**Federal Aviation Administration**

# 

![](media/image1.png){width="4.333333333333333in" height="1.425in"}

# Table of Contents {#table-of-contents .head}

**Section 1. Overview [1](#section-1.-overview)**

1.1 Contents [1](#contents)

1.2 Concept [1](#concept)

1.3 Background [1](#background)

1.4 Authority [2](#authority)

Section 2. Concept [3](#section-2.-concept)

2.1 Introduction [3](#introduction)

2.2 Concept Overview [3](#concept-overview)

2.2.1 Techniques [3](#techniques)

2.2.2 Categorization [4](#categorization)

2.2.3 Methodology and Tools [5](#methodology-and-tools)

2.2.4 Joint Resources Council [5](#joint-resources-council)

2.2.5 Mission Analysis [5](#mission-analysis)

2.2.6 Investment Analysis [6](#investment-analysis)

2.2.7 FAA Portfolio of Investments [6](#faa-portfolio-of-investments)

2.2.8 Portfolio Review [7](#portfolio-review)

2.3 Summary [7](#summary)

Section 3. Process [9](#section-3.-process)

3.1 Introduction [9](#introduction-1)

3.2 New Opportunities [9](#new-opportunities)

3.2.1 Step 1 [9](#step-1)

3.2.2 Step 2 [10](#step-2)

3.3.3 Step 3 [10](#step-3)

3.3.4 Step 4 [10](#step-4)

3.2.5 Step 5 [11](#step-5)

3.3 Existing Programs [11](#existing-programs)

3.4 Impact on Budget Process [12](#impact-on-budget-process)

Section 4. Roles and Responsibilities
[13](#section-4.-roles-and-responsibilities)

4.1 Portfolio Manager [13](#portfolio-manager)

4.2 Investment Manager [13](#investment-manager)

4.3 Project Manager [13](#project-manager)

4.4 Project Team [13](#project-team)

4.5 Value Management Office Manager
[13](#value-management-office-manager)

4.6 Value Management Team [13](#value-management-team)

4.7 Management Advisory Council [13](#management-advisory-council)

4.8 Management Advisory Council -- Aviation Subcommittee
[14](#management-advisory-council-aviation-subcommittee)

4.9 Chief Operating Officer [14](#chief-operating-officer)

Section 5. Guidance [15](#section-5.-guidance)

5.1 Value Management Services [15](#value-management-services)

5.1.1 Mission Analysis, Requirements Development, and Investment
Analysis
[15](#mission-analysis-requirements-development-and-investment-analysis)

5.1.2 Business Unit Support [16](#business-unit-support)

5.1.3 Benefits Realization [16](#benefits-realization)

5.2 Business Units [17](#business-units)

5.3 Joint Resources Council [18](#joint-resources-council-1)

5.4 Other Functions [19](#other-functions)

5.4.1 Air Traffic Operations and Maintenance
[19](#air-traffic-operations-and-maintenance)

5.4.2 Configuration Management [20](#configuration-management)

5.4.3 Test and Evaluation [20](#test-and-evaluation)

5.4.4 Measurement [20](#measurement)

Section 6. Tools [21](#section-6.-tools)

6.1 Results Chain ™ [21](#results-chain)

6.2 Risk [21](#risk)

6.3 Alignment Questionnaires [21](#alignment-questionnaires)

6.4 Value Plot [22](#value-plot)

6.5 Financial Worth Calculation [22](#financial-worth-calculation)

Appendix A. Definitions [23](#appendix-a.-definitions)

Appendix B. Acronyms [27](#appendix-b.-acronyms)

Appendix C. References [29](#appendix-c.-references)

# Section 1. Overview

## 1.1 Contents

This guidebook is intended to familiarize readers with Portfolio
Management---an investment management approach---as well as to
standardize expectations across organizational lines for what it will
accomplish. This guidebook describes the processes, roles and
responsibilities, and tools needed to successfully implement this
approach within Federal Aviation Administration (FAA) Air Traffic
Services (ATS). The information contained in this guidebook will be
updated as lessons are learned during the initial phases of the
implementation of Portfolio Management.

## 1.2 Concept

Portfolio Management is an investment management approach that will be
used to identify the investment opportunities that will deliver the most
value to the agency and its customers, in terms of operational benefits,
and to manage those investments to ensure the value is delivered. This
involves identifying the operational benefits to be gained from an
investment opportunity, identifying the investment's associated risks,
and comparing these benefits and risks to those of other investment
opportunities. Investments are then grouped into investment packages
consisting of a collection of the acquisition and non-acquisition
initiatives that are necessary to deliver the benefits for a particular
service. The Portfolio Management approach is expected to help FAA shift
focus from *product delivery* to *service delivery*.

## 1.3 Background

An FAA Executive Steering Committee (ESC) determined that applying
Portfolio Management techniques to the agency\'s services has a strong
likelihood of improving its investment decisions. The determination was
reached through discussions at several meetings of the Joint Resources
Council (JRC) and Integrated Product Leadership Team (IPLT).

The ESC is comprised of the following individuals:

-   Steven J. Brown, Associate Administrator for Air Traffic Services,
    ATS-1,

-   Steven Zaidman, Associate Administrator for Research and
    Acquisitions, ARA-1,

-   Thomas E. McSweeny, Associate Administrator for Regulation and
    Certification, AVR-1,

-   Donna R. McLean, Assistant Administrator for Financial Services,
    ABA-1, and

-   Daniel J. Mehan, Assistant Administrator for Information Services,
    AIO-1.

From January through December 2000, the Alignment Team---made up of
representatives from each line of business---examined the issues
involved with instituting Portfolio Management within the agency and
made plans for its implementation. The team identified portfolio service
areas into which most of the agency\'s business can be divided.

FAA Administrator Jane Garvey announced the formulation of the Terminal
Business Service (ATB) in January 2001. This followed an Executive
Order, signed by President Clinton on December 11, 2000, that the FAA
form a performance-based organization (PBO) to "...improve the delivery
of air traffic services to the American public." The PBO will begin
implementing the provisions of the *Wendell H. Ford Aviation Investment
and Reform Act for the 21^st^ Century* (AIR-21) by hiring a Chief
Operating Officer to head the new "Air Traffic Organization."

Although Portfolio Management is not specifically mentioned in AIR-21,
the Executive Order, or the Administrator\'s announcement, FAA executive
management believes that using the Portfolio Management approach will
help the FAA select better investments, manage them through the
acquisition process, and obtain real operational benefits.

## 1.4 Authority

The Associate Administrator for Air Traffic Services authorized the
implementation of Portfolio Management on January 26, 2001. John Staples
of the Air Traffic System Requirements Service was named to lead this
effort for Air Traffic Services.

