United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Aviation, 

Committee on Transportation and 

Infrastructure, House of Representatives

FEDERAL AVIATION 

ADMINISTRATION 

Key Issues in Ensuring the 

Efficient Development and 

Safe Operation of the Next 

Generation Air 

Transportation System 

Statement of Gerald L. Dillingham, Ph.D. 

Director, Physical Infrastructure Issues 

For Release on Delivery

Expected at 10 a.m. EDT 

Thursday, March 22, 2007

 

GAO-07-636T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 22, 2007

FEDERAL AVIATION ADMINISTRATION

Key Issues in Ensuring the Efficient 

Development and Safe Operation of the 

Next Generation Air Transportation 

System 

Highlights of GAO-07-636T, a testimony 

before the Subcommittee on Aviation, 

Committee on Transportation and

Infrastructure, House of Representatives 

The Federal Aviation 

Administration (FAA) operates one 

of the safest air transportation 

systems in the world. It is, 

however, a system under strain. 

The skies are becoming more 

crowded every day, with an

estimated 1 billion passengers per

year expected by 2015. The current 

aviation system cannot be

expanded to meet this growth. The 

reauthorization of FAA is an 

opportunity to examine how the 

agency is managing the operation

and safety of the air transportation

system as it leads the transition to 

the Next Generation Air 

Transportation System 

(NextGen)—a major redesign of

the current system. GAO’s 

testimony focuses on key issues 

related to FAA’s reauthorization, 

including (1) FAA’s progress in 

implementing initiatives that could 

provide a solid foundation for 

NextGen, (2) issues that need to be

addressed to help ensure a 

successful transition to NextGen, 

and (3) safety areas that are

important for the continued safe

operation of the current and future 

system. This statement is based on 

recent GAO reports and ongoing

work on some management and 

safety initiatives. 

What GAO Recommends

This testimony does not contain 

recommendations. However, GAO

reports containing relevant

recommendations are listed among 

the Related GAO Products, some of

which FAA is in the process of 

responding to. 

FAA has made significant progress in moving to more businesslike and costeffective operations and modernizing the air traffic control system. This 

progress should better position the agency for the complex implementation 

of NextGen. However, further work remains to fully address past problems 

in the modernization effort while at the same time finding new leadership—

due to losses of key leaders at FAA and its Air Traffic Organization—that can 

continue an agencywide commitment to transformation. While FAA has 

improved its financial management capability, including implementing a new 

cost accounting system and developing a cost allocation methodology, it is 

not yet clear if that methodology provides a sound basis from which to 

derive the administration’s proposed new cost-based funding structure for 

FAA. In addition, improved acquisition processes, such as establishing 

guidance on using Earned Value Management, are positive steps, but they 

need to be fully implemented across all critical acquisitions. As FAA works 

toward acquiring and deploying NextGen technology, it will also be 

important to phase out existing air traffic control equipment using a riskbased approach and continue to maintain existing systems. 

Key issues that FAA needs to address as it begins implementing NextGen 

include continued focus on coordination with the Joint Planning and 

Development Office (JPDO). FAA, in coordination with JPDO, is developing 

an implementation plan for NextGen that is expected to include details of 

the required technologies, procedures, and resources. This is a step in the 

right direction. While FAA estimates that its cost for NextGen programs may 

range between $15 billion and $22 billion, it will be important to determine 

which entities will fund and conduct the necessary developmental research. 

Also, GAO has recommended that FAA assess its capacity to handle the 

technical and contract management expertise to determine if it has the 

capabilities required to oversee the implementation of NextGen. FAA is 

considering action that would respond to this recommendation. 

To deal with current safety issues and the transition to NextGen, it will be 

important for FAA to address safety in the airport environment, where 

forecasted traffic growth could lead to increased ground congestion and 

safety hazards. FAA also needs to establish the appropriate regulatory 

approach for certain current airspace users, such as air ambulances, and 

new users, such as the emerging space tourism industry. In addition, to 

maintain and expand the margin of safety, especially if substantial growth in 

air traffic materializes, FAA will need to rely more on data than on laborintensive inspections. GAO has recommended that FAA improve its safety 

data. FAA has taken some action to improve its data, but more work 

remains. FAA’s ability to ensure a safe system will also be affected by its

ability to hire, train, and deploy its workforce of air traffic controllers, 

inspectors, and technicians. 

www.gao.gov/cgi-bin/getrpt?GAO-07-636T. 

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gerald L. 

Dillingham, Ph.D., at (202) 512-2834 or 

dillinghamg@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

I appreciate the opportunity to testify before you today as you consider 

the reauthorization of the Federal Aviation Administration (FAA). 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. Already, with the increasing demand for air travel, flight

arrival delays have increased; such delays are nearing the record levels of

2000, a year in which one in four flights reached its destination behind 

schedule. The system is also expected to absorb a variety of different 

types of aircraft in the near future, ranging from the jumbo Airbus A380—

which can hold more than 500 passengers—to very light jets—which may 

greatly increase the number of aircraft in the sky while transporting six or 

fewer passengers on any given flight. The consensus is that the current 

aviation system cannot be expanded to meet this projected growth. 

In 2003, recognizing the need for system transformation, Congress 

authorized the creation of the Joint Planning and Development Office 

(JPDO), housed within FAA but involving several federal partner 

agencies,1

 to conceptualize and plan for the Next Generation Air 

Transportation System (NextGen). NextGen is envisioned as a major 

redesign of the air transportation system that will move from largely 

ground-based radars to precision satellite-based navigation and includes 

digital, networked communications; an integrated weather system; 

layered, adaptive security; and more. The reauthorization of FAA and the 

Airport and Airway Trust Fund provides a unique opportunity to examine 

how the agency is managing the operation and safety of the current air 

traffic control system as it prepares to implement NextGen. My testimony 

today focuses on these questions: (1) What progress is FAA making in 

implementing initiatives that could provide a solid foundation for 

NextGen? (2) What are the key issues that need to be addressed to help 

ensure a successful transition to NextGen? and (3) What key safety areas 

 1

JPDO was authorized by the Vision 100—Century of Aviation Reauthorization Act (Pub. L.

No. 108-176), which requires the office to operate in conjunction with multiple government

agencies, including the Departments of Transportation, Commerce, Defense, and 

Homeland Security; FAA; the National Aeronautics and Space Administration (NASA); and 

the White House Office of Science and Technology Policy. JPDO also involves industry and 

other stakeholders through the Next Generation Air Transportation System Institute. 

Page 1 GAO-07-636T 
need to be addressed for the continued safe operation of the current and 

future air transportation system? My statement is based on our recent 

reports as well as ongoing work for this subcommittee assessing FAA’s 

performance metrics for its acquisitions, runway safety, and safety issues 

concerning the operation of unmanned aircraft systems in the national 

airspace. We conducted this work in accordance with generally accepted 

government auditing standards. 

In summary 

• Over the past few years, FAA has made significant progress in moving to 

more businesslike and cost effective operations and modernizing the air 

traffic control system, which should better position the agency for the 

complex implementation of NextGen. However, further work remains to 

fully address past problems in the modernization program. FAA has 

improved its financial management, including implementing a new cost 

accounting system and developing a cost allocation methodology; 

however, it is not yet clear if the cost allocation methodology is 

sufficiently valid and reliable to derive the administration’s proposed new 

cost-based funding for FAA. FAA has also sought to improve its financial 

management with efforts to control and reduce costs. For example, FAA 

plans to produce cost savings through outsourcing such as with its 

planned contracting out of new surveillance technology, and through 

facility consolidations. In addition to improvements in financial 

management, FAA has improved its acquisition management, which will 

be critical to a successful transition to NextGen. For example, FAA has 

begun reviewing its major systems acquisitions and has established 

guidance for using a project management technique known as Earned 

Value Management2

 in its acquisition management system, although 

institutionalizing these improvements will continue to be a challenge for 

FAA. FAA has also established performance measures and targets for its 

critical acquisitions. While the acquisition and deployment of NextGen 

technology are key issues facing the agency, it will be critical that FAA 

continue to maintain existing systems and phase out existing systems 

using a risk-based approach. And, although FAA has initiated numerous 

financial, management, and acquisition process improvements, the agency 

must work to institutionalize these changes while at the same time finding

new leadership—due to losses of key leaders at FAA and its Air Traffic 

 2

Earned Value Management combines measurements of technical, schedule, and cost 

performance with the intent of providing an early warning of problems while there is time 

for corrective action. 

