Air Traffic Control
Status of the Current Modernization Program and Planning for the Next Generation System Gao ID: GAO-06-738T May 4, 2006Over a decade ago, GAO listed the Federal Aviation Administration's (FAA) effort to modernize the nation's air traffic control (ATC) system as a high-risk program because of systemic management and acquisition problems. Two relatively new offices housed within FAA--the Air Traffic Organization (ATO) and the Joint Planning and Development Office (JPDO)--are now primarily responsible for planning and implementing these modernization efforts. Congress created ATO to be a performance-based organization that would improve both the agency's culture, structure, and processes, and the ATC modernization program's performance and accountability. Congress created JPDO, made up of seven partner agencies, to coordinate the federal and nonfederal stakeholders necessary to plan a transition from the current air transportation system to the "next generation air transportation system" (NGATS). This statement is based on GAO's recently completed and ongoing studies of the ATC modernization program. GAO provides information on (1) the status of ATO's efforts to improve the ATC modernization program, (2) the status of JPDO's planning efforts for NGATS, and (3) actions to control costs and leverage resources for ATC modernization and the transformation to NGATS.
ATO has taken a number of steps as a performance-based organization to improve the ATC modernization program, but continued management attention will be required to institutionalize these initiatives. ATO has adopted core values, streamlined its management, and begun to revise its acquisition processes to become more businesslike and accountable. For the past 2 years, ATO has met its major acquisition performance goals. ATO still faces challenges, including sustaining its transformation to a results-oriented culture, hiring and training thousands of air traffic controllers, and ensuring stakeholder involvement in major system acquisitions. JPDO has made progress in planning for NGATS by facilitating collaboration among federal agencies, ensuring the participation of federal and nonfederal stakeholders, addressing technical planning, and factoring global harmonization into its planning, but JPDO faces challenges in continuing to leverage the partner agencies' resources and in defining the roles and responsibilities of the various agencies involved. JPDO could find it difficult to sustain the support of stakeholders over the longer term and to generate participation from some key stakeholders, such as current air traffic controllers. JPDO has taken steps to develop an enterprise architecture (the blueprint for NGATS) and will have an early version later this year. The robustness and timeliness of this enterprise architecture are critical to many of JPDO's future NGATS planning activities. ATO has taken a number of actions to control costs and maximize capital funds, which will become increasingly important during the transition to NGATS. ATO has established cost control as one of its key performance metrics, developed a cost accounting system, and is using its performance management system to hold its managers accountable for controlling costs. ATO has developed a formal cost control program that includes, among other things, (1) conducting annual business case reviews for its capital programs, (2) decommissioning and consolidating ATC facilities, and (3) pursuing cost reduction opportunities through outsourcing. These cost control initiatives represent an important first step to improved performance but will require review and monitoring.
GAO-06-738T, Air Traffic Control: Status of the Current Modernization Program and Planning for the Next Generation System
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United States Government Accountability Office:
GAO:
Testimony:
Before the Subcommittee on Transportation, Treasury, the Judiciary,
Housing and Urban Development, and Related Agencies, Committee on
Appropriations, U.S. Senate:
Air Traffic Control:
Status of the Current Modernization Program and Planning for the Next
Generation System:
Statement for the Record by Gerald L. Dillingham, Ph.D.:
Director:
Physical Infrastructure Issues:
GAO-06-738T:
GAO Highlights:
Highlights of GAO-06-738T, a statement for the record for the
Subcommittee on Transportation, Treasury, the Judiciary, Housing and
Urban Development, and Related Agencies, Committee on Appropriations,
U.S. Senate.
Why GAO Did This Study:
Over a decade ago, GAO listed the Federal Aviation Administration‘s
(FAA) effort to modernize the nation‘s air traffic control (ATC) system
as a high-risk program because of systemic management and acquisition
problems. Two relatively new offices housed within FAA”the Air Traffic
Organization (ATO) and the Joint Planning and Development Office
(JPDO)”are now primarily responsible for planning and implementing
these modernization efforts. Congress created ATO to be a performance-
based organization that would improve both the agency‘s culture,
structure, and processes, and the ATC modernization program‘s
performance and accountability. Congress created JPDO, made up of
seven partner agencies, to coordinate the federal and nonfederal
stakeholders necessary to plan a transition from the current air
transportation system to the ’next generation air transportation
system“ (NGATS). This statement is based on GAO‘s recently completed
and ongoing studies of the ATC modernization program. GAO provides
information on (1) the status of ATO‘s efforts to improve the ATC
modernization program, (2) the status of JPDO‘s planning efforts for
NGATS, and (3) actions to control costs and leverage resources for ATC
modernization and the transformation to NGATS.
What GAO Found:
ATO has taken a number of steps as a performance-based organization to
improve the ATC modernization program, but continued management
attention will be required to institutionalize these initiatives. ATO
has adopted core values, streamlined its management, and begun to
revise its acquisition processes to become more businesslike and
accountable. For the past 2 years, ATO has met its major acquisition
performance goals. ATO still faces challenges, including sustaining its
transformation to a results-oriented culture, hiring and training
thousands of air traffic controllers, and ensuring stakeholder
involvement in major system acquisitions.
JPDO has made progress in planning for NGATS by facilitating
collaboration among federal agencies, ensuring the participation of
federal and nonfederal stakeholders, addressing technical planning, and
factoring global harmonization into its planning, but JPDO faces
challenges in continuing to leverage the partner agencies‘ resources
and in defining the roles and responsibilities of the various agencies
involved. JPDO could find it difficult to sustain the support of
stakeholders over the longer term and to generate participation from
some key stakeholders, such as current air traffic controllers. JPDO
has taken steps to develop an enterprise architecture (the blueprint
for NGATS) and will have an early version later this year. The
robustness and timeliness of this enterprise architecture are critical
to many of JPDO‘s future NGATS planning activities.
ATO has taken a number of actions to control costs and maximize capital
funds, which will become increasingly important during the transition
to NGATS. ATO has established cost control as one of its key
performance metrics, developed a cost accounting system, and is using
its performance management system to hold its managers accountable for
controlling costs. ATO has developed a formal cost control program
that includes, among other things, (1) conducting annual business case
reviews for its capital programs, (2) decommissioning and consolidating
ATC facilities, and (3) pursuing cost reduction opportunities through
outsourcing. These cost control initiatives represent an important
first step to improved performance but will require review and
monitoring.
Image: Air Traffic Control Tower:
[See PDF for Image]
Source: National Aeronautics and Space Administration.
[End of image]
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-738T].
To view the full product, click on the link above. For more
information, contact Dr. Gerald L. Dillingham, at (202) 512-2834 or
dillinghamg@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
We are pleased to present this statement for the record regarding the
status of efforts by the Air Traffic Organization (ATO) and the Joint
Planning and Development Office (JPDO) to modernize and transform the
nation's air traffic control (ATC) system. Both offices are within the
Federal Aviation Administration (FAA) and represent recent efforts by
Congress to, among others things, ensure a national airspace system
that is safe, efficient, and capable of meeting a growing demand for
air transportation--a demand that is expected to triple by 2025. ATO
has responsibility for operating, maintaining, and modernizing the
current ATC system. ATO was authorized as a performance-based
organization (PBO)[Footnote 1] in 2000 and includes 36,000 of FAA's
roughly 46,000 employees. JPDO, authorized in 2003, is responsible for
planning and coordinating the broader and longer-term transformation
(through 2025) to the "next generation air transportation system"
(NGATS).
The ATC system is composed of an array of subsystems, including radars;
automated data-processing, navigation, and communications equipment;
and ATC facilities. These systems work together to support all phases
of flight for aircraft operating in U.S. airspace. The ATC system also
includes the FAA employees who manage, operate, and maintain ATC
equipment and facilities. Over a decade ago, we designated FAA's ATC
modernization program as high risk because of systemic management and
acquisition problems, which we have reported on and made
recommendations to address over the years.
Efforts to modernize and transform the ATC system will be costly, yet
FAA anticipates lean capital budgets for the immediate future. Thus, to
maintain the current ATC system while preparing for the next, FAA will
have to work even harder to make the best and most efficient use of
increasingly scarce resources. These transformation efforts are getting
under way and will continue as the United States confronts multiple
challenges and demands for resources. ATC transformation also involves
the recognition that other nations are upgrading their aviation
technologies, creating a need for global harmonization to support
international travel.