# Section 2. Concept

## 2.1 Introduction

This section describes in detail the concept of Portfolio Management. It
focuses on how Portfolio Management theory and its tools and techniques
can be introduced into the FAA investment management process and the
acquisition management system. This section is written for primarily the
ATS organization, however the tenets discussed are applicable across the
FAA.

## 2.2 Concept Overview

Portfolio Management provides FAA management with the tools to
understand what is needed to ensure the agency gets the maximum value
out of each scarce dollar and staff year and to understand and actively
manage the risks. Currently, the agency's acquisition approach to is to
identify needs (mission need); and then work from the bottom up
identifying possible solutions (mission analysis), be they technical or
procedural; and work out funding (investment analysis). Funds are
usually delegated to a particular project or program. However, the
factors that contribute to the success of programs that are initiated as
solutions to needs are rarely limited to one line of business (LOB) or
functional domain. Hence factors that cut across lines of business and
domains, as well as factors outside the agency, such as the airlines,
are not measured in a meaningful way.

In contrast, the Portfolio Management approach is a top-down approach.
Agency goals are identified, and then all of the factors that will come
into play in achieving those goals are mapped out and analyzed in terms
of their costs and overall risks. The portfolio management approach
provides a holistic view of potential investments in context of all of
the areas that will be affected (i.e., facilities, technical products,
procedures, operations and maintenance). Portfolio management involves a
shift from project-by-project investment to service-level investment.
The focus of portfolio management is at a measurable service delivery
level (e.g., reducing the number of runway incursions).

## 2.2.1 Techniques

Portfolio Management uses a set of concepts and techniques to optimize
the identification, analysis, selection, and active management of
*investment opportunities*. An investment opportunity is a set of
initiatives that will further agency goals such as increasing
efficiency, responding to new needs, expanding current service, or
providing a new service. Initiatives include, not only acquisitions, but
any additional event (e.g., co-investment by airlines, training,
airspace re-design, etc.) necessary to achieving the desired outcome.

Portfolio management hinges on the concept of the *investment package*.
An investment package includes all of the work and costs necessary to
produce a desired benefit, across implementing offices and types of
funding (e.g., Operations (OPS), Facilities and Equipment (F&E),
Research, Engineering, and Development (RE&D), Airport Improvement
Program (AIP)). The portfolio management process also introduces new
roles and redefines existing roles, which do not necessarily fall into a
formal organizational structure.

A basic tenet of portfolio management is *value*. Value in this context
is interpreted as the set of activities that creates a positive change
(or prevents a negative change) in how agency goals are realized through
the expenditure of capital and research funding and the associated
operations funds. Value includes an investment's financial impact and
other metrics that measure positive movement towards critical agency
goals, such as safety, security, and efficiency. Value also includes
sustaining the current safe operations, preventing security incidents,
and maintaining our leadership position in aviation. This definition of
value highlights the importance of sustainment, technical refresh, and
service life extension activities, because they are investments that are
necessary for maintaining an existing level of service. Investment in
these activities ensures that the benefits of current services are
maintained while investments in enhanced services are evaluated and
pursued.

The FAA can derive three benefits from using portfolio management
techniques:

-   Increased timely delivery of operational benefits,

-   Increased operational benefits from capital investments, and

-   Clear linkage between capital investment and operational benefits.

### 2.2.2 Categorization

An aspect of portfolio management that will be useful in the early
stages of its inception is categorization. This technique divides
activities into three "buckets":

(1) Mandates (i.e., directed investments),

(2) Existing services (both current and expanded), and

(3) Other investment opportunities.

Categorization provides the JRC and financial community with an
additional way to view activities and to communicate about the types of
investments being made. Relatively little time is spent on dealing with
the Mandates bucket versus the other two buckets. A mandate is
validated, an appropriate approach is chosen for it, and it must be
immediately acted upon. After that, it only needs a periodic status
check.

Only activities that pertain to existing services should be relegated to
the Existing Services bucket. The intent of this categorization is to
highlight the importance of investing in current services, to ensure
their continuation at current levels and expand them to a wider customer
base. It is important to note that recent budgetary tradeoffs are often
at the expense of investments in this category. The value of these
investments must be understood, as well as the consequences of trading
them off for new opportunities.

The third bucket captures all other investment opportunities that
provide value to the FAA and its customers. It is important that the
total investment package (ground systems, flight systems, and other
components) be identified and the necessary activities understood before
an investment is identified as a new opportunity and tradeoff
discussions begin.

Efforts in the FAA have laid the foundation for using categorization as
the basis for introducing a wider range of portfolio management
principles and techniques. These efforts have highlighted the need to
understand the relationships among and interdependencies of the various
activities necessary to achieve an outcome. By augmenting existing work
with additional tools and techniques and designating an accountable
Investment Manager, the operational benefits of a capital investment
will be increased.

### 2.2.3 Methodology and Tools

A structured methodology for identifying, pursuing, and ultimately
achieving value is necessary to achieving these benefits. This must be
done in light of clearly defined agency goals and the activities
necessary to achieving the goals. The methodology rests in part on
using, a portfolio management technique, Results Chain™, to graphically
map the chain of events that lead to a specific goal (see Figure 1).
Mapping out the various factors involved in achieving a goal allows the
different possible paths leading to a goal to be assessed against each
other in a meaningful way. Once the chain of events is established, a
second technique, Value Plot, is used to provide a graphical comparison
of the relative value of investment opportunities by contrasting them in
terms of investment value and risk.

### 2.2.4 Joint Resources Council

Portfolio Management provides senior managers with the information they
need to identify how to derive value from the investment and to focus
their discussion on potential value and management of risk to that
value. Today, FAA capital projects tend to be funded, managed, viewed,
and evaluated largely in isolation, and the decisions on them made on a
case-by-case basis by senior managers at the Joint Resources Council
(JRC). This approach tends to promote a system or project focus, rather
than a capability or benefit focus. There is virtually no single FAA
project that can stand alone and still provide significant value to the
FAA. Instead, several Capital Investment Plan (CIP) projects and
associated OPS resources have to be integrated and sequenced and then
coordinated with other agency and customer actions to provide a new
capability, internal value, or external benefits. These actions include
FAA flight systems certifications and approvals, flight standards pilot
and procedural and airspace changes, new regulations, improvements in
maintenance capability, upgrades in power and facilities, changes in
controller and technician workload, and acceptance and investments by
National Airspace System (NAS) users. Further, agency management is
generally presented with only the programmatic and budgetary information
connected with a particular project or system, without sufficient
understanding of the relationship of that project or system to the
broader capability initiative of which the project is but a single
component.

