The air traffic control tower at Chicago O'Hare International Airport is pictured on the day passengers board their flights for the Thanksgiving holidays, in Chicago, Illinois, U.S., November 26, 2025. REUTERS/Jim Vondruska

By David Shepardson

WASHINGTON, Dec 4 (Reuters) - The Federal Aviation Administration said on Thursday it has picked Peraton, a national security company owned by Veritas Capital, as the project manager of a $12.5-billion effort to overhaul the aging U.S. air traffic control system.

The selection comes after Congress approved a $12.5-billion plan in July to overhaul the air traffic control system and boost controller hiring, following decades of complaints over airport congestion, technology failures and flight delays.

Peraton will be the single integrator to manage the massive project and deliver it on time without air traffic disruptions, said the FAA, which picked the firm over a joint bid by Parsons and IBM, among two it confirmed in September.

"We are taking bold action to ensure our air traffic system is the envy of the world," FAA Administrator Bryan Bedford said in a statement.

He is set to testify before House and Senate committees this month to update them on the air traffic control reform efforts.

In a statement, Peraton CEO Steve Schorer said the company "stands ready to hit the ground running to deliver a system Americans can count on."

The FAA said the first-of-its-kind contract is structured to reward good performance and incentivize smart funding.

Transportation Secretary Sean Duffy has said he wants an additional $19 billion to $20 billion from Congress for air traffic control reform.

A 2023 report said the FAA's communications system has been outdated for years and the agency can no longer get spare parts for many systems.

It detailed aging FAA air traffic control facilities with leaking roofs, broken heating and air conditioning systems and old surveillance radar systems that must soon be replaced at a cost of billions of dollars.

Of the FAA's 138 air traffic control telecoms systems, 51 were unsustainable, a separate report said last year.

The FAA said Peraton will begin work on initial priorities such as setting up a new digital command center and transitioning to modern fiber from copper infrastructure.

Chris Sununu, CEO of Airlines for America, praised the effort in a statement.

"It is past time to eradicate antiquated floppy disks, copper wires and paper strips and replace them with smarter, more efficient 21st-century equipment and technology," Sununu said.

The system overhaul will be completed in three years to "reduce outages, improve efficiency, reinforce safety, and support future growth of the national airspace," the Transportation Department said in a statement.

The FAA's $15-billion "Next Gen" project to overhaul air traffic control, begun more than two decades ago, has faced numerous delays, cost overruns and is less ambitious than initially envisioned, a report showed in October.

(Reporting by David Shepardson; Editing by Leslie Adler and Clarence Fernandez)