Federal Aviation Administration
Challenges Facing the Agency in Fiscal Year 2008 and Beyond Gao ID: GAO-07-490T February 14, 2007FAA operates one of the safest air transportation systems in the world. It is, however, a system under strain. The skies over America are becoming more crowded every day. FAA faces the daunting task of safely integrating a growing influx of passengers and aircraft into the system and simultaneously leading the transition to the Next Generation Air Transportation System (NextGen)--a complicated effort to modernize the system. FAA's broad responsibilities to maintain and modernize the nation's air transportation system must be met in an uncertain budgetary and long-term fiscal environment. GAO's concerns about financing the nation's transportation system, including aviation, led GAO to designate this issue as high-risk.
To ensure continued safety within the national airspace system, FAA is using risk-based, data-driven safety programs to oversee the industry; however, the agency faces data and human resource challenges that affect its ability to fully implement these programs. GAO has previously recommended that FAA improve the accuracy and completeness of the safety data and analysis of that data needed to monitor safety trends, fully implement its safety programs, and assess their effectiveness to determine if they are focused on the greatest safety risk. FAA has made progress in this area but more remains to be done. FAA's ability to oversee the aviation industry will be further affected by its ability to hire, train, and deploy its primary workforce of safety inspectors, engineers, and air traffic controllers. The expansion of FAA's oversight program for air carriers will result in workload shifts for its inspectors that will make it important for FAA to improve its staffing process. In addition, the agency estimates that it will lose about 70 percent of the air traffic controller workforce over the next 10 years, primarily due to retirements. FAA has made significant progress in implementing management processes and systems that use leading practices of private sector businesses; however, further work remains to institutionalize these efforts. For example, new and improved acquisition processes and oversight have contributed to FAA meeting its acquisition cost and schedule goals for the last three years. Additional work remains, though--FAA received a qualified opinion on its most recent financial audit as a result of lack of support for the accuracy of about $4.7 billion for equipment. Moreover, GAO has previously recommended that FAA should undertake additional efforts to consolidate its facilities and outsource some of its services to further cut costs. Some key challenges for the transition to NextGen include completing the design and cost estimates for NextGen and proposing how that cost will be funded. FAA will also need to assess its capacity to handle the technical and contract management expertise that will be required to oversee the implementation of NextGen. FAA estimates that the total cost for planned airport development that is eligible for funding from the Airport Improvement Program (AIP) will be about $42 billion for 2007 through 2011. FAA's budget request for fiscal year 2008 proposes significant cuts in AIP. These cuts, along with changes to the way AIP is allocated among airports and possible increases in the cap on passenger ticket charges for airport projects, could have implications for the amount of funding available for planned airport development, especially at small airports. Additionally, the taxes that fund the Airport and Airway Trust Fund are scheduled to expire at the end of fiscal year 2007. Until Congress reauthorizes those taxes, FAA's ability to carry out programs related to airport development as well as some other programs throughout the agency may be in jeopardy, compounding the safety and management challenges facing FAA.
GAO-07-490T, Federal Aviation Administration: Challenges Facing the Agency in Fiscal Year 2008 and Beyond
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United States Government Accountability Office:
GAO:
Testimony:
Before the Subcommittee on Aviation,Committee on Transportation and
Infrastructure, House of Representatives:
For Release on Delivery:
Expected at 2:00 p.m. EST Wednesday, February 14, 2007:
Federal Aviation Administration:
Challenges Facing the Agency in Fiscal Year 2008 and Beyond:
Statement of Gerald L. Dillingham, Ph.D.
Director, Physical Infrastructure Issues:
GAO-07-490T:
GAO Highlights:
Highlights of GAO-07-490T, a testimony to Subcommittee on Aviation,
Committee on Transportation and Infrastructure, House of
Representatives
Why GAO Did This Study:
FAA operates one of the safest air transportation systems in the world.
It is, however, a system under strain. The skies over America are
becoming more crowded every day. FAA faces the daunting task of safely
integrating a growing influx of passengers and aircraft into the system
and simultaneously leading the transition to the Next Generation Air
Transportation System (NextGen)”a complicated effort to modernize the
system. FAA‘s broad responsibilities to maintain and modernize the
nation‘s air transportation system must be met in an uncertain
budgetary and long-term fiscal environment. GAO‘s concerns about
financing the nation‘s transportation system, including aviation, led
GAO to designate this issue as high-risk.
This statement is based on recent reports and interviews with FAA
officials. It focuses on FAA‘s challenges relating to (1) ensuring the
continued safe operation of the nation‘s airspace system, (2)
continuing to improve FAA‘s management while leading the transition to
NextGen, and (3) funding issues concerning capital improvements for
airports and FAA‘s reauthorization.
What GAO Found:
To ensure continued safety within the national airspace system, FAA is
using risk-based, data-driven safety programs to oversee the industry;
however, the agency faces data and human resource challenges that
affect its ability to fully implement these programs. GAO has
previously recommended that FAA improve the accuracy and completeness
of the safety data and analysis of that data needed to monitor safety
trends, fully implement its safety programs, and assess their
effectiveness to determine if they are focused on the greatest safety
risk. FAA has made progress in this area but more remains to be done.
FAA‘s ability to oversee the aviation industry will be further affected
by its ability to hire, train, and deploy its primary workforce of
safety inspectors, engineers, and air traffic controllers. The
expansion of FAA‘s oversight program for air carriers will result in
workload shifts for its inspectors that will make it important for FAA
to improve its staffing process. In addition, the agency estimates that
it will lose about 70 percent of the air traffic controller workforce
over the next 10 years, primarily due to retirements.
FAA has made significant progress in implementing management processes
and systems that use leading practices of private sector businesses;
however, further work remains to institutionalize these efforts. For
example, new and improved acquisition processes and oversight have
contributed to FAA meeting its acquisition cost and schedule goals for
the last three years. Additional work remains, though”FAA received a
qualified opinion on its most recent financial audit as a result of
lack of support for the accuracy of about $4.7 billion for equipment.
Moreover, GAO has previously recommended that FAA should undertake
additional efforts to consolidate its facilities and outsource some of
its services to further cut costs. Some key challenges for the
transition to NextGen include completing the design and cost estimates
for NextGen and proposing how that cost will be funded. FAA will also
need to assess its capacity to handle the technical and contract
management expertise that will be required to oversee the
implementation of NextGen.
