FAA FACES SIGNIFICANT RISKS IN 

IMPLEMENTING THE AUTOMATIC DEPENDENT 

SURVEILLANCE – BROADCAST PROGRAM AND 

REALIZING BENEFITS

Federal Aviation Administration

Report Number: AV-2011-002

Date Issued: October 12, 2010
U.S. Department of

Memorandum

Transportation

Office of the Secretary

of Transportation

Office of Inspector General

Subject: ACTION: FAA Faces Significant Risks in 

Implementing the Automatic Dependent 

Surveillance – Broadcast Program and 

Realizing Benefits

Federal Aviation Administration

Date: October 12, 2010

Report Number AV-2011-002

From: Lou E. Dixon

Principal Assistant Inspector General 

 for Auditing and Evaluation

Reply to 

Attn. of: JA-1

To: Federal Aviation Administrator

This report presents the results of our review of the Federal Aviation

Administration’s (FAA) Automatic Dependent Surveillance-Broadcast (ADS-B) 

program.

1

At the request of the Chairmen of the House Committee on Transportation 

Infrastructure and Subcommittee on Aviation, we examined FAA’s plans for 

implementing ADS-B. Specifically, our objectives were to (1) examine key risks 

to FAA’s successful implementation of ADS-B and (2) assess the strengths and 

weaknesses of FAA’s contracting approach. This report summarizes our 

assessment of FAA’s progress to date and provides our recommendations for

reducing risk in developing and deploying ADS-B technology and strengthening 

contract oversight. We conducted this audit in accordance with generally accepted 

government auditing standards prescribed by the Comptroller General of the 

United States. Exhibit A details our scope and methodology.

ADS-B is a satellite-based surveillance technology that also uses

aircraft avionics and ground-based systems to provide information on aircraft 

location to pilots and air traffic controllers. ADS-B has the potential to 

fundamentally change the way air traffic is managed in the United States, and 

FAA expects that it will enhance capacity, improve safety, and play a critical role 

in the planned transition to the Next Generation Air Transportation System 

(NextGen).

 1 ADS-B is “automatic” because no external interrogation is required and is “dependent” because it relies on 

equipment on board aircraft to transmit flight information to controllers and pilots.
2

RESULTS IN BRIEF

FAA is making progress in implementing ADS-B at limited locations and working 

with airspace users to refine the use of the new technology. However, FAA’s 

plans to deploy ADS-B throughout the National Airspace System (NAS) and 

realize expected benefits face significant risks and challenges.

The greatest risks to successfully implementing ADS-B are airspace users’

reluctance to purchase and install new avionics for their aircraft and FAA’s ability 

to define requirements for the more advanced capabilities. Users have raised 

justifiable concerns about evolving requirements and uncertain equipage costs and 

benefits. For example, based on FAA’s analysis, the costs for users to equip with 

ADS-B avionics could range from $2.5 billion to $6.2 billion. Moreover, while

FAA is planning to mandate equipage for “ADS-B Out” by 2020, it plans to 

initially provide ADS-B surveillance information that essentially replicates 

existing domestic radar coverage—resulting in few new benefits to airspace users. 

Most new capabilities and benefits, such as enhancing airspace capacity, rely on 

“ADS-B In” and the display of information in the cockpit.

2

In addition to implementation issues that may delay deployment, risks within 

FAA’s acquisition and contract approach for ADS-B could also increase the 

overall program cost. Specifically, while FAA’s contract includes controls and 

analytical tools to measure progress with cost and schedule baselines, FAA did not 

conduct a comprehensive financial analysis before deciding that a service-based 

contract would save the Government more money than the traditional method of 

owning and operating the system. In fact, only months after it briefed Congress 

that this approach would save the Government $821 million, FAA revised its 

estimated cost savings to $628 million. FAA’s data show that if the Agency had 

owned the system through the first phase of ADS-B (establishing ground 

infrastructure), the Government could have saved over $600 million in that phase 

alone. FAA officials acknowledge that the analysis used to justify the servicebased approach and cost savings was flawed but asserted that over the long term, 

 However 

requirements and costs for ADS-B In may not be mature for at least 2 years. FAA 

also has yet to fully define requirements for modifying its existing automation 

systems that will display ADS-B information to controllers. Problems with 

integrating ADS-B on displays at the initial operating sites indicate this will be a 

significant challenge to nationwide deployment. Until FAA effectively addresses

these uncertainties associated with equipage and requirements for ADS-B’s

advanced capabilities, progress with ADS-B will be limited, and the potential for 

cost increases, delays, and performance shortfalls will continue.

 2 “ADS-B Out” allows aircraft to broadcast more accurate flight position data to controllers on the ground. 

“ADS-B In” will allow for display of key flight information in the cockpit, such as allowing pilots to “see” other 

aircraft.
3

the cost-benefit equation changes in favor of the contractor owning and operating 

the system. Yet, FAA has not updated its cost and benefit analysis to support the 

service-based approach. FAA will also pay the contractor over $1 billion for 

broadcast services—before airspace users are required to equip in 2020 and

congested airports see significant delay reductions. The contractor will be paid 

regardless of whether important efforts, such as modifying controller displays, 

remain on track. Moreover, there are unresolved questions with the contract that 

could increase the cost of the ADS-B ground system. For example, the contract 

does not have specific estimates for providing ADS-B In services to aircraft that 

will rely on different broadcast frequencies. Unless FAA addresses these 

concerns, the larger risk of minimal return on Federal investment and indefinite 

delays in achieving NextGen goals remains. We are making recommendations to 

help FAA reduce risk with ADS-B implementation and enhance contract

oversight. 

BACKGROUND

According to FAA, ADS-B will supplement and ultimately replace ground-based 

radar because an ADS-B-equipped aircraft can provide controllers and pilots in 

other aircraft with faster updates of important flight information (e.g., aircraft 

identification, position, altitude, direction, and speed). Specifically, ADS-B

transmits position information once per second, whereas radar systems in the

vicinity of airports generate reports once every 4 to 5 seconds. Also, unlike radar, 

the accuracy of ADS-B does not change based on the distance between the aircraft

and the sensor. In 1998, FAA began examining ADS-B as an alternative to radar

at several locations, including Alaska and the Ohio River Valley. 

In 2007, FAA awarded a contract to ITT Corporation for $1.8 billion—if all 

options are exercised through 2025—to develop and deploy the ADS-B ground 

infrastructure and start broadcasting services. FAA plans to implement ADS-B in 

two segments. Segment 1 (establish ground infrastructure for five key sites) is 

contracted under a cost-plus incentive fee agreement in which FAA covers the cost 

for any additional requirements.

3

 3 Miami, Florida; Louisville, Kentucky; Philadelphia, Pennsylvania; the Gulf of Mexico; and Juneau, Alaska.

 Segment 2 (equipment needed to fully deploy 

ADS-B nationwide) is contracted under a fixed-price arrangement in which ITT 

covers the cost of deploying enough radios to meet requirements. FAA approved

nearly $1.7 billion in capital costs through 2014, to support ADS-B 

implementation. FAA is planning to spend just over $200 million in fiscal year 

(FY) 2010. The total life-cycle cost through 2035 of the ADS-B effort is uncertain 

but estimated to be about $4.0 billion—this includes $2.3 billion in capital costs 

not yet formally “baselined.” The following figure illustrates FAA’s spending 

plans for ADS-B for the next 5 years. 
4

Figure. ADS-B Spending Plan FY 2010 to FY 2014

(Dollars in Millions)

Source: FAA’s 2010 budget enacted and Capital Investment Plan 2010-2014 

A key ADS-B priority is its air-to-air applications—this technology is a major step 

in the NextGen transition and a primary benefit expected by airspace users. In FY 

2008 and FY 2009, Congress provided more funding than FAA requested to 

specifically advance these ADS-B capabilities. Congress has shown significant 

support for the ADS-B program overall since its inception in 2007, with 

$510 million provided during the first 3 years of the program. 

In October 2007, FAA published a Notice of Proposed Rule Making (NPRM) for 

ADS-B outlining a mandate for airspace users to equip with new avionics for 

ADS-B “Out” by 2020. The NPRM was issued after review by FAA’s 

industry/Government Aviation Rulemaking Committee (ARC). The ARC 

recommended key actions FAA must take to increase user equipage. These 

include approving ADS-B-based aircraft separation standards that meet current 

ones and expediently deploying ADS-B where reduced separation standards will 

offer users the most value. The proposed rule generated considerable debate

among stakeholders who expressed concerns about undefined costs, benefits, and 

technical requirements. Based on public comments, FAA asked the ARC for 

additional recommendations. In 2008, the ARC made 36 recommendations, 

including studying frequency congestion concerns, adjusting ADS-B standards 

and requirements, and incentivizing airspace users to equip with new systems.4

The ARC cautioned that FAA should delay the proposed 2020 date for ADS-B 

equipage if ground station coverage, automation systems improvements, and 

 

 

4 Report from the ADS–B Aviation Rulemaking Committee to the FAA, September 26, 2008.

$201.4

$175.2

$284.2

$270.7

$256.9

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 
5

controller training slip beyond 2013. Based on industry comments, FAA adjusted 

its plans for ADS-B and issued the final rule in May 2010. 

ADS-B IMPLEMENTATION FACES A WIDE RANGE OF RISKS 

THAT WILL IMPACT COSTS AND EXPECTED BENEFITS 

FAA is in a difficult position with ADS-B because it is managing the parallel 

development and implementation of the air and ground components of a new 

satellite-based technology. Implementing ADS-B is a high-risk, complex 

undertaking that will require coordinated, billion-dollar investments from FAA 

and industry over the next decade. Our review identified the following five major 

risks that will have a direct bearing on the cost, schedule, and expected benefits of 

ADS-B: airspace users’ reluctance to equip, changing requirements and 

controller/pilot procedures for ADS-B In technologies, frequency congestion 

affecting ADS-B broadcasts, delays in integrating ADS-B with air traffic 

management systems, and potential security vulnerabilities. 