Our statement focuses on three key questions. (1) What is the status of
ATO's efforts to improve its performance as it modernizes our nation's
air traffic control system? (2) What is the status of JPDO's planning
efforts for NGATS? (3) To what extent are efforts being made to control
costs and leverage resources to support ATC modernization and the
transformation to NGATS? My statement is based on our recently
completed and ongoing studies of FAA's ATC modernization program,
together with updated information from ATO and JPDO officials and
aviation stakeholder[Footnote 2]s. Later this year, we expect to issue
two detailed reports related to the issues discussed in this statement.
One report will provide our assessment of the status of JPDO's efforts
to develop NGATS. Another report will examine a variety of cost-saving
and financing options for FAA in the 21st century. We are performing
our work in accordance with generally accepted government auditing
standards.
The following is a summary of our findings to date:
* Created as a performance-based organization, ATO has been working to
establish a results-oriented organizational culture, a more accountable
management structure, and more businesslike management and acquisition
processes, but continued management attention will be required to
institutionalize these initiatives. To bring about cultural change, ATO
has adopted core values such as integrity, accountability, and fiscal
responsibility and is using FAA Employee Attitude Survey data to
establish a baseline for assessing changes in attitudes over time. ATO
has begun to hold managers accountable for cost control through its
performance rating and bonus system. To improve its acquisitions
process, FAA is, for example, evaluating all investment decisions,
including those for systems in service beyond 2 years, to ensure that
all decisions support agency goals. Recently, FAA has reported positive
results: For the past 2 fiscal years, FAA has met its major acquisition
performance goal--to have 80 percent of its acquisitions meet scheduled
milestones and be within 10 percent of budget. However, FAA still faces
challenges, including sustaining ATO's transformation to a results-
oriented culture, hiring and training thousands of air traffic
controllers to replace those expected to retire, ensuring stakeholder
involvement in major system acquisitions to ensure that the
acquisitions meet users' needs, and keeping major acquisitions, such as
the FAA Telecommunications Infrastructure (FTI) on schedule and within
budget.
* JPDO has made progress in planning for the NGATS that is described in
its December 2004 Integrated Plan and its March 2006 Progress Report.
JPDO's focus has included facilitating collaboration among federal
agencies, ensuring active participation of stakeholders, addressing
technical planning, and factoring global harmonization into its
planning, but several challenges exist. Our work has shown that it is
important for collaborating agencies to leverage resources and define
roles and responsibilities.[Footnote 3] JPDO has facilitated
collaboration among its federal partner agencies, but faces challenges
in continuing to leverage the partner agencies' resources and in
defining the roles and responsibilities of the various agencies
involved. JPDO is structured in a way that involves federal and
nonfederal stakeholders, but could find it difficult to sustain the
support of nonfederal stakeholders over the longer term and has had
difficulty obtaining the participation of current air traffic
controllers. JPDO is using an iterative process for technical planning,
but has not completed some key activities. For example, JPDO's
Evaluation and Analysis Division is beginning to model anticipated
changes in air traffic controller workload, but has not completed human
factors modeling to determine the effects of potential changes in pilot
workload. JPDO has taken the initial steps to develop an enterprise
architecture (a blueprint for NGATS) and will have an early version by
the end of fiscal year 2006. The robustness and timeliness of JPDO's
enterprise architecture is critical to many of JPDO's future NGATS
planning activities.
* ATO has taken a number of steps to control costs and leverage
resources that, in combination with other actions, can provide funds
for ATC modernization and transformation to NGATS. ATO has established
performance metrics for cost control, developed a cost accounting
system, and is using its performance management system to hold its
managers accountable for controlling costs. ATO has also developed a
formal cost control program that includes (1) conducting annual
business case reviews for its capital programs, (2) decommissioning and
consolidating ATC facilities, (3) improving its project management of
its operations programs, (4) pursuing cost reduction opportunities
through outsourcing, (5) assisting Congress in identifying projects for
funding priority, and (6) reducing or avoiding personnel costs through
workforce attrition and efficiency gains. However, ATO's cost control
efforts are at an early stage, and ATO lacks a consistent process to
validate savings estimated for operations cost control initiatives.
Cost control will become increasingly important during the transition
from the current ATC system to NGATS, when ATO is expected to remain
responsible for the costs of operating and maintaining the current ATC
system while assuming major responsibility for the costs of
demonstrating and developing new NGATS technologies. Opportunities
exist for greater savings and cost control. Many of these opportunities
will require risk-based decision making and significant congressional
support. ATO and JPDO have collaborated on developing rough near-term
estimates of the funding requirements for defining concepts and
developing systems for surveillance, communications, and other key
NGATS components. However, these funding requirements are not currently
in ATO's budget-constrained capital spending plan. ATO's NGATS funding
burden could be reduced to the extent that JPDO is successful in
leveraging resources from its partner agencies. Further enhancement to
NGATS funding could be achieved by ATO utilizing its existing funding
flexibility.
Background:
In 1981, FAA began a program to replace and upgrade ATC facilities and
equipment. However, systemic management issues, such as frequent
turnover in agency leadership, an ineffective organizational culture,
and problems with its acquisition process, contributed to cost growth,
schedule slippages, and performance shortfalls, leading us to classify
FAA's ATC modernization program as high risk in 1995.[Footnote 4] That
same year, Congress passed legislation that exempted FAA from most
federal personnel and acquisition laws and regulations on the premise
that FAA needed such freedom to better manage ATC
modernization.[Footnote 5] In December 2000, President Clinton signed
an executive order and Congress passed supporting legislation that,
together, provided FAA with the authority to create ATO as a
performance-based organization (PBO) to control and improve FAA's
management of the modernization effort. In February 2004, FAA
reorganized, transferring 36,000 employees, most of whom worked in air
traffic services and research and acquisitions, to ATO.
Even with the creation of ATO, the current approach to managing air
transportation is becoming increasingly inefficient and operationally
obsolete. In late 2003, Congress created JPDO[Footnote 6] to plan
NGATS, a system intended to accommodate what is expected to be three
times more air traffic by 2025 than there is today. JPDO's scope is
broader than traditional ATC modernization in that it is "airport curb-
to-airport curb," encompassing such issues as security screening and
environmental concerns. Additionally, JPDO's approach will require
unprecedented collaboration and consensus among many stakeholders--
federal and nonfederal--about necessary system capabilities, equipment,
procedures, and regulations. Key to this collaboration will be the work
of JPDO's seven partner agencies: the Departments of Transportation,
Commerce, Defense, and Homeland Security; FAA; the National Aeronautics
and Space Administration (NASA); and the White House Office of Science
and Technology Policy. Each of these agencies will play a role in
creating NGATS. For example, the Department of Defense has deployed
"network centric" systems, originally developed for the battlefield,
that are being considered as a framework to provide all users of the
national airspace system--FAA and the Departments of Defense and
Homeland Security--with a common view of that system. JPDO began its
initial operations in early 2004. A Senior Policy Committee, chaired by
the Secretary of Transportation and including senior representatives
from each of the participating departments and agencies, provides
oversight to JPDO. JPDO is located within FAA and reports to the FAA
Administrator and to the Chief Operating Officer within ATO.[Footnote
7] See figure 1.
Figure 1: Organizational Chart of JPDO:
[See PDF for image]
Source: JPDO.
[End of figure]
Concurrent with JPDO's efforts, the European Commission[Footnote 8] is
conducting a project to harmonize and modernize the pan-European air
traffic management system. Known as the Single European Sky Air Traffic
Management Research Programme (SESAR), the project is overseen by the
European Organization for the Safety of Air Navigation
(Eurocontrol).[Footnote 9] Eurocontrol has contracted out the work of
SESAR to a 30-member consortium of airlines, air navigation service
providers, airports, manufacturers, and others. The consortium is
receiving 60 million euros ($73 million)[Footnote 10] to conduct a 2-
year definition phase and produce a master plan for SESAR.
ATO Has Taken Steps to Improve ATC Modernization, but Challenges Remain:
To improve its management of ATC modernization, ATO has taken steps
toward having a more results-oriented culture; a flatter, more
accountable management structure; and more businesslike management and
acquisition processes. In addition, ATO is implementing recommendations
we have made to address systemic factors that have contributed to cost,
schedule, and performance problems with major ATC acquisitions. For the
past 2 fiscal years, FAA has met its acquisition performance goals.
However, FAA still faces human capital challenges, such as
institutionalizing a results-oriented culture and hiring thousands of
air traffic controllers during the next decade. FAA also faces
challenges in keeping its major system acquisitions on track.