FAA estimates that the total cost for planned airport development that
is eligible for funding from the Airport Improvement Program (AIP) will
be about $42 billion for 2007 through 2011. FAA‘s budget request for
fiscal year 2008 proposes significant cuts in AIP. These cuts, along
with changes to the way AIP is allocated among airports and possible
increases in the cap on passenger ticket charges for airport projects,
could have implications for the amount of funding available for planned
airport development, especially at small airports. Additionally, the
taxes that fund the Airport and Airway Trust Fund are scheduled to
expire at the end of fiscal year 2007. Until Congress reauthorizes
those taxes, FAA‘s ability to carry out programs related to airport
development as well as some other programs throughout the agency may be
in jeopardy, compounding the safety and management challenges facing
FAA.
What GAO Recommends:
In prior reports, GAO has made recommendations to address data and
management problems. Although FAA has begun to address them, many have
not been fully implemented.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-490T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Gerald Dillingham, Ph.D.,
202-512-2834, dillinghamg@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to testify before you today as you
consider the Administration's budget proposal for the Federal Aviation
Administration (FAA) for fiscal year 2008. FAA operates one of the
safest air transportation systems in the world. It is, however, a
system under strain. The skies over America are becoming more crowded
every day. Demand for air travel has increased in recent years, with
over 740 million passengers flying in fiscal year 2006, climbing toward
an estimated 1 billion passengers per year in 2015, according to FAA
estimates. These passengers are expected to find more choices of
aircraft in the years ahead, ranging from the jumbo Airbus A380 that
can hold more than 500 passengers, to very light jets that might
transport 6 or fewer passengers on any given flight. Already with
increasing demand has come an increase in flight arrival delays; such
delays are nearing the levels of 2000, a year in which 1 in 4 flights
reached its destination behind schedule. And although the system
remains extraordinarily safe, if the current accident rate continues
while air traffic potentially triples in the next 20 years, this
country would see nine fatal commercial accidents each year, on
average. FAA thus faces the daunting task of safely integrating this
expected influx of passengers and aircraft into the system and
simultaneously leading the transition to the Next Generation Air
Transportation System (NextGen)--an enormously complicated endeavor to
transform the air traffic control system.
FAA's broad responsibilities to maintain and modernize the nation's air
transportation system must be met in an uncertain budgetary and long-
term fiscal environment. We recently reported that the federal
government's financial condition and fiscal outlook are worse than many
may understand.[Footnote 1] Additionally, our concerns about financing
the nation's transportation system, including the aviation system, led
us to designate this issue as high-risk.[Footnote 2] These
circumstances provide the context for my testimony today. In
particular, I will focus on some of the key challenges and issues
facing FAA and the Congress as the fiscal year 2008 budget for FAA is
considered. These challenges and issues are related to (1) ensuring the
continued safe operation of the nation's airspace system, (2)
continuing to improve FAA's internal management while leading the
transition to NextGen, and (3) funding issues concerning capital
improvements for airports and FAA's reauthorization. My statement is
based on our recent reports and updates that we obtained through
interviewing FAA officials and reviewing their documentation. We
conducted this work in accordance with generally accepted government
auditing standards.
In summary:
* To maintain and expand the margin of safety within the national
airspace system, FAA is using risk-based, data-driven safety programs
to oversee the industry; however, the agency faces data and human
resource challenges that affect its ability to fully implement these
programs. These challenges are especially important in light of the
agency not meeting its performance target for commercial air carrier
safety for fiscal year 2006 because of recent fatal accidents and
predictions of greatly increased air travel. FAA's approaches to safety
require that the agency obtain accurate and complete data to monitor
safety trends, fully implement its safety programs, and assess their
effectiveness to determine if they are focused on the greatest safety
risk. We have previously recommended that FAA improve the accuracy and
completeness of its safety data and its analysis of that data. FAA has
made progress in this area but more work remains. FAA's ability to
oversee the aviation industry and ensure a safe national air space
system will be further affected by its ability to hire, train, and
deploy its primary workforce of safety inspectors, engineers, and air
traffic controllers. The expansion of its oversight program for air
carriers will result in workload shifts for its inspector workforce
that will make it important for FAA to improve its staffing process and
address its lack of a staffing model. In addition, the agency estimates
that it will lose more than 10,000, or about 70 percent, of the air
traffic controller workforce over the next 10 years, primarily due to
retirements. In recent years, air traffic controllers have been
retiring at a faster rate than FAA anticipated, exacerbating this
hiring challenge.
* FAA has made significant progress in implementing management
processes and systems that use leading practices of private sector
businesses; however, further work remains to institutionalize these
efforts. FAA's progress led us to remove its financial management from
our high-risk list. Similarly, new and improved acquisition processes
and oversight have contributed to FAA reporting that it has met its
acquisition cost and schedule goals for the last three years.
Nonetheless, making and institutionalizing further improvements in
acquisition and investment management are still needed. For example,
while FAA has established a cost estimating methodology for
investments, it has not implemented it. In addition, during the last
two fiscal years, FAA has reported cost savings and cost avoidance of
$99.1 million and $81.9 million, respectively. Additional work remains,
though--FAA received a qualified opinion on its most recent financial
audit as a result of the agency's inability to support the accuracy and
completeness of about $4.7 billion for equipment reported in the
financial statements. Moreover, as we have previously recommended, FAA
should undertake additional efforts to consolidate its facilities and
outsource some of its services to further cut costs. FAA's focus on
maintaining and improving its record of internal achievement will be
further tested as it joins with its partners in the Joint Planning and
Development Office in transitioning from planning to implementing
NextGen. Some key challenges for the transition include completing the
design and cost estimates for NextGen and proposing how that cost will
be funded, especially in view of reduced funding for applied
aeronautical research, which is necessary to achieve some critical
NextGen capabilities. FAA will also need to assess if it has the
necessary expertise to handle the technical and contract management
that will be required to oversee the implementation of NextGen.
* Related to the challenge of modernizing the air traffic control
system, FAA faces the challenge of ensuring that the nation's 3,400
airports develop the capacity to safely and efficiently handle the
projected growth in the demand for air travel. FAA estimates that the
total cost for planned airport development that is eligible for funding
from the Airport Improvement Program (AIP) will be about $42 billion
for 2007 through 2011. FAA administers the AIP, which provides federal
funds for capital development projects at the entire range of the
nation's airports. In its fiscal year 2008 budget proposal, the
Administration has proposed reducing funding for AIP grants and
changing the allocation formula. Other changes being considered by FAA
could increase available funds for airport development. The net effect
of all these changes on the amount of funding available for planned
airport development is uncertain. Additionally, the excise taxes that
fund the Airport and Airway Trust Fund, such as those on ticket
purchases by airline passengers and aviation fuel, are scheduled to
expire at the end of fiscal year 2007. Avoiding a lapse in revenue to
the trust fund in fiscal year 2008 will require Congressional action.
