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40–696 PDF 2008

THE PRESIDENT’S FISCAL 

YEAR 2009 FEDERAL 

AVIATION ADMINISTRATION BUDGET 

(110–94) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

AVIATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

FEBRUARY 7, 2008 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

LAURA A. RICHARDSON, California 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

VACANCY 

(II) 

SUBCOMMITTEE ON AVIATION

JERRY F. COSTELLO, Illinois, Chairman 

BOB FILNER, California 

LEONARD L. BOSWELL, Iowa 

RICK LARSEN, Washington 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

DANIEL LIPINSKI, Illinois 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

BRUCE L. BRALEY, Iowa 

HARRY E. MITCHELL, Arizona 

JOHN J. HALL, New York, Vice Chair 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELLEN O. TAUSCHER, California 

TIM HOLDEN, Pennsylvania 

MICHAEL E. CAPUANO, Massachusetts 

DORIS O. MATSUI, California 

MAZIE K. HIRONO, Hawaii 

LAURA A. RICHARDSON, California 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

ROBIN HAYES, North Carolina 

SAM GRAVES, Missouri 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JOHN L. MICA, Florida 

(Ex Officio) 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Dillingham, Gerald, Director, Physical Infrastructure Issues, U.S. Government Accountability Office .................................................................................. 7 

Punwani, Ramesh K., Assistant Administrator for Financial Services, Chief 

Financial Officer, Federal Aviation Administration, accompanied by Gene 

Juba, Senior Vice President for Finance, Air Traffic Organization, Federal 

Aviation Administration ...................................................................................... 7 

Scovel, III, Hon. Calvin L., Inspector General, U.S. Department of Transportation ..................................................................................................................... 7 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Carnahan, Hon. Russ, of Missouri ......................................................................... 32 

Costello, Hon. Jerry F., of Illinois .......................................................................... 33 

Mitchell, Hon. Harry E., of Arizona ....................................................................... 45 

Oberstar, Hon. James L., of Minnesota ................................................................. 52 

Richardson, Hon. Laura A., of California .............................................................. 58 

Salazar, Hon. John T., of Colorado ........................................................................ 60 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Dillingham, Gerald L. ............................................................................................. 62 

Punwani, Ramesh K. ............................................................................................... 95 

Scovel, III, Hon. Calvin L. ...................................................................................... 110 

SUBMISSIONS FOR THE RECORD 

Federal Aviation Administration: 

Response to request from Rep. Costello ............................................................. 13 

Response to request from Rep. Costello ............................................................. 16 

Response to request from Rep. Duncan .............................................................. 20 

Response to request from Rep. Hall ................................................................... 27 

Responses to requests from Rep. Richardson .................................................... 30 

Responses to questions directed toward the Honorable Robert Sturgell, 

Acting Administrator, from Rep. Mica ............................................................ 141 

Consolidated listing of FAA facilities requiring repairs ................................... 144 

Mold remediation projects ................................................................................... 176 

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(1) 

HEARING ON THE PRESIDENT’S FISCAL YEAR 

2009 FEDERAL AVIATION ADMINISTRATION 

BUDGET 

Thursday, February 7, 2008 

HOUSE OF REPRESENTATIVES

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

SUBCOMMITTEE ON AVIATION, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2167, Rayburn House Office Building, the Honorable Jerry F. 

Costello [Chairman of the Subcommittee] presiding. 

Mr. COSTELLO. The Subcommittee will come to order. The Chair 

would ask all Members, staff, and everyone to turn their electronic 

devices off or on vibrate. 

The Subcommittee is meeting today to hear testimony on the 

President’s fiscal year 2009 FAA budget. The Chair will give an 

opening statement, recognize the Ranking Member for his opening 

statement or comments, and then we will get to our witnesses. 

The Chair would note that Mr. Petri, the Ranking Member of the 

Subcommittee, was snowed in and, unfortunately, can’t be here 

today, but we are fortunate to have, in his place as the Ranking 

Member today, the former Chair of this Subcommittee, Mr. Duncan 

from Tennessee, and after my opening statement I will recognize 

him for his comments. 

I welcome all of our witnesses here today. This Subcommittee is, 

of course, having our first Subcommittee hearing of this year on 

the President’s fiscal year 2009 FAA budget. I am pleased to welcome the Chief Financial Officer for the FAA, Ramesh Punwani, 

who is accompanied by Gene Juba, the Senior Vice President for 

Finance of the FAA’s Air Traffic Organization; the Department of 

Transportation’s Inspector General, Mr. Scovel; and Dr. Gerald 

Dillingham of the Government Accountability Office. 

The Administration’s fiscal year 2009 budget again proposes to 

transform the FAA’s current excise tax financing system to a user 

fee system. Under the fiscal year 2009 budget request, as detailed 

in the FAA’s reauthorization proposal submitted last year, the 

FAA’s financing sources would shift from a mix of fuel taxes, other 

excise taxes, and a general fund contribution to user fees, fuel 

taxes, and a general fund contribution. This proposal would take 

effect in 2010. 

Last year, however, this Subcommittee, the Full Committee, and 

the House soundly rejected the Administration’s user fee proposal 

during consideration of H.R. 2881, the FAA Reauthorization Act of 

2 

2007, which passed the House of Representatives on September 

20th, 2007. We, of course, are still awaiting the Senate to act on 

the reauthorization proposal. 

As everyone knows, this past year we experienced record delays. 

It is very difficult for me to understand why the Administration 

wants to cut the FAA’s total funding request by 1.8 percent at the 

same time it predicts that by 2014, without any change to the current air traffic system, delays will be 62 percent higher than today. 

The Administration’s fiscal year 2009 FAA budget request is simply inadequate to meet the growing demand in air travel and to 

keep pace with infrastructure needs of our aviation system. 

Let’s begin with looking at the F&E account, facilities and equipment, capital programs. In 2003, the FAA requested and received 

from the Congress an authorization of approximately $3 billion per 

year for its capital program. Yet, through fiscal year 2005, 2006, 

2007, and 2008, the Administration requested roughly $2.5 billion 

per year for its capital program. For fiscal year 2009, the Administration is requesting an 8.4 percent increase in the F&E account 

over the fiscal year 2008 enacted level. 

While I am pleased to see the Administration has asked for increased funding, I do not believe that it is enough to modernize the 

current air traffic control system. Moreover, the Administration’s 

fiscal year 2009 capital spending request appears to be at odds 

with its own preliminary Next Generation transportation system 

F&E cost estimate of $3.246 billion, which is also the funding level 

authorized in H.R. 2881. 

While it is important that funding is provided to make NextGen 

happen, NextGen is not just about financing. I am concerned with 

reports the FAA has yet to set near-term expectations for the 

NextGen system and establish funding priorities. We have learned 

from the past that the NextGen system must evolve incrementally 

through sound contract management by the FAA coupled with aggressive oversight by the Congress. To move forward with 

NextGen, the FAA must provide a clear road map detailing both 

short-and long-term goals and investment priorities. Moreover, the 

Administration must develop a plan on long-term NextGen costs. 

Last year, the Department of Transportation Inspector General 

reported that there are still unknowns regarding NextGen costs 

which will depend on, among other things, performance requirements for new automation, weather initiatives, and the extent to 

which the FAA intends to consolidate facilities. 

I am also concerned about the condition of our air traffic control 

facilities. In our hearing last year regarding ATC facility conditions, the Subcommittee found that the facilities were poorly maintained and had unsafe working conditions, jeopardizing the health 

of its employees. I have asked the FAA for a list of facilities that 

it will remediate in fiscal year 2008, as well as under the fiscal 

year 2009 budget, and FAA has not yet given the list to the Subcommittee. I expect the FAA to provide this information to the Subcommittee within seven days from today. The facilities that will be 

remediated in fiscal year 2008, as well as under the fiscal year 

2009 budget, this Subcommittee wants a list of those facilities 

within seven days from the agency. 

3 

I have said before that we can’t put the cart before the horse 

when it comes to modernization. While the FAA continues to lay 

the groundwork for modernization, it must also make certain that 

the current system can continue to operate in a safe, reliable way 

to properly invest in maintaining and upkeeping the existing structure. The FAA must also provide safe and healthy working conditions for its employees. 

In the AIP program, the Airport Improvement Program, the fis- cal year 2009 budget request provides $2.75 billion for the Airport 

Improvement Program, $1.15 billion less than the level authorized 

under H.R. 2881 and $765 million less than the fiscal year 2008 

enacted level. 

