National Airspace System
Transformation will Require Cultural Change, Balanced Funding Priorities, and Use of All Available Management Tools Gao ID: GAO-06-154 October 14, 2005The National Airspace System (NAS) is a complex network of airports, aircraft, air traffic control (ATC) facilities, employees, and pilots. The aviation industry, which depends on the NAS, contributes about 9 percent to the gross domestic product. The Federal Aviation Administration (FAA), funded through a tax-financed trust fund and General Fund appropriations, is pursuing a multibillion-dollar modernization program. Persistent cost, schedule, and/or performance shortfalls have kept this program on GAO's list of high-risk programs since 1995. GAO was asked to review the status of NAS modernization. This report addresses NAS status by identifying the challenges that FAA faces in managing (1) infrastructure, (2) human capital, and (3) financial resources.
GAO's recent reports indicate that FAA has made progress in managing its infrastructure--the systems, facilities, airports, and navigation aids that comprise the NAS--but acquisition, security, and capacity challenges remain. FAA met its fiscal year 2004 acquisitions performance goal. This goal was consistent with the President's Management Agenda and represents a positive step. However, FAA needs to continue addressing four key factors that, as GAO has reported, have historically contributed to acquisitions' missing their original cost, schedule, and performance targets: (1) actual funding less than planned, (2) increases in projects' scope, (3) underestimates of software complexity, and (4) insufficient stakeholder involvement. To address these factors, FAA has begun to prioritize its investments by considering their potential to reduce operational costs and by developing a blueprint for information technology investment; but FAA still needs to secure information technology systems and expand the NAS's capacity for an expected 25 percent increase in air travel by 2015. Human capital management challenges include hiring and training thousands of air traffic controllers to replace those expected to retire over the next decade and creating a results-oriented culture. FAA has developed a controller staffing plan, but has not estimated its cost, and therefore, cannot determine its impact on future budgets. Efforts to transform FAA's workforce culture address an impediment to ATC modernization that GAO has identified, but will require a sustained, multiyear commitment. Rising costs and shrinking revenues pose financial management challenges. To manage costs, FAA is using a new cost accounting system and emphasizing accountability. However, in view of current and anticipated funding reductions, FAA has eliminated initial research and development funding for new technologies that could support the next-generation air transportation system. Some stakeholders and FAA officials are discussing potential changes to FAA's funding mechanism. Some experts, and GAO's work, suggest that FAA pursue near-term options, such as contracting out more services. After establishing a sound financial management record, FAA could pursue options for greater financial management flexibility.
RecommendationsOur 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.
Director: Team: Phone:GAO-06-154, National Airspace System: Transformation will Require Cultural Change, Balanced Funding Priorities, and Use of All Available Management Tools
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Report to Congressional Requesters:
October 2005:
National Airspace System:
Transformation will Require Cultural Change, Balanced Funding
Priorities, and Use of All Available Management Tools:
GAO-06-154:
GAO Highlights:
Highlights of GAO-06-154, a report to congressional requesters.
Why GAO Did This Study:
The National Airspace System (NAS) is a complex network of airports,
aircraft, air traffic control (ATC) facilities, employees, and pilots.
The aviation industry, which depends on the NAS, contributes about 9
percent to the gross domestic product. The Federal Aviation
Administration (FAA), funded through a tax-financed trust fund and
General Fund appropriations, is pursuing a multibillion-dollar
modernization program. Persistent cost, schedule, and/or performance
shortfalls have kept this program on GAO‘s list of high-risk programs
since 1995. GAO was asked to review the status of NAS modernization.
This report addresses NAS status by identifying the challenges that FAA
faces in managing (1) infrastructure, (2) human capital, and (3)
financial resources.
What GAO Found:
GAO‘s recent reports indicate that FAA has made progress in managing
its infrastructure”the systems, facilities, airports, and navigation
aids that comprise the NAS”but acquisition, security, and capacity
challenges remain. FAA met its fiscal year 2004 acquisitions
performance goal. This goal was consistent with the President‘s
Management Agenda and represents a positive step. However, FAA needs to
continue addressing four key factors that, as GAO has reported, have
historically contributed to acquisitions‘ missing their original cost,
schedule, and performance targets: (1) actual funding less than
planned, (2) increases in projects‘ scope, (3) underestimates of
software complexity, and (4) insufficient stakeholder involvement. To
address these factors, FAA has begun to prioritize its investments by
considering their potential to reduce operational costs and by
developing a blueprint for information technology investment; but FAA
still needs to secure information technology systems and expand the
NAS‘s capacity for an expected 25 percent increase in air travel by
2015.
Human capital management challenges include hiring and training
thousands of air traffic controllers to replace those expected to
retire over the next decade and creating a results-oriented culture.
FAA has developed a controller staffing plan, but has not estimated its
cost, and therefore, cannot determine its impact on future budgets.
Efforts to transform FAA‘s workforce culture address an impediment to
ATC modernization that GAO has identified, but will require a
sustained, multiyear commitment.
Rising costs and shrinking revenues pose financial management
challenges. To manage costs, FAA is using a new cost accounting system
and emphasizing accountability. However, in view of current and
anticipated funding reductions, FAA has eliminated initial research and
development funding for new technologies that could support the next-
generation air transportation system. Some stakeholders and FAA
officials are discussing potential changes to FAA‘s funding mechanism.
Some experts, and GAO‘s work, suggest that FAA pursue near-term
options, such as contracting out more services. After establishing a
sound financial management record, FAA could pursue options for greater
financial management flexibility.
What GAO Recommends:
To facilitate NAS modernization, GAO recommends that FAA (1) estimate
controller hiring and training costs, (2) establish a long-term focus
on developing a more results-oriented culture, (3) balance immediate
and long-term investment needs, and (4) pursue options for improved
system management and development.
In commenting on a draft of this report, agency officials described
ongoing actions consistent with the third and fourth recommendations,
but did not comment on the others. GAO believes that all four
recommendations are needed.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Gerald L. Dillingham,
Ph.D. (202) 512-2834, dillinghamg@gao.gov.
[End of section]
Contents:
Letter:
Executive Summary:
Purpose:
Background:
Results in Brief:
Principal Findings:
Recommendations for Executive Action:
Agency Comments and GAO Evaluation:
Chapter 1: Introduction:
FAA Manages the National Airspace System, a Complex Collection of
Systems and Infrastructure:
FAA Envisions a More Flexible and Efficient NAS:
Numerous Reviews of FAA's Modernization Efforts Have Identified
Problems and Proposed Solutions:
Objectives, Scope, and Methodology:
Agency Comments and Our Evaluation:
Chapter 2: FAA Has Made Changes to Improve Infrastructure Management,
but Acquisition, Security, and Capacity Challenges Remain:
FAA Met Its 2004 Acquisitions Performance Goal:
FAA Is Addressing Key Factors That Contributed to Legacy Cost,
Schedule, and/or Performance Problems, but More Work Remains:
FAA Faces Challenges in Ensuring Information Security:
FAA Faces Challenges in Expanding NAS Capacity to Meet Current and
Future Needs:
Agency Comments:
Chapter 3: Human Capital Management Challenges Include Hiring Air
Traffic Controllers and Transforming FAA‘s Organizational Culture:
FAA Will Need to Hire and Train Thousands of Controllers in the Next
Decade:
FAA Has Made Progress in Implementing Human Capital Reforms, but
Challenges Remain in Transforming Its Workforce Culture:
Conclusions:
Recommendation for Executive Action:
Agency Comments:
Chapter 4: Rising Costs and Declining Revenues Pose Financial
Management Challenges:
To Address Rising Costs and Declining Revenues, FAA Is Focusing on Cost
Control:
To Fund Major System Acquisitions through Fiscal Year 2009, FAA Has Cut
Funding for Planned Investments in Other Areas:
FAA Is Reviewing Potential Changes in Its Funding Mechanism:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Methodology for Workforce Culture Assessment:
Appendix II: Major ATC System Acquisitions:
Appendix III: Perceptions of Organizational Culture in FAA's
Acquisition Workforce and in Other Organizations:
Appendix IV: Key Practices and Implementation Steps for Mergers and
Organizational Transformations:
Tables:
Table 1: NAS Overview:
Table 2: Four Key Interrelated Factors Contributing to Cost Growth,
Schedule Extensions, and/or Performance Shortfalls for 12 ATC System
Acquisitions:
Table 3: Common Themes and Number of Findings from ATO's Headquarters
Activity Value Analysis:
Table 4: FAA Capital Funding Plans for Major ATC Modernization
Acquisitions:
Table 5: Age of NAS Facilities:
Table 6: Number of Surveys That FAA Mailed to the Acquisition Workforce
and Completed Surveys Received in 1997, 2000, and 2003:
Figures:
Figure 1: Phases of Flight:
Figure 2: Trust Fund Revenue Sources, Fiscal Year 2004:
Figure 3: Trust Fund Expenditures by Category, Fiscal Year 2004:
Figure 4: Relationship of FAA's Plans to Department-Level and Executive
Branch-Level Plans:
Figure 5: Wide Area Augmentation System:
Figure 6: Local Area Augmentation System:
Figure 7: Prior and Current Structure of Research and Acquisitions, Air
Traffic Services, and Free Flight Organizations:
Figure 8: Commissioned and Planned Runways, December 1999 to November
2008:
Figure 9: Projected Controller Retirements, Fiscal Years 2005-2014:
Figure 10: Cultural Changes and Key Practices Necessary for Successful
Transformation:
Figure 11: Changes in Mean Response Scores for Selected Items on FAA's
Employee Attitude Surveys, 1997 to 2000, and 2000 to 2003, for the
Acquisition Workforce 58:
Figure 12: Actual Capital Appropriations, Fiscal Years 2002-2005, and
Budget Targets, Fiscal Years 2006-2009:
Figure 13: Aviation and Airway Trust Fund Expenditures and Revenues,
Fiscal Years 2002-2004:
Figure 14: Aviation and Airway Trust Fund Uncommitted Balances, Fiscal
Years 2002-2004:
Figure 15: Percentage Reductions in Capital Investment Plans as of
January 2005, Compared with January 2003:
Figure 16: Acquisition Workforce's Mean Responses to Selected Items
from FAA's 1997, 2000, and 2003 Employee Attitude Surveys and
Comparison Group's Mean and Benchmark Scores for Similar Items:
Abbreviations:
ADS-B: Automatic Dependent Surveillance-Broadcast:
ATC: air traffic control:
ATO: Air Traffic Organization:
ATOP: Advanced Technologies and Oceanic Procedures:
CPDLC: Controller-Pilot Data Link Communications:
DOD: Department of Defense:
ECG: En Route Communications Gateway:
ERAM: En Route Automation Modernization System:
FAA: Federal Aviation Administration:
FTI: Federal Telecommunications Infrastructure:
GPS: Global Positioning System:
JPDO: Joint Planning and Development Office:
LAAS: Local Area Augmentation System:
NAS: National Airspace System:
NEXCOM: Next Generation Air/Ground Communications:
STARS: Standard Terminal Automation Replacement System:
SWIM: System Wide Information Management System:
TAMR: Terminal Automation Modernization Replacement:
WAAS: Wide Area Augmentation System:
Letter:
October 14, 2005:
The Honorable Tom Davis:
Chairman:
The Honorable Henry A. Waxman:
Ranking Minority Member:
Committee on Government Reform:
House of Representatives:
The Honorable Don Young:
Chairman:
The Honorable James L. Oberstar:
Ranking Democratic Member:
Committee on Transportation and Infrastructure:
House of Representatives:
The Honorable John L. Mica:
Chairman:
The Honorable Jerry F. Costello"
Ranking Democratic Member:
Committee on Transportation and Infrastructure:
House of Representatives:
In response to your request, this report discusses the status of
national airspace modernization and the challenges that the Federal
Aviation Administration (FAA) faces in managing its infrastructure,
human capital, and financial resources. The report contains
recommendations to the Secretary of Transportation to ensure that FAA
(1) follows through with its efforts to improve workforce culture; (2)
balances current and long-term investment priorities; and (3) in the
near term, fully uses all existing flexibilities to reduce costs and
manage revenues, and, in the longer term, determines whether a business
case exists to pursue more extensive changes, such as those requiring
legislation.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution of it until 30
days from the date of this letter. At that time, we will send copies of
this report to interested congressional committees and the Secretary of
Transportation. We will also make copies available to others upon
request. In addition, this report will be available at no charge on the
GAO Web site at [Hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please call
me at (202) 512-2834 or [Hyperlink, dillinghamg@gao.gov]. Contact
points for our Offices of Congressional Relations and Public Affairs
may be found on the last page of this report. Key contributors to this
report are Tamara Dorland, Seth Dykes, Bess Eisenstadt, Brandon Haller,
Maren McAvoy, Edmond Menoche, Beverly Norwood, and Mark Ramage.
Signed by:
Gerald L. Dillingham:
Director, Physical Infrastructure Issues:
[End of section]
Executive Summary:
Purpose:
Since 1981, the Federal Aviation Administration (FAA) has been
conducting a program to modernize the National Airspace System (NAS) at
a cost of $43.5 billion, to date. In 2003, Congress passed legislation
to create the Next Generation Air Transportation System Joint Planning
and Development Office (JPDO) to transform the NAS to meet the
potential air travel demands of 2025. The NAS's infrastructure includes
the air traffic control (ATC) system, which relies on an extensive
array of information technology systems, including radars, automated
data processing, navigation and communications equipment, and ATC
facilities. The NAS's infrastructure also includes over 215,000
commercial and recreational aircraft as well as more than 19,000
airports. The aviation industry is critical to the nation's economic
health, contributing about 9 percent to the gross domestic product.
However, the ability of the NAS to accommodate increasing volumes of
air traffic is limited, in part, to airport capacity, as well as the
efficiency with which aircraft utilize the finite amount of airspace
available in the vicinity of airports and at cruising altitudes. The
JPDO is beginning to plan a multiagency effort to create the Next
Generation Air Transportation System (NGATS), intended to triple the
capacity of the current NAS. The NAS's human capital includes FAA's
50,000 employees--the air traffic controllers who guide aircraft as
they take off, land, and fly between airports--and others who certify
the safety of aircraft and equipment, manage ATC modernization
projects, maintain NAS systems, and provide support services. Finally,
the NAS's financial resources are vitally important to ensure that it
continues to meet the nation's mobility needs. From fiscal years 2000
through 2004, FAA's annual budget increased from $10.9 billion to
approximately $14 billion; however, in fiscal year 2005, FAA received
substantially less in capital funding than in prior years. FAA
anticipates lean capital budgets for the immediate future, which
enhances the need for FAA to manage its resources effectively.
In 1995, GAO designated the ATC modernization program--a major
component of NAS modernization--as a high-risk information technology
initiative because of its size, complexity, cost, and problem-plagued
past.[Footnote 1] FAA also faces challenges in expanding NAS capacity
to accommodate future increases in demand for air travel as well as in
hiring and training thousands of air traffic controllers to replace
those expected to retire in the next decade. Additionally, FAA has
attempted to change its workforce culture to one that stresses mission
focus, coordination, accountability, and adaptability, but the agency
has not provided the sustained leadership needed for lasting cultural
change.[Footnote 2]
Concerned about the challenges facing ATC modernization, the Chairman
and Ranking Minority Member, House Committee on Government Reform, and
the Chairmen and Ranking Democratic Members of the House Committee on
Transportation and Infrastructure and its Subcommittee on Aviation
asked GAO to provide an overall assessment of the status of NAS
modernization. This report addresses the status of ATC modernization as
well as other NAS components, by answering the following research
question: What challenges does FAA face in managing three distinct
areas: (1) infrastructure, (2) human capital, and (3) financial
resources? This report is based on FAA documents and briefings as well
as reviews and summaries of related GAO work. GAO also convened an
international panel of experts to discuss the challenges of FAA's NAS
modernization efforts and the prospects that the Air Traffic
Organization (ATO)--a recently created subunit of FAA--holds for
improving modernization management. In addition, GAO interviewed key
stakeholders representing labor, commercial airlines, general aviation,
and the Department of:
Defense (DOD). This report discusses all aspects of the NAS except
airline employees and FAA's aircraft and equipment safety assurance
operations.[Footnote 3] (See ch. 1 for additional information on GAO's
objective, scope, and methodology).
Background:
GAO has issued numerous reports on FAA's difficulty in meeting cost,
schedule, and/or performance targets, as well as on FAA's management of
information technology, which is at the heart of many modern ATC
systems. GAO has also reported on FAA's efforts to expand NAS capacity
and reduce delays, and on FAA's human capital challenges, such as the
need to hire and train thousands of air traffic controllers in the
coming decade to replace those becoming eligible to retire. Finally,
GAO has pointed out that FAA's acquisitions were impaired because
employees acted in ways that did not reflect a strong commitment to
mission focus, accountability, coordination, and adaptability.[Footnote
4]
Congress and others have taken steps to address these issues. For
example, Congress exempted FAA from federal personnel and acquisition
regulations in 1995, after the 1993 National Performance Review found,
and FAA asserted, that these regulations impeded its ability to
properly manage the ATC modernization program. In 1997, the
congressionally appointed National Civil Aviation Review Commission
recommended that FAA's management become more performance-based and
that changes be made in how FAA is funded. In December 2000, President
Clinton signed an executive order, and Congress passed, supporting
legislation that, together, provided FAA with the authority to create
the performance-based ATO to control and improve FAA's management of
the modernization effort. In February 2004, FAA reorganized,
transferring 36,000 employees, most of whom worked work in air traffic
services and research and acquisitions, to the ATO.
In 2003, Congress authorized creation of a Joint Planning and
Development Office (JPDO) to create and carry out an integrated plan to
develop the next generation air transportation system, capable of
meeting potential air traffic demand by 2025. While NAS modernization
has previously been mainly under the purview of FAA, with a 10-year
planning horizon, the JPDO is charged with coordinating research
activities of multiple agencies, including FAA, to coordinate a 20-year
research and development program.
Results in Brief:
As GAO reported, FAA has taken many positive steps to improve the
management of its infrastructure, but it still faces significant
challenges. FAA met its acquisition performance goal for 2004, which
indicates a good start in addressing the factors that contributed to
past system acquisition problems. However, FAA will need to continue
addressing four key factors that, as GAO has reported, have
historically contributed individually or collectively to acquisitions
missing their original cost, schedule, and performance targets: (1)
acquisitions receiving less funding than called for in agency planning
documents, (2) adding requirements and/or unplanned work, (3)
underestimating the complexity of software development, and (4) not
sufficiently involving stakeholders throughout system
development.[Footnote 5] To address these and other issues that GAO has
identified, FAA has taken some actions, but in some cases, needs to do
more. For example, to improve its acquisition of software-intensive ATC
systems, FAA developed a process improvement model, but did not mandate
the model's use throughout the organization. In response to GAO's
recommendation that it do so, FAA has begun developing a requirement
that projects have process improvement activities in place before
seeking approval from the FAA investment review board. Moreover, GAO
has reported that FAA's acquisition management system does not ensure
the use of a knowledge-based approach found in the best practices for
managing commercial product developments. Commercial best practices
call for specific knowledge to be captured and used by corporate-level
decision makers to determine whether an acquisition has reached a level
of development (product maturity) sufficient to move forward in the
acquisition process. Additionally, while FAA has begun to develop its
NAS enterprise architecture--a blueprint to guide and constrain its
information technology investments--the agency needs to do more to
achieve the architecture's full benefits. Another challenge is
protecting information technology systems--an issue that has been on
GAO's high-risk list since 1997. GAO recently reported that FAA faces
critical needs in protecting its information technology-intensive ATC
systems from inadvertent or intentional disruption.[Footnote 6]
Finally, FAA will be challenged to expand NAS capacity to accommodate
anticipated increases in air travel. To this end, FAA is supporting the
development of new runways and airports, and is redesigning flight
patterns to make more efficient use of airspace as aircraft take off,
cruise, and land.
FAA's major human capital challenges include hiring and training
thousands of air traffic controllers to replace those expected to
retire, and transforming the agency's organizational culture. First,
FAA will need to hire and train thousands of air traffic controllers in
the next decade to replace those who were hired after the air traffic
controllers' strike in 1981. As GAO recommended in 2002,[Footnote 7]
FAA developed a comprehensive plan for this hiring and training effort.
