Ramon Lopez/WASHINGTON DCGraham Warwick/ATLANTA

WILCOX ELECTRIC says that its $475 million Wide Area Augmentation System (WAAS) contract was terminated by the US Federal Aviation Administration because the agency became "a victim of its own experience" of cost and schedule overruns on previous programmes.

The FAA has switched the prime contract responsibility to Hughes Aircraft (previously the software engineering subcontractor to Wilcox), citing dissatisfaction with Wilcox's management.

Word of the award to Hughes came just three days after the existing WAAS contract was terminated on 26 April. The air-navigation system will consist of 35 ground-reference systems, plus ground and satellite communications systems.

The FAA says: "Hughes' engineering development...provides an eight-month cost, schedule and technical advantage for completing the delivery of the system on schedule and within the established cost baseline."

The Wilcox deal was cancelled after the FAA decided the US-based unit of France's Thomson-CSF would not be able to correct performance deficiencies outlined in a "cure letter" which the FAA sent to Wilcox on 18 March. Wilcox's options may include legal action.

The problems included overall project management, cost and schedule reporting, and systems engineering. The FAA also pointed to software deficiencies.

FAA Administrator David Hinson says that "decisive action" was needed to fix WAAS problems, saying: "We are doing business differently at the FAA now, and we will use our new acquisition contract to get our new deal in place as soon as possible." The FAA will incur some termination charges, but Hinson says that they will be "significantly less" than the estimated $100 million cost overrun from Wilcox.

Wilcox' director of advanced systems, Wayne Dohlman, says that the FAA "...lost confidence in Wilcox' ability to manage cost and schedule" and that the contract was terminated "for convenience" and not because of specified deficiencies.

Dohlman says that Wilcox was surprised by the termination, having responded to the FAA's ten-page cure letter with a 100-page remedy document. The company expected to be briefed on the FAA's response and instead received the termination notice.

Wilcox disagrees with the FAA estimate that the WAAS would have been ten months late and $100 million over budget: "We do not understand the FAA figures, based on the data we provided," it says. All cost and schedule risks had been identified, and risk-abatement plans reviewed by the FAA and implemented by Wilcox before the termination.

Dohlman says that the much-publicised delay in the design review, from December 1995 to March 1996, was agreed jointly with the FAA, to mitigate risk by ensuring that technical issues were clearly understood before beginning detailed design.

He believes that mechanisms put in place to provide the FAA with visibility into the programme may have contributed to the loss of confidence by giving the agency unaccustomed insight into early problems. Plans called for Wilcox to implement an integrated product-team structure, with the FAA as a team member, "...but we were never able to make it work", he admits, describing the FAA's chosen role as that of a "policeman" monitoring Wilcox. Dohlman says that it is not yet clear who has rights to the WAAS design work and whether Hughes will be able simply to pick up where Wilcox left off.

Wilcox parent company Thomson's work on the European equivalent to the WAAS, the European Geostationary Navigation Overlay, will not be affected by the termination. Wilcox was contractually required to obtain FAA approval to transfer technical data to Thomson in France, and no data had changed hands up to termination.

Source: Flight International