Increasing investment in aviation infrastructure is necessary to 

enhance capacity and reduce delays, and one way of achieving that 

goal is through the new runway and runway extensions in this 

Country. The AIP levels set forth in the Administration’s fiscal 

year 2009 proposal will not provide the investment needed to reduce congestion and delays. Under the current formula for distributing AIP entitlement funding, virtually every airport that currently receives AIP entitlement funding will have its entitlement 

reduced. 

Let me repeat that. Under the current formula for distributing 

AIP funding, virtually every airport in the Country that currently 

receives AIP entitlement funding will have its entitlement reduced. 

Additionally, small airports may be particularly hard hit by the 

Administration’s proposed AIP cut because AIP grants are a larger 

source of funding for smaller airports. 

Staffing. I am concerned about future staffing levels for the 

FAA’s controller and safety inspector workforces. In particular, the 

FAA estimates that, by 2016, approximately 60 percent of the 

FAA’s roughly 15,000 air traffic controllers will be eligible for retirement. The FAA plans to hire approximately 16,000 controllers 

over the next 10 years to have enough recruits in the pipeline to 

backfill the positions lost and to accommodate the increase in air 

traffic. 

The Inspector General will testify today that since 2005, 3,300 

controllers have left the agency and that the total rate of attrition 

was 23 percent higher than the FAA had projected. I will repeat 

that again. The rate of attrition is 23 percent higher than the FAA 

projected. If anyone doubts that we have a problem in the system, 

all they have to do is to take a look at the current staffing level 

and the projections that the FAA had made in the past. 

The National Air Traffic Controllers Association states that three 

veteran controllers have retired per day since the end of fiscal year 

2007. The acceleration of retirement is no doubt directly attributable to the imposition of the FAA work rules on its controller 

workforce. We are more than a bit strained in our system. We are 

headed toward a crisis if the FAA does not acknowledge that it has 

a serious controller staffing problem. Hiring new controllers is a 

complex process, and there is a significant difference between a 

trainee and a certified controller. 

Replacing a controller who retires must begin several years in 

advance, and I am concerned that the FAA does not have an effective program to ensure both efficiency and quality of the trainee. 

4 

Moreover, I have concerns about reports that some ATC facilities 

have more controllers in training than they can realistically handle. I think we will hear about that today from both the IG and 

the GAO as well. 

The FAA extension. Finally, this Subcommittee is well aware 

that the FAA is potentially facing significant fiscal year 2008 budget problems due to the lapse in funding for the AIP program, and 

the upcoming expiration of both the aviation excise taxes and the 

authority to make expenditures from the aviation trust fund. The 

House acted on three separate occasions to extend the FAA’s authorities, including passage of H.R. 2881, the four-year FAA reauthorization legislation. We are working with the Ways and Means 

Committee in the House to develop legislation that extends not 

only the aviation taxes and expenditure authority, but also AIP 

contract authority. We will work with the Senate to pass this extension as soon as possible. 

We must make the investments in our aviation infrastructure 

and workforce now so that they can maintain the highest level of 

safety and efficiency in our aviation system. 

With that, I will recognize, again, the Ranking Member who is 

sitting in for Mr. Petri today, but before I recognize Mr. Duncan, 

I would ask unanimous consent to allow two weeks for all Members 

to revise and extend their remarks and to permit the submission 

of additional statements and materials by Members and witnesses. 

Without objection, so ordered. 

The Chair now recognizes the Ranking Member from Tennessee, 

Mr. Duncan. 

Mr. DUNCAN. Well, thank you very much, Mr. Chairman. I 

thought you would make a great Chairman of this Subcommittee 

and you certainly have, and I am privileged to sit in on behalf of 

Mr. Petri and make a few remarks both on his behalf and mine. 

The fiscal year 2009 FAA budget request is a stark reminder of 

the need to get the FAA reauthorization bill signed into law. I anticipate that the witnesses will share with the Subcommittee the 

ramifications of further delay in passing the FAA reauthorization 

bill and the impact of repeated short-term extensions of the FAA’s 

authorities. I would encourage all Members to pay particular attention to the concerns raised in this regard and keep in mind that 

the House passed its reauthorization bill back on September 20th 

of last year. 

We will also explore the issues raised by the President’s budget 

request for fiscal 2009. Despite the fact that both the House of Representatives and most of the aviation community did not accept it, 

the proposal assumes a shift in the FAA’s revenue sources from the 

current assortment of excise taxes to a combination of general aviation fuel taxes and cost-based user fees for commercial users. While 

it seems to be a foregone conclusion that the FAA’s proposal will 

not be adopted at the end of the day, I admire the agency’s commitment to their cause. 

Like last year, I am particularly interested in how the FAA 

budget proposal addresses the much needed modernization of our 

national air space system. As we all know, air traffic control modernization will be a critical importance over the next 10 to 20 

years, as demand on the system is projected and certainly will 

5 

grow dramatically. The budget request includes $631 million for 

the transformation to NextGen. However, for modernization to be 

successful, development and deployment of cutting-edge technologies and performance standards must not be delayed. Congress 

must be assured that NextGen planning and investment decisions 

are being coordinated. 

Additionally, the Federal Government must work closely with 

aviation stakeholders, including industry and labor, to ensure that 

new technologies and operational changes are thoroughly vetted 

and that critical investment decisions are fully addressed and supported. This is a difficult thing for this Subcommittee, particularly 

with some of these very expensive, high-tech projects, and in that 

regard, so that we won’t be embarrassed by huge cost overruns and 

not do our duty to the taxpayers, we need much help in this regard 

from the witnesses who are here today, System Administrator 

Punwani and especially Inspector General Scovel and Director Gerald Dillingham, on whom we have relied so much in the past. 

I am interested in hearing what specific modernization initiatives 

the Administration proposes for fiscal years 2009 through 2015, as 

well as beyond. To keep pace with the rising demand, the FAA 

must also continue to support airport capacity capital projects with 

the continuation of a robust air improvement program. The President’s budget requests $2.75 billion for AIP. This request is some $765 million less than was enacted for fiscal year 2008 and almost $400 million less than what was authorized 

for fiscal year 2008 in our House-passed reauthorization bill. I am 

concerned about the impact that reduced funding would have on 

our airports’ ability to keep up with capital project needs, particularly at small and medium sized airports, as the Chairman has 

mentioned, that are unable to rely on sizable passenger facility 

charge receipts to complete the needed projects. 

In the aviation industry, safety and efficiency is not only 

achieved by technology and funding, but also by the dedicated and 

highly trained employees of the FAA. As we move forward with the 

budget, we must be sure to provide adequate funding for recruiting, 

hiring, and training FAA’s future safety professionals and air traffic controllers, and the Chairman, once again, went into this. Ensuring the right investment now is essential to maintaining the 

FAA’s critical safety mission and impressive safety record. 

I want to thank all of the witnesses for joining us here today, 

and I look forward to hearing your testimony, and I yield back the 

balance of my time. 

Mr. COSTELLO. The Chair thanks the Ranking Member and recognizes the gentleman from Colorado, Mr. Salazar. 

Mr. SALAZAR. I want to thank you, Mr. Chairman, for having this 

very, very important hearing. Today, I want to say that I associate 

myself with your remarks and the Ranking Member’s remarks, and 

I am very concerned about the dramatic $765 million cut to the 

Airport Improvement Program. I find that very, very troubling. Despite the increasing delays and congestion, you want to take funding out of these current infrastructure projects that many of them 

are underway right now, and we all know that for every billion dollars that we spend on our transportation and infrastructure 

projects in this Country, it creates 47,000 jobs. At this time, while 

6 

we are having to deal with an economic stimulus package, this is 

one way to make sure that we keep America’s workforce in play. 

The regional and smaller rural airports in Colorado actually provide the communities with the ability to enhance economic development, something that we could use quite a bit of these days. The 

FAA states that the cuts in the AIP program will be offset with the 

funding outlined in the FAA reauthorization bill. Well, I know that 

I have a brother in the upper house, but he is also very frustrated 

in how the Senate moves, and there is no telling when they will 

reach an agreement and bring that to the floor. 

We, as a Committee, have determined that the appropriate level 

of AIP funding to meet the needs of this entire airport system is 

$3.8 billion. I think that any proposal short of that will be met with 

opposition from me and hopefully others in this Committee. I know 

that the Colorado Department of Transportation does not support 

this level of funding. The communities who own and operate these 

airports do not support this level of funding. I do not support this 

level of funding. So I would like to hear today your justification for 

these cuts. 

And with that, Mr. Chairman, I yield back. 

Mr. COSTELLO. The Chair thanks the gentleman. 

Do any other Members wish to be recognized for an opening 

statement or comments? Mr. Lampson from Texas. 