ATO Has Begun Efforts to Transform Its Culture, Structures, and
Processes to Operate More Efficiently as a PBO:
ATO is working to establish the results-oriented organizational
culture, structures, and processes that are generally associated with a
PBO. FAA, through ATO, has established a strategic goal to become a
results-oriented organization. One key element of ATO's strategy is to
identify core values and track employees' attitudes about those values
to monitor cultural change.[Footnote 11] To implement this element, ATO
has identified multiple core values: integrity and honesty,
accountability and responsibility, commitment to excellence, commitment
to people, and fiscal responsibility. ATO is using FAA Employee
Attitude Survey data to determine employee attitudes toward these
values and has developed a baseline of employee attitudes for use in
monitoring changes in attitudes over time.[Footnote 12] Another key
element of ATO's strategy is to establish a viable, stable, and
sustainable organization that can transcend changes in leadership.
In our past work, we noted that FAA's acquisitions workforce did not
have an organizational culture and structure that supported the
acquisition and deployment of sophisticated technology on the scale
used in the national airspace system.[Footnote 13] For example,
acquisitions were impaired because employees and managers acted in ways
that did not reflect a strong commitment to mission focus,
accountability, adaptability, and coordination. Specifically, officials
performed little or no mission needs analysis, made unrealistic cost
and schedule estimates, and moved to producing systems before
completing their development. We also reported that accountability was
not well defined or enforced for decisions on requirements and contract
oversight. Additionally, vertical lines of authority impaired
communication across organizations that needed to coordinate,
particularly the acquisitions and operations areas of FAA. Finally, we
reported that FAA's culture of conservatism and conformity rewarded
employees for simply following the rules rather than considering
innovation. We recommended that FAA develop a strategy for cultural
change. Although FAA responded to our recommendation by developing a
cultural change strategy and some other related initiatives, these
initiatives were neither fully implemented nor sustained.
ATO has put a new management structure in place and established more
businesslike management and acquisition processes. ATO is structured as
a discrete management unit within FAA and is headed by a Chief
Operating Officer (COO), who is appointed to a 5-year term. It has
become a flatter organization, with fewer management layers. As a
result, managers are in closer contact with the services they deliver.
ATO is also taking some steps to break down the vertical lines of
authority, or organizational stovepipes, that we found hindered
communication and coordination across FAA. For example, the COO holds
daily meetings with the managers of ATO's departments and holds the
managers collectively responsible for the success of ATO through the
performance management system. According to the COO, the daily meetings
have been a revelation for some managers who were formerly only focused
on and responsible for their own departments.
ATO has begun to revise its business processes to increase
accountability. For example, it has recently established a cost
accounting system and made the units that deliver services within each
department responsible for managing their own costs. Thus, each unit
manager develops an operating budget and is held accountable for
holding costs within specific targets. Managers track the costs of
their unit's operations, facilities and equipment, and overhead and use
this information to determine the costs of the services their unit
provides. Managers are evaluated and rewarded according to how well
they hold their costs within established targets. Our work has shown
that it is important, when implementing organizational transformations,
to use a performance management system to assure accountability for
change.[Footnote 14]
Finally, ATO is revising its acquisition processes, as we
recommended,[Footnote 15] and taking steps to improve oversight,
operational efficiency, and cost control. To ensure executive-level
oversight of all key decisions, FAA plans to revise its Acquisition
Management System to incorporate key decision points in a knowledge-
based product development process by June 2006. Moreover, as we have
reported, ATO formed an executive council to review major acquisitions
before they are sent to FAA's Joint Resources Council.[Footnote 16] To
better manage cost growth, this executive council also reviews project
breaches of 5 percent or more in cost, schedule, or performance. FAA
has issued guidance on how to develop and use pricing, including
guidelines for disclosing the levels of uncertainty and imprecision
that are inherent in cost estimates for major ATC systems.
Additionally, ATO has begun to base funding decisions for system
acquisitions on a system's expected contribution to controlling
operating costs. Finally, FAA is creating a training framework for its
acquisition workforce that mirrors effective human capital practices
that we have identified, and the agency is taking steps to measure the
effectiveness of its training.
ATO Has Begun to Address Systemic Causes of Delays and Cost Overruns in
ATC Modernization:
ATO has begun taking actions to address systemic factors that our work
has shown contribute individually or collectively to schedule delays or
cost overruns in major system acquisitions. Such factors include
funding acquisitions at lower levels than called for in agency planning
documents, not considering all information technology investments as a
complete portfolio, not adequately defining a system's requirements or
understanding software complexity, and not adequately considering
customer needs in a system's functional and performance requirements.
Funding acquisitions at lower levels than called for in agency planning
documents. When FAA initiates a major system acquisition, it estimates,
and its top management approves, the funding plan for each year.
However, when budget constraints do not allow all system acquisitions
to be fully funded at the previously approved levels, FAA must decide
which programs to fund and which to cut, according to its priorities.
When a system acquisition does not receive the annual funding called
for in its planning documents, the acquisition may fall behind
schedule. This may also postpone the benefits of the new system and can
require FAA to continue operating and maintaining the older equipment
that the acquisition is intended to replace. For example, reduced
funding was one factor that caused FAA to reduce the initial deployment
of its ASR-11 digital radar system from 111 systems to 66 systems, as
well as defer decisions on further deployment pending additional study.
In the meantime, FAA will have to continue maintaining the aging analog
radars that the new system was intended to replace. To address this
issue, we recommended that, to help ensure key administration and
congressional decision makers have more complete information, FAA
identify and annually report which activities under the ATC
modernization program have had funding deferred, reduced, or
eliminated, and provide detailed information on how those decisions
have affected FAA's ability to modernize the ATC system and related
components in the near, mid, and longer term.[Footnote 17] Such
information would make clear how constrained budgets will affect
modernization of the national airspace system and how FAA is working to
live within its means. According to FAA, the agency intends to better
inform Congress in the future by providing information in its capital
investment plan, submitted to Congress annually with the President's
Budget, that will identify changes from the preceding year.
Not considering all information technology investments as a complete
portfolio. We pointed out that FAA does not evaluate projects beyond
the first 2 years of service to ensure that they are aligned with
organizational goals.[Footnote 18] Consequently, the agency could not
ensure that projects with a longer service history, totaling about $1.3
billion per year, were still aligned with FAA's strategic plans and
business goals and objectives. We recommended that FAA include these
projects in its investment portfolio management for review. FAA's
current version of its Acquisition Management Policy calls for periodic
monitoring of in-service systems to collect and analyze performance
data to use as the basis for sustained deployment. However, we have not
yet evaluated FAA's implementation of this policy.
Not adequately defining a system's requirements or understanding
software complexity. Inadequate or poorly defined requirements may
contribute to the inability of system acquisitions to meet their
original cost, schedule, or performance targets, since developing or
redefining requirements as an acquisition progresses takes time and can
be costly. In addition, unplanned development work may occur when the
agency misjudges the extent to which a commercial-off-the-shelf or
nondevelopmental item, such as one procured by another agency, will
meet FAA's needs. For example, FAA sought to use an Army radio as the
core of a new digital ATC communication system, but found that the
radio did not meet established interference requirements, which
contributed to schedule delays. When FAA underestimates the complexity
of software development or misjudges the difficulty of modifying
available software to fulfill its mission needs, acquisitions may take
longer and cost more than expected. FAA's acquisition of the Local Area
Augmentation System (LAAS)--a system that would allow precision
instrument approaches and landings in all weather conditions--is a case
in point. FAA underestimated LAAS's software complexity because it
inadequately assessed the system's technology maturity. In particular,
the agency misunderstood the potential for radio interference through
the atmosphere, which could limit LAAS's operations. The technical
difficulties encountered with LAAS, among other things, led FAA to
suspend this acquisition. To reduce these risks, FAA has developed and
applied a process improvement model to a number of acquisition
projects. This model is used to assess the maturity of FAA's software
and systems capabilities. As we reported, this approach has resulted in
enhanced productivity, higher quality, greater ability to predict
schedules and resources, better morale, and improved communication and
teamwork.[Footnote 19] However, FAA did not mandate the use of the
model throughout the organization. In response to our recommendation
that FAA institutionalize the model's use throughout the organization,
FAA has begun developing a requirement that acquisition projects have
process improvement activities in place before seeking approval from
FAA's investment review board.