Under Portfolio Management, using a Results Chain™ or similar technique
allows managers to understand quickly and at a high level the complexity
of the tasks, the level of responsibility needed, and the estimated
risks relative to other agency investments before a commitment to an
investment is made. Eventually, an LOB, associate administrator, or a
service director responsible for an operational element of the FAA could
become responsible for the selection of investments.

### 2.2.5 Mission Analysis

Mission analysis is a rigorous, forward-looking activity that enables
the FAA to determine and prioritize its critical needs and best
opportunities for sustaining and/or improving the safety, security,
capacity, efficiency, and effectiveness of its services. The intent of
mission analysis is to present clearly defined mission needs that focus
on operational benefits---with identified risks, assumptions, and
assessment of relative value---to the Joint Resources Council for
decision making so the agency can continue to fulfill its legislative
mandate and satisfy the service needs of its customers within the
parameters of the resources available.

To identify and then package the set of activities, mission analysis
must be focused on the goal, the opportunities for moving toward the
goal, and identifying all initiatives necessary to realizing the
opportunities. It is important to identify the sustainment activities
that are necessary to maintaining current service and service levels. In
some cases, a project's total investment may be in sustainment
activities, such as service life extension or technical refresh.

### 2.2.6 Investment Analysis

Once an investment opportunity (or an investment package) has been
agreed upon, investment analysis is focused on identifying the best
approach to accomplishing the initiatives necessary to realize the
value. This process is not all that different from the current
investment analysis phase, but also includes identification of risks
that need to be mitigated to ensure a successful and integrated outcome.
This approach fosters interaction with the affordability process, which
allows identification of any interdependencies of timing and phasing or
whether value or benefits can be partially attained through reduced
expenditure. The investment analysis effort should also produce a more
detailed and accurate results chain, as well as identify value and risk.

This interaction will be invaluable during the introductory phases of
portfolio management techniques, when discretionary spending is
extremely limited. JRC-2 deliberation will be able to focus on
understanding the investment package---recognizing the risks to
achieving value and the options for phasing or partial achievement---and
determine whether a commitment should be made to pursue the opportunity.

### 2.2.7 FAA Portfolio of Investments

An investment package that is committed to becomes part of the FAA
Portfolio of new opportunity investments. In its infancy, this FAA
Portfolio will be limited because the majority of the capital budget is
already committed for the next few years. However, as new opportunities
are managed according to the principles of Portfolio Management, the
portfolio will grow.

A significant enhancement to our current processes would be the
assignment of an Investment Manager, a responsible party from the
sponsor or operating LOB, to manage an investment package within the
context of an investment portfolio. Assignment of an Investment Manager
differs from the current practice of assigning a product to a specific
team, because an Investment Manager oversees all of the activities
necessary to realizing the benefits of an investment, not just the
acquisition activities. While the opportunity to introduce the full
range of portfolio management activities may initially be limited,
identifying an Investment Manager should accelerate the establishment of
investment packaging and promote trade-off discussions for activities
within the portfolio immediately.

### 2.2.8 Portfolio Review

An important addition to current agency processes is the Portfolio
Review. During the review, the portfolio and investment managers would
provide senior management with a comprehensive high-level review of the
initiatives. The review also identifies potential risks that could
prevent realization of the investment benefits. This process will ensure
that senior management is kept abreast of the portfolio's performance
and the specific investment package's progress. The discussions would
touch upon operational benefits, security, certification, return on
investment, and risks to any of these areas, encompassing much more than
do current reviews, which focus on acquisition cost and schedule. This
would ensure that each of the key FAA business interests involved with
the investment or portfolio is aware of the activities, their status,
and any potential risks that may jeopardize the realization of benefits.

## 2.3 Summary

The concepts expressed in this paper are intended to lay the foundation
for the implementation of Portfolio Management primarily within ATS. The
principle goal is to establish a process that assigns responsibility and
establishes accountability in a single place and promotes the delivery
of value and benefits through the expenditure of capital funds.
Establishing an investment package identifies the activities that will
be necessary to derive value early in the process. The investment
package is then debated, and if accepted, periodically reviewed by
senior management.

Investment packages are being promoted as the basis for establishing
portfolios and Investment Managers. An Investment Manager is responsible
for delivering the value and benefits of capital investment.
Consolidating investments into a portfolio would ensure that delivery of
existing services falls under the purview of the Portfolio Manager.
Consolidating investments will be critical in the early stages of
implementing these techniques because tradeoff's will be needed to
accommodate existing activities while introducing new investment
opportunities.

Work will continue over the next few weeks to further define this
concept. Efforts have already begun to identify the potential processes,
roles, and responsibilities that must be adopted or modified to
implement this concept. These activities will further define the
approach for applying portfolio management techniques to a wide array of
activities.

![](media/image2.wmf){width="6.103472222222222in" height="8.13125in"}

# Section 3. Process

## 3.1 Introduction

This guidebook describes how Portfolio Management will fit into the
current acquisition management system and budget process. Portfolio
Management will provide tools for making investment decisions and for
financial management of current and future capital programs. It is
important to note that this process does not apply to the technical
development, deployment, or implementation of a program. The process
described here will not involve large-scale changes to current agency
processes, but rather steps that can be taken within the context of
existing processes. By implementing this process we expect to increase
the operational benefits derived from the agency's capital investments
and establish clear linkages between the investments and their
operational benefits.

## 3.2 New Opportunities

### 3.2.1 Step 1

The first step in this process is evaluating potential investment
opportunities for capital funding. This will be accomplished within the
current mission analysis process. The mission analysis will be focused
on the benefits of a particular investment (or set of investments), as
well as on the value of the investment to the agency. This is a change
in focus from that of the current process, which is on cost, schedule,
and delivery of a capability. In addition to focusing on benefits and
value, the mission analysis will identify the relationship between a
proposed investment and the agency (or service) goal(s) the investment
supports. All initiatives necessary to realizing each of the
opportunities that will be provided by a proposed investment must be
identified. (These initiatives include procedural changes as well as
specific acquisitions).

A structured methodology that establishes the linkage between the
investment opportunity and established agency goals is used to make this
relative value assessment. All activities necessary to attaining a
particular goal are identified within a potential investment
opportunity. It is important to note that this approach includes
identifying the sustainment activities that are necessary to maintain
current service and service levels. In some cases, the total investment
may be focused on sustainment activities, such as service life extension
or technical refresh.