Page 2 GAO-07-636T 
Organization (ATO)—that can continue to enforce an agencywide 

commitment to change and continuous improvement. 

• As FAA begins implementing NextGen, key issues remain that will need to 

be addressed, such as coordinating with JPDO, funding for NextGenrelated programs, and ensuring that FAA has both the technical and

contract management expertise that will be required to oversee this 

complex undertaking. FAA has become steadily more focused on NextGen 

over the past few years and is expanding and revamping its Operational 

Evolution Plan—renamed the Operational Evolution Partnership—to 

integrate with JPDO activities and become its implementation plan for 

NextGen, including details of required technologies, procedures, and 

resources. This is a step in the right direction. JPDO recently reported that

the total cost for NextGen infrastructure may range between $15 billion 

and $22 billion. The agency also noted that it expects a corresponding cost 

to system users, who will have to equip themselves with the advanced 

avionics necessary to realize the full benefits of some NextGen 

technologies, in the range of $14 billion to $20 billion. Another transition 

challenge for FAA and JPDO is to address questions about which entities

will fund and conduct some of the necessary research, development, and

demonstration projects that will be key to achieving certain NextGen 

capabilities and keeping the development of new systems on schedule. We 

have also recommended that FAA examine its strengths and weaknesses 

with regard to the technical and contract management expertise that will 

be needed for NextGen implementation. In response to our 

recommendation, FAA is considering convening a blue ribbon panel to 

study the issue and make recommendations to the agency. We believe that 

such a panel could help FAA begin to address this challenge.

• To deal with current and future safety issues, it will be important for FAA 

to also address several issues as it works to ensure that its safety 

programs are aligned to meet future demand. First, ground safety is an 

area of increasing concern because air traffic is forecast to grow

substantially during the coming decades, which will result in more aircraft 

and increased congestion and safety hazards in the complex airport 

environment. FAA needs to keep on schedule to deploy NextGen 

technology that warns controllers of imminent ground collisions and 

implement recommendations by the National Transportation Safety Board 

(NTSB) (which continues to place runway incursions on its Most Wanted 

Transportation Safety Improvements list). Second, FAA needs to establish 

an appropriate regulatory approach for some current airspace users, such 

as air ambulances, and new users such as the emerging space tourism 

industry. For example, we suggested that Congress should consider 

Page 3 GAO-07-636T 
revisiting FAA’s dual role for ensuring safety and promoting the emerging

space tourism industry and decide whether the elimination of FAA’s 

promotional role is necessary to alleviate a potential conflict of interest. 

Third, to maintain and expand the margin of safety—especially if 

substantial growth in air traffic materializes—FAA cannot rely on its 

current oversight approach, which focuses on labor-intensive inspections. 

Accurate, complete safety data would provide FAA with an early warning 

of hazards that can lead to accidents. We have recommended that FAA 

improve the accuracy and completeness of its safety data and its analysis 

of that data. FAA is in the early planning stages of addressing our 

recommendations, but more work remains. Fourth, FAA’s ability to ensure 

safety in NextGen will be affected by its ability to manage its human 

capital, including safety inspectors, engineers, technicians, and air traffic 

controllers. FAA faces challenges in improving its staffing processes, 

addressing human factors issues associated with significant increases in 

the automation of air traffic management, replacing the large percentage

of staff expected to retire, and addressing the contentious relations with 

its employee unions, which have the potential to hinder the agency’s 

ability to retain and recruit skilled staff. 

Although the NextGen effort involves multiple government agencies and 

the private sector, FAA will be the entity largely responsible for 

implementing the policies and systems necessary for NextGen while safely 

operating the current air traffic control system 24 hours a day, 7 days a 

week. This means that FAA will be responsible for keeping a number of 

large NextGen systems acquisitions on budget and on schedule as it 

manages and sustains the current system. Historically, FAA has had 

serious weaknesses in its financial management as well as chronic cost 

and schedule difficulties with air traffic control system acquisitions. 

During the past few years, FAA has made significant progress in 

implementing businesslike processes and procedures for financial 

management, acquisitions, and organization structures. The 

implementation of these types of initiatives has improved FAA’s 

management of the current system and should better position the agency 

to manage the enormously complex transition to NextGen. However, 

further work remains to fully address past problems and institutionalize 

these changes throughout the agency, especially given the changing 

leadership within both FAA and its ATO. 

Improved, 

Businesslike 

Operations Should 

Better Position FAA 

to Implement and 

Manage NextGen, but 

Further Work 

Remains 

Page 4 GAO-07-636T 
Sound financial management, including sound cost accounting and cost 

allocation systems, is important for the current operation of FAA and lays 

the foundation for the transformation to NextGen and proposed changes 

to the agency’s funding system laid out in the administration’s 

reauthorization proposal. In 1999, we placed FAA on our high-risk list for 

its financial management practices, 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 Congress. In 2005, we removed FAA’s financial management 

from our high-risk list because the agency had made significant progress, 

including implementing a new financial management system called Delphi3

and receiving unqualified opinions from auditors on its annual financial

statements for fiscal years 2001 through 2005. Nonetheless, external 

auditors issued a qualified opinion on FAA’s fiscal year 2006 financial 

statement and repeated a material internal control weakness that was 

reported in 2005. The concerns that led to the qualified opinion stemmed 

from FAA’s inability to support the accuracy and completeness of its 

construction-in-progress account, reported in the financial statement as 

$4.7 billion. FAA is working to address the problem. 

As part of its improved financial management, FAA has developed a cost 

accounting system and a cost allocation methodology, which are critical to

the successful implementation of the new cost-based funding system 

included in the administration’s reauthorization proposal.4 The proposal 

would change FAA’s financing system from one based mainly on excise 

taxes to one that provides a better link between revenues and the costs 

that users of the national airspace system impose on the system, according 

to the agency. FAA also says the proposal would improve revenue 

adequacy, equity, and efficiency.

5

 While the reauthorization proposal may 

FAA Has Improved Its 

Financial Management, 

although the Soundness of 

Its Cost Allocation 

Methodology is Uncertain 

 3

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. 

4

The reauthorization proposal includes, among other things, introducing direct user 

charges for commercial aircraft based on the cost of the air traffic services they receive, 

eliminating many current taxes, substantially increasing the fuel taxes general aviation 

operators pay, charging both commercial and general aviation a fuel tax to pay for airport 

capital improvements, and linking the contribution to FAA’s budget from the General Fund

of the U.S. Treasury to the public benefits FAA provides. Under the administration’s

proposal, these changes would begin in fiscal year 2009. 

5

Revenue adequacy refers to the ability of FAA’s funding system to produce revenues 

commensurate with workload changes over time. Equity refers to the equitable distribution

of costs to aviation users. Efficiency refers to incentives that encourage the efficient use of 

the national airspace system. 

Page 5 GAO-07-636T 
address some of the equity and efficiency concerns that FAA has raised 

with the current funding structure, we have reported that it is not yet clear

if FAA has developed a sound cost allocation methodology from which to 

derive the new cost-based funding.6 We are reviewing FAA’s cost 

allocation methodology and expect to issue a report later this year. 

