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Boeing wins $1.7 billion contract from FAA

Under the lucrative contract, Boeing will develop the Next-Generation Air Transportation System designed to improve air-traffic control.

Boeing has won a $1.7 billion contract from the Federal Aviation Administration to create the Next-Generation Air Transportation System.

One of the goals of the system, also known as NextGen, will be to update the current air traffic control system from its traditional radar-based tracking to one that uses a GPS-based technology called ADS-B, the company said Thursday. Such a move is designed to deliver greater accuracy and safety in managing the growing traffic in the skies. To help develop the new system, Boeing said it will rely on air traffic management models and simulations.

In addition, Boeing will look at ways to integrate ground and air operations and technologies to handle all types of traffic, including commercial, military, general aviation, unmanned aerial systems, and rotorcraft.

The FAA's contract with Boeing guarantees five years with options for an additional five. Boeing isn't going it alone. Under the FAA's umbrella of NextGen contracts, known as System Engineering 2020 (SE2020), General Dynamics and ITT also were awarded business. Adding their contracts to Boeing's could potentially total $4.4 billion. Boeing said the FAA expects to award two more SE2020 contracts with a ceiling of $7 billion, making these the largest set of awards in FAA history.

Boeing has put together a team of more than a dozen subcontractors, including Airbus, Cessna, and Lockheed Martin. Boeing's partnership with Lockheed Martin is designed to allow the two to focus on integrating ground and air operations.