Airspace Users Are Reluctant To Equip with ADS-B Due to Undefined 

Costs and Benefits

Airspace users have raised legitimate questions about the costs to equip aircraft, 

evolving requirements for ADS-B In, and a lack of clearly defined benefits for 

enhancing capacity and reducing delays. FAA considers their concerns as a major 

risk to the successful implementation of ADS-B. Skepticism in the aviation 

community is largely due to prior experiences with other FAA programs, and

users are concerned that ADS-B could become another situation where they equip 

with a new technology but FAA never follows through with the requisite ground 

infrastructure. For example, FAA cancelled a Microwave Landing System in the 

1990s because of industry concerns and opposition. More recently, in 2003, FAA 

cancelled the Controller-Pilot Data Link Communications Program due to 

uncertain benefits, technical problems, and cost growth issues.5

ADS-B equipage cost estimates for airspace users vary widely. FAA’s 

equipage estimates reflect considerable uncertainty and require further refinement. 

FAA estimates that the aggregate cost for airspace users to equip with ADS-B 

avionics could range from $2.5 billion to $6.2 billion. In addition, these estimates 

generally exclude the cost associated with taking transport aircraft out of service to 

install new technology. As shown in table 1, estimated unit costs to equip aircraft 

also vary significantly. 

 As a result, FAA 

faces difficult challenges in determining how to move forward with ADS-B and 

spur airspace users to purchase and install new avionics. 

 5 OIG Report Number AV-2004-101, “Observations on FAA’s Controller-Pilot Data Link Communications Program,” 

September 30, 2004. OIG reports are available on our website: www.oig.dot.gov.
6

Table 1. Unit Cost Estimates for Equipping Aircraft with ADS-B

Airspace User Technology

ADS-B Out ADS-B In

Low High Low High

Air Transport Aircraft 1090 MHz Extended Squitter $32,000 $174,640 $162,250 $670,000

General Aviation

Universal Access 

Transceiver (UAT ) 978 MHz $7,644 $10,920 $10,444 $29,770

Source: OIG analysis of data from FAA’s Surveillance and Broadcast Services 

Several factors can affect the equipage cost estimates. These factors include 

aircraft age and type, the broadcast link airspace users decide to purchase, and the 

services users expect to obtain. One of the primary variables for ADS-B cost 

estimates is whether airspace users need other new avionics or upgrades to 

existing aircraft systems. For example, some users may be required to purchase:

• new or upgraded Global Positioning System (GPS) receivers or flight 

management system for aircraft. This will depend on the performance level of 

their current aircraft navigation systems. 

• avionics for the Wide Area Augmentation System—a satellite-based 

navigational system—to augment the GPS signal according to FAA standards. 

• new ADS-B avionics, in addition to those previously installed, to comply with 

updated standards in FAA’s recently issued ADS-B rule. While all new 

aircraft being produced by Airbus and Boeing will be able to broadcast ADS-B 

without modification, other large, commercial aircraft equipped with the 1090 

ES6

Evolving requirements for “ADS-B In” make it difficult for FAA to develop cost 

estimates for users to equip with this technology—which will add new cockpit 

displays capable of displaying traffic information. FAA expects that once airspace

users have invested in ADS-B Out as mandated, they will then voluntarily equip to 

realize the additional capabilities of ADS-B In (see table 2 below). However,

ADS-B In is still in its early stages, and requirements for the full range of its

applications envisioned in planning documents continue to change. FAA has 

established groups to develop a strategy for ADS-B In, including an ARC and a 

Steering Committee, but without mature requirements, reliable cost estimates, and 

defined benefits to offset those costs airlines are unlikely to expend resources to 

further modify aircraft. Further, because FAA adopted less stringent performance 

standards with the recently published rule in May 2010, airspace users may have 

to equip multiple times to take full advantage of ADS-B In capabilities.

alternative may not be compliant with the proposed rule. 

 6 Air Transport Aircraft transponders operate using 1090 MHz Extended Squitter (1090 ES).
7

Table 2. Anticipated Benefits of ADS-B

ADS-B “Out”

Allows aircraft to broadcast position and other flight data to ground systems for 

en route, terminal, and surface operations

• Enables more accurate data on aircraft position than current radar 

• Provides surveillance coverage where radar coverage is limited or nonexistent 

• Yields cost savings from decommissioning secondary surveillance radar

ADS-B “In”

Requires new cockpit displays; allows aircraft to receive and display air traffic 

information in the cockpit 

• Provides the above benefits, plus others, such as enhancing capacity at 

congested airports under all weather conditions 

• Enables air to air applications that could change current air traffic control 

concepts 

Source: OIG analysis of RTCA staff paper and FAA’s benefits analysis

FAA faces challenges in quantifying and delivering ADS-B benefits for 

airspace users. The question of benefits—and what it will take to obtain them—

will drive the transition to ADS-B. In the near term, ADS-B will not provide 

capacity benefits or relief from delays at many of the Nation’s most congested 

airports. This is because the first stage of ADS-B implementation will be limited 

to specific geographic locations, including select airports on the East Coast, such 

as Philadelphia and Miami, and airports where existing radar coverage is limited, 

such as Alaska and the Gulf of Mexico. 

Thus far, ADS-B has been beneficial in areas with limited radar coverage; for 

example, it has proven valuable in search and rescue missions. FAA and the 

industry expect to see tangible benefits from ADS-B in the Gulf of Mexico from 

reduced separation between aircraft (from 50 to 5 nautical miles). However, FAA 

still faces the challenges of quantifying and delivering the benefits from ADS-B in 

the continental United States where radar coverage exists and determining how to 

use new procedures to enhance capacity and reduce delays in congested airspace. 

In the near term, however, FAA expects ADS-B Out to provide “radar-like”

separation services. Coupled with new automation, this could allow for more 

efficient merging and spacing of air traffic within existing separation standards 

and improve detection of conflicts between aircraft. However, FAA has yet to 

fully quantify related benefits—such as enhanced controller productivity and more 

efficient management of the airport surface—and validate that ADS-B will meet 

or exceed the current level of separation services. To achieve these goals, FAA 

must effectively develop, certify, and implement the new procedures needed to 

separate aircraft at high capacity locations through the NAS based on ADS-B 

information. These procedures include significant changes to existing automation 

systems, such as new tools for controllers. In the longer term, industry officials
8

point out that ADS-B will be key to enhancing capacity but must be integrated 

with other NextGen initiatives (e.g., 4D trajectory management and data link 

communications for controllers and pilots).

7

Due to industry concerns about whether ADS-B can provide equivalent separation 

services, FAA sponsored research and modeling that examined the use of radar 

and ADS-B targets for separating air traffic.

 

8

Table 3. ADS-B Required To Meet Existing Separation Criteria 

 The studies show that 

ADS-B should be able to provide surveillance that is at least as good as radar if 

not better. However, automation systems will need to compensate for differences 

in ADS-B and radar with respect to update and error rates that will in turn provide 

controllers with reliable information. Table 3 identifies the existing criteria for 

separating aircraft that ADS-B must meet. The most stringent criteria focus on

4,300-foot spacing on parallel, independent approaches.

Existing Aircraft Separation Criteria Separation Range 

(in nautical miles)

En Route Environment 5.0

Terminal Environment 3.0

Approach 2.5

Staggered, Dependent Approach 1.5

Parallel, Independent Approaches 4,300 feet

Source: FAA’s Surveillance and Broadcast Services Briefing: Report on Modeling 

Results for Separation Standards with ADS-B 

FAA is testing ADS-B’s ability to manage and separate traffic at the key sites. 

However, a critical question remains open—whether ADS-B could allow a 

reduction in existing separation standards. FAA is examining whether separation 

standards at high altitude could be safely reduced from 5 to 3 miles, which could 

lead to significant benefits for airspace users. 

FAA faces important policy questions regarding incentives to spur ADS-B 

equipage. Given ADS-B’s wide-ranging cost estimates and undefined benefits, 

many within the aviation community (i.e., airspace users and avionics 

manufacturers) and FAA believe that incentives will be required to help spur 

aircraft equipage. As stakeholders point out, there is a precedent for helping

airspace users equip specifically with ADS-B avionics. FAA purchased ADS-B 

avionics for operators in Alaska as part of the Capstone initiative. This provided 

 7 4D trajectory management is an automation system that will rely on advanced software to assign and monitor flights. 8 Report on Modeling Results for Separation Standards with ADS-B, August 29, 2007. This research was performed 

by the Massachusetts Institute of Technology/Lincoln Labs, the Johns Hopkins University/Applied Physics 

Laboratory, and the Mitre Corporation. 
9

FAA with a base of properly equipped aircraft and allowed the Agency to examine 

the costs and benefits of the new technology. 

Our work shows that incentives for ADS-B deployment could take a number of 

forms. These include purchasing equipment for operators, an investment tax 

credit, an adjustment to current excise taxes for ADS-B-equipped aircraft, or 

research and development tax credits specifically for avionics manufacturers. In 

2008, the ARC’s report called for FAA to establish agreements with operators, 

subsidize the purchase and installation of new avionics, and accelerate ADS-B 

deployment at designated locations. FAA has since established several 

agreements with airlines and avionics manufacturers and purchased equipment for 

some airspace users. 

FAA has never managed such a large effort to equip commercial aircraft. 