FAA has also improved its financial management through increased efforts 

to achieve cost savings and cost avoidance throughout the agency. For 

example, FAA is outsourcing flight service stations and estimates a $2.2 

billion savings over 12 years. Similarly, FAA is seeking savings through 

outsourcing its planned nationwide deployment of Automatic Dependent

Surveillance-Broadcast (ADS-B), a critical element of NextGen. FAA is 

planning to implement ADS-B through a performance-based contract in 

which FAA will pay “subscription” charges for the ADS-B services and the 

vendor will be responsible for building and maintaining the infrastructure. 

(FAA also reports that the ADS-B rollout will allow the agency to remove 

50 percent of its current secondary radars, saving money in the program’s 

baseline. The remaining radars will serve as a back-up system to ADS-B.) 

As for consolidating facilities, FAA is currently restructuring ATO’s 

administrative service areas from nine offices to three offices, which FAA 

estimates will save up to $460 million over 10 years. 

We previously reported that FAA should pursue further cost control 

options, such as exploring additional opportunities for contracting out 

services and consolidating facilities. However, we recognize that FAA 

faces challenges with consolidating facilities, an action that can be 

politically sensitive. In recognition of this sensitivity, the administration’s 

reauthorization proposal presents a “BRAC-like” initiative in which the 

Secretary of Transportation would be authorized to establish an 

independent, five-member commission, known as the Realignment and 

Consolidation of Aviation Facilities and Services Commission, to 

independently analyze FAA’s recommendations to realign facilities or 

services. The commission would then send its own recommendations to

the President and Congress. In the past, we noted the importance of 

potential cost savings through facility consolidations; however, it must 

also be noted that any such consolidations must be handled through a 

process that solicits and considers stakeholder input throughout and fully 

 6

GAO, Federal Aviation Administration: Observations on Selected Changes to FAA’s 

Funding and Budget Structure in the Administration’s Reauthorization Proposal, 

GAO-07-625T (Washington, D.C.: Mar. 21, 2007). 

Page 6 GAO-07-636T 
considers the safety implications of both proposed facility closures and 

consolidations. 

A successful transition to NextGen will depend, to a great extent, on FAA’s 

ability to manage the acquisition and integration of multiple NextGen 

systems. Since 1995, we have designated FAA’s air traffic control 

modernization program as high risk because of systemic management and 

acquisition problems. However, in recent years, FAA has made significant 

progress toward improving its acquisition management. Realization of 

NextGen goals could be severely compromised if FAA’s improved 

processes are not institutionalized and carried over into the 

implementation of NextGen, which is an even more complex and 

ambitious undertaking than past modernization efforts. 

To its credit, FAA has taken a number of actions to improve its acquisition 

management. By creating ATO in 2003 and appointing a chief operating 

officer (COO) to head ATO, FAA established a new management structure 

and adopted more leading practices of private sector businesses to 

address the cost, schedule, and performance shortfalls that have plagued 

air traffic control acquisitions. ATO has worked to create a flatter 

organization, with fewer management layers, and has reported reducing 

executive staffing by 20 percent and total management by 16 percent. In 

addition, FAA uses a performance management system to hold managers 

responsible for the success of ATO. More specifically, to better manage its 

acquisitions and address problems we have identified,7

 FAA has 

Progress Has Been Made 

but Further Work Remains 

to Institutionalize Recent 

Improvements in 

Management and 

Acquisition Processes 

• undertaken human capital initiatives to improve its acquisition workforce 

culture and build towards a results-oriented, high-performing organization; 

• developed and applied a process improvement model to assess the 

maturity of its software and systems acquisitions capabilities resulting in, 

among other things, enhanced productivity and greater ability to predict 

schedules and resources; and 

 7

GAO, Federal Aviation Administration: Stronger Architecture Program Needed to Guide 

Systems Modernization Efforts, GAO-05-266 (Washington, D.C.: Apr. 29, 2005); 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 

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). 

Page 7 GAO-07-636T 
• reported that it has established a policy and guidance on using Earned 

Value Management (EVM) in its acquisition management system and that

19 of its major programs are currently using EVM.8

Institutionalizing these improvements throughout the agency will continue 

to be a challenge for FAA. For example, the agency has yet to implement 

its cost-estimating methodology, although, according to the agency, it has 

provided training on the methodology to employees. Furthermore, FAA 

has not established a policy to require use of its process improvement 

model on all major acquisitions for the national airspace system. Until the 

agency fully addresses these residual issues, it will continue to risk 

program management problems affecting cost, schedule, and performance. 

With a multibillion dollar acquisition budget, addressing these issues is as 

important as ever. 

In another effort to improve agency processes, FAA expanded its use of 

performance measures to track its performance. In its fiscal year 2007 

portfolio of goals, FAA lists 30 performance measures. As part of our 

ongoing work,9

 we are currently reviewing how FAA selects and measures 

two of these goals in particular: critical acquisitions on budget and critical 

acquisitions on schedule.10 FAA has reported exceeding targets for both of 

these measures for the past 3 fiscal years. FAA’s targets for fiscal year 

2006 were to have 85 percent of critical acquisition programs within 10 

percent of budget, as reflected in its capital investment plan, and to have 

85 percent of critical acquisition programs on schedule. For fiscal year 

2006, FAA reported that its critical acquisitions were 100 percent on 

budget and over 97 percent on schedule. This represents a major 

turnaround in a program that remains on our high-risk list. 

It will be important, as FAA begins to implement NextGen systems, to 

maintain critical acquisitions on schedule and on budget in order to meet 

the goal of transitioning to NextGen by 2025 and to prevent escalation of 

the costs of NextGen. Our ongoing work is examining FAA’s performance 

FAA’s Methodology for 

Tracking and Reporting 

Performance on Critical 

Acquisitions is Subject of 

Ongoing Work for this 

Subcommittee 

 8

EVM is a project management technique that combines measurements of technical 

performance, schedule performance, and cost performance with the intent of providing an

early warning of problems while there is time for corrective action. 

9

This work is in response to a joint request from this subcommittee and the Subcommittee 

on Aviation of the Senate Commerce, Science, and Transportation Committee. 

10ATO has the lead responsibility for both of these goals. 

Page 8 GAO-07-636T 
and reporting on its critical acquisitions, including applicable performance 

measures. We are also exploring FAA’s use of the most recently approved

cost and schedule baselines, which may have changed significantly since 

the start of an acquisition, to measure program performance. Rebaselining 

acquisitions is an accepted practice and there are valid reasons for doing 

so, such as when changes in a program’s requirements fundamentally alter 

the acquisition and make the originally approved schedule unrealistic. 

Because rebaselining resets the cost and schedule variances to zero, we 

want to verify that FAA’s practice is not masking acquisition performance 

problems. We expect to issue a report on these issues later this year. 

While the acquisition and deployment of NextGen technology are key 

issues facing the agency, it will be critical for FAA to continue to maintain 

existing systems and phase out existing systems using a risk-based 

approach. The adequacy of FAA’s maintenance of existing systems was 

raised following a power outage and equipment failures in Southern 

California that caused hundreds of flight delays during the summer of 

2006. Investigations by FAA and the Department of Transportation 

Inspector General into these incidents identified a number of underlying 

issues, including the age and condition of equipment. Nationwide, the 

number of scheduled11 and unscheduled outages of air traffic control 

equipment and ancillary support systems has been increasing (see fig. 1). 

Increases in the number of unscheduled outages indicate that systems are 

failing more frequently. 

Although FAA Is Now 

Focusing on NextGen, It 

Must Continue to Manage 

and Sustain the Current 

System 

 11Scheduled outages occur for scheduled maintenance. 

