest their own funds in the technology needed for their aircraft for the program. In FY2017, the FAA managed an acquisition portfolio exceeding $10 billion in value. Over $8 billion of that amount was associated with major acquisition programs, which the FAA defines as programs that are strategically important to the agency and designated as Acquisition Category 1, 2, or 3, the most expensive and complicated programs based on dollar thresholds and such qualitative factors as program risk, complexity, security, political sensitivity, and likelihood of changes to the safety of the national airspace. The OIG and various stakeholders have, however, identified significant issues surrounding the FAA’s acquisition processes and practices over the years—and the FAA’s management is considered by many to have fallen short.

One critic of the FAA’s handling of procurements, and in particular the NextGen program, has been Rep. Bill Shuster.  While serving in his former role as Chairman of the House Committee on Transportation and Infrastructure, Mr. Schuster expressed concerns that certain significant acquisition problems have persisted for decades despite attempts at acquisition reform. He went on to request that the agency review its procurement programs and processes, specifically focusing on the FAA’s competitive award practices for NextGen and air traffic control equipment and service contracts, as well as the FAA’s use of safeguard to protect against impermissible conflicts of interest in the contracting procurement and award process.

On February 25, 2019, the FAA’s Assistant Inspector General for Acquisition and Procurement Audits responded to Mr. Shuster by announcing the opening of a new audit aimed at assessing the agency’s (i) competitive award practices for its major acquisition program contracts; and (ii) safeguards against conflicts of interests on the part of FAA officials involved in the award process. The audit is set to begin immediately.

Time will tell whether this effort by the FAA will identify any procurement shortfalls or otherwise result in meaningful improvements to the agency’s major acquisition programs. We will monitor and report on future developments here. In the meantime, if you have any questions about this or other FAA acquisition issues, contact one of Stinson Leonard Street’s Government Contracts and Investigations attorneys.

Contact Eric Whytsell for more information.