FAA’S PROGRESS AND CHALLENGES 

IN MEETING FTI TRANSITION GOALS 

Federal Aviation Administration 

Report Number: AV-2008-089 

Date Issued: September 30, 2008 
U.S. Department of 

Memorandum

Transportation 

Office of the Secretary 

of Transportation 

Office of Inspector General 

Subject: ACTION: FAA’s Progress and Challenges in 

Meeting FTI Transition Goals 

Federal Aviation Administration 

Date: September 30, 2008 

Report Number AV-2008-089 

From: David A. Dobbs 

Principal Assistant Inspector General 

 for Auditing and Evaluation 

Reply to 

Attn. of: JA-1 

To: Acting Federal Aviation Administrator 

 

This report presents the results of our follow-up audit of the Federal Aviation 

Administration’s (FAA) Telecommunications Infrastructure (FTI) program. FTI 

is intended to replace seven FAA-owned and -leased telecommunications 

networks with a single network to reduce operating costs. FTI is a mission-critical 

program because its network carries National Airspace System (NAS) 

telecommunication services (e.g., voice, radar, and flight data communications) 

for air traffic control (ATC) operations. 

In July 1999, FAA established the original program baseline to transition FTI into 

the NAS by September 2005. In July 2002, FAA awarded a contract to Harris 

Corporation to transition FTI into the NAS and to provide management and 

support functions for the FTI network. In December 2004, FAA re-baselined FTI, 

pushing the completion date to December 2007 and significantly increasing the 

program cost. 

In April 2006, we reported that FTI was unlikely to meet its December 2007 

completion date and that FAA needed to improve FTI management controls.1

 To 

determine whether FAA addressed our concerns, we began a follow-up review of 

the FTI program. The objectives of this review were to assess FAA’s progress in 

(1) developing a realistic master schedule and an effective FTI transition plan and 

(2) mitigating technical risks to ATC operations before activating FTI services and 

disconnecting existing telecommunications services (by coordinating activities and 

 

1

 OIG Report Number AV-2006-047, “FAA Telecommunications Infrastructure Program: FAA Needs To Take Steps 

To Improve Management Controls and Reduce Schedule Risks,” April 27, 2006. OIG reports and testimonies are 

available on our website: www.oig.dot.gov. 

i
verifying site-specific requirements). We also examined FAA’s progress in 

responding to our April 2006 recommendations, including a recommendation that 

the Agency independently validate FTI cost and benefit estimates. Exhibit A 

details our audit scope and methodology. We performed our work in accordance 

with generally accepted Government Auditing Standards as prescribed by the 

Comptroller General of the United States. 

In August 2006, FAA’s Joint Resources Council2

 (JRC) met and subsequently 

approved a second re-baseline of FTI’s cost and schedule goals, which extended 

the completion date for the FTI transition to December 2008 and increased overall 

program costs by over $100 million (from $3.3 billion to $3.4 billion3

). FAA also 

reduced the total number of NAS services to be transitioned to FTI from 25,294 to 

20,033. Since FAA first established the cost and schedule baselines for FTI in 

1999, the JRC has approved several significant changes (see table 1). 

Table 1. History of FTI Program Changes 

Date Purpose FTI Sites 

Planned 

FTI 

Services 

Planned 

Planned 

Transition 

Completion 

Date 

Program 

Completion 

Date 

Planned 

Cost 

Estimate 

Jul. 1999 Establish 

Baseline 

1,374 Not 

Defined 

Sept. 2005 2010 $1.9 Billion 

Dec. 2004 First 

Re-baseline 

4,463 25,294 Dec. 2007 2017 $3.3 Billion 

Sept. 2006 Second 

Re-baseline 

4,053 20,033 Dec. 2008 2017 $3.4 Billion 

Source: FTI JRC Baseline Briefs and FTI National Implementation “Kickoff Team” Brief 

Through the end of fiscal year (FY) 2007, we estimated that FAA cumulatively 

spent just over $1.9 billion on the FTI program. FAA spent about $1.2 billion for 

operating legacy telecommunications networks from 2002 to 2007. About 

$300 million was for FTI transition efforts funded from the Facilities and 

Equipment (F&E) account; another $445 million funded FTI operations costs from 

the Operations and Maintenance account (operations). Unlike most acquisitions, 

the majority of FTI is funded from the Operations account instead of the F&E 

account (capital). For FY 2008, FAA estimates it will need $320 million to 

support the program while continuing the FTI transition ($18.3 million to support 

the FTI transition, $210 million to support FTI operations, and $91 million to 

extend legacy network operations). 

 

2

 The JRC is FAA’s senior decision-making body for approving major acquisition program funding and schedules. 3

 The $3.4 billion reflects the cost within the scope of “FTI Case,” which includes FTI facilities and equipment, 

operations and maintenance, and legacy operations costs affected by FTI. The “Base Case” reflects costs in the 

absence of FTI. According to FAA, cost avoidance is defined as the difference between the Base Case and the FTI 

Case. 

ii
RESULTS IN BRIEF 

Since we last reported, FAA has made significant progress with the FTI transition, 

with 19,977 services cut over to operation as of March 31, 2008. FAA also 

transitioned the costliest legacy network that FTI will replace, which will help to 

control telecommunications costs.4

 Notwithstanding this important progress, 

several areas remain critical watch items for decision makers as FAA moves 

forward with FTI. These include shifting service requirements, the extent to 

which expected cost savings will be realized, and efforts to mitigate risks to air 

traffic operations—all of which have impacted FAA’s ability to meet FTI’s 

original program goals. 

A key issue is that FAA will not replace all networks by December 2008, as 

originally planned. As a result, FAA will have to maintain existing equipment 

much longer than expected (e.g., digital equipment to support long-range radars 

and switching equipment to support high-altitude communications). The cost of 

doing so and the impact on potential FTI benefits remain uncertain. 

Additionally, even though the last baseline significantly reduced the number of 

services planned for transition, this number has since climbed to 22,719. FAA 

attributes the increase to “emerging requirements,”5

 among other issues, and 

acknowledges that these will continue to increase, which will require adjustments 

to the FTI master schedule. 

Further, the master schedule does not include requirements for moving forward 

with the Next Generation Air Transportation System (NextGen), which FAA 

classifies as “future requirements.” We recognize that NextGen requirements are 

uncertain and future telecommunications needs will initially be funded by other 

programs. However, FAA will inevitably have to address these requirements 

through adjustments to FTI or another effort. 

FAA’s main goal for FTI was to reduce Agency operating costs. Yet, we found 

that costs for FTI remain uncertain since FAA still has not validated cost and 

benefit estimates as agreed after our 2006 report. We are concerned because 

FAA’s last program baseline reduced the number of services planned but still 

increased the overall program cost estimate by more than $100 million. As costs 

escalate, FTI cost savings have eroded, with none achieved in FY 2007. 

Finally, FAA facilities using FTI have experienced outages of primary and backup services, which have disrupted ATC operations. In addition, we found that, 

FTI services are not meeting availability requirements or being restored within 

 

4

 The largest and costliest network FTI will replace is the Leased Interfacility National Airspace System 

Communications System with over $600 million spent for operations from 2002 to 2007. 5

 These are requirements for new services, such as FAA’s Flight Service 21 program. 

iii
contractual timeframes. As we reported in 2006, FAA must ensure that FTI 

services avoid these problems by meeting diversity requirements (adequate 

separation of primary and alternate services). 

FAA has made significant progress with the FTI transition but will not 

replace all networks as planned. After FAA added a year to FTI’s completion 

date, revising it to December 2008, it began making progress toward transitioning 

new services and replacing legacy systems. As of March 31, 2008, FAA replaced 

four of the seven legacy systems with FTI, including the costliest of those, the 

Leased Interfacility NAS Communications System (LINCS) network. Because the 

LINCS network had been fully decommissioned, FAA reported that 

March 31, 2008, would be the last time it would provide regular monthly reports 

on the FTI transition status. However, FAA has deferred replacing the following 

three networks beyond December 2008 due to technical challenges, such as 

prematurely installed FTI equipment needing upgrades and lack of an engineering 

solution to replace components for complex digital services: 

• The Data Multiplexing Network (DMN), which supports long-range radar 

services. 

• The National Airspace Data Interchange Networks Packet-Switched Network 

(NADIN-PSN),6

 which supports flight data and weather information services. 

• The Bandwidth Manager (BWM) network, which supports NAS and National 

Defense Program services (e.g., voice, radar, and data). 

The full impact of FAA’s decision to defer transitioning these three networks is 

still unknown, but it means that FAA will not possess an integrated suite of 

services as originally planned. As a result, FAA must continue funding multiple 

systems, which will have cost, benefit, and operational ramifications that have yet 

to be determined. Currently, the FTI schedule does not yet reflect when the three 

networks will be transitioned to FTI. 

In addition, FAA must ensure that all NAS programs requiring FTI services are 

included in FTI’s schedule. We found that the number of services planned for 

transition to the FTI network continues to fluctuate. Although FAA planned to 

transition 20,033 services to the FTI network, this number rose to 22,719 (as of 

March 2008) due to emerging requirements and could still grow. Yet, as these 

requirements emerge, FAA is not accounting for all of them in the FTI schedule. 

For example, as of March 2008, the FTI master schedule did not include about 

38 percent of needed Flight Service 21 (FS-21)7

 services. Moreover, key NextGen 

 

6

 NADIN PSN is an X.25 packet-switched network that augments and functions in parallel with the NADIN MessageSwitched Network. Packet-switching is a communications approach in which packets (discrete blocks of data) are 

routed between data link nodes shared with other network traffic. 7

 FS-21 is a new flight services operating system with 3 hubs and 16 continuing facilities. 

iv
services, such as Automatic Dependent Surveillance-Broadcast (ADS-B)8

 and 

System Wide Information Management (SWIM),9

 are not included in the FTI 

schedule. FTI program officials previously reported that these requirements 

would not be included in FTI’s schedule because their baselines were not finalized 

or approved by FAA and were considered “future requirements.” However, both 

programs now have established baselines, and FAA needs to add them to FTI’s 

master schedule. 

FAA has not validated FTI cost estimates, and the program costs and benefits 

remain uncertain. The FTI program has experienced cost growth, and benefits in 

terms of anticipated cost savings 

have eroded. In April 2006, we 

recommended that FAA validate 

all program estimates to 

determine whether FTI is still 

cost beneficial. 

In August 2006, the JRC’s 

approval of the second FTI 

re-baseline was contingent upon 

FAA’s validation of revised cost estimates. By September 2006, FAA’s 

Independent Evaluation Review (IER) team completed its assessment of various 

FTI cost elements, but did not validate the cost and benefit projections. Instead, 

the IER raised concerns about some of the costs. For example, the IER reported 

that the F&E baseline is masked by FTI business rules that allow F&E 

expenditures to be funded by the Operations account. Although the FTI estimates 

were not validated, the JRC still approved the new $3.4 billion estimate, which 

added over $100 million to the overall program cost despite reducing the number 

of services to be delivered (see table 2). We remain concerned about the accuracy 

of FTI cost and savings estimates for a number of reasons. 

