Air Traffic Control

In 1981, the Federal Aviation Administration (FAA) began an air traffic control modernization program that the agency now expects will cost more than $34 billion by 2003. The vast majority of these air traffic control capital investment projects, both in terms of money and number, involve software-intensive information acquisition, processing, and display systems. GAO found that the program's cost-estimating and accounting practices are badly flawed, resulting in an absence of reliable cost and financial information needed to make informed investment decisions. This report examines the cost-estimating and accounting practices that FAA has used for its air traffic control project. GAO discusses whether (1) air traffic control cost estimates are based on good estimating processes and (2) actual air traffic control project costs are being properly captured and reported.

GAO found that: (1) FAA's ATC modernization program's cost estimating processes do not satisfy recognized estimating requisites, and its cost accounting practices do not provide for proper accumulation of actual project costs; (2) the result is an absence of reliable project cost and financial information that the Congress has legislatively specified and that leading public-sector and private-sector organizations point to as essential to making fully informed investment decisions among competing ATC projects; (3) without this information, the likelihood of poor ATC investment decisions is increased, not only when a project is initiated but also throughout its life cycle; (4) with respect to cost estimating, FAA fails to meet five of the six process requisites that the Software Engineering Institute (SEI) says should be institutionally entrenched and consistently used for information technology projects; (5) in the absence of such institutional policies to guide ATC project cost estimating, FAA has adopted a cost estimating process that allows each ATC project to approach cost estimating in whatever manner its estimators choose; (6) the result is inconsistency in the rigor and discipline with which ATC project cost estimates are derived, which in turn means estimates of varying degrees of reliability; (7) when comparing the approaches that six ATC projects used to derive their current official life cycle cost estimates to SEI's project-specific criteria, GAO found that two were too poorly documented to permit any comparative analysis, while none of the remaining four satisfied all of the criteria SEI associates with highly credible estimates; (8) compounding these estimating process weaknesses is FAA's practice of presenting cost estimates as precise, point estimates; (9) by doing so, FAA fails to disclose the estimates' inherent uncertainty and risks, thus further limiting the estimates' decisionmaking value and credibility; (10) with respect to cost accounting, FAA is not accumulating all ATC project costs, and FAA does not have a cost accounting system for capturing and reporting the full cost of its ATC projects; (11) instead, FAA decisionmakers use accounting and financial management systems that omit relevant project costs, such as those associated with FAA project management; and (12) the result is that FAA cannot reliably measure the ATC projects' actual cost performance against established baselines, and cannot reliably use information relating to actual cost experiences to improve future cost estimating efforts.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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