Mr. LAMPSON. Thank you, Mr. Chairman. Just a quick statement. First, thank you for holding the hearing. I am anxious to 

hear what the witnesses have to bring to us. 

It is troubling indeed to consider having to face the problems 

that we are facing in some of our areas. Houston, Texas, as an example, with the congestion that Houston Intercontinental Airport 

and Hobby Airport and that whole system faces down there right 

now, when the area is expected to have, within the next 15 to 25 

years, an additional 3.5 million people, we are going to shut ourselves down. So this is extremely shortsighted. I look forward to 

finding solutions to it and working with this Committee to do so. 

Thank you, Mr. Chairman. I yield back. 

Mr. COSTELLO. The Chair thanks the gentleman and at this time 

will recognize our witnesses. First, as I said earlier, I am pleased 

to recognize Mr. Ramesh Punwani, who is the Chief Financial Officer for the Federal Aviation Administration. He is accompanied 

by—but I understand will not be presenting testimony, but will be 

here to answer questions—Mr. Gene Juba, who is the Senior Vice 

President for Finance at the FAA’s Air Traffic Control Organization. Also, we will hear testimony from the Honorable Calvin 

Scovel, III, who is the Inspector General for the Department of 

Transportation, and Dr. Gerald Dillingham, who, of course, has testified here many times, with the GAO. 

At this time, the Chair, under the five minute rule, would recognize Mr. Punwani. 

7 

TESTIMONY OF RAMESH K. PUNWANI, ASSISTANT ADMINISTRATOR FOR FINANCIAL SERVICES, CHIEF FINANCIAL OFFICER, FEDERAL AVIATION ADMINISTRATION, ACCOMPANIED 

BY GENE JUBA, SENIOR VICE PRESIDENT FOR FINANCE, AIR 

TRAFFIC ORGANIZATION, FEDERAL AVIATION ADMINISTRATION; THE HONORABLE CALVIN L. SCOVEL, III, INSPECTOR 

GENERAL, U.S. DEPARTMENT OF TRANSPORTATION; GERALD DILLINGHAM, DIRECTOR, PHYSICAL INFRASTRUCTURE 

ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. PUNWANI. Good morning, Chairman Costello, Congressman 

Duncan, and Members of this Subcommittee. It is a pleasure to appear before you this morning to provide an overview of the President’s budget request for the FAA for fiscal year 2009. With me 

today is my colleague, Gene Juba, Senior Vice President of Finance 

in our Air Traffic Organization. 

I would like to use my time to first briefly address some budget 

concerns for the current fiscal year and then provide a few highlights of our 2009 budget request. We need Congress’s immediate 

attention to an upcoming lapse in authorities that could significantly disrupt our normal day-to-day operations. 

First, the Consolidated Appropriations Act for this year permits 

us to make expenditures from the Airport and Airways Trust Fund 

only until the end of this month. Second, the authority to collect 

aviation-related excise taxes also expires on February the 29th. 

Third, the contract authority for the Airport Grants Program expired on December the 31st of last year, and for all practical purposes the Airport Grant Program is shut down. 

The consequences for FAA are that no new obligations can be 

made out of any capital account after February the 29th. This covers airport grants, F&E, and the RE&D accounts, including employees’ salaries. Without action, 4,000 employees will be sent 

home and the remaining 43,000 operational staff would follow 

when the General Fund is fully obligated, by about mid-June. 

Mr. Chairman, it is in the best interest of aviation safety and efficiency for these lapses to not take place, and the consequent disruption to our programs and personnel need to be avoided. We appreciate the efforts of this Committee to correct this problem as 

soon as possible. 

Turning now to the next fiscal year. Our 2009 budget request of $14.6 billion provides funding to support all the critical priorities 

of the FAA. As always, safety is our primary concern. As you know, 

we are fortunate to be living in the safest period in aviation history, and the FAA remains committed to making it safer still. This 

remarkable record is due to the combined efforts of the Administration, the aviation community, and, as always, the support of Congress. 

Sixty-seven percent of our budget request is dedicated to our 

safety mission. This includes meeting our NextGen transformation 

milestones, as well as hiring goals for our air traffic controller and 

safety workforces. The budget will allow us to hire and train safety 

personnel to enhance FAA’s oversight, surveillance, and certification activities. 

With regard to controller staffing, FAA is aggressively hiring and 

training controllers to ensure the right number of controllers are 

8 

in the right place at the right time. Our budget includes funding 

to provide a net increase of 306 new controllers, a level consistent 

with the targets being developed in our updated staffing plan. We 

are staying ahead of the attrition curve. 

As we look into the future, we see an aviation system that will 

need to grow to accommodate the demands of our stakeholders and 

the flying public. Our 2009 budget triples the investment in 

NextGen technology, proposing $688 million for the transformation 

from radar-based to satellite-based air traffic systems. That is $500 

million more in investment than in 2008. We will also invest $3.7 

billion in operating and capital funds to improve system capacity 

and address congestion and delays. 

With regard to AIP, which is a major concern, I realize, for the 

Subcommittee, with our proposed programmatic changes, including 

the proposed increase in the maximum PFC allowed, the $2.75 billion proposed in our budget will be sufficient to fund capital needs 

and meet the safety capacity and noise abatement objectives we 

have identified. As CFO, I am particularly proud, over the last five 

years, to say that we have improved our financial management performance in ways that enable us to better use the funding that 

Congress provides. 

We are continuing to make every effort to control our operating 

costs. We have improved the discipline with which agency programs and contracts are first approved; we have improved the 

tracking and monitoring of our programs; and, most important of 

all, we have reduced our overhead costs so that more of the taxpayer dollars are spent on a safe, efficient, and accessible aviation 

system. 

In conclusion, Mr. Chairman, with Congress’ help, we can avoid 

disruption to our programs this fiscal year with an extension of 

critical authorities and taxes. Time is of the essence. We stand 

ready to work with this Committee and others in Congress to enact 

a full-fledged reauthorization bill that is consistent with the key 

goals of the Administration and will enable us to move to the 

NextGen transportation system. 

That concludes my testimony, and my colleague and I would be 

happy to answer any questions that you and Members of the Subcommittee may have. 

Mr. COSTELLO. Thank you, Mr. Punwani. Let me say, before we 

recognize Mr. Scovel, that the Administration’s statement or position that the AIP program, as you are proposing, the level of funding, coupled with the PFC that you believe will be adequate funding, I doubt that there is an airport operator or airport executive 

in the Country that would agree with that. But we will get into 

that in just a few minutes. 

The Chair now recognizes Mr. Scovel. 

Mr. SCOVEL. Good morning, Mr. Chairman, Ranking Member 

Duncan, Members of the Subcommittee. We appreciate the opportunity to testify today regarding FAA’s $14.6 billion fiscal year 

2009 budget request. 

As this Subcommittee is well aware, meeting the current and 

forecasted demand for air travel is an important issue facing the 

Nation. The airlines transported over 700 million passengers in 

2007, and this number is expected to grow to over 1 billion by 

9 

2015. Escalating numbers of severe flight disruptions and delays 

are all signs of an increasingly strained system. 

Mr. Chairman, several key issues demand FAA’s attention. First, 

keeping existing modernization projects on track and setting realistic expectations for NextGen. FAA’s capital account is now being 

shaped by NextGen, an enormously complex effort that will cost 

tens of billions of dollars. We are not seeing the massive cost 

growth and schedule slips of the past. 

It will be important to keep existing efforts on track because 30 

projects will serve as platforms for NextGen. However, several programs do require attention, including a key technology to improve 

runway safety called ASDE-X. Thus far, 11 of 35 systems have 

been deployed for operational use. However, we are concerned 

about FAA’s ability to complete ASDE-X deployment with all 

planned capabilities at the more complex airports with less than 

half of the planned funds available. 

FAA is exploring ways to accelerate NextGen; however, it remains uncertain how much NextGen will cost or what can be delivered in terms of capacity and delay reduction. Therefore, we think 

a number of actions are needed. First, FAA must conduct a gap 

analysis of the current NAS and NextGen. FAA’s NextGen plans 

for the 2025 timeframe remain at a high level and do not detail 

how FAA will complete the transition to NextGen. Until this gap 

is understood, it will be difficult to set requirements and reliable 

cost estimates. 

Second, FAA must establish NextGen funding priorities. At this 

point, it is difficult for decision makers to determine what to invest 

in first or what can be accelerated. FAA needs to identify the highest priority improvements and reflect them in budget requests. 

In addition, FAA must develop an interim architecture for what 

can be accomplished in the 2015 time frame. This would help FAA 

determine reasonable goals, establish priorities and make adjustments to existing systems. 