The plan describes expected recruitment sources, planned revisions to
ATC facility staffing standards, a screening process to eliminate
potentially unsuccessful candidates, and proposed upgrades to
controller training facilities. To mitigate the costs of the controller
training and hiring program, FAA's plan includes a number of steps that
the agency expects will reduce controller staffing requirements by 10
percent. However, FAA has not calculated the savings that each step
will achieve or the total cost of hiring and training. As a result, FAA
cannot estimate the impact of the hiring and training effort on future
budgets. As of June 2005, FAA was studying a proposal that could save
costs by allowing potential controllers, after graduating from aviation-
related college programs, to bypass FAA's controller training academy
and immediately start their on-the-job training at an ATC facility.
Second, FAA's workforce culture remains a concern. Responding to GAO's
1996 finding that FAA's workforce culture impaired its acquisitions,
the agency developed a strategy for cultural change, but did not
sustain its efforts. FAA is now developing baseline data for measuring
the progress of its cultural transformation. FAA's recent action is a
good first step, but continued management focus and commitment will be
needed for success in this area, since, as we have reported, at least 5
years is needed to achieve cultural change.[Footnote 8]
In managing its financial resources, FAA faces the dual challenges of
rising costs and declining revenues that it projects will produce an
$8.2 billion gap between expected budget targets and expected spending
requirements through fiscal year 2009.[Footnote 9] FAA is striving to
live within its reduced means by focusing on cost control and
prioritizing projects. However, these actions will not come close to
eliminating the gap, and some actions, such as cutting funding for new
technology, come at the expense of future goals. For example, FAA
eliminated $1.4 billion planned for early research, which included
research on two systems that FAA had described as "cornerstones" of the
NAS of the future. These technologies could have supported the JPDO's
vision for the next generation air transportation system. As the
expiration for the Aviation and Airway Trust Fund (Trust Fund) and
FAA's reauthorization--both scheduled for 2007--approach, FAA
officials, aviation experts, and stakeholders are discussing how to
better align FAA's revenue structure with actual costs and changes in
the aviation industry. Over half of the Trust Fund's income now comes
from a ticket tax, which some stakeholders believe is not linked to
FAA's costs. A congressionally appointed commission made a similar
recommendation in 1997, that the FAA's revenue stream become more cost
based. Some experts suggested that FAA work toward changes that would
be possible within the existing federal structure, such as improving
its process for prioritizing programs or exploring further options for
contracting out services. Others maintained that the ATO's relationship
with Congress must change to allow the ATO to manage its own finances.
GAO has reported that to address the challenges of the 21ST Century,
the nation needs to fundamentally reexamine such governance issues. In
GAO's view, FAA could adopt a two-staged approach to address its
financial management challenges: In the near term, make changes that
are possible within the federal structure and establish a record of
sound financial management. Over the longer term, determine whether
sufficient evidence exists to develop a business case for more
fundamental changes that could permit greater financial management
flexibility.
Principal Findings:
FAA Has Made Changes to Improve Infrastructure Management, but
Acquisition, Security, and Capacity Challenges Remain:
GAO's recent reports on FAA's management of its infrastructure indicate
that FAA has responded to several past recommendations, but needs to do
more work to address continuing challenges. For example, FAA met its
acquisition performance goal for fiscal year 2004--to meet 80 percent
of designated milestones and maintain 80 percent of critical program
costs within 10 percent of the budget, as published in FAA's Capital
Investment Plan. This represents a good start. However, because the
goal uses cost or schedule milestones that are set for each fiscal
year, it needs to be viewed in the context of FAA's long-term
acquisition performance. For example, during 2005, FAA plans to make
changes to three major system acquisitions, effectively resetting the
program milestones and cost targets against which it measures annual
performance. Hence, this performance goal does not provide a consistent
benchmark--such as the cost and schedule targets set at an
acquisition's inception--for assessing progress over time. These annual
performance targets should continue to be viewed in the broader context
of acquisitions' original and revised baselines, and the variance
reports provided to the FAA administrator and to Congress.
FAA still faces challenges in addressing four factors that GAO found to
be the cause of acquisitions missing their original cost, schedule,
and/or performance targets. These factors---funding shortfalls,
requirements growth and/or unplanned work, insufficient stakeholder
involvement, and underestimation of software complexity--individually
or collectively contributed to these problems and often interacted. For
example, when developing a satellite navigation system, FAA
underestimated the complexity of the system's software as it compressed
the development schedule. This underestimate then contributed to
unplanned work, cost increases, and schedule delays.
To address these four factors and improve its general management of
system acquisitions, FAA has taken several steps, but in a number of
cases, it needs to do more. For example, FAA has obtained substantial
benefits by developing and using a process improvement model in a
number of software-intensive system acquisitions. FAA has begun
developing a requirement that projects have process improvement
activities in place before seeking approval from the FAA investment
review board, as GAO recommended.[Footnote 10] Also in response to a
GAO recommendation, FAA officials reported that they have improved the
agency's investment portfolio management through semiannual reviews of
in-service systems.[Footnote 11] FAA also changed its format for
justifying major technology investments to a format prescribed by the
Office of Management and Budget. However, FAA's acquisition management
system still lacks a knowledge-based approach consistent with
commercial best practices. Knowledge-based approaches ensure that, as
acquisitions progress, officials obtain knowledge at specific junctures
of an acquisition cycle, or knowledge points, thereby decreasing the
risk of cost growth and schedule delays. Finally, although FAA has
begun to develop a NAS enterprise architecture, it has not completed
the architecture that it needs to manage its information technology
investments.[Footnote 12] GAO's experience with federal agencies has
shown that making information technology investments without defining
these investments in the context of an architecture often results in
duplication, poor integration, and unnecessary costs.
GAO's most recent report on FAA's efforts to provide security for its
information technology-intensive ATC systems notes that FAA needs to
take steps to do more to protect these systems from inadvertent or
intentional disruption.[Footnote 13] While FAA has established an
information security program, the agency has not fully implemented it.
As a result, GAO found outdated security plans, a lack of security
awareness training, limited incident detection capabilities, and
shortcomings in service continuity plans. GAO also found weaknesses
that threaten the integrity, confidentiality, and availability of these
systems, including weaknesses in controls over who can obtain access.
Accordingly, GAO recommended several actions intended to improve FAA's
information security program. FAA agreed to consider our
recommendations, but expressed concern that we had overstated the
system's vulnerability to disruption. We acknowledged that FAA may have
other protections built into its overall system architecture. However,
because these systems are interconnected, the weaknesses we identified
in the systems that we reviewed may increase the risk to other systems.
To accommodate an expected 25 percent increase in air travel, many
airports are building new runways. FAA is leveraging the benefits of
new and existing runways by redesigning flight procedures to allow
properly equipped aircraft to take off, cruise, and land with reduced
separation while maintaining safety.
Human Capital Management Challenges Include Hiring Air Traffic
Controllers and Transforming FAA's Organizational Culture:
During the next decade, FAA will need to replace thousands of air
traffic controllers who will become eligible for retirement. During the
1980s and early 1990s, FAA hired large numbers of controllers to
replace those who were fired when they went on strike in 1981. As a
result, most of the current workforce will become eligible for
retirement over the next 10 years. In December 2004, responding to
GAO's recommendation,[Footnote 14] FAA issued a hiring and training
plan. To mitigate the cost of the plan, FAA plans to rely on part-time
employees and job-sharing arrangements. However, the plan does not
disclose the cost of hiring and training controllers, and agency
officials could not provide any analyses to support the plan's
estimates of cost savings. Hence, the impact of this hiring and
training program on future budgets is unclear. If FAA experiences
shortages in controller staffing, the agency plans to maintain safety
by slowing the traffic flow, which could result in delays. In June
2005, FAA began considering whether prospective controllers who
graduate from aviation-related programs in certain colleges could
bypass the currently required academy training and instead proceed
directly to an ATC facility to begin on-the-job training. Such a change
in the training program holds potential for cost savings and is
endorsed by union officials and by one of the colleges that prepares
graduates for careers in aviation.
FAA has implemented a number of human capital reforms in response to an
exemption from federal personnel management regulations. FAA replaced
the traditional civil service pay system with a series of pay bands and
specific job categories that have minimum and maximum pay rates
spanning two to five pay bands. FAA also established its own hiring
program, a flexible system for adjusting the number of executive-level
positions, and a new performance management system.
FAA is taking steps to create a results-oriented culture, addressing a
factor that we identified as an impediment to ATC modernization in
1996. Recognizing the importance of organizational culture in achieving
results, FAA's human capital plan includes a goal to create a results-
based performance culture. Furthermore, FAA is using the results of its
most recent employee attitude survey as a baseline to assess the
organization's progress in adopting five core values that the
management team selected. The core values are (1) integrity and
honesty, (2) accountability and responsibility, (3) commitment to
excellence, (4) commitment to people, and (5) fiscal responsibility.
FAA's actions are good first steps, but continuous management attention
over the next several years will be crucial to achieving the cultural
change that FAA is seeking. GAO's work has highlighted the importance
of recognizing organizational culture as a step in implementing mergers
and transformations and has found that achieving cultural change
typically takes 5 to 7 years years or longer.[Footnote 15] In the past,
FAA's efforts at cultural change lacked follow-through and continuity.
While there was some improvement in securing a more results-oriented
culture, as measured by employee responses to surveys in 1997 and 2000,
progress leveled off between the 2000 and the 2003 surveys.
Rising Costs and Declining Revenues Pose Financial Management
Challenges:
FAA projects that rising costs and reduced budgets will create a
cumulative gap of $8.2 billion between expected budget targets and
expected spending requirements through fiscal year 2009. FAA's budget
targets for capital for each year through fiscal year 2009 will be 17
percent less, on average, than the annual appropriations it received in
fiscal years 2002 through 2004. Additionally, recent trends in the
Trust Fund, which provides most of FAA's funding, have raised concerns.
Since 2002, FAA has spent more than the Trust Fund has taken in, and
the Trust Fund's uncommitted balance has declined by nearly 50 percent.
Although revenues increased in 2004, FAA's expenditures increased more.
FAA is striving to live within its reduced means by cutting programs
and focusing on cost control. For example, for fiscal year 2005, after
an intensive review of its capital investment portfolio, FAA suspended
the acquisition of a digital communications data link and a precision
landing system augmented by satellites, and terminated a major
component of a new digital communications system. Additionally, FAA has
begun to implement a new cost accounting system, as GAO has long
advocated. GAO had previously reported that FAA lacked the cost
information necessary for decision making and for adequate accounts of
its activities and major projects, such as the air traffic control
modernization program. FAA also expects to save about $450 million over
5 years through cost-reduction measures such as contracting out its
flight service stations. However, FAA is not likely to meet its
financial challenges through savings, given other pressing needs. FAA
has had to significantly cut capital funding aimed at providing future
benefits in order to remain within expected appropriations, while
providing $4.2 billion for 16 major system acquisitions through 2009.
For example, in its 2005 through 2009 capital investment plan, FAA
eliminated the $1.4 billion that it had set aside for what it calls the
"architecture segment," which would have supported initial research and
development of new technologies, prior to initiating formal acquisition
programs. This reduction comes at an inopportune time, as the JPDO
begins its efforts to coordinate the research of FAA and other federal
agencies to transform the NAS to meet potential capacity needs in 2025.
FAA also cut nearly $790 million from its planned investments for
facilities. While FAA has replaced many ATC facilities in the last 5
years, the funding reduction could delay progress on ATC facilities
that are scheduled for repair or replacement in the future.
In anticipation of the Trust Fund's expiration and FAA's
reauthorization, both scheduled for 2007, FAA officials, aviation
experts, and stakeholders are debating the appropriateness of the
current revenue structure and are reiterating some of the
recommendations made in the past, such as those that the National Civil
Aviation Review Commission made in 1997. Many stakeholders and aviation
experts, as well as Department of Transportation officials, have
suggested in various forums that FAA's funding mechanism needs to be
changed to one that is more closely aligned with FAA's costs. FAA's
2004 performance report notes that the current revenue structure is
heavily reliant on the number of airline passengers in the NAS, while
FAA's workload and costs are driven by the number of aircraft operating
in the NAS. Some experts stated that to effectively manage its
acquisitions, FAA needs multiyear funding, financed by debt if
necessary, as the commission recommended. Others suggested that FAA
take steps in the near term to reduce costs within the existing
structure of congressional oversight and financial control, such as
exploring additional opportunities to contract out night-time ATC
services. Others went so far as to state that FAA cannot fully address
legacy modernization problems without complete managerial and budgetary
independence. GAO has reported that to address the challenges of the
21ST Century, the nation needs to fundamentally reexamine what the
government should do, how it should do business, and how it should be
financed. GAO believes that in the near term, FAA must pursue currently
available options, such as exploring additional opportunities for
contracting out services and pursuing other cost-saving measures, and
demonstrate improvement in its ability to manage its costs. After fully
exploiting these options, and establishing a record of improved
financial management, FAA could consider longer term changes by
reexamining fundamental issues such as the appropriate government role
in aviation and the funding mechanism that supports the ATC system.
Ultimately, Congress and the President will decide these issues.
Recommendations for Executive Action:
GAO is recommending that FAA take the following four actions: (1)
estimate the cost of its controller hiring and training plan and
provide for these costs in future budget requests; (2) provide the long-
term commitment to transforming the culture to become more results
oriented so that the change takes root; (3) balance current and long-
term investment priorities; and (4) use all available management tools
and, after establishing a record of improved financial management,
explore more fundamental changes that could provide greater financial
management flexibility.
Agency Comments and GAO Evaluation:
GAO provided a draft of this report to the Department of Transportation
for its review and comment. In response, ATO managers; FAA's Chief
Information Officer; and the Acting Director, Office of Financial
Controls, provided oral comments. ATO managers noted that GAO's
recommendations on balancing current and long-term investment
priorities and using all available financial management tools may not
be necessary because FAA is taking actions consistent with these
recommendations. According to FAA, the agency's balancing of current
and long-term investment priorities will be reflected in its fiscal
year 2007 budget request, which was being formulated in parallel with
GAO's work. GAO is retaining this recommendation because it pertains
not only to fiscal year 2007, but to future years as well. FAA also
commented that it is using all available management tools, including
examining alternative funding mechanisms. GAO believes that FAA needs
to pursue additional cost saving tools, such as exploring further
opportunities to contract out services; consolidate major facilities;
and accelerate decommissioning of ground-based navigation aids, as GAO
has noted in this report. Therefore, GAO is retaining the
recommendation to this effect. FAA did not comment on the other
recommendations. FAA provided technical comments and clarifications
throughout the report, which GAO incorporated as appropriate.
[End of section]
Chapter 1 Introduction:
FAA Manages the National Airspace System, a Complex Collection of
Systems and Infrastructure:
The Federal Aviation Administration's (FAA) mission is to provide the
safest, most efficient aerospace system in the world. This system,
known as the National Airspace System (NAS), consists of (1)
infrastructure (systems, procedures, facilities, airports and aircraft,
communications equipment, satellite navigation aids, and radars); and
(2) human capital (the people who make the NAS work-- commercial,
military, and general aviation pilots and airline dispatchers, and FAA
employees, including equipment maintenance technicians and air traffic
controllers who work in airport towers, and terminal area, en route,
and oceanic air traffic control (ATC) centers. (See table 1.)
Table 1: NAS Overview:
Infrastructure: Airports;
Approximate number: 19,500.
Infrastructure: Aircraft (large, regional, and general aviation);
Approximate number: 215,000.
Infrastructure: En route control centers;
Approximate number: 21.
Infrastructure: Oceanic control centers;
Approximate number: 3.
Infrastructure: Terminal radar approach facilities;
Approximate number: 162.
Infrastructure: Ground-based navigational aids;
Approximate number: 2,200[A].
Infrastructure: Human capital.
Infrastructure: FAA's Air Traffic Controllers;
Approximate number: 15,000.
Infrastructure: Other FAA employees;
Approximate number: 35,000.
Infrastructure: Pilots;
Approximate number: 600,000.
Source: FAA.
[A] Includes approximately 950 nondirectional beacons owned by local
governments and other entities.
[End of table]
The NAS covers every aspect of aviation in the United States, beginning
with the aircraft itself. FAA certifies aircraft as safe to operate in
the NAS, from the earliest stages of design to 30 years after entry
into service. FAA also certifies the NAS's practices, personnel, and
spare parts. Additionally, FAA sets standards for the construction and
operation of the public and private airports located throughout the
NAS.
On a larger scale, the NAS is a highly technical system and includes
some 36,000 pieces of equipment operating in hundreds of locations
throughout the United States. This equipment can range from a single
navigation beacon in Brooke, Virginia, to an air route traffic control
center, such as that in Oberlin, Ohio, that handles en route traffic.
The mission of this highly integrated system is to support all phases
of flight for aircraft in the United States, from initial flight
planning to successful takeoff, en route operations, and landing. (See
fig. 1.)
Figure 1: Phases of Flight:
[See PDF for image]
[End of figure]
Definitions of phases of flight:
Preflight: The period before the aircraft starts to move. It includes
an extended strategic planning period that precedes flights. During
this period, air traffic controllers compare the amount of traffic in
the NAS with available capacity and develop initial strategies to
mitigate any imbalances.
Airport surface: The periods from the terminal gate to takeoff and from
touchdown to the terminal gate at the destination. Air traffic
controllers in airport towers control aircraft during this phase.
Terminal departure and terminal arrival: The periods immediately
following takeoff, when the aircraft initially climbs from the
origination airport, and toward the end of a flight, when the aircraft
descends to the destination airport. Air traffic controllers in airport
towers control aircraft during the initial moments after takeoff and
prior to landing, when the aircraft is within 5 nautical miles of the
airport and up to 3,000 feet above the airport. Air traffic controllers
at terminal approach control facilities, called TRACONS, control
aircraft from the point where the airport tower's control ends to
approximately 50 miles from the airport.
En route: The phase that occurs between terminal areas, including the
climb, cruise, and decent phases of the flight. Air traffic controllers
at air route traffic control centers control aircraft during the en
route phase of flight, and in some areas of the country, also control
aircraft during the arrival and departure phases.
Oceanic: Analogous to the en route phase, except the aircraft is
operating in oceanic air space, where there are fewer communication,
navigation, and surveillance capabilities than are available over land.
The ATC system, which is a principal component of the NAS, comprises a
vast network of radars; automated data processing, navigation and
communication equipment; and air traffic control facilities. About
15,000 air traffic controllers control aircraft in the system and
provide critical data throughout every stage. They work in the 162
terminal radar control facilities, the 21 air route traffic control
centers that manage aircraft in the en route environment, and the 3
oceanic control centers. All of these control centers are linked and
managed through the Air Traffic Control System Command Center in
Herndon, Virginia. The NAS also includes thousands of navigational aids
throughout the United States that provide critical location information
to pilots at all stages of their operations.[Footnote 16]
The nation's 19,500 airports are key components of the NAS, as they
serve as gateways to air travel. Several of the nation's largest
airports, such as Chicago's O'Hare, New York's La Guardia, and
Atlanta's Hartsfield, are at capacity and need immediate improvements.
Because the NAS functions as an interdependent network, delays at these
airports can quickly create a "ripple" effect of delays that affects
many airports across the country. For example, flights scheduled to
take off from these airports may find themselves being held at the
departing airport due to weather or limited airspace. Similarly, an
aircraft late in leaving the airport where delays are occurring may be
late in arriving at its destination, thus delaying the departure time
for that aircraft's next flight.
The current NAS continues to reflect its origins as a system in which
aircraft flew directly between ground-based navigational aids along FAA-
defined routes. The existing airspace structure and boundary
restrictions strongly reflect the constraints that communication and
computer systems imposed as the NAS developed over the past 80 years.
The advanced information technology available today, such as satellite
navigation systems onboard aircraft, digital communication, and
computer decision-support systems, holds potential for increasing
airspace capacity, improving aviation safety, and providing
efficiencies to aircraft operators and service providers.[Footnote 17]
FAA is working to harness this new technology by transitioning the NAS
from a ground-based system to a hybrid that uses both ground-based and
airborne systems, thereby allowing pilots to be the primary decision
makers as they navigate their aircraft, while controllers intervene
only by exception. Making this transition requires that procedures,
roles, responsibilities, equipment, and automation functions evolve
into a structure that gives users greater flexibility in planning and
conducting flights.
