National Airspace System
Experts' Views on Improving the U.S. Air Traffic Control Modernization Program Gao ID: GAO-05-333SP April 13, 2005In 1981, the Federal Aviation Administration (FAA) began a program to modernize the national airspace system and a primary component, the air traffic control (ATC) system. The ATC component of this program, which is designed to replace aging equipment and accommodate predicted growth in air traffic, has had difficulty for more than two decades in meeting cost, schedule, and performance targets. The performance-based Air Traffic Organization (ATO) was created in February 2004 to improve the management of the modernization effort. On October 7, 2004, GAO hosted a panel to discuss attempts to address the ATC modernization program's persistent problems. Participants discussed the factors that they believed have affected FAA's ability to acquire new ATC systems. Participants also identified steps that FAA's ATO could take in the short term to address these factors, as well as longer term steps that could be taken to improve the modernization program's chances of success and help the ATO achieve its mission. The participants included domestic and foreign aviation experts from industry, government, private think tanks, and academia. They are recognized for their expertise in aviation safety, economics, and engineering; transportation research and policy; and government and private-sector management.
What Participants Said: Overall, the participants identified cultural, technical, and budgetary factors that, in their view, have affected the progress of ATC modernization. To address these factors, they proposed what one participant termed a "two-pronged" approach--simultaneously taking care of "the here and now" and building a "viable future" for the ATO. Cultural and Technical Factors Have Impeded ATC Modernization: According to participants, the key cultural factor impeding modernization has been resistance to change. Such resistance is a characteristic of FAA personnel at all levels, participants said, and management, in the experience of some, is more resistant than employees who may fear that new technologies will threaten their jobs. The key technical factor affecting modernization, participants said, has been a shortfall in the technical expertise needed to design, develop, or manage complex air traffic systems. Without the technical proficiency to "scrub" project proposals for potential problems early and to oversee the contractors who implement its modernization projects, they said, FAA has to rely on the contractors, whose interests differ from its own. Budgetary Factors Have Constrained ATC Modernization: The most immediate budgetary constraint, participants said, is the multibillion-dollar shortfall that FAA is projecting between available revenues and modernization needs over the next 4 years. Participants also identified features of the federal budget process as constraints, noting, for example, that the federal budget cycle is too long and inflexible to meet the needs of a dynamic ATC system that requires much more managerial freedom and short-term decision making. They further noted that the budget process is influenced by the political process, and that the funding for capital projects is sometimes spread out over so many years that technologies are out of date by the time they are deployed. Annual funding uncertainties discourage strategic and capital planning, they said, and the budget fails to show priorities and relationships among proposed investments. Short-term and Longer Term Changes Could Promote Success: Participants suggested that the ATO could facilitate cultural transformation by creating a vision and strategy that would unite stakeholders and by assembling project teams with different skills and interests whose members could forge common organizational interests by working together to solve common technology development problems. To help offset technical inadequacies, the participants suggested that the ATO could consult an advisory board, identify and consider purchasing needed technologies that other countries have developed, and hire more skilled engineers to provide in-house expertise. To address budgetary constraints, participants suggested, among other short-term steps, reducing spending to match revenues and developing strategies for presenting FAA's budget request more clearly to Congress. Longer term suggestions included giving the ATO the predictable funding and decision-making authority it needs to carry out a "sensible" capital investment plan.
GAO-05-333SP, National Airspace System: Experts' Views on Improving the U.S. Air Traffic Control Modernization Program
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GAO Panel:
April 2005:
National Airspace System:
Experts' Views on Improving the U.S. Air Traffic Control Modernization
Program:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-333SP]:
GAO Highlights:
Highlights of GAO-05-333SP:
Why GAO Convened This Panel:
In 1981, the Federal Aviation Administration (FAA) began a program to
modernize the national airspace system and a primary component, the air
traffic control (ATC) system. The ATC component of this program, which
is designed to replace aging equipment and accommodate predicted growth
in air traffic, has had difficulty for more than two decades in meeting
cost, schedule, and performance targets. The performance-based Air
Traffic Organization (ATO) was created in February 2004 to improve the
management of the modernization effort.
On October 7, 2004, GAO hosted a panel to discuss attempts to address
the ATC modernization program's persistent problems. Participants
discussed the factors that they believed have affected FAA's ability to
acquire new ATC systems. Participants also identified steps that FAA's
ATO could take in the short term to address these factors, as well as
longer term steps that could be taken to improve the modernization
program's chances of success and help the ATO achieve its mission.
The participants included domestic and foreign aviation experts from
industry, government, private think tanks, and academia. They are
recognized for their expertise in aviation safety, economics, and
engineering; transportation research and policy; and government and
private-sector management.
What Participants Said:
Overall, the participants identified cultural, technical, and budgetary
factors that, in their view, have affected the progress of ATC
modernization. To address these factors, they proposed what one
participant termed a "two-pronged" approach--simultaneously taking care
of "the here and now" and building a "viable future" for the ATO.
Cultural and Technical Factors Have Impeded ATC Modernization:
According to participants, the key cultural factor impeding
modernization has been resistance to change. Such resistance is a
characteristic of FAA personnel at all levels, participants said, and
management, in the experience of some, is more resistant than employees
who may fear that new technologies will threaten their jobs. The key
technical factor affecting modernization, participants said, has been a
shortfall in the technical expertise needed to design, develop, or
manage complex air traffic systems. Without the technical proficiency
to "scrub" project proposals for potential problems early and to
oversee the contractors who implement its modernization projects, they
said, FAA has to rely on the contractors, whose interests differ from
its own.
Budgetary Factors Have Constrained ATC Modernization:
The most immediate budgetary constraint, participants said, is the
multibillion-dollar shortfall that FAA is projecting between available
revenues and modernization needs over the next 4 years. Participants
also identified features of the federal budget process as constraints,
noting, for example, that the federal budget cycle is too long and
inflexible to meet the needs of a dynamic ATC system that requires much
more managerial freedom and short-term decision making. They further
noted that the budget process is influenced by the political process,
and that the funding for capital projects is sometimes spread out over
so many years that technologies are out of date by the time they are
deployed. Annual funding uncertainties discourage strategic and capital
planning, they said, and the budget fails to show priorities and
relationships among proposed investments.
Short-term and Longer Term Changes Could Promote Success:
Participants suggested that the ATO could facilitate cultural
transformation by creating a vision and strategy that would unite
stakeholders and by assembling project teams with different skills and
interests whose members could forge common organizational interests by
working together to solve common technology development problems. To
help offset technical inadequacies, the participants suggested that the
ATO could consult an advisory board, identify and consider purchasing
needed technologies that other countries have developed, and hire more
skilled engineers to provide in-house expertise. To address budgetary
constraints, participants suggested, among other short-term steps,
reducing spending to match revenues and developing strategies for
presenting FAA's budget request more clearly to Congress. Longer term
suggestions included giving the ATO the predictable funding and
decision-making authority it needs to carry out a "sensible" capital
investment plan.
www.gao.gov/cgi-bin/getrpt?GAO-05-333SP.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Gerald Dillingham at
(202) 512-2834 or dillinghamg@gao.gov.
[End of section]
Contents:
Panel:
National Airspace System: Experts' Views on Improving the U.S. Air
Traffic Control Modernization Program:
Limitations and Qualifications:
Results in Brief:
Panelists Identified Cultural and Technical Factors That Have Affected
ATC Modernization and Suggested Short-term Steps to Address Them:
Panelists Said Funding Shortfall and Features of the Federal Budget
Process Affect ATC Modernization and Suggested Short-term Steps to
Address Them:
Panelists Suggested Structural Changes to Improve the ATO's Chances of
Success over Time:
Concluding Observations:
Appendixes:
Appendix I: GAO Panel Members:
Appendix II: GAO Contact and Staff Acknowledgments:
GAO Contact:
Staff Acknowledgments:
Related GAO Products:
Cultural and Technical Factors:
Budgetary Factors:
Structural Issues:
Abbreviations:
AOV: Air Traffic Safety Oversight Service:
ATC: air traffic control:
ATO: Air Traffic Organization:
COO: Chief Operating Officer:
DOT/IG: Department of Transportation's Office of Inspector General:
FAA: Federal Aviation Administration:
JPDO: Joint Planning and Development Office:
NAS: national airspace system:
NEXCOM: Next-Generation Air-to-Ground Communications System:
OEP: Operational Evolution Plan:
OMB: Office of Management and Budget:
RNAV: area navigation:
RNP: required navigation performance:
STARS: Standard Terminal Automation Replacement System:
URET: User Request Evaluation Tool:
WAAS: Wide Area Augmentation System:
[End of section]
National Airspace System: Experts' Views on Improving the U.S. Air
Traffic Control Modernization Program:
In 1981, the Federal Aviation Administration (FAA) began what it
initially envisioned as a 10-year modernization program to upgrade and
replace the national airspace system's (NAS) facilities and equipment
to meet projected increases in traffic volumes, enhance the system's
margin of safety, and increase the efficiency of the air traffic
control (ATC) system--a principal component of the NAS.[Footnote 1]
Through the ATC component of this modernization program, FAA planned to
acquire a vast network of radar, navigation, communications, and
information processing systems that would enhance aviation safety and
accommodate predicted growth in air traffic in the NAS. However, the
program has proved to be more challenging than anticipated, in terms of
both technology and management, and FAA's efforts to achieve desired
improvements in performance have typically taken longer and cost more
than anticipated. As a result, planned improvements in safety and
capacity have been delayed, and the costs, both of maintaining existing
technologies and of replacing outdated ATC systems and infrastructure,
have grown.[Footnote 2] FAA no longer sees its modernization program as
a multiyear initiative with a defined end; rather, it now sees the
program as an ongoing investment in technological advances designed to
improve aviation safety and capacity. To date, FAA has spent $43.5
billion on NAS modernization,[Footnote 3] and it expects to spend an
additional $9.6 billion through 2009, primarily to upgrade and replace
ATC facilities and equipment. Of the $43.5 billion spent thus far,
about $25.1 billion, or 58 percent, has gone to ATC upgrades and
replacements, according to FAA.
