The contract is worth a potential $1.8 billion over 18 years.
"Today is another great milestone in aviation," said FAA Deputy Administrator Robert Sturgell.
The new system, known as Automatic Dependent Surveillance-Broadcast, relies on precise navigation and location information provided by the Global Positioning System network of satellites. ADS-B is designed to provide air traffic controllers with data much more rapidly than the current radar-based system. That system updates every six seconds, while ADS-B will provide new data every second. Complementary GPS-based units installed in airplane cockpits will broadcast planes' locations to each other, helping pilots avoid collisions.
ITT's proposal for ADS-B was attractive for a number of reasons, said Vincent Capezzuto, FAA's director of surveillance and broadcast services. The company aims to leverage infrastructure already in place through a partnership with AT&T.
"We're excited," said Glen Dyer, ITT's ADS-B program manager. "This is a significant element of the FAA's modernization."
A model ADS-B program, known as Capstone, has been in place in Alaska for the past five years, and the FAA says that the use of GPS to help planes and controllers avoid collisions has cut accident rates there by 47 percent.
The rollout will continue in Alaska, and then move to other sites representing a variety of air traffic control challenges. These include the Gulf of Mexico, which has substantial commercial and helicopter traffic; Louisville, Ky., the home of UPS, which already has outfitted its fleet of planes for ADS-B; and Philadelphia, which will be the first major urban center on the system.
ITT will receive $207 million to develop and deploy the first phase of the system, which the company will own and maintain. The subsequent $1.6 billion will be paid in subscription fees over two periods defined by the contract.
Three teams, lead by ITT, Lockheed Martin and Raytheon, were chosen to submit bids for the contract in February. FAA officials said that each team's proposal had its merits, but declined to discuss specifics strengths and weaknesses to avoid revealing proprietary information.
In 2003, Lockheed Martin won a $1.9 billion contract to run the FAA's weather service centers, and touted that experience in competing for the ADS-B award. Raytheon, whose bid involved a partnership with XM Satellite Radio and Verizon Communications, proposed to expand already existing communications systems that deliver weather data to private and corporate aircraft.
But ITT's bid won out, Capezzuto said, because it "had [the] best value solution combined with least risk." Raytheon's bid was widely seen as going beyond the FAA's specifications, and it only relied on one frequency, though the agency had requested two.
"AT&T provides existing hardened infrastructure that we will leverage to provision the service so they will have a nationwide network with very good technical performance," Dyer said. "We know that we substantially beat FAA technical performance parameters."
He also described the company's proposal to include compact mobile stations that ITT could deploy in cases of disasters as a significant advantage.
Doug Church, a spokesman for the National Air Traffic Controllers Association, sounded a note of caution in response to the FAA's optimism.
"Let's not lose sight of [the fact that] this program and what it represents is not the answer to flight delays and the congestion that has choked the whole air traffic system," Church said. "It's a start, but it's a long-term concept, and in our view, it's FAA's way of waving a smoke screen. The real problem is understaffed, overscheduled airports."