Such an evolution is a key component of the Joint Planning and
Development Office's (JPDO) vision for the Next Generation Air
Transportation System. In 2003, Congress directed the Secretary of
Transportation to establish the JPDO to create, among other things, an
integrated plan to ensure that the future air transportation system
meets safety, security, mobility, efficiency, and capacity needs of the
year 2025.[Footnote 18] The JPDO is expected to operate in conjunction
with relevant programs in the National Aeronautics and Space
Administration; the Departments of Defense, Commerce, and Homeland
Security; and other agencies as needed. The JPDO published a report in
December 2004 that describes the need for change in the NAS over the
next 20 years.[Footnote 19]
FAA receives most of its funding from the Airport and Airway Trust Fund
(Trust Fund), which was established by the Airport and Airway Revenue
Act of 1970[Footnote 20] to help fund the development of a nationwide
airport and airway system as well as investments in air traffic control
facilities. The Trust Fund receives most of its income from a number of
taxes paid by passengers or airlines. (See fig. 2.) It funds the
Airport Improvement Program, which provides grants that airports use in
combination with other funding sources to finance construction and
safety projects; capital expenditures; and the Research, Engineering,
and Development account. (See fig. 3.) The General Fund provided 40
percent of FAA's operating funds and 22 percent of FAA's total budget
in fiscal year 2004.
Figure 2: Trust Fund Revenue Sources, Fiscal Year 2004:
[See PDF for image]
Note: Transportation of persons includes domestic passenger ticket
taxes, domestic flight segment fees, rural airports ticket taxes, and
frequent flyer taxes. In the past, FAA had reported estimates of each
of these taxes based on an internal allocation formula. Under that
formula, passenger ticket taxes contributed about half of the Trust
Fund's revenues. The Trust Fund also receives tax revenue from the sale
of noncommercial aviation gasoline. In fiscal year 2004, this tax
contributed 0.3 percent of Trust Fund revenues.
[End of figure]
Figure 3: Trust Fund Expenditures by Category, Fiscal Year 2004:
[See PDF for image]
[End of figure]
To organize its efforts to manage the NAS, FAA has developed a variety
of plans, which it links to the President's Management Agenda.[Footnote
21] (See fig. 4.) FAA's strategic plan, titled the Flight Plan,
provides a 5-year view of the agency's goals and performance measures.
Each of the agency's major organizational units, called lines of
business, develops a plan that supports the Flight Plan. The
Operational Evolution Plan monitors how NAS capacity will change over a
rolling 10-year planning horizon depending on numerous variables, such
as the demand for air travel, the completion of new runways; and the
availability of new ATC systems. Ultimately, FAA plans to link the
Operational Evolution Plan and the 20-year plan of the JPDO.
Figure 4: Relationship of FAA's Plans to Department-Level and Executive
Branch-Level Plans:
[See PDF for image]
[End of figure]
FAA Envisions a More Flexible and Efficient NAS:
Satellite-based ATC systems and new digital communications systems are
key elements of FAA's vision for NAS modernization. Under this vision,
pilots would use performance-based navigation, which makes optimum use
of an aircraft's capabilities, combined with new satellite and ground-
based navigation systems and digital communications systems to use the
NAS more efficiently. Properly equipped aircraft would navigate using
satellite signals from the global positioning system (GPS). Because GPS
alone does not produce a signal that matches the performance of
existing ground-based navigation aids, FAA has deployed a Wide Area
Augmentation System (WAAS), consisting of many widely spaced wide area
reference stations, that provide information necessary to transmit the
WAAS signal to users. (See fig. 5.) GPS and WAAS provide precise
navigation and landing guidance at all airports, including the
thousands that have no ground-based landing capacity. Consequently,
WAAS significantly enhances navigation capabilities at these U.S.
airports.
Figure 5: Wide Area Augmentation System:
[See PDF for image]
[End of figure]
FAA is developing a similar system, called the Local Area Augmentation
System (LAAS). (See fig. 6.) LAAS would also use GPS signals to provide
more precise landing guidance at airports, but coverage would be
airport-specific rather than nationwide, like WAAS's coverage. LAAS, as
envisioned, would exceed the capabilities of current instrument landing
systems and increase NAS capacity by providing more precise approach
paths and reducing required separation between incoming aircraft in all
weather conditions, as well as shorter and more flexible curved
approaches to airports. WAAS and LAAS could eventually allow FAA to
eliminate about half of the current ground-based system of navigational
aids and instrument landing systems.
Figure 6: Local Area Augmentation System:
[See PDF for image]
[End of figure]
However, WAAS and LAAS cannot fully replace ground-based navigational
technologies because GPS signals are susceptible to disruptions from
atmospheric effects, signal blockage from buildings, and interference
from communications equipment, as well as from deliberate acts. Without
a backup system, such as that provided by ground-based navigational
aids, commercial operations, which are essential to the nation's
economic vitality, could be interrupted. Therefore, FAA and the
Department of Defense (DOD) plan to maintain a number of ground-based
navigational aids and instrument landing systems as a backup system.
These aids and systems would also serve general aviation aircraft that
are not equipped with satellite navigation systems. The backup system
could further aid in reestablishing surveillance of an aircraft that
loses satellite contact.
FAA's vision for NAS modernization also includes digital communications
systems, such as that envisioned under the Controller-Pilot Data Link
Communications (CPDLC) program. CPDLC would improve the efficiency of
routine communications by sending structured sets of phrases between
controllers and pilots in suitably equipped aircraft to eliminate the
need for voice communications, thereby reducing air traffic controller
workload and allowing better use of voice frequencies. The Next
Generation Air-to-Ground Communication System (NEXCOM) would replace
existing analog controller-pilot communication systems with a new state-
of-the-art digital system. This would improve ATC communications
capabilities and security by requiring a digital form of
authentication, thus preventing the possibility of "phantom
controllers" gaining access to the communications system.
Collecting weather data and forecasting weather conditions are joint
efforts of the Department of Commerce, FAA, and DOD. Weather
information is critical for NAS operators--those who control aircraft
and provide flight service information to pilots, as well as NAS users-
-the pilots, airline dispatchers, and airport operators, among others,
who use it in every facet of their operations. Weather information
systems range from the automated weather data systems at airports to
sophisticated forecasts of en route conditions. For example, the
Alaskan Flight Services Automation System will integrate real-time
weather graphics with weather and aeronautical information.[Footnote
22] The overall network of weather data collection sites, computer
systems, and communications covers the entire United States.
Numerous Reviews of FAA's Modernization Efforts Have Identified
Problems and Proposed Solutions:
We have reported on the cost, schedule, and/or performance problems
that FAA has encountered in NAS modernization and Congress has passed
legislation to address these problems. We have issued numerous reports
and made over 30 recommendations to improve FAA's ATC modernization
efforts. These reports focused on many aspects of the NAS, including:
* the management of modernization projects, including the use of
project reviews, milestones, and baselines, and the development of cost-
accounting information;
* the management of the information technology that is at the heart of
many modern ATC systems, many of which could directly or indirectly
increase NAS capacity;
* the challenges FAA faces in increasing NAS capacity and reducing
delays;
* human capital challenges, such as the need to hire thousands of air
traffic controllers in the coming decade to replace those becoming
eligible to retire; and:
* a workforce culture that lacked the mission focus, accountability,
coordination, and adaptability needed for FAA to meet its cost,
schedule, and performance targets for system acquisitions.
FAA has implemented many of these recommendations to varying degrees.
In September 1993, the National Performance Review concluded that,
among other things, federal personnel rules prevented FAA from reacting
quickly to the agency's needs for attracting and hiring staff.
Subsequently, Congress directed the Secretary of Transportation to
study the management, regulatory, and legislative reforms that would
enable FAA to provide better ATC services. The Secretary of
Transportation argued strongly that the agency needed flexibility to
pay people what the job required and to move them where the work was
needed, without the restrictions of standard government personnel
procedures. FAA also maintained that it needed flexibility to deviate
from the Federal Acquisition Regulations to allow it to better manage
its ATC modernization program. Congress exempted FAA from most
personnel and procurement regulations in legislation passed in late
1995.[Footnote 23]
In 1994, to provide more stability in FAA leadership, Congress
established a 5-year term for the administrator. The first
administrator to complete this 5-year term served from 1997 to 2002. In
contrast, during the first 10 years of the ATC modernization effort,
FAA had seven administrators and acting administrators, whose average
tenure was less than 2 years.
In 1996, Congress established the National Civil Aviation Review
Commission to develop, among other things, specific recommendations on
how the administration could reduce costs, raise additional revenue for
the support of agency operations, and accelerate modernization efforts.
In 1997, the commission offered the following recommendations:
* FAA's management must become more performance based,
* FAA must control its operating costs and increase capital
investments,
* airport capital needs must be met,
* FAA's revenue stream must become more cost based, and:
* FAA's budget treatment must change.
In December 2000, President Clinton issued an executive order and
Congress passed supporting legislation, which together gave FAA the
authority to create the performance-based Air Traffic Organization
(ATO) to control and improve FAA's management of the modernization
effort.[Footnote 24] The executive order envisioned that the ATO would
be better able to exercise the procurement and personnel authorities
granted by Congress. The order directed the ATO to incorporate FAA's
Research and Acquisitions and Air Traffic Services organizations--
essentially those that develop and acquire systems, and those that
operate them, respectively. FAA hired a chief operating officer in
August 2003 to head the ATO. In February 2004, FAA reorganized,
transferring 36,000 employees, most of whom worked in air traffic
services and in research and acquisitions, to the ATO. (See fig. 7.)
Figure 7: Prior and Current Structure of Research and Acquisitions, Air
Traffic Services, and Free Flight Organizations:
[See PDF for image]
[End of figure]
Objectives, Scope, and Methodology:
We assessed the status of FAA's efforts to modernize several key
components of the NAS's infrastructure: ATC systems--a major component
of the NAS; information security; and NAS capacity expansion through
airspace redesign and runway construction. We also addressed FAA's
human capital and financial management challenges, including rising
costs and uncertain future revenues. We conducted our work from June
2004 through June 2005, in accordance with generally accepted
government auditing standards.
Our methodology included summarizing recently completed work on all
aspects of NAS modernization, and where necessary, updating that work
and performing new evaluation work. We reviewed FAA reports on its
plans for the NAS, including its Flight Plan, Operational Evolution
Plan, Roadmap for Performance-Based Navigation, and Controller Staffing
Plan, and reports by the Department of Transportation's Office of the
Inspector General. We also reviewed relevant legislation and committee
reports and drew heavily from our completed work on air traffic
congestion, runway construction, acquisitions management, acquisition
of software-intensive ATC systems, information technology investment
management, controller staffing, acquisition workforce culture, and
human capital reforms.
To broaden our perspective on NAS modernization, we assembled an
international panel of experts for a day-long symposium and asked them
to address the following questions:
* What factors have affected the schedule, cost, and performance of
FAA's ATC modernization program, and what steps could the ATO take in
the short term to address these factors?
* How have federal budget constraints affected ATC modernization, and
what steps could the ATO take in the short term to address these
constraints?
* What steps could FAA take in the longer term to improve the
modernization program's chances of success and help the ATO achieve its
mission?
We also interviewed a number of aviation stakeholders including
officials at the Radio Technical Commission for Aeronautics (RTCA),
DOD, the American Association of Airport Executives, the Aircraft Owner
and Pilots Association, FAA's Avionics Systems Branch, the Air
Transport Association, and the National Air Traffic Controllers
Association.
To update previous work and obtain a clearer understanding of FAA's
procedures, we met with FAA's administrator and assistant administrator
for human resources management and obtained information from officials
in FAA's Airports Organization. Within the ATO, we met with the chief
operating officer, the vice president for acquisitions and business
services, the vice president for finance, and the JPDO director and
deputy director.
As part of our effort to evaluate FAA's progress in addressing human
capital management challenges, we analyzed FAA employees' responses to
items on workforce culture issues that FAA included in employee
attitude surveys conducted in 1997, 2000, and 2003. We selected these
items with expert assistance and compared the responses to those for
similar items contained in a research database on workforce culture.
Appendix I contains detailed information on our methodology for
analyzing and comparing survey data.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of Transportation
for its review and comment. In response, ATO managers; FAA's Chief
Information Officer; and the Acting Director, Office of Financial
Controls, provided oral comments. FAA commented that its fiscal year
2007 budget request will reflect its balancing of current and future
funding priorities, and, therefore, our recommendation to this effect
may be unnecessary. We are retaining this recommendation because it
applies not only to fiscal year 2007, but to future years as well.
Likewise, FAA managers commented that the agency is already utilizing
all available financial management tools, including looking at
alternative financing mechanisms. Our draft report discussed FAA's
consideration of alternative financing mechanisms at length. We
continue to believe that FAA should explore further opportunities to
contract out its services; consolidate major facilities; and accelerate
decommissioning of ground-based navigation aids, as we have noted in
this report. Therefore, we are also retaining this recommendation. FAA
did not comment on the remaining recommendations.
FAA also provided a number of technical comments and clarifications
throughout the report, which we included as appropriate.
[End of section]
Chapter 2: FAA Has Made Changes to Improve Infrastructure Management,
but Acquisition, Security, and Capacity Challenges Remain:
We recently reported on FAA's system acquisition, security, and
capacity challenges. We reported that FAA got off to a good start in
2004 by meeting its acquisitions performance goal and has recently
taken several steps to address the factors that contributed to
acquisition problems in the past. However, it still faces challenges in
some areas. Our recent report on information security highlights the
need for FAA to ensure that key information technology systems are
protected from willful acts of sabotage. Finally, we reported on the
challenges that FAA faces in expanding the NAS's capacity to
accommodate current and anticipated increases in air travel.
FAA Met Its 2004 Acquisitions Performance Goal:
As we recently reported, FAA met its acquisitions performance goal for
fiscal year 2004: to meet 80 percent of the designated milestones and
maintain 80 percent of the critical program costs within 10 percent of
the budget, as published in FAA's Capital Investment Plan. Having such
a goal is consistent with the President's Management Agenda, which
calls for a commitment to achieve immediate, concrete, and measurable
results in the near term and meeting this goal indicates a good start
for the ATO. While meeting this 1-year goal is a positive step toward
better acquisition management, evaluating it in the context of overall
acquisition achievements provides a more comprehensive
assessment.[Footnote 25] For example, 3 of the 16 major system
acquisitions that we reviewed in detail were being revised to reflect
cost and/or schedule changes during 2005. These revised cost and
schedule changes would become the new milestones for the fiscal year
2006 performance goal. While revising targets that are no longer valid
is an appropriate management action, using revised targets, rather than
the original targets, as a basis for overall performance measurement,
does not provide a consistent benchmark for measuring acquisition
performance over time. Annual performance targets should continue to be
viewed in the broader context of acquisitions' original and revised
baselines, and in the variance reports provided to the FAA
administrator and to Congress.
FAA Is Addressing Key Factors That Contributed to Legacy Cost,
Schedule, and/or Performance Problems, but More Work Remains:
We recently reported that, historically, four factors individually or
collectively contributed to system acquisitions' missing cost,
schedule, and/or performance targets.[Footnote 26] FAA is taking steps
to address some of these factors, but needs to do more.
Four Key Factors Contributed to Legacy Cost, Schedule, and/or
Performance Problems:
One or more of four factors--(1) funding acquisitions at lower levels
than called for in agency planning documents, (2) adding requirements
and/or unplanned work, (3) underestimating the complexity of software
development, and (4) not sufficiently involving stakeholders throughout
system development--contributed to 12 of 16 major acquisitions' missing
targets.[Footnote 27] (See table 2.) Appendix II provides each system's
full name and purpose.
Table 2: Four Key Interrelated Factors Contributing to Cost Growth,
Schedule Extensions, and/or Performance Shortfalls for 12ATC System
Acquisitions:
Name of system: ASDE-X[A];
The funding level received was less than the agency planning documents:
X;
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: X;
Stakeholders were not sufficiently involved: [Empty].
Name of system: ASR-11;
The funding level received was less than the agency planning documents:
X;
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: [Empty];
Stakeholders were not sufficiently involved: .
Name of system: ATCBI-6;
The funding level received was less than the agency planning documents:
X;
The system acquisition experienced requirements growth and/or unplanned
work: [Empty];
The complexity of software development was underestimated: [Empty];
Stakeholders were not sufficiently involved: .
Name of system: CPDLC;
The funding level received was less than the agency planning documents:
[Empty];
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: [Empty];
Stakeholders were not sufficiently involved: .
Name of system: FFP2;
The funding level received was less than the agency planning documents:
X;
The system acquisition experienced requirements growth and/or unplanned
work: [Empty];
The complexity of software development was underestimated: [Empty];
Stakeholders were not sufficiently involved: .
Name of system: ITWS;
The funding level received was less than the agency planning documents:
X;
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: X;
Stakeholders were not sufficiently involved: .
Name of system: LAAS;
The funding level received was less than the agency planning documents:
[Empty];
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: X;
Stakeholders were not sufficiently involved: X.
Name of system: NEXCOM;
The funding level received was less than the agency planning documents:
X;
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: [Empty];
Stakeholders were not sufficiently involved: .
Name of system: NIMS-2;
The funding level received was less than the agency planning documents:
X;
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: [Empty];
Stakeholders were not sufficiently involved: .
Name of system: OASIS;
The funding level received was less than the agency planning documents:
X;
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: [Empty];
Stakeholders were not sufficiently involved: X.
Name of system: STARS;
The funding level received was less than the agency planning documents:
[Empty];
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: [Empty];
Stakeholders were not sufficiently involved: X.
Name of system: WAAS;
The funding level received was less than the agency planning documents:
[Empty];
The system acquisition experienced requirements growth and/or unplanned
work: X;
The complexity of software development was underestimated: X;
Stakeholders were not sufficiently involved: X.
Source: GAO analysis of FAA data.
Notes:
Blank spaces in the chart denote that the specific factor was not a key
contributor to a program's inability to meet cost, schedule, or
performance targets.
FAA's Telecommunications Infrastructure, another of the 16 system
acquisitions that we reviewed, also experienced cost growth, but for a
reason not shown above. The original planning document that was
prepared for this acquisition contained estimated costs for some of the
system's requirements. When the planning document was updated, it
included actual contract costs, which were greater than originally
estimated.
[A] Additional factors are listed, beyond those previously reported,
based on updated information provided by FAA.
[End of table]
A discussion of each factor follows:
* Funding acquisitions at lower levels than called for in agency
planning documents: When FAA initiates a major system acquisition, it
estimates, and its top management approves, the funding plans for each
year. However, when budget constraints do not allow all system
acquisitions to be fully funded at the previously approved levels, FAA
must decide which programs to fund and which to cut, according to its
priorities. When a system acquisition does not receive the annual
funding called for in its planning documents, the acquisition may fall
behind schedule. This may also postpone the benefits of the new system
for the NAS, and can require FAA to continue operating and maintaining
the older equipment that the acquisition is intended to replace.
* Adding requirements and/or unplanned work: Inadequate or poorly
defined requirements may contribute to the inability of system
acquisitions to meet their original cost, schedule, and/or performance
targets, since developing or redefining requirements as an acquisition
progresses takes time and can be costly. In addition, unplanned
development work may occur when the agency misjudges the extent to
which a commercial-off-the-shelf or nondevelopmental item,[Footnote 28]
such as one procured by another agency, will meet FAA's needs.
* Underestimating the complexity of software development: When FAA
underestimates the complexity of software development or misjudges the
difficulty of modifying available software to fulfill its mission
needs, acquisitions may take longer and cost more than
expected.[Footnote 29]
* Not sufficiently involving stakeholders throughout system
development: Not involving relevant stakeholders, such as air traffic
controllers and maintenance technicians, early and throughout a
system's development and approval may lead to costly changes in
requirements and unplanned work late in the development process.