To improve FAA's management of the modernization program, Congress, in
1995, gave the agency acquisition and human capital flexibilities,
which FAA has largely implemented.[Footnote 4] According to our most
recent work, FAA has made important progress and improvements in its
acquisition of major systems,[Footnote 5] but the modernization program
remains challenging and some problems have persisted. In 2000, Congress
and the administration took further steps to improve the modernization
program's management. Through legislation and an executive order, they
laid the foundation for a new, three-component structure, including an
oversight body, called the Air Traffic Services Subcommittee;[Footnote
6] a Chief Operating Officer; and the Air Traffic Organization (ATO), a
performance-based organization to manage FAA's ATC investments and
operations.[Footnote 7] In February 2004, FAA merged its Office of Air
Traffic Services, Office of Research and Acquisitions, and Free Flight
Program Office to create the ATO. The new organizational structure
sought to break some of the existing "stovepipes" and bring together
the key organizational units responsible for, among other things, ATC
modernization.
The terrorist attacks of September 11, 2001, temporarily reduced
airport congestion, but a number of factors--including a drop in air
traffic in the years following the attacks, the economic slowdown, and
an increase in businesses' use of low-cost carriers--led to a
significant decline in airline ticket tax receipts and in the Aviation
Trust Fund, where the receipts are deposited.[Footnote 8] Today, air
traffic has rebounded to near pre-September 11 levels and congestion is
increasing, but the Aviation Trust Fund balance appears to be smaller
than expected. For fiscal year 2005, for example, FAA reduced its
original estimate of this fund balance by nearly $3.5 billion, and the
agency is reviewing its estimates for future years.
The House Committees on Government Reform and Transportation and
Infrastructure asked us to conduct a comprehensive review of the NAS
modernization program's ATC modernization effort, the performance-based
organizational initiatives resulting in the creation of the ATO, and
the funding challenges that the changed budget situation poses for the
modernization program. As part of our efforts to respond to the
committees' request, which we plan to address through two separate
ongoing studies,[Footnote 9] we convened a panel of international
aviation experts and asked them 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?
This report summarizes the panelists' responses to these and related
questions that arose during the panel discussions.
The panel consisted of foreign and domestic aviation experts from
industry, government, private think tanks, and academia. Their fields
of expertise included aviation safety, economics, and engineering;
transportation research and policy; and government and private-sector
management. Former FAA officials and current executives of the air
traffic organizations in Canada and the United Kingdom[Footnote 10]
were among the experts, as was the chairman of EUROCONTROL's
Performance Review Commission.[Footnote 11] In addition, the Chief
Operating Officer (COO) of the ATO presented an initial briefing on the
status of and plans for the ATO. He responded to questions but did not
remain for the panel discussion. (See app. I for a list of the
panelists.)
The panelists convened at the National Academies Keck Center in
Washington, D.C., on October 7, 2004, after reviewing background
materials and discussion questions that we provided in advance. The
background materials included reports by GAO, the Department of
Transportation's Office of Inspector General (DOT/IG), FAA, and other
government organizations; industry publications; studies supporting and
opposing the corporatization of air traffic services; and a comparative
Performance Review Commission report.
As agreed with the panelists, the purpose of this panel was to engage
in an open, not-for-attribution dialogue. However, information from the
briefing by the ATO's COO and the COO's responses to the panelists'
follow-up questions are attributed to him because his presentation was
critical to the panelists' discussion. This material appears, together
with relevant information from some of our issued reports and work in
progress, in the italicized text at the end of each major section of
this report. (See Related GAO Products at the end of this report for a
list, by topic, of reports, testimonies, and other products we have
issued in recent years on topics related to those discussed by the
panel.) Otherwise, this report summarizes the collective discussion by
topic and does not necessarily represent the views of any individual
panelist, GAO, or the National Academies. We did not verify the
panelists' statements, although we did ask the panelists, in some
instances, to clarify certain details. See appendix II for GAO contacts
and staff acknowledgments.
Limitations and Qualifications:
The discussion summarized in this report should be interpreted in the
context of two key limitations and qualifications.
First, the panel was only an initial step in a possible long-term,
evolving effort to develop and sustain discussion on ATC modernization.
As such, it brought together generalists, rather than specialists, to
address broad themes and consider how to organize a more comprehensive
approach. Because our scope was limited, we could not include a large
number of leading experts, institutions, and networks involved in
specialized efforts. Furthermore, although many points of view were
represented, the panel was not representative of all potential
stakeholders.
Second, even though we, in cooperation with the National Academies,
conducted preliminary research and heard from national experts in their
fields, a day's conversation cannot represent the current practice in
this vast arena. More thought, discussion, and research are needed to
develop greater agreement on what we really know, what needs to be
done, and how to do it.
These two key limitations and qualifications provide contextual
boundaries. Nevertheless, the panel provided a rich dialogue on ATC
modernization, and the panelists developed strong messages in
responding to each of the three questions. Those messages are
highlighted below.
Results in Brief:
Overall, the panelists identified cultural, technical, and budgetary
factors that they thought had affected the progress of the
modernization program. To address these factors, the panelists proposed
what one panelist termed a "two-pronged" approach--simultaneously
taking care of "the here and now" and building a "viable future" for
the ATO.[Footnote 12] Envisioning "parallel efforts," the panelists
identified multiple steps that the ATO could take in the short term
within its existing legislative and organizational framework, as well
as structural changes that could be made in the longer term to enhance
the modernization program's prospects for success.
According to panelists, the key cultural factor impeding modernization
has been resistance to change. Such resistance is a characteristic of
FAA personnel at all levels, panelists said, and management, in the
experience of some panelists, is more resistant than employees who may
fear that new technologies will threaten their jobs. Panelists noted
that resistance to change is at odds with the financially stressed
aviation industry's need for new air traffic systems and procedures
that will enhance capacity and efficiency and reduce costly delays.
Panelists suggested that the ATO could facilitate cultural
transformation by (1) creating a vision and strategy that would unite
stakeholders and (2) assembling project teams with different skills and
interests--engineers, finance officers, information technology experts,
and controllers--whose members could work together to solve common
technology development problems and, in so doing, forge common
organizational interests. The key technical factor affecting
modernization, panelists said, has been a shortfall in the technical
expertise needed to design, develop, or manage complex air traffic
systems. Without the technical proficiency to "scrub" project proposals
for potential problems early and to oversee the contractors who
implement its modernization projects, they said, FAA has to rely on the
contractors, whose interests differ from its own. To help offset its
technical inadequacies, the panelists suggested that the ATO could take
steps such as consulting an advisory board, identify and consider
purchasing needed technologies that other countries have developed, and
hire more skilled engineers to provide in-house expertise.
According to the panelists, budget constraints have affected ATC
modernization in several ways, and the ATO could take a number of steps
in the short term to address them. The most immediate budgetary
constraint identified by the panel is the multibillion-dollar shortfall
that FAA is projecting between available revenues and modernization
needs over the next 4 years. One panelist predicted that this shortfall
would have gradual rather than catastrophic effects and would manifest
itself through a slow but sure increase in air traffic delays. The
panelists also identified features of the federal budget process that
they believe constrain modernization. They said, for example, that the
federal budget cycle is too long and inflexible to meet the needs of a
dynamic ATC system that requires much more managerial freedom and short-
term decision making. In addition, they noted that the budget process
is influenced by the political process, and that the funding for
capital projects is sometimes spread out over so many years that
technologies are out of date by the time they are deployed. Annual
funding uncertainties discourage strategic and capital planning, they
noted, and the budget fails to show priorities and relationships among
proposed investments. To address these constraints, the panelists
suggested various actions that the ATO could take in the short term,
including accepting the budget process as it is and reducing spending
to match revenues, developing strategies for presenting FAA's budget
request more clearly to Congress, implementing regulatory and
procedural changes to allow the use of existing cost-saving
technologies, contracting with the private sector to provide certain
air traffic services, and obtaining information on other countries' ATC
technologies and on international technical standards.
For the longer term, some panelists suggested structural changes, which
would generally require legislation. The goal of these longer term
initiatives would be to give the ATO the predictable funding and
decision-making authority these panelists said it needs to carry out a
"sensible" capital investment plan. The suggested initiatives included
replacing taxes with user fees based on the cost of air traffic
services, allowing the ATO to manage those fees, and giving the ATO
borrowing and leasing authority. The panelists advocating these kinds
of initiatives said the initiatives would help the ATO address the
predicted funding shortfall and free it from the constraints of the
federal budget process, as well as enable the ATO to pay for the
technical expertise and the technologies it needs to deliver efficient,
cost-effective service. In addition, these panelists said, removing the
ATO's funding from the appropriations process would establish a direct
relationship between the ATO and its customers that could promote
efficiencies and improve service. According to these panelists,
customers would monitor the ATO's spending to ensure that the ATO
addressed their priorities, and the ATO would provide better service
because it would try to please the customers rather than the
appropriators who now fund its activities. Restructuring the financing
of the modernization program could streamline and strengthen the ATO's
management, they said. According to these panelists, this kind of
financing arrangement would allow program managers to make decisions
quickly, on the basis of business rather than political considerations,
and could provide the ATO with the management tools needed to fully
execute its mission. While not disagreeing with the potential benefits
of the proposed structural changes, other panelists cautioned against
investing too much effort in them, since, in the view of these other
panelists, the changes were, for the most part, politically infeasible.
Moreover, as one panelist noted, even if the structural changes were
implemented, it would be important to consider what problems they were
creating as well as what problems they were addressing. He suggested,
for example, that a weight-based user fee might incentivize smaller
planes and more planes, thereby having the unintended effect of
increasing demands on the ATC system's capacity. Finally, one panelist
said, restructuring could resolve the conflict of interest inherent in
FAA's dual responsibility as the regulator and the operator of air
traffic services.
Panelists Identified Cultural and Technical Factors That Have Affected
ATC Modernization and Suggested Short-term Steps to Address Them:
The panelists attributed many of the ATC modernization program's
chronic problems to cultural and technical factors. In particular, they
cited resistance to change at all levels within the agency and
insufficient technical expertise as key factors impeding modernization.
They identified multiple, currently available options for addressing
these factors.