Not adequately considering customer needs in a system's functional and
performance requirements. We reported that FAA was not applying best
practices used in Department of Defense and commercial product
development. Best practices include balancing customer needs with
available resources. According to FAA, the agency is now including in
its acquisition guidance a requirement that top-level functional and
performance requirements reflect the needs of the customer.
FAA Met Its Acquisition Performance Goal for the Second Consecutive
Year, but Use of Revised Milestones Does Not Provide Consistent
Benchmarks:
FAA has now met its acquisitions performance goal 2 years in a row. The
goal for fiscal years 2004 and 2005 was to have 80 percent of its
system acquisitions on schedule and within 10 percent of budget. The
goal gradually increases to 90 percent by fiscal year 2008. The
increase will make FAA's acquisition performance goal consistent with
targets set in the Department of Transportation's strategic plan and
will comply with the Federal Acquisition Streamlining Act of 1994.
Having such a goal is consistent with the President's Management
Agenda, which calls for a commitment to achieve immediate, concrete,
and measurable results in the near term, and meeting this goal is a
positive step toward better acquisition management. However, if the
milestones for an acquisition have changed over the years to reflect
changes in its cost and schedule, then using those revised milestones
may not provide a complete picture of the acquisition's progress over
time. For example, the milestones for 3 of the 16 major system
acquisitions that we reviewed in detail during 2004 and 2005 were being
revised to reflect cost or schedule changes during 2005. These revised
milestones, together with revised targets for meeting them, will become
the new milestones for fiscal year 2006. While revising milestones and
targets that are no longer valid is an appropriate management action,
using revised rather than original targets for measuring performance
does not provide a consistent benchmark over time. The extent to which
an acquisition meets its annual performance targets is one measure of
its performance and should be viewed together with other measures, such
as its progress against original and revised baselines. The variance
reports provided to the FAA Administrator and to Congress may also be
useful in evaluating an acquisition's performance.[Footnote 20]
Since fiscal year 2003, the number of acquisition programs measured by
FAA has varied from 31 to 42. According to FAA, the number varies from
year to year, in part, because some programs reach completion and
others are initiated. The programs that are selected each fiscal year
represent a cross section of ATO programs, including investments in new
capabilities and others that are ready for use without modification.
FAA's Portfolio of Goals, which provides supplementary information on
the agency's performance goals, asserts that no bias exists in the
selection of milestones for performance review, but does not state the
basis for this conclusion. The portfolio also states that the
milestones selected represent the program office's determination of the
efforts that are "critical" or important enough to warrant inclusion in
the acquisition performance goal for the year. However, we have not
conducted a detailed examination of the reliability and validity of
FAA's metrics for its acquisition program performance.
ATO Faces Human Capital Challenges in Creating a More Results-Oriented
Culture and Hiring and Training Thousands of Air Traffic Controllers:
ATO faces a challenge in sustaining and institutionalizing management
focus on its transformation to an effective PBO and a results-oriented
culture. Our work has shown that successful transformations and the
institutionalization of change in large public and private
organizations can take 5 to 7 years or more to fully
implement.[Footnote 21] To ensure that FAA's focus on cultural change
does not diminish as it did in the past, we recommended that FAA
provide sustained oversight of efforts to achieve a more results-
oriented workforce culture, including periodically monitoring the
agency's progress against baseline data.[Footnote 22] As discussed, ATO
has established a baseline of employee attitudes for use in monitoring
cultural change, and similar long-term management attention will be
needed to conduct this monitoring and assess ATO's progress toward
becoming a PBO.
FAA also faces the challenge of hiring and training thousands of air
traffic controllers during the coming decade. According to its
controller staffing plan, FAA expects to lose about 11,000 air traffic
controllers due to voluntary retirements or mandatory retirements at
age 56, as well as other reasons.[Footnote 23] These retirements stem
from the 1981 controller strike, when President Ronald Reagan fired
over 10,000 air traffic controllers and FAA then had to quickly rebuild
the controller workforce. From 1982 through 1991, FAA hired an average
of 2,655 controllers per year. These controllers will become eligible
for retirement during the next decade. To replace these controllers, as
well as those who will leave for other reasons, and to accommodate
forecasted increases in air traffic, FAA's plan calls for hiring a
total of 12,500 new controllers over the next 10 years.[Footnote 24]
FAA Faces Challenges in Ensuring Stakeholder Involvement in Major
System Acquisitions and Keeping Acquisitions on Schedule and within
Budget:
Adequately involving stakeholders in a system's development is
important to ensure that the system meets users' needs. In the past,
air traffic controllers were permanently assigned to FAA's major system
acquisition program offices and provided input into air traffic control
modernization projects. In June 2005, FAA terminated this arrangement
because of budget constraints. According to FAA, it now plans to obtain
the subject-matter expertise of air traffic controllers or other
stakeholders as needed in major system acquisitions. It remains to be
seen whether this approach will be sufficient to avoid problems such as
FAA experienced when inadequate stakeholder involvement in the
development of new air traffic controller workstations (known as the
Standard Terminal Automation Replacement System (STARS)) contributed to
unplanned work, which, in turn, led to significant cost growth and
schedule delays.[Footnote 25]
Three systems--all communications-related--missed the fiscal year 2005
acquisition performance goal for schedule. According to FAA, the $310
million FTI acquisition, which is replacing costly existing networks of
separately managed systems and services by integrating advanced
telecommunications services, was behind schedule because initial plans
did not allow sufficient time for installations. To complete the
installations in fiscal year 2008, as originally scheduled, FAA
initiated a plan to put the program back on schedule and has met the
plan's milestones since August 2005. Two other communications
acquisition programs also missed the acquisition performance goal for
schedule--the $325 million Next Generation Air-to-Ground Communication
system, segment 1A, which replaces analog communication systems with
digital systems, and the $85 million Ultra High Frequency Radio
Replacement, which replaces aging equipment used to communicate with
Department of Defense aircraft. According to an FAA official, as the
agency assessed its priorities for fiscal year 2005, a decision was
made that these programs would receive fewer resources. The resources
that were then available were not sufficient to allow the programs to
meet established milestones.
To the extent that delays in FTI persist, FAA will lose the cost
savings that the system was expected to produce. The Department of
Transportation's Office of the Inspector General has reported that FAA
did not realize $32.6 million in anticipated operating cost savings in
fiscal year 2005 because of the limited progress made in disconnecting
legacy circuits. The office also reported that without a nearly tenfold
increase in its rate of transferring service to FTI and disconnecting
legacy circuits, FAA stands to miss out on an additional $102 million
in cost savings in fiscal year 2006. As an alternative to continuing
the current FTI program, some experts have suggested that FAA consider
outsourcing this activity, as it recently did for its flight service
stations.[Footnote 26]
In summary, ATO has made a number of promising moves toward becoming a
results-oriented organization, and we view ATO's efforts to improve its
culture, management, and acquisitions process as positive steps.
However, ATO has been established for only slightly more than 2 years.
Work remains to ensure that these processes become institutionalized.
Although it is still too early to evaluate the effectiveness of many of
these steps, we are monitoring ATO's progress. As ATO moves forward, it
will play a key role in implementing NGATS, as planned by JPDO. I will
now discuss the status of JPDO's planning efforts.
JPDO Has Made Progress in Planning for NGATS, but Faces Challenges and
Opportunities in Several Areas:
JPDO has engaged in practices that facilitate collaboration among its
partner agencies, but faces challenges in continuing to leverage
resources from these agencies and in defining the roles and
responsibilities of the various entities involved. JPDO has been
structured to involve both federal and nonfederal stakeholders, but
maintaining the support of nonfederal stakeholders over the long term
and soliciting the participation of some stakeholders may prove
difficult. JPDO is using a reasonable process for technical planning,
but several key technical planning activities remain. Lastly, JPDO is
including efforts toward global harmonization in its planning for
NGATS, but other opportunities for cooperation have not been fully
explored.
JPDO Has Begun to Facilitate Collaboration among Federal Agencies, but
Faces Challenges in Continuing to Leverage Resources and in Defining
Roles and Responsibilities:
Our work to date shows that JPDO is facilitating the federal
interagency collaboration that is central to its mission and
legislative mandate. According to our research, agencies must have a
clear and compelling rationale for working together to overcome
significant differences in their missions, cultures, and established
ways of doing business. In developing JPDO's integrated plan,[Footnote
27] the partner agencies agreed to a vision statement and eight
strategies that broadly address the goals and objectives for NGATS.
