Air Traffic Control

FAA's Modernization Investment Management Approach Could Be Strengthened Gao ID: RCED/AIMD-99-88 April 30, 1999

The Federal Aviation Administration (FAA) has undertaken an ambitious program to modernize its air traffic control system--one estimated to cost $26.5 billion through fiscal year 2004. FAA is buying new surveillance, data-processing, navigation, and communications equipment in addition to new facilities and support equipment. FAA estimates that it will need $12.9 billion for 59 information technology projects--the software-intensive and complex information and communications systems supporting the air traffic control system. In light of continuing congressional concerns about FAA's modernization effort, this report addresses the extent to which FAA, through its Acquisition Management System, (1) has established a structured approach for selecting and controlling its investments; (2) incorporates all investments, including those now in operation, in the agency's portfolio; and (3) selects, controls, and evaluates its investments with complete and reliable information.

GAO noted that: (1) AMS is a good first step in establishing a structured investment management approach for selecting and controlling the agency's investments; (2) the system contains a set of policies, procedures, and reporting requirements to analyze mission needs, assess the affordability of proposed projects, and establish life-cycle costs, schedules, benefits, and performance baselines to control the performance of the projects that are selected; (3) under this system, a senior management investment review group makes key decisions about which investments best meet the agency's needs and are to be funded; (4) however, the system is not comprehensive in that it does not incorporate all of FAA's projects into a complete strategic investment portfolio; (5) key decisionmaking processes and requirements of AMS are applied only to proposed projects and those under development but not to projects already in operation; (6) agency officials have not yet developed a sound estimate of the costs to operate projects and these costs are not included in the agency's financial plan for modernization; (7) because FAA does not apply the same scrutiny to all of its projects, senior officials are unable to fully assess and make trade-offs about the relative merits of spending funds to develop new systems, to enhance current systems, or to continue operating and maintaining existing systems; (8) AMS does not provide complete and reliable information for selecting, controlling, and evaluating the agency's investments; (9) the cost data used to select projects are of questionable reliability because of weaknesses in FAA's cost estimating practices and processes and the lack of a cost accounting system; (10) the information used to control projects is incomplete since FAA has not fully implemented an effective process for controlling the baselines for the costs, schedules, benefits, performance, and risks of its investments; (11) FAA has approved the baseline information for only half of the required universe of projects, and the agency's processes for tracking actual performance against estimates frequently has provided incomplete information; and (12) FAA lacks information needed to evaluate its investments since AMS does not have a post-implementation evaluation process for assessing projects' outcomes and feeding lessons learned back into the selection and control phases to help improve its management of future projects.


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