United States General Accounting Office 

GAO Testimony 

Before the Subcommittee on Aviation, 

Committee on Transportation and 

Infrastructure, House of Representatives 

For Release on Delivery 

Expected at 10:00 a.m. EST 

Thursday, October 30, 2003 AIR TRAFFIC CONTROL 

FAA’s Modernization 

Efforts—Past, Present, and 

Future 

Statement of Gerald L. Dillingham, Director, 

Physical Infrastructure Issues 

GAO-04-227T 

Highlights of GAO-04-227T, a testimony 

before the Subcommittee on Aviation, 

Committee on Transportation and 

Infrastructure, House of Representatives 

The Federal Aviation 

Administration’s (FAA) air traffic 

control modernization (ATC) 

efforts are designed to enhance the 

safety, capacity, and efficiency of 

the national airspace system 

through the acquisition of a vast 

network of radar, navigation, 

communications, and information 

processing systems, as well as new 

air traffic control facilities. Since 

1981, when these efforts began, 

FAA’s ATC modernization projects 

have consistently experienced cost, 

schedule, and performance 

problems that GAO and others 

have attributed to systemic 

management issues. As a result, 

FAA’s cost estimates have grown 

and planned improvements have 

been delayed. Initially FAA 

estimated that its ATC 

modernization efforts would cost 

$12 billion and could be completed 

over 10 years. Now, two decades 

and $35 billion later, FAA expects 

to need another $16 billion through 

2007 to complete key projects, for a 

total cost of $51 billion. 

This testimony (1) provides an 

overview of the systemic 

management issues that GAO and 

others have identified in FAA’s 

ATC modernization efforts over 

time, (2) discusses key actions that 

FAA and others have taken to 

address these issues, and (3) 

identifies the challenges that lie 

ahead for FAA. 

www.gao.gov/cgi-bin/getrpt?GAO-04-227T. 

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gerald L. 

Dillingham at (202) 512-2834 or 

dillinghamg@gao.gov. 

October 30, 2003 

AIR TRAFFIC CONTROL 

FAA’s Modernization Efforts—Past, 

Present, and Future 

Over the years, systemic management issues, including inadequate 

management controls and human capital issues, have contributed to the cost 

overruns, schedule delays, and performance shortfalls that FAA’s major ATC 

projects have consistently experienced. These problems occurred, in large 

part, because FAA lacked the information technology and financial 

management systems that would have helped it reliably determine the 

projects’ technical requirements and estimate and control their costs and 

schedules. In addition, organizational culture issues discouraged 

collaboration among technical experts and users, and frequent changes in 

FAA’s leadership—seven different Administrators and Acting Administrators 

in the first 10 years—hampered the modernization efforts. 

FAA has taken steps to improve the management of its ATC modernization 

efforts and has made progress. For example, it implemented a costeffective, incremental development approach that avoided costly late-stage 

changes. In addition, it has fully or partially implemented over 30 GAO 

recommendations designed to improve its management controls and address 

human capital issues. The Congress also extended the term of the FAA 

Administrator to 5 years, providing for greater continuity and stability, and 

enacted legislation designed to bring the benefits of performance 

management to ATC modernization. 

FAA faces a number of challenges in fully implementing recommendations 

that GAO and others have made to improve its management controls and 

address human capital issues. FAA also faces the challenge of becoming a 

more efficient and accountable performance-based air traffic organization. 

Finally, FAA has an opportunity to review its current 10-year plan for 

modernizing the National Airspace System and to assess the relative 

importance and feasibility of the plan’s priorities in light of current federal 

and private sector economic constraints, new aviation security 

requirements, and other issues. 

Air Traffic Controller at Work 

Source: National Air Traffic Controllers Association. 
Mr. Chairman and Members of the Subcommittee: 

We appreciate the opportunity to participate in today’s hearing to discuss 

our work on FAA’s air traffic control modernization (ATC) efforts, which 

are designed to enhance the safety, capacity, and efficiency of the national 

airspace system, primarily through software-intensive technology 

improvements. As you know, these efforts involve acquiring a vast 

network of radar, navigation, communications, and information 

processing systems, as well as new air traffic control facilities. Since 1981, 

when these efforts began, FAA’s ATC modernization projects have 

consistently experienced cost, schedule, and performance problems that 

we and others have attributed to systemic management issues. As a result, 

FAA’s cost estimates have grown and planned improvements have been 

delayed. Initially FAA estimated that its ATC modernization efforts would 

cost $12 billion and could be completed over 10 years. Now, two decades 

and $35 billion later, FAA expects to need another $16 billion through 2007 

to complete key projects, for a total cost of $51 billion. 

By the summer of 2000, the ATC system no longer had the capacity to 

manage demand efficiently, and flight delays produced near-gridlock 

conditions at many U.S. airports. The events of September 11 and the 

subsequent economic downturn severely reduced the demand for air 

travel for a time, but the aviation industry is gradually recovering, and FAA 

forecasts a return to pre-9/11 demand levels in about 2005 or 2006. This 

current period of reduced but growing demand for air travel has created a 

narrow window of opportunity to address the management issues 

underlying FAA’s ATC modernization problems and to prepare the ATC 

system for managing a growing volume of air traffic more safely and 

efficiently than in the past. 

