National Airspace System

To modernize the National Airspace System, the Federal Aviation Administration (FAA) plans to switch from ground- to satellite-based navigation by using satellite signals generated by the Defense Department's Global Positioning System (GPS). However, GPS by itself does not satisfy all civil air navigation requirements, such as the one requiring that aircraft operators be provided timely warnings of system malfunctions and another requiring that the system be available virtually around the clock. As a result, FAA is developing a network of ground stations and geostationary communications satellites, known as the Wide Area Augmentation System (WAAS), to enhance GPS so that satellite-based navigation can meet those requirements. The Secretary of Transportation reported in February 1998 on the program's status and management. GAO examines whether the Secretary's report provides a complete assessment of FAA's risks in developing the WAAS project. GAO also examines how alternative assumptions would affect WAAS' benefit-cost analysis of January 1998.

GAO noted that: (1) the Secretary's report provided a complete assessment of FAA's risks in achieving the WAAS project's performance and cost goals but not its scheduled goals; (2) in terms of system performance, the Secretary's report recognized that WAAS' vulnerability to intentional or unintentional interference from electronic equipment must be addressed; (3) in January 1998, FAA estimated that it would save about $500 million (in net present value) over the WAAS project's life cycle by fully phasing out its network of ground-based navigation aids; (4) if FAA retains some portion of this network, these benefits would decrease; (5) FAA also estimated that aircraft operators could save $350 million by removing ground-based navigation equipment from their aircraft; (6) these benefits would be reduced to the extent that operators must continue to keep such equipment on board; (7) by identifying a range of cost estimates and associated probabilities, the Secretary's report addressed GAO's past concern that FAA's firm, discrete-point cost estimates implied a level of precision that could not be supported; (8) GAO agreed with the Secretary's report that the greatest degree of uncertainty about the WAAS cost estimates relates to the costs of the geostationary communications satellites; (9) the uncertainty exists because FAA does not know exactly how many satellites will be needed and how much the per-unit costs will be; (10) the Secretary's report fell short of providing a complete assessment of the uncertainties FAA faces in achieving WAAS' schedule goals; (11) the report also did not discuss the risks to the overall schedule if FAA does not award the contract to lease the satellites by July 1998 as planned; (12) in January 1998, FAA's analysis found that the benefits to aviation from WAAS would be three times as great as its costs; (13) GAO requested that FAA recalculate its benefit-cost analysis to determine the impact of three alternative assumptions; (14) using these cost and decommissioning assumptions did not cause much of a decrease in the benefit-cost ratio or the net benefits; (15) however, the exclusion of small increments of passenger time savings had a much more significant impact; and (16) when these alternative assumptions were taken together, GAO found that the net present value of the project's net benefits decreased by more than $1 billion but were still about twice as great as the costs.

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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