Therefore, the aviation community will need a clear understanding of what the 

incentives would be used for as well as their strengths and weakness, timing, and 

potential impacts. Cost sharing mechanisms have merit because they help share 

risks between the Government and airspace users. If FAA does use equipage 

incentives, it must properly design them to achieve objectives at minimal cost to 

taxpayers.

Requirements for ADS-B In and Cockpit Displays Continue To Evolve

and Will Influence Pilot and Controller Roles

Most new capabilities and benefits in FAA’s plans to enhance capacity through 

NextGen rely on “ADS-B In” and the display of information in the cockpit. 

According to airspace users, without ADS-B In’s cockpit capabilities and related 

air-to-air applications, ADS-B will provide insufficient benefits. However, FAA 

has not yet certified the type of cockpit display (in the pilot’s forward field of 

view) needed to achieve ADS-B In capabilities due to safety concerns.

Once FAA certifies the cockpit display, airlines must either install new ones or 

modify their existing displays. However, since FAA has yet to clearly define 

ADS-B In requirements or estimated costs and benefits, it will be difficult to get 

users to equip. An aviation industry expert from Boeing pointed out that the

effectiveness of cockpit displays depends on large numbers of aircraft being 

equipped; otherwise the display might be hazardous as it would give pilots a sense 

of confidence that should not be expected. Table 4 below illustrates how ADS-B

and cockpit displays can enhance situational awareness and help fundamentally 

change how air traffic is managed when the display is in the pilot’s forward field 

of view.
10

Table 4. Anticipated Capabilities of ADS-B In

Situational Awareness

Enhances the flight crew’s knowledge of traffic both in the air and on the ground, 

thus improving their decision process for the safe and efficient management of 

flight. No changes in separation tasks or responsibility are required.

Spacing

Flight crews are responsible for spacing with designated aircraft in response to 

Air Traffic Control instruction. The separation minima are unchanged, and 

separation responsibility remains with controller.

Delegated Separation

The controller delegates separation responsibility to the flight crew for specific 

aircraft during certain operations.

Self Separation 

The flight crew is responsible for separation to a given minima from all other 

traffic for the duration of any particular phase of flight.

Source: FAA’s Surveillance and Broadcast Services Program Office, December 2007

We found that FAA faces considerable work to establish requirements and 

standards for ADS-B In. In its September 2008 report, the ARC recommended 

that FAA, in partnership with industry, define a strategy for ADS-B In by 2012. 

According to ADS-B program officials, they will define ADS-B In requirements 

and benefits through multiple workgroups and a new ARC, which is slated to 

begin work this summer. FAA also states that it has established a workgroup to 

conduct research and analysis on high-value advanced ADS-B In applications. 

According to FAA, the criteria for some of the more demanding ADS-B In 

applications should be completed by 2012. However, FAA’s decision to adopt 

less stringent performance requirements in the recently published final rule for 

ADS-B may further slow progress to transition to ADS-B In capabilities. 

Given that most benefits users anticipate rely on ADS-B In, FAA must obtain 

some consensus with industry on the specific applications it plans to consider. 

FAA has—and continues—to work with airspace users to refine ADS-B In 

applications and requirements. For example, the United Parcel Service (UPS) has 

been instrumental in pioneering ADS-B and the first generation of cockpit display 

applications for enhanced “see and avoid” capabilities. FAA is also providing 

$6 million to assist US Airways and an avionics manufacturer to equip up to 

20 Airbus aircraft, with the goal of assessing the economic and operational value 

of ADS-B at Philadelphia’s airport and on some transatlantic flights. 

Finally, the full potential of ADS-B In will require consideration of human factors, 

such as new procedures for pilots and controllers. As FAA officials point out, the 

Agency must conduct rigorous safety assessments to ensure changes do not impact 
11

safety or introduce new hazards. Therefore, FAA needs to prioritize efforts, 

examine sequencing of capabilities, and resolve the display requirements, 

including human factors considerations for both pilots and controllers. 

Frequency Congestion Concerns for the Broadcast of ADS-B for 

Transport Aircraft Could Limit Its Air-to-Air Benefits 

The frequency planned for ADS-B broadcasts to large commercial carriers could

become overcrowded when FAA adds ADS-B signal traffic. Currently, FAA and 

airspace users rely on the same frequency for other important systems, such as 

ground-based secondary radar, runway incursion systems, and aircraft collision 

avoidance systems. There is concern that the broadcast of ADS-B could cause 

signal interference problems with these systems. This is one reason that FAA 

decided to rely on two separate frequencies9

Frequency congestion could particularly impact ADS-B usage in high-density 

airspace, such as the Northeast Corridor (e.g., Washington, DC, and New York). 

As FAA expands ADS-B implementation between 2020 and 2035, problems with 

signal interference could increase and occur around more major airports across the 

country, such as Chicago, Los Angles, Dallas Forth Worth, and Atlanta. Unless 

FAA mitigates this problem, the number and type of air-to-air applications for 

ADS-B In will be limited due to the reduced range—or distance—of the 

ADS-B In signal. Table 5 illustrates the expected requirements for some of the 

planned uses of the ADS-B In signal.

for ADS-B and the contractor decided

to increase the number of ground radio stations from 500 to 794. 

 9 FAA will implement ADS-B via two separate broadcast links that will operate at one of two frequencies—

1090 megahertz (MHz) for air carrier and commuter fleets and 978 MHz for air taxi and general aviation fleets. The 

978 MHz band has more available bandwidth and can therefore provide graphic weather information and other 

data—a service needed by non-commercial fleets that do not communicate with airline dispatchers.
12

Table 5. Minimum Aviation System Performance Standards for ADS-B In

Minimum Performance Standards Range 

(in nautical miles)

• Enhanced Visual Acquisition

• Conflict Detection 10

• Station Keeping

• Airborne Conflict Management 20

• Merging

• Conflict Management

• In-Trail Climb

40

• Long Range Conflict Management 90 (desired - 120)

Source: Report from the ADS-B Aviation Rulemaking Committee to the Federal Aviation Administration,

September 26, 2008.

The frequency congestion problem is complex, but a number of techniques, such 

as multi-sector aircraft antennae and additional ADS-B ground stations could help

ensure adequate air-to-ground and air-to-air reception. However, solutions to 

address frequency congestion may require changes to the ADS-B baseline or 

equipment on aircraft, which would increase the program cost. Currently, FAA 

does not plan to make changes until 2020 when airspace users are required to 

purchase and install ADS-B equipment. The ARC recommended that FAA study 

the issue of congestion and consider the mitigation efforts needed to ensure a 45-

nautical mile range for ADS-B In applications. In response, FAA is examining 

potential solutions and exploring the specific changes needed for ADS-B air and 

ground components and existing systems (including airborne traffic collision and 

avoidance systems).

10

Integrating ADS-B with FAA’s Existing Automation Systems for 

Controllers Could Delay Its Implementation

Before FAA can implement ADS-B nationwide, it will need to modify the

automation systems controllers use to separate aircraft. Currently, most of these 

systems—in both the terminal and en route environments—do not process and 

display ADS-B information. FAA will also need to adjust the format of flight 

plans to properly identify ADS-B-equipped aircraft. Without these changes, users 

will be unable to operate ADS-B air traffic surveillance applications. FAA has 

elevated this issue to high risk, and the ADS-B program office is providing 

$150 million in Segment 1 to other FAA lines of business to modify their 

respective automation systems. 

FAA is testing ADS-B information on controller displays at key sites but has 

experienced a number of problems and limitations. For example, FAA has 

 10 According to FAA documents, realizing the air-to-air performance of ADS-B in the long term may depend on a 

replacement of ground radars or other technology (i.e. passive multilateration) and modifying the Traffic Collision 

and Avoidance System to exploit ADS-B signals.
13

experienced problems with integrating ADS-B on controller displays at Louisville, 

Kentucky. Controllers report that ADS-B targets (i.e., the location of aircraft on 

their display screens) split or drift, causing false alerts; therefore, controllers often 

opt to limit their ADS-B usage. However, as noted in FAA test reports, 

assessments at this point do not fully reflect the ADS-B end-state because there is

a limited number of properly equipped aircraft and no approved standards for 

ADS-B In operations. 

An important step to mitigate problems with ADS-B is implementing “fusion.”

Fusion in this context is defined as taking all surveillance data available for an 

aircraft and using the best data or combination of data to determine aircraft 

position and intent. FAA is working to refine fusion capability on the Louisville 

Common Automated Radar Terminal System. Table 6 shows the progress and 

challenges with implementing ADS-B with existing FAA automation systems—all 

of which will impact ADS-B deployment.

Table 6. Key Automation Platforms Requiring Modifications for ADS-B

Standard Terminal Automation Replacement System (STARS)

Manufactured by Raytheon and used at 51 medium sites to manage traffic in the vicinity of airports 

• FAA modified STARS to display ADS-B information at the Philadelphia TRACON. 

• STARS processors, displays, and network equipment face end-of-life issues. 

• STARS processors at 47 of 52 sites will be unable to support ADS-B beyond 2013 when large

numbers of airspace users are expected to equip with the new technology.

Common Automated Radar Terminal System (CARTS)

Manufactured by Lockheed Martin and used at 11 large and 99 small sites to manage traffic in the 

vicinity of airports

• FAA modified CARTS at Louisville, Kentucky, to accept and display ADS-B information.

• FAA tested CARTS with UPS ADS-B-equipped aircraft and achieved initial operating capability 

in November 2009. 

• Additional CARTS work is required for the large sites such as New York and Chicago.

• CARTS processors at 7 of the 11 large sites have limited ability to accept major improvements, 

including ADS-B. 

• The 99 small sites, as presently configured, cannot support any major improvements.