My statement today (1) provides an overview of the systemic management 

issues that we and others have identified in FAA’s ATC modernization 

efforts over time, (2) discusses key actions that FAA and others have 

taken to address these issues, and (3) identifies the challenges that lie 

ahead for FAA. The statement is based on our past reports on ATC 

modernization (see Related GAO Products)—updated to reflect important 

milestones—and recent interviews with key stakeholders in the aviation 

community, including the Air Transport Association, National Air Traffic 

Controllers Association, and Professional Airways Systems Specialists. We 

performed our work in accordance with generally accepted government 

auditing standards. 

Page 1 GAO-04-227T 
In summary: 

• 	 Over the years, systemic management issues, including inadequate 

management controls and human capital issues, have contributed to the 

cost overruns, schedule delays, and performance shortfalls that FAA’s 

major ATC projects have consistently experienced. These systemic 

management issues have kept FAA’s ATC modernization efforts on our 

watch list of high-risk federal programs since 1995. Both the Wide Area 

Augmentation System (WAAS)—designed to provide satellite-based 

navigation for airspace users—and the Standard Terminal Automation 

Replacement System (STARS)—designed to replace aging displays and 

processing systems used by air traffic controllers—have missed cost, 

schedule, and performance targets because of such issues. For both 

projects, FAA initially underestimated the costs and time needed to meet 

complex technical requirements and for STARS, it failed to involve 

stakeholders sufficiently in determining the project’s requirements. 

Consequently, when the projects failed to meet requirements, FAA had to 

contract for costly, time-consuming modifications and revise its cost and 

schedule estimates. These problems occurred, in large part, because FAA 

lacked the information technology and financial management controls that 

would have helped it reliably determine the projects’ technical 

requirements and estimate and control their costs and schedules. In 

addition, organizational culture issues discouraged collaboration among 

technical experts and users, and frequent changes in FAA’s leadership— 

seven different Administrators and Acting Administrators in the first 10 

years—hampered the modernization effort. In numerous reports and 

testimonies, we, the Department of Transportation’s Inspector General, 

and others have made recommendations to address these issues. 

• 	 FAA has taken steps to improve the management of its ATC modernization 

efforts and has made progress in a number of areas. For example, it 

implemented an incremental, “build a little, test a little” approach that 

improved its management by providing for mid-course corrections and 

thus helping FAA to avoid costly late-stage changes. Furthermore, since 

1995, FAA has fully or partially implemented over 30 of our 

recommendations, including recommendations to improve its 

management controls and address human capital issues. In the area of 

management controls, it has (1) developed a blueprint for modernization 

(systems architecture) to manage the development of ATC systems; (2) 

established processes for selecting and controlling information technology 

investments, (3) introduced an integrated framework for improving 

software and system acquisition processes, and (4) improved its costestimating and cost-accounting practices. In addition, it has taken steps to 

identify and address its information systems security needs. In the human 

Page 2 GAO-04-227T 
capital area, FAA has attempted to improve collaboration among technical 

experts and system users by establishing integrated teams to serve as 

vehicles for identifying needs, pooling expertise, and reconciling priorities. 

Additionally, in 1994, the Congress extended the term of the FAA 

Administrator to 5 years, providing for greater continuity and stability; in 

1995, the Congress exempted FAA, at its request, from certain federal 

human capital requirements; and in 2000, the Congress and the 

administration together provided for a new oversight and management 

structure and a new air traffic organization to bring the benefits of 

performance management to ATC modernization. To date, one FAA 

Administrator has completed a 5-year term; FAA has fully or partially 

implemented the personnel reforms that the Congress authorized; and the 

Air Traffic Services Subcommittee, which provides oversight, has recently 

appointed a chief operating officer to manage the new air traffic 

organization, which has yet to be formed. It is still too early to assess the 

results of some of these initiatives, and some challenges remain. 

• 	 While FAA has taken steps to improve its management controls and 

resolve human capital issues, it still faces challenges in fully implementing 

recommendations that we and others have made. For example, it still 

needs to (1) complete and make better use of its information technology 

blueprint to manage change; (2) put processes in place for evaluating 

projects after implementation to strengthen the investment management 

process, (3) ensure that systems achieve a minimum level of software 

capability before being funded; and (4) incorporate actual costs from 

related system development efforts in its processes for estimating the 

costs of new projects. Efforts to secure FAA’s air traffic control systems 

from cyber threats also remain a critical challenge. In the human capital 

area, FAA needs to do more to foster collaboration among technical 

experts and users, as well as fully implement the personnel reforms that 

the Congress authorized. FAA also faces the challenge of becoming a more 

efficient and accountable performance-based air traffic organization under 

the leadership of the Air Traffic Services Subcommittee and the recently 

hired chief operating officer. Finally, during the remaining lull in the 

demand for air travel, FAA has an opportunity to review its 10-year plan 

for modernizing the National Airspace System and to assess the relative 

importance and feasibility of the plan’s priorities in light of current federal 

and private sector economic constraints, new security requirements, and 

other issues. 