A portfolio management technique, Results Chain™---which graphically
maps the chain of events that lead to a specific goal---would be used to
identify the initiatives, risks, and outcomes required to support the
investment opportunity and provide value. Using Results Chains would be
required for new investment opportunities, and the technique could also
be applied to selected existing initiatives. Once the results chains are
identified, a second portfolio management technique, known as a *Value
Plot* is applied. Value Plot provides a visual comparison of the
potential investment opportunities, in terms of financial risk,
alignment to agency goals, and risk to attaining the identified
benefits.

### 3.2.2 Step 2

The second step is for the Joint Resources Council (JRC) to validate and
select the investment opportunity. Current JRC-1 discussion usually
focuses on individual projects with little discussion of the project's
relationships to other activities or impact on other investments. JRC-1
usually focuses first on validating and then on selecting an investment
opportunity in light of the its understanding of the initiatives that
must be successfully completed to realize full value. This step (JRC-1)
is consistent with the current acquisition management process, differing
only in the addition of a discussion of relative value and risk. At this
point, JRC can decide not to invest in an opportunity.

Eventually, a Line of Business, Associate Administrator, or a Service
Director responsible for an operational element of the FAA could become
responsible for the selection of investments. Regardless of who performs
this function, the process for selecting, funding, and managing the
investment remains the same.

### 3.3.3 Step 3

Once an investment opportunity has been agreed upon, investment analysis
would focus on identifying the best approach to accomplishing the
initiatives necessary to realizing the value. This process is not
different from the current investment analysis phase, but includes
identification of risks that need to be mitigated to ensure a successful
and integrated outcome. This approach fosters interaction with the
affordability process, which allows the identification of any
interdependencies of timing and phasing or whether value or benefits can
be partially attained through reduced expenditure. The results chain is
used during this step to monitor the opportunity's progress. It helps
senior management address high-value programs and produce appropriate
value measures by tracking and analyzing expenditures and benefits
delivery and providing a set of risk, alignment, and financial worth
charts. This allow them to review the business case for each major new
investment in the context of other candidate investments as well as
existing projects.

### 3.3.4 Step 4

After investment analysis is complete, the JRC convenes to review,
validate, and approve the investment package. JRC-2 deliberation focuses
on understanding the investment package and recognizing the risks to
achieving the value, along with options for phasing or partial
achievement. JRC-2 ultimately determines whether a commitment should be
made to pursue the opportunity. As mentioned above, over time a Line of
Business, Associate Administrator, or a Service Director responsible for
an operational element of the FAA could become responsible for the
selection of investments.

Given a JRC decision to invest capital in an opportunity, a significant
departure from current process would be identification of an Investment
Manager. The Investment Manager would be responsible for managing the
investment package within the context of an investment portfolio.
Assigning an investment package to an Investment Manager differs from
the current method of assigning a product to a specific team, because
the former entails oversight of all of the activities necessary to
deliver the value and benefits, not just the acquisition activities.

The Investment Manager, provides leadership and oversight to the project
team, and is accountable for realizing the benefits identified during
benefits realization planning. The Investment Manager:

-   Provides organizational oversight and guides the investment
    initiative toward the desired result;

-   Manages the investment package and has the appropriate resources in
    place to support it;

-   Believes in the business results and benefits, can champion the
    business results with others, and takes the necessary actions to see
    the business results realized; and

-   Ensures that the business areas affected by the investment package
    are able to make the change and will be able to achieve the business
    results.

While opportunities to engage in the full range of portfolio management
activities may be limited initially, identifying and assigning an
Portfolio Manager should accelerate the move toward investment packaging
and promote trade-off discussions for portfolio activities. A Portfolio
Manager is accountable for the overall success of a given investment or
a portfolio of investments. As portfolio management is implemented
within the agency, the Portfolio Manager would be responsible for
overseeing all of the investment packages within a given portfolio.

### 3.2.5 Step 5

An important addition to our current processes is the Portfolio Review.
During the review, the Investment and Portfolio Managers would provide
senior management with a comprehensive high-level review of the
investment packages. The review also identifies potential risks that
could prevent a full return on the investment. This process will ensure
that senior management is kept abreast of the portfolio's performance
and the progress of specific investment packages. The discussions would
cover operational value, security, certification, return on investment,
and risks to any of these areas, encompassing much more than do current
reviews, which focus primarily on acquisition cost and schedule. This
would ensure that each of the key FAA business interests involved in an
investment package or portfolio is aware of the activities, their
status, and any potential risks to realizing the benefits.

Another important part of the review is to show the continuing linkage
between an investment package and the agency's identified services and
goals. The review would also provide an opportunity to make sure the
investment is delivering the originally identified benefits, as well as
track the technical progress against the agency's identified services
and goals.

## 3.3 Existing Programs

The portfolio management process identifies investment packages and the
interdependent programs that support them. In some cases, it identifies
programs that may be discontinued as the result of implementation of an
investment package, which may necessitate value assessments on those
programs. Because the objective is to present senior management at JRCs
and other forums with the true value of a proposed investment, it is
expected that some of the interdependent programs identified in the
results chain would be assessed during mission analysis. This process
would apply portfolio management techniques such as result chains and
value plots to some existing programs, and the results would then be
part of the information provided to the JRC.

## 3.4 Impact on Budget Process

An important aspect of portfolio management is the concept of
categorization. This technique parses activities into three "buckets":
(1) mandates (i.e., directed investments), (2) existing services (both
current and expansion), and (3) new investment opportunities. Parsing
provides the JRC and financial community with an additional way to view
activities and to communicate about the types of investments being made.

Relatively little time is spent on dealing with the Mandates bucket
versus the other two buckets. A mandate is validated by the Systems
Engineering/Operational Analysis Team (SEOAT)/SEOAT Analytical Team
(SAT), an appropriate approach is chosen for it, and it must be
immediately acted upon. After that, it only needs a periodic status
check.

Only activities that pertain to existing services should be relegated to
the Existing Services bucket. The intent of this categorization is to
highlight the importance of investing in the services currently
provided, to ensure their continuation at current levels and to expand
current services to a wider customer base. It is important to note that
recent budgetary tradeoffs have been at the expense of investments in
this category. The value of these investments must be understood, as
well as the consequences of trading them off for new opportunities

The third bucket captures new investment opportunities that provide
value to the FAA and its customers. It is important that the total
investment package be identified and the necessary activities understood
before an investment is designated as a new opportunity and tradeoff
discussions begin.

The portfolio management process will also play a role in the agency's
budget formulation process by providing insight on a program's relative
value. The program offices will provide value-related questions to the
SAT to be used in its evaluation process.

# Section 4. Roles and Responsibilities

Portfolio management is a new process that will either introduce new
roles or redefine existing roles. This is not meant to imply that
organizational change is necessary. The purpose of this section is to
clarify how roles and responsibilities may be necessarily different
under Portfolio Management.