 

Table 2. FTI Life-Cycle Cost Estimates 

(Dollars in Millions)

Cost 

Categories 

JRC 

Dec. 2004 

JRC 

Aug. 2006 

Difference 

F&E $ 310.2 $ 318.8 +$8.6

Operations $2,110.1 $1,954.4 -$155.7

Legacy 

Operations 

$ 857.4 $1,117.3 +$259.9

Total FTI 

Lifecycle 

$3,277.7 $3,390.5 +$112.8

Source: FTI Program Baseline Briefs

• First, FAA increased the F&E cost for FTI by $8.6 million. In addition, we 

have identified additional network engineering costs (capital costs) that were 

charged to Operations instead of the F&E account. We recommended in April 

2006 that FAA update FTI business rules to properly charge these activities to 

the F&E account. Although FAA concurred, we found that FTI’s true impact 

on the F&E baseline was masked by business rules that allowed F&E 

expenditures to be improperly charged to the operations account. 

 

8

 ADS-B provides satellite-based technology that allows aircraft to broadcast their position to other aircraft and 

ground systems. ADS-B is a cornerstone technology for NextGen and has considerable potential for enhancing 

safety and boosting capacity. 9

 SWIM provides FAA with a web-based architecture that allows information sharing among airspace users. SWIM is 

a key transformational program for the development of NextGen. 

v
• Second, FAA predicated its investment in FTI on achieving savings through 

one consolidated telecommunications network. Now that the Agency has 

decided to indefinitely retain three legacy networks, it is imperative that FAA 

recalculate the legacy operations cost and determine the impact on FTI’s 

estimated cost savings. Further, FAA did not include about $200 million in 

prior operations costs, which were used to support the legacy networks, within 

the scope of the FTI program. When these costs are included, they increase the 

revised cost estimates for legacy operations (of $1.1 billion) by $57 million. 

FAA acknowledges that it did not include FY 2002 legacy operations costs in 

the updated baseline, but commented that the impact would be minimal. 

Nevertheless, in viewing the history of the FTI program, an accurate 

accounting of the legacy costs is important because delays with the FTI 

transition translate directly into reduced cost savings due to paying for legacy 

systems longer than planned. 

• Finally, expected savings have eroded, and considerable confusion exists 

about what level of savings will ultimately be realized. The extent of FTI’s 

cost savings is important because it is one of the few capital programs that 

promised to reduce operating costs.10 When FAA first re-baselined the FTI 

program in 2004, the Agency estimated cost savings to be $672 million. At the 

second re-baseline in 2006, the JRC approved estimated savings of 

$596 million for the period FY 2005 through FY 2017. To add further 

confusion, FAA’s independent assessment team did not validate FTI benefits 

approved by the JRC. The team calculated FTI benefits and estimated them to 

be $712 million (excluding prior investments) for the period FY 2007 through 

FY 2017. 

Our analysis of FTI cumulative benefits, which covers the period of 

performance from FY 2003 through FY 2017, shows that cost savings were 

reduced to $434 million (as calculated in then-year dollars). In current-year 

dollars, which are adjusted for inflation, we calculate that FTI benefits shrunk 

to $158 million through 2017. 

We recognize that Office of Management and Budget (OMB) guidance allows 

FAA to exclude prior investments when assessing cost and benefits and 

approving major acquisition baselines. However, this approach does not 

provide a complete picture of expected benefits in terms of savings to decision 

makers. Because the various estimates for FTI benefits we have seen excluded 

prior investments (as many as 4 years in some cases), benefits were overstated. 

FAA officials are confident that the Agency will realize savings from FTI 

given that the largest legacy network has been replaced. Nevertheless, costs 

 

10 Planning documents we reviewed supporting the FTI re-baseline in 2004 showed the program was estimated to save 

over $800 million. 

vi
and expected benefits should be reassessed so they can be accurately reported 

to congressional and departmental decision makers. 

Until FAA develops accurate FTI cost estimates, independently validates them, 

and reports the correct figures, the true program benefits with respect to cost 

savings will remain unknown. 

FAA must continue addressing technical and reliability issues that have 

impacted ATC operations. FTI technical problems are causing unscheduled 

outages and creating risks to air traffic control operations. In some cases, these 

outages have involved simultaneous loss of both primary and back-up FTI 

services, which not only disrupts air travel but also creates potential safety risks. 

In 2006, we reported that a loss of all FTI services led to numerous flight delays at 

Chicago O’Hare International Airport and that FAA needed to take action to 

ensure telecommunications diversity exists at facilities receiving FTI. 

We found that diversity issues and technical problems persist.11 According to an 

October 2007 internal FAA study on FTI diversity, several critical facilities are 

still vulnerable to outages because FAA has not ensured that its contractors and 

subcontractors adequately separate FTI primary and alternate services. The 

following are examples of significant FTI outages: 

• On September 25, 2007, all FTI paths providing radar, flight, and voice 

communications were lost at the Memphis Air Route Traffic Control Center 

(ARTCC), blacking out air traffic control throughout the region for several 

hours and causing 566 flight delays. This occurred due to the catastrophic 

failure of a key component (an optical network ring) that is supposed to have 

built-in fault tolerance. According to FAA’s investigation of this outage, FAA 

was vulnerable to the same type of failure at other critical ARTCC facilities, 

such as Atlanta and Jacksonville. In their comments on our draft report, FAA 

officials stated that the problem has been corrected at Memphis and other FAA 

facilities. 

• On November 9, 2007, all primary and alternate FTI service paths were lost at 

the Jacksonville ARTCC, resulting in 85 flight delays. FAA is now in the 

process of ordering installation of additional FTI equipment here and at other 

critical ATC sites. 

We also found that when FTI outages occur, the services are not always restored 

within contractual timeframes. For example, in March 2008, FTI contractor 

officials reported that an average of 7 percent of FTI services were not restored on 

time. While the FTI contract requires NAS services such as En Route Air to 

 

11 For the purposes of this report, we refer to diversity problems as instances where there is not adequate separation 

between FTI primary and alternative paths. We did not examine the overall FTI architecture or design. 

vii
Ground Communications to be restored within 3 hours, the FTI contractor was 

taking an average of almost 6 hours to do so. 

To mitigate risks to ATC operations and meet reliability standards required by the 

contract, FAA must (1) ensure that all sites requiring primary and alternate paths 

meet FAA requirements for diversity, (2) improve controls over all FTI 

contractors’ configuration of FTI equipment, and (3) take steps to prevent 

unscheduled outages and restore them on time. 

SUMMARY OF RECOMMENDATIONS 

Since we last reported, FAA has made significant progress with FTI and has 

transitioned the largest and costliest network to the new system. However, FAA 

will not meet all the FTI goals originally established for the program because 

some networks will not be transitioned and the expected level of cost savings will 

not be realized. As FAA moves forward with FTI, it must provide decision 

makers with an accurate account of FTI’s expected benefits and costs for both the 

capital and operations accounts. FAA must also ensure FTI diversity requirements 

are met to prevent outages to ATC operations. 

Our recommendations include (1) reassessing FTI program costs and benefits, as 

the current estimates do not include the cost to extend the use of legacy networks 

beyond December 2008; (2) updating the FTI schedule with an effective transition 

plan outlining when the DMN, NADIN-PSN, and BWM networks will be 

transitioned to FTI; (3) periodically conducting internal studies to ensure that 

contractors meet FTI diversity requirements to prevent outages; and 

(4) establishing an improved process that requires Harris’s technicians to restore 

FTI services within established contractual timeframes to meet reliability 

standards. Our complete recommendations are listed at page 16. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

On June 30, 2008, we provided FAA with our draft report. In addition, we held an 

exit conference on July 3, 2008, and subsequent meetings with FAA officials 

responsible for managing FTI, including the Senior Vice President for Operations 

and Assistant Administrator for Financial Services who also serves as the 

Agency’s Chief Financial Officer. 

On September 19, 2008, FAA provided its formal response to our draft report and 

concurred with all six of our recommendations, which included the need to 

reassess network engineering costs, conduct periodic audits to ensure diversity, 

viii
ix

and review internal procedures for reporting FTI outages. FAA also provided 

additional comments on various aspects of our report. FAA’s response is included 

in its entirety in the appendix to this report. FAA’s comments and our views on its 

comments are fully discussed on pages 17 through 20. 

We appreciate the cooperation and assistance of FAA representatives during this 

audit. If you have any questions regarding this report, please contact me at (202) 

366-1427 or Lou Dixon, Assistant Inspector General for Aviation and Special 

Program Audits, at (202) 366-0500. 

# 

cc: FAA Acting Deputy Administrator 

FAA Assistant Administrator for Financial Services 

 and Chief Financial Officer 

FAA Chief Operating Officer 

OST Director Office of Audit Relations 
TABLE OF CONTENTS 

FINDINGS .............................................................................................. 1

FAA Has Made Significant Progress Transitioning to FTI but 

Will Not Replace All Networks by December 2008 as 

Planned......................................................................................................1

FAA Has Not Validated FTI Cost Estimates, and the 

Program Costs and Benefits Remain Uncertain.........................................5

FAA Must Continue Addressing Technical and Reliability 

Issues That Have Impacted ATC Operations ...........................................10

RECOMMENDATIONS........................................................................ 16

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE ......................................................................................... 17

EXHIBIT A. OBJECTIVES, SCOPE, AND METHODOLOGY............ 21

EXHIBIT B. STATUS OF FTI REPLACEMENT OF SEVEN LEGACY 

TELECOMMUNICATION NETWORKS (AS OF MARCH 31, 2008)... 22

EXHIBIT C. TOTAL PLANNED FTI SERVICES DISTRIBUTION BY 

RMA LEVEL......................................................................................... 23

EXHIBIT D. MAJOR CONTRIBUTORS TO THIS REPORT .............. 24

APPENDIX. AGENCY COMMENTS................................................... 25
1

FINDINGS 

In August 2006, FAA’s JRC met and subsequently approved a second re-baseline 

of FTI’s cost and schedule goals, which extended the completion date for the FTI 

transition by 1 year to December 2008, increased overall program costs by over 

$100 million (from $3.3 billion to $3.4 billion), and reduced the total number of 

NAS services to be transitioned to FTI from 25,294 to 20,033. Since we last 

reported, FAA has made significant progress with the FTI transition, with 

19,977 services cut over to operations as of March 31, 2008. FAA also 

transitioned the costliest legacy network that FTI was planned to replace. 

However, FAA has decided to indefinitely defer the transition of three legacy 

networks beyond December 2008 due to technical challenges and other issues. As 

a result, FTI will not provide an integrated suite of NAS services as FAA 

originally planned. Further, FAA must continue funding multiple systems, which 

will have cost, benefit, and operational ramifications that have yet to be 

determined. Moreover, FAA is now addressing emerging requirements that were 

not included in the FTI baseline. Consequently, the total number of FTI services 

increased to 22,719; however, FAA has yet to update the FTI schedule to reflect 

all the additional services. 

Further, FTI’s costs and benefits remain uncertain. Although FAA completed its 

assessment of various FTI cost elements, concerns about how costs are charged to 

FAA Operations account persist to date. Moreover, FAA did not independently 

validate the $596.4 million estimated cost savings approved by the JRC. Until 

FAA develops accurate FTI cost estimates and independently validates them as 

agreed after our 2006 report, the true program benefits will remain unknown. 