About 80 percent of the budget request for FAA would be funded by the
trust fund and the remainder by the general fund. Without a continued
flow of funds to the trust fund, FAA's ability to carry out AIP and
other programs throughout the agency may be in jeopardy, compounding
the safety and management challenges facing the agency.
FAA Faces Challenges in Ensuring the Safe and Efficient Operation of
the Nation's Airspace System:
Aviation safety is a priority goal for FAA. That priority is reflected
in the Administration's budget for fiscal year 2008, which requests
$1.9 billion to promote aviation safety and efficiency. To the credit
of FAA and the aviation industry, U.S. commercial aviation has had an
extraordinary safety record in recent years. In 1997, FAA established a
goal to reduce the commercial fatal accident rate by 80 percent in 10
years and for many years the agency has made incremental progress
toward that goal. However, increased air traffic, leading to congestion
and delays, is straining the efficiency and potentially the safety of
the nation's airspace system. Moreover, while commercial aviation
safety trends have been positive over the last several years, FAA did
not meet its performance target for commercial aviation accidents last
year and does not expect to meet its target for 2007. If air traffic
triples as expected over the next two decades and the accident rate of
recent years is unchanged, there would be nine fatal commercial
aviation accidents each year, on average.
To maintain a safe and efficient airspace system, especially if
substantial growth in the industry materializes, it will be important
for FAA to have well-established, efficient, and effective processes in
place to provide an early warning of hazards that can lead to
accidents. It will also need a skilled workforce to implement these
processes. FAA is moving to a system safety approach to oversight and
has established risk-based, data-driven safety programs to oversee the
industry and a workforce that includes approximately 4,500 safety
inspectors and engineers to implement those programs, about 15,420 air
traffic controllers, and nearly 7,200 technicians responsible for
maintaining FAA's air traffic control equipment and facilities. In
addition, FAA leverages its inspector and engineer workforce through
its "designee" programs, in which about 13,400 private individuals and
over 200 organizations have been delegated to act on the agency's
behalf. Our recent work has identified data limitations and human
resource challenges facing the agency that affect its ability to
implement these programs and oversee aviation safety.
Data Limitations Affect FAA's Ability to Manage Risk:
FAA's ability to identify and respond to trends and early warnings of
safety problems and to manage risk is limited by incomplete and
inaccurate data. While FAA has developed risk-based processes for
monitoring and inspecting the aviation industry, in some cases, the
implementation of those processes is hampered by the lack of reliable
and complete data, which are important for identifying and mitigating
safety risks. In other cases, FAA does not fully utilize the data it
collects by evaluating or analyzing it for nationwide safety trends.
For example, FAA does not collect actual flight activity data for
general aviation operators and air taxis. Instead, the agency uses an
annual survey to query a sample of registered aircraft owners about the
activity of their aircraft during the previous year. The National
Transportation Safety Board[Footnote 3] (NTSB) noted a number of
problems with these data, such as historically low response rates, and
concluded that FAA's data do not accurately portray changes in general
aviation activity.[Footnote 4] As a result, FAA lacks information to
monitor the rate of general aviation accidents, which decreased from
1,715 in 2002 to about 1,500 in 2006. (See fig. 1.) Therefore, the
agency cannot meaningfully evaluate changes in the number of general
aviation accidents or determine the effect of its general aviation
safety initiatives. NTSB made a number of recommendations to FAA to
improve the accuracy of the survey data, such as improving the currency
of aircraft owner contact information.
Figure 1: Number of General Aviation Accidents and Fatalities, 2000
through 2006:
[See PDF for Image]
Source: NTSB.
[End of figure]
As another example, FAA does not collect basic data to measure changes
in the air ambulance industry, such as flight hours or number of trips
flown. From 1998 through 2005, the air ambulance industry averaged 11
accidents per year, peaking at 18 accidents in 2003. (See fig. 2.)
Without data about the number of flights or flight hours, FAA and the
air ambulance industry are unable to identify whether the increased
number of accidents has resulted in an increased accident rate, or
whether it is a reflection of growth in the industry. Data describing
the safety trends of the industry are essential to understanding the
impact of FAA efforts to improve air ambulance safety.
Figure 2: Total Air Ambulance Accidents, 1998 to 2005:
[See PDF for Image]
Source: GAO analysis of NTSB data.
[End of Figure]
In addition, while FAA receives important data, including self-
reporting of safety violations, through its partnership programs with
industry, the agency does not evaluate this information for nationwide
trends. According to FAA officials, the Aviation Safety Action Program,
Aviation Safety Reporting Program, and Voluntary Disclosure Reporting
Program[Footnote 5] allow the agency to be aware of many more safety
incidents than are discovered during inspections and surveillance.
Although FAA tracks the actions taken to resolve the individual safety
violations that it learns about through these programs, it does not
evaluate such information in the aggregate to identify trends in
violations and their potential cause in order to improve safety. We
recommended that FAA develop a continuous evaluative process for its
industry partnership programs, and use it to create measurable
performance goals for the programs and track performance towards those
goals.[Footnote 6] FAA has not taken these actions, but has begun to
address other data issues.
FAA recognizes the critical nature of the issues associated with its
data. To address its data limitations, FAA is in the early stages of
planning the Aviation Safety Information Analysis and Sharing system--
a comprehensive new data system that is expected to provide the agency
with access to a vast amount of safety data that reside with entities
such as NTSB and industry partners including airlines and repair
stations. Working with the National Aeronautics and Space
Administration (NASA), FAA began planning for the new system in 2006.
Because this activity is in the early planning stages, our concerns
about FAA's data remain relevant. The fiscal year 2008 budget for FAA
proposes $32 million for safety databases and computer systems. As FAA
prioritizes the activities that it undertakes with such funds, it will
be important to continue addressing these critical data limitations.
FAA Faces Workload Challenges for its Safety Inspectors:
Changes to FAA's oversight programs, such as the planned rapid
expansion of the Air Transportation Oversight System (ATOS), from 16
air carriers in 2005 to approximately 115 air carriers by the end of
2007, will pose workload challenges for FAA's safety inspector
workforce of about 3,600. As FAA moves air carriers under the ATOS
program, it will also move inspectors to the program. As of January
2007, the 51 air carriers in ATOS were overseen by 829 safety
inspectors. Unlike other FAA inspection programs, ATOS inspectors are
dedicated to an air carrier and generally cannot be used to inspect
other entities. Inspectors who are not part of ATOS, on the other hand,
have duties in addition to inspecting air carriers--such as overseeing
repair stations, designees, and aviation schools, and investigating
accidents. In prior work, we found that about 75 percent of the non-
ATOS inspectors had responsibility for more than 3 entities and about
half had responsibility for more than 15. In addition, we found that
ATOS requires more inspectors per airline than the traditional
inspection approach.[Footnote 7] As inspectors are transitioned to
ATOS, the remaining inspectors will have to add those other entities to
their workload. With the expansion of ATOS that will continue into
fiscal year 2008, it will be important to monitor the magnitude of the
shift in resources and the effect it may have on FAA's overall
capability to oversee the industry.
