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21–701 PDF 2005

TRANSFORMING THE FEDERAL AVIATION ADMINISTRATION: A REVIEW

OF THE AIR TRAFFIC ORGANIZATION AND THE JOINT PLANNING

AND DEVELOPMENT OFFICE

(109–11)

HEARING

BEFORE THE

SUBCOMMITTEE ON

AVIATION

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

APRIL 14, 2005

Printed for the use of the

Committee on Transportation and Infrastructure

(
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-Chair

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

WAYNE T. GILCHREST, Maryland

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

TOM OSBORNE, Nebraska

KENNY MARCHANT, Texas

MICHAEL E. SODREL, Indiana

CHARLES W. DENT, Pennsylvania

TED POE, Texas

DAVID G. REICHERT, Washington

CONNIE MACK, Florida

JOHN R. ‘RANDY’ KUHL, JR., New York

LUIS G. FORTUN ̃ O, Puerto Rico

LYNN A. WESTMORELAND, Georgia

CHARLES W. BOUSTANY, JR., Louisiana

VACANCY

JAMES L. OBERSTAR, Minnesota

NICK J. RAHALL, II, West Virginia

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

ROBERT MENENDEZ, New Jersey

CORRINE BROWN, Florida

BOB FILNER, California

EDDIE BERNICE JOHNSON, Texas

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

LEONARD L. BOSWELL, Iowa

TIM HOLDEN, Pennsylvania

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

BRIAN HIGGINS, New York

RUSS CARNAHAN, Missouri

ALLYSON Y. SCHWARTZ, Pennsylvania

JOHN T. SALAZAR, Colorado

(II)
SUBCOMMITTEE ON AVIATION

JOHN L. MICA, Florida, Chairman

THOMAS E. PETRI, Wisconsin

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

ROBIN HAYES, North Carolina

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

CHARLES W. DENT, Pennsylvania

TED POE, Texas

JOHN R. ‘RANDY’ KUHL, JR., New York

LYNN A. WESTMORELAND, Georgia

VACANCY

DON YOUNG, Alaska

(Ex Officio)

JERRY F. COSTELLO, Illinois

LEONARD L. BOSWELL, Iowa

PETER A. DEFAZIO, Oregon

ELEANOR HOLMES NORTON, District of

Columbia

CORRINE BROWN, Florida

EDDIE BERNICE JOHNSON, Texas

JUANITA MILLENDER-MCDONALD,

California

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

TIM HOLDEN, Pennsylvania

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

BEN CHANDLER, Kentucky

RUSS CARNAHAN, Missouri

JOHN T. SALAZAR, Colorado

NICK J. RAHALL II, West Virginia

BOB FILNER, California

JAMES L. OBERSTAR, Minnesota

(Ex Officio)

(III)

(V)

CONTENTS

TESTIMONY

Page

Brantley, Thomas, President, Professional Airways Systems Specialists ........... 28

Carr, John, President, National Air Traffic Controllers Association .................. 7

Chew, Russell G., Chief Operating Officer, Air Traffic Organization ................. 7

Dillingham, Dr. Gerald L., Director, Physical Infrastructure Issues, Government Accountability Office .................................................................................. 7

Douglass, John, President and CEO, Aerospace Industries Association ............ 28

Mead, Hon. Kenneth, Inspector General, U.S. Department of Transportation .. 7

Shane, Hon. Jeffrey N., Under Secretary for Policy, U.S. Department of

Transportation ...................................................................................................... 7

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Costello, Hon. Jerry F., of Illinois .......................................................................... 71

Oberstar, Hon. James L., of Minnesota ................................................................. 144

Porter, Hon. Jon, of Nevada ................................................................................... 148

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Brantley, Thomas .................................................................................................... 34

Carr, John ................................................................................................................ 43

Chew, Russell G ....................................................................................................... 56

Dillingham, Dr. Gerald L ........................................................................................ 73

Douglass, John ......................................................................................................... 101