Background 	 Commercial aviation is a critical component of our nation’s transportation 

infrastructure and a significant contributor to our nation’s economy. For 

example, in 2000, there were over half a billion passenger boardings of 

Page 3 GAO-04-227T 
commercial airline flights and the airline industry contributed $800 billion 

to Gross Domestic Product (8 percent) and employed nearly 10 million 

people (7 percent).1 

Automated information processing and display, communication, 

navigation, surveillance, and weather resources permit air traffic 

controllers to view key information, such as aircraft location, aircraft flight 

plans, and prevailing weather conditions and to communicate with pilots. 

These resources reside at, or are associated with, several ATC facilities— 

flight service stations, air traffic control towers, terminal radar approach 

control (TRACON) facilities, and air route traffic control centers (en route 

centers). These facilities are depicted in figure 1. 

1

These 10 million people include those with jobs both directly and indirectly related to 

aviation activities. 

Page 4 GAO-04-227T 
Figure 1: Overview of U.S. Air Traffic Control System 

Source: GAO 

Notes: 

Page 5 GAO-04-227T 
a

The Standard Terminal Automation Replacement System (STARS) is designed to allow controllers at 

TRACONs to separate and sequence aircraft. 

b

The Wide Area Augmentation System (WAAS), when fully developed, will comprise a network of up 

to 76 ground stations (not depicted in graphic) and three to four geostationary communications 

satellites. 

c

The Next-Generation Air/Ground Communications System (NEXCOM), is an integrated voice and 

data system that will be in aircraft avionics, with the ground network infrastructure to support data link 

services to be deployed, as appropriate, for operation in en route centers. 

Over the years, systemic management issues, including inadequate 

management controls and human capital issues, have contributed to the 

cost overruns, schedule delays, and performance shortfalls that FAA’s 

major ATC projects have consistently experienced. 

These problems were of such magnitude that we designated ATC 

modernization as high risk in 1995. Table 1 summarizes the types of 

problems experienced by five major air traffic control projects. 

Systemic Issues Have 

Contributed to ATC 

Modernization 

Projects’ Cost, 

Schedule, and 

Performance 

Problems 

Page 6 GAO-04-227T 
Table 1: Cost, Schedule, and Performance Information for Selected ATC 

Modernization Efforts 

Project Purpose 

Cost Schedule Performance 

overruns slips issues 

Standard Terminal To replace aging Yes Yes Yes 

Automation displays and 

Replacement System processing systems 

(STARS) used by air traffic 

controllers 

Next-Generation To replace existing No Yes Test pending 

Air/Ground communications 

Communications systems and provide 

(NEXCOM) additional voice 

channels 

Wide Area To provide satellite- Yes Yesa Yes 

Augmentation based navigation for 

System (WAAS) airspace users 

Integrated Terminal To provide air traffic Yes Yes Yes 

Weather System managers with 

(ITWSb) enhanced weather 

information that does 

not require 

meteorological 

interpretation 

Weather and Radar To provide Yes Yes Yes 

Processor (WARPb

) controllers, traffic 

managers, and 

meteorologists with 

accurate and reliable 

weather information 

Sources: GAO and Department of Transportation, Office of Inspector General. 


a

While WAAS was deployed in July 2003, historically, the project has had schedule slips.


b

Information for WARP reported by the Department of Transportation, Office of Inspector General. 


Two Projects Illustrate the 

Effects of Systemic 

Management Issues on 

Costs, Schedules, and 

Performance 

Two projects, WAAS and STARS, illustrate the effects of inadequate 

management controls and human capital issues on the costs, schedules, 

and performance of major ATC modernization projects. More specifically, 

FAA lacked adequate information technology and financial management 

controls to comprehensively identify these projects’ requirements, reliably 

estimate their costs and schedules, and hold contractors accountable for 

meeting cost, schedule, and performance targets. In addition, FAA lacked 

effective processes for fostering collaboration among technical experts 

and users, as well as sustained leadership to provide direction and followthrough. As a result, these projects cost more, took longer, and met fewer 

requirements than planned. 

Page 7 GAO-04-227T 
WAAS is designed to provide satellite-based navigation for airspace users. 

As we reported in June 2000,2

 FAA underestimated the complexity of 

developing WAAS. FAA originally planned to start deploying WAAS in 1998 

and finish in 2001; however, the agency could not deliver on this promise 

because an aggressive schedule contributed to software development 

problems, and the project was unable to meet a key integrity 

requirement—that WAAS would virtually never fail to warn pilots of 

potential navigation hazards. In January 2003, we reported in our high-risk 

series that the cost for WAAS had grown from an original estimate of $892 

million to $2.9 billion.3, 4

 In July 2003, FAA commissioned WAAS for 

instrument flight use. 