Part of the challenge that FAA faces with regard to safety inspectors
is improving its process for determining staffing needs. This is
especially important as oversight activities and workload shifts with
the expansion of ATOS and other program changes, yet FAA lacks staffing
standards for safety inspectors. The National Academy of Sciences,
under a congressional mandate, recently completed a study for FAA that
analyzed FAA's staffing processes for safety inspectors.[Footnote 8]
The study identified a number of issues that FAA must address when
developing a staffing model for safety inspectors. For instance, the
study included concerns that the current staffing process does not
focus resources in the areas of greatest need and the match between
individual inspectors' technical knowledge and the facilities and
operations they oversee is not always optimal. The study recommended a
process for FAA to follow to develop a staffing model and identified
key factors--such as changes in aircraft and systems, changes in FAA
oversight practices including a shift to a system safety approach
through programs like ATOS and increasing the use of designees, and new
knowledge and skill demands--that should be considered in developing
the model. In response to the Academy's recommendations, FAA expects to
develop a staffing model, but the agency does not have a specific
timeframe for initiating this effort. With nearly $1 billion of the
fiscal year 2008 budget request for FAA covering personnel compensation
and benefits for aviation safety and operations, these workload and
staffing challenges are critical to address.
Hiring and Training Air Traffic Controllers Remains a Challenge:
During the coming decade, FAA will need to hire and train thousands of
air traffic controllers to replace those who will retire and leave for
other reasons. FAA estimated it will lose 10,291 controllers, or about
70 percent of the controller workforce, during fiscal years 2006
through 2015, primarily due to retirements.[Footnote 9] To replace
these controllers and accommodate increases in air traffic while
accounting for expected productivity increases, FAA plans to hire a
total of 11,800 new controllers from fiscal year 2006 through 2015. In
fiscal year 2006, FAA hired 1,116 controllers. The Administration's
budget for fiscal year 2008 proposes about $4.4 billion for salaries
and benefits for the air traffic organization account, which includes
FAA's large air traffic controller workforce. The fiscal year 2008
proposal includes FAA's plans to hire 1,420 air traffic controllers,
which would bring the total number of air traffic controllers to about
15,000. Figure 3 shows the estimated losses each year as well as the
number of planned hires.
Figure 3: Estimated Controller Losses and Planned Hires, Fiscal Years
2006-2016:
[See PDF for Image]
Source: FAA.
Note: FAA established these hiring targets in its 2006 controller
workforce plan.
[End of figure]
Recent events may exacerbate the hiring situation. Data indicate that
controllers are retiring at a faster rate than FAA anticipated. FAA
projected 341 retirements for fiscal year 2005; 465 controllers
actually retired--36 percent more than FAA's estimate. Similarly, in
fiscal year 2006, 25 percent more controllers retired than FAA
projected.[Footnote 10] To meet its hiring target of 930 controllers in
fiscal year 2006, FAA shifted about 200 of its planned hires from
fiscal year 2007 to fiscal year 2006 by speeding up the initial
screening and training process. According to FAA, it is on track to
hire between 1,300 and 1,400 controllers in fiscal year 2007.[Footnote
11] To keep on track, FAA has recently expanded its hiring sources,
which had focused on individuals with prior FAA or Department of
Defense (DOD) air traffic control experience and graduates from FAA's
collegiate training initiative program, to include the general public.
This strategy is needed, according to FAA officials, because DOD has
recently become less of a hiring source for controllers due to military
incentives for retaining controllers and higher salaries than FAA's
entry-level salary.[Footnote 12]
It is also important for FAA to ensure that air traffic control
facilities have adequate staffing based on their unique traffic demands
and the accuracy of FAA's retirement forecast. Historically, FAA has
computed staffing standards, which are the number of controllers needed
on a systemwide basis, but distribution of these totals to the facility
level was a negotiated process. The staffing standards did not take
into account the significant differences in complexity and workload
among FAA's 300 terminal and enroute control facilities, which can lead
to staffing imbalances. FAA has begun developing and implementing new
staffing standards that use an algorithm that incorporates traffic
levels and complexity of traffic at the facility level to determine the
number of air traffic controllers needed, according to an FAA official.
As FAA further refines its process for determining controller staffing
needs, the ultimate objective is to assess the traffic level and
complexity on a sector-by-sector basis to develop more accurate
controller staffing requirements. This process is in the early stages
of implementation and it is too early to assess the outcome. Such
staffing standards for air traffic controllers as well as safety
inspectors are important to ensure that FAA deploys its resources for
fiscal year 2008 and later years in a cost-effective and risk-based
manner.
FAA Faces Challenges in Furthering and Institutionalizing Management
Improvements While Moving Toward Implementing NextGen:
FAA has made significant progress in implementing management processes
that use leading practices of private sector businesses, but further
work remains to fully address past problems. Historically, those
problems included chronic cost and schedule difficulties associated
with operating and modernizing the nation's air traffic control system
as well as weaknesses in FAA's financial management. In 1995, we
declared FAA's air traffic control modernization program a high-risk
initiative because of its cost, complexity, and systemic management and
acquisition problems. In 1999, we also placed FAA on the high-risk list
for financial management, noting weaknesses that rendered the agency
vulnerable to fraud, waste, and abuse by undermining its ability to
manage operations and limiting the reliability of financial information
provided to the Congress. FAA has made significant progress in both
areas and we removed FAA's financial management from our high risk list
in 2005. However, additional work is needed in managing its
acquisitions and finances and is crucial to developing a sustainable
capability for delivering priority systems on budget and on time. In
addition, FAA, in partnership with other federal agencies, is embarking
on the development of NextGen--one of the federal government's most
complex and comprehensive undertakings in recent times. FAA faces
challenges associated with moving forward from planning to implementing
NextGen.
Progress Has Been Made but Further Work Remains to Institutionalize
Recent Management Improvements:
FAA has taken actions to operate in a more business-like manner and
enable the agency to more economically and efficiently manage the $14.1
billion requested for its fiscal year 2008 budget. Since we designated
FAA financial management as high-risk in 1999, FAA has made significant
improvements, including implementing a new financial management system
called Delphi[Footnote 13] and developing a cost accounting system.