## 4.1 Portfolio Manager

The Portfolio Manager is the person from the sponsoring or operating
element who is accountable for the overall success of a given portfolio
of investments. As portfolio management is implemented throughout the
agency, a Portfolio Manager would become responsible for overseeing all
investment packages within a given portfolio. Portfolio Managers must be
appropriately positioned in the organization to realize, either directly
or through partnering, the business results and operational benefits of
their investment initiative(s).

## 4.2 Investment Manager

The Investment Manager provides the project team with leadership and
oversight and is accountable for realizing the operational benefits
identified during benefits realization planning; provides organizational
oversight and guides the investment initiative toward the desired
result; manages the investment package and has the appropriate resources
in place to support it; believes in the business results and benefits,
can champion the business results, and takes the necessary actions to
see the business results realized; and ensures that the business areas
affected by the investment package can make the change and achieve the
business results.

## 4.3 Project Manager

Project Managers, working with the Investment Manager, are responsible
for successful completion of the acquisition project. Project Managers
may be involved in more than one investment package at the same time.

## 4.4 Project Team

The Project Team is the implementation team assigned to the acquisition
project.

## 4.5 Value Management Office Manager

Currently under development.

## 4.6 Value Management Team

Currently under development.

## 4.7 Management Advisory Council

Currently under development.

## 4.8 Management Advisory Council -- Aviation Subcommittee

Currently under development.

## 4.9 Chief Operating Officer

Currently under development.

## 

# Section 5. Guidance

This section provides functional entities with guidance for implementing
Portfolio Management within ATS. The following precepts and techniques
are intended to standardize functions and facilitate organizational
understanding. In general, the purpose for using Portfolio Management
techniques is to focus program direction, accountability, and success
measures on operational needs and benefits. Success in a program is
defined as the delivery of the intended benefits

While Portfolio Management involves is a change in the way the FAA does
business, the changes for each of us in how we do our jobs may not be so
significant. In an attempt to implement Portfolio Management with
minimal disruption, we may initially try to start using Portfolio
Management tools and techniques without major organizational
restructuring. In time, the FAA may decide to reorganize in a way more
consistent with portfolio management, as ATS has done with the
establishment of the Terminal Business Services organization. For now,
the following paragraphs address functional, rather than organizational,
changes.

## Value Management Services

### 5.1.1 Mission Analysis, Requirements Development, and Investment Analysis

While agency mission needs will still need to be addressed, the
difference between the way the agency has been doing business and the
way it will do business under portfolio management is a broadening of
focus. That is, the response to a mission need will focus on delivery of
services, not on delivery of a particular product. Mission need analyses
will evolve to include a first cut understanding of all the steps
necessary to turn an acquisition into value, and the agency mission need
decision should include commitments by the sponsor to use the acquired
product and/or capability to achieve specific benefits that are of value
to the agency.

Mission Analysis, Requirement Development, and Investment Analysis may
be the areas where the most significant changes are evident. Individual
programs will still require mission analysis, requirements, and
investment analysis activity (especially those involving product
acquisition), but mission analysis and investment analysis work will
also be done on components---parts of potential investment opportunities
that in and of themselves deliver value and benefits. The goal is to
understand the entire investment that is required to produce value to
the agency and its users, not just the product. No investment should be
launched and funded unless the entire agency stands ready to make it
work, and until the risks to its success are fully understood and the
mitigation efforts defined.

To accomplish the additional mission analysis work employees will be
trained in the development and use of Results Chains ™, Value Plots,
Alignment Questionnaires, and other portfolio management tools. These
tools will allow us to understand all the steps needed to assure
benefits and identify who is responsible for each step. It will also
allow us to compare investments according to their risk and comparative
value. It will eventually allow us to prepare Value Plots, which are
pictorial representations of multiple investment opportunities and how
they relate to each other in terms of alignment to agency goals,
financial worth, and risk to achieving the value.

### Business Unit Support

Currently under development.

### 5.1.3 Benefits Realization

To support portfolio management, additional information is required
relating to value and risk associated with investment activities. Each
program will be correlated to goals to identify performance measures
showing the contributions programs are making toward accomplishing FAA
corporate and DOT strategic goals. For programs with a single year
budget of \$10M or above and all new starts, data relating to portfolio
management will be collected. This information will be considered with
other programs within a portfolio to help determine the best investments
to accomplish the objectives of the portfolio. The SAT/SEOAT will adjust
its processes to include portfolio management concepts into the
formulation process. Concurrently, AIO will be work within the SAT/SEOAT
process to develop investment strategies around goals, values, and risks
based on the responses to the questions.

Infrastructure programs are included, knowing that when answering the
questions, value may be interpreted differently. Answers and data used
in the answers should be consistent with all investment analyses
completed or under way. Tools to support completion of this requirement
can be found on the Internet.

Portfolio management will be conducted as part of SAT/SEOAT activities.
Portfolio management will be integrated into SAT/SEOAT process, not
conducted separately. The SAT/SEOAT will come up with a proposed budget
based on current agency priorities/commitments. Portfolio management
data will be utilized to demonstrate variations in the budget that might
occur if different emphasis were placed on new factors (goals, value,
risk, etc). The SAT/SEOAT will start to examine programs and present
recommendations within portfolios to better understand the relationships
and dependencies. It is expected some sensitivity analysis will be
conducted on the mix. The current 5-year planning number will be the
basis for starting. Each program must submit a package against their
current. Additional funding requested over the 5-year planning numbers
must have separate packages.

Existing business units will operate independently and conduct the
equivalent of the SAT/SEOAT activities for their service. They will have
their portion of the-5 year plan fenced for their prioritization.
However, they will have to resolve any funding issues associated with
implementation of any program in the terminal services environment. They
will coordinate these efforts and provide briefings and data to the
SAT/SEOAT, who will combine it into the total package and take it
forward.

Each investment should be able to answer the questions below. These
questions focus less on schedule, budget and software/hardware
acquisitions; rather they concentrate more on what value the investment
ultimately has to the Agency and the aviation community, and also on the
risk to achievement of that value. Value represents not only financial
value, but includes any net positive movement towards one of our agency
goals.

1\. (a) What are the ultimate benefits and values to the agency and its
stakeholders from the program?

\(b\) To whom are they going?

b.  \(c\) How do they relate to our agency goals as expressed in our
    Performance plans or other specific agency level document or
    Congressional mandate?

    \(d\) How will you be able to measure these benefits?