Panelists Cited Resistance to Change as a Key Cultural Factor Impeding
Modernization:
Although the panelists did not explicitly define "culture," they used
the term generally to denote an environment in which multiple
stakeholders with entrenched interests struggle to preserve their
interests and to retain control or influence. They described FAA's
culture as resistant to change and identified resistance to change as a
characteristic of FAA personnel at all levels. One panelist cited FAA's
ingrained preference for ground-based systems and for sticking with
what has worked in the past rather than rocking the boat by trying out
new technologies, especially since "the boss isn't telling you to rock
the boat." A second panelist described FAA as "very, very resistant" to
having private organizations, rather than FAA, develop new procedures
and systems for FAA to approve and institute.
Several panelists saw resistance to change as a consequence of federal
employment--of the security that comes from having a regular paycheck,
cost-of-living pay increases, and protections against layoffs. A
government organization is insulated from the economic pressures that
the private sector faces, one of the panelists indicated. In his view,
federal employees do not have the firsthand experience with layoffs and
business failures to understand, as private aviation industry employees
do, why improvements to the ATC system's efficiency are needed to help
revitalize the struggling aviation industry.
Other panelists emphasized the reluctance of management to change.
According to a panelist with experience in restructuring a foreign air
traffic organization, the senior and middle managers could not or would
not adjust to the change and had to be let go within the first 2 years.
The other employees also had difficulty adjusting and were still
adjusting in some respects, he said, but getting management on the
right page was the real challenge. Another panelist emphasized that
cultural change starts at the top and questioned why the ATO's new COO
had, according to the panelist's count, replaced only two top managers
in the ATO and simply reassigned other managers. Still another panelist
suggested that cultural change within the ATO alone would not be
sufficient to ensure the ATO's success, because so much of the ATO's
fate depends on other organizations, including FAA, DOT, the Office of
Management and Budget (OMB), and Congress.
A number of panelists described the air traffic controllers' union as
also resistant to change. According to one panelist, for example, the
union delayed the adoption of technologies such as the User Request
Evaluation Tool (URET) because some controllers saw them as a threat to
its membership.[Footnote 13] Another panelist cited the union's long-
term opposition to the implementation of a software program that tracks
productivity--a key measure for a performance-based
organization.[Footnote 14] The union is "very political," several
panelists asserted, and one panelist charged that it was "hindering the
progress" of a performance-based organization.
Resistance to change can be an issue outside FAA as well as within it,
panelists noted. For example, one panelist questioned how much support
the ATO was getting from DOT, OMB, and congressional committees for
changing "some extremely entrenched political fiefdoms." Another
panelist said that he had found the congressional authorizing
committees amenable to changes, but the appropriators liked things the
way they were.
Panelists Suggested Steps That the ATO Could Take in the Short Term to
Address Cultural Impediments to Modernization:
According to some panelists, creating a common vision, bringing in a
new management team, and employing strategies that bring disparate
stakeholders together could immediately help the ATO address the
cultural factors that have impeded modernization. The following are
steps that panelists proposed to facilitate the ATO's cultural
transformation:
* According to one panelist, the ATO needs to give people a vision and
a clear plan, or strategy, that they can understand. People have to
know what is expected of them, how they fit into the strategy, and what
the vision is for their organization.
* In addition to having a vision, another panelist said, it is
important for the ATO to tie that vision to the user constituency, not
confine it to the agency. FAA cannot do everything alone from the
inside, because airplanes and airports, for example, need to be
equipped with the technologies that will help realize the vision.
* Employing a team concept could help overcome resistance to the
implementation of new technologies, according to another panelist.
Putting engineers, finance people, controllers, and electronic
technologists together, all on the same team, he said, could unite them
as they moved through the stages of implementation. Therefore, when the
time comes to field a technology, the focus would be on getting it up
and running and operating safely--not, the panelist implied, on
obstructing its implementation because it might threaten jobs.
* A change in management's approach could go a long way toward
overcoming controllers' and other employees' resistance to change, one
panelist noted. One foreign air traffic organization changed its whole
approach to the unions and the staff, started talking to them as
people, and began executing "participative working" programs, according
to the panelist. Union representatives and managers take the same
courses together and address issues of affordability together, he said,
and, as a result, controllers' pay has increased, costs have dropped,
and productivity has risen. The key to these positive results, he said,
is psychological change--managers have stopped seeing employees as a
problem and have started to see them as part of the solution.
* According to other panelists, however, people find it very difficult
to change, and the only way to bring about a cultural transformation is
to replace those who resist change, either by allowing them to retire
or by hiring others to take their places. In the corporate world, one
panelist observed, a new executive brings in a new management team to
support a cultural turnaround. The new team is then loyal to the new
executive. In the view of this panelist, the COO's hiring of only two
new managers and reassignment of other managers would not be sufficient
to turn the ATO's culture around. Another panelist further noted that
an executive in the private sector replaced the top 200 people in his
organization to achieve the transformation he was seeking.
Panelists Said FAA Personnel Lack Technical Expertise Needed to Develop
Complex Systems and Oversee Contractors Effectively:
Technical as well as cultural factors have impeded ATC modernization,
according to several of the panelists. In the words of one speaker, FAA
does not have "the engineering technical capability to deal with an
extremely complex, highly nonlinear adaptive system that's got
technical safety risk as a key technical parameter." According to
another panelist, FAA does not apply rigorous systems engineering
expertise early in nonadvocate technical reviews of project proposals
to scrub them for potential issues. As a result, a number of FAA's
programs--including complex ones such as the Wide Area Augmentation
System (WAAS), as well as more "straightforward" ones such as the
Standard Terminal Automation Replacement System (STARS) and the Next-
Generation Air-to-Ground Communications System (NEXCOM)[Footnote 15]--
had fundamental system engineering technical issues that were not
identified early in the program. The risks were not mitigated, and the
programs experienced significant cost growth and schedule increases.
"The system engineering organization in FAA is nothing more than a
process organization," another panelist said. "The power resides with
the program manager. It doesn't matter what the systems engineering
people do, their job is to keep doing plans and processes. They think
that meetings are products."
FAA's lack of systems engineering expertise is problematic not only
when the agency reviews project proposals but also when it manages
contracts, panelists observed. Although FAA personnel receive training
in acquisition management, one panelist noted, they also need technical
skills. If they simply learn how to carry out the acquisition process
without really understanding the underlying technical
interrelationships, they will fail, he said. In the words of another
panelist, FAA may be able to hire smart contractors, but it needs
personnel of its own who are smart enough to ask the right questions
and smart enough to understand the answers. FAA lacks the technical
expertise needed to design, develop, or manage complex air traffic
systems, another panelist maintained, because the administration never
allowed the agency to invest in highly qualified technical personnel.
As a result, FAA is beholden to its contractors, who may or may not do
a good job, but who certainly have a different motivation from FAA. As
this panelist put it, FAA lacks a rudder, in a technical sense, for
modernization.
Panelists Suggested Steps That the ATO Could Take in the Short Term to
Address Insufficient Technical Expertise:
To help address its lack of technical expertise, panelists suggested,
the ATO could obtain advice from an independent board or information
from other countries on technologies that they have already adopted.
The panelists proposed some immediate steps that the ATO could take to
address this deficiency, including the following:
* A technical advisory board made up of system engineers could review
proposals for FAA and demand the kinds of data and tests needed to
scrub the proposals and identify any big roadblocks.
* Hiring skilled engineers instead of relying on contractors might
enable the ATO to develop systems more economically and efficiently,
one panelist suggested. This panelist described how a foreign air
traffic services organization develops new ATC systems in-house and
seldom uses contractors. It now utilizes its engineers to build systems
rather than manage contractors. As a result, he said, it is now
developing the systems it needs faster and at less cost.
* Maximizing the use of commercial inputs was the recommendation of
another panelist, who said that FAA needs to get out of the business of
designing systems. According to him, most companies no longer develop
their own large, complex systems; instead, they get other people to do
that for them in the private sector. Another panelist also emphasized
the availability of technical expertise in the private sector. However,
according to a third panelist, commercial systems have a shorter
economic service life than the systems that FAA designs.
* The ATO could profitably take advantage of the experiences of other
countries' air traffic organizations, which are technically as good as
FAA ever was or ever will be, one panelist said. He maintained that the
ATO should institute "a fundamental requirement and a cultural
expectation" that it will review existing technologies before it buys
or tries to develop its own. With a multibillion-dollar budget for
software and other information technology, he said, the ATO has ample
opportunity to save money.
In his opening remarks and in responding to panelists' questions, the
ATO's COO made a number of observations on FAA's culture. He also noted
that FAA plans to train or hire people with needed skills to address
shortfalls in technical expertise. The following summarizes some of his
key observations on FAA's culture and provides additional information
from previous GAO reports and work in progress on how FAA is addressing
some of the cultural and technical factors panelists identified as
affecting ATC modernization:
Recognizing that cultural factors can play a critical role in an
organization's success, the ATO has initiated organizational changes
that are designed to create a foundation for cultural change and
deliver benefits to customers efficiently. For example, the ATO:
* established collaborative teams of technical experts and ATC system
users;
* reorganized air traffic services and the research and acquisition
organization along functional lines of business to bring stakeholders
together and integrate goals, as well as reward cooperation by linking
investments to operations;
* reduced layers of management from 11 to 7 to help address the
hierarchical nature of the organization; and:
* conducted an organizationwide activity value analysis to determine
the full range of activities that ATO headquarters is engaged in, the
value customers place on those activities, and the potential for
conducting any of those activities more effectively and efficiently.
Although FAA anticipates that cultural change will take a long time, it
is giving high priority to changing its leadership model by linking top
management more closely to operations in the field and replacing
"command and control" with communication across organizational levels.
According to an FAA consultant's review of the agency's internal
communication needs,[Footnote 16]communication within FAA is, in many
ways, broken, but a good number of employees want to help fix it.
Employees willingly participated in discussions and focus groups, the
report said, indicating a desire to improve the flow of information
within the agency by sending a large number of detailed e-mails in
response to a call for recommendations to improve internal
communications.
In the past, according to the ATO's COO, FAA's management culture was
"intensely hierarchical, risk averse," and "reactionary." But now, he
said, FAA is attempting to foster "results-focused, proactive and
innovative behavior." Changing the agency's leadership model is also
designed, he said, to replace a "personality-driven culture" with a
sustainable, stable, viable organization that can make rational
decisions that transcend changes in political leadership.