Additionally, FAA received unqualified opinions from auditors on its
annual financial statements for fiscal years 2001 through 2005, in
spite of material internal control weaknesses that the auditors
identified. This progress led us to remove FAA financial management
from our high risk list in 2005.
Nonetheless, external auditors issued a qualified opinion on FAA's
fiscal year 2006 financial statements for the first time since 2000 and
repeated a material internal control weakness that was reported in
2005. The opinion and internal control report stemmed from FAA's
inability to support the accuracy and completeness of the construction-
in-progress account, reported in the financial statements as $4.7
billion. Difficulties with this account, which includes costs for
projects such as radars, runway guidance systems, and aviation safety
and security systems, have been a longstanding concern. FAA has begun
work to address this problem. However, it will be important for FAA to
develop a systematic solution to this problem, so that it does not
recur.
FAA's efforts towards improved financial management also include
establishing a cost control and cost reduction program. According to
agency officials, each line of business--such as FAA's Air Traffic
Organization (ATO), which is responsible for managing and modernizing
the air traffic control system--is annually required to propose at
least one cost control initiative, and the Administrator tracks and
reviews progress on these initiatives monthly. According to FAA, these
initiatives have yielded a total of $99.1 million in cost savings and
$81.9 million in cost avoidance for fiscal years 2005 and 2006.
Additional cost control efforts include outsourcing flight service
stations, which FAA estimates will save $2.2 billion over 10 years, and
restructuring its administrative service areas from 9 separate offices
to 3, which FAA estimates will save up to $460 million over 10 years.
We have ongoing work that is assessing FAA's cost control strategy and
identifying additional cost savings opportunities that may exist. For
example, we have previously reported the need for FAA to pursue further
cost control options, such as exploring additional opportunities for
consolidating facilities and contracting out more of its
services.[Footnote 14]
FAA has taken steps to improve its software acquisition and investment
management processes and for the last 3 years has reported meeting its
cost and schedule targets for the acquisition of major system
acquisitions, including air traffic control systems.[Footnote 15] These
improvements are particularly important since FAA plans to spend about
$9.4 billion from fiscal year 2007 through fiscal year 2011 to upgrade
and replace air traffic control systems. To better manage its
information technology investments, including its software intensive
air traffic control systems, and address problems we have
identified,[Footnote 16] FAA has changed its acquisition management
guidance to require review of all investments--new systems as well as
systems in service. In addition, FAA has established a cost estimating
methodology for its investment. FAA has also developed and applied a
process improvement model to assess the maturity of its software and
systems capabilities resulting in, among other things, enhanced
productivity and greater ability to predict schedules and resources.
Further, FAA has made progress in expanding its enterprise
architecture--a comprehensive guide to its plans for acquiring new
systems--to include the initial requirements for NextGen.
However, making further improvements and institutionalizing them
throughout the agency will continue to be a challenge for FAA. For
example, FAA's acquisition management guidance does not clearly
indicate whether the reviews of in-service systems include
reevaluations of projects' alignment with strategic goals and
objectives, as we recommended. In addition, the agency has yet to
implement its cost estimating methodology. Furthermore, FAA has not
established a policy to require use of its process improvement model on
all major acquisitions for the national air space system. Additionally,
as FAA begins to detail the scope and system requirements of NextGen,
it will be important to adapt and expand the enterprise architecture
for the national air space system to guide these future plans. Until
the agency fully addresses these residual issues, it will continue to
risk program management problems affecting cost, schedule, and
performance. With a multi-billion dollar acquisition budget, addressing
these actions are as critical as ever.
Institutionalizing these financial, acquisition, and information
technology improvements will be a challenge for FAA, especially in view
of the imminent departure of the Chief Operating Officer later this
month and the departure of the Administrator, who will reach the end of
her 5-year term this September. We have reported that the experiences
of successful transformations and change management initiatives in
large public and private organizations suggest that it can take 5 to 7
years or more until such initiatives are fully implemented and cultures
are transformed in a sustainable manner. Such changes require focused,
full-time attention from senior leadership and a dedicated
team.[Footnote 17]
Progress Continues to Be Made in Planning for NextGen, but Challenges
to Successful Implementation Remain:
Work to determine the capabilities and requirements that will be needed
for NextGen and to produce a comprehensive vision for that system is
nearing completion; however, given the staggering complexity of this
ambitious effort to modernize and transform the air traffic control
system over the next two decades, it will not be easy to move from
planning to implementation. To plan NextGen, Congress authorized the
creation of the Joint Planning and Development Office (JPDO) in 2003.
JDPO is housed within FAA and the Administration's fiscal year 2008
budget includes $14.3 million to support JPDO. To carry out its
planning function, JPDO is required to operate in conjunction with
multiple government agencies.[Footnote 18] JPDO's approach requires
unprecedented collaboration and consensus among many stakeholders--
federal and nonfederal--about necessary system capabilities, equipment,
procedures, and regulations. Recently, JPDO has made progress in
developing key planning documents, including a cost estimate for
NextGen. However, as efforts move forward to implement NextGen, it will
be important to identify the source and funding for completion of
intermediate technology development and determine how FAA can best
manage the complex implementation and integration of NextGen
technologies. Without a timely transition to NextGen capabilities, JPDO
officials estimate a future gap between the demand for air
transportation and available capacity that could cost the U.S. economy
billions of dollars annually.
JPDO Has Made Progress toward Finalizing Key Planning Documents and
Developing a Cost Estimate:
FAA and the other JPDO partners have been working to refine the vision
for NextGen and achieve a general consensus on that vision. The bulk of
JPDO's planning has been to develop three critical documents--a concept
of operations,[Footnote 19] enterprise architecture,[Footnote 20] and
operational improvement roadmaps.[Footnote 21] Once these key documents
are completed in the next few months, it will be important to
synchronize them with partner agency planning documents, including
FAA's implementation plan for NextGen--the Operational Evolution
Partnership (OEP)--and to continue to use the documents to drive agency
budget decisions. The OEP is intended as a comprehensive description of
how the agency will implement NextGen, including the required
technologies, procedures, and resources. JPDO is continuing to work
with the Office of Management and Budget (OMB) to develop a unified,
cross-agency program for NextGen funding requests.
Given the criticality of NextGen, another important planning document-
-possibly the most important for Congress--is a comprehensive estimate
of the costs to JPDO partner agencies, particularly FAA, for the
required research, development, systems acquisitions, and systems
integration. Such an estimate does not yet exist. As we reported in
November 2006,[Footnote 22] a limited, preliminary cost estimate
concluded that FAA's budget under a NextGen scenario would average
about $15 billion per year through 2025, or about $1 billion more
annually (in today's dollars) than FAA's fiscal year 2006
appropriation.[Footnote 23] A JPDO official told us they have submitted
a limited NextGen cost estimate to OMB with the 2008 budget request. As
of February 9, 2007, JPDO had not publicly released its cost estimate
for NextGen. According to the Department of Transportation, the
Administration's budget for fiscal year 2008 includes $175 million to
support key FAA investments in NextGen.