2\. (a) Now assume the program works (cost, schedule and performance
targets are met). What else needs to occur to achieve the ultimate
benefit and value to the agency and its stakeholders in the following
areas?

> \(b\) Supportability---What must happen to support the implementation
> of the program? The focus here is primarily Airway Facilities
> activities but include other supportability activities if they are
> needed.

\(c\) Interdependencies---What pieces of other programs must work for
this program to deliver the full value claimed? If they do not what
happens to the value and benefits?

\(d\) Factors outside the program---What changes in procedures, in
airspace design, what union buy-in, what human factor issues, what
co-investment by airlines or airports or industry, is required? What
must be done to meet other requirements such as environmental
regulations, information security, etc.

3\. (a) What are the major risks to achieve the value claimed?

(b)What could threaten the completion of the program?

> © If everything went well in the program, what are the circumstances
> (including those outside the program's control) that could threaten
> the achievement of the benefits and value identified above?

## 5.2 Business Units

The focus in the past has been on the delivery of a particular product
or acquisition, and all the associated steps to have a successful
acquisition. The difference under Portfolio Management is that the
product itself isn't the goal---the goal is to ensure that the *service
or value* promised (whether as a direct result of an acquisition, or
from non-procurement activities, such as procedural changes) occurs. We
will also focus on how the benefits are measured and tracked and on
managing risk to service delivery or value promised. Therefore, the
members of the business unit and existing IPT members are "team players"
because the product requested can be a significant contributor to the
achievement of benefits or value to the FAA. The IPT will be contracted
by a sponsoring organization to deliver a capability, but there will be
others who have to contribute in order to accomplish the delivery of a
particular service that adds benefit/value. Other business units and
IPTs will also play a role, as will non-acquisition personnel.

Business Units will prepare and submit long range plans and annual
supporting plans on the evolution of major functions of the Air Traffic
Control system. These plans will be in concert and support the
accomplishment of the ATC system plan and the annual performance plan of
the Administrator and the Chief Operating Officer. Metrics need to be
operational and must also assess the change in safety, productivity,
cost-savings, etc. Funding will be assessed to ensure that it supports
the strategic plan accomplishments.

The Service Team Planning efforts will be the implementation plans for
the FAA ATC system but they are subordinate to the annual and long-term
strategic plans. They must focus specifically on mission and objectives,
standards of performance, and accomplish goals in safety, efficiency and
productivity. These plans delineate and cause an acceleration of system
modernization and improvement in ATC safety. The service team plans will
be the implementation vehicle for COO plans to modernize, increase
productivity and cost-saving measures, and training and educational
goals. It is expected that service teams will have all resources under
their control, which are sufficient and necessary to be successful in
their individual portions of the ATC system mission accomplishment.

Old program documentation does not need to be redone. However, all new
starts and changes in baseline will need the accompanying analyses to
ascertain relative value, likely risks and desired benefits, which are
to be measured. New investments in sustainment will be reviewed using
the same techniques, which include the expected values of an investment,
risk to completion, relative worth, etc.

The basic premise is: the program is not a success until the benefits
are achieved and shown to exist through measurement. Benefits and risks
to benefits are reported at program review along with cost and schedule.
The relative value of projects will be assessed using instruments for
alignment with the assumptions above, potential benefit/value, and risk.
AIO will assist with standards in the assessment and techniques used.

Results chains will be prepared for presentation to the JRC and similar
decision meetings. The purpose of the results chain techniques is to
identify the benefits, which are the reason for the procurement or
non-material action (eg airspace, procedure, rule). They assist in
designing the operational measurement and help to identify all
implementation steps necessary from other organizations, such as
certification regulation. The steps include all necessary actions and
obstacles, such as airspace change, personnel training, political
barriers, etc. JRC approval means not only the ability to buy, but is an
agency commitment to work all of the dependencies. The intent is to
replace current investment analysis and cost effectiveness studies.

The basic sets of programs included in each portfolio will be approved
on a team by team basis. Generally the strawman developed in the initial
ATS prototype will be the starting point for developing these
portfolios.

## 5.3 Joint Resources Council

Since the intention of portfolio management is to take the JRC members
out of the role of project management/oversight and help them refocus
their energy on discussing the things that are valuable to our
stakeholders, the following scenario could well be the new model for
JRCs.

First we see JRC meetings as discussions about what is of value to the
agency and what investments are needed to achieve that value. The
discussions would lead to decisions at the beginning of the year,
whereupon lines of business or business units would receive guidance
from senior management on goals of the upcoming year. LOBs or Business
Units then return to their staffs, to identify the best investments
within their purview that further the goals. At a later time, the LOBs
or Business Units would present their best potential investments to
senior management. Senior management decides on are the best investments
(within each LOB/Business Unit) to further agency goals. Each LOB/BU
does the same. Eventually, senior management will have a roster of
investments for the upcoming business cycle. In the case of pop-up
funding requirements or funding reductions after an initial funding
level was given to the agency, the senior management team would
reconvene to decide what won't get accomplished during the current year
to accommodate the pop-up (assuming the program with the pop-up is more
'valuable', from an agency perspective, than the other identified
investment candidates) or the budget reduction.

At each meeting of the JRC, the total investment package would be
presented, including all the agreements necessary across the agency and
with customers and with the industry, that are needed to turn the
investment into real value. The risks would also be clearly presented so
that mitigation strategies could be agreed upon. We also envision
investment reviews, chaired by the sponsor, that would complement
acquisition reviews, and would focus on the overall investment, not just
the individual product.

## 5.4 Other Functions

### 5.4.1 Air Traffic Operations and Maintenance

A core tenet of portfolio management is that the only investments made
are those that reflect value. Value is defined as the relative worth of
an investment for an organization or its key stakeholders. Air traffic
operations is the sponsor of a significant number of current and
anticipated investments and as such is recognized as the key stakeholder
in these investments. As an air traffic operational organization, the
role of air traffic operations is to provide guidance to those who
define the technical value of an investment.

In many cases the operational value of an investment cannot be summed up
in cost-benefit analysis or by various risk assessment techniques alone.
However, these intrinsic benefits or risks must be accounted for in
determining the relative value of an investment. To provide assistance
in determining investment value with intrinsic operational components,
persons from the air traffic operational organization must be partners
and, in some cases, leaders in the assessment process.

The operational impact of an investment, both independently and within
the context of interdependent investments, must be determined and
provided by the air traffic operational organization to the development
organizations. As the air traffic operational organization defines its
needs, it will also, using portfolio and architectural tools, determine
the operational value of that investment. The air traffic operational
organization must also determine if procedural changes can mitigate the
need for a capital investment, as well as determine if it is
operationally suitable to segment the investment. The air traffic
organization will then work with the development organizations to ensure
that the final assessments reflect the operational value of that
investment.