STARS is designed to replace the outdated computer equipment that air 

traffic controllers currently use at some facilities to control air traffic 

within 5 to 50 nautical miles of an airport. In 1996, FAA anticipated very 

little software development, planned to install STARS in 172 facilities at a 

cost of $940 million, and expected implementation to begin in 1998 and 

end in 2005. In 1999, FAA modified its acquisition approach (from off-theshelf software to a combination of customized and off-the-shelf software) 

and then concluded that it did not have adequate funding to deploy STARS 

as widely as planned. In March 2002, FAA estimated that the project’s 

development costs would total $1.33 billion, and it received approval to 

deploy STARS at 74 facilities. FAA does not yet know to what extent its 

development cost estimate is reliable because, as we reported in January 

2003,

5

 it lacks accurate, valid, current data on the STARS project’s 

remaining costs and progress. FAA commissioned STARS at Philadelphia 

International Airport in June 2003. Figure 2 shows a STARS display. 

2

U.S. General Accounting Office, National Airspace System: Problems Plaguing the Wide 

Area Augmentation System and FAA’s Actions to Address Them, GAO/T-RCED-00-229 

(Washington, D.C.: June 29, 2000). 

3

These dollars are nominal. 

4

U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington, 

D.C.: January 2003). 

5

U.S. General Accounting Office, National Airspace System: Better Cost Data Could 

Improve FAA’s Management of the Standard Terminal Automation Replacement System, 

GAO-03-343 (Washington, D.C.: Jan. 31, 2003). 

Page 8 GAO-04-227T 
Figure 2: STARS Display with Air Traffic 

Source: FAA. 

Inadequate Management 

Controls Have Hampered 

ATC Modernization Efforts 

Our work has shown that several types of information technology and 

financial management controls are important to manage large ATC 

projects efficiently and effectively. These include a blueprint for planning, 

a system for managing information technology investments, and an 

integrated framework for improving system and software processes, as 

well as systems for estimating and accounting for costs. Efforts to ensure 

the security of ATC systems are also critical. As we have reported over the 

years, inadequate information technology and financial management 

Page 9 GAO-04-227T 
controls made it difficult for FAA to ensure, among other things, the 

integrity, efficiency, and security of ATC modernization projects. 

• 	 Incomplete blueprint for modernization (system architecture): This 

blueprint would define and constrain the development and maintenance of 

the many interrelated systems comprising the ATC infrastructure. In 1997, 

we reported that FAA lacked a complete blueprint. The agency’s lack of a 

complete and enforced systems architecture had permitted 

incompatibilities among existing ATC systems.6 

• 	 Ineffective information technology investment management: FAA lacked 

a complete framework for selecting, controlling, and evaluating a portfolio 

of investments. Investments in information technology can have a 

dramatic impact on an organization’s performance. If managed effectively, 

these investments can vastly improve government performance and 

accountability.7

 If not, however, they can result in wasteful spending and 

lost opportunities for improving delivery of services to the public. 

• 	 Immature software acquisition processes: FAA lacked a structured 

process for improving its capabilities in acquiring and developing 

software-intensive systems. As a result, we found that its processes for 

acquiring software were ad hoc. 

• 	 Inadequate cost estimating and cost accounting systems: In our 1997 

high risk series,8

 we reported that FAA’s cost estimating processes and 

cost accounting practices were not adequate to effectively manage its 

billion dollar information technology investments for ATC modernization.9 

Among other things, we recommended that FAA institutionalize defined 

processes for estimating projects’ costs. 

• 	 Poor information security: Since September 1996, we have reported that 

poor information security is a high-risk area across the federal government 

6

U.S. General Accounting Office, Complete and Enforced Architecture Needed for FAA 

Systems Modernization GAO/AIMD-97-30 (Washington, D.C.: Feb. 3, 1997). 

7

U.S. General Accounting Office, Information Technology Investment Management: A 

Framework for Assessing and Improving Process Maturity, Exposure Draft, GAO/AIMD10.1.23 (Washington, D.C.: May 2000). 

8

U.S. General Accounting Office, High Risk Program: Information on Selected High-Risk 

Areas, GAO/HR-97-30 (Washington, D.C.: May 16, 1997). 

9

U.S. General Accounting Office, Information Needed to Make Billion-Dollar 

Modernization Investment Decisions, GAO/AIMD-97-20 (Washington, D.C.: Jan. 22, 1997). 

Page 10 GAO-04-227T 
with potentially devastating consequences.10 One serious issue is 

protecting the information systems that support the nation’s critical 

infrastructure, including segments of the air traffic control system. 

Security at our nation’s airports alone does not ensure safe air travel. It is 

also critical to secure FAA’s air traffic control computer systems, which 

provide information to air traffic controllers and aircraft flight crews to 

help ensure the safe and expeditious movement of aircraft. Failure to 

adequately protect these systems, as well as the facilities that house them, 

could cause a nationwide disruption of air traffic or even a loss of life due 

to collisions. Between May 1998 and December 2000, we made 39 

recommendations to FAA to address pervasive weaknesses in the agency’s 

facilities’ physical and information systems security—both for currently 

operational and future air traffic control systems, security management, 

and personnel security. 