En Route Automation Modernization (ERAM) 

Developed by Lockheed Martin; will be used to manage high-altitude traffic at 20 planned sites

• ERAM has experienced problems during testing at its first site (Salt Lake City), the severity of 

which is unknown. 

• FAA is delaying initial ADS-B functionality to later ERAM software releases that have not been

baselined. ADS-B will initially be incorporated into ERAM Release 1 in a virtual radar format; 

later releases will accept ADS-B format for full functionality.

• FAA has not determined the allocation of ADS-B requirements among future ERAM software 

releases.

Source: OIG analysis of ADS-B automation program documentation
14

Potential Security Vulnerabilities in Using ADS-B To Manage Air 

Traffic Will Require Periodic Reassessment

ADS-B implementation has important security implications for the National 

Airspace System and the transition to NextGen. The Department of Defense

(DOD)—a key stakeholder in FAA’s NextGen development efforts—raised 

concerns that because ADS-B technology makes it possible to receive information 

about aircraft without a ground station, a lack of needed precautions could make

the position of aircraft available to virtually anyone. 

The September 2008 ARC report highlights other potential vulnerabilities with 

ADS-B that malicious cyber attacks may attempt to exploit. Examples include

interfering with ADS-B transmissions, jamming ADS-B broadcasts, and 

introducing false targets into the system. Failure to address these concerns early in 

the ADS-B program could result in cost increases and schedule delays. 

While the ADS-B signal is vulnerable like other satellite transmissions, 

mitigations or countermeasures are possible. In commenting on FAA’s proposed 

ADS-B rule, stakeholders, including DOD, stressed the need to develop some 

level of encryption of ADS-B signals to prevent adversaries from using the system 

to disrupt air traffic. DOD has asked FAA for a thorough security assessment 

involving DOD and the Department of Homeland Security to determine ADS-B 

risks and appropriate countermeasures. 

FAA is working with the National Security Agency and the Director of National 

Intelligence to get a better understanding of ADS-B vulnerabilities and has 

completed a classified report. According to FAA, the report concluded that while 

the ADS-B transmission gives more accurate data on aircraft position than 

previous technology, many other factors are involved in coordinating and 

executing an attack on an aircraft, which severely limits the likelihood of success. 

Nevertheless, FAA must maintain focus on this issue to adequately address any 

threats and vulnerabilities. Given the substantial support ADS-B receives from 

Federal investments, FAA should also inform Congress of the results of 

vulnerability assessments and identify the countermeasures necessary to address 

known vulnerabilities. In December 2009, we began a review of information 

technology security and controls over the ADS-B system and will continue to 

monitor these issues.11

 11 OIG Audit Announcement, “Audit Initiated of Security and Controls of the Automatic Dependent Surveillance–

Broadcast System,” December 8, 2009.
15

FAA’S ACQUISITION STRATEGY HAS NOT BEEN UPDATED, 

AND CONSIDERABLE UNKNOWNS COULD IMPACT THE COST 

OF THE ADS-B CONTRACT 

FAA chose to rely on a service-based contract approach to implement ADS-B. 

Despite subsequent data showing that FAA could have saved significantly with a 

traditional acquisitions approach for at least the first phase of the program, FAA 

still has not conducted an updated cost analysis to ensure it is pursuing the most 

cost effective way to introduce a new surveillance technology. FAA must update 

ADS-B cost and benefit information given the complexity and unresolved 

implementation issues of the contract, which could cost the U.S. Government 

almost $2 billion if all options are exercised. Moreover, it is difficult for decision 

makers to track current and potential costs due to the contract’s structure, which 

“bundles” costs for various ADS-B services. FAA will be challenged to address

these issues without the right skill mix among staff responsible for developing and 

managing ADS-B; however, FAA has not yet assessed staffing gaps or actions 

needed to ensure the Agency can effectively oversee the contractor once it begins 

operating the ADS-B ground system.

FAA Has Not Updated the Cost and Benefit Analysis of Its Contract 

Approach for Developing the ADS-B Ground System

FAA is relying on a service-based contract, which means it will not own the 

ADS-B ground infrastructure. FAA will own the data transmitted between aircraft 

and the ground but not the hardware, software, or ground stations. In a more 

traditional acquisition, FAA would specify the functional design and hardware 

deliverables and would ultimately own the equipment. 

FAA decided on this contract approach without a comprehensive analysis of the 

costs involved. In May 2007, FAA provided Congress with data that showed a 

service-based approach for ADS-B would cost about $821 million less than a 

traditional acquisition approach. Yet, several months later, FAA increased its cost 

estimates to reflect the need for additional ADS-B ground stations, which reduced 

its cost savings estimate to about $628 million. Table 7 shows the differences 

between the service-based approach and more traditional FAA acquisition in cost 

estimates FAA provided to the FAA’s Joint Resources Council (JRC).
16

Table 7. Adjusted Cost Differential from FAA Ownership 

and Service Approach ($ in Millions)

Program Office Estimates 

as of :

Traditional 

GovernmentOwned ApproachService Provider 

Approach

Expected

Cost Savings

May 2007 $ 3,745.60 $ 2,923.90 $ 821.70

August 2007* $ 5,022.77 $ 4,394.48 $ 628.29

Difference $ 1,277.17 $ 1,470.58 $ -193.41

Source: FAA’s Surveillance and Broadcast Service Program Office JRC Cost Estimates, August 2007 and 

FAA analysis, “Service Provider vs. Government owned”

ADS-B officials state there is no need to do a complete analysis to fully update the 

latest Government estimate to account for changes (including the change in 

ground stations) in order to have an “apples to apples” comparison. This is despite 

FAA data showing that it may have been more cost beneficial for the Government 

to own the system until completion of Segment 1. For example, according to 

FAA’s data, the Government could have saved approximately $600 million in 

Segment 1 alone ($1.77 billion for Government-owned cost versus $2.37 billion 

via service provider owned and operated). FAA points out that over the long term, 

the cost-benefit equation changes in favor of ITT owning and operating the 

system. According to ADS-B program officials, the independent Government 

estimates used to support the costs were flawed because the Agency incorrectly 

allocated more radios than required under Segment 2 of the program. This further 

demonstrates why FAA should have updated the analysis.

FAA decision makers need a full understanding of the cost parameters of FAA’s 

approach for implementing ADS-B given the key role it is expected to play in 

NextGen and the evolving requirements for ADS-B In. Therefore, FAA should 

update its analysis and validate that its preferred approach remains cost beneficial 

before committing to an additional $2.7 billion by 2012 to proceed with the 

nationwide implementation of ADS-B air and ground capabilities. 

The ADS-B Contract Is a Complex Financial Agreement That Will 

Require Rigorous Oversight To Protect Government Interests 

FAA is using a hybrid contract that includes elements such as a cost-plus incentive 

fee arrangement for the development of the ground system, firm fixed-price 

subscription charges for the broadcast of ADS-B services, and time and materials 

arrangements for engineering work. Each type of contract mechanism has unique 

risks and management challenges. 

Segment 1, or the first 3 years of the contract, is predominately a cost-plus 

incentive fee agreement that places the majority of risk with the Government 
17

because FAA must pay the cost for any cost overruns associated with additional 

work to meet existing requirements. Under this arrangement, FAA reimburses the 

contractor for all costs incurred for work performed up to a cost target; this 

encourages the contractor to accomplish work specifications at target costs. This 

first segment focuses largely on developing and installing the ground 

infrastructure for five key sites. FAA has a number of controls in place on the 

contract to incentivize or penalize the contractor for cost overruns for the first 

segment. The bulk of the remaining contract relies on fixed-price subscription 

charges. Under the fixed-price contract, the contractor is obligated to perform the 

stated effort within the fixed price of the contract and assumes the risks of any cost 

increases. Table 8 below describes the elements of the ADS-B contract.

Table 8. Elements of the ADS-B Contract

Contract Line Item 

Number (CLIN) Supplies /Services Contract Type Costs

CLIN 0001 Development and Installation Cost Plus 

Incentive Fee

$ 207,576,480

CLIN 0002 Equipment Usage Charges Firm Fixed Price 30,952,941

CLIN 0018 (3 years) Engineering Services Time and Material 4,500,000

Subtotal $ 243,029,421

Options (FY 2009-FY 2025)

CLIN 0003 thru 0014

Subscription Charges

(Essential & Critical Service) Firm Fixed Price $ 1,398,508,646

CLIN 0015 thru 0017 Program Management Firm Fixed Price 84,823,266

CLIN 0018 Engineering Services Time and Material 30,004,404

CLIN 0019 thru 0034

Subscription Charges

(Including Weather Services) Firm Fixed Price 108,625,534

Subtotal $1,621,961,849

 Grand Total $1,864,991,270

Source: OIG analysis of FAA’s ADS-B contract

FAA will pay the contractor on average over $90 million annually for broadcast 

services before airspace users are required to equip by 2020. The contractor will 

be paid regardless of whether important efforts remain on track, including 

modifications to various controller displays and automation equipment, finalizing 

requirements for ADS-B In, procedure development, and controller training 

programs. Under the current plan, FAA will have spent almost $2 billion on the 

ground infrastructure, but neither the traveling public nor airspace users will 

realize significant benefits in terms of delay reduction at already congested 

airports until 2020.

The ADS-B contract also allows ITT to sell “value-added services to airspace 

users.” The contractor must seek approval from FAA before releasing the 

surveillance data, and the Agency is expected to provide criteria for filtering the 
18

data. These services could include enhanced weather products for specific regions 

(like the Gulf of Mexico) and sales of traffic information. FAA officials 

commented that airports may be interested in purchasing information on aircraft 

position and location for a better understanding of facility utilization and better 

surface management.