In some cases, FAA missed cost, schedule, and/or performance targets
because of two or more of the factors discussed above. For example, FAA
underestimated the complexity of the software that would be needed to
support WAAS when the agency reduced, by 3 years, its plans to develop,
test, and commission the system. FAA then tried to accomplish these
tasks in 28 months, even though the software development alone was
originally expected to take from 24 to 28 months. FAA's efforts to
resolve this issue resulted in unplanned work, which then contributed
to cost increases and schedule delays. For STARS, not adequately
including stakeholders during the development phase contributed to
unplanned work, which in turn, contributed to cost growth, schedule
delays, and eventually a reduction in the number of systems to be
deployed.
The remaining three systems that we reviewed--En Route Automation
Modernization System (ERAM), Advanced Technologies and Oceanic
Procedures (ATOP), and En Route Communications Gateway (ECG)--are
meeting cost, schedule, and performance targets, but warrant close
attention. ERAM, the new computer system to help run FAA's en route ATC
operations, is a high-risk effort, in part because it requires over 1
million lines of code. While ERAM's contractor has completed the first
three of four software deliveries ahead of schedule, "bugs" could be
discovered through further testing and integration, which could require
additional software development, according to a senior program
official. In the past, FAA has had difficulty developing systems with
such a high volume of code. Also, FAA assumed responsibility after
February 2005 for the cost of resolving any additional software
problems that it identifies with ATOP, its new oceanic ATC system. A
fixed-price contract previously governed the acquisition. FAA also
anticipates adding requirements costing about $500,000 to ECG, a
communications interface.
FAA Has Taken Steps to Improve Acquisition Management, but Has Not
Fully Implemented Some Recommendations:
FAA has announced plans to implement recommendations we made to improve
software-intensive acquisitions and investment management
practices.[Footnote 30] However, FAA has not yet adopted a knowledge-
based approach for system acquisitions or fully implemented our
recommendations to improve its enterprise architecture development.
To reduce the risk of requirements growth and/or unplanned work, as
well as the risks associated with acquiring software-intensive systems,
FAA has developed and applied a process improvement model to a number
of acquisition projects. This model is used to assess the maturity of
FAA's software and systems capabilities. As we reported, this approach
has resulted in enhanced productivity, higher quality, greater ability
to predict schedules and resources, better morale, and improved
communication and teamwork.[Footnote 31] However, because FAA did not
mandate the use of the model throughout the organization, we
recommended that it do so. In response, FAA has begun developing a
requirement that projects have process improvement activities in place
before seeking approval from the FAA investment review board.
FAA told us in December 2004 that it is taking actions that respond to
our recommendations for improvements to its Acquisition Management
System.[Footnote 32] For example, FAA reports that when reviewing
acquisitions, it now focuses on the acquisition's impact on customer
service and contribution to achieving the agency's strategic and
performance goals, including expanding NAS capacity, rather than on the
approval and management of individual acquisition programs. FAA has
also informed us that it has established basic investment management
capabilities, including many practices for selecting and controlling
its mission-critical information technology investments. Our previous
work showed that FAA was not regularly reviewing investments that are
more than 2 years into their operations. As a result, FAA was limited
in its ability to oversee, as a total package of competing investment
options, more than $1 billion of its information technology
investments, and to pursue only those that best meet its
goals.[Footnote 33] In its response to our recommendation, FAA stated
that it had changed its acquisition review process to a semiannual
"service level review" process that encompasses systems that are in
service. Additionally, FAA has changed its format for justifying major
technology investments to that prescribed by the Office of Management
and Budget. According to FAA, this change provides more comprehensive
information than the previous format and provides efficiencies by
avoiding the need to later translate the information into the Office of
Management and Budget's prescribed format. We have not yet assessed
these actions.
Additionally, further improvements to FAA's Acquisition Management
System are warranted. We recently reported that while the system
provides some discipline for acquiring major ATC systems, it does not
apply a knowledge-based approach to acquisitions that is characteristic
of commercial best practices. Such practices call for specific
knowledge to be captured and used by corporate-level decision-makers to
determine whether a product has reached a level of development (product
maturity) sufficient to demonstrate its readiness to move forward in
the acquisition process. Knowledge is captured at specific junctures,
or knowledge points, in the acquisition cycle, which developers use to
determine whether they have attained the knowledge they need to move to
the next phase or activity in the acquisition process. Such developers
also conduct corporate executive-level reviews to ensure that they
obtain the insights and perspectives of stakeholders throughout their
organization. If the knowledge attained does not meet the criteria for
advancement or if the executive reviewers determine that further
development is inconsistent with their priorities, the acquisition does
not move forward.
Experience with these best practices has shown that to the extent that
the level of knowledge called for at each knowledge point is not
attained, organizations take on risks in the form of unknowns that will
persist into the later stages of development, where they will take more
time and money to resolve if they become problems. Such problems lead
to cost increases and schedule delays. Accordingly, we recommended that
FAA (1) develop explicit written criteria for the key decision points
called for under best practices, including the capture of specific
design and manufacturing knowledge, and (2) require corporate executive-
level decisions at these key decision points (before an acquisition
moves from integration to demonstration and, again, before it moves to
production).[Footnote 34]
We also reported that FAA has taken some initial steps to develop a NAS
enterprise architecture, but further steps are needed.[Footnote 35] An
enterprise architecture serves as a blueprint to guide and constrain
investments in a consistent, coordinated, and integrated fashion. It
should provide a clear and comprehensive picture of an organization,
including snapshots of the current "as is" environment as well as the
target "to be" environment, and a roadmap for transition. FAA has
committed resources to this effort, established a project office,
designated a chief architect, and issued the latest version of its
architecture. However, FAA has not taken some key steps, such as
designating a committee or group representing the enterprise to direct,
oversee, or approve the architecture; establishing a policy for
developing, maintaining, and implementing the architecture; or fully
developing architecture products that meet contemporary guidance and
describe both the "as is" and the "to be" environments and developed a
sequencing plan for transitioning between the two. Our experience with
federal agencies has shown that making information technology
investments without defining these investments in the context of an
architecture often results in systems that are duplicative, not well
integrated, and unnecessarily costly to maintain and interface.
FAA Faces Challenges in Ensuring Information Security:
Because ATC systems rely heavily on information technology, protecting
them from inadvertent or intentional disruption is critically
important. The risks to information systems include the escalating
threat of computer security incidents, the ease of obtaining and using
hacking tools, the steady advance in the sophistication and
effectiveness of attack technology, and the emergence of new and more
destructive attacks. Inadequately protected systems are at risk of
intrusion by individuals or groups with malicious intent, who could use
their unauthorized access to obtain sensitive information, disrupt
operations, or launch attacks against other computer systems and
networks. A prolonged disruption in ATC systems and communications,
accidental or intentional, could disrupt air traffic, cause significant
economic losses, and subject travelers to delays and inconvenience.
Federal information security has been on GAO's list of high-risk areas
since 1997; in 2003, GAO expanded this high-risk area to include the
protection of cyber-critical infrastructure.[Footnote 36]
Recently, we reported that FAA had established, but not fully
implemented, an information security program for its ATC information
systems.[Footnote 37]For example, some of the agency's security plans
were outdated; security awareness training requirements were not fully
met; system testing and evaluation programs were inadequate; security
incident detection capabilities were limited; and shortcomings existed
in providing service continuity to protect against disruptions in
operations. Furthermore, we identified security weaknesses that
threaten the integrity, confidentiality, and availability of the three
critical systems we reviewed, including weaknesses in controls designed
to manage access to these systems. Weaknesses in physical security
increase the risk that unauthorized individuals could gain access to
sensitive computing resources and data and could inadvertently or
deliberately misuse or destroy them. In response to weaknesses that we
had identified, FAA officials told us they recognized that more work
was needed to continue to improve their information security program
and that they had already corrected many of their electronic access
control weaknesses.
We recommended several actions intended to improve FAA's information
security program. FAA agreed to consider our recommendations, but
emphasized that, because our review focused on only three systems, it
does not indicate that the entire NAS is vulnerable. Additionally, FAA
maintains that vulnerabilities are mitigated by redundancies and
separate access controls. Consequently, FAA concluded that the public
may infer from our review that security risks are higher than they
actually may be. In our report, we acknowledged that FAA may have other
protections built into its overall system architecture. However, as
noted in the report, the complex air traffic control system relies on
several interconnected systems. As a result, the weaknesses we
identified may increase the risk to other systems. For example, FAA did
not consistently configure network services and devices securely to
prevent unauthorized access to and ensure the integrity of computer
systems operating on its networks.
FAA Faces Challenges in Expanding NAS Capacity to Meet Current and
Future Needs:
The current level of air travel, combined with airlines' use of smaller
aircraft, is straining NAS capacity and further increases in air travel
are forecast. FAA has developed a rolling 10-year plan for capacity
improvements at the nation's 35 busiest airports, and airports are
building new runways. However, many congested airports are not building
or cannot build new runways, and delays at these airports can have
ripple effects throughout the NAS. FAA is considering administrative
and market-based options to ease congestion at the most delay-prone
airports. The agency is also redesigning flight procedures in specific
locations to improve the efficiency with which aircraft use crowded
airspace. However, FAA has encountered difficulties in establishing
reliable costs and schedules for its airspace redesign efforts, and
airlines have been reluctant to equip their aircraft because of
uncertainty about FAA's future plans for airspace redesign.
More Travelers and Smaller Aircraft Could Strain NAS Capacity:
In 2004, passengers returned to air travel, following a lull that
resulted from a series of largely unforeseen events, including global
recessions, the terrorist attacks of September 11, and the Severe Acute
Respiratory Syndrome (SARS) scare, the war in Iraq, and associated
security concerns. Enplanements in 2004 exceeded those in 2000 by 5
percent. The high level of traffic in the summer of 2000 produced the
worst record of delays up to that time; however, nearly as many delays
occurred in 2004, but the delays were longer, on average, mainly
because of bad weather, according to FAA officials. FAA forecasts a 25-
percent increase in air traffic by 2015, and the JPDO is developing
plans to transform the NAS to accommodate a tripling of capacity by
2025.
The airlines' increasing use of smaller aircraft is likely to enhance
the need for capacity. In 2001, we reported that the growing number of
regional jets, which generally seat fewer than 100 passengers, was
contributing to congestion in our national airspace.[Footnote 38] The
industry experts we interviewed repeatedly expressed concern about the
impact of additional aircraft on airspace whose capacity was already
strained. Because hundreds of new aircraft have been added to already
congested airspace while comparatively few aircraft have been taken out
of service, many experts believe that increasing congestion and delays
are inevitable. Moreover, the experts noted that with many more
regional jets on order, congestion and delays are not likely to
diminish in the near future. In 2003, Boeing forecast that regional
jets would account for 16 percent of the world aircraft fleet by 2022.
In June 2004, the Chairman and Chief Executive Officer of AirTran
Airways noted that the ATC system could have difficulty absorbing the
hundreds of regional jets then on order.[Footnote 39] Recent data
validate those concerns. Although passenger travel between 2000 and
2004 increased by 5 percent, the number of aircraft operating in the
NAS, as indicated by domestic aircraft departures, increased by 36
percent during that time period.
Additionally, air taxis, which carry about four passengers each, could
begin operations within the NAS. FAA officials told us that they have
been briefed on proposals for using air taxis in selected metropolitan
areas to relieve heavy traffic congestion on roadways. Air taxis could
add to air congestion, as well as increase the workload of air traffic
controllers in metropolitan areas where air traffic is already likely
to be heavy. Potential increases in general aviation could further
increase air congestion and controllers' workload.[Footnote 40]
New Runways Are Under Construction and More Are Planned to Increase NAS
Capacity:
According to FAA, building new runways is the most direct approach to
increasing NAS capacity. FAA estimates that a new runway increases an
airport's capacity by between 30 and 60 percent. FAA's plans for
capacity enhancement at the nation's 35 busiest airports are laid out
in the agency's rolling 10-year Operational Evolution Plan. Since 1999,
8 of the nation's 35 busiest airports--Phoenix, Detroit, Denver, Miami,
Cleveland, Houston, Philadelphia, and Orlando--have each opened a new
runway. Collectively, these runways have provided these airports with
the potential to accommodate about 1 million more annual operations
(takeoffs and landings). Six more runways, one runway extension, and
one airfield reconfiguration are scheduled to open by the end of 2008
at the nation's 35 busiest airports. These runways are expected to
provide those airports with the potential to accommodate 830,000 more
annual operations (see fig. 8). In addition to the runways scheduled
for the 35 busiest airports, nine more capacity-enhancing projects are
in the planning or environmental review stages, including one new
runway, three runway extensions, three new airports and two airfield
reconfigurations in major metropolitan areas.
Figure 8: Commissioned and Planned Runways, December 1999 to November
2008:
[See PDF for image]
Note: Included in the planned runways is one runway extension project
at Philadelphia.
[End of figure]
Several of the nation's largest airports are among those most in need
of capacity improvements. In a recent study, FAA reported that the
Atlanta, Newark, New York LaGuardia, Chicago O'Hare, and Philadelphia
airports needed immediate capacity improvements to meet existing
demand. The study identified 15 airports that would need capacity
improvements by 2013.
However, building new runways is not an option at all airports with
pressing needs for more capacity. Some airports are not able to build
even one more runway, either because they lack the space or would face
intense opposition from adjacent communities. Only 3 of the 9 most
delay-prone airports will receive new runways, and delays at these
airports can have a ripple effect throughout the NAS, notwithstanding
capacity improvements made elsewhere. For example, in 2000, Phoenix Sky
Harbor International Airport put an additional runway into service, and
the airport had sufficient capacity to allow flights to take off on
time. However, the airport ranked among the top 15 in the United States
for flight delays. According to airport officials, most of the delays
in Phoenix were the result of delays and cancellations at other
airports--circumstances unrelated to the capacity at Phoenix. To reduce
flight delays at some of the delay-prone airports, such as New York
LaGuardia and Chicago O'Hare, FAA is exploring administrative and
market-based options. For example, FAA is considering auctioning off
landing and takeoff rights at New York LaGuardia and is currently
limiting the number of scheduled arrivals during peak periods at New
York LaGuardia and Chicago O'Hare.
FAA Is Redesigning Flight Paths to Create More Capacity:
FAA is redesigning how aircraft utilize airspace during the takeoff,
landing, and en route phases of flight. Currently, most aircraft must
follow established routes over designated navigation aids and maintain
wide separation from other aircraft. Wide separation has been necessary
to provide a margin of error against inaccuracies in older navigation
systems. However, many aircraft in use today carry navigation equipment
that is not dependent on ground-based navigation aids and would enable
aircraft to safely operate in a less restrictive manner, allowing more
efficient use of airspace and increased NAS capacity.[Footnote 41]
Moreover, this equipment provides aircrews with precise information on
the location of their aircraft and that of nearby aircraft, allowing
them to fly more directly to their destinations, thereby saving time
and fuel, and reducing congestion. Advanced navigation capabilities
also reduce the adverse impact of bad weather on NAS efficiency by
allowing pilots to land in weather conditions that they otherwise would
have to avoid.
In 2005, FAA increased airspace capacity by reducing the required
minimum vertical separation from 2,000 feet to 1,000 feet for properly
equipped aircraft at altitudes between 29,000 and 41,000 feet,
essentially doubling capacity at those altitudes. FAA anticipates that
this change will allow aircraft to safely fly the most efficient
routes, increase airspace capacity, and save airlines about $400
million in fuel costs during the first year.
FAA reports that airspace redesign can provide benefits at a number of
airports. For example, at Dulles International Airport, suitably
equipped aircraft could simultaneously depart on parallel routes in bad
weather, which would not otherwise be possible. Dallas-Fort Worth
International Airport could increase capacity by 20 percent by allowing
aircraft with the appropriate capabilities to depart more quickly from
multiple points at the airport, thereby reducing the taxi time between
terminal and departure, as well as ground congestion. According to FAA,
allowing aircraft with appropriate equipment to use parallel runways
during periods of marginal visibility could increase arrival rates by
10 to 24 percent at airports with closely spaced runways, such as those
in Boston, Cleveland, Newark, Portland, Philadelphia, Seattle, and San
Francisco.[Footnote 42] An FAA official told us that these procedures
could leverage the future benefits of ATC systems currently in the
acquisitions pipeline if planned and implemented in coordination with
the systems' acquisition schedules.
Redesign is a complex process that requires the development of specific
navigation procedures tailored to each location, taking into account
numerous factors. According to FAA, the following factors pose
challenges for redesign efforts:
* costly environmental reviews required by the National Environmental
Policy Act,
* the logistics of coordinating meetings with controllers and operators
to discuss how to design the procedures,
* aircrew training,
* the modeling and testing of procedures, and:
* the development of written navigation and air traffic control
procedures.
Consequently, FAA focuses its efforts on airports that are the best
candidates to benefit from airspace redesign, such as those that have
frequent bad weather, parallel runways that cannot be used for parallel
approaches in bad weather, nearby mountains or tall buildings, or
aircraft noise that adversely affects nearby communities. Also, having
an airline that has a significant presence at an airport and is willing
to take the lead in airspace redesign facilitates its implementation.
Airspace Redesign Efforts Have Encountered Cost and Schedule
Challenges, and Airlines Are Hesitant to Invest in Advanced
Capabilities:
The Department of Transportation's Office of the Inspector General has
testified that FAA is experiencing significant problems in its airspace
redesign efforts. The office reported that FAA lacks reliable
information on costs and schedules for 42 airspace redesign efforts and
found that FAA's process for controlling costs, mitigating risks, and
coordinating these efforts was fragmented and diffuse.
Expanding efforts to redesign airspace also depends on the willingness
of NAS users to equip their aircraft with advanced capabilities--a
willingness that is based, in part, on the belief that FAA will
continue with its redesign plans. Some stakeholders we interviewed
expressed concern that FAA may not follow through with its airspace
redesign efforts. For example, a DOD official said that in response to
budget constraints, FAA might curtail its airspace redesign efforts
after DOD had equipped its aircraft with advanced capabilities,
resulting in a waste of DOD resources. The official cited FAA's actions
to suspend certain acquisition programs such as LAAS, NEXCOM, and long-
range radar. An official of the Airline Owners and Pilots Association,
which represents general aviation pilots, cited similar concerns with
WAAS and another system (Automatic Dependent Surveillance - Broadcast)
in onboard navigation systems. Consequently, general aviation pilots
are hesitant to invest in systems for their aircraft unless they are
sure that FAA will continue to redesign airspace and implement
procedures that will make use of this equipment. According to one
expert, some aircraft have been retired without ever having their
advanced capabilities used.
Overcoming these challenges is a productive area of focus for FAA. Our
panel of experts noted that exploiting airspace redesign is a "quick
hit" that would produce good value for the investment, and airlines are
anxious to see more airspace redesign efforts. The experts also noted
that the private sector has the capacity to develop new flight
procedures as part of airspace redesign, and a precedent exists in
another country. However, the experts said that in the past, FAA has
resisted outside parties' efforts to design new flight procedures for
FAA's approval, and they suggested that FAA could be more flexible in
this area.
Agency Comments:
FAA provided technical comments, which we included as appropriate.
[End of section]
Chapter 3: Human Capital Management Challenges Include Hiring Air
Traffic Controllers and Transforming FAA's Organizational Culture:
During the coming decade, FAA will need to hire and train thousands of
air traffic controllers to replace those who will retire. FAA has
implemented a number of human capital reforms but still faces the
challenge of transforming its workforce to a more results-oriented
culture.
FAA Will Need to Hire and Train Thousands of Controllers in the Next
Decade:
In 2002 and 2004, we reported that FAA would need to hire and train
thousands of air traffic controllers during the next decade, and we
recommended in 2002 that FAA develop a comprehensive workforce plan
that includes strategies to ensure that FAA would have adequate human
resources and training facilities to meet its hiring needs while
maintaining safety.[Footnote 43] Additionally, we recently reported
that succession planning and management are critical steps that federal
agencies need to take to meet the challenges of the 21ST
Century.[Footnote 44] In 2004, FAA published a controller staffing plan
that includes several of the strategies that we recommended.
Recognizing that the plan would be costly, FAA planned to obtain
savings from a number of human capital management initiatives, some of
which will require union negotiation.