The ATO is trying to better align FAA's priorities and stakeholders'
interests by developing a strategy map that captures the outputs
desired by the ATO's owners and customers, along with the outputs that
must be achieved. Called the Strategic Management Process, this effort
borrows heavily from a private-sector model and uses the ATO's
strategic goals and objectives to drive investment decisions. According
to FAA, the strategy map will enable owners and customers to clearly
understand both the services that the ATO is providing and the effects
of products in development on those services. As a result, FAA says,
future budgetary conversations will revolve around the desired level of
service, instead of focusing on a product, as past discussions
typically did. According to FAA, the Strategic Management Process will
ensure linkage between FAA's operating and capital budgets.
To become a "performance-based organization" and identify customer
groups and their service needs, the ATO created "value-based"
performance metrics; that is, it defined its performance in terms of
customers' needs and connected efforts to satisfy those needs with
cost. Ultimately, the ATO wants to know how much every unit of output
costs so that it can allocate and compare costs and measure
productivity. Thus, each organizational unit and facility is developing
applicable metrics for performance so that the ATO can compare costs,
identify factors that affect costs, and use this information to improve
performance. For example, each en route facility is determining its
hourly cost to control flights. The ATO can then compare and analyze
these costs to identify positive and negative factors affecting
performance and productivity.
FAA is implementing its 10-year strategy for air traffic controllers,
the Air Traffic Controller Workforce Plan, released in December 2004.
This plan is a response to a congressional mandate, based on a
recommendation we made in 2002, that FAA develop a plan for addressing
an impending wave of controller retirements and deal with productivity
issues.
Panelists Said Funding Shortfall and Features of the Federal Budget
Process Affect ATC Modernization and Suggested Short-term Steps to
Address Them:
The panelists identified and discussed the impact of funding
constraints and the federal budget process on ATC modernization. In
their view, the most immediate issue is a critical shortage of funds to
meet the current modernization program's plans and users' demands.
Additionally, they said, the federal budget process is slow,
inflexible, and influenced by the political process; annual
appropriations are uncertain and discourage planning; and the budget
fails to show investment priorities and relationships between FAA's
capital and operating budgets. The panelists suggested a number of
steps that the ATO could currently take to address these challenges.
With Funding Shortfall, Flight Delays May Gradually Increase, Panelists
Said:
Panelists viewed the ATO's apparent fiscal shortfall--which one
panelist said would amount to a 20 percent deficit in 4 years--as a
severe challenge. In terms of operations, the panelist said, this
deficit was more likely to have a gradual than an immediately
catastrophic onset. He did not expect to see major system outages but
predicted, instead, "a slow but sure increase in delays." However, as
another panelist said, if the ATO did not carefully analyze demand and
determine how that demand could be served, the ATO would find itself
facing what a third panelist referred to as a "perfect storm,"
reiterating a term the ATO itself has used.
Severe reductions in the funding for ATC modernization, if required to
address the currently projected shortfall, could exacerbate what one
panelist described as the government's traditional underfunding of the
ATC system's capital requirements. According to this panelist, the
government undercapitalizes any complex, rapidly evolving operational
system, including the ATC system, and overestimates the economic
service lives of information technology investments. Whereas the
government typically assumes such investments will last for 15 years,
he said, a 7-year estimate would be more reasonable.
Although the ATO has said that its business plan, when completed, will
provide policy makers with detailed information on the current funding
shortfall, panelists expressed concerns about the political
implications of showing large deficits. They suggested, for example,
that FAA and DOT officials might be unwilling to publicly release data
that could raise questions about their management.
Funding Air Traffic Services through the Budget Process Is Slow and
Inflexible, Some Panelists Said:
Several panelists maintained that the federal budget cycle is too long
and inflexible to meet the needs of an ATC system. According to one
panelist, it is "impossible" to run the U.S. ATC system within the
classic federal structure. Such a "dramatic," "dynamic" system requires
"more managerial freedom, much more day-to-day, week-to-week, month-to-
month decision-making," he said. The federal budget process freezes
plans for the system 12 or 18 months in advance, but for an ATC system
to succeed, "you've got to be 12 or 18 days ahead."
The budget procedure requiring that capital investments be funded out
of annual appropriations means that major acquisitions generally take
many years to implement and projects may continue to be implemented
even after they have outlived their usefulness. Particularly when
annual appropriations fall short, panelists noted, projects'
development and deployment may be delayed and their costs may increase
with time. Furthermore, until the acquisitions are completed, the
benefits of the new technologies are deferred, aging equipment may pose
risks to users, and outdated software may require costly upgrades. By
the time the acquisitions are fully deployed, panelists said, they may
be out of date.
Panelists Described the Effects of the Political Process on the Federal
Budget:
Several panelists discussed the impact of the political process on the
federal budget. According to one panelist, Members of Congress may base
funding decisions on how jobs in their districts will be affected,
rather than on how reasonable the business cases for actions may be. As
evidence, he cited a Senate provision that prohibited FAA from closing
its regional accounting departments and centralizing them to achieve
cost efficiencies because the regional departments were big employers
in congressional districts. Another panelist noted that political
considerations may be more influential than broader issues. In his
view, competition among appropriators for projects benefiting their
constituents, regardless of the need for those projects, undermined
need-based efforts to allocate scarce resources so that the NAS can
serve as many people as possible. "I've been in too many of these
meetings where we prioritize things," he said. "And if your
constituency doesn't get something, I know you're not going to support
me." Thus, Oklahoma, for example, may get the same ATC technology as
New York, despite resource constraints and major differences in air
traffic demand.
The political process influences budget decisions in the administration
as well as in Congress, some panelists said. According to one panelist,
Congress has generally supported FAA's modernization program, but
funding difficulties have ensued because the budget is consolidated and
there are always pressures on it. Other panelists added that the ATO
would have difficulty "deliver[ing] the bad news"--that is, publishing
a business plan that projects deficit scenarios--unless revenue
increases are forthcoming. According to this panelist, OMB would deny
any requests for increased funding and would, instead, tell the ATO to
find another way of doing business.
Panelists Said Uncertain Annual Funding Discourages Effective Planning:
Panelists noted that funding from annual appropriations is uncertain,
and that this uncertainty is incompatible with strategic and capital
planning. The amount of money available for appropriation each year
cannot be predetermined, one panelist said, and the size of the
appropriation may vary from year to year. This uncertainty focuses
attention on which technology will receive the funding (the inputs)
rather than on what improvements in safety or capacity the technology
is supposed to deliver (the outputs), he said. In debating whether this
investment or that investment should receive funding, planners have
lost sight of the big picture, he suggested, and the ATO has spent most
of its capital investment dollars on sustaining and maintaining
existing systems. Only about 14 percent of its expenditures, he
recalled, were for flight enhancement. "Who anywhere would have a
capital investment plan that was predominantly about standing still?"
he asked.
Another panelist also considered the federal budget process
incompatible with strategic planning. In his words, "it is absolutely a
problem at FAA" that "budget drives strategy and strategy does not
drive budget." Although FAA is good at forecasting demand, he said, it
does not evaluate "the anatomy of demand" and determine how that demand
will be served. Panelists noted, for example, that the number of
regional jets, low-fare airlines, and unmanned aerial vehicles are
increasing, but FAA has not developed a business model or plans for
managing the increased air traffic.
Other panelists suggested that the federal budget process discourages
realistic capital planning. FAA's capital investment plan is "mired in
predictable annual fits and starts subject to micromanagement by
Congress," one panelist said, rather than integrated, organized, and
periodically revised. Another panelist observed that FAA asks for more
than it can get and then carries the difference over from year to year,
creating "a bow wave" of unfunded requests for capital projects that it
seldom reduces. Furthermore, as a third panelist pointed out, the
budget process establishes incentives for unrealistic planning: Project
managers first overpromise capabilities and underestimate costs to
increase the chances that new projects will be accepted. Then, after
projects are accepted, they overestimate costs because they assume
their requests will be cut. Although managers could include options in
their budget submissions to indicate what could be accomplished at
different funding levels, they do not do so because they assume items
identified as options will be cut. Finally, managers are reluctant to
revise ongoing projects because they do not want to be seen as fickle.
By contrast, another panelist said, a private company that operates
under a board of directors and obtains revenue from customers does not
have incentives to play budget games to get projects approved. "Your
money is your own money," he said.
Some Panelists Believed That the Federal Budget Fails to Show
Priorities and Relationships:
Some panelists criticized the federal budget for failing to show
priorities and relationships among proposed investments. In the budget,
one panelist said, "everything is as important as everything else."
Another panelist observed that the budget sets no capital investment
priorities. According to a third panelist, a line item budget tears
apart a highly layered, interdependent system and does not reveal
synergies between projects. Then, when the budget request goes to
Congress, he said, "you have no opportunity to try to explain to
anybody the interconnections of these programs." As a result, when the
appropriators decide not to fund a project, they may not understand how
their decision will affect other projects.
Several panelists discussed the "firewall" that federal budget
procedures create between the FAA's capital (Facilities and Equipment)
and operating (Operations) accounts, noting that separating these two
types of costs makes it difficult to recognize interactions between
them.[Footnote 17] "You can't make rational decisions if somebody is
handing you those two separate pieces with a wall between them," one
panelist said. He added that the firewall discourages analyses of life-
cycle costs and may lead, in some instances, to investments in
technologies that end up in a warehouse because the ATO cannot afford
to operate them. Similarly, another panelist observed that the
separation of capital and operating costs in FAA's accounting system
makes it difficult to see the implications of capital investment
decisions for operating costs, even though "everything we put in the
field winds up increasing the ops budget." Furthermore, as another
panelist noted, the firewall makes it difficult to see the relationship
between software replacement (capital) and maintenance (operating)
costs. Thus, decisions to postpone purchases of new or upgraded
software may save capital investment costs, but rising maintenance
requirements may increase operating costs. Eventually, he said, the
maintenance costs may "far exceed" the replacement costs.
Finally, other panelists said, the budget is not integrated to show
what investments buy in terms of productivity, safety, or environmental
benefits, and FAA's capital budget fails to show the impact of
investments on the country. This can lead to mismatches--that is, to
funding projects that will provide limited benefits for users.
