Hopes of Fullerton Unit Ride With Bid : Hughes Sends Plans for Air Traffic System to FAA

Early this morning, a Washington-bound American Airlines flight is scheduled to depart from Los Angeles, its cargo bay loaded with 2,500 pounds of documents detailing Hughes Aircraft’s proposal to design a new nationwide air traffic control system.

If Hughes wins the massive federal contract, its Ground Systems Group in Fullerton expects to add at least 650 employees and receive roughly half of an estimated $4.6 billion to $10 billion in project revenues over a span of 10 to 15 years.

For three years, Hughes’ Orange County unit has been locked in competition with IBM for a contract to make the nation’s skies safer by designing a highly automated system to direct air traffic control functions at airports across the country.

The contract would be the single largest award ever won by Hughes, the General Motors subsidiary best known as a major manufacturer of missiles, communications satellites and defense electronics equipment.

“The initial contract is huge, even by Hughes’ standards,” said Joe A. Capobianco, manager of the Hughes division that is managing the air traffic control project.

Hughes, which already has 350 people working on the program in Fullerton, would increase the number to at least 1,000 if it receives the contract. Most of the new jobs would be for highly paid engineers and computer scientists.

The Federal Aviation Administration is expected to announce the winner this summer.

If Hughes wins the project, it would be the second major award to go to an Orange County aerospace company since December, when McDonnell Douglas Astronautics Co. in Huntington Beach received a $1.9-billion contract to build a major portion of America’s first permanent manned space station.

At a time when defense budgets are shrinking, non-military projects take on particular importance for companies such as Hughes, which depends on Pentagon contracts for 70% of its business.

Hughes would receive about half of the initial $4.6-billion award and subsequent contracts, which are expected to boost total federal expenditures on the project to about $10 billion.

The remainder would be divided among Hughes’ subcontractors, including Unisys, a major computer manufacturer based in Detroit, and Sanders Associates, a New Hampshire-based subsidiary of Lockheed.

The FAA has already awarded about $500 million in contracts to Hughes’ Fullerton unit and IBM’s Maryland-based Federal Systems Division for research and development on the system.

IBM, which built the existing U.S. air-control system, is teamed with Raytheon, a Massachusetts-based defense contractor, and Computer Sciences Corp., an El Segundo-based computer maker.

Another advantage for the eventual winner is that it’s likely to gain an important edge in competing for future business in a huge international market for air-control systems.

“Many nations simply buy an FAA-approved system,” said Capobianco. “So the winner of this competition has a tremendous edge.” Several nations are known to be considering overhauls of their air traffic systems, including Canada, New Zealand and Australia.

The contract is the cornerstone of the FAA’s Advanced Automation System, a national network of computers, video display terminals and control devices designed to allow more planes to fly while improving air safety. The system will automate many tasks now performed by air traffic controllers.

The nation’s existing air traffic system uses technology developed 20 years ago. The equipment is prone to breakdowns and is not designed to handle the rapidly growing volume of air traffic.

The air traffic control system has come under intense scrutiny in recent years because of the crash of an Aeromexico jetliner and a small plane over Cerritos in 1986.

The FAA plans to replace hardware at more than 300 airport towers and radar facilities across the nation. Installation would be done in phases, beginning in 1992 at the 150 largest facilities, with the remaining sites completed by the year 2000.

Orange County’s John Wayne Airport and Fullerton Airport probably would be included in the latter group of installations.

“From everything we’ve been told, the new system will provide a tremendous improvement,” said Marion Davis, manager of the FAA’s Coast Terminal Radar Approach Control facility in El Toro, which controls traffic in a 3,000-square-mile area ranging from Oceanside to Torrance.

The El Toro facility was hampered last year by a malfunctioning computer. “It’s my understanding that the new system will have a redundancy factor” that would provide backup systems in the event of equipment malfunctions, Davis said.

Hughes officials claim to have an edge on IBM in the contract competition, in part because of the Ground Systems unit’s experience with building military air-control systems. Hughes, for example, built a highly sophisticated air-defense system used by NATO.

IBM officials could not be reached for comment.

One measure of Hughes’ confidence is the fact that it recently placed help-wanted advertisements in several newspapers for anticipated new jobs associated with the air traffic control program.

Although the ads explained that Hughes had not won the contract, the number of applicants who responded “was phenomenal,” Capobianco said.

Hughes isn’t leaving anything to chance today as it forwards its 47,000-page bid to FAA headquarters in Washington in time to meet a Monday deadline set by the federal agency.

Hughes will have a backup crew and duplicate set of documents ready just in case this morning’s American Airlines flight from Los Angeles International Airport is delayed or other problems develop.

The company has maintained tight security in preparing its proposal. Electronic security locks have been placed on doors in sensitive areas of the Fullerton facility. The final bid was assembled in an area called the “pricing room,” accessible only through three sets of locked doors.

“There are only two or three of us that know the bottom-line price,” Capobianco said.

The FAA will study the weighty bids for several months before the winner is announced. The contract is expected to be awarded sometime in late July.