Impending Retirements Will Require Extensive Hiring and Training:
FAA's controller staffing plan indicates that the agency expects to
lose about 11,000 air traffic controllers, or about 73 percent of the
controller workforce, to retirements and other factors.[Footnote 45]
This high percentage of retirements is attributable to the 1981
controller strike, when President Ronald Reagan fired over 10,000 air
traffic controllers, and the consequent need to quickly rebuild the
controller workforce. From 1982 through 1991, FAA hired an average of
2,655 controllers per year. These controllers will become eligible for
retirement during the next decade. (See fig. 9.)
Figure 9: Projected Controller Retirements, Fiscal Years 2005 - 2014:
[See PDF for image]
[End of figure]
To replace the controllers who will retire, as well as those who will
leave for other reasons, and to accommodate forecasted increases in air
traffic, FAA plans to hire a total of 12,500 new controllers over the
next 10 years, or 1,250 per year, on average. Because of training
facility limitations and the need to minimize the impact on operational
facilities of on-the-job training for new controllers, FAA plans to
hire relatively equal numbers of controllers each year.
FAA's Controller Staffing Plan Reflects Lessons Learned Since 1981
Controller Strike:
To manage the air traffic control workforce over the next decade, the
controller staffing plan that lays out a 10-year strategy for
recruiting, hiring, and training new controllers to replace those that
retire. This plan, which we recommended in a 2002 report and Congress
mandated in 2003, reflects recruiting and training lessons learned
since the 1981 air traffic controllers' strike, endeavors to benefit
from the expertise of today's experienced controllers, and addresses
staffing and equipment needs at FAA's training academy.
According to the controller staffing plan, FAA has established a
facility-by-facility retirement loss model that FAA will use to
determine annual hiring targets for each facility. The plan also lays
out a strategy to develop new staffing standards for each ATC facility,
starting in fiscal year 2005. Additionally, the plan describes a
revised hiring policy, which recognizes the need to hire replacement
controllers well in advance of expected retirements, rather than
waiting until after each controller leaves.
FAA's plan lays out new recruitment sources designed to identify and
retain viable candidates. Through this approach, FAA expects to achieve
greater success than it did in the 1980s, when it last hired large
numbers of controllers but had problems with retention. At that time,
FAA officials told us, most of the candidates were recruited "off the
street," with no prior background in air traffic control. According to
the plan, over 40 percent of the candidates failed training, resulting
in wasted training funds. This time, FAA plans to hire new controllers
from a variety of sources, including some that can provide candidates
with training or experience in aviation. A primary source will be the
Air Traffic Collegiate Training Initiative, which FAA established in
January 1991 and has since expanded.[Footnote 46] Under this
initiative, participating schools produce candidates with college
degrees and a broad knowledge of the aviation industry. These
candidates have at least a basic level of training in air traffic
control and have demonstrated their interest in the field by the
investment they have made in their own training. Other potential
recruits include former and retired military personnel, former
Professional Air Traffic Controllers Organization controllers, and the
general public.
FAA is also evaluating the effectiveness of a tool to screen potential
controllers. Between 1981 and 1992, FAA screened out unsuccessful
candidates over a period of 9 weeks as they attended a formal training
program. Fewer than 60 percent of the candidates passed the screen.
Recognizing that this was a costly process, FAA dismantled the 9-week
screening process in 1992 and implemented an 8-hour computer-based Air
Traffic Selection and Training exam to screen candidates, reducing the
screening cost from $10,000 per candidate to $800 per candidate. The
screening exam evaluates many aptitudes, including prioritization and
problem solving, decisiveness, and composure. The controller staffing
plan indicates that FAA's Civil Aerospace Medical Institute is
evaluating the effectiveness of this new screening tool, as we
recommended.
FAA believes that allowing some controllers to continue working beyond
the current age limitation could help alleviate staffing shortages in
targeted locations. Under legislation enacted in 1971,[Footnote 47]
most controllers are required to stop handling live traffic when they
reach age 56. FAA has reviewed the safety implications of waiving this
requirement under certain circumstances. Specifically, its Civil
Aerospace Medical Institute reviewed the scientific basis for the law
and concluded that the scientific literature did not provide a firm
foundation for either retaining the age 56 limit or seeking a
legislative change. A supplemental study found that the likelihood of
an en route operational error declined with age as a function of
experience. According to the controller staffing plan, FAA believes
that waivers to the age 56 rule may be of value for targeted locations
where there may be a critical staffing shortage. FAA estimates that 5
to 10 percent of current controllers might be granted such waivers.
The controller staffing plan describes FAA's plans to address staffing
and equipment needs at the training academy. FAA plans to meet the need
for more instructors by working with its contractor to ensure that
training needs are met. FAA has also upgraded equipment at the training
academy. We reported in 2002 that equipment used at the academy to
train en route controllers did not match equipment used in the field.
We also reported that tower simulators were often broken or outdated,
and lacked the necessary capacity to train large numbers of new hires.
FAA has since acquired four new tower simulators, and in the spring of
2005, it opened a laboratory for en route training at the academy,
several months ahead of schedule.
FAA Plans Cost-Saving Initiatives to Mitigate the Expense of the
Controller Staffing Plan:
Recognizing the immense cost of recruiting and training enough
controllers to replace those who are retiring, FAA plans to implement
efficiencies that would reduce training costs and allow a 10 percent
reduction in the controller workforce over the next decade. FAA plans
to provide more intensive training so that controllers can be certified
in 2 to 3 years, rather than 4 to 5 years as in the past. Some of these
initiatives will require union consent which FAA will have to negotiate
when it renews its contract with the controllers. For example, FAA
plans to rely on part-time employees and job-sharing arrangements, as
well as implement split shifts, where all controllers work during peak
periods, but some leave during slack periods and return to complete
their shifts later. FAA also plans to improve its management of
overtime by using the optimal mix of increased staffing and overtime
hours to meet workload demands. In addition, FAA plans to oversee the
use of sick leave more aggressively and to manage workers' compensation
cases to bring employees back to duty as quickly as possible. Other
steps include reducing the number of hours controllers spend on union-
related duties and in workgroups, conferences, and meetings; and
employing efficiencies made possible by implementing technological
advances, consolidating facilities, and expanding the contract tower
program.
FAA has neither determined the total cost of the controller staffing
plan, nor developed any basis for the cost savings planned for many of
the initiatives described in the plan. For example, FAA officials told
us that they have not determined:
* the costs of hiring and training controllers from different sources;
* the amount of productivity savings from various sources, including
implementing new technology and adjusting staffing according to traffic
levels; or:
* the savings from the improved training success rate.
Therefore, the impact of this plan on future funding needs is unclear.
FAA officials indicated that they view the plan as fluid, and will make
yearly updates and changes as they move forward with its
implementation. However, without supportable estimates of the hiring
and training program's cost and potential savings, FAA lacks key
information needed to plan for future funding needs. The plan states
that if FAA does not receive sufficient funds to hire adequate numbers
of controllers, FAA will maintain safety before addressing delays.
According to the plan, FAA would slow air traffic to a level that the
available controllers could handle safely, an action that could create
significant delays in the NAS.
FAA has also begun considering whether graduates of its Air Traffic
Collegiate Training Initiative can bypass the currently required
training at the FAA Academy--a change that could produce savings.
Currently, graduates must attend the academy for 37 days if they are
training to be terminal controllers or 57 days if they are training to
be en route controllers, before they can report to an ATC facility to
begin on-the-job training. The National Air Traffic Controllers
Association and one of the colleges that participates in the Air
Traffic Collegiate Training Initiative believe that graduates could
bypass the training academy and report directly to an ATC facility to
begin on-the-job training. In June 2005, FAA initiated a review to
determine whether graduates could bypass the academy training.
FAA Has Made Progress in Implementing Human Capital Reforms, but
Challenges Remain in Transforming Its Workforce Culture:
Since receiving an exemption from many federal personnel management
regulations in 1995, FAA has implemented a number of compensation,
hiring, and performance management reforms. Additionally, FAA is taking
steps toward developing a results-oriented culture, but needs to ensure
continuity and follow-through for these efforts to have a lasting
effect.
FAA Has Implemented Elements of Personnel Management Reform:
After being exempted from most federal personnel regulations in 1995,
FAA initiated a broad set of changes in compensation, performance
management, and workforce management. FAA replaced the general schedule
system of 15 pay grades--each with 10 within-grade pay steps--with a
series of pay bands and specific job categories with minimum and
maximum pay rates spanning two to five pay bands. Since 2003, when we
last reported on the status of FAA's human capital reforms, FAA has
increased the percentage of the workforce covered by the new pay system
from about 75 percent to 82 percent.[Footnote 48]
Additionally, FAA established its own hiring policies and began hiring
applicants directly, rather than going through the Office of Personnel
Management. It also established a flexible system for adjusting the
number of executive positions in response to shifting agency priorities
and set up flexible policies for determining whether and how much to
reimburse employees' relocation expenses.
Finally, FAA established a new performance management system, which it
uses for 45 percent of its employees. The new system requires that
employees have performance plans that identify specific work
expectations and outcomes and are linked to agency and organizational
goals. The new system changed performance assessment from a once-a-year
process to one that focuses on interim feedback discussions between
employees and supervisors to address performance issues when they
arise, and identify opportunities for improving performance and meeting
developmental needs. The performance management system also determines
whether an employee is eligible for agencywide performance-based
bonuses. FAA has not yet included most of its bargaining unit employees
under the new performance management system, but plans to negotiate
this issue during contract negotiations, which began in the spring of
2005.
While we have not evaluated the merits of the new performance
management system or that used to manage the performance of bargaining
unit employees, linking work expectations and outcomes to
organizational goals, as FAA has done in its new performance management
system, is a positive first step. We have reported that effective
performance management systems are not merely used for once or twice-
yearly individual expectation setting and rating processes, but are
tools to help the organization manage on a day-to-day basis. These
systems are used to achieve results, accelerate change, and facilitate
two-way communication throughout the year so that discussions about
individual and organizational performance are integrated and
ongoing.[Footnote 49]
Developing a Results-Oriented Organizational Culture Remains a Key
Challenge:
Recognizing the importance of cultural change in achieving results, FAA
is moving forward on actions consistent with those that we have
identified as important for cultural transformation. In 1996, we
reported that FAA's acquisition workforce culture lacked a commitment
to mission focus, accountability, adaptability, and coordination, which
impeded its ATC modernization efforts. While FAA took a number of
actions over the past several years to change the culture of its
acquisition workforce, these actions lacked continued management
commitment. Our work shows that successfully implementing cultural
change requires continued management attention over several years.
FAA Recognizes the Importance of a Results-Oriented Culture:
FAA has established a goal to create a results-oriented culture and is
developing baseline data for tracking progress. FAA's Human Capital
Plan includes a goal to create a results-based performance culture and
strategies for implementing performance management and compensation
systems that focus on achieving results, providing training and
briefings on the agency's new performance management system, and
implementing a communication plan for performance management
responsibilities. Additionally, FAA's performance-based compensation
system provides most employees with a bonus when the agency meets its
performance goals.
FAA's emphasis on performance management is an important step toward
creating a results-oriented culture in the acquisition workforce. Our
work has highlighted the importance of organizational culture in
implementing mergers and transformations. Using a performance
management system to define responsibility and ensure accountability
for change is a key practice that can help agencies transform their
cultures so that they can be more results oriented, customer focused,
and collaborative.[Footnote 50] (See fig 10.)
Figure 10: Cultural Changes and Key Practices Necessary for Successful
Transformation:
[See PDF for image]
[End of figure]
The chief operating officer, who heads the ATO, has also recognized
that cultural factors can play a critical role in an organization's
success and is aiming to make a transformation similar to that shown
above. For example, he has observed that FAA's management culture has
been "intensely hierarchical, risk averse," and "reactionary," and aims
to develop a viable, stable, and sustainable organization that can make
fact-based decisions that transcend changes in leadership. He said that
FAA is giving high priority to changing its leadership model by linking
top management more closely to operations in the field and by replacing
command and control with communication across organizational levels.
To further support cultural change, FAA is emphasizing accountability
and other core values. For example, it is holding managers accountable
for managing their budgets. Additionally, FAA has chosen five core
values and plans to use employees' responses to selected questions in
the most recent employee attitude survey[Footnote 51] to set a baseline
for cultural improvement. The five core values are (1) integrity and
honesty, (2) accountability and responsibility, (3) commitment to
excellence, (4) commitment to people, and (5) fiscal responsibility.
FAA's Civil Aerospace Medical Institute analyzed the survey results by
grouping three to seven survey items under each of these areas. For
example, FAA placed the survey item "We are encouraged to express our
concerns openly" along with four other items under the integrity and
honesty core value. For many items, across all core values, fewer than
40 percent of ATO employees indicated agreement or strong agreement,
indicating that FAA still has work to do to create a culture where
these core values are readily evident to the majority of its employees.
FAA is addressing these items by developing its own action plan, and
documenting best practices for items where positive response rates--the
total percentage of agree and strongly agree--are above 55 percent.
The FAA's recognition of the importance of creating a results-oriented
culture is an important step, particularly within the ATO, which is
composed of formerly separate organizations. We have reported that many
mergers or transformations fail because the cultures of the originating
components are not fully understood or considered.[Footnote 52] Thus,
identifying cultural features of the originating components, prior to,
or early on, in the merger and transformation process, can help
leadership gain a better understanding of their beliefs and values.
Organizationwide surveys, employee focus groups, and individual
interviews can be used to assess culture in order to provide a better
understanding of how work gets done and what values are important to
employees.
Past Cultural Change Efforts Met with Limited Success:
Since we identified the acquisition workforce culture as an underlying
cause of FAA's chronic system acquisition problems in 1996,[Footnote
53] FAA has taken a number of steps to change its culture, but long-
term management attention and focus have been lacking. Our 1996 report
showed that FAA's acquisitions were impaired because the employees and
managers acted in ways that did not reflect a strong commitment to
mission focus, accountability, adaptability, and coordination--the key
factors that we identified at that time as being associated with a
constructive culture. These factors are similar to the characteristics
of the results-oriented culture that FAA is seeking to develop. A
results-oriented culture is also an organizational element that we have
identified as key in transforming the government to meet the management
challenges of the 21ST Century.
In 1996 we reported that agency officials performed little or no
mission needs analysis, made unrealistic cost and schedule estimates,
and proceeded into the production phase of systems before completing
their systems' development. We also reported that accountability was
not well defined or enforced for decisions on requirements and
oversight of contracts. Additionally, ineffective coordination that
resulted from, among other things, stovepipe lines of authority,
impaired communications between organizations that needed to
coordinate, particularly between the acquisition and operations sides
of FAA. Finally, we reported that FAA's culture of conservatism and
conformity discouraged innovation and, instead, rewarded employees for
simply following the rules.
FAA responded to our 1996 report in several ways. As we recommended,
FAA developed a strategy to implement cultural change. While the
strategy called for, among other things, a report on the primary
impediments to cultural change and a detailed action plan, the strategy
was not implemented exactly as FAA anticipated. For example, FAA laid
out a series of tasks over the course of a year, including developing a
communications plan, conducting focus groups, and encouraging workforce
participation. However, according to FAA, the communications plan was
never implemented because of a shift in senior leadership and
organizational dynamics.
Rather than implementing the strategy for cultural change, FAA took a
number of alternative actions aimed at changing the culture. For
example, FAA developed an intellectual capital investment plan that
outlined corporate investment priorities for workforce development. FAA
also implemented a results-based individual performance management
program that showed the relationship between individual performance
plans and the agency's goals. Finally, FAA hired consultants to assess
the acquisition workforce culture in 1998 and 2000 and developed action
plans to address the issues that the assessments identified. According
to an FAA official, FAA started implementing these action plans, but
suspended them when the ATO was established. Additionally, although FAA
strongly emphasized cultural change in the annual performance plans
developed in the late 1990s, the emphasis tapered off from 2000 through
2002.
Some Recent FAA Survey Results Suggest Less Improvement in Workforce
Culture Than in Prior Years:
Improvements in some culture-related responses in FAA's employee
attitude survey have tapered off, compared with prior years. Since
1984, FAA has periodically conducted employee attitude surveys, most
recently in 1997, 2000, and 2003.[Footnote 54] The survey gathers
information on employees' attitudes, perceptions, and opinions about a
broad variety of organizational issues. Many of the survey items relate
to mission focus, accountability, coordination, and adaptability--the
four characteristics of a constructive culture that we identified in
1996.
According to our analysis of employee responses to survey items, FAA
made some initial progress between 1997 and 2000, but progress leveled
off for many items thereafter.[Footnote 55] (See fig. 11.)
Figure 11: Changes in Mean Response Scores for Selected Items on FAA's
Employee Attitude Surveys, 1997 to 2000, and 2000 to 2003, for the
Acquisition Workforce:
[See PDF for image]
Note: FAA score estimates have 95 percent confidence intervals of plus
or minus 0.06 or less. Year-to-year differences in scores of 0.08 or
more are significant at the 95 percent confidence level.
[A] This question is negatively worded, such that "strongly agree,"
would be a negative response. For consistency, we reversed the scoring
for this question, so that a "strongly agree" response would be scored
1, and a "strongly disagree" response would be scored 5. The practice
of reverse scoring negatively worded items is a commonly accepted
professional practice in survey research methodology.
[B] Not asked in the 1997 survey.
[End of figure]
FAA's Survey Results Are Lower Than Those for Other Organizations on
Similar Culture and Climate Surveys:
Surveys of organizational culture in other organizations, conducted
over the past 20 years (comparison group), show higher mean scores than
those for FAA's acquisition workforce. To determine how FAA's culture
compares with that of other organizations, we contracted with an expert
in organizational culture. With this expert's assistance, we compared
FAA's scores for the survey items listed in figure 10 with the
comparison group's responses to similar items.[Footnote 56] While an
exact match in the wording of survey items was not possible, we found
that the mean scores for FAA's acquisition workforce were lower than
those of the comparison group for 14 out of 16 items that we compared.
The exceptions were for items that addressed the adequacy of training
provided to perform one's job and the sufficiency of tools and
equipment needed to do one's job efficiently. Appendix III lists the 16
items that we compared and the respective mean scores of FAA's
acquisition workforce and of the comparison group. Appendix III also
shows the mean scores for organizations with highly effective cultures,
which could be used as a target towards which other organizations, such
as FAA, could work to redirect their cultures and improve their
performance.[Footnote 57]
It is important to note that comparisons of the responses to questions,
whose wording is similar, but not identical, are difficult because even
subtle changes in a question's wording can result in different
outcomes. Our expert commented that FAA's survey results are more
indicative of an organization's climate, rather than culture. The
expert noted, however, that research shows that climate is strongly
related to culture. Therefore, we present the two sets of survey
results here because the concepts that they are measuring are, in our
opinion, similar enough to warrant a general comparison. Additionally,
we noted in 1996 that the culture of FAA's 2,000-employee acquisition
workforce needed improvement, and that the rate of initial improvement
has not been sustained. Additionally, as previously stated, FAA has
demonstrated its recognition of the need for a results-oriented culture
by creating a goal to create such a culture in its Human Capital Plan.
The chief operating officer has also observed the need to change the
culture of the ATO's 36,000 employees.
Transforming organizational cultures requires substantial management
attention. The experiences of successful transformations and change
management initiatives in large public and private organizations
suggest that it can take 5 to 7 years or more until such initiatives
are fully implemented and cultures are transformed in a sustainable
manner. Such changes require focused, full-time attention from senior
leadership and a dedicated team. The team must have vested authority
and resources from top management to set priorities, make timely
decisions, and move quickly to implement decisions. Such a team
provides a visible signal that the transition is being undertaken with
the utmost seriousness and commitment. Having a dedicated transition
team is just one of several practices that we have identified, such as
setting implementation goals and a timeline and establishing a
communication strategy, that are key to successful mergers and
organizational transformations. (See app. IV for a complete list.)
Conclusions:
FAA has addressed a number of the challenges it faces in hiring and
training thousands of air traffic controllers over the coming decade.
However, FAA's lack of information on the cost of this program is of
particular concern as the agency enters a period of anticipated lean
budgets, as discussed in the next chapter. A shortage of funds that
results in hiring fewer controllers than needed could lead to
additional delays in air travel, beyond those caused by infrastructure
constraints.