Finally, we found that FAA facilities using FTI have experienced outages of 

primary and back-up services, which have disrupted ATC operations. Further, 

these outages are not always restored within contractual timeframes. FAA must 

ensure that FTI services meet diversity requirements and reliability standards to 

avoid further ATC disruptions. 

FAA Has Made Significant Progress Transitioning to FTI but Will Not 

Replace All Networks by December 2008 as Planned 

Since we last reported in April 2006, FAA has made significant progress 

transitioning telecommunications services to the FTI network. FAA’s current 

transition plan focuses on first decommissioning LINCS, the costliest legacy 

network; then implementing emerging service requirements; and, finally, 

implementing all services. To its credit, FAA replaced four of the seven legacy 

systems with FTI, including the LINCS network as of March 31, 2008 (see 

exhibit B). Additionally, because the LINCS network had been fully 

Findings 
2

decommissioned, FAA reported that March 31, 2008, would be the last time it 

would provide regular monthly reports on the FTI transition status. 

Overall, FAA has made significant progress transitioning to FTI. For example, as 

of March 31, 2008, FAA reported that it accepted 90 percent of the FTI services 

(see table 3). FAA also reported that it disconnected about 82.1 percent of the 

planned legacy service disconnects. For comparison, when we last reported on 

these steps in April 2006, FAA had only accepted 6.3 percent of the services and 

disconnected only 3.1 percent of the legacy services. 

Table 3. Status of FTI’s Five Critical Steps 

(as of March 31, 2008) 

Transition Steps Actual Tasks 

Reported 

*Total Quantity 

Planned 

Percent Complete 

Site Acceptance 3,826 4,174 91.7 % 

Service Acceptance 20,516 22,719 90.3 % 

Service Cut Over 19,977 22,719 87.9 % 

Legacy Service/Circuit 

Disconnects 

14,113 17,191 82.1 % 

LINCS A-Node 

Decommissions 

160 160 100 % 

* The total number of planned services and legacy circuit disconnects is provided in the March 2008 FTI master 

schedule. 

** According to FTI program officials, all 160 LINCS A-Nodes were decommissioned by April 2008. 

 Source: FTI Program Office, “Metrics Report,” as of March 31, 2008 

We found, however, that FAA will not replace all legacy networks by 

December 2008 as planned since it has deferred transitioning three of the seven. 

As a result, FTI will not provide a fully integrated suite of NAS services as FAA 

envisioned. Further, as FAA moves forward with FTI, it must update the FTI 

master schedule to address the Agency’s growing needs for telecommunications. 

FAA Will Not Replace All Legacy Networks by the Planned December 

2008 Transition Completion Date 

FAA intended for FTI to replace seven existing FAA-owned or leased 

telecommunications networks with a single network by December 2008. 

However, FAA experienced technical challenges transitioning digital services 

(such as those that transmit critical radar and flight data) to FTI. As a result, FAA 

has deferred transitioning the following three networks, which support key NAS 

services, to FTI beyond the December 2008 completion date: 

Findings 
3

• DMN, which supports long-range radar services: DMN services transport 

radar information throughout FAA facilities. The technologies include (1) data 

multiplexing, which enables consolidation of several independent transmission 

requirements to a single circuit, and (2) automated network monitoring and 

controls, which enable real-time identification of failed NAS elements from 

central locations and circuit restoration. 

FAA will not replace the DMN modems until after December 2008. In the 

interim, FAA will continue to depend on older FAA equipment, such as DMN 

Codex modems. FAA’s decision to defer the transition of specific services is 

related to uncertainty with the overall direction of related modernization 

efforts. For example, FAA has been transitioning some services from DMN, 

but it decided to leave surveillance services supporting long-range radars on 

DMN until it decides how surveillance data will be handled under NextGen. 

• NADIN-PSN, which supports flight data and weather information 

services: The NADIN data communications network is a tool for aviation 

users in both the NAS and the international community. The network is used 

to store, handle, and edit flight planning and weather messages at FAA’s 

facilities that manage high-altitude traffic. 

NADIN switches12 will not be replaced by FTI at FAA centers until 2009 or 

2010. FAA decided to avoid the custom development cost of establishing the 

same capability under FTI as the technology is becoming obsolete. In the 

interim, FAA will continue to depend on the older NADIN equipment. 

• BWM, which supports NAS and National Defense Program services: The

BWM network supports the transmittal of voice and radar data in and between 

FAA facilities. BWM provides bandwidth-on-demand, automatic restoration, 

switching, and intelligent routing of these services. 

The BWM transition to FTI will not occur until after December 2008, if at all. 

The Department of Defense raised interface concerns about replacing BWM 

with FTI. Moreover, the contractor has had to replace or upgrade other digital 

equipment, such as routers13 that were installed but failed to meet 

requirements. 

FAA needs to update the FTI schedule so that it details when the DMN, NADINPSN, and BWM networks will be replaced by FTI.

 

12 A network switch is a computer networking device that connects network segments. 13 A router is a device that determines the proper path for data to travel between different networks. 

Findings 
4

The Number of Services That Need To Be Transitioned to FTI Continues 

To Fluctuate 

The FTI schedule continues to fluctuate even though FAA significantly reduced 

the number of services planned for transition to the FTI network. When FAA 

approved the FTI schedule in August 2006, it reduced the number of services to be 

transitioned from 25,294 to 20,033 (about a 20-percent reduction). FAA reduced 

the number of FTI services to be transitioned by re-categorizing the majority of 

them as future requirements. Since then, the total number of planned FTI services 

has begun climbing again and remains uncertain. 

According to the FTI master schedule, as of March 2008, FAA now plans to 

transition 22,719 services to the FTI network (see figure 1). According to FTI 

program officials, the service count increased because they added mission support 

services, emerging service requirements (that had not been previously identified), 

and site-specific requirements. 

Figure 1. FTI Planned Services Have Fluctuated Over Time 

0

10,000

20,000

30,000

Number of 

Planned FTI 

Services

Planned Services 25,294 20,033 22,719

Prior Plan 

Dec - 2004

Current Plan 

Aug - 2006

Master Schedule 

Mar - 2008

Source: OIG analysis of FTI current versus prior baseline schedules and the FTI master schedule 

FAA must ensure that all NAS programs requiring FTI services are included in 

FTI’s schedule, including those that FTI program officials classified as 

“emerging” and “future” requirements to effectively manage the transition and 

reduce the risks of schedule delays, cost growth, and risks to ATC operations. For 

example, FTI program officials classified services for FAA’s FS-21 program as 

“emerging requirements” and began transitioning these services to the FTI 

network. When FAA issued its last report on FTI transition goals in March 2008, 

however, only 1,149 of 1,847 FS-21 services were included in the FTI schedule. 

The FTI master schedule still did not include about 700 remaining FS-21 services 

planned for transition. 

Findings 
5

Moreover, the master schedule does not include key services that FTI program 

officials classified as “future services” required for the NextGen system, such as 

ADS-B and SWIM. FTI program officials previously reported that these programs 

were not included in the FTI schedule because their baselines were not finalized 

and approved by FAA. However, we note that both programs received their 

baselines in 2007, and FAA needs to add them to FTI’s master schedule. In 

addition, Mitre14 estimates that about 4,000 services classified as “future 

requirements” need to be added to the total quantity to be implemented and 

transitioned to FTI. The cost of these future services is currently unknown. 

FTI program officials acknowledge that the number of services to be transitioned 

to FTI will continue to increase and that adjustments to the schedule will be 

required to accommodate emerging and future services requirements. As FAA 

moves forward with FTI, it must update the FTI master schedule to reflect 

emerging and future NAS service requirements. 

FAA Has Not Validated FTI Cost Estimates, and the Program Costs 

and Benefits Remain Uncertain 

The FTI program has experienced cost growth, and its benefits have consequently 

eroded. We recommended in April 2006 that FAA validate all program estimates 

to determine whether FTI is still cost beneficial. FAA concurred and stated that it 

would complete a cost and benefit reassessment based upon actual and projected 

FTI and legacy costs and have the estimates independently evaluated. 

In August 2006, FAA’s JRC planned to approve a 1-year FTI schedule delay to 

December 2008 and increase the overall program costs to $3.4 billion. The JRC 

stated, however, that its approval was contingent on FAA’s finance group, the Air 

Traffic Organization-Finance (ATO-F), validating the revised cost estimates. 

In September 2006, FAA’s Independent Evaluation Review (IER) team (within its 

ATO-F division) completed its assessment of various FTI cost elements but did 

not validate the cost and benefit projections. Instead, the IER team raised 

concerns about some of the baselined costs. For example, the IER team reported 

the F&E baseline is masked by FTI business rules that allow traditional F&E 

expenditures to be funded by the Operations account. 

Although the FTI estimates were not validated, the JRC still approved the new 

baseline, which added over $100 million to the overall program cost estimate 

despite reducing the number of services. We do not understand why the JRC 

approved the revised FTI baseline without validating costs and expected benefits 

as agreed. As we reported in the past, FAA policy requires that FAA program 

 

14 Mitre is a federally funded research and development center under contract to FAA. 

Findings 
6

officials submit independently validated cost and benefit estimates for planned 

capital investments, such as FTI, to the JRC before the JRC approves a re-baseline 

request. Validating cost and benefit estimates is important because if the revised 

program costs are underestimated, cost growth will cause benefits to be reduced, 

possibly to the point of undermining the cost effectiveness of the investment. 

We have several concerns regarding the accuracy and validity of FTI revised cost 

estimates because our analysis indicates that FAA has understated costs for the 

F&E and legacy categories. Due to this uncertainty with FTI revised costs, FTI 

estimated cost savings benefits remain questionable. 

FTI Facilities and Equipment Costs Are Understated, and FAA Had 

Improperly Charged Activities to the Operations Account 

FTI’s revised F&E cost estimate of $318.8 million is underestimated due to 

additional F&E costs for network engineering activities (capital costs) that were 

charged to the Operations account. 

We found that network engineering was the primary cost driver impacting F&E, 

which grew by more than $36 million over a 4-year period ending in FY 2007 (see 

table 4). In FY 2007 alone, we identified a nine-fold increase over FAA’s original 

estimate of $1.5 million to $15.8 million for network engineering support. 

Table 4. FTI Network Engineering Cost Growth 

Charged to FTI Operations Account 

Contract 

Year 

Contract 

Modification 4 

(Apr. 27, 2004)

Contract 

Modification 12 

(Nov. 20, 2006) 

Cost 

Growth 

Percent 

Increase

FY 2004/CY-2 $2,231,090 $ 4,401,683 $ 2,170,593 97%

FY 2005/CY-3 $2,305,557 $12,761,781 $10,456,224 454%

FY 2006/CY-4 $2,282,499 $11,700,000 $ 9,417,501 413%

FY 2007/CY-5 $1,548,163 $15,846,038 $14,297,875 924%

Totals $8,367,309 $44,709,502 $36,342,193 -- Source: FTI Contract Modifications 

FTI program officials acknowledge that some network engineering costs should 

have been charged to the F&E account and that the Agency did not reflect the 

increased network engineering costs in its F&E budget. Most of this cost growth 

occurred before FAA updated its business rules in July 2006. Cost growth during 

this time period was related to the additional cost incurred to pay for FTI network 

Findings 
7

implementation (which, as FAA states in its response, is normally funded by the 

F&E account). 