Finally, the Agency needs to obtain the expertise required to execute and manage NextGen. We believe that strong contract management, systems integration, and system engineering skills with 

an understanding of human factors will be needed. 

Another key issue is addressing attrition in FAA’s critical 

workforces. The long-expected surge in controller attrition has 

begun. Since 2005, 3,300 controllers have left the agency, which 

was 23 percent higher than FAA had projected. However, since 

2005, FAA has hired 3,450 new controllers, which was 25 percent 

higher than it had projected. New controllers now represent 23 percent of the workforce, up from 15 percent in 2004, and this varies 

by location, from 2 percent at the Boston TRACON to 50 percent 

at the Las Vegas TRACON. 

FAA is facing a fundamental transformation in the composition 

of its controller workforce. A major challenge will be to train new 

controllers to the certified level at their assigned locations. Facility 

training can take up to three years and is the most expensive part 

of new controller training. Training new controllers to the fully certified level is important for two reasons: one, only certified controllers can control traffic on all positions of their assigned area and, 

two, controllers must be fully certified for at least six months beVerDate Aug 31 2005 15:26 Jul 09, 2008 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 P:\DOCS\40696 JASON
10 

fore they can train other new controllers on the job, a critical component of FAA’s plans to hire and train 15,000 new controllers 

through 2016. 

We recently completed an audit of FAA’s controller facility training program. Overall, we found that the program continues to be 

extremely decentralized and the efficiency and quality of the training vary from one location to another. We found similar problems 

in 2004. FAA is taking steps at the national level, but many efforts 

are still in the early stages. 

Key actions needed include: first, establishing realistic standards 

for the number of new controllers facilities can accommodate; second, clarifying responsibilities for oversight and direction at the national level; and, finally, following through on key initiatives included in its 2004 workforce plan, such as holding managers accountable for achieving timeframes for certifying new controllers. 

FAA faces similar issues in its inspector workforce. A key issue 

here will be to develop a reliable staffing model for ensuring its 

limited inspector resources are placed where they are most needed. 

Mr. Chairman, that concludes my statement. I would be happy 

to answer any questions you or other Members may have. 

Mr. COSTELLO. The Chair thanks you, Mr. Scovel, and recognizes 

now Dr. Dillingham. 

Mr. DILLINGHAM. Thank you, Mr. Chairman, Mr. Duncan, Members of the Subcommittee. My written statement includes our preliminary analysis of the President’s 2009 budget for FAA and identifies some of the key challenges for FAA and the Congress associated with maintaining the current ATC system and the transformation to NextGen. 

Regarding the budget, although the Administration’s budget proposes major changes in the way that FAA is funded, we believe 

that the current funding mechanism of the trust fund and the general fund can provide sufficient resources to support FAA activities, 

including NextGen. However, the proposed changes to FAA’s funding mechanism could better align its operational costs with revenues, that is, if FAA’s cost allocation system reliably allocates cost 

to the users. 

The budget also proposes an overall reduction of $765 million for 

AIP and would allow airports to increase PFCs to $6. However, for 

smaller airports, the PFC increase would not compensate for the 

reduction in AIP dollars. In addition, it is not entirely clear how 

such a reduction in AIP funds will affect the efforts to increase system capacity through AIP-funded projects. 

With regard to the challenges associated with the current ATC 

system, FAA has determined that it can best achieve its safety mission by using risk-based, data-driven safety programs. GAO agrees 

that this is a rational approach for monitoring safety. However, for 

this approach to be effective, FAA must obtain accurate and complete safety related data. 

Another challenge for FAA is its ability to continue to hire, train, 

and deploy a sufficient number of air traffic controllers. Although 

FAA has been able to hire several thousand controllers in recent 

years, controllers have been retiring faster than FAA anticipated, 

thereby making this challenge more difficult. In some cases, FAA 

will have to plan for the time and funds that will be needed for 

11 

dual training for the controllers to operate within the current ATC 

system as well as in the NextGen environment. 

Another immediate challenge for FAA is repairing and maintaining the safety and physical condition of over 400 terminal facilities. 

Some of these facilities will need to be operational for years to 

come, including being a part of the NextGen infrastructure. The 

one-time cost to repair and bring existing facilities up to standards 

is estimated to be about $300 million. 

With regard to the challenges associated with the transformation 

to NextGen, transitioning to NextGen will mean an increasing 

number of acquisitions and increasing complexity within those acquisitions. The challenge for FAA is to continue the organizational 

cultural changes that were started about four years ago with the 

startup of the ATO and to maintain its key acquisitions on schedule and within budget. This challenge will be especially difficult because of the need to attract managers and other staff with the technical skills to apply a systems approach to managing the acquisitions and the integration of NextGen systems. 

FAA has already taken steps to identify the required workforce 

competencies and define strategies for obtaining the necessary expertise. The challenge that remains is the analysis of FAA’s existing staff resources, a determination of what gaps exist, and filling 

those gaps in a timely manner. Another NextGen challenge for 

FAA is developing a new configuration of facilities and airspace 

that will support the transformed system. Unless a plan for facility 

consolidation or realignment is developed and airspace design 

projects are implemented, the cost of NextGen could increase significantly and the potential system efficiency gains will be delayed 

or not realized. 

Finally, FAA faces the challenge of improving communications 

with stakeholders with the goal of obtaining their buy-in and support for NextGen implementation. The stakeholders that we have 

talked to have expressed frustration over not being able to obtain 

satisfactory responses to some of their basic questions, such as who 

is in charge of NextGen, how is NextGen going to be implemented, 

and what kind of capacity or efficiency gains can be expected from 

various components of NextGen. Some of the stakeholders are concerned that FAA is not adequately focusing on NextGen initiatives 

that could have a more immediate effect on the efficiency and capacity problems of the ATC system but, instead, is pursuing a path 

with benefits targeted too far in the future. 

Mr. Chairman and Members of the Subcommittee, as my final 

point, I would like to identify with the remarks of the Chairman 

and the two previous witnesses. It is vitally important that the 

FAA reauthorization legislation be completed in a timely fashion. 

Progress on critical projects such as runway safety, the hiring of 

safety personnel, and capacity projects depends on timely action on 

the reauthorization legislation. Thank you. 

Mr. COSTELLO. Thank you, Dr. Dillingham. 

Mr. Punwani, let me begin with you and ask just a few questions. One, in the Administration’s proposed budget you are proposing $688 million for NextGen for fiscal year 2009. That is an increase, as you stated in your testimony and we acknowledge, of 

$476 million from fiscal year 2008. However, when you look at the 

12 

capital and research budget only rising $234 million for fiscal year 

2009, something has to give here, and my question is what other 

capital and research programs within the base will have to be cut 

to pay the $476 million increase for NextGen? 

Mr. PUNWANI. Let me start by saying there are many programs 

within the capital program that are winding down, and I am going 

to ask my associate to give you further detail on those programs. 

Mr. COSTELLO. Mr. Juba? 

Mr. JUBA. Mr. Chairman, the additional money is coming from, 

as Mr. Punwani said, the wind-down of some of the programs that 

we are putting in place right now, the biggest of which is our En 

Route Automation Program, which would be the platform for a 

number of the NextGen applications. We are also winding down the 

ATOP program. This is a base automation system for the oceanic 

area. 

Our capital portfolio is actively managed. We look at what we are 

investing in, and some of the things for which we have reduced investments are being replaced by NextGen technologies. For example, the biggest component of our 2009 NextGen budget is ADS-B, 

or our satellite-based surveillance system. With more surveillance 

being provided by satellite, we can reduce our investment in some 

of the ground-based surveillance, some of the radar programs. 

Mr. COSTELLO. So that would make up the entire $234 million 

difference? 

Mr. JUBA. We can get you a complete detail of exactly the programs that it comes out to, but I can tell you the ERAM, for one, 

or the En Route Automation, is $165 million of that difference. 

Mr. COSTELLO. We are pleased that you recognize the need to increase money for NextGen. My only question is where is it coming 

from to bump the number up. 

Mr. JUBA. Right. 

Mr. COSTELLO. And if it comes from areas that do not jeopardize 

other important areas of either NextGen or other operations, then 

that is fine. If you could get us that information, I would appreciate 

it. 

[Information follows:] 

13 


40696.015
14 

Mr. COSTELLO. Mr. Scovel, let me ask you. As you know, for the 

past few years we have been expecting the Enterprise Architecture 

to define NextGen’s cost, and now that we have the Enterprise Architecture, you state in your testimony that the MITRE Corporation says that it is too theoretical. I wonder if you might elaborate 

on what you have seen and what MITRE is saying, that it is too 

theoretical. Elaborate on that and tell me when you might think 

that we might get a more reliable cost schedule or estimate for 

NextGen. 