Human Capital Issues Also Our work has also shown that, to avoid costly changes to ATC system 

Impeded ATC contracts, it is important to bring technical experts and users together to 

Modernization design and test the systems to ensure that they will meet users’ needs and 

work as intended. We found that FAA’s organizational culture discouraged 

such collaboration. In addition, a lack of sustained leadership slowed the 

progress of ATC modernization. 

• 	 FAA’s “stovepiped” organizational culture, as we reported in 1996,11 

created barriers to collaboration and encouraged a focus on the goals of 

individual program offices, rather than on the goals of projects as a whole. 

As a result, employees sometimes acted in ways that did not reflect a 

strong enough commitment to mission focus, accountability, coordination, 

and adaptability, and the conflicting priorities led to project delays. 

• 	 The lack of sustained leadership at FAA was problematic throughout the 

first decade of ATC modernization and beyond. During the first 10 years, 

the agency had seven different Administrators and Acting Administrators, 

whose average tenure was less than 2 years. In addition, five people held 

the position of senior acquisition executive between 1990 and 1995. As we 

10U.S. General Accounting Office, Information Security: Opportunities for Improved OMB 

Oversight of Agency Practices, GAO/AIMD-96-110 (Washington, D.C.: Sept. 24,1996). 

11U.S. General Accounting Office, Aviation Acquisition: A Comprehensive Strategy Is 

Needed for Cultural Change at FAA (Washington, D.C.: Aug. 22, 1996). 

Page 11 GAO-04-227T 
FAA Has Taken Steps 

to Address Systemic 

Management Issues 

reported in 1995,

12 such frequent turnover at the top contributed to an 

agency culture that focused on short-term initiatives, avoided 

accountability, and resisted fundamental improvements in the acquisition 

process. 

In addition, according to FAA, burdensome governmentwide human 

capital rules impeded its ability to hire, train, and deploy personnel, 

thereby hampering its ability to manage ATC modernization projects 

efficiently. 

FAA has taken a number of steps to improve the management of its ATC 

modernization efforts and has made progress. First, it has implemented an 

incremental approach to project development, under which it “builds a 

little, tests a little” to better estimate the time and costs needed to 

complete modernization projects. In addition, it has fully or partially 

implemented over 30 recommendations that we have made, as well as 

recommendations made by the Department of Transportation’s Inspector 

General and others. Our recommendations focused on two key areas—(1) 

strengthening management controls for major ATC modernization systems 

(e.g., improving estimates of the time and cost to develop and implement 

projects) and (2) better managing FAA’s human capital resources (e.g., 

improving FAA’s organizational culture to better leverage its human 

capital resources to effectively support ATC modernization). The Congress 

has also taken actions designed to address some of FAA’s human capital 

issues. 

A New Development 

Approach and Better 

Management Controls 

Have Given FAA Stronger 

Tools for Managing ATC 

Projects 

• 	 “Build a little, test a little” approach to system development: During its 

implementation of Free Flight Phase 1, FAA adopted a more incremental 

approach to acquiring its ATC modernization systems than it had for 

previous systems. FAA refers to this as the “build a little, test a little” or 

spiral development approach. Some aviation stakeholders applaud this 

approach because, although they have found that its use can increase 

costs initially, money can be saved in the long run by avoiding mistakes 

that are very costly to fix once a system has been developed. This 

approach helps to ensure that the necessary building blocks of a system 

are tested along the way through the early and ongoing involvement of key 

stakeholders, such as those who will use and maintain the system. These 

12U.S. General Accounting Office, Exempting FAA From Procurement and Personnel 

Rules, GAO/RCED-96-27R (Washington, D.C.: Oct. 27, 1995). 

Page 12 GAO-04-227T 
stakeholders are key to identifying critical omissions and “no go” items 

that could prevent a system from operating as intended. 

• 	 Blueprint for modernization (system architecture): FAA has developed a 

systems architecture, or overall blueprint, that clarifies interdependencies 

and interrelationships among national airspace systems and the technical 

standards to which systems must comply for information technology. In 

November 2002, the Office of Management and Budget instructed agencies 

to base investments in information technology on enterprise architectures, 

which define (in both business and technology terms) how an entity 

operates today and how it wants to operate in the future, including a 

roadmap for transitioning to this future operational state. In April 2003, 

GAO issued guidance on developing enterprise architectures.13 

• 	 Improved information technology investments management: In response 

to our recommendations, FAA has improved its process for managing 

information technology investments (e.g., the software-intensive systems 

under ATC modernization) by overseeing investment risks and capturing 

key information from the investment selection process in a management 

information system. Also, FAA has developed and implemented guidance 

for validating costs, benefits, and risks. 

• 	 Improved software acquisition processes: In response to shortcomings 

that we identified in FAA’s process for acquiring software, FAA developed 

an integrated framework for improving its software acquisition, software 

development, and systems engineering processes. FAA has also continued 

to expand the number of system development projects that use this 

integrated framework. 