We previously reported on this problem in 2006 and identified about $11 million 

that FAA had improperly charged to the Operations account instead of the F&E 

account. We recommended that FAA update FTI business rules to properly 

charge the F&E account for FTI transition activities. 

Although FAA concurred and revised its business rules, it continued to allow 

charges to its Operations account that should have been charged to the F&E 

account. For example, although FAA updated FTI business rules in July 2006 and 

added $7 million in F&E funding for network engineering, FAA’s own IER team 

found that most of the network engineering cost increase from FY 2004 through 

FY 2006 was absorbed in the operations appropriation. Moreover, the IER team 

reported that the adjusted business rules did not establish a clear boundary 

between F&E- and operation-funded activities. 

In addition, when the IER team assessed FTI costs in September 2006, it found 

that $24.7 million in network engineering cost was charged to the Operations 

account through the end of FY 2006. The IER team also found that FTI’s impact 

on the F&E baseline is masked by business rules that allow F&E expenditures to 

be funded from the Operations account. 

Ultimately, assigning some of these network engineering costs to the Operations 

account understates the true F&E costs for the FTI program. Because FTI 

program officials did not discontinue this practice after changing their business 

rules, it is difficult for decision makers to understand the actual cost to transition 

to FTI. Until FAA reassesses the network engineering costs paid from the 

Operations account to the F&E account, the true transition costs for FTI will 

remain unknown. 

FAA Will Have To Account for Increased Telecommunications Operating 

Costs Due to the Increased Number of FTI Services 

The FTI revised operations cost estimate of $1.95 billion was planned to support 

20,033 services, but this estimate did not consider the cost to support additional 

services such as “emerging requirements.” FAA has increased the number of FTI 

services to 22,719. According to FAA officials, the majority of these 

requirements will be paid for by other programs. This explains why FAA’s 

planned operations costs for FTI over the next 4 years (between FY 2009 and 

FY 2012) show a steady state of decline (see figure 2 on page 8). 

Findings 
8

Figure 2. FTI Planned Operations Cost Are Declining While the 

Demand for FTI Services Is Increasing 

(FY 2009 – FY 2012) 

Source: FTI Metrics Report and OMB Exhibit 300 (Budget Year 2009) 

0

50

100

150

200

250

Fiscal Years

$ in Millions

FTI Scope (FTI OPS + Legacy OPS) 206 165.4 152.6 145.3

FY 2009 FY 2010 FY 2011 FY 2012

It is important to note that FTI’s costs do not reflect all of the Agency’s 

telecommunications costs. Since the cost of emerging services is not part of the 

FTI cost baseline, FAA will need to account for the cost of those services within 

the individual programs that are the sources of the requirements. Regardless of 

whether FAA includes the additional funding for these services in revised FTI cost 

estimates, funding for these requirements will inevitably need to be reflected, 

either through adjustments to FTI or in the Agency’s total operating budget for 

telecommunications services. 

FTI Cost Savings Have Eroded, and FAA Needs To Reassess Its 

Revised Benefits 

When FAA first re-baselined the FTI program in 2004, we found that FTI’s 

estimated cost savings decreased from $820 million to $672 million through 2017. 

In October 2005, we received an updated status report from the Program Office 

showing that FTI benefit estimates had been reduced to $672 million. As a result 

of cost growth in the FTI program, FAA’s cumulative cost benefit estimates 

continued to erode, with no cost savings achieved in FY 2006 or FY 2007. 

As we previously noted, FAA did not validate FTI benefits (cost savings) before 

the JRC approved the baseline. Moreover, considerable confusion exists about the 

Findings 
9

expected savings from FTI because we have seen various estimates and different 

periods of performance used to calculate the benefits. 

When FAA established a second re-baseline in 2006, we estimate that FTI 

cumulative benefits were further reduced from $672 million to $434 million (as 

calculated in then-year dollars) for the period FY 2003 through FY 2017. In 

current-year dollars, which are adjusted for inflation, we calculate that FTI 

benefits shrunk to $158 million (see table 5). 

Table 5. Changes in FTI Cost Savings Estimates in 

 Then-Year and Current-Year Dollars 

(Dollars in Millions)

FTI Cost 

Savings 

(then-year) 

FY 

2003 

FY 

2004 

FY 

2005 

FY 

2006 

FY 

2007 

FY 

2008 

FY 

2009 

FY 

2010 

FY 

2011 

FY 

2012 

FY 

2013-

2017 

Total 

December 

2004 $-60.4 $-67.5 $-131.7 $-111.5 $-84.9 $14.7 $67.3 $97.8 $111.4 $129 $708.2 $672.4 

September 

2006 *N/A *N/A -83.1 -133.4 -140.6 -73 39 83.6 105.2 123.9 674.8 596.4 

OIG 

Calculation -45.4 -97.1 -92.1 -127.1 -157.4 -73 39 83.6 105.2 123.9 674.9 434.4 

FTI Cost 

Savings 

(current-year) 

December 

2004 -60.4 -67.5 -131.7 -108.5 -77.4 12.8 56 77.6 84.4 93.3 445.5 326.1 

September 

2006 *N/A *N/A -83.1 -133.4 -140.6 -69.5 35.3 72.2 86.4 97 455.8 320.1 

OIG 

Calculation $-45.5 $-97.1 $-92.1 $-127.1 $-157.4 $-69.5 $35.3 $72.2 $86.4 $97 $455.8 $158 

*FAA’s calculation of cost savings for the current baseline in 2006 excludes sunk costs reported in FY 2003 and FY 

2004. Our calculations of FTI cost savings for the current baseline in 2006 include all sunk costs, and we relied on 

actual costs from 2003 to 2007 to estimate savings. 

Source: FTI basis of estimates in 2004 and FTI Program Office cost savings estimates in 2006.

Moreover, according to program officials, FTI benefits approved by the JRC 

included estimates for the period FY 2005 through FY 2017 and totaled 

$596.4 million. However, FAA’s independent assessment did not validate the 

estimates approved by the JRC. Instead, FAA used estimates for the period 

FY 2007 through FY 2017 to calculate FTI benefits, which totaled $712.8 million. 

We recognize that OMB guidance allows FAA to exclude prior investments when 

reporting benefits to OMB; however, this approach does not provide a complete 

picture of FTI cumulative benefits to decision makers. In our view, FAA should 

include prior investments in its calculations of estimated savings when reporting 

FTI cumulative benefits to decision makers. Because FAA’s assessment excluded 

4 years from its calculations, FTI benefits were overstated and should be 

Findings 
10

reassessed to be accurately reported to congressional and departmental decision 

makers. 

Another cause for concern with FAA’s projection of FTI cost savings involves 

legacy operations costs. FAA predicated its investment in FTI on achieving 

savings through one consolidated telecommunications network. Now that the 

Agency has decided to continue operating a portion of three legacy networks 

beyond December 2008, it is imperative that FAA recalculate the legacy 

operations cost and determine its impact on FTI’s estimated cost savings. 

Additionally, in September 2006, FAA added $259.9 million to the baseline cost 

for operating legacy telecommunications networks within the scope of the FTI 

program. This resulted in a revised legacy cost total of about $1.1 billion. We 

found, however, that the revised total was underestimated because FAA did not 

include about $200 million in its revised estimate. As a result, based on our 

calculation of actual legacy costs through June 2007, FAA already expended about 

$57 million more than planned ($1,174 million spent versus $1,117 million 

planned). FTI program officials acknowledged that they did not include FY 2002 

legacy operations costs in the updated baseline. In viewing the history of the FTI 

program, an accurate accounting of the legacy costs is important as delays with the 

FTI transition translate directly into reduced cost savings due to paying for legacy 

systems longer than planned. Moreover, this is a key omission on FAA’s part that 

must be fully disclosed to accurately report the true legacy cost within the scope of 

the FTI program. 

Because FAA has yet to correct these issues, we continue to question the accuracy 

of FAA’s cost projections for FTI. In fact, at the end of FY 2006, FAA 

expenditures for the year totaled $372 million for telecommunications services—

$27 million more than the $345 million the Agency planned to spend. In 

FY 2007, FAA spent $397 million—$37 million more than planned. We note that 

every dollar spent above FAA’s annual cost estimates is a dollar directly deducted 

from FAA’s projected FTI cost savings. In FY 2008, through FAA’s last 

reporting period for FTI (which ended March 31, 2008), the Agency spent about 

$160 million to support the program. 

FAA Must Continue Addressing Technical and Reliability Issues That 

Have Impacted ATC Operations 

We found that FAA facilities using FTI have experienced unscheduled service 

outages, which have disrupted ATC operations and caused flight delays. Because 

of these outages, several FTI services are not meeting availability requirements or 

being restored within contractual timeframes. As we reported in 2006, FAA must 

Findings 
11

ensure that FTI services avoid these problems by meeting diversity requirements 

(adequate separation of primary and alternate services) and reliability standards. 

FTI Services at Critical Locations Have Experienced Outages and Caused 

Flight Delays 

One of the primary technical risks occurring with FTI services is unscheduled 

service outages. In some cases there has been a simultaneous loss of primary and 

alternate telecommunications paths. Unscheduled outages in which both primary 

and back-up FTI services are lost not only disrupt and delay air travel but also 

have critical safety implications. We reported in 2006 that FAA needed to pay 

special attention to ensuring telecommunications diversity after a loss of all FTI 

services led to numerous flight delays at Chicago O’Hare International Airport. 

Our current review found, however, that diversity problems persist with the FTI 

program. An October 2007 internal study completed by the FTI prime contractor 

found that several critical NAS locations continue to lack adequate diversity 

between primary and alternate telecommunications paths. Therefore, the potential 

to simultaneously lose all primary and alternate FTI services remains at those 

sites, and this could result in a loss of ATC operations. 

We identified key FAA facilities in the New York metropolitan area that lack FTI 

diversity: the Kennedy Airport tower, the New York Terminal Radar Approach 

Control Center, and the New York ARTCC. The FTI services at these facilities 

were all routed through a single switching center operated by a single telephone 

company. No FTI services for these facilities were routed through an alternate 

switching center to provide back-up should an outage occur at the primary 

switching center. 

The primary cause of these diversity problems is inadequate coordination between 

FTI’s prime contractor and its subcontractors when designing and installing FTI 

services. FAA must continually review the implementation of critical services to 

ensure that diversity requirements are being met. We found that the diversity 

problems and other issues continue to result in flight delays. For example, 

• On November 9, 2007, when FTI service was interrupted at Jacksonville 

ARTCC, all primary and alternate paths were lost, which resulted in 85 flight 

delays. FAA is now in the process of ordering installation of additional FTI 

equipment in New York, Jacksonville, and other critical ATC sites where FTI 

diversity was found to be inadequate. 

• On September 25, 2007, all FTI primary and alternate paths providing radar, 

flight, and voice communications were lost at the Memphis ARTCC, blacking 

out air traffic control throughout the region for several hours and causing

Findings 
12

566 flight delays. The problem was caused by the catastrophic failure of a key 

component (an optical network ring) that is supposed to have built-in fault 

tolerance. According to FAA’s investigation of this outage, FAA was 

vulnerable to the same type of failure at other critical FAA facilities, including 

Atlanta and Jacksonville. The Memphis outage could have been prevented if 

the alternate telecommunications path was routed differently. FAA officials 

stated that the problem has been corrected at Memphis and other facilities. 