Panelists Identified Short-term Steps within the Budget Process and
Other Steps That the ATO Could Take under Its Existing Authorities to
Address Budget Constraints:
While recognizing the magnitude of the ATO's projected funding
shortfall over the next few years, the panelists identified a number of
steps that the ATO could take to address its current financial
situation. These steps included accepting the budget process as it is
and reducing spending to match revenues, developing strategies for
presenting the ATO's budget request more clearly to Congress,
implementing regulatory and procedural changes to allow the use of
existing cost-saving technologies, contracting with the private sector
to provide certain air traffic services, and obtaining information on
other countries' ATC technologies and on international technical
standards.
Short-term Steps within the Budget Process:
Several panelists emphasized the importance of accepting the budget
process as it is and of doing what can be done in today's government
system:
* One panelist thought that the ATO should scope the modernization
program so that it realistically reflects the resources that can be
expected within the next 5 years and then put together and communicate
a strategy and a vision to guide the agency's 36,000 people. He called
for the ATO to adjust its capital requirements to what can
realistically be funded and to review and cut its programs in light of
the current budget constraints.
* This panelist also recommended looking at longer term alternatives to
annual appropriations that are available within the government and work
well for other organizations, such as "working capital accounts and all
kinds of industrial funding schemes."
* Another panelist encouraged the ATO to focus its capital investment
on avoiding outages--that is, on replacing equipment that would
otherwise fail. This panelist also said that FAA needs a customer-
oriented business strategy and a business plan.
* One panelist, who observed that operating costs account for about
three-quarters of the ATO's total costs,[Footnote 18] suggested that
the upcoming wave of air traffic controller retirements[Footnote 19]
would create "an opportunity to redistribute and even to trim the work
force in some areas," as well as reduce personnel costs by offering
incentives for early retirement.
* Improving controllers' productivity would be another way to save
money, a fourth panelist said, but he characterized his suggestion as
"touch[ing] the third rail of aviation politics."
* Another panelist emphasized the importance of starting to plan now to
accommodate the airplanes that are being bought today to provide
service for the next generation, which he variously estimated at 20,
30, or 40 years.
Some panelists proposed strategies for the ATO to present its budget
request more clearly to Congress:
* For example, one panelist said that the ATO needed to understand the
interconnections between ATC systems and break the big picture into
nuggets so that it could clarify for the appropriators why they should
not break apart the ATO's capital investment plan and selectively fund
only some components.
* Another panelist maintained that the ATO could mitigate the effects
of the firewall between its capital and operating budgets by modifying
its budget submissions to show the future cost implications of current
investment decisions.
Steps outside the Budget Process under Current Authorities:
Several panelists identified options outside the budget process that
the ATO could pursue under its current authorities. They said, for
example, that the ATO could pursue procedural and regulatory changes
that would take advantage of existing technologies to increase
capacity, pilot test contracts with the private sector to provide
certain air traffic services, and obtain information on technologies
and procedures developed in other countries that could be used in the
United States.
Regulatory and Procedural Changes Could Allow the Use of Existing
Technologies to Enhance Capacity and Efficiency:
Several panelists discussed the potential benefits of a more widespread
use of a concept called area navigation (RNAV), which allows operators
of properly equipped aircraft to use onboard navigation capabilities to
fly desired flight paths without requiring direct flight over ground-
based navigation aids. This 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. RNAV and RNP hold promise for saving
system users time and money--largely by reducing flight times and fuel
consumption by allowing users to fly shorter routes or avoid bad
weather. In addition, RNAV and RNP could potentially increase the
capacity of the ATC system to handle air traffic by reducing the
required distance (separation) between aircraft equipped with advanced
navigation capabilities if the aircraft can safely operate closer to
one another than FAA's regulations currently allow.
According to some panelists, many aircraft have had the navigation
capabilities to implement RNP for many years, but operators have not
been able to use these capabilities to their full potential in the
United States because FAA has not approved procedures for its use.
However, the airlines are "crying for" FAA to approve RNP, one of the
panelists said, because aircraft equipped with RNP capabilities could
then fly alternative rolling, moving routes to avoid weather delays.
Service would improve for travelers, and the airlines would avoid the
substantial costs of delays, he said. Implementing RNP could also
eventually lower the ATO's costs, another panelist said, since RNP does
not require any ground equipment.
RNP technologies have been installed on larger aircraft for so long
that some aircraft equipped with the technologies have already been
retired to the desert, one panelist said. In addition, pilots have been
trained to use the technologies, and the technologies are already being
used in some other countries, including Canada, where a private airline
company (West Jet) developed implementation procedures in collaboration
with the Canadian ATC regulatory agency and the Canadian air traffic
management organization.
As a first step toward obtaining FAA's approval of procedures for using
RNP, a panelist said, the ATO could make policy announcements to set a
tone and direction. These announcements would enlist the user
community's support at little or no cost to the ATO, give the ATO an
early success, and help tie customers to the ATO's mission. However, he
also cautioned, it would be important for FAA to implement RNP in a way
that did not "disenfranchise" general aviation interests and regional
carriers whose aircraft are not already equipped with RNP technologies.
Two panelists expressed concerns about the government's approach to
regulating the use of onboard navigation equipment and the associated
procedures needed to implement RNP. According to one of these
panelists, FAA has "the wrong conceptual framework" for developing
regulations to implement new procedures. Its current approach is
disproportionate, he said, because it establishes the same safety
standards for aircraft of all sizes. "We can't keep treating airplanes
that need 100 cubic miles of airspace the same from a cost and benefit
point of view as airplanes that need a quarter cubic mile of airspace,"
he said. In his view, FAA needs to revise its approach to assessing and
balancing risks. He maintained that the role of regulatory management
on the evolution of the ATC system has been underestimated and called
for significant investment in understanding risk management.
The other panelist who expressed concerns about the government's
regulatory approach argued that navigational technology is evolving and
shifting from ground-based to cockpit-based systems. He maintained that
"you've got to get aircraft closer and closer together to be able to
increase capacity," and said that the government should allow the ATO
to change its policies on aircraft separation to permit "the technology
that exists on airplanes today to do the job." He suggested that the
private sector could assume the cost of capitalizing the equipment, but
"the government's got to allow that technology to be used, and it
hasn't."
Although one panelist emphasized the importance of conducting thorough
technical evaluations of RNP to identify any roadblocks to its use, the
panelists generally considered it a highly promising, low-cost option
for the ATO to improve service. One panelist recommended that the ATO
create incentives, such as the right to fly in preferred airspace, for
users that equip their aircraft with RNP technologies, to lower the
ATO's costs.
Contracting with the Private Sector to Provide Certain Air Traffic
Services Could Demonstrate Efficiencies and Potential Cost Savings:
Throughout the panel, panelists discussed an initiative that FAA has
already begun--determining whether a private contractor or the federal
government can provide automated flight service station services more
efficiently.[Footnote 20] OMB Circular A-76 directs federal agencies to
(1) identify all activities performed by government personnel as either
commercial or inherently governmental, (2) perform inherently
governmental activities with government personnel, (3) use a
competition to determine who should perform commercial activities, and
(4) award a contract to the private sector if the outcome, or
performance decision, of the competition is determined in its
favor.[Footnote 21] The panelists, who generally assumed that the
private sector could provide flight service station services and other
air traffic services more efficiently than the government, suggested
that if contracting for flight service station services proved to be
effective, FAA could contract for other air traffic services, such as
oceanic, night, en route, or airways facilities services. The A-76
process would then serve not only as a way of saving money but also as
"a pilot program for how things could get done," one panelist said. In
the view of another panelist, ongoing government oversight would ensure
the safety of contracted operations, and "staged outsourcing" of the
NAS's functions might build confidence in the private sector's ability
to provide air traffic services safely and efficiently.
Obtaining Information on Other Countries' ATC Technologies and on
International Technical Standards Could Help the ATO Save Costs:
Obtaining information on technologies and procedures that other
countries have already developed could help the ATO control costs, as
well as help compensate for its lack of technical expertise, panelists
noted. "We should be using and sharing" the technologies that have
already been invented, one panelist said. According to his
organization, the air navigation service business worldwide spends $3
billion to $4 billion a year on writing code for air traffic management
software, and "at least half of that" is writing code for "something
that's already been invented and—works just fine somewhere else."
Although this panelist's organization formerly maintained, as FAA has
done, that it could not adapt other countries' systems to its own
unique needs, it found, when faced with financial pressures, that it
could buy technologies from other countries or enter into agreements
with them and that it could do so at less cost than it could develop
its own technologies. To facilitate information sharing and cost
saving, the panelist suggested, benchmarks of the existing market would
be useful, including information on the systems that are already
running in countries, their performance, and their cost.[Footnote 22]
Sharing information on technical standards with international
organizations could also help the ATO avoid costly investments in
technologies whose standards were incompatible with those of other
countries. A shared vision is crucial for a globally based air traffic
system, one panelist said. If every country or continent had its own
technical standards--a North American switch, a European switch, a
South American switch, and an Australian switch, for example--an
international system could not function effectively.[Footnote 23]
The following provides additional information from the ATO's COO and
from previous GAO reports and work in progress on how FAA is addressing
some of the funding shortfalls and features of the federal budget
process that panelists identified as affecting ATC modernization:
The ATO's COO believes that good financial management means linking
FAA's capital and operating budgets. Previously, FAA developed separate
capital (Facilities and Equipment) and operating (Operations) budgets.
But the ATO recognizes that capital expenditures directly affect
operating costs over time, and therefore the two budgets must be
developed together. Creating this linkage is important for the ATO to
respond to concerns expressed by its owners and customers as well as to
address internal issues, such as training, staffing, pay disparities,
and infrastructure. Using the Strategic Management Process to drive
budget decisions will help to ensure the establishment and maintenance
of a linkage between the capital and operating budgets.
According to the ATO's COO, it will be at least 2 years before the ATO
has completed the basic management processes needed to use the new
financial management systems it has been putting in place. As steps
toward that goal, the ATO expects everyone to learn the difference
between cost and cash flow and get a better handle on unit costs as
better cost accounting data become available. To gain a more complete
understanding of its costs, FAA is revising its cost accounting
practices and changing from a cash flow to a total cost business model
for the ATO, and the ATO is developing management training in cost
accounting and budgeting. Moreover, FAA plans to finish putting a new
cost accounting system in place by 2006 that will allow it to assign,
track, and better control costs.