• 	 Cost-estimating and cost-accounting systems: To improve cost estimates, 

FAA developed a standard work breakdown structure and established an 

historical database for tracking ATC systems’ estimated costs and other 

information. As we reported in January 2003,14 FAA has made significant 

progress in implementing its cost accounting system since our last highrisk series. 

13U.S. General Accounting Office, Information Technology: A Framework for Assessing 

and Improving Enterprise Architecture Management (Version 1.1), GAO-03-

584G (Washington, D.C.: April 2003). 

14U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington, 

D.C.: January 2003). 

Page 13 GAO-04-227T 
• 	 Information security: FAA has initiated numerous activities in response 

to our recommendations about pervasive weakness in its facilities’ 

physical and information security system. For example, in recent years, 

the Chief Information Officer’s information systems security office has 

developed an information systems security strategy, security architecture 

(i.e, overall blueprint), security policies and directives, and a security 

awareness training campaign. The security office also implemented a 

certification and accreditation process to ensure that vulnerabilities in 

current and future ATC systems are identified and weaknesses are 

addressed. 

FAA Is Implementing 

Human Capital Initiatives 

• 	 Organizational culture framework: In response to recommendations we 

made about the need for FAA to address the organizational barriers that 

had impaired its ATC acquisition process, the agency issued an 

organizational culture framework in 1997 and is working to implement it. 

For example, it has used integrated project teams to improve collaboration 

among technical experts and users. 

• 	 Personnel reform: In response to FAA’s request, the Congress exempted 

FAA from many federal laws governing human capital, and the agency 

began implementing sweeping human capital reforms in 1996. These 

reforms addressed (1) compensation and performance management, (2) 

workforce management, and (3) labor and employee relations. In our 

February 2003 report on FAA’s implementation of personnel reform,15 we 

found that the agency had fully or partially implemented initiatives in each 

of these areas. 

• 	 Actions to sustain leadership: To provide FAA’s ATC modernization 

efforts with needed direction and stability, the Congress established a 5-

year term for the FAA Administrator in 1994. Former Administrator 

Garvey was the first to complete a term of this length in 2002. In addition, 

the three individuals who served as FAA’s senior acquisition executive— 

the Associate Administrator for Research and Acquisitions—between 1996 

and 2003 held this position longer than their predecessors. 

• 	 Chief operating officer and Air Traffic Organization: To accelerate ATC 

modernization and improve the performance of the air traffic control 

system, the Congress enacted legislation in 2000 that established a fivemember board (the Air Traffic Services Subcommittee) to oversee, and a 

15U.S. General Accounting Office, Human Capital Management: FAA’s Reform Effort 

Requires a More Strategic Approach, GAO-03-156 (Washington, D.C.: February 3, 2003). 

Page 14 GAO-04-227T 
chief operating officer to manage, a new performance-based organization, 

the Air Traffic Organization, which was created through an executive 

order to operate the ATC system. Under the act, the Subcommittee 

provides oversight by, among other things, reviewing and approving 

strategic plans, large contracts, and budget requests for the air traffic 

control system. The Subcommittee has been meeting since January 2001, 

and a chief operating officer was appointed in June 2003. While awaiting 

the appointment of a chief operating officer, the Subcommittee focused on 

bringing performance management, accountability, and a more 

businesslike structure to the ATC system, and it took some specific 

actions, including reviewing and approving performance metrics, a budget, 

and three large procurements that FAA initiated. 

Key Challenges Lie 	 FAA faces a number of challenges in fully implementing management 

controls for major ATC projects and marshalling the human capital

Ahead 	 resources to deliver on these controls. Additionally, during this lull in the 

demand for air travel, it has an opportunity to review its long-term ATC 

modernization priorities to assess their relative importance and feasibility 

in light of current economic constraints, security requirements, and other 

issues. 

Continuing to Improve 

Management Controls and 

Use Human Capital 

Resources More 

Effectively Poses Ongoing 

Challenges 

Despite the progress FAA has made in improving its management controls 

and human capital management for ATC modernization, systemic 

management issues persist and warrant sustained attention. In our 2003 

review of federal high-risk areas,16 we considered these issues of sufficient 

magnitude to continue placing ATC modernization on our high-risk list. 

• 	 Need for complete and enforced enterprise architecture: FAA has 

developed a systems architecture, or overall blueprint, which clarifies 

interdependencies and interrelationships among national airspace systems 

and the technical standards to which systems must comply. However, in 

February 2002, we reported that while FAA’s enterprise architecture is at a 

moderate level of maturity—that is, the agency has begun developing 

architecture products such as policies and concepts— it has not yet 

completed the architecture products or leveraged the architecture for 

16U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington, 

D.C.: January 2003). 

Page 15 GAO-04-227T 
managing change.17 

• 	 Need to strengthen information technology investment management 

processes: Although FAA has developed guidance for validating costs, 

benefits, and risks, the agency has not yet implemented processes for 

evaluating projects after implementation in order to identify lessons 

learned and improve the investment management process. Our work has 

also identified the need for sustained attention to managing ATC systems 

over their entire lifecycles—from the cradle to the grave. 