• On July 27, 2007, FAA lost primary and back-up FTI services providing en 

route communications (ECOM) between air traffic controllers and pilots over 

North Carolina. Primary service was not restored for about 7 hours, and it took 

over 6 hours for back-up service to be restored. 

In addition to inadequate diversity of services, we have identified several other 

causes for outages. Table 6 provides examples of critical FTI outages and their 

causes that disrupted ATC operations. 

Table 6. Examples of Critical FTI Outages 

That Disrupted Air Traffic Control Operations

Location Date Duration Details 

Arrival/ 

Departure 

Delays 

Chamblee, GA 05/15/08 3.8hrs FTI circuit failure resulted in loss of 

multiple services. 

41 

San Diego, CA 04/12/08 2.2hrs Teleco failure resulted in loss of 

services. 

5 

Leesburg, VA 03/24/08 1.08 hrs Service between Washington and 

Jacksonville failed. No definitive 

cause has been identified. 

60 

Merrimack, NH 12/04/07 1.95hrs Cables dislodged from the patch panel 

interrupted multiple services. 

49 

Jacksonville, FL 11/09/07 38 minutes Inadequate physical diversity resulted 

in loss of service. 

85 

Memphis, TN 9/25/07 3 hours Inadequate physical diversity resulted 

in loss of service. 

566 

Chicago, IL 5/23/07 3.5 hours Improperly configured FTI equipment 

resulted in loss of service. 

77 

Los Angeles, CA 

ATCT 

3/30/07 5 minutes Display services interrupted during 

FTI troubleshooting. 

25 

Salt Lake, UT 

ARTCC 

1/09/07 3 hrs FTI maintenance supervisor failed to 

follow established procedures. 

92 

Orlando, FL 

ATCT 

12/11/06 1.3 hrs Improper configuration caused loss of 

service. 

63 

San Juan, PR 

CERAP 

12/04/06 20 hrs Underwater cable cut caused loss of 

service. 

60 

Atlanta, GA 

ATCT 

09/28/06 1.25 hrs Defective equipment caused the loss 

of multiple services. 

8 

Source: FAA NOCC Reports 

Findings 
13

The causes of other outages include defective or improperly configured 

equipment, and poor reliability of installed equipment. For example, on 

May 23, 2007, improperly configured FTI equipment in Chicago caused the loss 

of all radar service, forcing air traffic controllers to implement a local ground stop 

that caused 77 flight delays. Another incident occurred on December 4, 2006, in 

San Juan, Puerto Rico, which resulted in the loss of an FTI circuit and caused 60 

flight delays. 

To prevent additional FTI outages caused by inadequate physical separation of 

primary and alternate services, FAA needs to require that its prime contractor 

periodically conduct internal studies to ensure all sites requiring primary and 

alternate paths meet FAA requirements for diversity. 

FAA Needs To Ensure the FTI Contractor Responds to FTI Outages 

More Efficiently 

At FAA sites we visited, regional officials told us that the FTI contractor’s 

responses to service outages are unacceptable. For instance, without informing 

FAA regional technicians, the FTI contractor has dispatched its own or local 

telephone company technicians to sites in response to outages. This results in 

inefficient use of resources as the contractor technicians must wait for an FAA 

escort before they can begin working. Moreover, any time waiting for the FAA 

escort to arrive counts as “customer time” and is not included in the reported 

outage time. 

In addition to slow and uncoordinated responses, FTI technicians have left sites 

before completing repairs. For example, in some cases, technicians did not know 

how to repair services or did not have the correct parts or testing equipment. This 

means that, in those instances, multiple site visits are required for the technicians 

to restore the service. For example, FAA experienced several outages at the 

Duluth Radio Communication Air to Ground facility in Minnesota. Here, 

response times ranged upwards of 20 hours. Another problem hampering 

customer service is that service restoration sometimes depends on the local 

telephone companies that are not aware of the criticality of the FTI network. As a 

result, FAA’s own technicians have become critical links in restoring FTI services 

by providing assistance to the FTI contractor and its subcontractors. 

Another challenge that FTI program officials need to address is the lack of 

communication between the contractor and FAA when outages occur. FAA field 

personnel at sites we visited reported difficulty receiving updates and information 

from Harris’s command center regarding the status of FTI outages. For example, 

we witnessed an outage at the Albuquerque ARTCC that FAA had to report to 

Findings 
14

Harris, when Harris should have detected it and reported it to FAA. Also, after 

receiving the report, Harris did not provide any updates for over 2 hours. 

In another instance, poor workmanship at the Boeing Field tower in Seattle led to 

an FTI outage that caused the tower to close and transfer local air traffic control to 

another location. The outage went unnoticed by Harris’s command center. 

Instead, FAA technicians had to notify Harris of the problem. It then took 3 days 

for Harris’s subcontractor to visit the site to determine the cause of the incident. 

FAA and the FTI prime contractor have taken a number of steps to improve FTI 

processes and procedures for reporting and resolving problems with outages. 

However, additional work is needed to ensure that FTI outages are restored in a 

timely manner and meet contractual requirements. 

FAA Must Ensure That FTI Services Are Meeting Reliability Standards 

We found that some FTI services are not meeting contractual reliability, 

maintainability, and availability requirements (RMA requirements).15 For 

example, in March 2008, FTI contractor officials reported that an average of 

7 percent of FTI services experienced outages and were not restored on time to 

meet their availability requirements. 

There are seven different levels of RMA services being provided by FTI. For 

instance, RMA-1 services,16 such as radars, are required to be restored within 

6 seconds; however, we found the contractor took an average of 1 minute and 

32 seconds in March 2008 to restore them. 

Key RMA-4 services, such as En Route Air to Ground Communications, account 

for about 75 percent of all FTI services (see exhibit C). FAA requires that these 

services be restored within 3 hours. We found, and FAA acknowledged, that there 

was a problem in restoring these services in a timely fashion. FAA determined 

that since there would be a significant amount of RMA-4 services, meeting the 

requirements would be essential to improving overall FTI performance. 

Nevertheless, as of March 2008, we found the condition persists, with the FTI 

contractor taking an average of 5 hours and 47 minutes to restore RMA-4 services. 

FAA must improve its processes and procedures for restoring FTI outages and 

ensure that FTI technicians restore services within established contractual 

timeframes to meet the availability requirements. When FTI technicians do not 

meet those timeframes, FAA should impose penalties against the FTI prime 

contractor. FAA should also develop improved procedures and controls for 

 

15 The FTI contract requires the contractor to issue credits to FAA when services do not met contractual specifications. 

16 RMA refers to reliability, maintainability, and availability, which are FAA performance measures for operational 

services. 

Findings 
15

contractor coordination, equipment installation, and configuration of FTI 

equipment to assist with improving the reliability of FTI services. 

FAA Needs To Assess Controls Over FTI Reporting To Ensure FAA Senior 

Management Has Full Visibility Into All FTI Outages 

In reviewing FAA’s outage reports, we identified concerns regarding whether 

FAA senior management is aware of all FTI-related outages. While FAA’s 

National Operational Command Center (NOCC) reports provide some visibility 

into FTI outages, FAA procedures call for many outages to be filtered out as they 

are reported up the management chain. Based on the Agency’s NOCC reports 

between December 2006 and August 2007, we identified 21 unscheduled outages 

that resulted in flight delays and 38 other outages that did not result in delays. 

According to Professional Airways System Specialists, or PASS (FAA’s union 

representing its technicians), the number of FTI outages was different from what 

was identified in the NOCC reports. On May 9, 2007, PASS testified before the 

House Committee on Transportation and Infrastructure that, over a 9-day period, 

60 unscheduled FTI-related outages occurred in the Central Service Area alone, 

while the NOCC reported only 8 outages during the same time period. 

Based on a limited analysis of FAA’s Central Service Area daily outage reports, 

we found that more than 60 FTI-related outages occurred during the 9-day 

period—not 8, as FAA reported in the NOCC. In its comments on our draft 

report, FAA stated that all FTI outages are logged and reported to the appropriate 

operational points-of-contact for the affected services. Notwithstanding FAA’s 

position, our work shows that some FTI outages go unreported and that additional 

steps are needed to clarify and strengthen reporting requirements. 

While FAA procedures require that outages resulting in air traffic delays be 

reported to senior management, we believe that decision makers must have 

accurate data about FTI outages that could impact ATC operations. Therefore, 

FAA needs to review internal procedures over NOCC reporting and ensure that all 

critical, FTI-related outages resulting in ATC delays that the regions include in 

daily outage reports are included in the NOCC report. Ultimately, this will help 

FAA to target solutions to the most vulnerable facilities and provide an accurate 

picture of FTI operations to senior decision makers. 

Findings 
16

RECOMMENDATIONS 

As FAA moves forward with FTI, it must provide decision makers with an 

accurate account of FTI’s expected benefits and cost impact on FAA’s capital and 

operations funds. Additionally, FAA needs to ensure that FTI diversity 

requirements are met to prevent outages to ATC operations. We recommend that 

FAA: 

1. Reassess network engineering cost growth that was associated with the FTI 

transition during FY 2004 to FY 2007 but paid from the operations account 

to accurately report the true F&E costs associated with developing and 

transitioning to FTI. 

2. Document the planned schedule for completing the FTI transition for 

services remaining on the DMN, NADIN PSN, and BWM networks beyond 

the current baseline transition end date of December 2008 and those 

emerging services that were identified but not yet included in the schedule 

during the last reporting period for FTI. 

3. Calculate how updates to the transition schedules for the DMN, NADIN 

PSN, and BWM network components remaining in operation will impact 

FTI’s life-cycle cost and benefits baselines. 

4. Conduct periodic internal audits to ensure that adequate physical diversity 

exists at all facilities requiring separation of primary and alternative access 

paths. 

5. Develop an action plan for (a) reducing the time to restore FTI services so 

that it conforms with contractual requirements and (b) improving the 

percentage of FTI services that meet availability specifications. 

6. Review internal procedures over NOCC reporting and ensure all critical 

FTI-related outages resulting in ATC delays that are reported in daily 

outage reports by the regions are included in the NOCC report. 

Recommendations 
17

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

On June 30, 2008, we provided FAA with our draft report. In addition, we held an 

exit conference on July 3, 2008, and subsequent meetings with FAA officials 

responsible for managing FTI, including the Senior Vice President for Operations 

and Assistant Administrator for Financial Services who also serves as the Agency’s 

Chief Financial Officer. Based on FAA’s initial comments, we made a number of 

technical adjustments to our report where appropriate and revised the 

recommendations to clarify our intent and more accurately describe the corrective 

actions that FAA needs to take with respect to FTI. 

On September 19, 2008, FAA provided formal comments to our draft report and 

concurred with all six of our recommendations. 

Recommendation 1: FAA stated that it will reassess network engineering cost 

growth that was associated with the FTI transition during FY 2004 to FY 2007 but 

paid from the operations account. FAA stated it will report on its findings by 

November 29, 2008. 

Recommendation 2: FAA stated that it will document the planned schedule for 

completing the FTI transition for services remaining on the DMN, NADIN PSN, 

and BWM networks beyond December 2008. FAA also stated it would document 

the planned schedule for completing the FTI transition for those emerging services 

that were identified but not yet included in the schedule during the last reporting 

period for FTI. FAA stated it will report on the schedule by November 29, 2008. 