In the fall of 2004, FAA updated its cost estimates in light of OMB's
revenue projections for the next 4 years and arrived at a cumulative
shortfall for the period of $5 billion for the operating budget and
$3.2 billion for the capital budget. According to FAA, a business plan
that the ATO was preparing at that time will show, when completed, how
large a funding gap the ATO faces and how far it will have to go to
address that gap. Whatever the exact size of the gap may be, FAA says
that it is prepared to identify and eliminate redundancies in the NAS
and to review its long-term ATC modernization priorities.
FAA has already taken some steps to control the costs of ATC
modernization. For example, it has adopted the phased approach to
implementing new ATC systems that it used under Free Flight Phase 1,
called "build a little, test a little." This approach relies on the
early and ongoing investment of stakeholders, who review the progress
of new projects regularly and identify critical omissions and "no go"
items that would prevent a system from operating as intended. Reviews
of three projects with cost, schedule, and performance issues that our
reports had identified--the Local Area Augmentation System, Controller-
Pilot Data Link Communications, and Next-Generation Air-to-Ground
Communications System--led FAA to reduce the funding for them in FAA's
fiscal year 2005 budget request. The ATO says it plans to continue this
phased approach to acquiring new systems.
FAA developed a Roadmap for Performance-Based Navigation, which it
published in July 2003, but the ATO is having difficulty finding the
$10 million in its operations budget that it needs to chart RNP
procedures. Airspace redesign using RNAV is occurring in phases, and
its implementation will depend on those owners and operators who have
fully equipped aircraft and are sufficiently trained. To encourage
progress, FAA is implementing procedures that provide benefits for
those customers that do equip. Now, during the first phase, FAA is
implementing the redesign at very high altitudes. In January 2005, FAA
doubled the airspace routes between 29,000 feet and 41,000 feet by
spacing aircraft 1,000 feet apart instead of 2,000 feet. The procedure,
invisible to passengers, is called Reduced Vertical Separation Minimum
and is expected to save airlines $400 million in fuel costs during the
first year. As technology allows, FAA says, more flight altitude levels
will be added. Currently, FAA is implementing a number of improvements
to airspace and procedures using RNP. In addition, according to FAA,
five airports are developing RNP-based procedures in partnership with
airlines that favor RNP.
Panelists Suggested Structural Changes to Improve the ATO's Chances of
Success over Time:
While recognizing that the ATO could make some progress in addressing
its cultural, technical, and budgetary challenges under its current
authorities, the panelists generally agreed that structural changes
would increase the ATO's chances of success. These changes, which would
give the ATO a more predictable source of funding and greater decision-
making authority, would generally require legislative action and take
time to implement. To give the ATO a more predictable source of
funding, panelists suggested that it be authorized to establish and
manage user fees, rather than rely on appropriated tax receipts, and
that it be allowed to issue revenue bonds backed by these fees. To give
the ATO greater decision-making authority, panelists proposed
restructuring it to streamline and strengthen its management and
provide its managers with the tools needed to address its challenges.
These changes would allow the ATO to implement a "sensible" capital
investment program; hire the technical expertise it needs; achieve cost
efficiencies; and offer better, more responsive service. Additionally,
panelists said, restructuring could resolve the conflict of interest
inherent in FAA's dual responsibility as the regulator and the operator
of air traffic services.
Some Panelists Considered the Steps Taken to Create a Performance-Based
Air Traffic Organization Insufficient for Its Success:
When Congress authorized the ATO's creation and generally implemented
the Mineta Commission's[Footnote 24] organizational recommendations
without implementing its funding recommendations, it produced an
anomaly--that is, an organization charged with becoming performance-
based but deprived of the means to transform itself, according to one
panelist. Other panelists also portrayed the ATO as an organization
that is charged with operating like a business but is not provided with
the management tools available to a business. In their view, the ATO's
chances for success are limited because the COO is being asked to turn
the organization around without being given the tools to do so. One
panelist, who said he was skeptical about the ATO's ability to act like
a business when it is not really one, suggested that it was only at the
margins that the creators of the ATO had replicated a business.
According to him, the ATO is still largely a government organization
and therefore remains subject to most governmental constraints.
Panelists Said a User Fee System Would Give the ATO a More Predictable
Source of Funding and Link Air Traffic Services with Demand:
Replacing airline ticket taxes with a user fee and allowing the ATO,
rather than Congress, to manage the collected fees is a step that many
panelists considered essential for the ATO's success. While recognizing
that such a fee would be controversial, since the costs for most users
would likely increase, the panelists maintained that it would produce a
more predictable, reliable funding stream than the annual
appropriations process.
A user fee system would link air traffic services directly with demand,
panelists pointed out. Under the annual appropriations process, they
noted, Congress comes between the ATO and the airlines that use its
services. The ATO lacks a direct link with the users because Congress
appropriates the revenue from them--the airline ticket taxes that are
deposited into the Aviation Trust Fund--and the ATO is required to
spend the funds as Congress directs. Not having a direct financial link
between the ATO and the users can create inefficiencies, panelists
said: The users lack incentives to monitor the ATO's spending and may
not insist on cost control, while the ATO lacks incentives to consult
the users and may invest in technologies that the users do not want. A
user fee makes the ties between the funding source and the users "much
more transparent," according to one panelist, and helps preclude
spending for "gold-plated things that don't affect the true performance
of the system and drive the costs up completely unnecessarily." Without
a direct connection to the users and their mission, another panelist
said, "evolution takes very unintended and very undesirable paths over
long periods of time." As long as the customers are not directly paying
the bills and providing the resources, still another panelist
maintained, "it's going to be very hard to bring about real change" and
make the ATO "a customer-driven, customer-servicing organization. The
ones who pay the bills are the ones you respond to and serve," he
concluded.
While panelists generally favored a user fee system, they cautioned
care in proposing and implementing one. As one panelist said, the fee
question, once raised, would be all-consuming and would require the
expenditure of political capital. In his view, it was critical that the
ATO wait to achieve some successes before seeking a user fee system.
Another panelist called for figuring out "not only what problem we're
solving, but what problems we might be likely to create," and noted
that the government would have to consider what it was incentivizing
through user fees. For example, if the fee was based on weight, he
said, it might "incentivize even smaller planes and more planes,"
thereby increasing demands on the ATC system's capacity. Another issue
that would have to be worked out, is how the common costs of air
traffic services (e.g., the costs of activities in the ATC system
operated by the Department of the Air Force) should be allocated--
whether users should pay only for the incremental costs of the services
they use, as most users would argue, or whether some cross-subsidies
should continue. Another panelist pointed out that implementing a user
fee alone would not guarantee efficiency, because the air traffic
services provider could simply raise the fee when costs increased and
the users would have to pay, since the service is a monopoly. Some
method of controlling costs would have to be built into the system, he
said.
Most panelists correctly assumed that legislation would be required to
institute a user fee system. Specifically, a user fee system could be
implemented in a government or a public-private type of air traffic
services organization. However, one panelist cautioned, it would be
"fatal" to implement the fee in any way that did not make the ATO
financially independent of Congress. Once the airlines and general
aviation users started to pay a fee to finance the ATO, then the ATO
should be held accountable to them, he said, and "FAA should not be
getting approval from government to spend its budget."
Panelists Said Borrowing Authority Would Provide the Funding for
Efficient Capital Investment:
Revenue bonding based on a new user fee stream would create an
"alternative to capital starvation," one panelist said. Even if the
user fee stream initially produced no more revenue than the airlines
are now paying in aviation-related taxes, he said, the ATO could reap a
"transition dividend" during the first 5 or 10 years after the bonds
are issued, limiting its annual outlays to the debt service on the
bonds. To facilitate the airlines' recovery, he suggested, the ATO
could cut what the airlines pay and "still have a robust modernization
program being financed by the revenue bonds." He characterized this
strategy as "money that's lying on the sidewalk waiting to be picked
up" and saw it as an opportunity to buy some new equipment in bulk and
get it installed before it becomes obsolete. Such a "sensible" approach
would not be possible with annual appropriations, he said.
Further Organizational Restructuring Could Streamline and Strengthen
the ATO's Management:
Panelists maintained that the ATO's organizational placement, combined
with its dependence on Congress for funding, limits the COO's ability
to make decisions and take actions. The COO is not a Chief Executive
Officer, as one of the panelists observed. Instead, he reports to his
"owners"--who include the FAA Administrator and the DOT Secretary, who
in turn receive direction from the administration (the President and
OMB Director) and Congress.
Because the ATO is embedded so deeply in the executive branch, the COO
has no means of communicating directly with the congressional
committees that authorize and fund the ATO. Congress originally tried
to address this issue when, as part of the legislation creating the COO
position, it created the Air Traffic Services Subcommittee to oversee
the ATO and report independently to Congress on the ATO's
performance.[Footnote 25] However, the legislation did not authorize
funds to support an independent staff for the subcommittee, and when
the FAA Administrator requested funds, DOT denied the request, one
panelist said, because the Deputy Secretary saw the subcommittee as
performing a DOT function. Moreover, as another panelist noted,
Congress eliminated the subcommittee's oversight authority,[Footnote
26] making the subcommittee purely advisory. Consequently, he said,
there is no oversight group that is expected to provide constructive
criticism of FAA, and FAA does not get "the kind of constructive advice
that you might hope for." According to a third panelist, Europe's
Performance Review Commission provides such constructive advice for
EUROCONTROL, the European air traffic management organization. The
commission serves as a panel of independent advisers and costs about
$2.5 million a year, he said, and "it's well worth the investment."
According to several panelists, the ATO's COO lacks the management
tools that would be available to a private-sector CEO. His ability to
plan modernization projects, set program priorities, and implement new
technologies is constrained because the FAA Administrator, DOT
Secretary, and OMB Director can revise his budget request and Congress
can make further changes in the ATO's budget. In addition, the 20-year
vision of the Joint Planning and Development Office (JPDO)[Footnote 27]
is at odds with the ATO, according to one panelist, because it looks
forward to the ATC system of 2025, rather than helping the ATO address
its immediate funding needs. Other panelists observed that the
controllers' union influences management's decisions.