Mead, Hon. Kenneth ................................................................................................ 109

Shane, Hon. Jeffrey N ............................................................................................. 149

SUBMISSIONS FOR THE RECORD

Chew, Russell G., Chief Operating Officer, Air Traffic Organization:

Response to a question from Rep. Costello ........................................................ 18

Response to a question from Rep. Mica ............................................................. 62

Douglass, John, President and CEO, Aerospace Industries Association, response to a question from Rep. Costello ............................................................. 107

Mead, Hon. Kenneth, Inspector General, U.S. Department of Transportation,

response to a question from Rep. Costello ......................................................... 142

ADDITIONS TO THE RECORD

Chew, Russell G., Chief Operating Officer, Air Traffic Organization, additional response to a question from Rep. Costello .............................................. 171

National Air Traffic Controllers Association, Ruth E. Marlin, Executive Vice

President, statement ............................................................................................ 154

National Association of Air Traffic Specialists. Kate Breen, President, statement ...................................................................................................................... 162

(1)

TRANSFORMING THE FEDERAL AVIATION ADMINISTRATION: A REVIEW OF THE AIR

TRAFFIC ORGANIZATION AND THE JOINT

PLANNING AND DEVELOPMENT OFFICE

Thursday, April 14, 2005

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON AVIATION, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, WASHINGTON, D.C.

The subcommittee met, pursuant to call, at 10:03 a.m., in Room

2167, Rayburn House Office Building, Hon. John L. Mica [chairman of the subcommittee] Presiding.

Mr. MICA. Good morning. I would like to call this hearing of the

House Subcommittee on Aviation to order. Today’s hearing is entitled ′′Transforming the FAA: A Review of the ATO and JPDO.′′

We will have as an order of business today opening statements

by members, and then we have two panels of witnesses. So we will

proceed. I have an opening statement. Then I will recognize other

members good morning and welcome.

This morning’s hearing will continue the Aviation Subcommittee’s oversight of the Federal Aviation Administration. We will be

joined today by a number of distinguished panelists, including Honorable Jeff Shane and the COO of the Air Traffic Organization,

Russ Chew.

Since I joined the House of Representatives in 1993 the FAA has

had a reputation as being one of the Federal Government’s most

dysfunctional agencies. Its record in modernizing air traffic control

has been the poster child of how to not run a government program.

Unfortunately, year after year, the FAA allowed its major modernization programs to falter. What began in 1983 as a 13-year, $2.5 billion effort has ballooned into a $35 billion enterprise that is still some 10 years

away from completing its original mission. FAA’s operation of the

National Airspace System has essentially remained unchanged

since the 1960s. Four and a half decades ago, no one anticipated

the growth of regional jets, the emergence of low-cost carriers, the

current development of microjets, and the massive restructuring of

large network carriers. The system, in its current configuration, is

reaching a maximum capacity. I predict that clogged airspace, bad

weather systems, and systems outages will, in fact, create massive

delays and backups throughout our system this summer, and may,

in fact, be routine for the future.

The Agency’s past failure to adopt a sensible business approach

to both management and operations has kept it out of touch with
2

the rest of the progress within our aviation industry. While the airlines have been struggling, focusing on cost-cutting and efficiency

gains—those are some of the goals of the private sector—the FAA’s

operating costs have grown dramatically.

If problems of the FAA are not addressed in the not-too-distant

future, our air traffic control system could become an ′′Amtrak in

the sky.′′

Air traffic is predicted to triple over the next few decades. If the

demand for air transportation continues to outpace the FAA’s ability to increase capacity, consumers could lose $30 billion annually

by 2025, and that would be due to people and products not reaching their destination within the time periods that we take for

granted today.

While most air traffic control modernization programs have been

over budget and behind schedule, I must say that FAA should be

given credit for achieving the safest air traffic control system in the

world, not to mention that our U.S. air traffic accounts for twothirds of all of the world’s aviation traffic.