FAA believes that the sale of value-added services will help reduce the overall 

costs with ADS-B and therefore made it an essential element of the business 

model for the contractor. The contract states that the Government and the 

contractor will share revenue from the sale of these services. Several industry 

representatives have stated that ITT and FAA’s value-added services need greater 

clarity and raised concerns that these services appear to be a “back-door method”

to augment FAA’s budget. 

At this juncture, however, it is difficult to predict the demand for services and 

what stakeholders will value over the life of the ADS-B contract. Further, there 

may be other entities that can share or provide information on the location of 

aircraft on the surface at high-activity airports or weather to pilots. For example, 

FAA is currently testing enhanced information sharing with an existing groundbased system for surface surveillance at New York’s John F. Kennedy airport.

12

Unresolved Questions Exist That Could Materially Affect the 

Government’s Liability and Overall Cost for Implementing the ADS-B 

Ground System

FAA should assess ongoing and planned efforts to share more information as part 

of NextGen and determine whether the assumptions and profitability of valueadded services specifically for ADS-B remain valid. If value-added services do 

not materialize, the underlying business case for the ADS-B contractor may not be 

achievable and cause problems for FAA in managing the implementation of a key 

NextGen technology. FAA indicated that its Chief Operating Officer is chairing 

meetings on information sharing as part of NextGen and the role of the ADS-B 

contractor regarding value-added services.

According to FAA, the Agency has minimized contract risks because most of the 

contract is fixed price (including the capital and operating costs), which places the 

majority of risk with the contractor. This assumes, however, that requirements are 

firm and achievable and that there is a clear end state to ADS-B. We identified

several unknowns within the contract that could materially affect the cost of the 

ADS-B effort and the Government’s liability. 

 12 A key element of this effort is Airport Surface Detection Equipment-Model X (ASDE-X), planned for deployment at 

35 airports, including JFK. This system displays aircraft and vehicle positions and identification to aid air traffic 

controllers in preventing ground collisions on the airport surface and reducing runway incursions.
19

The contract does not require critical services throughout the NAS. The 

ADS-B contract does not include cost estimates to support critical services for all 

sites throughout the life of the contract.13

The contract includes charges supporting a total of 323 service volumes, or about 

239 sites that will provide ADS-B services.

The ADS-B contract states that the 

contractor shall provide both critical and essential services at an estimated cost of 

$1.4 billion at defined sites as specified by the Government. The contract includes 

about $1.3 billion in subscription charges for essential services but only 

$62 million for critical services, which have far more demanding performance 

requirements. 

14

Development risks with broadcasting ADS-B on two distinct links could 

increase costs. The contract does not provide cost estimates specifically for the 

development of a critical service called Automatic Dependent SurveillanceRebroadcast (ADS-R). Because FAA will rely on two links, it must rebroadcast 

the ADS-B information to all aircraft to get the benefits from ADS-B In. It is

important to ensure that different aircraft (equipped with different broadcast links) 

can “see” each other. The timely delivery of ADS-R signals will be necessary to 

enable advanced applications such as runway safety information. There is 

potential for cost growth as FAA officials told us that they expect some changes to 

requirements. One FAA official stated that it may be cost prohibitive to 

implement ADS-R nationwide.

These totals are different because 

multiple service volume types (i.e., en route, terminal, and/or surface operations) 

can support one site. However, we found the contract does not require that critical 

services be provided at all sites or include life cycle costs at numerous sites (such 

as Washington, Boston, and Chicago) that will have critical services. For 

example, for 24 of the 25 sites, the contract only includes ADS-B critical service 

charges supporting the en route operations for 1 year but did not state any price for 

the remaining years through 2025. In addition, the contract only includes costs for 

35 airports to obtain critical services supporting surface operations, and 10 of 

those 35 have costs for only 1 year. As a result, FAA has not specified to decision 

makers how the contractor will provide critical ADS-B services supporting the en

route and airport surface domains throughout the National Airspace System over 

the life of the contract. 

In addition to uncertain costs, ADS-R presents added risks of faults, failures, and 

delays in the ground hardware and software required to merge and rebroadcast 

information on two links. Various representatives from airline associations 

expressed concern that ADS-R may not be technically feasible and that it may lack 

 13 Essential services will be used by pilots as advisory information, whereas critical services will be used to separate 

and manage aircraft. 14 In addition to the 239 sites, there are 25 more sites where ADS-B weather services will be provided.
20

sufficient growth capacity to support future applications, including collision 

avoidance. For example, information based on ADS-R could lack the precision 

necessary for some important applications, such as merging and spacing and 

ultimately allowing pilots to “self-separate.” In addition, the system could present 

false targets to pilots during critical phases of flight. 

FAA, however, believes that it can mitigate these risks and that they will not result 

in performance issues for targeted ADS-B In applications. Nevertheless, the 

development of ADS-R remains a key risk to full ADS-B implementation, and its 

true costs remain unknown. 

The number of ADS-B ground radio stations could grow and increase 

contract costs. The number of ADS-B ground radio stations and their installation 

costs are key cost drivers for the ADS-B program. Due to changing requirements 

between air and ground elements, the need for additional ground stations is 

uncertain and could increase FAA’s contract costs and therefore the Government’s 

liability. For example, FAA’s own analysis increased the estimated system 

deployment costs by over $1 billion regardless of public or private ownership of 

the ground system.

FAA states that the contractor will deliver more than 300 ground systems as part 

of Segment 1 of the contract under the cost plus agreement. However, FAA 

proposed that aircraft be equipped with both a top and bottom antenna to support 

ADS-B Out and future ADS-B In applications. Many stakeholders oppose these 

requirements due to the increased costs. As FAA points out, there are legitimate 

reasons for more than one antenna to achieve sufficient update rates for 

controllers. Nevertheless, the ARC urged FAA to consider allowing aircraft with 

a single antenna to fly through high-density airspace and recommended that FAA 

explore how the drawbacks of single antenna could be offset by adding additional 

ground stations. In the final rule for ADS-B, FAA decided to rely on a single 

bottom-mounted antenna, which could translate into more ground stations.

Currently, FAA estimates it will need almost 800 ground radio stations to provide 

service to 323 segments of airspace, or “service volumes.” For example, each 

major airport constitutes a specific service volume. FAA estimates that 60 service 

volumes will be required to provide surveillance for the Nation’s 20 facilities that 

manage high-altitude traffic. As FAA points out, the number of radio stations is 

subject to change as the Agency conducts more detailed site surveys. Until FAA 

completes all site surveys, the total number of radio stations FAA is responsible 

for under the first segment remains uncertain.

FAA will procure the remaining 454 radio stations needed to complete ADS-B 

deployment nationwide under Segment 2 of the contract, which makes ITT 

responsible for the cost of deploying enough radios to meet requirements. ITT 
21

will recover its costs through fixed-price subscription charges. FAA states that 

there will be no risk to the Government if additional ground stations or towers are 

needed during Segment 2. This is because the contract does not specify the 

number of radios or towers. Nevertheless, the number of radio stations will be 

important to obtain the necessary coverage and level of performance with ADS-B 

for safe, efficient operations, particularly in congested airspace.

A September 2009 joint government and industry task force report on NextGen’s 

mid-term implementation made recommendations that if accepted, could also 

impact the ADS-B contract.15

The ADS-B contract misclassified essential service charges as critical service 

charges for the Gulf of Mexico service volumes. We found a $16 million 

variance for subscription charges supporting Segment 1 critical services through 

2016 (see table 9). While the contract states the value is about $2 million, our 

review of the pricing table found costs totaling about $18 million. According to 

ADS-B program officials, although the contract pricing spreadsheet shows ADS-B

critical services under the Gulf of Mexico (GOMEX) Service Volume, it should 

have been included as an essential service price. FAA officials acknowledge that 

this same condition exists with contract line items that identify charges between 

2017 through 2025.

The task force stated that FAA should expand the 

volume of what “radar-like services” will be provided by redefining the contract 

with ITT to deliver ADS-B data in “non-radar” airspace. It also noted that FAA 

should expand ADS-B to additional locations. The initial focus is low altitude

airspace, where radar is not available, within 35 to 40 miles of airports in 

Washington, D.C., and New York. If FAA reallocates requirements between air 

and ground elements or adds locations, it could result in a change to the contract. 

Such a change would entitle the contractor to request an equitable adjustment to 

the contract’s price and schedule.

Table 9. Contract Misclassification of Essential Services as Critical Services

(Dollars in Millions)

Contract Line 

Item Number

(CLIN)

Subscription Charges 

(thru 2016)

Total Costs

Discrepancy 

CLIN Pricing Table Amount

0003 Segment 1: Critical 

Services 

$2,072,944 $18,101,786 $16,028,842

0006 Segment 1: Essential 

Services

$311,873,778 $295,844,936 ($16,028,842)

Source: OIG analysis of FAA’s ADS-B contract

 15 RTCA NextGen Mid-Term Implementation Task Force, NextGen Mid-Term Implementation Task Force Report, 

September 9, 2009.
22

Based on concerns we raised with the program office, FAA modified the ADS-B 

contract in June 2010 to make the CLINs and pricing tables consistent. FAA 

modified the pricing spreadsheets by deleting ADS-B critical service charges from 

GOMEX service volumes and reclassifying them under essential services. This 

will ensure that the contract accurately reflects what ADS-B critical and essential 

services the contractor is liable to provide and that both parties agree on their 

respective charges. 

The ADS-B Contract Structure Bundles and Comingles Tasks and 

Costs, Making It Difficult for Decision Makers To Track Capital and 

Operating Costs

The basic structure of the ADS-B contract makes it difficult for FAA to accurately 

track costs. For example, the first contract line item number (CLIN-0001) 

supports the development and installation of the ADS-B ground infrastructure for 

approximately $207 million. However, various tasks and their associated costs for 

developing this system (e.g., program management, hardware and software design, 

procurement/production, and site installation) are embedded or bundled together 

within this one contract line item. This makes it difficult to trace actual 

development and unit production costs, including how many radio stations will be 

needed to support Segment 1. 