Mr. SCOVEL. Thank you, Mr. Chairman. I would like to give credit to the FAA because they have made some progress on the Enterprise Architecture—the JPDO has. The Enterprise Architecture is 

their technical road map for NextGen, and it is aimed at the 2025 

timeframe, and that is an important date to keep in mind. However, this Enterprise Architecture is very much a work in progress, 

and it is difficult to develop an accurate architecture when we are 

shooting out as far as 2025. 

My office, on its own review, and after we have assessed the 

MITRE review, which was completed last October, found some significant shortcomings in the JPDO’s first attempt at its Enterprise 

Architecture. The information in the Enterprise Architecture 

doesn’t adequately align with NextGen’s own concept of operations; 

it ranges from partial alignment to examples of no connection at 

all. 

The difference is this, Mr. Chairman: the concept of operations 

lays out how NextGen will actually operate; the Enterprise Architecture lays out the systems that will support those operations. 

Sometimes there is a mismatch. In other cases, the information remains at much too high a level to be effective. Some activities are 

insufficiently described, and occasionally only a single sentence is 

dedicated to describe those activities. 

We think—and as we have elaborated in our testimony—that 

there is a gap between today’s system and the NextGen concept. 

We think that what we are calling a gap analysis would assist FAA 

and this Committee in determining what systems and what priorities need attention between now and the out-years. We also think 

that the 2025 target date is difficult for all of us to get our arms 

around, and so we recommended in our testimony today that an interim architecture targeted at 2015—perhaps 2016, 2017, that middecade timeframe—would be helpful. In other words, we would like 

to put an island out there midstream and find out where we need 

to go to get there. Once there, we can assess, re-adjust, and shoot 

for the far bank. 

We don’t know what timing FAA will need in order to accomplish 

all of this, but our discussions with them have informed us that 

perhaps a year, maybe two, would be required for them to refine 

the Enterprise Architecture. If they were to adopt our recommendation for an interim enterprise architecture, we would hope that 

they would be able to accomplish that in the same time frame. 

Mr. COSTELLO. Two more quick questions, Mr. Scovel. You cite 

in your testimony there is an industry analysis that you recently 

have seen that suggested that the FAA could face possibly as high 

as a $50 billion software development effort with NextGen. In your 

view, is that estimate within the realm of possibility? 

15 

Mr. SCOVEL. Mr. Chairman, we do think it is certainly within the 

realm of possibility. We think it is credible. NextGen presents FAA 

with the need for a very large and complex software development, 

and this is certainly a major risk to the entire NextGen effort, as 

it is to any particular program. The analysis that we refer to in our 

statement, that you referred to just a moment ago, was provided 

to us by a major industry stakeholder. It was done under contract 

to them. 

We have no reason at this point to doubt it. Their methodology 

was based on a review of both past FAA major programs and DOD 

systems that involved large software acquisitions, and it was done 

with at least a broad acquisition of what NextGen is envisioning 

currently. The study—and you referred to it—pegged a figure of 

$50 billion, and, of course, when we add that on top of the $15 billion to $22 billion that FAA currently estimates for global costs for 

NextGen, then we are speaking of total costs now on an order of 

magnitude greater than what we have currently seen for NextGen 

estimates. 

Mr. COSTELLO. I wonder if you would comment, either one of you, 

Mr. Juba. Have you seen this, the estimate that the software could 

cost as high as $50 billion? I would like your response. 

Mr. JUBA. At this point, we have not changed our long-term pro- jection of $15 billion to $22 billion on NextGen. 

Mr. COSTELLO. I understand that, but my question is have you seen this industry analysis that says that it could cost up to $50 

billion, as the IG has? 

Mr. JUBA. No, I have not. 

Mr. COSTELLO. Okay. Is it something that you think you should 

take a look at? 

Mr. JUBA. Yes, it is. 

Mr. COSTELLO. Well, I would ask that you take a look at it immediately, because it is alarming to me that you have an industry 

analysis out there that is saying that it could be as high as $50 

billion, which, of course, would take the cost of the NextGen system 

as much as four, five, or six times higher than the agency is estimating right now. So I would ask that you go back and take a look 

at that and give us your opinion as to if you think it is realistic 

and your response to it. 

[Information follows:] 

16 


40696.016
17 

Mr. COSTELLO. Final question, and then I will turn it over to the 

Ranking Member for his questions. 

Mr. Scovel, there is no question—you know, there was an article 

in The Wall Street Journal and USA Today and The Washington 

Post about controller staffing issues, and I said then, and I will say 

now, that the FAA does not want to acknowledge that there is a 

staffing problem. We all know there is. Everyone involved in the 

system knows there is. Everyone involved in the system knows that 

fatigue is a factor and an issue. Dr. Dillingham has touched on that 

previously. 

The fact is there is a problem, and my question to you is while 

the FAA has underestimated the number of retirements over at the 

agency, while you correctly noted in your testimony they have increased the number of trainees that they have hired and put into 

the program, there is a problem here. 

I mean, when we have one-fourth of the air traffic controllers 

today coming into the workforce and we have three controllers retiring, the most senior controllers retiring at a rate of three a day, 

when the agency is now saying that we are willing to offer up to 

a $24,000 bonus to keep the most senior controllers, there is a 

problem. 

So my question to you is, one, I would like you to comment. Is 

there a problem, in your opinion? Number two, the issue of the facilities, does the FAA have the facilities to handle the number of 

trainees that they are trying to get into the program and get them 

out to facilities? I can tell you I was at their training facility in 

Oklahoma in November with Mr. Duncan and other Members of 

the Subcommittee, and I can tell you they are doing their best to 

get people in and out of the program as quickly as possible. 

But I have major concerns with what is going on. I just want you 

to comment. One, are you concerned? Do we have a problem in the 

system? Two, do they have enough personnel to train the people 

coming in to the academy and into the training program in order 

to get them out into facilities and to supervise them properly? 

Mr. SCOVEL. Mr. Chairman, we are concerned with the overall 

state of controller staffing. However, we think it is important to 

really refine the question. Everybody has known that this surge in 

attrition was coming ever since the mid-1980s, when the baby 

boom, if you will, of controllers was hired in the aftermath of the 

PATCO strike. We knew that the day would come when that baby 

boom would have fully matured, and they have served admirably 

on behalf of the Nation. But now it is time for them to take their 

well-earned rewards and to transition into retirement. 

There is much talk given of the overall numbers of controllers in 

the workforce—14,800, 15,300—and we wish to give FAA credit for 

stepping up to the problem in terms of making the adjustment and 

hiring at least rookie controllers to fill the vacancies that are coming. As you have noted, they haven’t been able to anticipate the 

rate at which the attrition would materialize. They have consistently underestimated that. However, they have adjusted on-the-fly 

by hiring many more new controllers than even they projected 

would be needed in the first place, and they deserve credit, great 

credit on the hiring side. 

18 

As you have correctly noted, however, the problem then shifts. 

We may have enough controllers overall, but what is the composition of that workforce, veteran controllers versus new controllers in 

training? And that is where we have the problem. The focus now 

needs to shift to training of the new controllers, and part of that 

process begins at the FAA training academy in Oklahoma City, as 

you have noted. We have a project underway, at your request, to 

study training attrition and try to determine root causes for that. 

It is too early in that effort for me to say at this point whether 

the academy is properly staffed in order to turn out the number of 

new controllers that it needs; however, we will certainly have that 

information for you. Based on what we have completed to date, I 

can say that when new controllers leave the academy and go to 

their first air traffic control facility, the efficiency and the quality 

of that training varies greatly. 

New controllers in 2004 amounted to 15 percent of the total controller workforce. Today, it stands at 23 percent. FAA itself estimates that within four years 30 percent of the total workforce will 

be new controllers. Assuming the academy can push those students 

out to the field, then it becomes the responsibility of each facility 

to train them according to local rules and requirements. 

What we have seen there is really a gap in training. We have 

seen some facilities that are able to handle that quite well. They 

have used their classrooms and simulators, which FAA has aggressively pushed out to them—and, again, we will give credit to the 

agency for that because the simulators have been a great force 

multiplier in completing training quicker than might otherwise be 

required. 

What has happened, however, is that the agency has neglected 

to follow through on a couple of its key promises in its 2004 controller workforce. One of those had to do with emphasizing controller training at the facility level as a true priority, second only 

to critical operational requirements. 