FAA has made numerous attempts at reform and Congress has,

in fact, provided additional resources and unprecedented authority

to address some of the unique needs of the Agency.

To the credit of the current FAA leadership under administrator

Blakey, FAA’s recent record has shown some marked improvement.

Today we will hear about our current organizational efforts that

will hopefully give FAA the business-minded focus that it needs for

the future.

Over the past few years, Congress created the position of chief

operating officer. After we created it, we had to redefine its role

and also position compensation. We were pleased to have Russell

Chew chosen to be the Agency’s first COO after that long process.

The Air Traffic Organization, under Mr. Chew, has been committed to serious reform, including the establishment of specific performance goals, deadlines, and deployment schedules. While others

may have had good intentions, there is no question that Mr. Chew

is serious about this. He has already eliminated 1,000 FAA executive positions.

I joked with staff; I said, ′′And we haven’t even missed those

folks.′′

Today we will hear additional details of his plans.

One of the major challenges confronted by the ATO is how to replace its aging air traffic control facilities and obsolete legacy systems.

According to the FAA’s own analysis, two-thirds of its $30 billion

worth of assets are behind their useful life. Air traffic control towers average 30 years in age. TRACON facilities average 34 years.

Primary en route radar systems average 27 years, and our en route

control centers average 40 years and are rated by the General

Services Administration as being in poor condition. The FAA will

require more than $30 million over the next 10 years just to maintain the current condition of our system.

FAA has indeed a very difficult task ahead of it. We have a limited window of opportunity to transform the FAA today and create

a viable FAA for the future.
3

I look forward to hearing from our witnesses today and their

plans, their progress that they are making in instituting reforms

we have talked about.

I am pleased now to recognize our Ranking Member, Mr.

Costello.

Mr. COSTELLO. Mr. Chairman, I thank you, and I thank you for

calling this hearing today. I do have a lengthy opening statement

that I would like to submit for the record and make brief comments.

Mr. MICA. Without objection, so ordered.

Mr. COSTELLO. Mr. Chairman, as you noted, commercial aviation

is on track to exceed 1 billion passengers by the year 2015. At the

same time, much of the FAA’s infrastructure has passed its useful

life. The GSA rates the average condition of the FAA’s en route

centers as poor and getting worse each year. You noted that the

aviation industry has seen many changes over the years but the

FAA’s infrastructure has basically remained the same.

The modernization program that started in 1983 and was due to

be completed in 1996, we are 20 years past the start of the modernization program and 9 years past the completion date. Thirty

billion dollars later, we are told now that it may be 5 to 10 more

years before the modernization program is, in fact, completed. So

obviously we have a lot of work that the FAA and this Congress

needs to do to move forward with the plan.

I was pleased, as you noted, with the JPDO’s release of the Next

Generation Air Transportation System integrated plan last December. The plan provides, in general terms, a vision for the air traffic

system. Unfortunately, the vision of this plan is challenged by the

reality of severe budget cuts to the FAA’s facility and equipment

budget, the primary program for modernizing the National Airspace System.

Just 2 years ago the FAA requested and received from the Congress a $3 billion a year authorization for its F&E program. However, the FAA is now proposing to cut the F&E program well below

its authorized level. Also the FAA’s latest capital investment plan

would freeze F&E spending at roughly $2.4 billion for the next 5

years. The Agency will now spend 53 percent less over the next 4

years to enhance the system.

Mr. Chairman, this subcommittee must demand specifics and ask

tough questions about the how the FAA intends to implement the

next generation plan. While the plan provides broad concepts, we

need to know more about the specific technologies that are expected to transform the system. Additionally, we need to have a serious discussion about cost resources in financing.