We are also concerned that the contract currently comingles the costs of capital 

assets (the equipment required to broadcast the ADS-B signal) and a variety of 

operating costs within the contract line items. For example, based on recent ITT 

estimates, $295.2 million is associated with capital assets for radio stations and 

complementary hardware and software that fall within two distinct contract line 

items (CLINS 0006 and 0012) ).16

For example, FAA conducted an extensive review of the contractor’s cost proposal 

in 2007 and reported to the Office of Management and Budget (OMB) that capital 

costs for about $150 million were required for the contract. However, in August

2009, FAA advised us that ITT had since estimated that ADS-B capital costs—

including amounts for research and development, bid and proposal, and general 

 The subscription charges for these two contract 

line items total $676.1 million. However, ITT’s cost proposal for these two 

contract line items also includes operating costs, such as rent, utilities, operations,

and maintenance for radio stations, control stations, and service delivery points, 

plus service monitoring costs. The contract does not separately identify or track 

any of these operating costs elsewhere. As a result, it will be difficult for FAA

and the contractor to identify and verify the capital and operating costs incurred or 

billed under this contract.

 16 FAA reported these assets as capital leases to the Office of Management and Budget officials that represent the net 

present value of future payments.
23

and administrative costs—were $348 million. Additionally, in August 2009 

FAA’s legal counsel determined that the assets being constructed for ADS-B did 

not meet the criteria for a capital lease. This means that additional radio stations, 

equipment, software, and implementation costs may be required. FAA needs to 

understand what the expected capital costs are for the system; track the types of 

capital and operating costs billed to identify potential cost overruns; and monitor 

progress by determining whether ADS-B is meeting program goals in terms of 

cost, schedule, and performance. 

Capital costs for expenditures, construction, equipment, software, and 

implementation costs should be separately estimated, recorded, and billed. Such 

accountability helps to identify operating costs and prevents “hiding” of related 

cost overruns in capital accounts as construction progresses. Since operating costs 

are period costs they should be easily identified and excluded from capital charges 

in subscription fees billed to FAA. In January 2010, FAA agreed with our 

observation that the contract provided the Agency with the means to require the 

contractor to separately track and bill the Government for capital costs at no 

additional expense. In June 2010, FAA issued a contract modification to exercise 

this option. 

Basic Management Controls Over the ADS-B Contract Are Lacking

While FAA’s contract for ADS-B has controls that are important for managing 

and overseeing a complex acquisition, we identified a number of areas where FAA 

could strengthen them. Specifically, FAA convened an oversight and review 

board that meets monthly and relies on Earned Value Management (EVM)—an 

analytical tool—to monitor progress in meeting cost and schedule targets.17

Mechanisms to track progress with cost and schedule parameters are limited 

to the first segment of the contract. Our July 2009 management advisory to 

FAA raised a number of concerns about its methods for assessing progress with 

ADS-B. For example, the contractor’s EVM data showed that the estimated 

solution development cost to complete ADS-B ground infrastructure through 

September 2009 was approximately $111.8 million; however, this activity was

initially budgeted to cost about $84.1 million. Despite this $27.7 million variance, 

 

However, EVM will primarily be used for the first segment of the contract. This 

is a concern given the problems we have identified with basic contract 

administration, such as undocumented contract changes, and the question of 

whether FAA has the in-house expertise to effectively oversee the contractor once 

the ground infrastructure is in place.

 17 Earned Value Management System (EVM) is a management tool that provides for integrating technical, cost, and 

schedule information about contract performance. This information enables FAA to proactively manage contracts. 
24

the contracting officer was reporting that the contractor was meeting ADS-B cost 

goals.

In an updated analysis we reviewed, we questioned why the contractor EVM data 

reported as of September 2009 indicated the estimated costs and fees to develop 

and install ADS-B would exceed the contract total by approximately $7 million 

(from $207 million to $214 million). FAA officials acknowledge there have been 

a number of changes to requirements that increased the ADS-B development and 

installation costs.

FAA is planning to use EVM to measure progress with ADS-B development and 

installation activities, which are under a cost-plus incentive fee arrangement. This 

represents only the first segment of the contract, which was originally valued just 

over $207 million (or approximately 10 percent of the total contract value). 

However, FAA points out that EVM is generally not used for fixed-price contract 

elements, which make up the later segments of the ADS-B contract. FAA would 

benefit from establishing a mechanism to track and monitor the costs of the 

remaining ADS-B implementation activities associated with fixed-price elements. 

FAA needs to correct improper contract administration practices and 

document contract modifications. Our July 2009 management advisory also 

raised concerns that FAA’s contracting officer for ADS-B was not documenting 

contract changes in a timely manner. FAA’s Acquisition Management System

guidance specifies that contract modifications should be properly documented to 

describe the changes made to the scope of work, the contract price, the period of 

performance, and other contract terms. During our review, we analyzed 

13 contract modifications that primarily funded development and installation 

activities.

We found that although FAA’s contracting officer had provided funds to the 

contractor, he did not identify the changes in the scope of the work, the prices, 

periods of performance, or other terms. For example, in March 2009, the ADS-B 

contracting officer issued a contract modification funding the contract to 

approximately $124 million but did not define the additional scope of work to be 

performed. As a result, FAA agreed to pay the contractor more than $60 million 

without the proper documentation needed to adequately account for what the 

contract would perform. 

Documenting contract changes is a fundamental contracting officer responsibility. 

Unless the contract includes a clear definition of the work and its prices, the 

Government is at risk of overpaying or paying for something it does not want. In 

response to our concerns, FAA has placed additional resources to help improve 

overall contract administration.
25

FAA does not yet have the in-house expertise to effectively oversee

ADS-B. As we have noted in multiple reports and testimonies, the right skill mix 

is essential to develop and manage NextGen initiatives, and this is particularly true 

for ADS-B. For example, FAA must ensure that all 323 planned service volumes 

are working as intended on a regular basis. It will be difficult for the Agency to 

build and sustain sufficient in-house knowledge of how the system actually works 

and how problems are solved since it will neither own the hardware, ground 

stations, and related software nor be responsible for the operation and maintenance 

of the ground system.

Further, much of the ADS-B infrastructure will be embedded in commercial

equipment and networks. FAA knowledge may diminish once contractors assume 

sole responsibility for operating and maintaining the satellite-based system. The 

key personnel skills that are needed for effective ADS-B oversight include 

telecommunications, signal processing, and knowledge of the GPS constellation. 

However, FAA has not assessed the in-house skills it needs to oversee the ADS-B 

ground infrastructure. Without this information, we are concerned that FAA could 

find itself in the unenviable position of knowing very little about a system that is 

expected to be the foundation of NextGen. 

CONCLUSION

ADS-B is a cornerstone NextGen technology and has the potential to significantly 

enhance capacity and safety. However, FAA faces multiple challenges and 

considerable risks in implementing ADS-B. FAA must provide Congress and 

airspace users with a plan to address the challenges, mitigate the risks, and assess 

the costs and benefits of its decisions. Until FAA addresses challenges such as 

equipage, requirements, system integration, and contract management issues, 

realization of ADS-B program goals will remain uncertain and NextGen initiatives 

will be delayed.

RECOMMENDATIONS

To reduce risk with ADS-B implementation, FAA needs to:

1. Accelerate efforts to establish requirements for ADS-B In and certify cockpit 

displays for enhancing pilot situational awareness to improve operations at

high-density airports.

2. Further quantify and validate controller productivity enhancements that can 

result from displaying ADS-B information on controller displays and the

additional automation needed to maximize these ADS-B benefits.
26

3. Develop and fund a targeted human factors research effort for pilots and 

controllers for ADS-B In requirements (display and procedures) in order to 

prioritize efforts and examine the proper sequence for introducing new 

capabilities.

4. Work with the U.S. intelligence community to assess potential threats to the 

ADS-B system and ways to mitigate them.

To enhance oversight of the ADS-B contract, FAA needs to:

5. Update the cost benefit analysis for the acquisition to ensure that FAA’s plan 

is still appropriate before committing the additional funds for a nationwide 

deployment of the ADS-B ground infrastructure.

6. Clarify the use of ADS-B value-added services and reexamine assumptions 

about the ability of ITT to sell them in light of other planned NextGen efforts 

to greatly expand information sharing between FAA and stakeholders.

7. Specify the cost and schedule for providing ADS-B critical services to all en 

route and airport surface domains over the life of the contract.

8. Assess the technical readiness of ADS-R and any risks to its development 

and determine which locations will need ADS-R.

9. Determine and obtain the necessary in-house expertise to effectively monitor 

the contractor’s efforts and oversee the ADS-B ground infrastructure over the 

long term.

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE

We discussed the results of our review with FAA’s Assistant Chief Counsel, 

Acquisition and Commercial Law Division, and the Director of Surveillance and 

Broadcast Services and provided FAA with our draft report on September 2, 2010. 

We received the Agency’s formal response on September 28, 2010. FAA 

concurred with seven of our nine recommendations but did not provide a target 

completion date for recommendation 2 and partially concurred with 

recommendations 5 and 7. FAA’s complete response is included as an appendix 

to this report.