Page 9 GAO-07-636T 
Figure 1: Number of Scheduled and Unscheduled Equipment Outages, Calendar

Years 2001-2006 

In addition, the duration of unscheduled equipment outages has also been 

increasing in recent years from an average of about 21 hours in 2001 to 

about 40 hours in 2006 (see fig. 2), which may indicate, in part, that 

maintenance and troubleshooting activities are requiring more effort and

longer periods of time. However, according to FAA, it considers user 

impact and resource efficiency when planning and responding to 

equipment outages. As a result, according to the agency, although some 

outages will have longer restoration times, the agency believes they do not 

adversely affect air traffic control operations. It will be critical for FAA to 

monitor and address equipment outages to ensure the safety and efficiency 

of the legacy systems, since they will be the core of the national airspace 

system for a number of years and, in some cases, will become part of 

NextGen. 

Page 10 GAO-07-636T 
Figure 2: Average Duration of Scheduled and Unscheduled Equipment Outages, 

Calendar Years 2001-2006 

While FAA has implemented many positive changes to its management and 

business processes in recent years, it currently faces the loss of key 

leaders. We 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.12 However, the agency will 

have lost two of its significant agents for change—the FAA administrator 

and the COO, who heads ATO—by the end of September 2007. The 

administrator’s term ends in September 2007; the COO left in February 

Institutionalizing Change 

Within FAA Will Require 

Continued Strong 

Leadership

 12GAO, 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). 

Page 11 GAO-07-636T 
2007, after serving 3 years. This situation is exacerbated by the fact that 

the current director of JPDO is new, having assumed that position in 

August 2006. For the financial, management, and acquisition 

improvements to further permeate the agency, and thus provide a firm 

foundation upon which to implement NextGen, FAA’s new leaders will 

need to demonstrate the same commitment to improvement as the 

outgoing leaders. This continued commitment to change is critical over the 

next few years, as foundational NextGen systems begin to be

implemented. Because this is a critical time for FAA, the agency needs to 

move expeditiously to find a new COO for ATO. It could be useful to have 

a COO whose tenure lasted the length of the current statutory 5-year term. 

This would allow for stable leadership at ATO during this critical 

transition from planning to early implementation of NextGen. 

Several key issues will need to be addressed to help ensure a successful 

transition to NextGen as FAA moves from the conceptualization and 

planning of NextGen, handled largely through the interagency 

collaborative efforts of FAA’s JPDO, to the implementation of NextGen 

technologies and systems. Those issues include (1) continuing to focus on 

the coordination between ATO and JPDO and stakeholder involvement; 

(2) determining which entities will fund the necessary research, 

development, and demonstration projects for NextGen; and (3) 

determining whether FAA has the technical and contract management 

expertise necessary to oversee the complex implementation of NextGen. 

FAA has become steadily more focused on NextGen implementation, but 

some key stakeholders, such as FAA technicians who will maintain 

NextGen systems, are not currently involved. One of the most important 

changes FAA has made with regard to NextGen is the expansion and 

revamping of its Operational Evolution Plan (OEP)—renamed the 

Operational Evolution Partnership—to become FAA’s implementation 

plan for NextGen. This is a step in the right direction. The OEP is being 

expanded to apply to all of FAA and is intended to become a 

comprehensive description of how the agency will implement NextGen, 

including the required technologies, procedures, and resources.13 (Figure 3 

shows the OEP framework.) An ATO official told us that the new OEP is 

Key Issues Remain in 

the Transition From 

Planning to 

Implementing 

NextGen 

FAA Has Improved 

Coordination with JPDO, 

but Some Key Stakeholder 

Involvement is Absent 

 13Prior to expansion of the OEP, the document centered on plans for increasing capacity 

and efficiency at 35 major airports. 

Page 12 GAO-07-636T 
expected to be consistent with JPDO’s key planning documents and 

partner agency budget guidance.14 According to FAA, the OEP will allow it 

to demonstrate appropriate budget control and linkage to NextGen plans 

and will force FAA’s research and development to be relevant to 

NextGen’s requirements. According to FAA documents, the agency plans 

to publish the new OEP in June 2007.

 14The planning documents include the Concept of Operations, Enterprise Architecture, and 

Integrated Work Plan. 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. The Enterprise

Architecture follows from the Concept of Operations and describes the system in more 

detail. It will be used to integrate planning efforts and drive partner agency guidance. The 

Integrated Work Plan lays out a timeline for deploying and integrating NextGen systems. 

Page 13 GAO-07-636T 
Figure 3: New OEP Framework 

Source: JPDO. 

Note: The concentric rings indicate the nature of initiative development from the outer ring (NextGen 

strategic initiatives), in which new programs and concepts are analyzed and demonstrated; to the 

second ring, where decisions are made regarding safety, operating policy, performance standards, 

and certification requirements; to the third ring (technical development), where concepts are 

prototyped and investment analysis decisions are made. The progression through the rings is not 

necessarily linear, and a program may be in more than one ring at a time. Data communications, for 

example, is in the technical development ring and also in the middle ring as policy and rulemaking is

considered. The core is divided into three sections, which indicate the FAA offices that implement the 

final NextGen program. 

In an effort to further align FAA’s efforts with JPDO’s plans for NextGen, 

FAA has created a NextGen Review Board to oversee the OEP. This 

review board will be co-chaired by JPDO’s director and ATO’s vice 

president of operations planning services. Initiatives, such as concept 

demonstrations or research proposed for inclusion in the OEP will now 

need to go through the review board for approval. Initiatives are to be 

assessed for their relation to NextGen requirements, concept maturity, and 

risk. An ATO official told us that the new OEP process should also help 

identify some smaller programs that might be inconsistent with NextGen 

Page 14 GAO-07-636T 
and could be discontinued and will assist in project integration. 

Additionally, as a further step towards integrating ATO and JPDO, the 

administration’s reauthorization proposal calls for the JPDO director to be

a voting member of FAA’s Joint Resources Council and ATO’s Executive 

Council. 

Some stakeholders, such as current air traffic controllers and technicians, 

will play critical roles in NextGen, and their involvement in planning for 

and deploying the new technology will be important to the success of 

NextGen. In November 2006, we reported that air traffic controllers were 

not involved in the NextGen planning effort.15 Controllers are beginning to

become involved as they are now represented on a key planning body.

However, the technicians do not participate in NextGen efforts. Input from 

current air traffic controllers who have recent experience controlling 

aircraft and current technicians who will maintain the new equipment is 

important in considering human factors and safety issues. Our work on 

past air traffic control modernization projects has shown that a lack of 

stakeholder involvement early and throughout a project can lead to cost 

increases and delays. 

JPDO recently reported some estimated costs for NextGen, including 

specifics on some early NextGen programs.16 JPDO believes the total 

federal cost for NextGen infrastructure through 2025 will range between 

$15 billion and $22 billion. JPDO also reported a preliminary estimate of 

the corresponding cost to system users to equip themselves with the 

advanced avionics that are necessary to realize the full benefits of some 

NextGen technologies may range from $14 billion to $20 billion. JPDO, in 

its recently released 2006 Progress Report, noted that this range for 

avionics costs reflects uncertainty about equipage costs for individual 

aircraft, the number of very light jets that will operate in high-performance 

airspace, and the amount of out-of-service time required for installation. 

In its capital investment plan for fiscal years 2008-2012, FAA includes 

estimated expenditures for 11 line items that are considered NextGen 

FAA Has Begun Budgeting 

for NextGen Programs, 

although Questions 

Remain About the Funding 

of NextGen Research and 

Development 

 15GAO, 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). 

16JPDO, Making the NextGen Vision a Reality: 2006 Progress Report to the Next 

Generation Air Transportation System Integrated Plan (Washington, D.C.: March 2007). 

Page 15 GAO-07-636T 
capital programs.17 The total 5-year estimated expenditures for these 

programs is $4.3 billion. In fiscal year 2008, only 6 of the line items are 

funded for a total of roughly $174 million; funding for the remaining 5 

programs would begin with the fiscal year 2009 budget. According to FAA, 

in addition to capital spending for NextGen, the agency will spend an 

estimated $300 million on NextGen-related research and development 

from fiscal years 2008 through 2012. The administration’s budget for fiscal

year 2008 for FAA includes a total of $17.8 million to support the activities 

of JPDO. 