• 	 Need to improve software acquisition processes: Since our last high-risk 

update, FAA has continued to expand the number of system development 

projects that use an integrated framework. However, FAA still does not 

require all systems to achieve a minimum level of progress within the 

framework before being funded. 

• 	 Need to improve cost-estimating practices: FAA has not yet fully 

instituted rigorous cost-estimating practices. That is, it is not yet 

incorporating actual costs from related system development efforts in its 

processes for estimating the costs of new projects. Cost estimation was 

problematic for both STARS and WAAS. As we reported in January 2003,18 

FAA lacks accurate, valid, and current data on the remaining costs and 

progress of STARS. Without such data, FAA is limited in its ability to 

effectively oversee the contractor’s performance and reliably estimate 

future costs. Given FAA’s chronic difficulty in meeting cost, schedule, and 

performance targets, some members of the aviation community have 

suggested that more rigor needs to be built into these estimates when 

projects are started and that this could best be done by having an 

independent group of experts review FAA’s initial estimates for ATC 

projects. The accuracy of these estimates is particularly important as FAA 

embarks on two relatively new and costly ATC modernization projects— 

NEXCOM, which is expected to cost nearly $1 billion, and the En Route 

Automation Replacement Modernization (ERAM), which will provide new 

hardware and software to facilities responsible for directing high-altitude 

air traffic and is expected to cost over $2 billion. 

17U.S. General Accounting Office, Information Technology: Enterprise Architecture Use 

Across the Federal Government Can Be Improved, GAO-02-6 (Washington, D.C.: Feb. 19, 

2002). 

18U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington, 

D.C.: January 2003). 

Page 16 GAO-04-227T 
• 	 Need to improve cost-accounting system: In January 2003, we reported 

that FAA had made significant progress in implementing its costaccounting system since we issued our last high-risk report. However, in 

June 2003, the Department of Transportation’s Inspector General issued an 

assessment of FAA’s cost-accounting system and found that the system 

was still not effective.19 According to the Inspector General, FAA could not 

credibly claim to be a performance-based organization, or function as one, 

without a cost-accounting system that is compliant with federal costaccounting standards. 

• 	 Need to improve information security: Despite improvements by FAA, 

the agency faces continued challenges in improving its intrusion detection 

capabilities, obtaining accreditation for systems that are already 

operational, and managing information systems security throughout the 

agency. 

• 	 Need to change organizational culture: Although FAA issued an 

organizational culture framework in 1997 and established integrated teams 

to implement it, the Department of Transportation’s Inspector General 

reported in 2000 that FAA’s culture remains a barrier to successful 

acquisition projects and that integrated teams are not working well 

because FAA’s culture continues to operate in vertical “stovepipes” that 

conflict with the horizontal structure of team operations. Our 2000 report 

on WAAS confirmed that the integrated teams were not working as 

intended.20 We found that competing priorities between two key 

organizations that are part of WAAS’ integrated team negated the 

effectiveness of the team’s approach for meeting the agency’s goals for the 

system. 

• 	 Need to fully implement personnel reforms: In our February 2003 report 

on FAA’s implementation of personnel reforms, we found that the agency 

had not fully incorporated elements that are important to effective human 

capital management into its overall reform effort, including data collection 

and analysis, performance goals and measures, and links between reform 

goals and program goals. In turn, we recommended that FAA develop a 

more strategic approach to its reform effort, to better position itself to 

19U.S. Department of Transportation, Inspector General, 2002 Status Assessment of Cost 

Accounting System and Practices, Federal Aviation Administration, Report Number FI2003-043 (Washington, D.C., June 3, 2003). 

20U.S. General Accounting Office, National Airspace System: Persistent Problems in 

FAA’s New Navigation System Highlight Need for Periodic Reevaluation, 

GAO/RCED/AIMD-00-130 (Washington, D.C.: June 12, 2000). 

Page 17 GAO-04-227T 
evaluate the effects of its reform initiatives, use the evaluations as a basis 

for any strategic improvements to its human capital management 

approach, and hold its leaders accountable for the results of its human 

capital management efforts. FAA generally agreed with our 

recommendations. 

• 	 Implement the new Air Traffic Organization: The new Air Traffic 

Organization remains to be formed by joining FAA’s Air Traffic Services 

and Research and Acquisition offices. In addition, some issues that we 

identified in our May 2003 report pose potential challenges to this 

restructuring effort. For example, certain lines of authority between the 

Subcommittee and the FAA Administrator remain to be clarified. 

