FAA Confirms $1.5 Billion Peraton Contract as U.S. Air Traffic Control Overhaul Accelerates

The Federal Aviation Administration has confirmed that its contract with national security firm Peraton, the project manager for a sweeping $12.5 billion modernization of the U.S. air traffic control system, is valued at $1.5 billion. The disclosure was made public Tuesday as part of a congressional presentation detailing the scope, cost, and progress of the long-awaited overhaul of the nation’s aging aviation infrastructure.

FAA Administrator Bryan Bedford told House lawmakers that the final contract price reflected a $200 million reduction negotiated in December by U.S. President Donald Trump from the original proposal. Peraton, which is owned by private equity firm Veritas Capital, is serving as the primary implementation and integration partner for the project. According to Bedford, the FAA always anticipated the need for a centralized partner to manage the complex modernization effort.

The newly released FAA presentation outlines an innovative, performance-based contract structure that includes a strict “No Excuses” clause. Under this framework, Peraton’s fees are earned or forfeited based on its ability to meet specific benchmarks tied to schedule adherence, quality standards, cost control, and overall management performance. The FAA says this approach is designed to ensure accountability and timely delivery.

A major focus of the air traffic control overhaul is migrating hundreds of legacy computer systems at 318 FAA facilities into a secure, cloud-based environment. Bedford emphasized that moving away from isolated, facility-level computers toward scalable cloud computing is critical to unlocking future airspace redesign and efficiency gains. He described cloud migration as a foundational step toward modernizing how U.S. airspace is managed.

As of December 31, the FAA has already obligated $1.6 billion toward the broader modernization program. Officials reported that 40% of telecommunications connections have been upgraded, replacing outdated copper wiring with fiber-optic and wireless systems. In addition, 612 new radar systems are scheduled for installation by June 2028 at a cost of $1.1 billion. Separate contracts include a $420 million deal with RTX, featuring up to $270 million in performance-based payments.

Congress approved the air traffic control modernization initiative in June, citing chronic airport congestion, recurring technology failures, and persistent flight delays. Transportation Secretary Sean Duffy has since requested an additional $19 to $20 billion to complete the overhaul and deploy a next-generation system.

The FAA continues to face significant workforce challenges, operating roughly 3,500 air traffic controllers below targeted staffing levels. Many controllers are working mandatory overtime and six-day weeks, while the FAA’s air traffic control academy reports a failure rate exceeding 30%. Bedford noted that the new funding framework allows the agency to finally adopt a multi-year modernization strategy, supported by a detailed scorecard tracking progress across reform efforts.