While the Congress must provide the resources necessary for the

plan to succeed, we must not abandon our efforts to control the cost

of the FAA’s programs. The IG will testify here today that 11 of

the 16 major FAA programs have experienced cumulative cost

growth of 5.6 billion. Cost overruns on legacy systems cannot be allowed to crowd out our future. This subcommittee must continue

vigorous oversight to ensure that the FAA’s scarce resources are

used effectively and efficiently as possible.
4

I am pleased that Mr. Chew is here today and will be testifying

before this subcommittee to talk about not only past problems but

also what progress is being made.

I look forward to hearing from all of our witnesses about the

problems and progress at the ATO. I am glad to see that both the

industry and union representatives, including the employees that

operate the system, the National Air Traffic Controllers Association, and the Professional Airways System Specialists are here

today. The JPDO will clearly need to build a consensus with employees and the industry in order to accomplish its mission.

Mr. Chairman, again, I thank you for calling the hearing today,

and I look forward to hearing from our witnesses.

Mr. MICA. I thank the gentleman.

Ms. Kelly.

Mrs. KELLY. Thank you, Mr. Chairman. I thank you for holding

this hearing today. I think it is an important one. I don’t think

there is any question we have to put forth a sustained effort to

modernizing our air traffic control system.

The U.S. maintains the safest system in the world, but without

comprehensive modernization that title could be in jeopardy. In

just 10 years we are looking at losing nearly 75 percent of our air

traffic control workforce. In the meantime, we find that some towers are understaffed and our controllers are definitely overworked.

On top of this, traffic at all of our airports is increasing daily.

Last year, Kennedy, La Guardia, and Newark, in the New York

area, handled 94 million passengers. That is more than the records

set before 9/11. Stewart Airport in my district is one of the fastest

growing airports in the United States, which only adds to the burden of the New York Terminal Radar Approach Control. Despite

the increased traffic, New York struggles to achieve an appropriate

staffing level. They are authorized to have 270 controllers, but have

to make do right now with only 206. It is the busiest air space in

the world and it is operationg without 76 percent of its workforce.

I want you to know the FAA made great strides, and I want to

thank you, Mr. Chew, for moving things forward. We want to

thank you for your efforts. I look forward to hearing the testimony

from all of our witnesses, but I specifically look forward to hearing

testimony from COO Chew on how the Agency will deal with this

increasingly dangerous problem and what he needs from us to help

encourage and to help quickly makeover our national airspace, but

especially with regard to these air traffic controllers.

Thank you.

Mr. MICA. Thank you.

Mrs. Tauscher.

Mrs. TAUSCHER. Mr. Chairman, I want to thank you for the opportunity to make a brief statement about the progress of meeting

the Nation’s air traffic demands. Unless we act now, we could face

jeopardy in our international airspace.

I wholeheartedly agree with Secretary Mineta. It is with importance that we address the needs today so that the future of the system remains and we can meet what the American people demand.

It is no secret over the next few years air traffic demand is expected to grow significantly. At the 35 Nation’s airports, total operations are expected to increase by more than 25 percent by 2020.
5

The FAA’s Air Traffic Organization and Joint Planning and Development Office face both foreseeable and developing challenges

while attempting to redevelop our Nation’s Airspace System.

We are facing aging passenger facilities and the need for additional capacity both on the ground and in the air, and the necessity

of replacing our air traffic control system are all apparent needs.

In fact, the FAA’s own analysis found that two-thirds of its $30 billion worth of assets are beyond their useful life.

I believe it is also useful to understand our developing needs, the

needs that we anticipate but may not yet be clear or definable. For

example, what new demands will the changing business models of

the low-cost air carriers and legacy airlines have on our air traffic

demands? How will we deal with the need for additional air traffic

controllers who will require increased knowledge of newly developed air traffic technologies? Finally, how will the FAA manage to

accomplish this Herculean task with a shrinking pool of funding?

I am particularly interested in learning from today’s panelists if

they believe they can meet all of the demands before them with the

administration’s budget request. It is unreasonable to assume that

the FAA will have the ability to replace over $20 billion in aging

infrastructure and meet the new capacity needs of the next two

decades if we continue to underfund the Agency’s core programs.