The administration’s reauthorization proposal would allow for $5 billion in 

Treasury debt financing authority for NextGen-related capital needs for 

fiscal years 2013-2017. Projects that might be appropriate for such 

financing include safety-critical and mission-essential software and 

systems that controllers and traffic flow managers will use to support 

certain aircraft operations in the NextGen system, according to the 

proposal. However, the proposed borrowing authority seems unlikely to

have a major impact on FAA’s ability to pay for capital investment 

associated with moving to NextGen because the payback period is 

relatively short. With a maximum payback period of 5 years, the advantage 

of matching the time period for paying for a capital investment with the 

time period in which the benefits of that investment are realized is unlikely 

to be achieved. Therefore, the advantage of borrowing versus receiving 

appropriations for a period of up to 5 years is unclear. 

While FAA and JPDO have begun to release estimates for FAA’s NextGen 

investment portfolio, questions remain over which entities will fund and 

conduct some of the necessary research, development, and demonstration 

projects that will be key to achieving certain NextGen capabilities and 

keeping the development of new systems on schedule. In the past, a 

significant portion of aeronautics research and development, including 

intermediate technology development, has been performed by NASA. 

However, NASA’s aeronautics research budget and proposed funding 

shows a 30-percent decline, in constant 2005 dollars, from fiscal year 2005

 17FAA has six capital investment programs that it considers transformational NextGen

programs slated to receive funding in fiscal year 2008: ADS-B nationwide implementation, 

System Wide Information Management (SWIM), NextGen Data Communications, NextGen 

Network Enabled Weather, National Airspace System Voice Switch, and NextGen 

Technology Demonstration. In addition, five other programs are slated to begin funding in

2009: NextGen System Development, NextGen High Altitude Trajectory Based Operations, 

NextGen High Density Airports, NextGen Networked Facilities, and NextGen Cross-Cutting 

Infrastructure. 

Page 16 GAO-07-636T 
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 and JPDO face the challenge of determining 

the nature and scope of the research and technology development 

necessary to begin the transition to NextGen. They also have to identify 

the entities that can conduct that research and development and the 

source of funding to support it. 

In the past, a lack of expertise contributed to weaknesses in FAA’s 

management of air traffic control modernization efforts, and industry 

experts with whom we spoke questioned whether FAA will have the 

technical expertise needed to implement NextGen. In addition to technical 

expertise, FAA will need contract management expertise to oversee the 

systems acquisitions and integration involved in NextGen. In November 

2006, 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.18 In response to 

our recommendation, FAA is considering convening a blue ribbon panel to 

study the issue and make recommendations to the agency about how best 

to 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. 

As FAA works to develop the policies and systems to transition to 

NextGen, it will be important for the agency to also ensure that its safety 

programs are aligned with these changes. While recent safety trends are 

generally positive, improving upon those trends will be necessary simply 

to maintain the same level of safety if air traffic doubles or triples during 

the coming decades. Moreover, certain recent trends—such as the 

commercial air carrier fatal accident rate—may warrant immediate 

attention. Although this accident rate has steadily declined in recent years, 

FAA did not meet its performance target in this area for fiscal year 2006 

due to four accidents, including two accidents on runway and ramp areas 

and one runway overrun. FAA’s ability to deal with current safety issues 

and the transition to NextGen would be enhanced by (1) acquiring and 

FAA Needs to Explore 

whether It Has the 

Technical and Contract 

Management Expertise 

Necessary to Implement 

NextGen 

Aviation Safety 

Record Remains High, 

but Some Areas Need 

to be Addressed for 

Current and Future 

Safety as FAA 

Transitions to 

NextGen 

 18GAO-07-25. 

Page 17 GAO-07-636T 
deploying new safety enhancing technologies; (2) establishing appropriate 

regulatory approaches for current airspace users and emerging sectors; (3) 

improving the accuracy and completeness of its safety data; and (4) 

addressing human capital issues associated with hiring, training, and 

deploying its skilled workforce of air traffic controllers, safety inspectors, 

engineers, and technicians. 

Safety in the airport environment is an area of increasing concern because

air traffic is forecast to grow substantially during the coming decades. 

More aircraft and congestion at the airport will make maintaining safety 

even more critical, as the airport environment involves enormously 

complex interactions between air traffic controllers and the people who 

operate on the airport surface, including pilots, mechanics, maintenance 

technicians, and airport employees. FAA’s efforts to improve safety in the

airport environment include deploying NextGen technology, such as the 

Airport Surface Detection Equipment Model X (ASDE-X),19 evaluating 

runway status lights, and testing a low-cost surface surveillance system. 

FAA pursues new technologies to improve runway safety because the 

incursion rate at U.S. airports was higher in fiscal year 2006 than it was in 

fiscal year 2002.20 (Incursions are potential collisions on the ground.) 

However, the deployment of new technology has faced schedule delays. 

FAA originally planned to deploy ASDE-X at 35 major airports by 2007, but 

the technology is operational at only 8 airports to date, and deployment at 

the remaining 27 airports is not scheduled to be complete until 2011 (see 

fig. 4). At the same time, FAA is evaluating the performance of runway 

status lights, another technology aimed at preventing runway incursions 

by warning pilots when a runway is unsafe for crossing or departure. FAA 

expects to decide this year whether to deploy the system at 35 large 

airports at an estimated cost of $300 million. Although the 35 airports that 

are to receive ASDE-X—and may receive runway status lights—handle 

about 70 percent of enplanements in the United States, they represent only 

about 6 percent of the country’s 573 commercial service airports. 

Therefore, FAA is also evaluating a low-cost surface surveillance system 

that could meet the needs of small- to medium-sized airports. The system 

FAA Faces Challenges in 

Implementing Advanced 

Technology and Other 

Measures to Improve 

Safety in the Airport 

Environment 

 19ASDE-X is the upgraded digitally-based technology that enables air traffic controllers to

detect potential runway conflicts by providing detailed coverage of movement on runways

and taxiways. ASDE-X warns controllers of potential runway incursions. 

20The rate was 5.4 incursions per 1 million tower operations in fiscal year 2006 and 5.2

incursions per 1 million tower operations in fiscal year 2002. 

Page 18 GAO-07-636T 
is designed to alert controllers of potential conflicts and hazards and 

provide direct warnings to pilots entering or approaching active runways.

Figure 4: Airport Surface Detection Equipment Model X (ASDE-X) Deployment Sites 

The number of serious incursions—incidents where a collision was 

narrowly avoided—rose from 28 in fiscal year 2004 to 31 in fiscal year 

2006. As a result, NTSB continues to place runway incursions on its Most 

Wanted Transportation Safety Improvements list. FAA has not yet 

implemented any of the six runway incursion prevention 

recommendations that NTSB made in 2000. The recommendations include 

such things as implementing at commercial airports ground movement 

safety systems that provide a direct warning to flight crews of possible 

Page 19 GAO-07-636T 
incursions and changing air traffic control procedures.21 According to 

NTSB, FAA has not completed its evaluation and implementation of 

technology to address the recommendation on safety systems, and the two 

agencies have not reached agreement on the recommendations to change

air traffic control procedures. 