Successful organizational transformations and cultural changes require
several years of focused attention from senior leadership. In the past,
FAA set, but did not sustain, a fact-based course for creating a
constructive organizational culture. Promising initiatives, such as
detailed action plans, were developed but not implemented or sustained,
and without continued attention to cultural change from the top,
improvements leveled off, and FAA now appears to lag behind other
organizations on cultural measures. FAA's current effort to establish a
baseline for measuring cultural change represents an important first
step, but additional steps and sustained management attention will be
needed to achieve and maintain progress. Unless FAA succeeds in
transforming itself into an organization that is more mission focused,
accountable, cooperative, and adaptable, it could have difficulty
establishing the results-oriented culture that it seeks.
Recommendation for Executive Action:
To provide Congress with accurate information on the resources needed
to hire and train thousands of air traffic controllers over the next
decade, we recommend that the Secretary of Transportation direct the
FAA Administrator to estimate the cost of FAA's controller hiring and
training plan and incorporate these estimates into future budget
requests.
To ensure that FAA provides the long-term focus needed for an effective
cultural transformation, we recommend that the Secretary of
Transportation direct the FAA Administrator to provide sustained
oversight of efforts to transform FAA's workforce culture to one that
is more results-oriented, including periodically monitoring the
agency's progress against baseline data.
Agency Comments:
FAA did not comment these recommendations, but provided technical
comments which we included as appropriate.
[End of section]
Chapter 4: Rising Costs and Declining Revenues Pose Financial
Management Challenges:
FAA faces the dual challenge of rising costs and declining revenues,
culminating in a projected multibillion-dollar gap between its expected
budget targets and expected spending requirements through fiscal year
2009. To attempt to live within its means, FAA is cutting programs and
controlling costs, but these steps will not come close to closing the
gap. FAA officials and some experts and stakeholders believe a key
element in addressing the agency's financial management challenges is
changing FAA's revenue structure from the present ticket-tax-based
structure to one more closely tied to FAA's cost of providing services.
Collectively, aviation experts and stakeholders suggested that FAA
could address its financial management challenges through a two-pronged
approach: in the near term, consider options that are readily
available, such as contracting out more of its services and pursuing
other cost-saving measures; and over the longer term, determine whether
a business case could be developed to support more extensive changes
that would require presidential and/or congressional action to
implement, such as providing the ATO with more financial management
flexibility.
To Address Rising Costs and Declining Revenues, FAA Is Focusing on Cost
Control:
FAA is concerned about the impact of rising costs and reduced budget
targets through fiscal year 2009, combined with uncertainty over future
balances in the Trust Fund.[Footnote 58] FAA is attempting to live
within its reduced means by controlling its costs.
FAA Projects a Multibillion-Dollar Gap:
FAA projects an $8.2 billion gap between its expected budget targets
and expected spending requirements through fiscal year 2009. Under
existing budget targets set through fiscal year 2009, FAA would receive
about 17 percent less each year in capital funding than it received in
fiscal years 2002, 2003, and 2004. For fiscal year 2005, FAA received
an appropriation of $2.5 billion for capital expenditures, and capital
budget targets for fiscal years 2006 through 2009 are just under $2.5
billion. In contrast, for fiscal years 2002 through 2004, FAA received
annual capital appropriations of nearly $3 billion. (See fig. 12.)
Figure 12: Actual Capital Appropriations, Fiscal Years 2002 - 2005, and
Budget Targets, Fiscal Years 2006 - 2009:
[See PDF for image]
[End of figure]
Compounding FAA's financial concerns is ongoing uncertainty over
revenue forecasts for the Trust Fund. From fiscal years 2002 through
2004, FAA's expenditures declined at a steeper rate than the Trust Fund
revenues, but the expenditures nonetheless remained higher. (See fig.
13.) Although revenues increased from fiscal years 2003 through 2004,
expenditures increased more rapidly.
Figure 13: Aviation and Airway Trust Fund Expenditures and Revenues,
Fiscal Years 2002 - 2004:
[See PDF for image]
[End of figure]
The combined effect of the higher expenditures and the lower revenues
is a reduction in the Trust Fund's uncommitted balance of nearly 50
percent from fiscal years 2002 through 2004. (See fig. 14.)
Figure 14: Aviation and Airway Trust Fund Uncommitted Balances, Fiscal
Years 2002 - 2004:
[See PDF for image]
[End of figure]
We recently testified that in 4 out of the last 5 years, actual trust
fund revenues fell short of forecasts. Our analysis indicated that if
revenues fall 10 percent short of forecasts for fiscal years 2005
through 2007, the fund could be bankrupt by 2006.[Footnote 59]
FAA Cut Major Programs and the ATO Is Gathering and Tracking Data to
Control Costs:
FAA cut funding for three major programs. For fiscal year 2005, the
appropriation for FAA's facilities and equipment budget, which funds
ATC system acquisitions, was $393 million less than the agency had
planned to spend. FAA conducted an intensive review of its capital
investment portfolio and absorbed the $393 million reduction largely by
suspending the funding for CPDLC, an e-mail-like messaging system for
communications between air traffic controllers and pilots; eliminating
a major component of NEXCOM, an air-to-ground digital communications
system; and returning LAAS, a precision landing system augmented by
satellites, to research and development to resolve a key performance
shortfall.
The ATO plans to manage its services on the basis of costs. Key to this
effort is FAA's implementation of a cost accounting system. Until
recently, FAA had no cost accounting system and could not accurately
determine the cost of its activities. When fully implemented in 2006,
the cost accounting system should address our long-standing concern
that FAA lacked the cost information necessary for decision making as
well as to adequately account for its activities and major projects,
such as the air traffic control modernization program. Additionally,
the ATO intends to use the cost accounting system to provide more
credible and transparent analyses of the costs and benefits of
alternative plans of action. For example, ATO officials said the system
will enhance their ability to accurately determine the costs of
providing specific services or products, and to compare those costs
with the value provided to the organization's customers. This
information will be valuable in prioritizing activities and weighing
the costs and benefits of various courses of action when developing and
supporting proposed budgets.
The ATO also plans to hold its managers accountable for cost control.
The ATO has decentralized cost accountability to service delivery
points--the units that actually provide services--such as air traffic
control facilities. Each manager of a service delivery point will
develop an operating budget. According to the ATO's plans, each manager
will be held accountable for holding costs within specific targets.
Managers will track their costs using reports that show expenditures
for operations, facilities and equipment, and overhead, as well as cost
per service. For example, managers will receive reports indicating the
cost per takeoff and landing, or cost per flight hour, depending on the
organizational unit's purpose. ATO officials stressed that training key
executives and managers to understand the general ledger and cost
accounting system is a key element in controlling costs. The ATO plans
incorporate cost control into the performance rating and bonus system
in fiscal year 2006.
FAA has also begun to base funding decisions for system acquisitions on
their contribution to reducing the agency's operating costs, among
other things. Currently, FAA's Telecommunications Infrastructure--one
of the 16 major system acquisitions that we reviewed in detail--is the
only one of the 55 system acquisitions in FAA's ATC modernization
program that helps reduce the agency's operating costs. However, FAA
does not expect to realize most of these benefits until after 2009.
The ATO is conducting activity value analysis as another method to
reduce costs. Through activity value analysis, the ATO determines (1)
the costs of the products and services provided, (2) the factors that
affect the costs, and (3) the value of these products and services, as
perceived by the ATO's internal customers. Through activity value
analysis, officials are asking the internal organizations that use the
ATO's products and services to categorize their value as high, medium,
or low, while ATO officials categorize the cost of performing each
activity as high, medium, or low. ATO officials expect the process to
help them eliminate activities with low customer value and determine
ways to reduce the costs of activities with high customer value.
The ATO first focused the activity value analysis on headquarters
units, and plans to do so later at field units. The results of the
headquarters analysis indicated that internal customers rated only 5
out of 73 reviewed products or services as low value, and all of these
were also low cost. Officials judgmentally selected 11 activities for a
more in-depth analysis to determine areas for potential improvement.
The activity value analysis resulted in 39 discrete findings and
recommendations with common themes. (See table 3).
Table 3: Common Themes and Number of Findings from ATO's Headquarters
Activity Value Analysis:
Common theme: Accountability or metrics is needed;
Number of findings: 19.
Common theme: Tools and systems lack standardization;
Number of findings: 18.
Common theme: Approach across service units is inconsistent;
Number of findings: 15.
Common theme: Process is too complex or disparate;
Number of findings: 9.
Common theme: Function or organization is too spread out;
Number of findings: 9.
Common theme: Process is sound, but not enforced;
may require minor adjustments;
Number of findings: 3.
Common theme: Product or service is an afterthought;
Number of findings: 3.
Source: FAA.
[End of table]
Existing Cost Control Initiatives Will Not Close the Projected Gap:
FAA, through the ATO, has a number of cost control initiatives under
way. For example, the ATO is evaluating whether some of its services
can be provided for less cost by contracting out. In February 2005, FAA
awarded a contract for the operation of its flight service stations.
Under this arrangement, which FAA termed the largest competitive
sourcing activity, at that time, in the federal government, the agency
expects significant savings. According to FAA's estimate, the agency
will save $441 million in capital costs because it will not continue to
procure modernized equipment for the flight service stations.
Additionally, FAA expects to save $1.2 billion in operating costs.
However, the projected operating cost savings would not occur until
fiscal year 2011 or later; only about $241 million savings in operating
costs would be realized through fiscal year 2010.[Footnote 60] For
fiscal years 2005 through 2010, FAA also projects savings of $212
million in operating costs from a variety of other actions, including
improvements in procurement for office supplies, office equipment,
mail, printing and information technology hardware and software;
improving cell phone contracting; and cutting night shift operations at
selected ATC towers.
These cost control efforts are not likely to close the projected gap.
In total, the estimated operating cost savings that the agency could
realize from current cost-reduction actions is $454 million through
fiscal year 2010--far short of the projected gap. However, additional
options for cost savings exist. Some will require FAA to address
organizational barriers and receive strong political support for
implementation. Frequently cited cost control strategies are described
below.
* Consolidate major air traffic control facilities. A 1997 Coopers &
Lybrand report concluded that the number of these centers could be
reduced without a negative impact on air safety, but that such an
initiative was considered unfeasible without strong political support
for cost control.[Footnote 61] Some stakeholders told us that six or
fewer facilities could be sufficient. FAA officials said they have no
plans to consolidate centers because the concept would require strong
political support that is not yet evident and they have no current
financial estimate of potential savings. In addition, FAA's Management
Advisory Council[Footnote 62] recently recommended that FAA develop a
plan for reducing the number of terminal radar approach control
facilities from their current level of 150 aging and inefficient
facilities to around 50 to 60 newer, upgraded facilities using more
capable and efficient automation.
* Consolidate regional offices. According to the Coopers & Lybrand and
the National Civil Aviation Review Commission reports, FAA could
achieve savings by consolidating its nine regional offices. Both
reports said that FAA had studied the issue numerous times but had
never acted on the results of its own studies. According to the
commission's report, consolidating nine FAA regional offices into three
could save $400 million over a 5-year period. Several stakeholders told
us this is an initiative that FAA should pursue.
* Expand the Contract Tower Program. Although FAA employees staff
control towers at most of the nation's busiest airports, FAA contracts
for outside staff to work at over 200 airports with lower traffic
levels. Both the Coopers & Lybrand study and the commission report
recommended expanding the contract tower program to achieve savings of
$20 million to $30 million per year. More recently, the Department of
Transportation's Office of the Inspector General reported that each
contract tower costs FAA nearly $900,000 less per year than comparable
FAA towers, without compromising flight safety.
* Decommission infrastructure. Aviation stakeholders noted that savings
could be achieved by decommissioning ground-based navigational aids,
but FAA has been slow to take action. As of May 2005, approximately
2,200 ground-based navigation aids were in operation. At the same time,
FAA is fielding costly satellite navigation systems such as WAAS, but
has made little progress in decommissioning the ground-based
infrastructure. Its current plan calls for modest equipment retirements
over the next 5 years and more substantial decommissioning over the
next 10 to 15 years. According to one estimate, these actions could
save $150 million per year. FAA maintains that a long decommissioning
process is required because general aviation users will continue to
rely on some of these systems until their aircraft are upgraded to use
satellite-based navigation. Several stakeholders commented that
responding to the general aviation community on this issue has long
been a roadblock to decommissioning obsolete equipment, and the ATO
cannot afford to maintain these systems indefinitely.
To Fund Major System Acquisitions through Fiscal Year 2009, FAA Has Cut
Funding for Planned Investments in Other Areas:
FAA plans to spend $4.2 billion on 16 major system acquisitions in
fiscal years 2005 through 2009. (See table 4).
Table 4: FAA Capital Funding Plans for Major ATC Modernization
Acquisitions:
Dollars in millions.
Major System: ERAM;
Funds planned for fiscal years: 2005-2009: $1,531.8.
Major System: STARS[A];
Funds planned for fiscal years: 2005-2009: $614.9.
Major System: WAAS;
Funds planned for fiscal years: 2005-2009: $570.8.
Major System: FFP2;
Funds planned for fiscal years: 2005-2009: $235.3.
Major System: ASR-11;
Funds planned for fiscal years: 2005-2009: $230.8.
Major System: NEXCOM;
Funds planned for fiscal years: 2005-2009: $212.8.
Major System: ATOP;
Funds planned for fiscal years: 2005-2009: $197.7.
Major System: FTI;
Funds planned for fiscal years: 2005-2009: $163.4.
Major System: ASDE-X;
Funds planned for fiscal years: 2005-2009: $107.9.
Major System: NIMS-2;
Funds planned for fiscal years: 2005-2009: $104.2.
Major System: ITWS;
Funds planned for fiscal years: 2005-2009: $77.7.
Major System: ECG;
Funds planned for fiscal years: 2005-2009: $74.3.
Major System: ATCBI;
Funds planned for fiscal years: 2005-2009: $73.7.
Major System: OASIS;
Funds planned for fiscal years: 2005-2009: $31.7.
Major System: LAAS;
Funds planned for fiscal years: 2005-2009: $9.9.
Major System: CPDLC;
Funds planned for fiscal years: 2005-2009: $2.9.
Total;
Funds planned for fiscal years: 2005-2009: $4,239.8.
Source: GAO analysis of FAA data.
Note: Amounts shown in the table for NEXCOM, LAAS, and CPDLC reflect
cuts previously described in this chapter.
[A] Funding includes the remaining STARS acquisitions for fiscal years
2006 and 2007 and $256.5 million for the Terminal Automation
Modernization Replacement (TAMR) program. In 2004, FAA decided to end
the STARS acquisition in fiscal year 2007 and began TAMR. FAA plans to
continue terminal modernization incrementally under TAMR, but has not
formally approved its funding. For purposes of this table, we are
treating STARS and TAMR as a single acquisition.
[End of table]
As table 4 shows, ERAM is a major component of FAA's system
acquisitions. This system will replace the software and hardware in the
current en route host computers at 20 of FAA's air route traffic
control centers.[Footnote 63] This acquisition is still in its early
stages, but will consume 35 percent of FAA's total estimated funding
planned through 2009 for the 16 systems listed in table 4.
To provide the $4.2 billion for its major system acquisitions in fiscal
years 2005 through 2009 while remaining within its budget targets, FAA
has reduced funding planned for new technology, facilities, and airport
improvements, among other things. (See fig. 15).
Figure 15: Percentage Reductions in Capital Investment Plans as of
January 2005, Compared with January 2003:
[See PDF for image]
[End of figure]
FAA Has Reduced Funding for New Technology That Could Produce Future
Benefits:
For fiscal years 2005 through 2009, FAA eliminated the $1.4 billion
that it had set aside for what it calls the "architecture segment."
These funds would have been used to perform about 2 years' worth of
early research on new programs that have not been officially approved
as part of an acquisition decision by FAA management. According to FAA
officials, these new programs will be postponed until they are
affordable.
Architecture segment funds would have funded some technology
developments intended to serve as cornerstones of FAA's planned
evolution from a controller-based ATC system to one that relies more on
collaboration between pilots and controllers and on better use of the
technology on board an aircraft for safe navigation. For example,
architecture segment funds would have been used to develop, among other
things, the System Wide Information Management network (SWIM). SWIM
would help transition the NAS to network-centric operations by
providing the infrastructure and associated policies and standards to
enable information sharing among all authorized NAS users, such as the
airlines, other government agencies, and the military.
The architecture segment would also have funded the initial development
of Automatic Dependent Surveillance-Broadcast (ADS-B), which FAA
describes as another cornerstone of its long-term plans. ADS-B is a
surveillance technology that transmits an aircraft's identity,
position, velocity, and intent to other aircraft and to ATC systems on
the ground, thereby enabling pilots and controllers to have a common
picture of airspace and traffic. By providing pilots with a display
that shows the location of nearby aircraft, the system enables pilots
to collaborate in decision making with controllers, safely allowing
reduced aircraft separation and thereby increasing NAS capacity.
Eliminating the architecture segment comes at an inopportune time, as
the JPDO begins its congressionally mandated efforts to coordinate the
research efforts of FAA and other federal agencies to create the Next
Generation Air Transportation System that would provide capacity to
meet the air transportation needs of 2025. The JPDO issued a report in
2004 outlining its plans to triple NAS capacity by 2025 and proclaimed
that it can reach this goal only by completely transforming the way air
traffic is managed. Network-centric operations and improved
surveillance technology, such as SWIM and ADS-B might provide, are key
elements of this transformation. A senior JPDO official told us that
the JPDO's planning is still at an early stage, and therefore, the JPDO
is not certain whether SWIM or ADS-B, as currently configured, would
address NAS needs for 2025. However, he said that further development
work is needed on these and other new technologies, and consequently,
the JPDO hopes to see some funding for early technology development
restored in FAA's capital investment plans as FAA's fiscal year 2007
budget request moves forward.
According to FAA, the program requirements for new technologies
included in the JPDO's plans for the future were not mature enough, and
business cases were not validated at that time, to justify inclusion
within FAA's constrained capital investment plan. FAA stated that it
plans to work with the Department of Transportation, the Office of
Management and Budget, and congressional appropriations committees to
introduce new technologies associated with the JPDO's future plans. We
believe that FAA needs to give continuing priority to developing
business cases for new technologies such as ASD-B and SWIM. Such
actions will help FAA and the JPDO transition the current NAS to the
next generation air transportation system.
FAA Has Reduced Funding for Facilities:
FAA cut nearly $790 million from its planned investments for
facilities--an action that could delay actions on facilities scheduled
for repair or replacement. Much of FAA's infrastructure--the buildings
and towers that house ATC employees and costly systems--is aging. (See
table 5). For example, the Casper, Wyoming, air traffic control tower
was built in 1937; the tower in Binghamton, New York, was built in
1951; and FAA's newest air route traffic center was occupied in 1963.
The average age of air traffic control towers at airports is 30 years.
FAA's chief operating officer told us that the Houston traffic control
center floods during heavy rains. Fire suppression systems are another
concern, he said. While FAA has replaced more than 30 air traffic
control towers and terminal radar approach control facilities in the
last 5 years, the funding reduction could delay progress on ATC
facilities that are scheduled for repair or replacement in the future.
Table 5: Age of NAS Facilities:
Facility: Air route traffic control facilities (that house en route ATC
operations);
Average age: 43 years.
Facility: Air traffic control towers (that house airport ATC
operations);
Average age: 29 years.
Facility: Terminal radar control facilities (that house ATC approach
and departure operations);
Average age: 25 years.
Source: FAA.
[End of table]
The capital spending reductions that FAA has planned for fiscal years
2005 through 2009 reflect the end result of difficult decisions about
which programs to fund and which to cut in order to remain within
budget targets. However, as we recently reported, FAA does not provide
sufficient information to senior agency, department, Office of
Management and:
Budget, and congressional decision-makers of how it has arrived at its
spending plans.[Footnote 64] Specifically, FAA does not identify the
impact of these decisions on ATC and NAS modernization. Such
information would make clear how constrained budgets will affect NAS
modernization and how FAA is working to live within its means.
Accordingly, we recommended that FAA begin providing such information
with its budget submissions to Congress. FAA informed us that it
intends to better inform Congress in the future by adding a section to
its annual capital investment plan that will summarize major changes
from the preceding year.