These strategies formed the basis for JPDO's eight integrated product
teams (IPT), and various partner agencies have taken the lead on
specific strategies. Our research has also shown that it is important
for collaborating agencies to include the human, technological, and
physical resources needed to initiate or sustain their collaborative
effort. To leverage human resources, JPDO has staffed the various
levels of its organization with partner-agency employees, many of whom
work part time for JPDO. To leverage technological resources, JPDO
conducted an interagency program review of its partner agencies'
research and development programs to identify work that could support
NGATS. Through this process, JPDO identified early opportunities that
could be pursued during fiscal year 2007 to produce tangible results
for NGATS, such as the Automatic Dependent Surveillance-Broadcast (ADS-
B)[Footnote 28] program at FAA.
However, while JPDO's legislation, integrated plan, and governance
structure[Footnote 29] provide the framework for institutionalizing
collaboration among multiple federal agencies, JPDO is fundamentally a
planning and coordinating body that lacks authority over the key human
and technological resources needed to continue developing plans and
system requirements for NGATS. Consequently, the ability to continue
leveraging resources of the partner agencies will be critical to JPDO's
success. However, beginning around 2008, JPDO expects a significant
increase in its IPTs' workloads. JPDO officials told us that although
the partner agencies have not yet expressed concerns over the time that
their employees spend on JPDO work, it remains to be seen whether
agencies will be willing to allow their staff to devote more of their
time to JPDO. In addition, JPDO anticipates needing more agency
resources to plan and implement demonstrations of potential
technologies to illustrate some of the early benefits that could be
achieved from the transformation to NGATS.
This challenge of leveraging resources arises, in part, because the
partner agencies have a variety of missions and priorities other than
supporting NGATS. NASA, for example, while conducting key aeronautical
and safety research relevant to NGATS, nonetheless has other competing
missions. Recently, NASA's management determined that for the agency to
meet its other mission needs, it would not develop new aviation
technologies to the extent that it had in the past. As a result,
additional development costs related to NGATS will have to be borne by
JPDO, industry, or some combination.
JPDO also faces the challenge of clearly defining its partner agencies'
roles and responsibilities. Our work has shown that collaborating
agencies should work together to define and agree on their respective
roles and responsibilities, including how the collaboration will be
led. In JPDO's case, there is no formal, long-term agreement on the
partner agencies' roles and responsibilities in creating NGATS.
According to JPDO officials, a memorandum of understanding that would
define the partner agencies' relationships was being developed as of
August 2005, but has not yet been completed.
Defining roles and responsibilities is particularly important between
JPDO and ATO, because both organizations have responsibilities related
to planning the national airspace system's modernization. ATO has
primary responsibility for the ATC system's current and near-term
modernization, while JPDO has responsibility for planning and
coordinating a transformation to NGATS over the next 20 years. The
roles and responsibilities of each office are currently being worked
out. ATO now plans to expand its Operational Evolution Plan so that it
applies FAA-wide and represents FAA's piece of JPDO's overall NGATS
plan. [Footnote 30] As the roles and responsibilities of the two
offices become more clearly defined, there is also a need to better
communicate these decisions to stakeholders.
JPDO Is Structured to Involve Federal and Nonfederal Stakeholders, but
Faces a Challenge in Soliciting and Maintaining Support over the Long
Term:
JPDO has structured itself to involve federal and nonfederal
stakeholders throughout its organization. Our work has shown that
involving stakeholders can, among other things, increase their support
for a collaborative effort. Federal stakeholders from the partner
agencies serve on JPDO's Senior Policy Committee, board, and IPTs.
Nonfederal stakeholders may participate through the NGATS Institute
(the Institute). Through the Institute, JPDO obtained the participation
of over 180 stakeholders from over 70 organizations for the IPTs. The
NGATS Institute Management Council, composed of top officials and
representatives from the aviation community, oversees the policy and
recommendations of the Institute and provides a means for advancing
consensus positions on critical NGATS issues.
Although JPDO has developed the mechanisms for involving stakeholders
and brought stakeholders into the process, it faces challenges in
sustaining nonfederal stakeholders' participation over the long term.
Much as with the federal partner agencies, JPDO has no direct authority
over the human, technical, or financial resources of its nonfederal
stakeholders. To date, these stakeholders' investment in NGATS has been
through their part-time, pro bono participation on the IPTs and the
NGATS Institute Management Council.[Footnote 31] The challenge for JPDO
is to maintain the interest and enthusiasm of these nonfederal
stakeholders, which will have to juggle their own multiple priorities
and resource demands, even though some of the tangible benefits of
NGATS may not be realized for several years. For example, stakeholders'
support will be important for programs such as System Wide Information
Management (SWIM),[Footnote 32] which is a prerequisite to future
benefits, but may not produce tangible benefits in the near term.
In the wake of past national airspace modernization efforts, JPDO also
faces the challenge of convincing nonfederal stakeholders that the
government is financially committed to NGATS. While most of FAA's major
ATC acquisition programs are currently on track, earlier attempts at
modernizing the national airspace system encountered many difficulties.
In one instance, for example, FAA developed a datalink communications
system that transmitted scripted e-mail-like messages between
controllers and pilots. One airline equipped its aircraft with this new
technology, but because of funding cuts, FAA ended up canceling the
program. In a similar vein, we have reported that some aviation
stakeholders expressed concern that FAA may not follow through with its
airspace redesign efforts and are hesitant to invest in equipment
unless they are sure that FAA's efforts will continue. One expert
suggested to us that the government might mitigate this issue by making
an initial investment in a specific technology before requesting that
airlines or other industry stakeholders purchase equipment.
In addition to maintaining stakeholder involvement, JPDO faces
challenges in obtaining the participation of all stakeholders. In
particular, JPDO does not involve current air traffic controllers, who
will play a key role in NGATS. The current air traffic control system
is based primarily on the premise that air traffic controllers direct
pilots to maintain safe separation between aircraft. In NGATS, this
premise could change and, accordingly, JPDO has recognized the need to
conduct human factors research on such issues, including how tasks
should be allocated between humans and automated systems, and how the
existing allocation of responsibilities between pilots and air traffic
controllers might change. The input of current air traffic controllers
who have recent experience controlling aircraft is important in
considering human factors and safety issues, as our work on STARS has
shown.
However, as mentioned, no current air traffic controllers are involved
in NGATS. In June 2005, FAA terminated its liaison program through
which air traffic controllers had been assigned as liaisons to its
major system acquisition program offices. This included the liaison
assigned to JPDO. Since that time, the National Air Traffic Controllers
Association (NATCA), the labor union that represents air traffic
controllers, has not been a participant in planning NGATS. Although the
NGATS Institute Management Council includes a seat for the union, a
NATCA official told us that the union's head had been unable to attend
the council's meetings. According to JPDO officials, the council has
left a seat open in hopes that the controllers will participate in
NGATS after a new labor-management agreement between NATCA and FAA has
been settled.
JPDO Is Using a Reasonable Process for Technical Planning, but Has Not
Yet Completed Key Activities:
To conduct the technical planning needed to develop NGATS, JPDO is
using an iterative process that appears to be reasonable given the
complexity of NGATS. Two fundamental pieces of this technical planning
are modeling and developing an enterprise architecture (a tool, or
blueprint, for understanding and planning complex systems).
JPDO has formed an Evaluation and Analysis Division (EAD), composed of
FAA and NASA employees and contractors, to assemble a suite of models
that will help JPDO refine its plans for NGATS and iteratively narrow
the range of potential solutions. For example, EAD has used modeling to
begin studying how possible changes in the duties of key individuals,
such as air traffic controllers, could affect the workload and
performance of others, such as airport ground personnel. NGATS could
shift some tasks now done by air traffic controllers to pilots.
However, EAD has not yet begun to model the effect of this shift on
pilots' performance because, according to an EAD official, a suitable
model has not yet been incorporated into the modeling tool suite.
According to EAD, addressing this issue is difficult because data on
pilot behavior are not readily available to use in creating such
models. Furthermore, EAD has not studied the training implications of
various NGATS-proposed solutions because further definition of the
concept of operations for these solutions has not been completed. As
the concept of operations matures, it will be important for air traffic
controllers and other affected stakeholders to provide their
perspectives on these modeling efforts. In addition, as the concept of
operations and plans for sequencing equipment matures, EAD will be able
to study the extent to which new air traffic controllers will have to
be trained to operate both the old and the new equipment.