FAA is also making efforts to prevent runway overruns, which occur when

aircraft pass the ends of runways during aborted takeoffs or while landing,

by the construction of runway safety areas or the installation of arresting 

material at the end of runways. In 2000, FAA established its Runway Safety

Area program to accelerate the construction of runway safety areas—

areas surrounding the runways designed to reduce the risk of damage to 

aircraft from overruns. Since 2005, commercial service airports have been 

required22 to bring their runway safety areas into compliance with FAA 

standards by 2015. According to FAA, as of January 2007, 70 percent of the 

1,020 runways at 573 commercial airports in the United States

substantially comply with runway safety area standards, up from 55 

percent in 2000. In fiscal year 2006, the Airport Improvement Program 

(AIP) awarded more than $240 million in grants for runway safety area 

improvement projects. FAA indicates that about $1.1 billion in AIP funds 

will be needed to complete the remainder. The administration’s budget 

request for FAA calls for $2.75 billion in AIP funds in fiscal year 2008, a 

substantial reduction from the $3.5 billion funding levels for fiscal years 

2006 and 2007. It will be important for FAA to consider these runway 

safety areas as it prioritizes AIP funds. FAA considers the installation of an 

Engineered Materials Arresting System (EMAS), a bed of crushable 

concrete designed to safely decelerate and stop overrunning aircraft, to be 

an acceptable alternative for meeting runway safety area standards. As of 

December 2006, EMAS was installed on 21 runways at 16 U.S. airports and 

had successfully stopped three aircraft from overrunning runways. We are 

conducting ongoing work for this subcommittee on runway and ramp 

safety and expect to issue our final report later this year. 

 21Recommended changes to air traffic control procedures include clarifying authorized 

runway crossings, increasing the situational awareness of the flight crews for arriving 

aircraft at night or in poor visibility conditions without relying on the controllers, and the

use of international landing clearance procedures and standard phraseology for airport 

surface operations. 

22Public Law 109-115. 

Page 20 GAO-07-636T 
Future air traffic is expected to include not only increases in the number 

of traditional airspace users, but new users as well. It will be important for 

FAA to establish the appropriate regulatory approach for current users 

and new users such as the emerging space tourism industry and unmanned 

aircraft systems. For example, we recently found that FAA’s current 

oversight approach for air ambulances was not geared to the unique 

operating characteristics and risks associated with that sector.

23 Further, 

in 2006, NTSB recommended, among other things, that FAA require that all 

air ambulance operators comply with Part 135 of Title 14 of the Code of 

Federal Regulations during all flights with medical personnel on board.24

Under FAA regulation, most air ambulances operate under rules specified 

in Part 135. However, pilots may operate under different standards, 

depending on whether they are carrying patients. Without patients or 

passengers on board, pilots may operate under rules specified in Part 91 of 

Title 14 of the Code of Federal Regulations. With patients on board, pilots 

are required to operate under Part 135 rules. Parts 91 and 135 flight rules 

differ significantly in two key areas—(1) weather and visibility minimums 

and (2) rest requirements—with Part 135 requirements being more 

stringent. 

FAA and Congress Should 

Address Regulatory

Approaches to Some 

Current Airspace Users 

and Emerging Sectors 

In many air ambulance trips, part of the trip may involve Part 135 rules, 

while another part may involve Part 91 rules. For example, scene response 

missions for air ambulance helicopters frequently have three legs—the 

flight en route to the accident scene, the transport of the patient to the 

hospital, and the reposition of the helicopter back to its base (see fig. 5). 

Only the leg during which patients or other passengers (medical crew 

members are not considered passengers) are on board must be flown 

under Part 135 flight rules. Of the 89 air ambulance accidents that we 

examined from 1998 through 2005, 64 took place during Part 91 flight and

the remaining 25 took place during Part 135 flight. However, because air 

ambulance flights without patients or passengers could be flown under 

Part 91 requirements, there may be more than twice as many flights taking 

place under Part 91 compared with Part 135. A better understanding of the 

trends in the air ambulance industry, including accident data, will be 

important in deciding if the current regulatory approach is appropriate or 

 23GAO, Aviation Safety: Improved Data Collection Needed for Effective Oversight of Air

Ambulance Industry, GAO-07-353 (Washington, D.C.: Feb. 21, 2007). 

24NTSB, Special Investigative Report on Emergency Medical Services Operations 

(Washington, D.C.: 2006). According to NTSB, as of December 21, 2006, this 

recommendation and others made in this report were still open. 

Page 21 GAO-07-636T 
if more fundamental changes, such as revising FAA regulations, need to be

made. 

Figure 5: Air Ambulance Scene Flight Response Legs

As another example, the need for a different regulatory approach for allcargo operations has been raised. According to FAA, from 1998 through 

2005, the accident rate for scheduled air cargo operators declined 

significantly but was still about 2.5 times higher than the accident rate for

scheduled passenger operators. The Congressional Research Service 

pointed out that the size of aircraft, the range of operations flown by allcargo operators, and the large growth in the all-cargo sector introduce 

unique risks to operators, airports, and the public that may call for 

revisiting the safety standards that apply to all-cargo operations.25

 25Congressional Research Service, Reauthorization of the Federal Aviation

Administration: Background and Issues for Congress (Washington, D.C.: Jan. 29, 2007).

Page 22 GAO-07-636T 
In recent work, we also raised issues concerning FAA’s regulation of the 

emerging space tourism industry.26 Specifically, we suggested that 

Congress should consider revisiting the granting of FAA’s dual mandate 

for ensuring safety and promoting space tourism and decide whether the 

elimination of FAA’s promotional role is necessary to alleviate a potential 

conflict. FAA licenses the operation of commercial space launches and 

launch sites. Historically, these launches carried commercial payloads and 

were unmanned. The prospect for commercial space tourism materialized 

in 2004, after the successful launches of SpaceShipOne raised the 

possibility of an emerging U.S. commercial space tourism industry that 

would make human space travel available to the public. Several companies 

are planning to start taking paying passengers on suborbital flights within 

the next few years and a number of commercial spaceports are being

planned. For example, Virgin Galactic intends to provide suborbital space 

flight from a planned spaceport in New Mexico starting in 2009. It plans to 

carry 3,000 passengers over 5 years, with 100 individuals having already 

paid the full fare of $200,000. Figure 6 shows current and planned 

spaceports. In 1984, the Commercial Space Launch Act gave DOT the 

authority to license and monitor the safety of commercial space launches 

and to promote the industry. It is important that FAA’s statutory 

responsibility to promote the commercial space launch industry does not 

interfere with its safety oversight of the industry as the space tourism 

sector develops. We have no evidence that FAA’s promotional activities, 

such as sponsoring an annual industry conference and publishing 

economic impact studies, have conflicted thus far with its safety 

regulatory role, but conflicts could occur as the industry matures. 

 26GAO, Commercial Space Launches: FAA Needs Continued Planning and Monitoring to 

Oversee the Safety of the Emerging Space Tourism Industry, GAO-07-16 (Washington,

D.C.: Oct. 20, 2006). 

Page 23 GAO-07-636T 
Figure 6: Federal Commercial Launch Sites and Existing and Proposed Spaceports in the United States, October 2006 

Wallops Flight Facility

Mid-Atlantic Regional Spaceport

Vandenberg AFB

White Sands Missile Range

Cape Canaveral Air Force Station

Kodiak Launch Complex

California Spaceport

Mojave Spaceport

Spaceport Washington

Wisconsin Spaceport

Blue Origin West Texas

Spaceport

Gulf Coast

Regional Spaceport South Texas Spaceport

Southwest Regional

Spaceport

Oklahoma Spaceport

Spaceport Alabama

Ronald Reagan 

Ballistic Missile Test Site

(Kwajalein Atoll, Marshall Islands)

Sources: FAA and GAO.

Federal launch site

Spaceport

Proposed spaceport

Cape Canaveral Spaceport

In addition, FAA faces the challenge of determining the circumstances 

under which it would regulate the safety of crew and space flight 

participants. In 2004, the Commercial Space Launch Amendments Act 

prohibited FAA from regulating crew and passenger safety before 2012, 

except in response to high-risk incidents, serious injuries, or fatalities. 

FAA has interpreted this limited authority as allowing it to regulate crew

safety in certain circumstances and has been proactive in proposing 

regulations concerning emergency training for crews and passengers. 