The air traffic operational organization must also be a partner in
evaluating relative value among competing or interdependent investments.
Understanding the operational value of an investment is crucial to
determining trade-off among investments. This participation may be
working with the requirement organizations, working within the
individual business services, or both.

It is important to recognize that most of the investment decisions will
have a direct impact on how air traffic service providers perform their
tasks, which must be taken into account during when planning all phases
of development.

This is a major change in focus and behavior for sponsors. At present,
the role of the sponsor after the mission need decision is primarily to
support the IPT in the struggle for agency resources. We have not as an
agency held our sponsors accountable for achieving value and providing
services. Portfolio management requires that sponsors be active in
managing the acquisitions into production and beyond, ensuring that the
infrastructure is there, that the procedures and airspace changes occur
on schedule, that the workforce and user issues are addressed, that
co-investment by NAS users is tracked against expectations, etc. It
envisions that sponsors, not IPT's lead the discussion with other agency
managers at major investment decisions to ensure that the investment is
successful. No investment will be undertaken unless there is a sponsor
ready, willing, and able to assume this accountability.

### 5.4.2 Configuration Management

Currently under development.

### 5.4.3 Test and Evaluation

Currently under development.

### 5.4.4 Measurement

Metrics need to be based upon operational benefits and must also assess
the change in safety, productivity, cost-savings, etc. Funding will be
assessed to ensure that it supports the strategic plan accomplishments.

# Section 6. Tools

The following techniques are discussed as possible tools for
implementing Portfolio Management.

## Results Chain ™

The Results Chain™ model provides an important visual representation, or
road map, which visually represents the links among outcomes,
initiatives, contributions, and assumptions---all the pieces necessary
to delivery benefits. A result chain tracks:

-   Outcomes (represented by circles)---a desired change in, or
    maintenance of, an element of the agency that cannot be acted upon
    directly; the specific intermediate and end results being sought;
    must be measurable;

-   Initiatives (represented by rectangles)---the key actions the agency
    must undertake and manage to achieve the desired outcomes;

-   Contributions (represented by lines)---relationships and
    dependencies among initiatives, outcomes, and assumptions; and

-   Assumptions (represented by hexagons)---uncontrollable external
    factors that contribute to outcomes, and controllable internal
    factors outside the scope of the investment; mitigating projects may
    need to be defined to reduce the risks associated with assumptions.

Because outcomes and end results are defined, a results chain is a
useful means of identifying measurement points for tracking achievement
of benefits.

## 6.2 Risk

Currently under development.

## 6.3 Alignment Questionnaires

The alignment questionnaire focuses on three separate elements of
alignment to establish how well an investment fits with agency goals.
The questionnaire can be used continuously as a program develops to
gauge whether the agency is investing in the right things. The elements
are:

-   Current (tactical) needs---the current focus and priorities of the
    agency and how well the program helps to improve performance.

-   Long term (strategic) needs--- how well the investment fits with the
    agency goals.

-   Vision Alignment---how much the investment contributes to the
    desired future state of the agency.

Answers to the questionnaire are weighted and transferred to a
spreadsheet where a final score is calculated.

## 6.4 Value Plot

With a score of how well an investment is aligned (i.e., its economic
worth and its degree of risk of achieving its objectives), the
investment can be charted on a value plot. A value plot is a graphical
representation of how investments compare to each other. The data is
normally plotted as financial worth versus risk.

## 6.5 Financial Worth Calculation

The financial worth calculation is the monetary component of the value
equation and is calculated repeatedly as more information is learned
about an investment. Typically, the data is used to calculate elements
such as:

-   Net Present Value (NPV), and

-   Ratio of economic benefits and economic costs.

These two elements are used in benefits calculations to calculate
*value* indices based on concepts of financial worth, customer worth,
and stakeholder worth, which shows the economic value of an investment.

# Appendix A. Definitions

**Alignment---**A measure of the fit of a planned investment direction
with organizational direction, including vision, mission, goals,
objectives, and architectural principles.

**Assumption---**Any activity that the agency does not have control
over; assumptions are risks.

**Benefits---**An outcome whose nature and value (expressed in various
ways) are considered advantageous by an organization.

**Benefits Realization Approach---**A business-oriented framework,
supported by a set of processes, techniques, and instruments that
enables organizations to select and manage a portfolio and programs such
that benefits are clearly defined, optimized, and harvested.

**Benefits Realization Planning---**Once a decision is made to fund an
investment, measurement and tracking of the investment's specific
benefits; part of investment analysis.

**Benefits Stream---**The flow of benefits over time, which results from
successful implementation and management of a business program.

**Benchmarking---**A systematic approach to comparing an organization's
performance against peers and competitors in an effort to learn the best
ways of conducting business (e.g., benchmarking of quality, logistical
efficiency and various other metrics).

**Business Case---**The rationale for making a business investment; used
to support a business decision on whether to proceed or not with the
investment.

**Categorization---**A technique that parses investments into different
"buckets" or categories. For our purposes, we are considering three
categories: (1) mandates, or directed investments, (2) existing services
(both current and expanded), and (3) new investment opportunities.
Categorization provides senior management and the financial community
with an additional way to view our agency activities, and to communicate
about the type of investments currently being made.

**Financial Worth (Measurement)---**One of three supporting measures of
the four "ares" (the other two are alignment and risk), financial worth
is a measure of monetary contribution, calculated using traditional
accounting methods.

**Governance---**Governance is an integrated management mechanism that
operationalizes the concepts of portfolio management. It allows for
support and management of the benefits realization process from the
conception of an investment opportunity until the investment benefits
have been realized and harvested. Functionally, agency senior management
moves from making primarily funding decisions on a project-by-project
basis to being responsibile for the life-cycle investment in packages
that provide value and benefit to stakeholders

**Initiatives---**Purchases and any additional event that must take
place (e.g., co-investment by airlines, training, airspace re-design,
etc.) to achieve a desired outcome.

**Investment Commitment Case---**The value case written to request the
commitment of capital funds to undertake a specific investment package.
It will also have a risk assessment, alignment assessment, and a
financial worth assessment. There will be much more detail in these
documents than in the initiation case. A higher level of confidence in
the cost and benefit estimates is expected, and plans to mitigate areas
of high risk must be identified.

**Investment Decision Board (IDB)---**A management structure (could be
the current JRC, or the Management Board, or some other senior
management decision-making body) primarily accountable to act as an
agency-level Portfolio Manager who is responsible for managing the level
of overall funding to provide the necessary balance between agency-wide
and LOB/Business Unit needs.