According to JPDO officials, their current estimate focuses only on the
near-term capital needs for FAA's ATO portfolio. To develop what they
believed would be a more accurate cost estimate, JPDO also focused on
the funding necessary to achieve only the capabilities of the NextGen
system around 2016, rather than the long-term 2025 capabilities. JPDO
then laid out the major systems and investments required by ATO to
achieve the mid-term vision and the related costs for ATO.
While JPDO's new estimate will be a step toward understanding the costs
of NextGen, this estimate is still incomplete. Much work remains to
develop a comprehensive cost estimate for NextGen that includes the
costs to the rest of FAA (beyond ATO), the other JPDO partner agencies,
and industry. A JPDO official told us the agency is working to develop
a comprehensive estimate and plan to have one ready to submit with the
2009 budget request. This comprehensive estimate is intended to
describe the business case for NextGen and detail the investments that
will be required by all the JPDO partner agencies to achieve the
NextGen vision by 2025.
Both JPDO and FAA Face Challenges as NextGen Moves from Planning to
Implementation:
The successful implementation of NextGen will depend, in part, on
resolving the uncertainty over which entities will fund and conduct the
research and development necessary to achieve some key NextGen
capabilities and to support the operational roadmaps. In the past, a
significant portion of aeronautics research and development, including
intermediate technology development, has been performed by NASA.
However, our analysis of NASA's aeronautics research budget and
proposed funding shows a 30 percent decline, in constant 2005 dollars,
from fiscal year 2005 to fiscal year 2011. To its credit, NASA plans to
focus its research on the needs of NextGen. However, NASA is also
moving toward a focus on fundamental research and away from
developmental work and demonstration projects. FAA has determined that
research gaps now exist as a result of both NASA's cuts to aeronautical
research funding and the expanded requirements for NextGen coming from
JPDO. These gaps are in the activities of applied research and
development--activities that will be required to implement new
policies, demonstrate new capabilities, set parameters for
certification of new systems, and develop technologies for transfer to
industry.
It will be important for both FAA and JPDO to find ways, in the near
term, to keep the necessary research and development on track to
support implementation of NextGen by 2025. In 2006, officials from FAA
and JPDO initiated an assessment of NextGen research and development
requirements. Their goal was to identify specific research initiatives
that were not currently funded, but which they said must be initiated
no later than fiscal year 2009 to comply with the operational roadmaps.
The preliminary findings from this assessment led to increased budget
requests for FAA to help lessen the research and development gaps.
However, JPDO officials noted that a research and development gap
remains, with items in the research and development pipeline that need
funding to take them from concept to development. Other options for
addressing the gap are for JPDO and FAA to further explore ways to
leverage the research being conducted in other agencies or to partner
with industry or academia. For example, JPDO and FAA have already
identified research within DOD on alternative fuels that, with a modest
investment, could be leveraged to include civil aviation. Currently, it
is unknown how all of the significant research and development
activities inherent in the transition to NextGen will be conducted or
funded.
Another issue with regard to NextGen implementation will be FAA's
ability to manage the systems acquisitions and integration needed to
implement a system as broad and complex as NextGen. In the past, a lack
of expertise contributed to weaknesses in FAA's management of air
traffic control modernization efforts. Industry experts with whom we
have spoken continue to question whether FAA will have the technical
expertise needed to implement NextGen. In November, we recommended that
FAA examine its strengths and weaknesses with regard to the technical
expertise and contract management expertise that will be required to
define, implement, and integrate the numerous complex programs inherent
in the transition to NextGen.[Footnote 24] In response to our
recommendation, FAA is considering convening a blue ribbon panel to
study this issue and make recommendations to the agency about how to
best proceed with its management and oversight of the implementation of
NextGen. We believe that such a panel could help FAA begin to address
this challenge.
Funding Issues May Affect Airports' Investment and Other FAA Programs:
As it modernizes the national airspace system to meet the nation's
future air transportation needs, FAA must not only transform the air
traffic control system, but also work with airport operators to provide
increased capacity at airports to safely handle the projected growth in
the demand for air travel. This latter responsibility will include
overseeing airports' efforts to adapt their infrastructure to
accommodate the introduction of very light jets, and in the case of the
largest airports, the new large Airbus A380. Airports are an integral
part of the nation's transportation system and maintaining their safety
and efficiency is an important FAA responsibility. To this end, FAA
administers the Airport Improvement Program (AIP), which provides
federal funds for development projects at the entire range of the
nation's 3,400 airports--from small general aviation airports to the
very largest that handle several million passengers per year. The
Administration has proposed cuts in AIP funding and is considering
possible changes to the AIP allocation formula as well as increasing
the cap on passenger facility charges[Footnote 25] for airport
development projects. Any change in the level or allocation of these
funds could have implications for funding airport capital projects. Not
only AIP grants but also portions of other FAA programs receive funds
from the Airport and Airway Trust Fund, which is largely financed by
excise taxes on ticket purchases by airline passengers and aviation
fuel. Since these taxes are scheduled to expire at the end of September
2007, ensuring that there is no lapse in revenue to the trust fund will
require Congressional action.[Footnote 26] Without a continued flow of
funds to the trust fund, FAA's ability to carry out AIP and other
programs during fiscal year 2008 may be in jeopardy.
FAA's Recent Estimate of Planned Capital Development Similar to Past
Estimate:
FAA estimates the total cost for planned airport projects that are
eligible for AIP funding, including runways, taxiways, and noise
mitigation and reduction efforts, will be about $42 billion for fiscal
years 2007 through 2011.[Footnote 27] This estimate is little changed
from the agency's last estimate in 2004 for the period 2005 to 2009.
FAA's current estimate indicates that over half of the planned
development will occur at large and medium hub airports.[Footnote 28]
The Airports Council International--North America (ACI-NA) also
provides estimates of planned airport development. ACI-NA includes both
AIP-eligible projects and ineligible projects and, as a result, has
higher estimates.
Historically, airports have received funding for capital development
from a variety of sources. As we reported in 2003, the single largest
source of financing for airports is tax-exempt bonds, followed by AIP
grants and passenger facility charges. Tax exempt bonds are currently
supported by airport revenue and, in some cases, by passenger facility
charges. Access to these funding sources varies according to airports'
size and funding capabilities. Large and medium hub airports depend
primarily on tax-exempt bonds, while the smaller airports rely
principally on AIP grants.[Footnote 29] Passenger facility charges are
a particularly important source of capital for large and medium hub
airports because they have the majority of commercial service
passengers.