Recommendation 3: FAA stated that it will calculate how updates to the 

transition schedules for the DMN, NADIN PSN, and BWM network components 

remaining in operation will impact FTI’s life-cycle cost and benefit baseline. 

FAA stated that it will report on its findings by November 29, 2008. 

Recommendation 4: FAA stated that it will conduct periodic, internal audits to 

ensure that adequate physical diversity exists at all facilities requiring separation 

of primary and alternative access paths. FTI program officials pointed out that 

they are already conducting some diversity audits. 

Recommendation 5: FAA stated that it will develop an action plan for 

(a) reducing the time to restore FTI services so that it conforms with contractual 

requirements and (b) improving the percentage of FTI services that meet 

availability specifications. FAA stated it will complete the action plan by 

November 29, 2008. 

Agency Comments and Office of Inspector General Response 
18

Recommendation 6: FAA stated that it will review internal procedures over 

NOCC reporting to ensure that critical, FTI-related outages resulting in ATC 

delays that regions include in daily outage reports are included in the NOCC 

report. FAA stated that it will provide the results of the review by 

November 29, 2008. 

When successfully implemented, FAA’s planned actions will meet the intent of 

our recommendations and provide greater transparency into the Agency’s plans to 

address the remaining challenges in meeting FTI transition goals. 

FAA General Comments 

FAA also included four general comments about FTI and our report. 

FAA’s Comments on FTI Business Rules: FAA disagreed with our conclusions 

that all network engineering costs through FY 2007 should have been charged to 

the F&E account and that FAA continued to allow Operations costs to be charged 

to the F&E account. FAA stated that it follows the July 2006 revised business 

rules. 

We question FAA’s position because our report does not state that all network 

engineering costs should have been charged to the F&E account. FTI program 

officials agree that FTI’s revised F&E cost estimate of $318.8 million is 

underestimated due to additional network engineering activities (capital costs) that 

were charged to the Operations account. We found that network engineering was 

the primary cost driver impacting F&E, which grew by more than $36 million over 

a 4-year period ending in FY 2007. In FY 2007 alone, we identified a nine-fold 

increase over FAA’s original estimate of $1.5 million to $15.8 million for network 

engineering support. 

Moreover, FTI program officials acknowledge that some network engineering 

costs should have been charged to the F&E account and that increased network 

engineering costs were not reflected in its F&E budget. We note that most of the 

cost growth occurred before FAA updated its business rules in July 2006. For 

these reasons, we recommended, and FAA agreed, that FAA assess the cost 

growth to determine the true F&E costs associated with transitioning to FTI. 

FAA’s Comments on Legacy Network Operating Costs: FAA disagreed with 

our conclusion that it would have exceeded its life-cycle cost estimate for legacy 

operations by $57 million if legacy operations costs from 2002 were included. 

FAA states that its year-by-year reporting shows that the actual costs are 

$43.7 million less than the plan to date and $231.2 million below the life-cycle 

estimate. 

Agency Comments and Office of Inspector General Response 
19

We maintain that the analysis in our report is correct because FAA did not include 

about $200 million in prior operations costs used to support the legacy networks 

within the scope of the FTI program. When these costs are included, they increase 

the revised cost estimates for legacy operations (of $1.1 billion) by $57 million. 

FAA acknowledges that it did not include FY 2002 legacy operations costs in the 

updated baseline. In viewing the history of the FTI program, an accurate 

accounting of the legacy costs is important because delays with the FTI transition 

translate directly into reduced cost savings due to paying for legacy systems longer 

than planned. 

We have not reviewed FAA’s most recent projections of actual costs for legacy 

network operations in detail. However, we found a $50 million variance in the 

actual costs being reported for legacy network operations. For example, when 

comparing actual costs incurred for legacy operations through FY 2007, FTI 

metrics report totaled $948 million, but FTI program officials’ updated projections 

totaled $898 million. This type of inconsistency is the reason we continue to 

question the accuracy and validity of FTI program officials’ projections of FTI 

costs and benefits. 

FAA’s Comments on Projections of FTI Cost Savings Benefits: FAA 

disagreed with our calculation of FTI cost savings benefits. FAA has developed 

an updated projection of cost savings using all actual costs incurred to date and a 

revised projection for FY 2008 to reflect the early completion of the LINCS 

transition. FAA’s revised projections show that the FTI program remains on track 

to produce nearly $600 million in cost savings. 

As noted in our report, cost and benefits for FTI remain uncertain, and we have 

seen various estimates that rely on different periods of performance. In April 

2006, we recommended that FAA independently validate FTI cost projections to 

ensure that there was an objective assessment of FTI cost and benefit information. 

However, the Agency did not validate the cost and benefit projections. An 

internal FAA assessment raised concerns about some of the baselined costs and 

reported that the F&E baseline was masked by FTI business rules that allow 

traditional F&E expenditures to be funded by the Operations account. 

In our analysis of FTI expected savings, we included prior investments (e.g., sunk 

costs) as well as the cost of operating legacy systems longer than planned. We 

continue to believe that decision makers need a complete picture of costs for FTI 

given that it was one of the few acquisitions expected to reduce the Agency 

operating costs. 

We do not understand why the JRC approved the revised FTI baseline in 2006 

without validating costs and expected benefits as agreed. FAA policy requires that 

Agency program officials submit independently validated cost and benefit 

Agency Comments and Office of Inspector General Response 
Agency Comments and Office of Inspector General Response 

20

estimates for planned capital investments, such as FTI, to the JRC before a 

re-baseline request is approved. Validating costs and benefits estimates is 

important because if the revised program costs are underestimated, cost growth 

will cause benefits to be reduced, possibly to the point of undermining the cost 

effectiveness of the investment. Finally, until FAA calculates what impact the 

three remaining legacy networks will have on FTI’s life-cycle cost and benefit 

baselines, FAA’s projections of FTI cost savings benefits will remain uncertain. 

FAA’s Comments on the Reporting of FTI Outages: FAA disagreed that some 

FTI outages may be going unreported. Our report states that FAA needs to ensure 

FAA senior management has full visibility into all FTI outages. While FAA’s 

NOCC reports provide some visibility into FTI outages, FAA procedures call for 

many outages to be “filtered” as they are reported up the management chain. 

Based on a limited analysis of FAA’s daily outage reports, we found that more 

than 60 FTI-related outages occurred during a 9-day period—not 8, as FAA 

reported in the NOCC. For this reason, we recommended, and FAA agreed, that 

FAA review internal procedures over NOCC reporting and ensure all critical FTIrelated outages are reported. 

ACTION REQUIRED 

We consider FAA’s actions taken or planned to be responsive to the intent of our 

recommendations. In accordance with Department of Transportation Order 

8000.1C, we consider the recommendations addressed but open until FAA 

completes all planned actions. 
21

EXHIBIT A. OBJECTIVES, SCOPE, AND METHODOLOGY 

Our audit objectives for this audit were to (1) assess FAA’s progress in developing 

a realistic master schedule and an effective FTI transition plan and (2) determine if 

FAA is mitigating technical risks to air traffic control operations by coordinating 

activities and validating site-specific requirements before activating FTI services 

and disconnecting existing telecommunication services. 

To achieve our objectives, we obtained FTI monthly status reports, master 

schedules, reliability reports, outage reports, budget data, planned and actual cost 

expenditure data, revised cost and schedule projections, independent evaluations, 

and other supporting documentation from FAA. We also acquired relevant 

contractor financial and performance reports from Harris Corporation. We 

analyzed FAA’s FTI master schedule and budget and cost estimates. We reviewed 

FAA’s FTI transition strategy documents for reasonableness. We analyzed 

Harris’s financial and performance reports to determine if FTI equipment was 

performing and being maintained as required. We examined FAA’s expenditures 

data for FTI and for FAA’s legacy telecommunications networks to determine if 

FTI is achieving cost and benefit goals. 

While conducting this review, we interviewed key FAA and FTI program officials 

at the Agency’s Headquarters in Washington, DC, including FAA officials 

responsible for Telecommunications, Acquisition, and Finance, as well as FAA 

staff members in organizational units reporting to these officials. We interviewed 

FTI prime contractor officials at Harris’s primary FTI location in Melbourne, 

Florida. We also met with officials from Mitre. Additionally, we visited 

numerous FAA locations in the Agency’s Western Pacific, Northwest Mountain, 

Southwestern, Southern, and Great Lakes Regions and interviewed numerous 

FAA regional officials, engineers, managers, and technicians involved with 

acquiring or operating FAA telecommunications or FTI equipment. 

We performed our audit work from May 2006 through July 2008. We performed 

our work in accordance with generally accepted Government Auditing Standards

as prescribed by the Comptroller General of the United States. 

Exhibit A. Objectives, Scope, and Methodology
Exhibit B. Status of FTI Replacement of Seven Legacy 

Telecommunication Networks (as of March 31, 2008)

22

EXHIBIT B. STATUS OF FTI REPLACEMENT OF SEVEN LEGACY 

TELECOMMUNICATION NETWORKS (AS OF MARCH 31, 2008) 

Network 

Acronym 

Network Name / Description 

FTI 

Transition 

Status 

Comments 

LINCS* Leased Inter-Facility National Airspace 

Communications System – Provides connectivity to 

all NAS facilities via leased services on a point-topoint basis. 

Complete 160 out of 160 LINCS A-nodes 

Decommissioned. 

NADIN 

PSN 

National Airspace Data Interchange Network – Part 

of the data switching sub-element that provides high 

speed data communication between subsystems in 

the NAS. 

 

Not Complete Interim solution pending 

replacement of NADIN II 

equipment. Not anticipated to be 

complete until 2009 to 2010 

timeframe. 

DMN Data Multiplexing Network – Provides a simple 

multiplexing function for digital data transfer across 

narrow band. 

Not Complete DMN supporting long-range radars 

remain. Interim solution pending 

replacement of DMN equipment. 

To be replaced after December 

2008. 

BWM Bandwidth Manager – Provides multiplex sub-rate 

and data streams primarily on ARTCC-to-ARTCC 

circuits. 

Not Complete National Security Issue - Interim 

solution pending replacement of 

BWM equipment. Likely to be 

completed after December 2008. 

FTS2000 

/2001* 

Federal Telecommunications System 2000 and 

2001 – Leased (GSA-provided) connectivity for 

administrative voice, data, and video connectivity. 

Complete FTS dedicated circuits will be 

transitioned to FTI. 

FAATSAT* FAA Telecommunication Satellite System – 

Provides leased point-to-point connectivity between 

facilities using satellite transmission. 

Complete FAATSAT network has been 

decommissioned. Transition of 

FAATSAT services to FTI was 

completed in September 2006. 

ADTN Administrative Data Telecommunications 

Network – Carries all of the administrative 

infrastructure data and video traffic, including 

financial and personnel data and e-mail. 

Complete ADTN network has been 

decommissioned. The transition of 

services from ADTN to the new FTI 

Mission Support Network was 

completed in September 2006. 

* LINCS, FTS2000/2001, FAATSAT, and ADTN were leased telecommunications networks. 