Mr. Chairman, as you know, for several years I have questioned

the FAA’s procurement for modernization of terminal air traffic

control facilities.

In light of tightening budget streams which will be described

here today, I continue to question why the STARS program is over

4 years behind schedule and nearly 900 million over budget. I believe this procurement practice deserves additional scrutiny, Mr.

Chairman, and with your permission and because of time being

limited, I ask to be able to submit these questions in writing and

allow both Mr. Chew and Inspector General Mead to respond in

writing.

Thank you, Mr. Chairman, for the time. I look forward to the

panelists’ comments today and the opportunity to work with them

as they continue to transform the Agency so it can meet the demands of the future. I yield back the balance of my time.

Mr. MICA. I thank the gentlelady.

Mr. Holden.

Mr. HOLDEN. Thank you, Mr. Chairman and Ranking Member

Costello, for holding this important hearing today.

I look forward to hearing the testimony from the administration

witnesses and the various stakeholders on the progress and challenges facing the FAA’s Air Traffic Organization and the Joint

Planning and Development Office.

I have a particular area of concern that I will raise with Mr.

Chew later in the hearing concerning the FAA’s proposal to close

42 air traffic control towers between the hours of midnight and 5

a.m.

The Harrisburg International Airport in my congressional district is one of these 42 towers. It is my understanding the FAA

used operations per hour as the sole criteria for choosing these 42

towers for possible closure overnight. Specifically, it added to its

list of consideration any tower which averaged four or less oper-
6

ations per hour during the months of June, July, and August of

2004.

The tower at Harrisburg International Airport averaged 3.7 operations per hour during that time period. Operations per hour cannot be a sole criteria for considering whether or not to shut down

an airport’s tower overnight. During the hours of midnight to 5

a.m., the Harrisburg tower not only controls its own airspace, but

that of the Reading Regional Airport, the Lancaster Airport, and

the Capital City Airport in Cumberland County.

The Harrisburg tower monitors the airspace at Three Mile Island

and Peach Bottom Nuclear Power Plant for homeland security purposes on a 24-hour basis. Should the Harrisburg tower be shut

down from midnight to 5 a.m., the airspace will be monitored by

a New York center, a regional control center which is not capable

of seeing below 5,000 feet. If a plane with malicious intent is flying

below 5,000 feet near one of these nuclear power plants, there will

be no one who could see it between midnight and 5 a.m.

Mr. Chairman, I look forward to discussing these points and others concerning the Harrisburg International Airport with Mr. Chew

later in the hearing.

I yield back the balance of my time.

Mr. MICA. I thank the gentleman.

Additional opening statements?

If there are no additional opening statements, what we will do

is turn to our panel of witnesses.

But before I turn to our panel of witnesses, I have an announcement for this subcommittee and those here in the hearing. Today

is the last hearing of one of our senior aviation subcommittee staffers, Adam Tsao. Adam has been with us—well, as long as I think

I have been Chairman—and done a wonderful job. He is abandoning us for the Homeland Security Committee, a higher position and

higher salary, which I don’t blame him for, but we will certainly

miss him. Today is his last hearing.

So on behalf of the subcommittee, we want to thank him. I followed him through bachelorhood, through marriage, through one

child, and we have one coming in 2 weeks. Well, Adam is going to

have a lot of excitement in his life. But maybe we will see him. I

am sure we will see him when we have a great addition to the

Homeland Security Committee he will be serving. So we want to

thank Adam for your service.

Mrs. KELLY. Mr. Chairman.

Mr. MICA. Ms. Kelly.

Mrs. KELLY. I simply want to say congratulations, Adam. Homeland Security’s gain is our great loss. It has certainly been a great

pleasure to have you here and work with you on the committee.

Bon voyage.

Mr. MICA. I am sure all of the others join in wishing Adam success.

Ms. NORTON. Mr. Chairman.

Mr. MICA. Ms. Norton.