**Investment Initiation Case---**A value case written to translate an
initiantive into the first definition of an investment package which, if
put into place, would provide a measurable benefit for the agency. It
includes risk and alignment assessment and some basic financial worth
information. The sponsor approves it. The sponsor uses the case to
compare this idea with others proposed and to decide if it is wise to
invest further. It is also needed for the potential investment package
to be eligible for forward resource planning and potential commitment of
capital funds.

**Investment Opportunity---**A set of initiatives that will further
agency goals such as increasing efficiency, responding to new needs,
expanding current service, or providing a new service.

**Investment Package---**A set of work managed for value in support of
an agency opportunity. It is a collection of technology acquisitions and
organizational-, procedural-, and other non-acquisition-related projects
that are necessary to bring about a desired outcome.

**Investment Packaging---**A grouping of the multiple paths that will
lead to the desired outcome.

**Investment Sponsor---**The entity who is ready, willing, and able to
deliver investment benefits (and is held accountable for the realization
of those benefits). The sponsor monitors the investment from conception
to benefits realization. The sponsor signs up to an agreed-upon scope of
work leading to benefits. If the technical components are completed on
time and within budget, the sponsor commits to operating the investment
to obtain the benefits. The sponsor must have the authority to exercise
managerial control over the business or process area that will undergo
change. The sponsor periodically reports to senior management on the
status of investments and any risk factors that threaten realization of
benefits from an investment.

**Portfolio (Investment Portfolio)---**A process of managing agency
investment packages in context rather than as independent investment
opportunities. A portfolio is a grouping of investment packages,
selected by senior management, to achieve defined agency results while
meeting clear risk/value standards. All agency investments would be
reflected in the FAA portfolio, but investments supporting specific
service areas (EnRoute, Terminal, etc.) or business units could
constitute "service" (or business unit) portfolios within the FAA
portfolio. This can be an agency-level portfolio or, within that,
service portfolios.

**Portfolio Management---**The use of concepts and techniques to
optimize the identification, analysis, selection, and active management
of capital investment resources, with the aim of maximizing the total
value received by the agency and its customers. Portfolio Management
will help the agency shift focus from a *product delivery* model to a
*service delivery* model.

PM takes a broad cross-functional view of agency needs, opportunities,
and investments, so as to pick and manage an optimum set of investment
packages to deliver the best risk-adjusted value over time, while
adjusting the composition of the portfolio as more knowledge is gained
or as the environment changes.

**Portfolio Manager---**If there are multiple LOBs or Business Units
with more than one investment, the LOB or Business Unit Portfolio
Manager would be the party responsible for making sure that all
investments within the LOB/BU portfolio are on target for delivery of
benefits. If there are impediments to that benefits delivery, the
Portfolio Manager is positioned to inform the Sponsor, who can identify
the appropriate resources to mitigate the risk of not achieving the
benefits.

**Portfolio Review---**A high-level review of the investment packages,
including risks, operational value, security, and return on investment;
also shows the linkage between the packages and agency goals.

**Project---**A group of activities for delivering a defined capability
based upon an agreed schedule and budget.

**Project Management---**Management of the full project life cycle from
design to delivery, which includes definition of project scope, project
design, construction, testing, and implementation.

**Results Chain** ™---A portfolio management tool used to graphically
map the initiatives, outcomes, assumptions, and contributions that lead
to a desired end-state (ultimate outcome).

**Risk---**Degree of probability of not realizing the benefits of a
business program.

**Value---**Relative worth or importance of an investment. The set of
activities that creates a positive change (or prevents a negative
change) in how agency goals are realized through the expenditure of
capital and research funding and the associated operations funds;
includes an investment's financial impact and other metrics that measure
positive movement towards critical agency goals, such as safety,
security, and efficiency; also includes sustaining the current safe
operations, preventing security incidents, and maintaining our
leadership position in aviation.

**Value Management Office (VMO)---**The secretariat for the Investment
Decision Board (IDB) that manages investment portfolios.

**Value Plot---**A graphical comparison of multiple investment packages,
in terms of financial worth, alignment to agency goals, and risks to
attaining the specified benefits.

**Value Tests---** tools that measure an investment opportunity for
alignment, financial worth, and risk:

-   *Alignment:* is measure of a planned investment direction against
    the desired agency direction, including the mission, goals,
    objectives, and architecture.

-   *Financial Worth:* is a measure of the investment's monetary impact
    on the agency.

-   *Risk (to benefit):* is a measure of the investment's potential for
    realizing the benefits currently sought by the agency.

#   {#section-2 .unnumbered}

# Appendix B. Acronyms

AIP--Airport Improvement Program

AMASS--Airport Movement Area Safety System

AMS--Acquisition Management System

ASDE--Airport Surface Detection Equipment

ATS--Air Traffic Services

CIP--Capital Investment Plan

F&E--Facilities and Equipment

FAA--Federal Aviation Administration

IPDS--Integrated Product Development System

IPT--Integrated Product team

JRC-- Joint Resources Council

LOB--line of business

NAS--National Airspace System

OPS--Operations

R,E&D--Research, Engineering, and Development

SAT--SEOAT Analytical Team

SEOAT--Systems Engineering/Operational Analysis Team

# Appendix C. References

*FAA Acquisition Management System,* June 1997

*Avoiding Aviation Gridlock and Reducing the Accident Rate: A Consensus
for Change,* National Civil Aviation Review Commission, Norman Y.
Mineta, Chair, December 1997

*The Information Paradox,* Thorp, John, et al., McGraw-Hill Ryerson,
1998

*Think Value,* Version 3.0g, DMR, May 1999

*Wendell H. Ford Aviation Investment and Reform Act for the 21^st^
Century (AIR-21),* FAA Office of Airports Planning and Programming,
April 5, 2000

Executive Order 13180, Air Traffic Performance-Based Organization,
December 11, 2000

**Establishment of the Terminal Business Service,** FAA Memorandum from
AOA-1, January 10, 2001

*Portfolio Management,* FAA Memorandum from the Executive Steering
Committee, December 4, 1999

*Service-Oriented Portfolio Management,* FAA Memorandum from Assistant
Administrator for Information Services and Chief Information Officer,
Associate Administrator for Research and Acquisitions, Assistant
Administrator for Financial Services, Acting Associate Administrator for
Air Traffic Services, Associate Administrator for Regulation and
Certification, December 2, 1999

**Video tapes**

1\. Distinguished Visitor Presentation, John Thorp, DMR

2\. Distinguished Visitor Presentation, Russ Caple, DMR

3\. ATS/ARA Portfolio Management Familiarization, ARS January 25, 2001