The FAA is seeking an ownership stake in Air Space Intelligence, the company developing its new AI-supported air traffic management platform, according to an internal agency document reviewed by POLITICO Thursday. The proposed arrangement would give the federal government a financial interest in a company already holding a major FAA contract. No agreement has been finalized.
Proposed Ownership Arrangement
According to POLITICO, the FAA has prepared a term sheet outlining a potential equity investment and is negotiating a warrant that would allow the government to purchase company shares at a predetermined price. The term sheet expires at the end of 2026, and it remains unclear whether a final agreement is imminent. Neither the FAA nor Air Space Intelligence provided comments.
The Boston-based company received a 12-year contract worth up to $875.9 million in June to develop two air traffic management systems. One is Strategic Management of Airspace, Routes and Trajectories (SMART), an AI-supported platform that analyzes weather, flight schedules and other operational data to predict congestion. The FAA began limited use of SMART around Washington, D.C., in September, ahead of a planned nationwide rollout. The system provides recommendations to traffic managers but does not directly control aircraft.
Congressional Scrutiny
The proposal comes amid congressional concerns about the technology’s deployment. In an Oct. 9 letter, 25 Democratic lawmakers urged the FAA to suspend SMART’s initial 90-day evaluation period until the agency provided additional information about safety testing, controller training and oversight. The lawmakers requested a response by Oct. 19.
“Any upgrades and changes to ATC systems must be made with safety as the first priority,” the lawmakers wrote.
The proposed investment would represent the first known instance of the FAA pursuing an ownership arrangement of this kind. The agency has not publicly disclosed the size of the potential stake or a timeline for completing the transaction.
Hmm. Am I the only one who sees a potential conflict of interest with this arrangement? What happens if the vendor fails to perform according to the contract? Is the FAA going to discipline itself? Or cancel a contract with itself? At a minimum, it sounds like a recipe for massive cost over-runs.
This arrangement is fraught will all manner of conflict of interest. Bryan Bedford is behind this with the potential of his ascendancy when his FAA gig ends after 5 years, or if not before. Congress must declare this hare brained idea dead on arrival.