To develop an enterprise architecture, JPDO has taken several important
first steps and is following several effective practices that we have
identified for enterprise architecture development. However, JPDO's
enterprise architecture is currently a work in progress. Development of
the NGATS enterprise architecture is critical to JPDO's planning
efforts, and many of JPDO's future activities will depend on the
robustness and timeliness of its architecture development. The
enterprise architecture will describe ATO's operation of the current
national airspace system, JPDO's plans for the NGATS, and the sequence
of steps needed to transition between them. The enterprise architecture
will provide the means for coordinating among the partner agencies and
private sector manufacturers, aligning relevant research and
development activities, integrating equipment, and estimating system
costs.
To date, JPDO has formed an Enterprise Architecture Division and plans
to have an early version of the architecture by the end of fiscal year
2006. The office has established and filled a chief architect position
and established an NGATS Architecture Council composed of
representatives from each partner agency's chief architect office. This
provides the organizational structure and oversight needed to develop
an enterprise architecture. JPDO's phased "build a little, test a
little" approach for developing and refining its enterprise
architecture is similar to a process that we have advocated for FAA's
major system acquisition programs. In addition, this phased development
process will allow JPDO to incorporate evolving market forces and
technologies in its architecture and thus better manage change.
JPDO Is Planning for Global Harmonization as Part of the NGATS Effort,
but Additional Cooperative Activities Have Not Been Fully Explored:
Global harmonization is one of the important strategies underlying
NGATS, and JPDO has started to plan for harmonization. JPDO officials
said they recognize the need to work toward the global harmonization of
systems and have met with officials from various parts of the world,
including China, East Asia, and Europe, to assess the potential for
cooperative NGATS demonstrations. JPDO has a global harmonization IPT,
led by managers from ATO's International Operations Planning Services
International and FAA's Office of International Aviation. The IPT's
mission is to harmonize equipment and operations globally and advocate
for the adoption of U.S.-preferred transformation concepts,
technologies, procedures, and standards. The harmonization IPT
finalized its charter in March 2006 and is working to develop an
international strategy and outreach plan. In addition to external
efforts, the harmonization IPT plans to work as a crosscutting IPT that
will raise awareness of global interoperability and standards issues
within the other IPTs as they consider product development.
JPDO officials have noted the need to work toward harmonization with
the Single European Sky Air Traffic Management Research Programme
(SESAR), a major initiative to modernize the airspace system of the
European Union. Eurocontrol has been designated to conduct SESAR to
both modernize and integrate European air traffic management systems.
While similar in many respects to the NGATS planning effort,
Eurocontrol has contracted with an industry consortium to conduct the 2-
year planning phase of the project.
According to several European officials with whom we spoke, global
harmonization (and harmonization with the U.S. system specifically) is
considered to be a key ingredient for the success of SESAR. Several of
these officials said that although the European organization invited
JPDO to participate as a full member in SESAR and the organization has
indicated its willingness to have reciprocal participation with the
United States, personnel exchanges are just beginning to occur. JPDO
officials recognize the importance of cooperative efforts and noted
that if Europe and the United States were to implement different and
incompatible standards and technologies, there could be a major adverse
impact on airlines that serve international markets. Nonetheless, these
officials point out that JPDO, as a U.S. government entity, could not
participate as a member in a private industry effort like the SESAR
consortium. FAA is, however, a member of the European Commission's
Industry Consultation Body, which provides advice to SESAR. The JPDO
officials also said personnel exchanges and other cooperative
activities, such as information exchanges and a joint working group on
technical standards, are now being conducted under a memorandum of
cooperation between FAA and Eurocontrol.
While FAA and the harmonization IPT are planning cooperative
activities, our research has identified several other areas where
cooperation does not appear to be fully developed. For example, the
SESAR and NGATS initiatives, despite their similarities, do not have
coordination activities such as peer reviews of relevant research,
cooperation on safety analysis (such as through the pooling of accident
data), or validation of technologies. It is possible that greater
cooperation and exchange between NGATS and SESAR might develop once
planning has progressed to the development and validation stage.
ATO and JPDO are Working to Address Funding Challenges:
In the face of rising operating costs, ATO has implemented a number of
cost control initiatives. Savings realized from ATO efforts to control
costs could be used for modernization efforts, including the
development of NGATS. Funding flexibility could also help to address
these challenges. In addition to the cost savings efforts initiated by
ATO, JPDO is identifying potential ways to leverage available resources
to support initial NGATS initiatives.
ATO Has Begun to Take a Number of Steps to Address Rising Operating
Costs:
To address rising operating costs and improve performance, ATO has
developed a formal cost control program that includes completing the
development of a cost accounting system and using information from the
system to conduct activity value analysis--that is, to assess the value
of its products and services to its customers. The cost control program
also includes conducting annual business case reviews, primarily for
its capital programs, and assisting Congress in identifying funding
priorities. To control costs, ATO is decommissioning and consolidating
ATC facilities, improving its contract management, pursuing cost
reduction opportunities through outsourcing, and avoiding or reducing
personnel costs through workforce attrition and efficiency gains.
ATO has made significant progress in developing its cost accounting
system.[Footnote 33] In doing so, ATO is addressing our long-standing
concern that FAA lacked the cost information necessary for decision
making and could not adequately account for its activities and major
projects, such as its ATC modernization programs. ATO officials have
also noted that the system will enhance their ability to accurately
determine the costs of providing specific services or products and to
compare those costs with the value provided to the organization's
customers. This information will be valuable in prioritizing activities
and weighing the costs and benefits of various courses of action when
developing and supporting proposed budgets. It will also allow FAA to
base funding decisions for system acquisitions on their contribution to
reducing the agency's operating costs. These efforts facilitate ATO's
activity value analysis, through which ATO determines (1) the costs of
the products and services provided, (2) the factors that affect the
costs, and (3) the value of these products and services, as perceived
by ATO's customers. By comparing the costs of providing services with
their value to customers, ATO officials expect the process to help them
eliminate activities with low customer value and determine ways to
reduce the costs of activities with high customer value.
ATO expects business case reviews of its capital programs to reduce its
ATC modernization costs by about $62 million in fiscal year 2007 and by
nearly $400 million by fiscal year 2008. Over the last 2 years, ATO
conducted business case reviews of 81 programs, including 67 capital
programs and 14 operations programs. Through these annual reviews, ATO
examines each program to ensure that its funding is justified, and if
ATO determines that the funding is not justified, it may terminate or
restructure the program. To date, ATO has terminated or restructured 6
programs after reviewing the business cases for them, including its
Medium Intensity Airport Weather System (MIAWS) program. ATO canceled
this program's $4 million spending request.[Footnote 34] ATO also
reduced the funding for a radar replacement program after reviewing its
business case and identifying opportunities to conduct more effective
maintenance rather than replace radars. Through these combined efforts,
FAA expects to reduce costs by $32 million in fiscal year 2007.
ATO is working with Congress to discuss proposed projects and maximize
capital funds, as we previously recommended.[Footnote 35] ATO reported
that Congress designated approximately $300 million for specific
projects in fiscal years 2003 and 2004. In fiscal year 2005, according
to ATO, designated projects totaled almost $430 million. In fiscal year
2006, ATO staff met with Senate offices to provide input on
projects,[Footnote 36] and the value of the congressionally designated
projects declined, as indicated in table 1.
Table 1: Congressionally Designated Projects for ATO, Fiscal Years 2003
through 2006:
Dollars in millions.
Fiscal year: 2003:
Amount total; $295,905.
Fiscal year: 2004:
Amount total; $282,280;
Percentage change from prior year; -4.6%.
Fiscal year: 2005:
Amount total; $429,160;
Percentage change from prior year; 52.0%.
Fiscal year: 2006:
Amount total; $245,800;
Percentage change from prior year. -42.7%.
Source: GAO analysis of ATO data.
[End of table]
ATO has saved about $84 million to date through initiatives to control
its costs. For example, ATO has begun to decommission ground-based
navigational aids, such as compass locators, outer markers and
nondirectional radio beacons, and to close related ATC facilities as it
transitions to a satellite-based navigation system. In fiscal year
2005, ATO decommissioned 177 navigational aids for a savings of $2.9
million. However, ATO has thousands of navigational aids in use, many
of which could be decommissioned during the transition to NGATS.
