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Home » FAA’s $875 Million Contract Reflects Years of Pressure on Outdated Air Traffic System

FAA Awards Air Space Intelligence 12-Year, $875 Million Air Traffic Software and AI Contract

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FAA\u2019s 875 Million Contract Reflects Years of Pressure on Outdated Air Traffic System

Strategically, the FAA’s newest purchase is about timing. On Monday the agency announced a 12-year, $875 million contract with Air Space Intelligence for software and artificial intelligence meant to head off flight delays before aircraft leave the gate.

The company will deliver “two complementary, cutting-edge technologies,” the FAA said. One is Flow Management Data and Services, which the agency says will become “the new technological backbone” of a modernized Air Traffic Control System Command Center. The other is a system called SMART, short for Strategic Management of Airspace, Routes and Trajectories.

A fact sheet describes how SMART works: it uses AI to analyze airline schedules, weather, airport capacity, airspace conditions and operational constraints, then predicts traffic flows and spots possible conflicts ahead of time.

What Bedford said

FAA Administrator Bryan Bedford put the problem in daily terms. “Every day, our air traffic professionals knowingly manage thousands of scheduling conflicts across the National Airspace System, which ultimately end up as delays for the traveling public,” he said in a statement. He said the combined system would help by improving how airspace is managed before flights depart, cutting congestion, easing controller workload and “directly cutting down delays across the system.”

Timeline

The FAA hopes to start initial deployments of SMART as soon as this fall. Air Space Intelligence expects both systems to roll out over the next 12 to 24 months.

Part of a larger overhaul

The award sits inside a wider push by the FAA and the Transportation Department. Transportation Secretary Sean Duffy launched the effort in May 2025, saying it would involve some brick-and-mortar upgrades but that “everything else that controls the airspace is going to be brand new.” Replacing legacy systems with a modernized flight management system and updated ground radar at U.S. airports is a central piece.

The launch followed several high-profile air traffic control outages over the previous few years, and the January 2025 collision of an Army Black Hawk helicopter and a commercial airliner near Ronald Reagan Washington National Airport, which killed all 67 people on both aircraft.

In April, just short of the program’s one-year mark, Duffy conceded that a few workstreams were “a little behind.” Even so, he said, “for the most part, we’re on track to have this project completed before President Trump leaves office.” In December the FAA picked Peraton as prime integrator to oversee the new Air Traffic Control System contract.

Money has been a running question. The One Big Beautiful Bill, which Trump signed in July 2025, set aside $12.5 billion for the modernization. The FAA called that a “down payment” in December and said it would need an additional $20 billion.

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