However, FAA has not developed safety indicators by which it would 

monitor the developing space tourism sector and determine when to step 

in and regulate human space flight. We have recommended that the agency 

be proactive about safety rather than respond only after a fatality or 

serious incident occurs by identifying and monitoring safety indicators 

that might trigger the need for regulation before 2012. Actions have not 

been taken on our recommendations. 

Page 24 GAO-07-636T 
Another emerging sector that poses regulatory issues is unmanned aircraft 

systems (UAS)

27 (see fig. 7), which are expected to be part of the mix of 

aircraft that will operate in NextGen. A small number of UASs are 

currently used by government agencies for a variety of purposes, such as

border security, search and rescue, firefighting, military training exercises, 

and other law enforcement and homeland security initiatives. Recent 

projections indicate that over 10,000 UASs could be in operation in the 

United States by 2015, but FAA believes that the number may be less. We 

have work ongoing for this subcommittee to assess issues such as the 

technological and regulatory issues that remain in order for UASs to be 

safely integrated in the national airspace system, the timeframes for 

completing such work, and the identification of entities that should take 

the lead in such work. We expect to issue a report later this year. 

Figure 7: U.S. Air Force’s Global Hawk UAS 

 27Unmanned aircraft systems do not carry a human operator; they are either programmed 

for autonomous flight (called a “drone”) or are flown remotely by a ground operator. 

Page 25 GAO-07-636T 
Our preliminary work, indicates that UASs pose unique safety challenges

and questions. For example, what standards should UASs meet to ensure 

that they detect, sense, and avoid other aircraft? What standards should be 

set for UAS safety and reliability? How should FAA classify UASs, which

can range in size from very small, hand launched systems to those similar 

in size to a large passenger aircraft? What pilot qualifications are needed 

for UAS operators? FAA has begun to answer such questions by reviewing 

its existing safety regulations developed for manned aircraft to determine 

how or whether they need to be modified to enable UASs to be safely 

integrated into the national airspace system. FAA expects this to be a 5- to 

10-year effort. In the meantime, FAA will continue its existing oversight 

approach and review each request to operate on a case-by-case basis. If 

FAA determines that a UAS can operate safely under specified conditions, 

the agency issues a certificate of authorization and the airspace is 

restricted during the period of operation.28 In fiscal year 2006, FAA 

processed 96 applications for certificates of authorization and issued 62 

certificates. FAA projects that it will receive over 400 applications in 2010.

The agency may have difficulty handling such an increase under its 

existing case-by-case process, which could serve as a de facto limit on the 

number of UASs operating in the next few years.

FAA Needs Improved Data 

and Analysis for Current 

Safety Oversight and for 

the Transition to NextGen 

FAA cannot rely on its current oversight approach, which focuses on 

labor-intensive inspections to maintain and expand the margin of safety, 

especially if substantial growth in air traffic materializes. FAA 

acknowledges this situation and sees the need to establish a safety 

information system that can provide an early warning of hazards that may 

lead to accidents and help the agency manage risk. However, our past 

work has found problems with the accuracy and completeness of FAA’s 

safety data. For example, FAA does not collect actual flight activity data

for general aviation operators, air taxis, or air ambulances. As a result, 

FAA lacks information to monitor the rate of accidents and determine the 

effectiveness of its oversight. We have recommended that FAA improve 

the accuracy and completeness of its safety data and evaluate this 

information to identify nationwide trends. FAA is in the early planning 

stages of addressing our recommendations, but more work remains. 

 28A certificate of authorization allows an operator to use defined airspace for a specified 

time (up to one year, in some cases) and includes special provisions unique to each

operation. For instance, a certificate may include a requirement to operate only under 

visual flight rules. 

Page 26 GAO-07-636T 
An important aspect of FAA’s safety oversight is the use of over 13,000

private individuals and organizations, known as designees, to leverage 

inspector resources. Designees act as representatives of the agency to 

conduct many safety certification activities, such as administering flight 

tests to pilots, inspecting repair work by maintenance facilities, and 

approving designs for aircraft parts. In reviewing FAA’s designee 

programs, we found that the agency’s oversight of designees was 

hampered, in part, by limited data on designees’ performance.29 FAA is in 

the early stages of addressing our recommendation to improve the 

consistency and completeness of designee information. FAA is also 

changing and expanding the designee programs by replacing certain 

designee programs with an organization designation authorization. By 

expanding the number and types of organizational designees, FAA’s role is 

being further transformed to monitoring the performance of organizations 

rather than overseeing the individuals who perform the certification 

activities. It will be important for FAA to have the data, evaluative 

processes, and a well-trained inspector staff to effectively monitor the new 

program to make sure that safety is not adversely affected. 

FAA is in the early stages of addressing some of these data issues as it 

begins planning a new system— Aviation Safety Information Analysis and 

Sharing System—that would provide access to large volumes of industry 

safety data. 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 successful completion of this planning effort will be 

critical to FAA’s ability to improve safety. In fiscal year 2008, FAA 

proposes budgeting $32 million for safety databases and computer 

systems. As FAA prioritizes the activities that it undertakes with these 

funds, it will be important to continue addressing these critical data 

limitations. 

In addition, FAA is shifting to a data-driven, risk-based approach to 

maintaining the agency’s approximately 40,000 pieces of air traffic control

equipment, but it has not yet determined its new data needs. FAA is in the 

very early planning stages of a 10-year or longer effort to switch to this 

new approach, termed reliability centered maintenance (RCM), which 

private industry and other federal agencies, such as the Department of 

Defense (DOD) and NASA, use to maintain equipment. FAA expects the 

 29GAO, Aviation Safety: FAA Needs to Strengthen the Management of Its Designees 

Programs, GAO-05-40 (Washington, D.C.: Oct. 8, 2004). 

Page 27 GAO-07-636T 
new approach to improve equipment performance. However, we reported 

in November 2006 that FAA had not developed a plan to implement RCM, 

has not determined the data needs for RCM, and has not decided what 

training will be provided to staff.30 As the agency moves forward with this 

approach, it will be important for FAA to address the issues we identified 

as well as work with stakeholders, including FAA maintenance 

technicians, to ensure that decisions are not driven entirely by cost savings

and that the safety and efficiency of national airspace operations are not 

adversely affected. 

FAA Faces Human Capital 

Challenges 

FAA’s ability to ensure safety in NextGen will also be affected by its ability 

to manage its human capital, including air traffic controllers, safety 

inspectors, engineers, and technicians. FAA faces a challenge in managing 

human capital due to contentious relations with its labor unions. Fourteen

unions represent more than 34,000 of FAA’s 43,200 full time permanent 

employees. With the exception of two unions—the National Air Traffic 

Controllers Association (NATCA) and the Professional Airway System 

Specialists (PASS), which represent about 23,000 FAA employees—12 

unions have negotiated a contract or memorandum of agreement with 

FAA, according to agency officials. In April 2006, after reaching an impasse

in negotiations with NATCA, FAA used its authority31 to settle the impasse 

by imposing a contract on its air traffic controllers. After 4 years of 

contract negotiations with PASS, FAA reached an agreement in April 2006. 

The PASS membership, however, according to an FAA official, rejected 

this proposed contract. Subsequently, FAA filed a complaint with the 

Federal Labor Relations Authority claiming an unfair labor practice, 

according to the same FAA official. Until this complaint is adjudicated, the 

previous PASS contract remains in effect, according to the FAA official. 

Improving the contentious relationship between FAA and these unions 

could have positive effects on both the safety of FAA operations and the 

implementation of new air traffic management systems under NextGen. 

For example, delays in union approvals that may be needed to implement 

new systems could lead to delays in their implementation if labor 

management relations are acrimonious. In addition, the current contract 

situations have the potential to hinder FAA’s ability to retain and recruit 

skilled technical staff. 