** NADIN PSN, DMN, and BWM are FAA-owned assets.
23

EXHIBIT C. TOTAL PLANNED FTI SERVICES DISTRIBUTION BY 

RMA LEVEL 

RMA 

Level* Example of Services Number of Services Planned 

Percent of 

Total 

RMA1 Radar, WAAS 202 1% 

RMA2 Interphone, ATC Computer Circuits 1331 6% 

RMA3 Flight and Weather Data, 

Air Traffic Management 883 4% 

RMA4 En Route Air to Ground Communication, 

Remote Maintenance Monitoring 16,400 75% 

RMA5 ASOS Weather Sensor, 

High Capacity (T1) Circuits 1999 9% 

RMA6 FTI Mission Support 820 4% 

RMA7 FTI SAT 236 1% 

Total 21,871** 100% 

* RMA 1-3 Diverse: dual path implementation, RMA 4-5 Avoided: single path implementation. 

**Total of 21,871 represents FAA planned services by RMA levels, while the 22,719 services we note throughout the 

report represent estimates to completion at a given point in time. 

Exhibit C. Total Planned FTI Services Distribution by RMA Level 
Exhibit D. Major Contributors to This Report 

24

 EXHIBIT D. MAJOR CONTRIBUTORS TO THIS REPORT 

Name Title 

Matthew E. Hampton Deputy Assistant Inspector General 

for Aviation and Special Program 

Audits 

Kevin Dorsey Program Director 

Charles Ward Project Manager 

Katrina Knight Senior Auditor 

Diane Brattain Auditor 

Kim Won Auditor 

Curtis Dow Analyst 

Andrea Nossaman Writer-Editor 
25

APPENDIX. AGENCY COMMENTS 

Federal Aviation 

Administration 

Memorandum 

Date: September 19, 2008 

To: Lou E. Dixon, Assistant Inspector General for Aviation and Special Program Audits 

From: Ramesh K. Punwani, Assistant Administrator for Financial Services/CFO 

Prepared by: Anthony Williams, x79000 

Subject: OIG Draft Report: FAA’s Progress and Challenges in Meeting FTI Transition Goals 

Federal Aviation Administration

Thank your for the opportunity to review your most recent draft of the subject report. We concur with 

all recommendations contained in the report. The Agency’s planned action for addressing each 

recommendation is stated below. However, despite the changes that have been made since the original 

draft, we continue to have concerns with the accuracy of your findings in four areas: business rules; 

legacy network operating costs; projections of Telecommunications Infrastructure (FTI) costs savings 

benefits; and reporting of FTI outages. As such, we have included statements outlining our concerns 

and positions, and request you consider these statements when preparing your final report. 

OIG Recommendation 1: Reassess network engineering costs growth associated with the 

Telecommunications Infrastructure transition during fiscal year (FY) 2004 to FY 2007, but paid from 

the operations account, to accurately report the true F&E costs associated with developing and 

transitioning to FTI. 

FAA Response: Concur. The Agency will reassess network engineering costs growth associated with 

the FTI transition during FY 2004 to FY 2007, but paid from the operations account, to accurately 

report the true F&E costs associated with developing and transitioning to FTI. The Agency will 

provide a report on its findings by November 29. 

OIG Recommendation 2: Document the planned schedule for completing the transition to FTI of 

services remaining on the DMN, NADIN PSN, and BWM networks beyond the current baseline 

transition end date of December 2008, and those emerging services that were identified but not yet 

included in the schedule during the last reporting period for FTI. 

FAA Response: Concur. The Agency will document the planned schedule for completing the 

transition to FTI of services remaining on the DMN, NADIN PSN, and BWM networks beyond the 

current baseline transition end date of December 2008, and those emerging services that were 

Appendix. Agency Comments 
26

identified but not yet included in the schedule during the last reporting period for FTI. The Agency 

will provide a report on the schedule by November 29. 

OIG Recommendation 3: Calculate how updates to the transition schedules for the DMN, NADIN 

PSN, and BWM network components remaining in operation will impact FTI’s life cycle cost and 

benefits baselines. 

FAA Response: Concur. The Agency will calculate how updates to the transition schedules for the 

DMN, NADIN PSN, and BWM network components remaining in operation will impact FTI’s life 

cycle cost and benefits baselines. The Agency will provide a report on its findings by November 29. 

OIG Recommendation 4: Conduct periodic internal audits to ensure that adequate physical diversity 

exists at all facilities requiring separation of primary and alternative access paths. 

FAA Response: Concur. The Agency will conduct periodic internal audits to ensure that adequate 

physical diversity exists at all facilities requiring separation of primary and alternative access paths. 

FTI is already performing regularly scheduled diversity audits. Results of these audits can be made 

available upon request. 

OIG Recommendation 5: Develop an action plan for: (1) reducing the time to restore FTI services so 

that it conforms with contractual requirements; and (2) improving the percentage of FTI services that 

meet availability specifications. 

FAA Response: Concur. The Agency will develop an action plan for: (1) reducing the time to restore 

FTI services so that it conforms with contractual requirements; and (2) improving the percentage of 

FTI services that meet availability specifications. The Agency will complete the action plan by 

 November 29. 

OIG Recommendation 6: Review internal procedures over National Operations Command Center 

(NOCC) reporting and ensure all critical FTI-related outages resulting in ATC delays that are reported 

in daily outage reports by the regions are included in the NOCC report. 

FAA Response: Concur. The FAA will review internal procedures over NOCC reporting and will 

continue to ensure all critical FTI-related outages resulting in ATC delays that are reported in daily 

outage reports by the regions are included in the NOCC report. The results of the review will be 

provided by November 29. 

Comments on the findings in the report: 

Business Rules 

FAA Comments: The FAA does not agree with the OIG conclusions that: (1) all Network Engineering 

costs through FY2007 should have been charged to the F&E account; and (2) the FAA continued to 

allow Operations costs to be charged to the F&E account. With respect to the first conclusion, the 

FAA agrees that implementation-related costs should be funded by the F&E account, but not all 

Network Engineering activities are related to network implementation. Thousands of FTI services 

have been in operation since 2005 and a significant portion of Network Engineering activities are 

appropriately funded by the Operations account because they are related to network optimization and 

changes to services that are already in operation, i.e., they are not related to network implementation. 

Appendix. Agency Comments 
Appendix. Agency Comments 

27

With respect to the second conclusion, in April 2006, the DOT OIG issued an audit report 

recommending that FTI business rules should be revisited since the transition was running behind 

schedule and significant implementation-related activities were still ongoing. Consistent with the OIG 

recommendation, the FTI business rules were updated to specify that implementation-related Network 

Engineering activities should be funded by the F&E account and operations-related activities should 

be funded by the Operations account. The FAA follows the revised business rules. For this reason, the 

FAA disagrees with the OIG finding that the FAA continued to allow charges to the Operations 

account that should have been charged to the F&E account. 

Legacy Network Operating Costs 

FAA Comments: The FAA disagrees with the OIG conclusion that FAA would already have exceeded 

its life cycle cost estimate for legacy operations costs by $57 million if the legacy operations costs 

from 2002 were included. The FAA’s year-by-year reporting shows that the actual costs are 

$43.7 million less than the plan to-date and $231.2 million below the life cycle estimate. 

Projections of FTI Costs Savings Benefits 

FAA Comments: The FAA does not agree with the OIG calculation of FTI costs savings benefits. The 

FAA has developed an updated projection of cost savings benefits using all actual costs incurred todate and a revised projection for FY2008 to reflect the early completion of the LINCS transition. The 

revised projection shows that the FTI program remains on track to produce nearly $600 million in 

then-year cost savings which equates to $375 million in discounted dollars using the prevailing 

discount rate published by the OMB. 

Reporting of FTI Outages 

FAA Comments: FAA does not agree with the OIG assertion that some FTI outages may be going 

unreported. The FAA has defined procedures for reporting outages and those procedures are followed 

for FTI. All FTI outages are logged and reported to the appropriate operational points-of-contact. In 

addition, all FTI outages that impact air traffic control operations are reported to FAA senior 

management. 
The following pages contain textual versions of the graphs and charts included in 

this document. These pages were not in the original document but have been 

added here to accommodate assistive technology. 
FAA’s Progress and Challenges in Meeting FTI Transition Goals 

Section 508 Compliant Presentation 

Table 1. History of FTI Program Changes 

In July 1999, FAA established the FTI baseline. This baseline included 1,374 

planned FTI sites. FTI services planned were not defined in this baseline. This 

baseline also included a planned transition completion date of September 2005, a 

planned program completion date of 2010, and a cost estimate of $1.9 billion. 

In December 2004, FAA re-baselined FTI, with 4,463 FTI sites planned, 25,294 

FTI services planned, a planned transition completion date of December 2007, a 

planned program completion date of 2017, and a cost estimate of $3.3 billion. 

In September 2006, FAA did a second FTI re-baseline, with 4,053 FTI sites 

planned, 20,033 FTI services planned, a planned transition completion date of 

December 2008, a planned program completion date of 2017, and a cost estimate 

of $3.4 billion. 

Source: FTI JRC Baseline Briefs and FTI National Implementation “Kickoff 

Team” Brief 

Table 2. FTI Life-Cycle Cost Estimates 

In December 2004, FAA’s Joint Resources Council approved $310,200,000 for 

FTI facilities and equipment costs. In August 2006, the Joint Resources Council 

approved $318,800,000 in FTI facilities and equipment costs. This increased FTI 

facilities and equipment costs by $8,600,000. 

In December 2004, FAA’s Joint Resources Council approved $2,110,100,000 for 

FTI operations costs. In August 2006, the Joint Resources Council approved 

$1,954,400,000 for FTI operations costs. This decreased FTI operations costs by 

$155,700,000. 

In December 2004, FAA’s Joint Resources Council approved $857,400,000 for 

FTI legacy operations costs. In August 2006, the Joint Resources Council 

approved $1,117,300,000 for FTI legacy operations costs. This increased FTI 

legacy operations costs by $259,900,000. 

In December 2004, FAA’s Joint Resources Council approved $3,277,700,000 in 

total FTI life-cycle costs. In August 2006, the Joint Resources Council approved 
$3,390,500,000 in total FTI life-cycle costs. This increased total FTI life-cycle 

costs by $112,800,000. 

Source: FTI Program Baseline Briefs 

Table 3. Status of FTI’s Five Critical Steps as of March 31, 2008 

Site Acceptance 3,826 actual 

tasks reported 

4,174 total 

quantity planned 

91.7 percent 

complete 

Service Acceptance 20,516 actual 

tasks reported 

22,719 total 

quantity planned 

90.3 percent 

complete 

Service Cut Over 19,977 actual 

tasks reported 

22,719 total 

quantity planned 

87.9 percent 

complete 

Legacy 

Service/Circuit 

Disconnects 

14,113 actual 

tasks reported 

17,191 total 

quantity planned 

82.1 percent 

complete 

LINCS A-Node 

Decommissions 

160 actual 

tasks reported 

160 total 

quantity planned 

100 percent 

complete 

Note 1: The total number of planned services and legacy circuit disconnects is 

provided in the March 2008 FTI master schedule. 

Note 2: According to FTI program officials, all 160 LINCS A-Nodes were 

decommissioned by April 2008. 