FAA Is Reviewing Potential Changes in Its Funding Mechanism:
With the various taxes that accrue to the Trust Fund scheduled to
expire in 2007, and FAA's reauthorization, also scheduled for 2007,
many aviation experts, as well as top Department of Transportation and
FAA officials, are revisiting the way FAA receives its funding and are
repeating recommendations made in the past, such as those of the
National Civil Aviation Review Commission in 1997. Aviation experts and
stakeholders agree that the incomplete implementation of these
recommendations and additional factors could limit FAA's ability to
fully address long-standing NAS modernization problems.
The ATO, as Created, Implemented Only Part of the 1997 Commission's
Recommendations:
The 2000 executive order and related legislation that laid the
foundation leading to FAA's creation of the ATO did not implement all
of the recommendations of the National Civil Aviation Review
Commission. The report stressed that the recommendations composed an
integrated and comprehensive funding package and that the
commissioners' agreement on the recommendations was contingent on their
implementation as a total package. The report stated that implementing
the recommendations in total could put FAA and aviation stakeholders in
a position to take advantage of industry growth and technological
change. The commission recommended the following:
* FAA's budget treatment must change. The commission recommended that
FAA's funding and financing system receive a federal budget treatment
ensuring that revenues from aviation users and spending on aviation
services are directly linked and shielded from discretionary budget
caps. This linkage would ensure that FAA's expenditures are driven by
aviation demand.
* FAA's management must become performance based. The commission
recommended that services related to the air traffic system be placed
in a performance-based organization, managed by a chief operating
officer, and overseen by a board of public interest directors. In
addition, FAA should institute a cost accounting system and be given
authority to implement innovative programs involving leasing and
borrowing authority. The commission further stated that the safety and
security functions of FAA, which are separate from the performance-
based organization, should also adopt a performance-based management
philosophy so that the quality of these programs can be improved.
* FAA's revenue stream must become more cost based. The commission
recommended that FAA adopt a cost-based revenue stream to support its
air traffic system activities including capital investments. At the
same time, funding for aviation security, safety, and government use of
the air traffic system should be provided by the federal government's
general fund.
* FAA must control its operating costs and increase capital
investments. The commission reviewed FAA's forecasted budget needs and
assumed the agency's budget projections to be reasonable in a status
quo environment. However, the commission noted that FAA's operating
costs could be better managed and controlled and that investments in
ATC modernization should be increased.
* Airport capital needs must be met. The report noted that the federal
requirements of airport capital development exceeded the amount of
revenue that was available to finance these requirements through the
Airport Improvement Program. The commissioners believed that the
Airport Improvement Program is the linchpin of airport financial
planning and stated that the program should be funded at a minimum of
$2 billion annually over the next 5 years.
While we do not necessarily agree with all of the commission's
recommendations, we note that they were not implemented as a complete
package, as the commission intended. Indeed, the ATO has been created
as a legislatively mandated performance-based organization, headed by a
chief operating officer, and focused on cost control, as the commission
recommended. However, creating the ATO did not change its funding
mechanism--a topic currently under discussion as the Trust Fund and
FAA's reauthorizations are about to expire. Additionally, FAA's
spending remained subject to congressional appropriations and the ATO
was not given authority to implement innovative programs involving
leasing and borrowing. Furthermore, the Trust Fund continues as a
partial funding source for aviation security and safety.[Footnote 65]
Aviation Experts and Stakeholders Repeated Several Past
Recommendations:
With the Trust Fund's scheduled 2007 expiration, and FAA's
reauthorization drawing near, stakeholders, aviation experts, and
Department of Transportation officials are discussing whether or how
the Trust Fund should be changed to better meet FAA's needs. Potential
changes echo those made by the commission in 1997. For example, FAA's
2004 performance report notes that the FAA's funding mechanism does not
link revenues with FAA's cost of providing ATC services.[Footnote 66]
The report states that Trust Fund revenues are affected primarily by
the number of passengers in the NAS, while FAA's workload and costs are
based on the number of aircraft operating in the NAS, regardless of the
number of passengers on each aircraft. Given the same number of
passengers, the Trust Fund's revenues would remain constant, even
though the passengers may be traveling on more, smaller aircraft. Under
this scenario, FAA's workload and costs would increase but FAA's income
would remain the same. The FAA Administrator noted that a tax on
airline fares paid by passengers, which is the Trust Fund's primary
source of revenue, is not related to FAA's actual cost of providing ATC
services, and is not responsive to changes in the aviation industry.
According to the Administrator, the United States is in a select
minority of countries--all of them small, third world nations--that do
not charge for the actual cost of air traffic control. She added that
the current structure provides little incentive for FAA's customers to
look at what things cost and help FAA to focus its resources where they
matter the most. Under this system, she observed, "everyone wants
everything and in a political environment, it becomes difficult — often
impossible — to do things differently and undertake real reform."
Some aviation experts also noted that FAA's funding stream needs to be
linked to the cost of its services and FAA needs multiyear funding,
financed by debt if necessary, to effectively manage its acquisitions,
as the commission recommended.[Footnote 67] FAA's chief operating
officer said that multiyear funding would provide needed stability, and
a senior Department of Transportation official stated that 50 percent
of acquisition cost overruns resulted from an unstable funding stream.
One stakeholder concluded that, at the present time, a window of
opportunity may exist to seriously reexamine past recommendations that
have been repeated over time, such as those of the commission. However,
not all stakeholders agree that significant changes are needed. The
National Air Traffic Controllers' Association, the labor union
representing air traffic controllers, testified that the Trust Fund is
a stable and strong source of revenue and structural changes should not
be taken lightly.
Some aviation experts and our work suggests steps that FAA could take
in the short term to improve its performance-based characteristics
within the existing structure of congressional oversight and financial
control. For example, one expert suggested that FAA has room for
improvement in prioritizing how it commits to programs that require
future investments, keeping in mind realistic funding assumptions.
Another noted that FAA's anticipated high retirement rate over the next
few years provides an opportunity to cut costs by redistributing and
trimming the workforce. Finally, some experts suggested that if
contracting for flight service stations proved to be effective, FAA
could consider contracting for other functions, such as oceanic or en
route ATC, or nighttime operations. Under this option, experts noted
that ongoing government oversight could ensure the safety of contracted
operations, and a "staged outsourcing" of the NAS's functions might
build confidence in the private sector's ability to provide air traffic
services safely and efficiently. As previously discussed, our work has
also pointed out cost-saving options that FAA could pursue, such as
consolidating ATC facilities and regional offices, decommissioning
ground-based navigational aids, and expanding the contract tower
program.
Other experts went so far as to state that FAA, through the ATO, cannot
fully address legacy modernization problems unless the ATO receives
managerial and budgetary independence. To this end, some stated that
the ATO's basic relationship with Congress must be changed so that ATO
has the authority to manage its own finances, as the private sector
does. Experts noted that, in contrast to the independence, flexibility,
and tools available to private business executives, the business
decisions made by the ATO's executives are subject to review by the FAA
Administrator, the Secretary of Transportation, the Office of
Management and Budget, and Congress. Increasing the ATO's autonomy
would entail fundamental structural changes to the how the ATO receives
and spends funding.
Considering such fundamental changes is consistent with our work on the
challenges facing this nation in the 21ST Century. Addressing these
challenges requires a fundamental reexamination of government policies,
programs, and functions to determine what the federal government should
do and how it should be financed in the future. Concerning
transportation, federal decision makers need to ask whether existing
program constructs and financing mechanisms are relevant to the
challenges of the 21ST Century.
Conclusions:
The current tight budget environment has forced FAA to make some tough
decisions, the implications of which may not be apparent to executive
branch and congressional decision makers. Including information in its
budget submissions on the impact of these decisions, as we previously
recommended, will enable FAA to provide decision makers with a better
understanding of the funding trade-offs it is proposing. FAA's current
capital investment plan sacrifices funding for the early development of
new technologies--included in the JPDO's plans for the NAS of the
future--to make funding available for ongoing modernization projects.
Although many of these ongoing projects are supportive of the JPDO's
vision, eliminating the funding for research and development for new
technologies runs counter to the JPDO's objectives. Balancing the needs
of ongoing and future projects is essential to provide for transforming
the NAS, both in the near term and by 2025.
The costs of hiring and training thousands of controllers annually for
the next decade, as discussed in chapter 3, add to FAA's financial
challenges. It is important that FAA estimate these costs now, so that
it can incorporate them in future budget requests. These cost estimates
will affect the amounts of funding FAA will have available for
modernization as well as operations.
The observations of aviation experts and stakeholders, as well as our
work on the nation's 21ST Century challenges, suggest a two-staged
approach to addressing FAA's financial management challenges. First,
FAA needs to pursue those options available under the existing federal
oversight and appropriations process, such as exploring opportunities
for contracting out more of its services, and consolidating facilities.
Once FAA has fully exploited those options, and has established a
record of improved financial management, it could consider developing a
business case to reexamine fundamental issues such as the appropriate
government role in aviation and the funding mechanism that support the
ATC system. Ultimately, Congress and the President decide these issues.
Recommendations for Executive Action:
To position FAA to best meet NAS needs in both the near term, and the
longer term, we are making the following two recommendations to the
Secretary of Transportation. The Secretary should direct the FAA
Administrator to (1) balance current and long-term investment
priorities; and (2) use all available management tools and, after
establishing a record of improved financial management, explore more
fundamental changes that could provide greater financial management
flexibility.
Agency Comments and Our Evaluation:
FAA commented that its fiscal year 2007 budget request will reflect its
balancing of current and future funding priorities, and, therefore, our
recommendation to this effect may be unnecessary. We are retaining this
recommendation because it pertains not only to fiscal year 2007, but to
future years as well. Likewise, FAA commented that it is already
utilizing all available financial management tools, including looking
at alternative financing mechanisms. Our draft report discussed FAA's
consideration of alternative financing mechanisms at length. We
continue to believe that FAA should explore further uses of available
management tools such as opportunities to contract out its services;
consolidate major facilities; and accelerate decommissioning of ground-
based navigation aids, as we have noted in this report. Therefore, we
are also retaining this recommendation. FAA also provided technical
comments, which we included as appropriate.
[End of section]
Appendixes:
Appendix I: Methodology for Workforce Culture Assessment:
Because we identified the acquisition workforce culture as an
underlying cause of air traffic control (ATC) modernization problems in
1996 and had not revisited this area since the Federal Aviation
Administration (FAA) published its strategy for cultural change in
1997, we reassessed the status of FAA's efforts in this area. We
obtained documents that showed evidence of the steps that FAA took to
improve the acquisition workforce culture between 1997 and 2005. To
benchmark the acquisition workforce against organizations with
constructive cultures, we employed the services of a consultant with
extensive experience in analyzing organizational culture and used a
research database of responses to the Organizational Culture Inventory"
and Organizational Effectiveness Inventory'. These instruments have
been administered over a period of 20 years to nearly 1,000
organizations selected to maximize the number and diversity of the
organizations represented in the database.
The research database does not contain client data--that is, data
obtained from organizations that contracted for an organizational
assessment. Such data would be subject to self-selection biases because
the factors prompting the use of culture and climate surveys by such
organizations almost ensure that the results will be skewed and
somewhat negative. Additionally, the types of organizations (typically
large, for-profit corporations) that undertake, and can afford, such
surveys are not necessarily representative of the larger population of
organizations. Instead, the organizations, whose responses are in the
research database, were strategically selected and invited to use the
surveys on a research basis.[Footnote 68] Additionally, priority was
placed on gaining entrée into a number of highly effective
organizations, including some that initially turned down the invitation
on the grounds that their cultures represented a competitive advantage
and were proprietary. Thus, though not collected from a random sample
of organizations, the research data are less subject to systematic
biases than are client-based data.
The research database provides both "historical averages" and
"constructive benchmarks" against which organizations can compare their
results. The historical averages, for the purposes of this study, are
the mean scores for all respondents across the organizational units
surveyed. The constructive benchmark scores are the averages for up to
172 highly effective units--defined as those with predominately
positive and adaptive cultures. These scores provide a target toward
which organizations can work to redirect their cultures and enhance
their performance.
We compared the results in the research database with those that FAA
obtained through its periodic employee attitude survey. Specifically,
we used 1997, 2000, and 2003 survey results for the acquisition
workforce, the same segment of the organization that we focused on in
1996. In each of these years, FAA mailed surveys to the entire
acquisition workforce and received completed surveys from approximately
half of the workforce, as summarized in table 6.
Table 6: Number of Surveys That FAA Mailed to the Acquisition Workforce
and Completed Surveys Received in 1997, 2000, and 2003:
Year: 1997;
Surveys mailed: 2,051;
Completed surveys returned: 1,004.
Year: 2000;
Surveys mailed: 1,983;
Completed surveys returned: 1,057.
Year: 2003;
Surveys mailed: 1,825;
Completed surveys returned: 928.
Source: GAO representation of FAA data.
[End of table]
The results derived from these completed surveys could differ if a
different subset of the workforce responded. Consequently, we treat the
completed surveys as a random sample of the workforce to acknowledge
the sampling error that would be expected for a probability sample of
this size. This treatment assumes that response is random and that the
completed surveys constitute a simple random sample of the acquisition
workforce. If this assumption is not correct, for example, if employees
with positive attitudes were more (or less) likely to respond than
employees with negative attitudes, then the scores developed from the
survey results could overstate (or understate) the scores for the
workforce overall.
Mean scores were developed from the survey data by assigning values of
1 through 5 to the five-point extent scales for each question, and then
using these score values to estimate an average score based on all
responses for that question.[Footnote 69] We express our confidence in
the precision of these score estimates at 95 percent confidence
intervals. This is the interval that would contain the actual
population value for 95 percent of the samples we could have drawn. As
a result, we are 95 percent confident that each of the confidence
intervals in this report will include the true values in the study
population. For the estimated acquisition workforce scores in this
report, the 95 percent confidence intervals are within plus or minus
.06 points of the score estimate. For example, if the estimated score
is 3.21, then the 95 percent confidence interval would run from 3.15 to
3.27.
With our expert's assistance, we selected items from FAA's employee
attitude survey that addressed cultural issues and matched them with
similar survey items used to assemble the research database. Each of
our comparisons addressed a common aspect of organizational culture or
climate. For example, FAA's survey asks for agreement or disagreement
with the following statement: "In my organization, there are service
goals aimed at meeting customer expectations." We compared FAA's
responses to the following item used in the comparison group survey:
"Are you encouraged to emphasize the perspective and needs of customers
when making decisions?" Appendix III shows a complete list of FAA
survey items and comparison group survey items that we used for
comparison, and the respective scores.
It is important to note that comparisons of the responses to questions
whose wording is similar, but not identical, are difficult because even
subtle changes in a question's wording can result in different
outcomes. We present the two sets of survey results here because they
are measuring similar enough concepts that we think a general
comparison is warranted. Additionally, we used the results of our
comparisons as part of a body of evidence that also includes our past
work on FAA's culture, and FAA's more recent recognition of the
importance of a results-oriented culture.
We believe that the research database is sufficiently authoritative,
appropriate, and reliable for us to use it as a basis for comparing
FAA's workforce culture with other organizations' cultures. The survey
that was used to create the database has been completed by over
2,500,000 respondents since its publication in prototype form in 1983.
It has been administered in thousands of organizations throughout the
world, including the Department of the Navy, the Coast Guard, the
Defense Logistics Agency, major retailing organizations, international
pharmaceutical companies, financial services corporations, newspapers,
high tech firms, universities and hospitals, not-for-profit
organizations, and numerous manufacturing firms. These organizations
have variously used the results to diagnose their cultures and initiate
change programs, to identify the "ideal" culture for maximizing their
effectiveness, and to monitor the impact of organizational development
efforts. More specialized applications have included programs focusing
on diversity within organizations, mergers and acquisitions, and union-
management relations.
Additionally, the survey is referenced in various textbooks and has
been adopted for instructional purposes by leading universities. It has
been used in research projects on topics ranging from organizational
reliability and effectiveness to member socialization and citizenship
behavior. These projects include a Department of Defense study of the
culture of highly effective units during the Desert Shield buildup; a
comparative study of 150 supermarkets sponsored by the Coca-Cola
Retailers' Research Council; the Readership Institute's (Northwestern
University) national survey of 100 newspapers; and various projects
focusing on organizations carrying out critical activities (e.g.,
nuclear power plants, nuclear aircraft carriers, critical care units).
The survey has also been used in international cross-cultural projects,
including one by the International Association of Economic and
Management Students focusing on management cultures in over 40
different countries. The survey has been published in Bulgarian,
Chinese (traditional and simplified), Dutch, Finnish, French (European
and Canadian), German, Icelandic, Japanese, Korean, Portuguese,
Romanian, Russian, Spanish (Castilian and Latin American), and Swedish,
and preliminary translation keys have been developed in Afrikaans,
Hindi, Polish and other languages. Results of research supporting the
scientific reliability and validity of the survey have been published
in Psychological Reports, Group and Organization Studies, Human
Relations, and the Handbook of Organizational Climate and Culture.
Similarly, we believe FAA's employee attitude survey is sufficiently
authoritative, appropriate, and reliable for us to use it as a basis
for comparing FAA's workforce culture over time. FAA has administered
the employee attitude survey to its employees nine times since 1984.
The survey was designed to gather information on employees' attitudes,
perceptions, and opinions about a broad variety of organizational
issues. Although elements of the survey have changed over time, items
thought to represent core areas of interest have remained relatively
unchanged. For our analysis, we used FAA's data showing the acquisition
workforce's responses for surveys conducted in 1997, 2000, and 2003.
The acquisition workforce's response rate for these years was,
respectively, 49 percent, 53 percent, and 51 percent.
[End of section]
Appendix II: Major ATC System Acquisitions:
Air Traffic Control Radar Beacon Interrogator--Replacement (ATCBI-6):
ATCBI-6 is a replacement radar capable of determining both range and
direction to and from the aircraft. It can also forward this
information to the appropriate air route traffic control centers. It
will replace radars that have exceeded their life expectancy and have
proved extremely vulnerable to outages and critical-parts shortages.
Advanced Technologies and Oceanic Procedures (ATOP):
ATOP is an integrated system of new controller workstations, data-
processing equipment, and software that will enhance the control and
flow of oceanic air traffic to and from the United States. ATOP is
planned for the three sites that control oceanic air traffic:
Anchorage, Alaska; New York, New York; and Oakland, California.
Airport Surface Detection System-Model X (ASDE-X):
ASDE-X is an airport surveillance system that enables air traffic
controllers to track the surface movement of aircraft and vehicles. The
detection system automatically predicts potential conflicts and
seamlessly covers airport runways, taxiways, and other areas.
Airport Surveillance Radar Model-11 (ASR-11):
ASR-11 is a digital radar that replaces aging analog radars, such as
ASR-7 and ASR-8, as well as collocated ATCBI-4 and ATCBI-5 secondary
radars, with a single, integrated digital radar system. ASR-11 reduces
operational costs, improves safety, and can accommodate future capacity
increases.
Controller-Pilot Data Link Communications (CPDLC):
CPDLC is a communication system that will allow pilots and controllers
to transmit data messages directly between FAA automated ground
computers and aircraft.
En Route Automation Modernization (ERAM):
ERAM will replace software and hardware in the host computers at FAA's
20 en route air traffic control centers, which provide separation,
routing, and advisory information. It provides a flexible and
expandable base to facilitate further National Airspace System (NAS)
modernization initiatives.
En Route Communications Gateway (ECG):
A precursor to ERAM, ECG provides a communications interface between
radar sites and en route centers. The system has an open and expandable
platform that allows for new connectivity and functionality as the NAS
evolves. It replaces the interim Peripheral Adapter Module Replacement
Item that has been operating for 10 years and has exceeded its life
expectancy.
FAA Telecommunications Infrastructure (FTI):
FTI is FAA's new telecommunications system. It will replace costly
networks of separately managed systems and services--both leased and
owned--by integrating advanced telecommunications services within FAA's
NAS and non-NAS infrastructures.
Free Flight Phase 2 (FFP2):
FFP2 is a suite of air traffic control tools and subsystems that allows
air traffic controllers to move gradually from a highly structured
system, based on elaborate rules and procedures, to a more flexible
system wherein pilots, within limits, can change their route, speed,
and altitude while keeping air traffic controllers informed of such
changes. It includes the Traffic Management Advisor, Collaborative
Decision Making, and the User Request Evaluation Tool.