What sometimes happens at facilities, we have noted, is that facility managers will use a controller in training who is accredited 

on a particular position over and over again on that position to the 

detriment of training that new controller on other positions and 

pushing that new controller up to the most desirable level of certified professional controller, CPC. That ultimately is the goal both 

for the facility—which gives the facility greater flexibility in assigning that new controller throughout the facility—and also, frankly, 

for the controller himself or herself, who would like to see the larger paycheck that comes with being a CPC. 

We have also seen confusion on the part of controllers in the field 

and, honestly, some people at FAA headquarters regarding oversight and responsibility for facility training within FAA headquarters. As our testimony notes today, four different vice presidents within FAA headquarters have important roles to play in facility training. 

Confusion exists, however, on the user side as to what some of 

those authorities and responsibilities are. We won’t presume to tell 

FAA how to organize itself, but we can certainly offer the suggestion that far greater clarification is needed on the part of headVerDate Aug 31 2005 15:26 Jul 09, 2008 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\DOCS\40696 JASON
19 

quarters in informing all of its staff who has what responsibilities 

when it comes to facility level training. 

Mr. COSTELLO. Thank you very much. 

The Chair now recognizes the Ranking Member, Mr. Duncan. 

Mr. DUNCAN. Thank you, Mr. Chairman. 

Administrator Punwani, you heard me say in my opening statement that I think it is very important that we move on the FAA 

reauthorization bill as soon as possible, but I am wondering. You 

know, a couple of years ago we did a series of short-term extensions in regard to the highway bill. What adverse impacts would 

there be if we had to do that in regard to the FAA, a series of 

short-term extensions? You mentioned the 4,000 you would have to 

furlough or send home if we don’t meet the February 29th deadline, but are there other adverse impacts or problems that a series 

of short-term extensions would cause? 

Mr. PUNWANI. There is no doubt that an extension, short-or longterm, would alleviate the immediate problem that we are faced 

with on February the 29th. But some of the problems with shortterm extensions include, in the case of airport grants, if you have 

a short-term extension of contract authority; it leads to sub-optimal 

allocations of airport grants, the entitlements are sub-optimal. The 

formulas that are used to come up with airport grant allocations 

are very complex; they have minimums and maximums and entitlement recoveries, and the formulas just don’t work unless you have 

a full year entitlement. So it is sub-optimal. 

If you extend the expenditure authority for the short-term when 

we already have a full year appropriation and have less than a full 

year’s expenditure authority, that limits our ability to manage effectively. 

Mr. DUNCAN. Let me ask you another thing. We have heard a lot 

over the last couple of years about the contract negotiations with 

the controllers and so forth. Have there been any benefits or savings to date from the contract that you have with the controllers? 

And what would be the situation if the FAA was forced into binding arbitration? 

Mr. PUNWANI. Let me begin to answer that by telling you our fiscal year 2009 budget does recognize some cost reductions through 

various actions we have taken, including cost savings related to the 

controller contract. But I believe Gene Juba would be able to give 

you more information on that detail. 

Mr. DUNCAN. All right. Mr. Juba? 

Mr. JUBA. Mr. Duncan, I can find that number. In the 2009 

budget, we have taken a reduction in the operating account due to 

the new contract that is in place with our controllers. 

[Information follows:] 

20 


40696.017
21 

Mr. DUNCAN. All right. 

Well, let me move on to something else, then, and this is the 

thing that is the most important to me, and I think I would like 

to get comments from all three of you. I am really concerned about 

this NextGen problem. I know that we need to do this, have this 

technical progress, but what concerns me is on almost all Federal 

programs we usually hear low-ball estimates of the cost on the 

front end. 

Yet, we have heard estimates everywhere from $14 billion to $25 

billion on this NextGen project, or probably more so in the range 

of $14 billion to $22 billion, but that is a huge range. I mean, we 

are talking about billions up here like it is some small amount, but 

it is not; that is a huge difference. 

And then my eyes really popped open when the Chairman said 

$50 billion a few minutes ago. I mean, it is getting kind of scary, 

really. If we don’t really stay on top of this, these costs could just 

explode, and I am wondering are we sure that we are doing everything possible to make sure that we don’t have huge cost overruns 

in the years ahead? 

I am wondering, too, Chairman Costello and I, several months 

ago, got a presentation on the—is it SESAR, the European—I am 

not if I pronounced that right—the SESAR system in Europe. Are 

we ahead of them, behind them? Have we learned anything from 

some of their preliminary experiences? I am just wondering about 

where we stand on all that. 

And then I notice that Administrator Scovel complimented the 

FAA on the technical road map, but he also expressed several concerns; number one, that 2025 was too far out to really have realistic planning. I would like to know what you say about that. 

Then, Administrator Scovel, I didn’t really understand what you 

meant by the things not aligning with the concept of operations. I 

would like to hear you comment more specifically, in a more downto-earth, less bureaucratic way about what you mean by that. 

And then, Dr. Dillingham, you wrap it up with what you are saying on this NextGen progress so far. 

Go ahead, Mr. Juba. 

Mr. JUBA. Mr. Duncan, I think the NextGen endeavor that we 

are on is a complex program. It is software-intensive; it requires 

careful integration with other programs across not only the FAA, 

but other partner agencies. But one thing that gives me confidence 

that we will manage these programs is—I can go through a couple 

of reasons why I am confident. I am the one that is tracking our 

progress along on our programs. 

First off, we have done a better job of managing capital programs. My colleagues at the IG and GAO have even admitted that 

though there is still work to be done, that we are doing a better 

job there. But there are three things there that you might not be 

aware of that we are undertaking right now, activities that I think 

will help us tremendously in executing the programs. 

First off, two years ago, we set out a goal to get off the GAO’s 

high risk list. This is the list of agencies that have programs that 

are complex and there is risk of cost overruns. We actually provided the GAO a written plan of action in April of last year, and 

22 

we are meeting with the GAO every quarter to go over status on 

that. 

Mr. DUNCAN. That is good. 

Mr. JUBA. And this planning includes things like best practices 

in terms of program management and putting those inside of all 

our programs. Talking about software, it includes IT development 

best practices, which is key to managing these software-intensive 

programs. Other things, it is using the right metrics, including 

EVM, or earned value management, which is another way of tracking our cost and schedule performance. 

It also includes improvements in our cost estimating and cost accounting. So that is one activity that is out there, one that is not 

just an activity led by a small work group, but it is an activity that 

is chaired and overseen by senior people at the FAA, including Mr. 

Punwani, myself, our CIO and our chief acquisition executive. So 

that is one thing. 

The second thing is that—and I think it was brought up—there 

is a need for the right human capital, the right Federal employees 

at the agency to manage these programs. We see that. We know 

that. We have actually hired, in the past two years, 40 contracting 

officers or specialists. Just in the last year we hired over 40 system 

engineers, computer science people, and program management people. We also are working with the National Academy of Public Administration. They are helping us look at what other needs that we 

have out there to manage a program such as this. So we have that 

activity that is underway. 

Lastly, and probably most important, is we are using the OEP, 

the new OEP, our Operational Evolution Partnership, to manage 

NextGen throughout the agency. And let me tell you just a little 

bit about OEP. OEP is composed of the lines of business heads of 

all the lines of business with the FAA. It includes the JPDO. It also 

includes the heads of two of our larger unions that are affected by 

NextGen, NATCA and PASS. Why this is a key activity out there? 

This is a group that is going to oversee the progress and ensure 

that activities are coordinated among the different lines of businesses, and this is absolutely key with such a complex endeavor 

that we are on. 

That is what gives me comfort, anyway. 

Mr. DUNCAN. That is a good report and I appreciate all those 

things. You know, this is my twentieth year on this Subcommittee, 

and I have just seen so many of these things just explode and, boy, 

when you are talking about these kind of figures, you are talking 

about a really big deal. 

Let me go to Mr. Scovel and Dr. Dillingham. I know, in fairness 

to other Members, I will have to ask you to be fairly short. I know 

I asked a lot of questions at one time, but go ahead, Administrator 

Scovel. 

Mr. SCOVEL. Thank you, Mr. Duncan. You have expressed frustration with the imprecision in the cost estimates and, of course, 

we share your great concern over that. Let me take just a couple 

of examples, and perhaps this will also assist you in understanding 

what I meant when I said there was a mismatch between concept 

of operations and the Enterprise Architecture. 

23 

A big question mark when it comes to the cost estimates is what 

will happen between NextGen, its primary system, ADS-B, and 

what must be accomplished by way of terminal modernization at 

air traffic control facilities. As you know from your years on the 

Subcommittee, what has happened, for instance, with the STARS 

program was tremendous cost growth and a reduction in the number of air traffic control facilities that would be modernized through 

that system. There is now a gap of some 100-plus facilities, the 

modernization status for which is very much up in the air. That 

contributes, of course, to the imprecision in the cost estimate and 

it also illustrates the question of what will happen between how 

NextGen is actually supposed to operate, along with the concept of 

operations, and the Enterprise Architecture, what systems or platforms will be needed to pull that off. 

