FAA's $12.5B Air Traffic System Overhaul Undertakes Massive Modernization

The Federal Aviation Administration (FAA) announced a $1.5 billion contract with national security firm Peraton on Tuesday, advancing a $12.5 billion project to revamp the U.S. air traffic control system. FAA Administrator Bryan Bedford highlighted that President Trump previously secured a $200 million discount for the contract managed by Veritas Capital.

In a detailed presentation to Congress, Bedford revealed the contract's innovative features, including a 'No Excuses' clause that ties fees to performance metrics such as schedule adherence, quality, and cost control. A significant focus of the overhaul is transitioning from outdated computer systems across 318 FAA facilities to a modern cloud-based infrastructure.

Bedford emphasized that the move to cloud computing would enable significant airspace redesign opportunities, supported by telecommunications upgrades from copper wire to fiber and wireless connections. The FAA has already earmarked $1.6 billion through December 31, 2023, with plans to install 612 radar systems by June 2028. Transportation Secretary Sean Duffy has requested an additional $19-$20 billion to complete the ambitious modernization effort.