The COO lacks key financial data needed to determine, analyze, and
manage the ATO's costs. When he was "parachuted" into the ATO, as one
panelist put it, he did not have the numbers he needed to know where
the ATO stood because FAA did not maintain basic information on the
costs and value of existing systems, reducing the ATO's potential to be
data driven. As a result, he spent most of his first year overseeing
the implementation of a cost accounting system and collecting other key
data.
Finally, the COO's ability to manage the ATC workforce is limited.
Civil service rules give the ATO's employees powers and rights that
they would not have in a private organization, and management's ability
to influence their performance is constrained because their terms of
employment and compensation are based largely on negotiated agreements
rather than on performance. In addition, salary caps limit FAA's
ability to pay for technical expertise.
Restructuring Could Resolve the Conflict of Interest Inherent in FAA's
Dual Role as the Regulator and the Operator of Air Traffic Services:
As one panelist observed at the end of the panel, the ATO's creation
did not address the structural conflict of interest that exists because
FAA is both the regulator and the operator of air traffic services. "We
didn't have arms length regulation of air traffic control in FAA," he
said, "and the ATO didn't do anything to accomplish that." Another
panelist noted that when his country restructured its air traffic
organization, it immediately eliminated the same structural conflict of
interest, and "overnight" the regulator became more effective and the
operator's safety performance "significantly improved." According to
the first panelist, other countries that have reorganized their air
traffic organizations have also instituted arms' length regulation if
they did not have it already. "We remain one of the few places that
somehow thinks that self-regulation is a good idea, in spite of sort of
overwhelming evidence in lots of arenas that it's not a very good
idea," he said.
The following is additional information from the ATO's COO and from
previous GAO reports and work in progress that indicates how FAA is
addressing some of the structural changes that panelists proposed to
improve the ATO's success over time:
In addition to the business plan that the ATO is developing to guide
and improve its operations and financial management, FAA has worked to
develop three longer term planning documents. First, it has published
its Flight Plan for 2005 through 2009, a multiyear strategic effort
that sets a 5-year course for FAA in the areas of safety, capacity,
international leadership, and organizational excellence. Second, it has
developed a rolling 10-year effort, called the Operational Evolution
Plan (OEP), through which FAA plans to increase the capacity of the NAS
by one-third. Finally, FAA is participating in a multiagency effort,
sponsored by the JPDO, to develop a national plan for aviation in 2025
and beyond. Both the OEP and the JPDO's plan are designed to meet the
Flight Plan's commitment to help the NAS flow smoothly and meet future
needs. According to FAA, the Vice President of the Operations Planning
Service Unit in the ATO is also the Director of the JPDO, helping to
ensure integration of near-term and long-term planning.
According to the ATO's COO, the restructuring of U.S. air traffic
services that has taken place thus far, through the establishment of a
performance-based air traffic organization, constitutes "the first
building block" of the longer term effort to transform the aviation
system envisioned in the JPDO's 20-year plan. According to the COO,
this vision of the U.S. aviation system will incorporate both
technologies and processes. However, he acknowledged that the ATO has
not yet connected this long-term vision with the financial and other
challenges it currently faces. He said that his goal is to establish an
organization that can execute the long-term vision and manage not only
its finances but also its future--an organization that can, in effect,
ensure the viability of the long-term vision. Over time, he said, he
plans to expand the OEP to include a strategy and the JPDO's long-term
vision, thereby "tie[ing] the vision to the viability of the future."
The OEP will then be "not just a set of projects," but a project plan
with a vision and a strategy that goes out 20 years. But given the
current budget constraints, he conceded, the path to that goal is not
clear.
In March 2004, FAA created the Air Traffic Safety Oversight Service
(AOV), under FAA's Office of Aviation Safety. This step established
separate reporting relationships for the ATO, which is responsible for
managing the ATC system, and for the AOV, which is responsible for
ensuring the safety of changes to air traffic standards and procedures.
The establishment of the AOV responds directly to a recommendation by
the 1997 National Civil Aviation Review Commission that safety
oversight of FAA's traffic function be provided by a separate part of
the agency. Although both organizations remain within FAA, under the
FAA Administrator, they are less closely joined than they were
previously. Hence, this step is a positive move toward providing "arm's
length" safety oversight, although it does not go as far as placing the
two organizations in separate federal agencies or removing one of the
agencies from the federal government altogether.
Concluding Observations:
At our request, the panelists concluded the panel with their parting
thoughts on the day's discussion, including any advice they had for FAA
or for Congress. Overall, the panelists were united in their desire for
the ATO to succeed, but they generally agreed that its opportunities
for success were constrained within a government system. For many, the
steps taken thus far to create a performance-based organization were
insufficient, in large part because the ATO lacks control over its
revenues and funding priorities, and the ATO still had a long way to go
to achieve its goals.
Some panelists stressed the importance of progressing by small steps
within the existing system, at least for the time being. Such small
steps might include obtaining good performance and cost information,
scoping programs in accordance with current budget projections,
contracting out some air traffic services, and obtaining outside
expertise from systems engineers and other technical and management
experts. It was critical, one panelist said, for the ATO to "have some
small early practical successes" to enlist the political support of the
user community and help tie the customers to the ATO's mission.
Other panelists focused on the obstacles within the system that they
believed would impede or prevent success. Among the obstacles they
cited were the counterproductive incentives inherent in the budget
process, the government's refusal to allow new air traffic technologies
to be used, and opposition to organizational and technological change.
It was important, one panelist said, to overcome this opposition by
describing "the difference between how things are and how they might
be." Descriptions of accomplishments elsewhere, together with actions
to implement whatever safeguards and regulatory framework might be
necessary, could perhaps make the argument for change "compelling," he
said.
Still other panelists looked to the future, calling for international
technical benchmarks to promote efficient development, business models
that take into account operational trends (e.g., the growing market
share of regional jets and low-fare airlines) and incentives to help
users overcome cost barriers to acquiring new technologies. As one
panelist said, "we have to target the future mix of real operations
that we're really going to see, not build the world's most perfect
system from 1956."
Despite their reservations about the ATO's potential for success as a
government organization, the panelists generally agreed that
stakeholders should not "allow the concept of privatization to be the
enemy of moving forward with the ATO," as one panelist said, or
"sacrifice the good for the better" in the words of another. Instead,
taking a two-pronged approach--telling people "what's to be done now to
get results" and telling them "that they have an obligation to build
for the future"--would be the best way, in the view of most panelists,
for the ATO to meet its immediate and longer term challenges.
[End of section]
Appendixes:
[End of section]
Appendix I: GAO Panel Members:
Clinton V. Oster, Jr. (Panel Moderator),
Professor of Public and Environmental Affairs,
School of Public and Environmental Affairs, Indiana University:
Anthony J. Broderick,
Independent Consultant,
Former FAA Associate Administrator for Regulation and Certification:
Steven R. Bussolari,
Assistant Division Head, Tactical Systems Division,
Manager, Air Traffic Control System Group, Lincoln Laboratory,
Massachusetts Institute of Technology:
John W. Crichton,
President and CEO,
NAV Canada:
George L. Donahue,
Director, The Center for Air Transportation Systems Research,
George Mason University,
Former FAA Associate Administrator for Research and Acquisition:
John J. Fearnsides,
Professor of Public Policy,
George Mason University,
Chief Strategist and Partner of MJF Strategies:
Xavier Fron,
Head,
Performance Review Commission, EUROCONTROL:
Richard Golaszweski,
Executive Vice President,
Gellman Research Associates (GRA), Inc.
Ian Hall,
Director of Operations,
National Air Traffic Services,
United Kingdom:
Thomas Imrich,
Chief Pilot, Research,
Boeing Commercial Aircraft:
Satish C. Mohleji,
Principal Engineer,
Center for Advanced Aviation System Development,
The MITRE Corp.
Robert W. Poole, Jr.,
Director of Transportation Studies,
Reason Foundation:
Michael Powderly,
President,
Airspace Solutions:
John A. Sorensen,
Chief Executive Officer,
Seagull Technology, Inc.
James A. Wilding,
Former President and Chief Executive Officer,
Metropolitan Washington Airports Authority:
[End of section]
Appendix II: GAO Contact and Staff Acknowledgments:
GAO Contact:
Gerald Dillingham, Ph.D., (202) 512-2834:
Staff Acknowledgments:
In addition to the individual named above, Elizabeth Eisenstadt,
Brandon Haller, Bert Japikse, Maren McAvoy, Beverly Norwood, and
Richard Scott made key contributions to this special product.
[End of section]
Related GAO Products:
Cultural and Technical Factors:
Air Traffic Control: FAA Needs to Ensure Better Coordination When
Approving Air Traffic Control Systems.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-11]
Washington, D.C.: November 17, 2004.
Air Traffic Control: FAA's Acquisition Management Has Improved, but
Policies and Oversight Need Strengthening to Help Ensure Results.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-23]
Washington, D.C.: November 12, 2004.
Air Traffic Control: System Management Capabilities Improved, but More
Can Be Done to Institutionalize Improvements.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-901]
Washington, D.C.: August 20, 2004.
Information Technology: FAA Has Many Investment Management Capabilities
in Place, but More Oversight of Operational Systems Is Needed.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-822]
Washington, D.C.: August 20, 2004.
Federal Aviation Administration: Plan Still Needed to Meet Challenges
to Effectively Managing Air Traffic Controller Workforce.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-887T]
Washington, D.C.: June 15, 2004.
Air Traffic Control: FAA's Modernization Efforts--Past, Present, and
Future.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-227T]
Washington, D.C.: October 30, 2003.
National Airspace System: Current Efforts and Proposed Changes to
Improve Performance of FAA's Air Traffic Control System.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-542]
Washington, D.C.: May 30, 2003.
Human Capital Management: FAA's Reform Effort Requires a More Strategic
Approach.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-156]
Washington, D.C.: February 3, 2003.
National Airspace System: Better Cost Data Could Improve FAA's
Management of the Standard Terminal Automation Replacement System.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-343]
Washington, D.C.: January 31, 2003.
National Airspace System: Status of FAA's Standard Terminal Automation
Replacement System.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-1071]
Washington, D.C.: September 17, 2002.
National Airspace System: FAA's Approach to Its New Communications
System Appears Prudent, but Challenges Remain.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-710]
Washington, D.C.: July 15, 2002.
Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of
Controller Attrition.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-591]
Washington, D.C.: June 14, 2002.