Ms. NORTON. If you would forgive me, I had not intended on

making an opening statement, but since I may not be here

throughout the hearing evening, I better. I have to be someplace

at 11 o’clock.
7

Mr. MICA. Thank you. You are recognized.

Ms. NORTON. Thank you, Mr. Chairman.

I just want to put on the record that the Chairman and Ranking

Member of this subcommittee and of the full committee and the

Chairman and Ranking Member of the Government Reform Committee have both introduced bills that would allow general aviation

to be resumed at Reagan National Airport. The Chairman has

pressed this matter, including a hearing at the hangar at Reagan

National last year. He included in the FAA reauthorization a mandate for a plan to be presented to the Congress for the reopening.

It is quite extraordinary to have the Chairman and Ranking

Members of two full committees put forward legislation essentially,

overriding the Agency, because there has been no action for 4 years

and because you have shut down a substantial amount of commerce and important business in the Nation’s Capital.

The impression has been left that either our agencies or our security officials are not able to protect their own Nation’s Capital.

That is not the view of this Congress, and we don’t believe that is,

in fact, the case. These bills simply mandate that after enactment,

Reagan National will be—of general aviation—be open 6 months

thereafter.

In case I am not here, I want to thank the Chairman and the

Ranking Member and indicate the seriousness of this matter, when

two Chairmen and Ranking Members feel they have to override a

Federal agency just to get ordinary business resumed, when the

same kind of business goes on everywhere in the United States.

Thank you very much, Mr. Chairman.

Mr. MICA. I thank the gentlelady and associate myself with her

remarks.

We are going to move right along with our subcommittee hearing, and we will turn now to our first panel of witnesses. That

panel includes Russell Chew, who is the Chief Operating Officer of

the Air Traffic Organization of FAA.

We have the Honorable Jeffrey Shane, Under Secretary for Policy

of the United States Department of Transportation; Honorable Ken

Mead, Inspector General at the Department. We have Dr. Gerald

Dillingham, Director of Physical Infrastructure Issues with the

Government Accountability Office.

So I would like to welcome our witnesses. I think most of them

have been here before and know the routine. If you have lengthy

statements or information you would like included in the record,

you can do so through the Chair.

TESTIMONY OF RUSSELL G. CHEW, CHIEF OPERATING OFFICER, AIR TRAFFIC ORGANIZATION; HON. JEFFREY N. SHANE,

UNDER SECRETARY FOR POLICY, U.S. DEPARTMENT OF

TRANSPORTATION; HON. KENNETH MEAD, INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION; AND DR.

GERALD L. DILLINGHAM, DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE

Mr. MICA. So we will kick off our witnesses with welcoming back

Russell Chew and hear from the COO of FAA.

Welcome, and you are recognized.
8

Mr. CHEW. Is this working? Okay, good.

Chairman Mica, Congressman Costello, Members of the Subcommittee. Thank you for the opportunity to talk about the FAA’s

Air Traffic Organization. This morning I will discuss our activities

and achievements as well as some of the ongoing challenges we

face as we continue to restructure the FAA’s air traffic services organization.

I know I speak for Administrator Blakey and Secretary Mineta

when I say how proud we are to operate and maintain the largest

and the safest air transportation system in the world. Our employees safely orchestrate the takeoff, landing, and routing of approximately 50,000 airplanes per day across U.S.-controlled airspace.

Last year we achieved the lowest airline fatal accident rate in history.

Mr. Chairman, you and this committee have consistently focused

on ways to make the FAA more customer-oriented and efficient by

giving us the authority to reform and streamline our activities.

Using this authority, we began one of the largest reorganizations

ever undertaken in government. We realigned the ATO workforce

into a more customer-focused bottom-line business designed to be

more responsive to our customers and more fiscally accountable.

This morning I will touch on some of the highlights of what we

have accomplished this past year, but our activities and plans for

the future are described in more detail in our first Annual Performance Report for the ATO, which we delivered to you yesterday.