Consolidating ATC facilities, including terminal radar approach control
(TRACON) facilities and air traffic control centers, can also save
costs. According to one estimate, undertaking all of these actions
could save ATO approximately $600 million per year. We have also found,
in researching cost control efforts undertaken by international air
navigation service providers, that consolidating regional
administrative offices offers additional potential cost savings.
While efforts to decommission navigational aids and close ATC
facilities offer potential savings, we found that ATO lacks a
consistent process for identifying the costs and benefits associated
with these efforts. For example, although ATO reported saving $2.9
million in fiscal year 2005 by decommissioning 177 navigational aids,
its report did not offset these savings with the costs of
decommissioning activities, such as real property disposition
(including buildings or real property leases, standby power systems,
and fuel storage tanks), site cleanup, and restoration. Experts
estimate that the costs of decommissioning all possible navigational
aids and conducting the needed environmental remediation could total
about $300 million. Opportunities may exist for ATO to reuse these
sites to reduce or eliminate environmental cleanup costs. For example,
sites could be used for cell phone towers, generating about $100,000
per year in revenue per site. Other sites could be leased as
warehouses. Together, these efforts could potentially save FAA up to
$14 million per year. However, without a transparent and verifiable
process for determining both the costs and benefits, it remains
difficult to accurately determine financial savings.
As ATO proceeds with these efforts, stakeholders caution that
decommissioning navigational aids and closing facilities should entail
comprehensive risk mitigation to ensure that ATO retains adequate
safety levels. This includes risk prevention, which focuses on elements
that the agency can prevent, and risk recovery, which recognizes that
some events cannot be prevented and the system must recover from them.
It is important that facility closures happen within the context of a
logical, well-documented, and reasoned process in consultation with
congressional oversight committees. Any process to determine closures
or consolidations should use consistent, accurate data collection and a
common analytical framework to ensure the integrity of the process.
ATO is also attempting to examine existing service contracts to better
control costs. For example, it has saved about $2 million by
renegotiating task orders and modifying contracts for technical
assistance provided by contractors that manage facilities and equipment
projects. According to ATO, these renegotiations did not affect the
associated programs. In addition, ATO has saved about $1 million to
date by negotiating cell phone contracts with four large service
providers. Formerly, ATO employees arranged individual plans for their
work cell phones. ATO also entered into a new contract with natural gas
and electricity providers at its Technical Center that has saved about
$358,000 to date. Lastly, through a strategic sourcing initiative, it
has newly negotiated purchasing deals for support services, including
printing and mail services, office equipment and supplies, and
information technology hardware and software.
As another cost-saving measure, ATO is exploring opportunities for
outsourcing work that is now performed by the government. Under the
Office of Management and Budget's Circular A-76 (Revised), federal
agencies can compete with and rely on the private sector to enhance
productivity. Recently, FAA contracted with Lockheed Martin to operate
its flight service stations. According to FAA, this contract will cost
approximately $2.2 billion less over 10 years than FAA would have had
to pay to operate the stations itself. FAA's estimate includes the
savings it expects to realize as the contractor assumes the costs of
providing the services and paying their utility and maintenance costs.
FAA is currently working to identify other opportunities to reduce
costs through the A-76 process. Some experts have suggested that the
time may be right for FAA to examine opportunities to contract out the
ground portion of its FTI program, through which FAA is replacing air-
ground telecommunications networks. According to these experts, this
approach could save FAA up to $130 million a year beginning in fiscal
year 2008. The FTI program is not expected to provide financial savings
until fiscal year 2010; however, the savings might take longer to be
realized because the program is falling behind schedule.
ATO is working to control personnel costs through both attrition and
improved productivity. According to ATO, these efforts have saved about
$67 million from the beginning of fiscal year 2005 to date. For
example, ATO has saved about $44 million from the attrition of both
nonsafety and Flight Service staff. ATO further expects efficiencies
and lower training costs to allow a 10 percent reduction in the
controller workforce over the next decade. These efficiencies include
relying on part-time employees and job-sharing arrangements,
implementing split shifts, and improving the management of overtime
through an optimal mix of increased staffing and overtime hours to meet
workload demands. Through gains in air traffic controllers'
productivity, ATO has reduced its hiring requirements by about 460
controller positions, thereby avoiding salary costs of about $23
million, according to ATO. In addition, ATO is considering the
feasibility of saving air traffic controller training costs by allowing
graduates of its Air Traffic Collegiate Training Initiative (CTI) to
bypass the FAA Academy, where FAA provides initial qualification
training to new hires.[Footnote 37] According to an FAA Academy
official, the proposal to allow these graduates to bypass the academy
is being considered as part of a comprehensive review of the Collegiate
Training Initiative that will be completed this fall. We had previously
identified this effort as offering potential savings.[Footnote 38]
ATO Faces Challenges in Funding NGATS:
As the organization primarily responsible for implementing NGATS, ATO
will face substantial funding requirements beyond those needed to
maintain the current system. Funding constraints have required ATO to
carefully scrutinize capital projects and defer or eliminate funding
for systems that could support NGATS, such as a precision-landing
system augmented by satellites (LAAS), a digital e-mail-type
communication system between controllers and pilots (CPDLC), and the
next generation air/ground communication system (NEXCOM).
Although the cost of NGATS is not yet known, JPDO and ATO are
collaborating in developing rough near-term funding requirements for
NGATS's concept definition and development for major categories of air
traffic control functions such as automation, communications,
navigation, surveillance, and weather. While these funding requirements
are not in FAA's current 5-year spending plan, they could be included
once JPDO presents, and FAA accepts, business cases, according to an
FAA official.
JPDO has identified some key factors that will drive NGATS costs. One
of the drivers is the technologies expected to be included in NGATS.
Some of these are more complex and thus more expensive to implement
than others. A second driver is the sequence in which NGATS
technologies will replace the technologies now in use. A third driver
is the length of time required to transition to NGATS, since a longer
transition period would impose higher costs. JPDO held the first in a
series of investment analysis workshops to determine the basis for
developing future NGATS cost estimates on April 25 and 26, 2006. This
first workshop focused on recommendations from commercial and business
aviation, equipment manufacturers, and systems developers.
Resources Available to Support NGATS Could Be Enhanced through
Leveraging and Funding Flexibility:
Resources available to support NGATS could be enhanced to the extent
that JPDO leverages other partner agency resources. JPDO has already
moved in this direction by conducting a review of its partner agencies'
research and development programs to identify ongoing work that could
support NGATS and the potential for more effective interagency
collaboration. Through this process, for example, JPDO successfully
requested that FAA pursue funding to accelerate development of ADS-B
and SWIM, which are two key systems identified for NGATS. However, JPDO
officials told us that, while FAA did receive a funding increase for
those systems, FAA did not receive the full amount it had requested. As
noted, our past work on FAA's national airspace modernization program
has shown that receiving fewer resources than planned was one factor
that contributed to delays in implementing technologies and significant
cost increases.
To further leverage resources for NGATS, JPDO has issued guidance to
its partner agencies identifying areas that JPDO would like to see
emphasized in the agencies' fiscal year 2008 budget requests. JPDO is
also working with the Office of Management and Budget to develop a
systematic means of reviewing partner agency budget requests so that
the NGATS-related funding in each request is easily identified. This
includes a review of budgets submitted by the Department of Homeland
Security for efforts by the Transportation Security Administration, and
the Department of Commerce for efforts by the National Oceanic and
Atmospheric Association. Such a process would help the Office of
Management and Budget consider NGATS as a unified program rather than
as disparate line items distributed across several agencies' budget
requests.
Further enhancement to NGATS funding could be achieved by ATO utilizing
its existing funding flexibility. Under existing law, ATO has a 3-year
spending authority for Facilities and Equipment funds. It also has
discretion to shift as much as 10 percent of a given program's funds
over a fiscal year. This is important, since annual expenditures for
several large capital projects will soon be trending downward.[Footnote
39] Concurrently, FAA is working to conduct business case reviews of
existing capital projects on an annual basis. These combined efforts
could potentially yield hundreds of millions of dollars to pursue
initial NGATS projects.
Concluding Observations:
ATO has put mechanisms in place to change the culture and business
processes that have plagued the past modernization efforts of FAA.
ATO's new cost accounting system and management practices are important
steps toward improved accountability. Similarly, it has taken steps, in
response to our recommendations, to improve its acquisition processes.