One further example, sir, by way of communications, I know too 

from your years on the Subcommittee you know that the controllerpilot data link communication program ended up being terminated 

a few years back, or at least suspended. Data link communications 

will be a very expensive component of NextGen. FAA intends to 

embark, in the next year or two, to restart the data link communication effort, scope it out, and resume some sort of data link communication program so that NextGen can be fully realized. Cost estimates? Uncertain. Again, how will that work between other 

NextGen programs remains to be seen. 

Mr. DUNCAN. All right. Let Dr. Dillingham explain where he 

thinks we are. 

Mr. DILLINGHAM. Mr. Duncan, I think what Mr. Juba said about 

FAA being on our high-risk list for ATC modernization is very important, because we have had them on the list for almost 15 years. 

But, most recently, we concluded that the changes that FAA has 

made in managing its acquisitions, the outcome of those changes, 

we have labeled them as making significant progress. 

We are guardedly optimistic, but still watching to make sure that 

the culture that was put in place, that put those business practices 

in place and those cost-saving mechanisms, will go through with 

the next administrator as well as the new chief operating officer. 

Progress has been made, but clearly we have to watch it. 

Also, with regard to the cost of NextGen, clearly it is something 

that everybody is wondering about and, as you say, we had estimates that run the gamut. I think, you know, the way we look at 

it is that, yes, we need to be focused on what the total cost is, but 

I think after you get out beyond a certain number of reasonable 

years it becomes a real guess. 

We look at the capital program over the next five years that contains the NextGen technologies and we see they are asking for $5.4 

billion. We look at that and say that is a more reasonable focus, 

but keep trying to project out so that Congress can know where we 

are going and you can monitor it to that extent. But, you know, as 

the IG has said, let’s move back a little bit and let’s sort of look 

at what is reasonable to make that kind of estimate about it. 

We have seen, from the 15, 20 years we have been looking at 

this, that—you were here, Mr. Duncan, when we had the AAS sort 

of thing, and we told FAA at that point in time to go from the big 

bang theory to the build-a-little/test-a-little theory, and that is in 

24 

fact what we are seeing in many cases, and we think that is a positive development. 

With regard to the Concept of Operations and the Enterprise Architecture, those are also necessary documents, but it is also the 

case that the more understandable—at least from my perspective— 

document that is in the works right now is the Integrated Work 

Plan, which talks about which systems when, what steps along the 

way; and that is still being vetted by the stakeholders. 

So although part of what we are hearing out there is let’s start 

to talk about what we can do with NextGen that is going to have 

a more immediate effect on system capability and efficiency—and, 

by example, they talk about instead of trying to figure out and deploy ADS-B across the Nation, maybe we should look at some existing procedures and technologies and deal with where we have problems that are facing us everyday—New York, Miami, Los Angeles—and use those as both immediate kinds of things to address as 

well as test beds for the larger national layout kind of thing. 

With regard to SESAR, the question that comes to us about the 

European effort is the very question that you asked, Mr. Duncan. 

Who is on first—who is ahead? Basically, you know, if I had to answer that straight out, we would say the U.S., of course. But the 

deal is that they are probably in the same place. The Europeans 

are just finishing what they call the definition stage, which is sort 

of their overall planning and sort of what is it going to be, and they 

are getting ready to move forward into some early implementation. 

The major difference that we need to sort of keep in mind, that 

I think is going to keep the U.S., you know, moving ahead—because that is in important in terms of who is going to set the standards and how is that going to play into our economy—we in the 

United States have to deal with lots of agencies to make all of this 

work, but over in Europe they have to deal with 10 or 11 sovereign 

nations in their air traffic control system. 

So I think that idea, in conjunction with one of the things—based 

on what we were asked to do by this Committee, in fact, we talked 

to FAA about international harmonization, and FAA went forward 

under the last administrator to establish an MOU with the Europeans so that there could be some sharing and lessons learned kind 

of thing. This is, no doubt, complicated—the analogy has been that 

trying to do NextGen is sort of like trying to go to the moon. It is 

that complicated, it is that much of an issue, and it is something 

that we have to watch. 

But I think, under the circumstances, progress is being made. 

More needs to be done. 

Mr. COSTELLO. The Chair thanks the Ranking Member and now 

recognizes the gentleman from New York, Mr. Hall. 

Mr. HALL. Thank you, Mr. Chairman, and thanks to all of our 

witnesses for being here and giving us your testimony today. 

Mr. Punwani, I wanted to start by asking you if the budget contains funds to implement the airspace redesign for the New YorkNew Jersey-Philadelphia area. 

Mr. PUNWANI. The budget does contain that allowance. 

Mr. HALL. Okay. And as a result of the redesign, a number of 

communities in my district, including Pound Ridge and Bedford in 

Westchester County, and parts of Rockland and Orange County, 

25 

have seen or will seen an increase in air traffic. Is there any funding in the budget for noise mitigation or other means directed by 

the damage caused by the increased number of airplanes flying 

over communities that previously had little or no aircraft noise? 

Mr. PUNWANI. We do have a provision of as much as $276 million 

in our airport grants program to address issues of noise mitigation. 

Mr. HALL. Thank you. And you spoke in your testimony about offering controllers a variety of retention incentives. Could you explain some of those incentives and how effective they have been in 

attracting or retaining controllers? Mr. Juba? 

Mr. JUBA. Mr. Hall, we introduced a number of different incentives or tools that we could use both to recruit new controllers, as 

well as retain the seasoned controllers that we have. One of those 

is the retention incentive. In areas where we needed—this is not 

an across-the-board incentive, but it is at those airports, those terminals, and those en route facilities where we believe there is a 

need to keep a controller on for training or watch-standing. 

We also are actively pursuing reassignment provisions, using a 

reassignment bonus to incentivize controllers to move out of places 

that may be well staffed or overstaffed into places like Atlanta. 

There are other things we have. We introduced child care benefits; 

and also have a recruitment bonus available that we have used to 

attract military controllers. 

Mr. HALL. Excuse me, I just wanted to ask since it used to be 

a pattern for military controllers to come into the FAA system, why 

is it necessary now to have a bonus offered to get them to do that? 

Mr. JUBA. We found that to get people to go to the places we 

want, sometimes a bonus actually works to incentivize somebody to 

do that. There are incentives being offered at DOD for these same 

employees. It is a competitive environment out there. 

Mr. HALL. Since we are speaking, Mr. Juba, I wanted to ask you 

about the cost savings you referred to a few minutes ago due to the 

new contract. My understanding of a contract is that it is an agreement negotiated between two parties willingly and signed by those 

two parties. Are you referring in fact to the work rule that FAA 

instituted? 

Mr. JUBA. We are talking about the contract that was put in 

place I believe a year and a half ago. 

Mr. HALL. Put in place by who? 

Mr. JUBA. I can’t answer you from the legal perspective, but we 

went by the rules established by Congress in negotiation with our 

controllers and have a contract in place. 

Mr. HALL. So you would call it a contract. 

Mr. JUBA. Yes, sir. 

Mr. HALL. Okay. I have yet to see a document that most people 

would regard as a contract. In fact, that is why this Subcommittee, 

and I believe the Full Committee, voted to require, as our last FAA 

reauthorization bill that we passed, require binding arbitration, because of the fact that there was not in fact a contract agreed upon 

and that the FAA was, many of us think, the intransigent party. 

I am just curious how much the cost savings you are telling us 

about are offset by the retention bonuses and by the other incentives that you have to provide, and also by the loss of efficiency and 

26 

the loss of experience from people retiring who might not otherwise 

retire. Any thoughts about that? 

Mr. JUBA. Just on retirements, we did project for retirements 

and, as reported by a number of people, we have under-projected. 

But just to give you a perspective on that, in 2007 we projected 700 

retirements. Actual requirements were 828. We missed by a little 

over 100. To put that in perspective, that is less than 1 percent—— 

Mr. HALL. Thank you, Mr. Juba. I have just a few seconds left. 

I wanted to ask Dr. Dillingham for a comment on—well, you said 

in your testimony that the FAA ‘‘faces a challenge in establishing 

credibility with stakeholders that the agency is fully committed to 

NextGen.’’ And referring back to a comment, if I got it correctly, 

Mr. Scovel, you said that the cost for NextGen is uncertain. It is 

also difficult to predict how much NextGen will enhance capacity 

and reduce delays. Did I hear you more or less correctly? 

Mr. SCOVEL. Yes, sir. 