Other Challenges Lie 

Ahead 

FAA faces a variety of other challenges as it attempts to balance its 

modernization investments. These include working effectively in the post9/11 environment to determine how best to move forward with ATC 

modernization. In addition, FAA must contend with a number of economic 

constraints, including the current economic downturn, poor financial 

condition of the airline industry, competing demands for agency resources 

(e.g. safety, security, infrastructure, and operations), and the need for 

airlines to voluntarily equip their fleets with technologies needed to 

participate in a modernized National Airspace System. As we, the 

Department of Transportation’s Inspector General, and others have noted, 

to work effectively within these constraints, it is important for FAA to 

determine how it can best maximize the ATC system’s current capabilities 

by (1) identifying the initiatives that hold the most promise for increasing 

capacity and efficiency in the near-term and (2) determining the extent to 

which the airline industry will be financially able to equip with new 

technologies in the near and mid-term. A review of FAA’s 10-year plan to 

increase the capacity and efficiency of the National Airspace System called 

the called the Operational Evolution Plan, could ultimately result in a 

reordering of some ATC modernization priorities because the plan, though 

issued in 2002, is based on analyses that precede the important changes in 

aviation security and the nation’s economy that have taken place during 

the past 2 years. A fresh view of this plan could put FAA in a better 

position to target its resources toward projects that will maximize the 

system’s capacity and efficiency and identify those ATC projects that 

should be kept in the pipeline to meet critical future needs. 

In summary, we are at a critical juncture for reassessing FAA’s ATC 

modernization efforts. Given over two decades of experience with ATC 

modernization, it is time to take advantage of the lessons learned to date 

Page 18 GAO-04-227T 
and the relative lull in air traffic demand resulting from the events of 9/11 

to make inroads in improving the capacity and efficiency of the National 

Airspace System. The systemic issues that have plagued FAA’s ATC 

modernization efforts for over two decades also provide us with critical 

lessons learned as we navigate our way around past mistakes and into this 

new century of aviation. 

Contact Information 

This concludes my statement. I would be pleased to respond to any 

questions that you or other Members of the Subcommittee may have at 

this time. 

For further information on this testimony, please contact Gerald 

Dillingham at (202) 512-2834 or by e-mail at dillinghamg@gao.gov, or David 

Powner at (202) 512-9286 or by e-mail at pownerd@gao.gov. Individuals 

making key contributions to this testimony include Elizabeth Eisenstadt, 

Samantha Goodman, Maren McAvoy, Beverly Norwood, Colleen Phillips, 

and Richard Scott. 

Page 19 GAO-04-227T 
Related GAO Products 


Aviation Safety: Information on FAA’s Data on Operational Errors at 

Air Traffic Control Towers. GAO-03-1175R. Washington, D.C.: September 

23, 2003. 

National Airspace System: Current Efforts and Proposed Changes to 

Improve Performance of FAA’s Air Traffic Control System. GAO-03-542. 

Washington, D.C.: May 30, 2003. 

National Airspace System: Reauthorizing FAA Provides Opportunities 

and Options to Address Challenges. GAO-03-473T. Washington, D.C.: 

February 12, 2003. 

Human Capital Management: FAA’s Reform Effort Requires a More 

Strategic Approach. GAO-03-156. Washington, D.C.: February 3, 2003. 

National Airspace System: Better Cost Data Could Improve FAA’s 

Management of the Standard Terminal Automation Replacement System. 

GAO-03-343. Washington, D.C.: January 31, 2003. 

High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January 2003. 

Air Traffic Control: Impact of Revised Personnel Relocation Policies Is 

Uncertain. GAO-03-141. Washington, D.C.: October 31, 2002. 

National Airspace System: Status of FAA’s Standard Terminal Automation 

Replacement System. GAO-02-1071. Washington, D.C.: September 17, 2002. 

Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of 

Controller Attrition. GAO-02-591. Washington, D.C.: June 14, 2002. 

National Airspace System: Long-Term Capacity Planning Needed Despite 

Recent Reduction in Flight Delays. GAO-02-185. Washington, D.C.: 

December 14, 2001. 

National Airspace System: Free Flight Tools Show Promise, but 

Implementation Challenges Remain. GAO-01-932. Washington, D.C.: 

August 31, 2001. 

Air Traffic Control: Role of FAA’s Modernization Program in Reducing 

Delays and Congestion. GAO-01-725T. Washington, D.C.: May 10, 2001. 

Page 20 GAO-04-227T 
National Airspace System: Problems Plaguing the Wide Area 

Augmentation System and FAA’s Actions to Address Them. GAO/T-RCED00-229. Washington, D.C.: June 29, 2000. 

National Airspace System: Persistent Problems in FAA’s New Navigation 

System Highlight Need for Periodic Reevaluation. GAO/RCED/AIMD-00-

130. Washington, D.C.: June 12, 2000. 

Air Traffic Control: Status of FAA’s Implementation of the Display System 

Replacement Project. GAO/T-RCED-00-19. Washington, D.C.: October 11, 

1999. 

Air Traffic Control: FAA’s Modernization Investment Management 

Approach Could Be Strengthened. GAO/RCED/AIMD-99-88. Washington, 

D.C.: April 30, 1999. 

Air Traffic Control: Observations on FAA’s Air Traffic Control 

Modernization Program. GAO/T-RCED/AIMD-99-137. Washington, D.C.: 

March 25, 1999. 

(540077) Page 21 GAO-04-227T 
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