In February, we began removing layers of management, reducing

our executive ranks by now 20 percent, and reducing the number

of high-paid nonexecutive positions by 9 percent. We also streamlined administrative services by consolidating dispersed work

groups under centralized support centers, reducing our overhead in

Washington headquarters. There are now 10 operations that support service units that are accountable for achieving specified and

measurable results.

Basically, in addition to reducing overhead, we moved everyone

in the ATO closer to the customer, those people who use our air

traffic system, whether a passenger or a pilot.

Our efforts have started to produce results. Our unit cost is down

and our productivity is up. For example, the FAA’s average cost of

controlling a single instrument flight rule flight fell $17, from $457

a flight to $440 per flight, as compared to 2003.

In addition, we used the competitive sourcing opportunity outlined in the President’s management agenda, more commonly referred to as the A-76 process, for the delivery of services now provided by our automated flight service stations. This was the largest

public-private competition our government has ever attempted. As

a result, we expect to save more than $2.2 billion over the next 10

years.

We also created financial baselines that began a 5-year strategic

business planning process that incorporates both operational and

financial commitments and is tied to the FAA’s flight plan.

By implementing cost accounting, labor distribution reporting

and a new financial management system, we have established a

basis for an ATO cost control program. This enables us to identify
9

where costs can be managed and reinvested to meet the strategic

initiative described in our business plan.

By integrating our financial and operational perspectives, we can

make long-term decisions about budgeting and staffing. Managing

our costs enables us to manage our future.

Now, I must acknowledge that along with our successes, we have

a number of challenges. As the 11,000 controllers hired after the

1981 strike become eligible to retire, it is imperative that the ATO

find a way to meet the demand for controllers without straining the

hiring or training pipelines.

We developed the air traffic controller workforce management

plan which was delivered to Congress in December. This plan lays

out a cost-saving mechanism that will allow the ATO to reduce previous staffing projections by 10 percent over the next 5 years, but

full implementation of the plan is underway and will enable us to

have the right people in the right places at the right time.

Another challenge we face is upcoming labor negotiations with

two of our bargaining units. With our labor costs accounting for almost 80 percent of our total costs, we must reach an equitable

agreement that ensures financial solvency and corporate efficiency

on all sides.

These challenges make it critical for us to change the businessas-usual operating practices to businesslike practices. As we face

our upcoming challenges, we must continue to ensure that the ATO

is as streamlined and as efficient as possible in order to justify supporting our essential operating and capital costs as they compete

with other important programs for limited fiscal resources.

The ATO must deliver the safest, most efficient. Cost-effective,

and well managed services in order to serve our stakeholders and

our customers well. I am proud of the work we have done in this

last year and even more confident in the direction we are headed.

As we progress in our transformation, we intend to retain our

global leadership in delivering air traffic services by providing the

greatest value to our customers, to our owners, and to our employees. We look forward to working with you to meet these challenges,

and I am really grateful for the opportunity to be in a position to

help.

There is hard work ahead of us and tough choices, but I am confident that together we will do what needs to be done.

Mr. Chairman, that concludes my prepared statement.

Mr. MICA. Thank you. We will hold off questions until we have

heard statements from all of our witnesses.

We will now recognize Jeff Shane, who is Under Secretary for

Policy at U.S. Department of Transportation. Welcome, and you are

recognized, sir.

Mr. SHANE. Thank you, Mr. Chairman, I have a longer prepared

statement.

Mr. MICA. Without objection, we will put the whole thing in the

record.

Mr. SHANE. I thank you for that.

First of all, let me say on behalf of Secretary Mineta and Administrator Blakey and all of us at the Department of Transportation

that we join you and other members in taking enormous pleasure

in the fact that Russ Chew is one of our colleagues now. He is mak-
10

ing a tremendous difference. I don’t want to dwell on it at this

point, but it is just a tremendous boost to everything that the FAA

is doing to have him in the COO position.