Integrated Terminal Weather System (ITWS):
ITWS is a weather information system that furnishes air traffic
controllers and supervisors with full-color graphic displays of weather
conditions that need no meteorological interpretation. It provides a
comprehensive representation of the current weather situation and
precise forecasts of weather conditions for the next 20 minutes (to be
increased to 60 minutes in 2006) of convective weather conditions.
Local Area Augmentation System (LAAS):
LAAS is a landing guidance system that would use global positioning
satellites and would be installed at airports to allow aircraft to
execute precision instrument approaches and landings in all weather
conditions. LAAS would eliminate the need for multiple instrument
landing systems at airports where it is installed.
NAS Infrastructure Management System--Phase 2 (NIMS-2):
NIMS is a centralized system to help manage and schedule maintenance on
the NAS infrastructure, including its facilities, systems, and
equipment. NIMS will decrease the number of en route delays by reducing
the time required to restore systems to full operation following
maintenance. NIMS Phase 1, already complete, provides initial
Operational Control Center capability, along with remote monitoring and
control functionality, to 3,700 NAS facilities and 5,800 deployed
maintenance data terminals.[Footnote 70] Phase 2 will fully implement
resource management and enterprise management software and focus on
increasing workers' productivity in receiving orders and managing
resources.
Next Generation Air/Ground Communications (NEXCOM):
NEXCOM is a digital communications system, consisting of multimodal
digital radios, avionics, and ground stations, that will improve ATC
communications by replacing old analog communication systems. Segment
1A will replace 30-to 40-year-old radios, deploying 6,000 new radio
sets that use both analog and digital communications with aircraft.
Segment 1B will create ground stations to communicate with aircraft
equipped with digital capability.
Operational and Supportability Implementation System (OASIS):
OASIS is a system used at flight service stations to assist general
aviation pilots with flight planning. The system provides up-to-the-
minute weather graphics by integrating real-time weather and flight
planning data with overlays of flight routes. It replaces the Flight
Services Automation system for which FAA has had difficulty obtaining
spare parts and hardware support.
Standard Terminal Automation Replacement System (STARS):
STARS is a workstation to allow civilian and military air traffic
controllers to direct aircraft near major U.S. airports and will
replace aging workstations at certain facilities. It has an open and
expandable terminal automation platform that can accommodate air
traffic growth, as well as new hardware and software that is designed
to promote safety, maximize operational efficiency, and improve
controllers' productivity. FAA will terminate STARS after replacing 47
older systems by the end of fiscal year 2007.
Terminal Automation Replacement (TAMR):
TAMR is a modernization program to resolve existing safety, capacity,
and obsolescence concerns in terminal automation systems at
approximately 115 terminal radar approach control facilities and their
associated towers. FAA initiated TAMR in 2004, concurrent with its
decision to end STARS acquisitions by the end of fiscal year 2007.
According to FAA, TAMR will incrementally continue the modernization
and replacement actions.
Wide Area Augmentation System (WAAS):
WAAS is a navigation and landing guidance system that uses global
positioning satellites to provide precise navigation and landing
guidance at all U.S. airports, including thousands that have no ground-
based instrument landing capability.
[End of section]
Appendix III: Perceptions of Organizational Culture in FAA's
Acquisition Workforce and in Other Organizations:
This appendix provides the results of surveys conducted at FAA and at a
variety of other organizations (comparison group). FAA has conducted
employee attitude surveys periodically since 1984, and most recently in
1997, 2000, and 2003. At the other organizations, Human Synergistics,
International, has surveyed employees over a 20-year period to develop
a database for research on organizational culture and climate, as
discussed in appendix II, using its Organizational Culture Inventory"
and its Organizational Effectiveness Inventory' (see app. II for more
detail about these inventories). Human Synergistics also identified a
subset of these organizations as highly effective organizations with
constructive cultures.
To compare the perceptions of FAA's acquisition workforce with the
perceptions of employees at other organizations, including those
organizations with constructive cultures, we compared the mean
responses of FAA and other employees to similar items in their
respective surveys. We selected four survey items to compare for each
of four key factors associated with a constructive organizational
culture--mission focus, accountability, adaptability, and coordination.
In this appendix, we refer to the mean responses of the FAA and other
employees as the mean scores for the survey items. Additionally, we
refer to the mean responses of the constructive organizations'
employees as the benchmark scores for the items.
Figure 16 presents the mean and benchmark scores for the four survey
items associated with each of the four factors we considered. For FAA's
acquisition workforce, we provide the mean scores, as calculated by
FAA, for each item from the agency's 1997, 2000, and 2003 surveys. For
the employees of the other and the highly effective organizations, we
provide the mean and the benchmark score for each item that we obtained
from the research database. We display these scores in consecutive
charts whose juxtaposition shows how the perceptions of FAA acquisition
employees compare at three points in time with the perceptions of
employees at other organizations generally and at organizations with
constructive cultures.
[This page left blank intentionally]
Figure 16: Acquisition Workforce's Mean Responses to Selected Items
from FAA's 1997, 2000, and 2003 Employee Attitude Surveys and
Comparison Group's Mean and Benchmark Scores for Similar Items:
[See PDF for image]
Note: FAA score estimates have 95 percent confidence intervals of plus
or minus 0.06 or less. Differences in scores of 0.08 or more are
significant at the 95 percent confidence level.
[A] This question is negatively worded, such that "strongly agree,"
would be a negative response. For consistency, we reversed the scoring
for this question, so that a "strongly agree" response would be scored
1, and a "strongly disagree" response would be scored 5. The practice
of reverse scoring negatively worded items is a commonly accepted
professional practice in survey research methodology.
[B] Not asked on the 1997 survey.
[End of Figure]
[End of section]
Appendix IV: Key Practices and Implementation Steps for Mergers and
Organizational Transformations:
Practice: Ensure top leadership drives the transformation;
Implementation steps:
* Define and articulate a succinct and compelling reason for change;
* Balance continued delivery of services with merger and transformation
activities.
Practice: Establish a coherent mission and integrated strategic goals
to guide the transformation; Implementation steps:
* Adopt leading practices for results-oriented strategic planning and
reporting.
Practice: Focus on a key set of principles and priorities at the outset
of the transformation; Implementation steps:
* Embed core values in every aspect of the organization to reinforce
the new culture.
Practice: Set implementation goals and a time line to build momentum
and show progress from day one; Implementation steps:
* Make public implementation goals and time line;
* Seek and monitor employee attitudes and take appropriate follow-up
actions;
* Identify cultural features of merging organizations to increase
understanding of former work environments;
* Attract and retain key talent;
* Establish an organizationwide knowledge and skills inventory to allow
knowledge exchange among merging organizations.
Practice: Dedicate an implementation team to manage the transformation
process; Implementation steps:
* Establish networks to support the implementation team;
* Select high-performing team members.
Practice: Use the performance management system to define
responsibility and ensure accountability for change; Implementation
steps:
* Adopt leading practices to implement effective performance management
systems with adequate safeguards.
Practice: Establish a communication strategy to create shared
expectations and report related progress; Implementation steps:
* Communicate early and often to build trust;
* Ensure consistency of message;
* Encourage two-way communication;
* Provide information to meet specific needs of employees.
Practice: Involve employees to obtain their ideas and gain ownership
for the transformation; Implementation steps:
* Use employee teams;
* Involve employees in planning and sharing performance information;
* Incorporate employee feedback into new policies and procedures;
* Delegate authority to appropriate organizational levels.
Practice: Build a world-class organization; Implementation steps:
* Adopt leading practices to build a world-class organization.
Source: GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, [Hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-03-669](Washington, D.C.: July 2,
2003).
(542036):
FOOTNOTES
[1] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.:
Jan. 1, 2005). In August 2005, FAA submitted a plan to the Office of
Management and Budget to remove ATC modernization from GAO's high-risk
list. FAA submitted this plan in response to a request from the Office
of Management and Budget, which had asked agencies with programs on
GAO's high-risk list to identify their goals for reducing fraud, waste,
or mismanagement. Although the request specified that the purpose of
the plans was not to get agency programs off the high-risk list, FAA
intends to use the activities described in the plan as means for doing
so, according to a Department of Transportation official.
[2] "Organizational culture" is the underlying assumptions, beliefs,
values, attitudes, and expectations shared by an organization's members
that affect their behavior and the behavior of the organization as a
whole.
[3] For reports on airline employees and aircraft and equipment safety
assurance workforce and procedures, see, for example, GAO, Aviation
Safety: FAA Needs to Update the Curriculum and Certification
Requirements for Aviation Mechanics, GAO-03-317 (Washington, D.C.: Mar.
6, 2003); Human Factors: FAA's Guidance and Oversight of Pilot Crew
Resource Management Training Can Be Improved, GAO/RCED-98-7
(Washington, D.C.: Nov. 24, 1997); and Aviation Safety: Safer Skies
Initiative Has Taken Initial Steps to Reduce Accident Rates by 2007,
GAO/RCED-00-111 (Washington, D.C.: June 28, 2000).
[4] GAO, Aviation Acquisition: A Comprehensive Strategy Is Needed for
Cultural Change at FAA, GAO/RCED-96-159 (Washington, D.C.: Aug. 22,
1996).
[5] GAO, The National Airspace System: FAA Has Made Progress but
Continues to Face Challenges in Acquiring Major Air Traffic Control
Systems, GAO-05-331 (Washington, D.C.: June 10, 2005).
[6] GAO, Information Security: Progress Made, but Federal Aviation
Administration Needs to Improve Controls Over Air Traffic Control
Systems, GAO-05-712 (Washington, D.C.: Aug. 26, 2005).
[7] GAO, Air Traffic Control: FAA Needs to Better Prepare for Impending
Wave of Controller Attrition, GAO-02-591 (Washington, D.C.: June 14,
2002).
[8] GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, GAO-03-669 (Washington,
D.C.: July 2, 2003).
[9] In this report, the term "budget targets" means the outyear budgets
provided by the Office of Management and Budget.
[10] GAO, Air Traffic Control: System Management Capabilities Improved,
but More Can Be Done to Institutionalize Improvements, GAO-04-901
(Washington, D.C.: Aug. 20, 2004).
[11] GAO, Information Technology: FAA Has Many Investment Management
Capabilities in Place, but More Oversight of Operational Systems Is
Needed, GAO-04-822 (Washington, D.C.: Aug. 20, 2004).
[12] GAO, Federal Aviation Administration: Stronger Architecture
Program Needed to Guide Systems Modernization Efforts, GAO-05-266
(Washington, D.C.: Apr. 29, 2005).
[13] GAO-05-712.
[14] GAO-02-591.
[15] GAO-03-669.
[16] A navigation aid is any visual or electronic device, airborne or
on the surface, that provides point-to-point guidance information or
position data to aircraft in flight.
[17] The term "service provider" refers to anyone who furnishes NAS
users with separation assurance, traffic management, infrastructure
management, aviation information, navigation, landing, airspace
management, search and rescue, or aviation assistance services.
[18] P.L. 108-176, December 12, 2003.
[19] Joint Planning and Development Office, Next Generation Air
Transportation System: Integrated Plan (Washington, D.C.: Dec. 12,
2004).
[20] P.L. 91-258.
[21] The President's Management Agenda was issued in fiscal year 2002
as a strategy for improving the performance and management of the
federal government.
[22] FAA has an ongoing ATC modernization effort in Alaska. This
modernization effort includes software improvements for pilots' weather
briefings and infrastructure improvements for flight service
facilities.
[23] P.L. 104-50, Fiscal Year 1996 Department of Transportation
Appropriations Act.
[24] Executive Order 13180, which created the ATO, was amended by
Executive Order 13264 in June 4, 2002, which removed the caveat that
air traffic services are an "inherently governmental function."
[25] Our statements about cost, schedule, and/or performance in this
and past reports are based on the original targets that FAA established
and approved for each acquisition program. FAA noted that it tracks
acquisition performance against original baselines and reports
variances that exceed predefined thresholds to the administrator and
Congress as required.
[26] GAO-05-331.
[27] See GAO-05-331. We reviewed the 16 ATC system acquisitions with
the largest life-cycle costs that met the following criteria: each
system had cost, schedule, and/or performance targets; each system was
discussed in prior GAO and Department of Transportation Inspector
General reports, had not been fully implemented or deployed by 2004,
and received funding in 2004. We reviewed this list with FAA officials
to ensure that we did not exclude any significant system. In fiscal
year 2005, these 16 major ATC system acquisitions account for about 36
percent of FAA's capital budget.
[28] FAA defines a item as a product or service that has been developed
for sale, lease, or license to the general public. The product is
currently available at a fair market value. FAA defines a
nondevelopmental item as an item that was previously developed for use
by a government (federal, state, local, or foreign) and that requires
limited further development. For example, an Army radio is the core of
FAA's NEXCOM radio, and the software that FAA selected for its new
oceanic ATC system was a nondevelopmental item from New Zealand's air
system.
[29] For purposes of this report, the underestimation of software
complexity refers to poor estimation of the level of effort that would
be required to modify software to meet requirements (e.g., commercial-
off-the-shelf or nondevelopmental items).
[30] As required by 31 U.S.C. 720, the Department of Transportation
submitted a written statement of the actions taken on our
recommendations to the Senate Committee on Homeland Security and
Governmental Affairs and to the House Committee on Government Reform.
We have not yet evaluated whether these actions fully address our
recommendations.
[31] GAO-04-901.
[32] GAO, Air Traffic Control: FAA's Acquisition Management Has
Improved, but Policies and Oversight Need Strengthening to Help Ensure
Results, GAO-05-23 (Washington, D.C.: Nov. 12, 2004).
[33] GAO-04-822.
[34] GAO-05-23.
[35] GAO-05-266.
[36] GAO-05-207.
[37] GAO-05-712.
[38] GAO, Aviation Competition: Regional Jet Service Yet to Reach Many
Small Communities, GAO-01-344 (Washington, D.C.: Feb. 14, 2001).
[39] Testimony of Joseph Leonard, Chairman and Chief Executive Officer
of AirTran Airways before the Subcommittee on Aviation, House Committee
on Transportation and Infrastructure, June 3, 2004.
[40] General aviation includes a wide variety of aircraft, ranging from
corporate jets to small piston-engine aircraft as well as helicopters,
gliders, and aircraft used in operations such as firefighting and
agricultural spraying.
[41] FAA has established "Area Navigation," commonly known as RNAV,
which allows properly equipped aircraft to navigate using onboard
systems in conjunction with satellites or ground-based navigation aids
to fly desired flight paths without requiring direct flight over ground-
based navigation aids. RNAV provides for more direct routing, avoiding
suboptimal routes prescribed by conventional "highways in the sky" that
are defined by point-to-point flying over ground-based navigation aids.
The RNAV concept and a major new method for exploiting it, called
required navigation performance (RNP), permit flight in any airspace as
long as aircraft have been certified to meet the required accuracy
level for navigation performance.
[42] Marginal weather conditions occur between 5 and 20 percent of the
time at these airports.
[43] GAO-02-591; GAO, Federal Aviation Administration: Plan Still
Needed to Meet Challenges to Effectively Manage Air Traffic Controller
Workforce, GAO-04-887T (Washington, D.C.: June 15, 2004).
[44] GAO, Human Capital: Selected Agencies Have Opportunities to
Enhance Existing Succession Planning and Management Efforts, GAO-05-585
(Washington, D.C.: June 30, 2005); and 21ST Century Challenges:
Reexamining the Base of the Federal Government, GAO-05-325SP
(Washington, D.C.: February 2005).
[45] FAA, A Plan for the Future: The Federal Aviation Administration's
10-Year Strategy for the Air Traffic Control Workforce (Dec. 21, 2004).
[46] Because FAA's intake of new controllers was very low from 1994
until recently, the agency did not need to seek candidates from other
sources.
[47] P.L. 92-297.
[48] GAO, Human Capital Management: FAA's Reform Effort Requires a More
Strategic Approach, GAO-03-156 (Washington, D.C.: Feb. 3, 2003).
[49] GAO, Results-Oriented Cultures: Creating a Clear Linkage between
Individual Performance and Organizational Success, GAO-03-488
(Washington, D.C.: Mar. 14, 2003).
[50] GAO, 21ST Century Challenges: Transforming Government to Meet
Current and Emerging Challenges, GAO-05-830T (Washington, D.C.: July
13, 2005).
[51] Although this survey was administered in September 2003, before
the ATO was formed, FAA organized the responses according to the former
suborganizations that became part of the ATO.
[52] GAO-03-669.
[53] GAO/RCED-96-159.
[54] See appendix I for additional information on these surveys.
[55] The surveys elicited information in a variety of ways. For
example, in some cases, questions were asked and the response choices
ranged from "to a limited extent" to "a great extent." In other cases
statements were presented and response choices ranged from "strongly
disagree" to "strongly agree." On a five-point scale, the most negative
response is scored "1" and the most positive response is scored "5."
Mean scores were developed by summing the responses to each question
and dividing by the number of respondents. For example, a mean score of
3 for a particular question would indicate that the average response
was "neither agree nor disagree," while a mean score of 4 would
indicate the average response was "agree."
[56] See appendix II for additional information on our methodology for
assessing FAA's workforce culture.
[57] In November 2003, GAO hosted a forum to discuss the
characteristics of high-performing organizations. The forum
participants agreed that the key characteristics and capabilities of
high-performing organizations can be grouped into four themes: (1) a
clear, well-articulated, and compelling mission; (2) focus on needs of
clients and customers; (3) strategic management of people; and (4)
strategic use of partnerships. See GAO, High-Performing Organizations:
Metrics, Means, and Mechanisms for Achieving High Performance in the
21ST Century Public Management Environment, GAO-04-343SP (Washington,
D.C.: February 2004).
[58] The Office of Management and Budget reviews each executive branch
agency's input to the budget that the President submits to Congress
each February. The budget includes the most recently completed year,
the current year, the budget year, and at least the four following
years, called outyears. The Office of Management and Budget informs
agencies of its decisions on the budget through its "passback." In this
report we refer to the outyear budgets shown in the passback as budget
targets.
[59] GAO, Airport and Airway Trust Fund: Preliminary Observations on
Past, Present, and Future, GAO-05-657T (Washington, D.C.: May 4, 2005).
[60] FAA also saved $494 million in operating costs through staff
attrition that occurred in advance of contracting out. FAA did not fill
these vacancies because it was planning to contract out the flight
service stations.
[61] Coopers & Lybrand, L.L.P., Federal Aviation Administration
Independent Financial Assessment (Feb. 28, 1997).
[62] In 1996, Congress authorized the Administrator of the FAA to
establish the Management Advisory Council. The council reviews,
comments, and makes recommendations on FAA management, policy,
spending, funding, and regulatory matters affecting the aviation
industry. On May 12, 2005, the council issued a report that included
suggestions for reducing FAA's costs.
[63] ERAM will not be installed at the Anchorage, Alaska, air route
traffic control center.
[64] GAO-05-331.
[65] Security fees, collected as a fee imposed on airline passengers,
also help pay for aviation security.
[66] FAA is funded through the Trust Fund and the General Fund. In
fiscal year 2004, the General Fund provided 22 percent of FAA's total
budget.
[67] As part of our research, we sought the perspective of an
international group of experts. We asked these experts to address,
among other things, short-term steps that the ATO could take to address
funding constraints and longer term steps that FAA could take to help
the ATO achieve its mission. The options presented were identified by
one or more members of our expert panel or others that we interviewed
and do not necessarily reflect the views of GAO or of all aviation
experts.
[68] The research database includes responses from government agencies,
not-for-profit organizations, public and private schools, libraries and
museums, sports teams and athletic organizations, professional groups,
and small businesses. Approximately 10 percent of the respondents in
the research database are from public agencies, a rate that is
significantly higher than would be the case for a client database.
[69] Responses to questions range over a five-point scale. For example,
the possible responses might be: strongly disagree, disagree, neither
agree nor disagree, agree, strongly agree. In this case, if "strongly
agree" were the most positive response for the question, it would be
scored a "5," "neither agree nor disagree" would score a "3," and
"strongly disagree" would score a "1."
[70] Operational Control Center capability, established in 2001, was a
standard set of tools and procedures needed to open the control
centers. The tools provide the initial enterprise management and
resource management technical capabilities needed at Operational
Control Centers.
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