Source: FTI Program Office, “Metrics Report,” as of March 31, 2008 

Figure 1. Number of FTI Planned Services Have Fluctuated Over Time 

In the December 2004 FTI plan, there were 25, 294 planned FTI services. In the 

August 2006 FTI plan (the current plan), there are 20, 033 planned FTI services. 

In the March 2008 FTI master schedule, there are 22, 719 planned FTI services. 

Source: OIG analysis of FTI current versus prior baseline schedules and the FTI 

master schedule 
Table 4. FTI Network Engineering Cost Growth Charged to FTI Operations 

Account 

• FTI Contract Modification 4 (dated April 27, 2004) estimated network 

engineering costs for fiscal year 2004 at $2,231,090. FTI Contract 

Modification 12 (dated November 20, 2006) estimated network engineering 

costs for fiscal year 2004 at $4,401,683. This represents a cost growth of 

$2,170,593—a 97 percent increase.

• FTI Contract Modification 4 (dated April 27, 2004) estimated network 

engineering costs for fiscal year 2005 at $2,305,557. FTI Contract 

Modification 12 (dated November 20, 2006) estimated network engineering 

costs for fiscal year 2005 at $12,761,781. This represents a cost growth of 

$10,456,224—a 454 percent increase.

• FTI Contract Modification 4 (dated April 27, 2004) estimated network 

engineering costs for fiscal year 2006 at $2,282,499. FTI Contract 

Modification 12 (dated November 20, 2006) estimated network engineering 

costs for fiscal year 2006 at $11,700,000. This represents a cost growth of 

$9,417,501—a 413 percent increase.

• FTI Contract Modification 4 (dated April 27, 2004) estimated network 

engineering costs for fiscal year 2007 at $1,548,163. FTI Contract 

Modification 12 (dated November 20, 2006) estimated network engineering 

costs for fiscal year 2007 at $15,846,038. This represents a cost growth of 

$14,297,875—a 924 percent increase.

• FTI Contract Modification 4 (dated April 27, 2004) estimated total network 

engineering costs for fiscal year 2004 through fiscal year 2007 at $8,367,309. 

FTI Contract Modification 12 (dated November 20, 2006) estimated total 

network engineering costs for fiscal year 2004 through fiscal year 2007 at 

$44,709,502. This represents a total cost growth for the 4-year period of 

$36,342,193.

Source: FTI Contract Modifications 
Figure 2. FTI Planned Operations Cost Are Declining While the Demand for 

FTI Services Is Increasing (Fiscal Year 2009 to Fiscal Year 2012) 

Fiscal Year 2009 FTI planned operations costs are $206 million. 

Fiscal Year 2010 FTI planned operations costs are $165.4 million. 

Fiscal Year 2011 FTI planned operations costs are $152.6 million. 

Fiscal Year 2012 FTI planned operations costs are $145.3 million. 

Source: FTI Metrics Report and OMB Exhibit 300 (Budget Year 2009) 

Table 5. Changes in FTI Cost Savings Estimates in Then-Year and CurrentYear Dollars 

FTI Cost Savings (then-year) as calculated in December 2004 are as follows: 

Fiscal Year 2003 -$60.4 million

Fiscal Year 2004 -$67.5 million

Fiscal Year 2005 -$131.7 million

Fiscal Year 2006 -$111.5 million

Fiscal Year 2007 -$84.9 million

Fiscal Year 2008 $14.7 million

Fiscal Year 2009 $67.3 million

Fiscal Year 2010 $97.8 million

Fiscal Year 2011 $111.4 million

Fiscal Year 2012 $129 million

Fiscal Year 2013 through 2017 $708.2 million

Total $672.4 million

FTI Cost Savings (then-year) as calculated in September 2006 are as follows: 

Fiscal Year 2003 N/A

Fiscal Year 2004 N/A

Fiscal Year 2005 -$83.1 million

Fiscal Year 2006 -$133.4 million

Fiscal Year 2007 -$140.6 million 

Fiscal Year 2008 -$73 million 

Fiscal Year 2009 $39 million 

Fiscal Year 2010 $83.6 million 

Fiscal Year 2011 $105.2 million 

Fiscal Year 2012 $123.9 million 

Fiscal Year 2013 through 2017 $674.8 million 

Total $596.4 million 
FTI Cost Savings (then-year) as calculated by the Office of Inspector General 

are as follows: 

Fiscal Year 2003 -$45.4 million

Fiscal Year 2004 -$97.1 million 

Fiscal Year 2005 -$92.1 million 

Fiscal Year 2006 -$127.1 million 

Fiscal Year 2007 -$157.4 million 

Fiscal Year 2008 -$73 million 

Fiscal Year 2009 $39 million 

Fiscal Year 2010 $83.6 million 

Fiscal Year 2011 $105.2 million 

Fiscal Year 2012 $123.9 million 

Fiscal Year 2013 through 2017 $674.9 million 

Total $434.4 million 

FTI Cost Savings (current-year) as calculated in December 2004 are as 

follows: 

Fiscal Year 2003 -$60.4 million

Fiscal Year 2004 -$67.5 million 

Fiscal Year 2005 -$131.7 million 

Fiscal Year 2006 -$108.5 million 

Fiscal Year 2007 -$77.4 million 

Fiscal Year 2008 $12.8 million 

Fiscal Year 2009 $56 million 

Fiscal Year 2010 $77.6 million 

Fiscal Year 2011 $84.4 million 

Fiscal Year 2012 $93.3 million 

Fiscal Year 2013 through 2017 $445.5 million 

Total $326.1 million 

FTI Cost Savings (current-year) as calculated in September 2006 are as 

follows: 

Fiscal Year 2003 $ N/A 

Fiscal Year 2004 $ N/A 

Fiscal Year 2005 -$ 83.1 million 

Fiscal Year 2006 -$ 133.4 million 

Fiscal Year 2007 -$140.6 million 

Fiscal Year 2008 -$ 69.5 million 

Fiscal Year 2009 $35.3 million 

Fiscal Year 2010 $72.2 million 

Fiscal Year 2011 $86.4 million 

Fiscal Year 2012 $97 million 

Fiscal Year 2013 through 2017 $455.8 million 

Total $320.1 million 
FTI Cost Savings (current-year) as calculated by the Office of Inspector General are 

as follows: 

Fiscal Year 2003 -$45.5 million

Fiscal Year 2004 -$97.1 million 

Fiscal Year 2005 -$92.1 million 

Fiscal Year 2006 -$127.1 million 

Fiscal Year 2007 -$157.4 million 

Fiscal Year 2008 -$69.5 million 

Fiscal Year 2009 $35.3 million 

Fiscal Year 2010 $72.2 million 

Fiscal Year 2011 $86.4 million 

Fiscal Year 2012 $97 million 

Fiscal Year 2013 through 2017 $455.8 million 

Total $158 million 

Note: FAA’s calculation of cost savings for the current baseline in 2006 excludes sunk 

costs reported in FY 2003 and FY 2004. Our calculations of FTI cost savings for the 

current baseline in 2006 include all sunk costs, and we relied on actual costs from 2003 to 

2007 to estimate savings. 

Source: FTI basis of estimates in 2004 and FTI Program Office cost savings estimates in 

2006. 

Table 6. Examples of Critical FTI Outages That Disrupted Air Traffic 

Control Operations 

Chamblee, 

Georgia 

05/15/08 3.8 hours 

duration 

Reason: FTI circuit failure 

resulted in loss of multiple 

services. 

Caused 41 

arrival or 

departure 

delays 

San Diego, 

California 

04/12/08 2.2 hours 

duration 

Reason: Teleco failure resulted 

in loss of services. 

Caused 5 

arrival or 

departure 

delays 

Leesburg, 

Virginia 

03/24/08 1.08 hours 

duration 

Reason: Service between 

Washington and Jacksonville 

failed. No definitive cause has 

been identified. 

Caused 60 

arrival or 

departure 

delays 

Merrimack, 

New 

Hampshire 

12/04/07 1.95 hours 

duration 

Reason: Cables dislodged from 

the patch panel interrupted 

multiple services. 

Caused 49 

arrival or 

departure 

delays 

Jacksonville, 

Florida 

11/09/07 38 minutes 

duration 

Reason: Inadequate physical 

diversity resulted in loss of 

service. 

Caused 85 

arrival or 

departure 

delays 
Memphis, 

Tennessee 

9/25/07 3 hours 

duration 

Reason: Inadequate physical 

diversity resulted in loss of 

service. 

Caused 566 

arrival or 

departure 

delays 

Chicago, 

Illinois 

5/23/07 3.5 hours 

duration 

Reason: Improperly configured 

FTI equipment resulted in loss 

of service. 

Caused 77 

arrival or 

departure 

delays 

Los Angeles, 

California Air 

Traffic Control 

Tower 

3/30/07 5 minutes 

duration 

Reason: Display services 

interrupted during FTI 

troubleshooting. 

Caused 25 

arrival or 

departure 

delays 

Salt Lake, Utah 

Air Route 

Traffic Control 

Center 

1/09/07 3 hours 

duration 

Reason: FTI maintenance 

supervisor failed to follow 

established procedures. 

Caused 92 

arrival or 

departure 

delays 

Orlando, 

Florida 

Air Route 

Traffic Control 

Center 

12/11/06 1.3 hours 

duration 

Reason: Improper configuration 

caused loss of service. 

Caused 63 

arrival or 

departure 

delays 

San Juan, 

Puerto Rico 

Combined EnRoute and 

Approach 

12/04/06 20 hours 

duration 

Reason: Underwater cable cut 

caused loss of service. 

Caused 60 

arrival or 

departure 

delays 

Atlanta, 

Georgia 

Air Traffic 

Control Tower 

09/28/06 1.25 hour 

duration 

Reason: Defective equipment 

caused the loss of multiple 

services. 

Caused 8 

arrival or 

departure 

delays 

Source: FAA National Operational Command Center Reports 
Exhibit C. Total Planned FTI Services Distribution by Assigned ReliabilityMaintainability-Availability (RMA) Level 

RMA1 Example of Services : Radar, Wide Area 

Augmentation System (WAAS) 

Number of Services 

Planned: 202 

Percent of 

Total: 1% 

RMA2 Example of Services : Interphone, Air Traffic 

Control Computer Circuits 

Number of Services 

Planned: 1331 

Percent of 

Total: 6% 

RMA3 Example of Services : Flight and Weather 

Data, Air Traffic Management 

Number of Services 

Planned: 883 

Percent of 

Total: 4% 

RMA4 

Example of Services : En Route Air to 

Ground Communication, Remote 

Maintenance Monitoring 

Number of Services 

Planned: 16,400 

Percent of 

Total: 75% 

RMA5 

Example of Services : Automated Surface 

Observing Systems (ASOS) Weather Sensor, 

High Capacity (T1) Circuits 

Number of Services 

Planned: 1999 

Percent of 

Total: 9% 

RMA6 Example of Services : FTI Mission Support Number of Services 

Planned: 820 

Percent of 

Total: 4% 

RMA7 Example of Services : FTI SAT Number of Services 

Planned: 236 

Percent of 

Total: 1% 

Total number of services planned: 21,871. 

Note 1: RMA 1-3 Diverse: dual path implementation, RMA 4-5 Avoided: single 

path implementation. 

Note 2: Total of 21,871 represents FAA planned services by RMA levels, while 

the 22,719 services we note throughout the report represent estimates to 

completion at a given point in time.