However, as I mentioned, ATO faces challenges in sustaining and
furthering its transformation to a results-oriented culture, and in
many cases, it is still too early to judge the long-term success of
these attempts at fundamental organizational change. ATO must continue
to measure its progress and work to change the culture at all levels of
the organization, as our work has shown that these types of
transformations can sometimes take close to a decade to truly become
entrenched within the organization. We believe that, overall, ATO is
moving in the right direction, and we will continue to monitor its
progress.
We also believe that JPDO is moving in the right direction in creating
an organizational structure that facilitates the federal interagency
collaboration that must occur for the office to be successful in its
mission. JPDO is working to leverage the various human, technological,
and financial resources of its partner agencies. This is key given the
coordinating role of JPDO and its lack of authority over key resources
needed to continue developing the NGATS plan. However, because of this
lack of authority, JPDO could be challenged to maintain partner agency
and stakeholder commitment to the NGATS effort in the long term. Also,
much of the NGATS planning and implementation depends on the
development of the NGATS enterprise architecture. Although JPDO has
said that a version of the enterprise architecture will be completed
later this year, the architecture will require further refinement and
commitment from the partner agencies into the future.
Transforming the national airspace system to accommodate what is
expected to be three times the current amount of traffic by 2025,
providing adequate security and environmental safeguards, and doing
these things seamlessly while the current system continues to operate,
will be an enormously complex undertaking. Both ATO and JPDO have been
given difficult tasks in a difficult budgetary environment. Going
forward, efforts to control costs and leverage resources will become
even more critical. Success also depends on the ability of ATO and JPDO
to define their roles and form a collaborative environment for planning
and implementing the next generation system.
Mr. Chairman, this concludes my statement for the record.
Contact and Staff Acknowledgments:
For further information on this statement for the record, please
contact Gerald Dillingham at (202) 512-2834 or dillinghamg@gao.gov.
Individuals making key contributions to this
statement include Nabajyoti Barkakati, Christine Bonham, Jay Cherlow,
Elizabeth Eisenstadt, Colin Fallon, David Hooper, Heather Krause,
Elizabeth Marchak, Maren McAvoy, Edmond Menoche, Faye Morrison, Richard
Scott, Sarah Veale, and Matthew Zisman.
(540126):
[End of section]
FOOTNOTES
[1] PBOs are discrete units, led by a Chief Operating Officer, that
commit to clear objectives, specific measurable goals, customer service
standards, and targets for improved performance.
[2] Because ATO includes the majority of FAA employees, this statement
will refer to ATO initiatives, even though some may apply FAA-wide.
[3] GAO, Results-Oriented Government: Practices That Can Help Enhance
and Sustain Collaboration among Federal Agencies, GAO-06-15
(Washington, D.C.: Oct. 21, 2005).
[4] ATC Modernization has remained on our high-risk list since 1995.
See GAO, High Risk Series: An Update, GAO-05-207 (Washington, D.C.:
January 2005).
[5] P.L. 104-50, Fiscal Year 1996 Department of Transportation
Appropriations Act.
[6] P.L. 108-176, Vision 100--Century of Aviation Reauthorization Act,
December 12, 2003.
[7] For more information on JPDO, visit www.jpdo.aero.
[8] The European Commission is a politically independent institution
that prepares and implements legislative instruments.
[9] Eurocontrol is an autonomous organization established in 1963 with
the intention of creating a single upper airspace in Europe.
[10] A portion of this funding is in-kind services from Eurocontrol. To
convert euros to U.S. dollars, we used 1.2098, the foreign exchange
rate for March 21, 2006, as published in The Washington Post.
[11] FAA, Employee Attitudes Within the Air Traffic Organization
(Washington, D.C; December 2004).
[12] Because the most recent FAA Employee Attitude Survey was conducted
in September 2003, prior to the formation of ATO, FAA combined survey
data from the FAA organizations that were merged into the ATO.
[13] GAO, National Airspace System: Transformation Will Require
Cultural Change, Balanced Funding Priorities, and Use of All Available
Management Tools, GAO-06-154 (Washington, D.C.: Oct. 14, 2005).
[14] GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, GAO-03-669 (Washington,
D.C.: July 2, 2003).
[15] GAO, Air Traffic Control: FAA's Acquisition Management has
Improved, but Policies and Oversight Need Strengthening to Help Ensure
Results, GAO-05-23 (Washington, D.C.: Nov. 12, 2004).
[16] The Joint Resources Council is an FAA body responsible for
approving and overseeing major system acquisitions.
[17] GAO, The National Airspace System: FAA Has Made Progress but
Continues to Face Challenges in Acquiring Major Air Traffic Control
Systems, GAO-05-331 (Washington, D.C.: June 10, 2005).
[18] GAO, Information Technology: FAA Has Many Investment Management
Capabilities in Place, but More Oversight of Operational Systems Is
Needed, GAO-04-822 (Washington, D.C.: Aug. 20, 2004).
[19] GAO, Air Traffic Control: System Management Capabilities Improved,
but More Can Be Done to Institutionalize Improvements, GAO-04-901
(Washington, D.C.: Aug. 20, 2004).
[20] According to FAA, the agency tracks acquisition program
performance from its original baseline or any subsequently approved
baselines approved by the Joint Resource Council, and reports variances
to the Administrator and to Congress as required.
[21] GAO-03-669.
[22] GAO-06-154.
[23] FAA, A Plan for the Future: The Federal Aviation Administration's
10-Year Strategy for the Air Traffic Control Workforce (Dec. 21, 2004).
[24] Since issuing its controller staffing plan, FAA has achieved
productivity gains that have reduced the need to hire about 460 air
traffic controllers.
[25] GAO-05-331.
[26] In February 2005, FAA awarded a contract for the operation of its
flight service stations.
[27] The Vision 100 Act called for JPDO to create and carry out an
integrated plan for NGATS. This integrated plan was developed by the
partner agencies and submitted to Congress on December 12, 2004.
[28] ADS-B is a surveillance technology that transmits an aircraft's
identity, position, velocity, and intent to other aircraft and to ATC
systems on the ground, thereby enabling pilots and controllers to have
a common picture of airspace and traffic. By providing pilots with a
display that shows the location of nearby aircraft, the system enables
pilots to collaborate in decision making with controllers, safely
allowing reduced aircraft separation and thereby increasing NAS
capacity.
[29] Some of JPDO's governance structure was determined by Vision 100,
which directed the Secretary of Transportation to establish a Senior
Policy Committee and set forth the membership of this committee. In
addition, JPDO has established a Board of Directors, a Master IPT, and
several divisions.
[30] Currently, FAA's Operational Evolution Plan monitors how NAS
capacity will change over a rolling 10-year planning horizon depending
on numerous variables, such as the demand for air travel, the
completion of new runways, and the availability of new ATC systems.
[31] Nonfederal stakeholders' participation varies from approximately
10 percent to 25 percent of their time per week on the IPTs and
involves approximately one meeting per month for members of the council.
[32] SWIM is expected to help transition the NAS to network-centric
operations by providing the infrastructure and associated policies and
standards to enable information sharing among all authorized NAS users,
such as the airlines, other government agencies, and the military.
[33] FAA is using its cost accounting system to potentially allocate
costs of its services to users to better align its costs with revenues
through a new funding mechanism. GAO is currently examining this effort
as part of an ongoing study examining FAA financing options.
[34] MIAWS was intended to provide real-time displays of storm
positions and estimated storm tracks for airports and airlines.
[35] GAO, National Airspace System: FAA Has Made Progress but Continues
to Face Challenges in Acquiring Major Air Traffic Control Systems, GAO-
05-331 (Washington, D.C.: June 10, 2005).
[36] The House of Representatives did not have any designated projects
for FAA for fiscal year 2006.
[37] Graduates of schools participating in the Collegiate Training
Initiative have college degrees, a broad knowledge of the aviation
industry, a basic level of training in air traffic control, and a
demonstrated interest in the field. The Department of Transportation
Inspector General reported that course work in these collegiate
programs duplicates a portion of the academy-provided training.
[38] GAO, National Airspace System: Transformation Will Require
Cultural Change, Balanced Funding Priorities, and Use of All Available
Management Tools, GAO-06-154 (Washington, D.C.: Oct. 14, 2005).
[39] ATO expects that by fiscal year 2008, spending for its En Route
Modernization (ERAM), Oceanic Services, Standard Terminal Automation
Replacement System (STARS), Airport Surveillance Radar-Model 11 (ASR-
11), and FAA Telecommunications Infrastructure programs should begin
trending downward.
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