FAA Funding Proposals Would Change How Airport Development is Financed:
The Administration has proposed changing the federal role in financing
airport development in its fiscal year 2008 budget proposal, which also
includes a reauthorization proposal for FAA that will be submitted
later this month. Funding for AIP grants would be reduced and the
allocation formula changed. The Administration's reauthorization
proposal is expected to provide details on these proposed changes. It
is, therefore, currently unclear how a number of issues will be
addressed.
The reauthorization proposal may clarify the impact on smaller
airports,[Footnote 30] which received about two-thirds of AIP grants in
fiscal year 2004. As noted earlier in my statement, smaller airports
rely primarily on AIP grants for capital funding. In recent years,
statutory changes in the distribution of AIP grants have increased the
share to smaller airports.[Footnote 31] However, under the fiscal year
2008 budget proposal, funding changes would especially impact smaller
airports if the current allocation formulas are unchanged in the
forthcoming reauthorization proposal. First, primary airport
entitlements[Footnote 32] under AIP would be cut in half from the
fiscal year 2006 level. In turn, the small airport fund, which is
funded from AIP entitlement amounts that large and medium hub airports
must turn back if they impose passenger facility charges,[Footnote 33]
would also be reduced by half. Second, state entitlements for non-
primary[Footnote 34] commercial service and general aviation airports
would be reduced from 20 percent to 18.5 percent of total AIP
obligations. Finally, discretionary set aside grants for reliever
airports would be eliminated under the fiscal year 2008 budget
proposal. Table 1 shows the effect on the amounts available for various
types of AIP grants at different funding levels including the $2.75
billion requested in the Administration's budget and the actual funding
level for fiscal year 2006.
Table 1: Estimated AIP Distribution Under Alternative Funding Levels
(in millions):
Primary airports entitlements;
Alternative funding levels: $2,750 (proposed FY 2008): $496.0;
Alternative funding levels: $3,000: $496.0;
Alternative funding levels: $3,250: $857.7;
Alternative funding levels: $3,550 (actual FY 2006): $888.0.
Entitlements for non-primary, general aviation and reliever airports;
Alternative funding levels: $2,750 (proposed FY 2008): $487.9;
Alternative funding levels: $3,000: $534.1;
Alternative funding levels: $3,250: $242.0;
Alternative funding levels: $3,550 (actual FY 2006): $299.5.
Other entitlements[A];
Alternative funding levels: $2,750 (proposed FY 2008): $103.0;
Alternative funding levels: $3,000: $111.8;
Alternative funding levels: $3,250: $516.5;
Alternative funding levels: $3,550 (actual FY 2006): $526.6.
Carryover entitlements[B];
Alternative funding levels: $2,750 (proposed FY 2008): $447.8;
Alternative funding levels: $3,000: $447.8;
Alternative funding levels: $3,250: $447.8;
Alternative funding levels: $3,550 (actual FY 2006): $431.7.
Small airport fund;
Alternative funding levels: $2,750 (proposed FY 2008): $214.2;
Alternative funding levels: $3,000: $214.2;
Alternative funding levels: $3,250: $428.4;
Alternative funding levels: $3,550 (actual FY 2006): $428.4.
Discretionary set aside grants for reliever airports;
Alternative funding levels: $2,750 (proposed FY 2008): $0.0;
Alternative funding levels: $3,000: $0.0;
Alternative funding levels: $3,250: $4.3;
Alternative funding levels: $3,550 (actual FY 2006): $5.6.
All other discretionary and set aside grants[C];
Alternative funding levels: $2,750 (proposed FY 2008): $888.3;
Alternative funding levels: $3,000: $1,083.3;
Alternative funding levels: $3,250: $640.4;
Alternative funding levels: $3,550 (actual FY 2006): $844.6.
Total AIP funds available for grants[D];
Alternative funding levels: $2,750 (proposed FY 2008): $2,637.3;
Alternative funding levels: $3,000: $2,887.2;
Alternative funding levels: $3,250: $3,137.1;
Alternative funding levels: $3,550 (actual FY 2006): $3,424.4.
Source: FAA.
[A] Includes grants for Alaskan airports and cargo service airports.
[B] Funds that some airports can claim to use in the fiscal year in
which the amount was apportioned and two fiscal years immediately after
that year.
[C] Funds that are available for use on AIP eligible projects at FAA's
discretion. This includes funds set aside for such things as noise
planning and programming, reliever airports and capacity, safety,
security, and noise projects. It also includes discretionary grants
that can be used for any AIP eligible project at any airport.
[D] The funding available for grants after the 2006 rescission and
deductions for airport research, other programs, and administrative
costs.
[End of table]
To help offset any reductions in AIP grants, FAA is also considering
allowing airports to collect more revenue from passenger facility
charges, which large airports generally prefer. Airlines, however, have
been generally opposed to an increase in these charges because they
have little control in how passenger facility charges are spent and
because they believe these charges reduce passenger demand for air
travel. Nonetheless, if airports were to increase charges, additional
airport revenue could be generated. Increasing the cap on passenger
facilities charges would primarily benefit larger airports because
these charges are a function of passenger traffic. However, as already
noted, under AIP, large airports that collect passenger facility
charges must forfeit a certain percentage of their AIP formula funds.
These forfeited funds are subsequently divided between the small
airport fund, which is to receive 87.5 percent, and the discretionary
fund, which is to receive 12.5 percent. Thus, under current law,
smaller airports would benefit indirectly from any increases in
passenger facility charges and help offset reductions in AIP funding.
FAA and the Congress Will Face a Challenge Funding FAA Programs in
Fiscal Year 2008 if Reauthorization is Not Timely:
With the excise taxes that fund the Airport and Airway Trust Fund
scheduled to expire at the end of fiscal year 2007, Congress will need
to act if there is to be no lapse in revenue to the trust fund to fund
FAA. If the taxes are neither reauthorized by that time nor replaced by
other revenue sources for the trust fund, the only revenues to the
trust fund will be interest earned on the fund's cash balance. FAA
estimates that two previous lapses in 1996-1997 resulted in the trust
fund not receiving about $5 billion in revenue.