Specifically, for recommendation 2, FAA stated that it is finalizing negotiations 

with the National Air Traffic Controllers Association (NATCA) about the nature 

and extent of controller participation in potential ADS-B modifications to 

controller displays. FAA noted—and we agree—that controller productivity 
27

enhancements could arise from procedural changes, not necessarily changes to the 

automation systems. While FAA’s efforts with NATCA are an important step, 

FAA must determine what levels of productivity it can realistically achieve and 

what new technology and procedures it will need to do so. This will help boost 

industry confidence in FAA’s ability to not only deliver technology but also 

benefits to airspace users. Therefore, FAA needs to provide our office with target 

action dates for completing ongoing work with the controllers to identify potential 

modifications to procedures and automation platforms.

For recommendation 5, FAA agreed that it needs to update the cost benefit 

analysis but stated that it is premature to update the benefits portion at this time 

since benefits are tied to the equipage rate. While users are not mandated to equip 

until 2020, FAA proposed doing an interim sample of the equipage rate between 

2015 and 2016, at which time it will validate the cost benefit analysis against the 

original baseline. We note, however, that our recommendation also included 

validating that FAA’s acquisition approach is still appropriate since FAA may

spend an additional $2.7 billion to implement ADS-B. FAA needs to conduct this 

analysis sooner rather than later given the central role ADS-B will play in 

revamping air traffic management. Therefore, we reiterate that FAA should 

validate that its preferred approach remains cost beneficial before committing 

additional funds by the planned Joint Resources Council in 2012, which will 

baseline and fund activities for 2014 and beyond.

For recommendation 7, FAA agreed that the lifecycle contract costs for critical 

services require clarification. FAA stated, however, that it is difficult to reflect 

this in contract pricing tables, which show only the initial costs for critical 

services. FAA proposed to issue a contract modification by October 31, 2010, in 

lieu of reissuing the pricing tables. This contract modification will clarify pricing 

assumptions to state when charges for ADS-B critical services are included under 

Essential Services for a specific service volume if the pricing table does not 

separately reflect them. Moreover, FAA is planning to refine its schedule for 

establishing critical services for all locations by FY 2014. FAA’s response meets 

the intent of our recommendation and if implemented will increase contract 

transparency. However, we plan to keep this recommendation open until the end 

of FY 2014 so we can verify whether the ADS-B contract includes cost estimates 

to support critical services for all sites throughout the life of the contract. 

ACTION REQUIRED

FAA’s proposed actions for all nine recommendations are responsive, and we 

consider them addressed but open pending completion of the planned actions. In 

accordance with DOT Order 8000.1c, we request that FAA provide us with a 

target completion date for recommendation 2 and reconsider its completion date 
28

for recommendation 5. We appreciate the courtesies and cooperation of 

Department of Transportation, FAA, and various stakeholder representatives 

during this audit. If you have any questions concerning this report, please contact 

me at (202) 366-1427 or Kevin Dorsey, Program Director, at (202) 366-1518.

#

cc: FAA Assistant Administrator for Financial Services/CFO

FAA Deputy Administrator 

Assistant Secretary for Aviation and International Affairs

FAA Chief of Staff

FAA Director, Audit and Evaluation

Anthony Williams, AAE-001

Martin Gertel, M-1 
29

Exhibit A. Objectives, Scope, and Methodology

EXHIBIT A. OBJECTIVES, SCOPE, AND METHODOLOGY

At the request of the Chairmen of the House Committee on Transportation 

Infrastructure and the House Subcommittee on Aviation, we examined FAA’s 

plans for implementing ADS-B. Specifically, our objectives were to (1) examine 

key risks to FAA’s successful implementation of ADS-B and (2) assess the 

strengths and weaknesses of FAA’s proposed contracting approach. 

To achieve our objectives, we analyzed contract data, budget data, acquisition 

documents, cost and schedule projections and other supporting documentation 

provided by FAA. We also reviewed the ADS-B contract and relevant contractor 

financial and performance reports from ITT Corporation, the prime contractor. 

We reviewed FAA’s ADS-B budget and cost estimates and ADS-B strategy 

documents for reasonableness and cost effectiveness. We examined FAA 

expenditure data for ADS-B, to determine how much has been spent since the 

program’s inception and for FAA’s legacy systems to determine if ADS-B is 

achieving cost and benefit goals. We also analyzed the FAA’s Notices of 

Proposed Rulemaking for the ADS-B system.

We interviewed key FAA and ADS-B program officials at FAA Headquarters in 

Washington, D.C. We also met with industry officials and union representatives. 

We interviewed ITT Corporation officials to discuss the contract and the status of 

the system’s development, installation, and implementation.

We conducted this performance audit between August 2007 and June 2010. The 

audit was performed in accordance with Generally Accepted Government 

Auditing Standards prescribed by the Comptroller General of the United States. 

As required by those standards, we obtained evidence that we believe provides a 

reasonable basis for our findings and conclusions based on our audit objectives. 
30

Exhibit B. Key ADS-B Implementation Milestones

EXHIBIT B. KEY ADS-B IMPLEMENTATION MILESTONES

Thus far, FAA has completed a number of important ADS-B actions on schedule. 

For example, FAA has completed a critical design review18 of the ground system 

and ADS-B ground systems have been deployed at the first key site in Miami, 

Florida. The Miami systems have been declared suitable for operational use and 

are providing services to a limited number of pilots in properly equipped aircraft.19

Between 2009 and 2014, FAA plans to complete the ground infrastructure, and 

fully integrate ADS-B with existing FAA automation systems that controllers 

currently rely on to manage traffic, and provide weather services. Further 

refinement of additional air-to-air applications (for ADS-B-In) and the 

decommissioning of radars are planned for the 2015 to 2025 timeframe. 

Table B-1 shows the key milestones for ADS-B implementation.

 

Table B-1. ADS-B Key Milestones

Milestone Projected/Actual

Completion Date

In Service Decision—Miami November 2008

Initial Operating Capability—Louisville November 2009

Initial Operating Capability—Gulf of Mexico December 2009

Initial Operating Capability—Philadelphia March 2010

Initial Operating Capability—Juneau April 2010

Publish Final Rule for ADS-B Out May 2010

In Service Decision for Critical Services September 2010

Complete ADS-B NAS-wide Infrastructure Deployment September 2013

Source: FAA Contract—ADS-B Program, August 24, 2007

 18 A critical design review validates that the contractor’s overall design of the system meets the contract requirements. 19 It is important to note that the ADS-B ground systems deployed in Miami are broadcasting “essential” services 

(advisory information) to pilots as opposed to broadcasting “critical” services or the down-linking of information to 

FAA automation systems that will be used for separating aircraft.
31

Exhibit C. Major Contributors to This Report

EXHIBIT C. MAJOR CONTRIBUTORS TO THIS REPORT

Name Title . 

Kevin Dorsey Program Director 

Lillian Slodkowski Project Manager

Melissa Pyron Senior Analyst

Won Kim Auditor

Andrea Nossaman Writer-Editor

 Arthur Shantz Technical Advisor
32

Appendix. Agency Comments

APPENDIX. AGENCY COMMENTS

Federal Aviation 

Administration 

Memorandum

Date: September 28, 2010

To: Matthew E. Hampton, Deputy Assistant Inspector General for Aviation and 

Special Program Audits

From: Clay Foushee, Director, Audit and Evaluation

Prepared by: Anthony Williams, x79000

Subject: OIG Draft Report: FAA Faces Significant Risks in Implementing the

Automatic Dependent Surveillance - Broadcast Program and Realizing Benefits

The Automatic Dependent Surveillance-Broadcast (ADS-B) program is a cornerstone of the 

Federal Aviation Administration’s (FAA) overall approach to evolving air traffic control, from its 

present state into the Next Generation Air Transportation System (NextGen) approach; increasing 

safety and the overall efficiency of the National Airspace System. While it employs a complex 

multifaceted approach, it is built upon the straightforward concept of leveraging Global 

Positioning System technology to give the pilot and controller the access to better information for 

making safe aviation decisions. The FAA appreciates the Office of Inspector General (OIG) 

report’s recognition of the strides that FAA has achieved and agrees that the program offers the 

potential for significant long term benefits. At the same time, it is a long term program that 

requires the careful coordination of disparate participants, with varying perspectives ranging 

from cost, to effectiveness, to national security.

FAA Involved Stakeholders and ADS-B Development

FAA obtained stakeholder input throughout the ADS-B program and ensured that decisions were 

transparent, objective and appropriate. FAA enlisted the participation of diverse stakeholders to 

help refine requirements for both ground and avionics system elements. Significant industry 

involvement resulted in a performance-based contract that incentivized the contractor to perform 

- and actual results are essentially on-time and under budget. The ADS-B signal provides the 

controllers more accurate data than previously available and FAA is soliciting controller 

feedback on how best to display and use that data across each automation platform. The ADS-B 

final rule for equipage was issued on May 27, 2010 after Aviation Rulemaking Committee 

(ARC) and significant industry input. The FAA coordinated with the Radio Technical 

Commission for Aeronautics (RTCA) and other aviation organizations before issuing a Technical 

Standard Order (TSO) which defines ADS-B “Out” manufacturer requirements for avionics. The 
33

Appendix. Agency Comments

FAA has also established an advisory circular which identifies the requirements for avionics

installation. This stability in requirements is expected to allow the avionics industry to 

manufacture, certify and install rule-compliant equipment well in advance of the 2020 required 

date.

FAA Defining Advanced ADS-B Requirements

FAA is now defining the more advanced requirements for ADS-B “In” applications. Due in part 

to program success to-date, increased demand for avionics applications by the user community 

may present the FAA with the future choice of whether to modify ADS-B air or ground 

components. The plan for ADS-B “In” high value advanced applications is to define 

requirements through the Applications Integrated Work Plan Steering Committee and Work 

Group, and from an Aviation Rulemaking Committee convened July 2010. If these ADS-B “In”

requirements are cost beneficial, the FAA will decide whether to add to the existing program or 

contract baseline.