Air Traffic Control: Role of FAA's Modernization Program in Reducing
Delays and Congestion.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-01-725T]
Washington, D.C.: May 10, 2001.
National Airspace System: Problems Plaguing the Wide Area Augmentation
System and FAA's Actions to Address Them.
[Hyperlink, http://www.gao.gov/archive/2000/rc00229t.pdf]
Washington, D.C.: June 29, 2000.
Aviation Acquisition: A Comprehensive Strategy Is Needed for Cultural
Change at FAA.
[Hyperlink, http://www.gao.gov/archive/1996/rc96159.pdf]
Budgetary Factors:
FAA Budget Policies and Practices.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-841R]
Washington, D.C.: July 2, 2004.
Air Traffic Control: FAA's Modernization Efforts--Past, Present, and
Future.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-227T]
Washington, D.C.: October 30, 2003.
National Airspace System: Current Efforts and Proposed Changes to
Improve Performance of FAA's Air Traffic Control System.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-542]
Washington, D.C.: May 30, 2003.
National Airspace System: Reauthorizing FAA Provides Opportunities and
Options to Address Challenges.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-473T]
Washington, D.C.: February 12, 2003.
National Airspace System: Better Cost Data Could Improve FAA's
Management of the Standard Terminal Automation Replacement System.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-343]
Washington, D.C.: January 31, 2003.
National Airspace System: FAA's Approach to Its New Communications
System Appears Prudent, but Challenges Remain.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-710]
Washington, D.C.: July 15, 2002.
National Airspace System: Free Flight Tools Show Promise, but
Implementation Challenges Remain.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-01-932]
Washington, D.C.: August 31, 2001.
Structural Issues:
Federal Aviation Administration: Challenges for Transforming Into a
High-Performing Organization.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-770T]
Washington, D.C.: May 18, 2004.
National Airspace System: Current Efforts and Proposed Changes to
Improve Performance of FAA's Air Traffic Control System.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-542]
Washington, D.C.: May 30, 2003.
(540095):
FOOTNOTES
[1] The NAS is a complex network of interconnected systems that
includes over 19,000 airports, 750 ATC facilities, and about 45,000
pieces of equipment.
[2] See GAO, Air Traffic Control: FAA's Modernization Efforts--Past,
Present, and Future, GAO-04-227T (Washington, D.C.: Oct. 30, 2003);
National Airspace System: Current Efforts and Proposed Changes to
Improve Performance of FAA's Air Traffic Control System, GAO-03-542
(Washington, D.C.: May 30, 2003); and High-Risk Series: An Update, GAO-
05-207 (Washington, D.C.: January 2005).
[3] For purposes of this report, NAS modernization refers to ATC
facilities, equipment, and related expenses.
[4] Fiscal Year 1996 Department of Transportation Appropriations Act,
Public Law 104-50, Section 348.
[5] See GAO, Air Traffic Control: FAA Needs to Ensure Better
Coordination When Approving Air Traffic Control Systems, GAO-05-11
(Washington, D.C.: Nov. 17, 2004); 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); 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); Air Traffic
Control: System Management Capabilities Improved, but More Can Be Done
to Institutionalize Improvements, GAO-04-901 (Washington, D.C.: Aug.
20, 2004); and GAO-05-207.
[6] This body was created as a subcommittee of a larger, preexisting
organization, the Management Advisory Council, which Congress had
established in 2000 to oversee the administration, management, conduct,
direction, and supervision of the ATC system. When Congress
reauthorized FAA in December 2003, it eliminated the subcommittee's
oversight responsibilities, and the subcommittee is now purely
advisory. According to FAA, the subcommittee can help the ATO achieve
consensus on difficult issues and contribute business expertise.
[7] Wendell H. Ford Aviation Investment and Reform Act for the 21st
Century, Public Law 106-181, Section 303, April 5, 2000; Executive
Order 13180, December 7, 2000. Under the executive order, part of the
ATO's purpose is to "develop methods to accelerate air traffic control
modernization and to improve aviation safety related to air traffic
control."
[8] Congress appropriates funds for FAA's budget from both the Aviation
Trust Fund and the General Fund. According to FAA's FY 2006 Budget in
Brief, the Aviation Trust Fund accounted for $9.7 billion of FAA's
$14.1 billion budget for fiscal year 2004, and the General Fund
accounted for the remainder.
[9] These include a report on the status of individual ATC system
acquisitions and a comprehensive report on the status of the complete
NAS modernization program. In addition, in response to a request from
the Senate Committee on Commerce, Science, and Transportation, we are
currently obtaining information and plan to report on how other
countries have commercialized their air traffic services, applying a
performance-based approach. For this work, we asked the panelists to
discuss any lessons that can be learned from commercializing air
traffic services abroad. We plan to incorporate the panelists' comments
on this topic in the report that we expect to issue for the Senate
committee.
[10] The head of Germany's air navigation services responsible for air
traffic control, DFS (Deutsche Flugsicherung GmbH), provided written
responses to our questions.
[11] EUROCONTROL is the European Organization for the Safety of Air
Navigation. The Performance Review Commission, one of EUROCONTROL's
oversight bodies, was established to ensure effective management of
European Air Traffic Management, through target-setting and the
establishment of a transparent and independent performance review
system.
[12] The panelists used the terms "FAA" and "ATO" interchangeably.
Therefore, references to FAA should be considered references to the ATO
in this context.
[13] URET is a computer program that aids controllers in granting
pilot's requests to change their flight paths for more direct routes or
for different altitudes and allows controllers to look 20 minutes into
the future of a flight path. If a pilot wants a different route, the
controller punches in the request and is immediately advised if the
request is safe. Previously, the controller relied on paper flight
strips and mental calculations. According to FAA, as a result of URET,
pilots now receive more direct routes and the airlines are saving time
and money.
[14] The National Air Traffic Controllers Association, the federal-
sector labor union representing air traffic controllers, engineers, and
other safety-related professionals, testified in June 2004 that
"controller time on position," a measure of time that tracks when
controllers are working with the primary responsibility for an
operational ATC position, tracks only a portion of the controller's job
functions and, therefore, is not an accurate measure. Testimony of Ruth
E. Marlin, Executive Vice President, National Air Traffic Controllers
Association Before the U.S. House of Representatives, Committee on
Transportation and Infrastructure, Subcommittee on Aviation, Status of
the Air Traffic Controller Workforce, June 15, 2004.
[15] WAAS is a navigation and landing system that uses global
positioning system technology. According to FAA, WAAS is to improve
safety by providing precision guidance to an aircraft in all phases of
flight at thousands of airports and landing strips, including runways
where there is no ground-based landing capability. STARS is a color
computer display system used at FAA terminal radar control and
Department of Defense facilities. NEXCOM will replace the existing
analog ATC communications system with a digital system that has greater
capabilities.
[16] "Communicating the Future within the Federal Aviation
Administration," Review of Findings from Summer 2004, Internal
Research, August 13, 2004.
[17] The vast majority of funds for FAA's ATC modernization program and
operations comes from taxes on airline tickets that are deposited into
the Aviation Trust Fund. Congress then appropriates the trust fund
revenues for line items in FAA's budget. Under federal budget
procedures, funds are appropriated separately for capital projects and
for operations.
[18] According to DOT/IG, salaries and benefits make up approximately
73 percent of FAA's operating budget. See DOT/IG, Key Issues for the
Federal Aviation Administration's FY 2005 Budget, CC-2004-038
(Washington, D.C.: Apr. 22, 2004).
[19] In 2002, we reported that almost one-half of FAA's controller
workforce (about 7,000 controllers) would retire over the next 10 years
and about 93 percent of controller supervisors would be eligible to
retire by the end of 2011. See GAO, Federal Aviation Administration:
Plan Still Needed to Meet Challenges to Effectively Managing Air
Traffic Controller Workforce, GAO-04-887T (Washington, D.C.: June 15,
2004) and Air Traffic Control: FAA Needs to Better Prepare for
Impending Wave of Controller Attrition, GAO-02-591 (Washington, D.C.:
June 14, 2002).
[20] FAA formally announced in December 2003 that its flight service
stations met the criteria for competitive sourcing, and that it would
conduct a competition under OMB's A-76 guidelines for an improved way
to provide flight service operations. On February 1, 2005, FAA
announced the selection of a team headed by Lockheed Martin to provide
services now offered by the agency's network of 58 automated flight
service stations across the United States. These services include
weather briefing and flight planning services, which are used primarily
by general aviation pilots. The total evaluated cost of the 5-year
contract, with 5 additional option years, is $1.9 billion and
represents estimated savings of $2.2 billion over the next 10 years.
[21] Under President Clinton, air traffic services were defined as
"inherently governmental," meaning that they could not be provided by
the private sector. In June 2002, President Bush issued Executive Order
13264, which revised that definition and opened the way for FAA to
contract with private companies for services on a test basis, as
directed by OMB Circular A-76.
[22] EUROCONTROL has been collecting and reporting performance data
from its members since 1998, and the International Air Transport
Association is calling on the Civil Air Navigation Services
Organization (CANSO) to develop performance benchmarks for its members.
CANSO represents the interests of air navigation service providers
(organizations that provide ATC services) and technology suppliers of
goods and services to the industry worldwide.
[23] FAA has ceased funding the ground station component of one
modernization program (NEXCOM), in part because it is reevaluating its
approach for modernizing the air-to-ground communications. FAA will
move forward with replacing older radios, which is the least complex
element of the NEXCOM effort.
[24] The Mineta Commission, formally authorized as the National Civil
Aviation Review Commission, recommended in 1997 that FAA's air traffic
system be restructured as a performance-based organization, subject to
independent oversight, and be given leasing and borrowing authority.
[25] As originally implemented, this committee, the Air Traffic
Services Subcommittee, was similar to the board of public interest
directors that the Mineta Commission recommended be established to
oversee a performance-based air traffic services organization.
[26] Congress eliminated the subcommittee's oversight responsibilities
when it reauthorized FAA in December 2003.
[27] This office coordinates an air transportation system planning
initiative that involves the Departments of Transportation, Commerce,
Defense, and Homeland Security; the National Aeronautics and Space
Administration; and the Office of Science and Technology Policy and
other experts from the public and private sectors. The office reports
to a Senior Policy Committee chaired by the Secretary of
Transportation.
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