Mr. HALL. Okay. So you can answer this too, but I wanted to ask 

Dr. Dillingham if this perhaps has some relationship to the difficulty in establishing credibility with stakeholders, that the agency 

is fully committed to NextGen. 

Mr. DILLINGHAM. Yes, sir, that is exactly the issue. What the 

stakeholders are telling us is that they need to know, in terms of 

return on investment, what is it that is going to come out of 

NextGen so they know how to—be it an avionics manufacturer or 

an airline—how to plan their operations. And they are saying we, 

as stakeholders, need to have that kind of capacity or efficiency explanation. So, that gives us more of an incentive to, in fact, come 

on board with NextGen technologies. 

Mr. HALL. Lastly, I just wanted to ask, if I may, starting with 

Mr. Punwani, which corporation is the biggest corporation for 

NextGen? 

Mr. PUNWANI. I don’t have that information readily available. Do 

you? 

Mr. JUBA. In the 2009 budget, we have a line item in there for 

ADS-B, which is our satellite-based surveillance system. ITT is the 

lead contractor on that, and I would have to believe that they are 

the largest. Of course, there are subcontractors below them; they 

are not doing all the work by themselves. 

Mr. HALL. Perhaps if you could reply in writing to the question, 

in order of total dollars, who are the biggest contractors, you know, 

maybe the top half dozen or so. I would be curious to know who 

is receiving how much money for a program that is difficult to predict the expense of and is also difficult to predict how much it is 

actually going to enhance the capacity or reduce delays. 

[Information follows:] 

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40696.018
28 

Mr. HALL. And I yield back. Thank you. 

Mr. COSTELLO. The Chair thanks the gentleman and recognizes 

Mr. Boozman from Arkansas. 

Mr. BOOZMAN. Thank you, Mr. Chairman, very much. 

We have really been blessed. You know, when you look at our 

safety record, it has been tremendous, and that reflects on you all 

and your predecessors. It really reflects on our controllers, the tremendous job they are doing and have done in the past. I would like 

for the Committee to claim some credit for that, but it is probably 

in spite of us that you all have been able to do all that. 

But I think we have some concerns about, you know, with so 

many new people coming into the system, the quality of the people 

that you are getting. So I would like you to tell us a little bit about 

where those people came from in 2007 and just kind of tell us are 

they former controllers from the military, are they coming out of 

the schools, are they coming off the street? If you give us some 

numbers as to what is going on in that regard, I would appreciate 

it. 

Mr. JUBA. Let me talk about where we hired controllers last 

year. The biggest source of new hire controllers has been through 

our college training initiative, or CTI, schools. These are two-and 

four-year programs. They go through a variety of aviation subjects. 

Nearly, 60 percent of the over 1800 people we hired last year came 

from those schools. 

As a side note, we actually have expanded that program—it has 

been very successful; we get very high-quality candidates—from 

the 14 current schools out to 23 schools. 

The second biggest source is the military. We have about a third 

of our new hires last year came from the military. A lot of those 

from military controllers. 

And lastly, about 7 percent come from local hires. These are people who had applied through our Web site and have been screened 

and have gone to the Academy straight from there. A lot of those 

have aviation experience of some sort and all are required to meet 

the medical, security and cognitive testing that we put them 

through. 

Mr. BOOZMAN. Thank you. On a similar note, in looking at the budget, the $2.75 billion for the AIP funding level, which is significantly reduced, do you think that you will be able to meet the critical safety needs that we have in our airports with that level of 

funding? And I will just throw that out to whoever wants to—— 

Mr. PUNWANI. I will answer that. We recognize, first of all, that 

this Committee is a big supporter of a robust airport grants program. The $2.75 billion request may seem low, but we believe it is 

affordable when it is coupled with some of the formula changes 

that we proposed in our reauthorization proposal, coupled with an 

increase in the passenger facility charge at large airports, where 

we are proposing that the maximum go from $4.50 to $6.00. That 

increase by itself would generate an additional $1.5 billion of funding. 

But it doesn’t just end there. More importantly, the formula 

changes that we are proposing will allow us to direct airport grants 

and entitlements to the smaller airports that have greater difficulty in raising funding. Taken together, this budget will allow us 

29 

to meet our major capacity, safety, noise abatement, and environmental issues. 

Mr. BOOZMAN. So are you saying that the funding that we have 

used for airport improvement in the past, that if we did adopt the 

fees and those things, are you saying, then, that that goes up to 

$4.25 billion for the same—are we talking apples and apples or apples and oranges? 

Mr. PUNWANI. Apples and apples. 

Mr. BOOZMAN. Very good. Thank you all. 

Thank you, Mr. Chairman. 

Mr. COSTELLO. I thank the gentleman from Arkansas, and the 

Chair now recognizes the gentlelady from California, Ms. Richardson. 

Ms. RICHARDSON. Thank you, Mr. Chairman. 

Two brief questions that I want to follow up on Mr. Boozman’s 

comments. One, of the categories where you are doing your hiring, 

what is the average work experience, though, for those different 

categories? Because I would think that if someone is being hired 

from the military who is currently doing the job, maybe they have 

done it for a couple years or five years or ten years; whereas, 

maybe someone coming out of the school may have the academic 

experience, but that may not translate to actual work experience. 

So do you have some sort of averages? 

Mr. JUBA. I don’t have those numbers right now, but I would believe that your assessment is probably right; the people coming out 

of the school probably do not have a lot of work experience. 

Ms. RICHARDSON. Okay. Could you supply this to the Committee? 

Because I think that gets to the heart of Mr. Boozman’s question. 

Although the school might be great and wonderful and, you know, 

we are getting a lot of good people, the limited real-life experience 

might not be as strong, and that is, I think, a concern in some of 

the issues that we might be hearing about. 

[Information follows:] 

Ms. RICHARDSON. My follow-up question to that would be how do 

you determine who goes to what location? So what I mean by that 

is an average person with limited experience, would they typically 

get a Chicago assignment or a Los Angeles assignment, or do they 

have to first do kind of a smaller tier location and then work their 

way up, or is it just people go wherever there is an opening? 

[Information follows:] 

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40696.019
31 

Mr. JUBA. Well, there are two parts to that, where people go. One 

is their desires. I mean, do they bid for a job location? We put it 

out by State sometimes. So it is where they want to go. The second 

part is, from our operational side, where do we put people. We put 

people in every level of the facility, from the smaller towers up to 

the larger towers. This is actually consistent with what some of our 

global partners do. 

In the case where we put somebody at a high level facility and 

they can’t perform up to that level, but are good employees nonetheless, we have actually taken those people and moved them down 

to lower level facilities and sometimes from en route to terminal. 

Ms. RICHARDSON. So, Mr. Chairman, that would be a second 

thing I would like to suggest we might like to pull that further, because it is my understanding—since I do represent a fairly active 

area, Long Beach Airport; we also have LAX, which is my neighboring airport—I have heard that maybe it really shouldn’t be to 

the discretion of someone who wants to go to LAX. If they don’t 

have an extensive amount of experience, maybe there could be 

some additional requirements that could be instituted before they 

are able to go to some of the more higher capacity tower facilities. 

Mr. JUBA. One thing I might add, Ms. Richardson, is that in 

some of the larger, more complex facilities, what we have done, as 

I mentioned earlier, is actually reassigned some of our veteran controllers from other facilities into those facilities to help out with 

training and standing watch there. 

Ms. RICHARDSON. Right. Because I spoke with an air traffic controller in my district, in the Long Beach Airport, who said he has 

only been on board maybe about a year and a half, and he is already training other people, and, you know, that is kind of a concern of mine. Someone who has only been doing the job a year or 

so is training someone else, I mean, they haven’t even walked 

through the breadth of all potential examples that might occur. 

So I think building upon what Mr. Boozman said, this really is 

at the heart of what I know a lot of my concerns are. 

Thank you very much, Mr. Chairman. 

Mr. COSTELLO. The Chair thanks the gentlelady. As you might 

have heard, we have been called for a vote. We have a series of 

four votes. 

That concludes our hearing today. I would like to remind our 

friends from the FAA to—we understand the acting administrator 

is on the Senate side today in a confirmation hearing, but please 

remind him that we expect a report seven days from today concerning the facilities that we spoke about earlier, and we would expect to get that report. We have been waiting for some time and 

our patience is running thin. [Note provided by FAA: this information was provided to the Committee at a briefing held on February 

14, 2008.] 

Again, on behalf of the Members of the Subcommittee, we thank 

you for testifying here today, and that concludes the hearing. 

[Whereupon, at 11:33 a.m., the Subcommittee was adjourned.] 

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