RECOMMENDATIONS AND RESPONSES

Recommendation 1. Accelerate efforts to establish requirements for ADS-B In and certify 

cockpit displays for enhancing pilot situational awareness to improve operations at high-density 

airports.

FAA Response: Concur. In July 2010, FAA formed an ARC to explore ADS-B In. The FAA has 

agreements with several airline partners (e.g., United Parcel Service, United, US Air, etc.) to 

equip aircraft and collect data. The airline partners have subcontracts with avionics 

manufacturers and those efforts will lead to certified avionics. Cockpit displays are expected to 

be the most expensive type of avionics. As the FAA and industry research potential high-value 

ADS-B “In” applications, part of that work will involve prioritizing which applications would 

require a cockpit display. The ARC is chartered to deliver a final report on its recommendations 

by September 30, 2011. It will also complete all follow on work and prepare a summary report 

detailing recommended next steps by June 1, 2012.

Recommendation 2. Further quantify and validate controller productivity enhancements that can 

result from displaying ADS-B information on controller displays and the additional automation 

needed to maximize these ADS-B benefits.

FAA Response: Concur. The FAA is nearing completion of negotiations with the National Air 

Traffic Controllers Association about the nature and extent of controller participation in 

evaluating any potential modifications. Potential productivity enhancements could arise from 

procedural changes and do not necessarily involve changes to the automation system. The FAA 

will analyze the costs and benefits between contemplated procedural and automation changes in 

its decision making process. As part of the FAA’s business case, the benefits of providing 

improved surveillance data via ADS-B Out to air traffic control decision support tools such as 

User Request Evaluation Tool (URET) and Traffic Management Advisor (TMA) were 

quantified. The present value of increasing the utility of these decision tools was estimated to be 

$802 million for URET and $417 million for TMA. The URET benefits begin to be accrued in 

2017 after the decision support tool is migrated to the R-Side (radar) while the TMA benefits 
34

Appendix. Agency Comments

were not to be accrued until 2020 due to uncertainty of achieving the benefit prior to full user 

equipage. 

Additionally, the implementation of a ground based interval management system in conjunction 

with ADS-B Out provides air traffic control with the ability to support optimal profile descents in 

busier traffic environments translating to $796 million in present value dollars between 2014 and 

2035.

Recommendation 3. Develop and fund a targeted human factors research effort for pilots and 

controllers for ADS-B In requirements (display and procedures) in order to prioritize efforts and 

examine the proper sequence for introducing new capabilities.

FAA Response: Concur. The Agency will evaluate any recommendations from the ADS-B ‘In’

ARC and RTCA efforts. All recommendations will be addressed and incorporated into the Joint 

Resources Council (JRC) in 2012 which will baseline and fund activities 2014 and beyond. 

DO-317 A, the standard for cockpit based ADS-B ‘In’ applications, is under development as a 

joint RTCA/EuroCAE product. Development of this standard will be completed by the end of 

fiscal year (FY) 2011 third quarter. After DO-317A is published, a TSO – certification 

requirements for avionics invoking it will be published within 3 months (by FY 2011 fourth 

quarter).

The Agency has conducted multiple focused human factors research efforts to date related to

ADS-B ‘In’ and has plans to continue conducting this research in the future. Examples of

research efforts include and/or will include: Surface Indications with Alerts - conducted 5

human-in-the-loop (HITL) studies (between 2008-2010) plus additional simulation and flight test

HITL studies (February 2010); In Trail Procedures (ITP) - white paper on ITP display issues and 

potential resolutions (March 2010), demonstration of ITP display concepts (July 2010), human 

factors flight simulator evaluation (September 2010), human factors flight test evaluation

(February 2011); Interval Management - HITL simulations (April 2007, June 2008, July 2008,

September 2008, December 2008, August 2009), field tests (June 2010, August 2010), and

additional HITL simulations (beginning FY11 if the ARC endorses). There will also be Traffic

Situation Awareness with Alerts human factors studies completed by 2012.

Recommendation 4. Work with the U.S. intelligence community to assess potential threats to 

the ADS-B system and ways to mitigate them.

FAA Response: Concur. FAA is conducting an ongoing dialogue with DoD and the intelligence 

community and making annual updates to its Security Certification and Authorization Package 

(SCAP). The next authorization date (SCAP update) is October 29, 2010.

Recommendation 5. Update the cost benefit analysis for the acquisition to ensure that FAA’s 

plan is still appropriate before committing the additional funds for a nationwide deployment of 

the ADS-B ground infrastructure.

FAA Response: Partially Concur. The FAA agrees with the need to eventually update the cost 

benefit analysis, but disagrees with the timing of the recommendation. It is premature to update

the benefits portion of the cost benefit analysis because the benefits are tied to the equipage rate.
35

Appendix. Agency Comments

The FAA approved and baselined the nationwide deployment of ADS-B at the August 2007 JRC

meeting. Using the latest July 2010 Earned Value Management data, FAA planned to spend

$522,762,990 by that point and actually spent $488,038,680. The plan included attaining Initial

Operating Capability at four key sites and publishing a rule for ADS-B Out, all of which have

been accomplished. The program Cost Performance Index is 1.04 and program Schedule

Performance Index is 0.97, indicating a healthy program.

The ADS-B In Service Decision (ISD) occurred on September 22, 2010. At this time, an analysis 

of approved versus spent dollars will be conducted as part of a decision to continue nationwide 

deployment of the system.

The ADS-B Out rule was recently published (May 2010) and the compliance date is not until

2020. The cost benefit analysis will be updated once a substantial level of equipage is in place to

realize and calculate the planned benefits. In the interim, the Agency will sample the equipage

rate between 2015 - 2016 and validate the cost benefit analysis as compared to the baseline.

Recommendation 6. Clarify the use of ADS-B value-added services and reexamine assumptions 

about the ability of ITT to sell them in light of other planned NextGen efforts to greatly expand 

information sharing between FAA and stake holders.

FAA Response: Concur. The FAA agrees that plans to share data with the aviation industry and 

others should be carefully coordinated. The ADS-B contractor was not promised exclusive use of 

ADS-B data - but the value of that data feed could be diluted to the extent that similar aviation 

data becomes available from alternate sources. The FAA is in the process of creating a new 

organization (ATO-V, Mission Support Services) with overall responsibility for coordinating 

data release issues. The ability of ITT to sell value added services in light of other planned 

NextGen efforts may be aided by segregating data related to FAA “core” activities from data to 

be used for other customer activities such as asset tracking and resale of surveillance data to third 

parties. Actual sale of value added services is dependent on equipage rates, customer demand, 

and ITT marketing.

The Surveillance Broadcast Services (SBS) program office has initiated discussions with ITT

regarding which value added services would be most attractive to potential customers and would

provide an effective stream of revenue. The ITT value added ADS-B architecture has been

approved by FAA. A Beta Test period has been initiated where data is currently being provided

to several users. The Beta Test will aid in determining how the delivered data could be displayed

and utilized. The SBS program office is developing a governance policy (to be in place by

calendar year 2010) which will guide the type of data which will be released and the authorized

usage by each customer. It is envisioned the Beta Test will last approximately 6 months. After

the Beta Test is completed, ITT will charge customers for data. At that time, a system will have

been developed which will include the data release approval process and a related revenue

reporting system. The SBS program office has also authorized ITT to establish a link for display

of ADS-B value added data to Alaskan pilots to enable them to assess the potential of value

added products.

Recommendation 7. Specify the cost and schedule for providing ADS-B critical services to all

Enroute and airport surface domains over the life of the contract.
36

Appendix. Agency Comments

FAA Response: Partially Concur. The FAA agrees that the contract pricing tables do not in some 

instances separately identify pricing for ADS-B Critical Services and that it is not always clear in 

those tables whether the costs are included in the pricing.

The stated cost for providing Critical Services is a layer of the overall cost because the contract

pricing assumptions stated that the Critical Services would be built upon the pre-established

Essential Services network. Accordingly, there is an initial charge for establishing Critical

Services, after which the cost of providing Critical Services are included in the Service Volume

Essential Services prices.

The schedule for establishing Critical Services (based on the contract’s pricing tables) for

remaining locations is:

FY 2011: 6

FY 2012: 97

FY 2013: 109

FY 2014: 86

Total: 298 locations

In lieu of reissuing the pricing tables with a specific cost and schedule for ADS-B Critical 

Services, existing contract provisions for pricing assumptions will be clarified to state that where 

there is no separate ADS-B Critical Services subscription charge in the pricing table, the charge 

is included in the Essential Services charge for that service volume. A contract modification will 

be completed by October 31, 2010.

Recommendation 8. Assess the technical readiness of Automatic Dependent SurveillanceRebroadcast (ADS-R) and any risks to its development and determine which locations will need

ADS-R.

FAA Response: Concur. ADS-R was baselined for situational awareness as part of the essential 

services ISD in November 2008, before reaching ISD extensive testing and validation was 

completed to ensure technical readiness. All sites will be deployed with ADS-R capability by 

2014. When high value ADS-B ‘in’ applications are baselined ADS-R will be reassessed, which 

will include all necessary testing and validation.

Recommendation 9. Determine and obtain the necessary in-house expertise to effectively

monitor the contractor’s efforts and oversee the ADS-B ground infrastructure over the long term.

FAA Response: Concur. The FAA is continually assessing the extent to which various skill sets 

are necessary as part of its annual Acquisition Workforce Planning. In addition, there were two 

SBS ISD action plans related to staffing identified and approved within Category 8 of the ISD 

checklist which will be closed by June 2011.

Overall, the OIG report provides a useful summary of the issues and perspectives involved with

ADS-B development. The FAA appreciates the time that the OIG office took to carefully review

the ADS-B program and to speak with Agency officials.