 30GAO, FAA’s Proposed Plan for Implementing a Reliability Centered Maintenance 

Process for Air Traffic Control Equipment, GAO-07-81R (Washington, D.C.: Nov. 9, 2006). 

3149 U.S.C. §40122(a)(2). 

Page 28 GAO-07-636T 
FAA estimates it will lose about 72 percent of its air traffic controller 

workforce over the next 10 years. (See fig. 8.) To replace these controllers, 

FAA plans to hire 15,004 new controllers from fiscal years 2006 through 

2016, according to the agency’s March 2007 controller workforce plan. 

This recent hiring target is higher than FAA’s June 2006 hiring target32 to 

reflect recent data indicating that controllers are retiring at a faster rate 

than FAA anticipated. To meet these higher targets, FAA has expanded its 

hiring sources, which had focused on individuals with prior FAA or 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 DOD’s higher salaries than FAA’s entry-level salary.33

However, those new hires that lack prior air traffic control experience will

require more training to become certified controllers.34 Additionally, since 

it can take up to 3 to 5 years for a controller to become certified, within a

few years, a large portion of the controller workforce may be trainees and 

not fully certified. Based on FAA’s hiring and retirement projections, by 

2010, about 40 percent of the air traffic controller workforce will have 5 or

fewer years of experience. This high percentage of newly hired controllers 

will continue for a number of years, making it important for FAA to 

carefully balance the ratio of trainees to certified controllers at each air 

traffic control facility. 

 32In June 2006, FAA planned to hire 11,851 new air traffic controllers from 2006 through 

2015. FAA’s revised plan calls for hiring 13,641 new controllers for the same time period. 

33Under FAA’s recently implemented contract with air traffic controllers, most current 

controllers continue to receive their existing base salaries and benefits, while new

controllers are hired at lower wages. 

34Only newly hired controllers without any previous experience or specialized education

are required to complete 5 weeks of initial qualification training. 

Page 29 GAO-07-636T 
Figure 8: Estimated Controller Losses and Planned Hires, Fiscal Years 2006-2016

Note: Numbers for fiscal year 2006 represent actual losses and hires. 

In addition to the challenge of hiring and training new air traffic 

controllers, it will be important to deploy them in an optimal manner to 

reflect changing air traffic demands. FAA’s recent controller workforce 

plan includes facility-by-facility staffing standards for fiscal year 2007 

expressed as ranges.35 The staffing standards are intended to take into 

consideration facility-specific information, such as air traffic operations, 

productivity trends, expected retirements, and the number of controllers 

in training. These new standards are an improvement over FAA’s historical 

approach, which was to compute the number of controllers needed 

systemwide and negotiate the distribution of these totals to the facility 

level. However, FAA’s current staffing does not align with the new 

standards at about one-third of FAA’s 314 facilities—93 of which are 

 35For example, the staffing range at the Seattle-Tacoma International Airport is from 23 to

29 controllers. 

Page 30 GAO-07-636T 
currently overstaffed and 11 understaffed. This situation adds further 

complexity to the controller hiring, training, and staffing issues that FAA 

must carefully manage in the upcoming years. Furthermore, FAA has not 

factored into its staffing standards or its projected hiring targets the effect 

of new NextGen technologies on controller workload. The new 

technologies will result in a more automated system that, over time, is 

expected to change the role of controllers as well as productivity. In future

updates of the controller workforce plan, it will be important to begin to 

factor in this impact. 

Furthermore, having the right skill mix of safety inspectors and 

technicians and deploying them to make best use of their skills is 

especially important as new and developing sectors emerge. By 2010, 44

percent of FAA’s inspector workforce of about 3,865 will be eligible to 

retire. To begin addressing this situation, FAA has requested funding to 

hire an additional 87 inspectors in fiscal year 2008. In addition to 

maintaining a sufficient number of safety inspectors, it will be important to 

deploy them where they are most needed. However, FAA lacks a staffing 

model to accomplish this. The National Academy of Sciences recently 

completed a study that analyzed FAA’s staffing processes for safety 

inspectors and identified a number of issues that the agency needed to

address. For instance, the study indicated 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. In response to academy 

recommendations, FAA expects to develop a staffing model, but the 

agency does not have a specific time frame for initiating this effort. In 

addition, FAA lacks staffing standards for its approximately 6,100 

technicians, who are responsible for maintaining the agency’s air traffic 

control equipment. The development of staffing models for safety 

inspectors and technicians is important in the changing aviation 

environment and is critical to FAA’s ability to ensure that its safety 

programs and workload are aligned to meet the future demands for which 

NextGen is preparing. 

For further information about this testimony, please contact Dr. Gerald L. 

Dillingham at (202) 512-2834 or dillinghamg@gao.gov. Individuals making 

key contributions to this testimony include Faye Morrison, Teresa Spisak,

Nancy Boardman, Anne Dilger, Sharon Dyer, Kevin Egan, Colin Fallon, Jim 

Geibel, Bob Homan, Rosa Leung, Ed Menoche, Taylor Reeves, Richard 

Scott, Jeremy Sebest, Larry Thomas, Pam Vines, and Carrie Wilkes. 

Page 31 GAO-07-636T 
Page 32 GAO-07-636T 

Related GAO Products 

Federal Aviation Administration: Observations on Selected Changes to 

FAA’s Funding and Budget Structure in the Administration’s 

Reauthorization Proposal. GAO-07-625T. Washington, D.C.: March 21, 

2007. 

Aviation Safety: Improved Data Collection Needed for Effective 

Oversight of Air Ambulance Industry. GAO-07-353. Washington, D.C.: 

February 21, 2007. 

Federal Aviation Administration: Challenges Facing the Agency in 

Fiscal Year 2008 and Beyond. GAO-07-490T. February 14, 2007. 

Next Generation Air Transportation System: Progress and Challenges 

Associated with the Transformation of the National Airspace System. 

GAO-07-25. Washington, D.C.: November 13, 2006. 

FAA’s Proposed Plan for Implementing a Reliability Centered 

Maintenance Process for Air Traffic Control Equipment. GAO-07-81R. 

Washington, D.C.: November 9, 2006.

Aviation Safety: FAA’s Safety Efforts Generally Strong but Face 

Challenges. GAO-06-1091T. Washington, D.C.: September 20, 2006. 

Commercial Space Launches: FAA Needs Continued Planning and 

Monitoring to Oversee the Safety of the Emerging Space Tourism 

Industry. GAO-07-16. Washington, D.C.: September 20, 2006. 

Aviation Safety: FAA’s Safety Oversight System Is Effective but Could 

Benefit from Better Evaluation of Its Programs’ Performance. GAO-06-

266T. Washington, D.C.: November 17, 2005. 

National Airspace System: Transformation will Require Cultural 

Change, Balanced Funding Priorities, and Use of All Available 

Management Tools. GAO-06-154. Washington, D.C.: October 14, 2005. 

Aviation Safety: System Safety Approach Needs Further Integration into 

FAA’s Oversight of Airlines. GAO-05-726. Washington, D.C.: September 28, 

2005. 

Federal Aviation Administration: Stronger Architecture Program 

Needed to Guide Systems Modernization Efforts. GAO-05-266. 

Washington, D.C.: April 29, 2005. 
Aviation Safety: FAA Needs to Strengthen the Management of Its 

Designees Programs. GAO-05-40. Washington, D.C.: October 8, 2004. 

Air Traffic Control: System Management Capabilities Improved, but 

More can be Done to Institutionalize Improvements. GAO-04-901. 

Washington, D.C.: August 20, 2004. 

Information Technology: FAA Has Many Investment Management 

Capabilities in Place, but More Oversight of Operational Systems is 

Needed. GAO-04-822. Washington, D.C.: August 20, 2004. 

Page 33 GAO-07-636T (540146) 
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