As of the end of fiscal year 2006, the trust fund's uncommitted
balance--surplus revenues in the trust fund against which no
commitments, in the form of budget authority, have been made--was less
than $2 billion. The Administration's budget proposal projects that the
uncommitted balance will be about $2 billion at the end of fiscal year
2007. If today's level of monthly tax revenue continues, a 2-to 3-month
lapse in fiscal year 2008 could reduce the revenue to the trust fund
enough to cause the uncommitted balance to fall to zero in fiscal year
2008. Most of FAA's funding comes from the trust fund--the fiscal year
2008 budget request for FAA proposes about 80 percent of the agency's
funding from the trust fund with the remainder from the general fund.
If the trust fund balance falls to zero, continuation of FAA's
programs--including efforts to address some of the safety and
management challenges that I have discussed--would depend on providing
additional general revenues.
GAO Contact and Staff Acknowledgements:
For further information on this testimony, please contact Dr. Gerald L.
Dillingham at (202) 512-2834 or dillinghamg@gao.gov. Individuals making
key contributions to this testimony include Paul Aussendorf, Jay
Cherlow, Jessica Evans, Colin Fallon, Carol Henn, Ed Laughlin, Ed
Menoche, Faye Morrison, Colleen Phillips, Taylor Reeves, Richard Scott,
Teresa Spisak, and Larry Thomas.
(540144):
FOOTNOTES
[1] GAO, Fiscal Stewardship: A Critical Challenge Facing Our Nation,
GAO-07-362SP (Washington, D.C.: January 2007).
[2] GAO, High Risk Series: An Update, GAO-07-310 (Washington, D.C.:
January 2007).
[3] NTSB, Current Procedures for Collecting and Reporting U.S. General
Aviation Accident and Activity Data (Washington, D.C.: April 2005).
[4] In fiscal year 2006, FAA made changes to its survey, increasing the
sample size from 30,000 to 75,000 and, according to the agency,
responses increased from 15,000 to 32,000. However, the response rate
still remains low.
[5] Participants in the Aviation Safety Action Program include
employees of air carriers and repair station; participant in the
Aviation Safety Reporting Program include all users of the national
airspace system, including air traffic controllers; participants in the
Voluntary Disclosure Reporting Program include air carriers, repair
stations, and aviation manufacturers.
[6] GAO, Aviation Safety: Better Management Controls are Needed to
Improve FAA's Safety Enforcement and Compliance Efforts, GAO-04-646
(Washington, D.C.: July 6, 2004).
[7] GAO, Aviation Safety: System Safety Approach Needs Further
Integration into FAA's Oversight of Airlines, GAO-05-726 (Washington,
D.C.: Sept. 28, 2005).
[8] National Research Council, Staffing Standards for Aviation Safety
Inspectors (Washington, D.C.: The National Academies Press, 2006).
[9] The high percentage of retirements is attributable to the 1981
controller strike, when President Ronald Reagan fired over 10,000 air
traffic controllers, and the consequent need to quickly rebuild the
controller workforce. From 1982 through 1991, FAA hired an average of
2,655 controllers per year. These controllers will become eligible for
retirement during the next decade.
[10] FAA estimated 467 retirements in fiscal year 2006 and 583
controllers actually retired.
[11] FAA originally planned to hire 1,136 controllers in fiscal year
2007 as shown in figure 3. In January 2007, FAA revised that hiring
target to 1,386.
[12] Under FAA's recent contract with air traffic controllers, most
current controllers continued to receive their existing base salaries
and benefits, while new controllers are hired at lower wages.
[13] Delphi is a commercial off-the-shelf financial management system
that was acquired by the Department of Transportation and fully
implemented in FAA in 2003.
[14] 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).
[15] We have on-going work examining FAA's procedures for measuring its
acquisition performance.
[16] GAO, Federal Aviation Administration: Stronger Architecture
Program Needed to Guide Systems Modernization Efforts, GAO-05-266
(Washington, D.C.: Apr. 29, 2005); 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); and 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).
[17] GAO-06-154.
[18] In addition to FAA, these agencies include the Departments of
Transportation, Commerce, Defense, and Homeland Security; the National
Aeronautics and Space Administration (NASA); and the White House Office
of Science and Technology Policy.
[19] The concept of operations describes how the transformational
elements of NextGen will operate in 2025. It is intended to establish
general stakeholder buy-in to the NextGen end state, transition path,
and business case.
[20] The enterprise architecture follows from the concept of operations
and describes the system in more detail (using federal enterprise
architecture and DOD enterprise architecture frameworks). It will be
used to integrate planning efforts and drive partner agency guidance.
[21] The operational improvement roadmaps lay out a timeline for
deploying and integrating NextGen systems.
[22] GAO, Next Generation Air Transportation System: Progress and
Challenges Associated with the Transformation of the National Airspace
System, GAO-07-25 (Washington, D.C.: Nov. 13, 2006).
[23] This preliminary estimate--developed by the Research, Engineering
and Development Advisory Committee, an advisory committee to FAA--
indicates that the cost for a status quo scenario (i.e., no NextGen)
would also be about $15 billion per year through 2025. This is due
primarily to the expectation that, under the NextGen scenario, capital
expenditures would be higher than under the status quo scenario in the
near term, but operations costs would be lower because of productivity
improvements in the longer term.
[24] GAO-07-25.
[25] Passenger facility charges are fees airports can charge passengers
to fund FAA approved projects.
[26] Congress also would need to renew FAA's authority to spend from
the trust fund.
[27] FAA's estimate, in nominal dollars, is based on the agency's
National Plan of Integrated Airport Systems, which FAA published in
September 2006.
[28] Commercial service airports are categorized by the number of
enplanements. Large hubs are those airports that account for at least
one percent of total passenger enplanements. Medium hubs account for
between 0.25 and 1 percent of total passenger enplanements.
[29] Any increase in the issuance of bonds exempt from federal taxation
has an impact on federal revenue.
[30] Smaller airports include small hub, nonhub, other commercial
service, reliever (high capacity general aviation airports in major
metropolitan areas that provide pilots with an alternative to using
congested hub airports) and general aviation airports.
[31] For example, FAA's 2000 authorization (Pub. L. No. 106-181)
boosted funding for nonprimary airports and small primary airports by
increasing the portion of AIP passenger entitlement funds that must be
turned back by large and medium hub airports. Under AIP, airports that
collect passenger facility charges must forfeit a certain percentage of
their AIP entitlement funds, which are then distributed to smaller
airports. In fiscal year 2004, smaller airports received a total of
about $380 million as a result of these turn backs.
[32] Entitlements are AIP funds apportioned to airport sponsors and
states for eligible projects based on formulas.
[33] Small airport fund grants must be spent at small hub primary
airports, general aviation airports (including reliever airports), and
nonhub commercial airports.
[34] Non-primary airports are commercial service airports that have
from 2,500 to 10,000 annual passenger enplanements. These airports are
used mainly by general aviation.
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