Mr. Chairman, Ranking Member Costello, I looked over my testimony and was thinking about how best to summarize it in the

short time I wanted to take here this morning. As I read it over,

it seemed to me it was rather more focused on bureaucracy rather

than on the vision of the Next Generation Air Transportation System Initiative.

So what I would like to do, if I might have your permission, is

just give you a quick sense of that vision.

There is no doubt that we have to do something dramatic if we

are going to accommodate the levels of traffic that we know are

coming at us. It is the case that we will have three times the number of operations in the system, by just about every estimate I have

seen, by 2025. That means that as we continue to simply modernize the system in the very important ways we are doing now, leading up gradually to 2025, we will not have a system in place that

is either intelligent enough or efficient enough or safe enough or

secure enough to handle that measure of operations.

Therefore, it was no surprise that the Commission on the Future

of the Aerospace Industry in America concluded that we had to do

something dramatic. No surprise that the industry felt that we had

to do something pretty important. No surprise at all that Secretary

Mineta came to the office with a conviction that we had to do something important.

This Next Generation Air Transportation System Initiative is

that important initiative. It recognizes that we have to do something special, that we need a new system. The best way I think I

can perhaps describe it for you is just every member of the subcommittee, and indeed every Member of Congress, is an expert on

the air transportation system. You are frequent users of the system.

I ask you to simply remember the best day you ever flew. You

came to the airport, there probably wasn’t much traffic there, you

didn’t spend a lot of time in security. You got through it fairly

quickly. You got onto the airplane fairly quickly. The airplane took

off on time. It landed on time. You got off on time. You were home.

You probably did not spend a single minute talking to your spouse

about the experience you had in the air transportation system on

that day. That is what we like to achieve for every traveler on

every day, even the most crowded days, even with three times the

number of operations in the system.

I do not pretend to be a futurist. I do not know what the future

system is going to look like. I know a lot of people are predicting

microjets, composite jets, personal jets. I don’t pretend to have a

view of what the system is going to be. I just know that government’s sole responsibility at this point in time is to ensure that

whatever the market delivers in terms of demand, we have a system in place that can accommodate that demand.

That is what we are striving for with the Next Generation Air

Transportation System Initiative. It is different from what we have

ever done before by virtue of it being governmentwide. It involves

the Department of Transportation, the Department of Defense, the
11

Department of Commerce, the Department of Homeland Security.

It involves NASA. The White House’s Office of Science and Technology Policy is playing an important role. It is being operated

through a joint program and development office that includes participants from all of those agencies as well as the private sector.

There is buy-in throughout the industry and throughout the government that this is an important initiative, that we cannot fail

that. That is what is so different from what we have seen before.

The board of directors—and I can use that phrase for this effort—is a senior policy committee that is chaired by Secretary Mineta. I have never seen in a lot of the years that I have spent in

government anything to compare with it. You have deputy secretaries and administrators of all of the participating agencies coming

to meetings and spending 2 or more hours thinking original

thoughts about what the future air transportation system of this

country needs.

When they engage at that level, the importance of the initiative

is not just at the working level. So that is why we have such engagement throughout the government, throughout these agencies,

and particularly at the working level and the JPDO. I think we

have created a template for the way government is do going to address large capital-intensive and technology-driven projects in the

future. It is something to behold and we are very, very proud of it.

Thank you, Mr. Chairman and I look forward to any questions

you might have on some of the specifics.

Mr. MICA. Thank you, Mr. Chew. As I said, we will hold questions until we hear from our other witnesses.

Ken Mead, Inspector General, we will hear from you now. Thank

you.

Mr. MEAD. Thank you, Mr. Chairman, Mr. Costello.

I think since its inception the ATO has worked to flatten its organizational structure and align responsibility for acquiring new

systems with the organizations that provide the services. That was

not the case before. Also, the ATO has showed a willingness to

measure itself through better methods. That, too, is an improvement.

But a great deal of the ATO’s efforts thus far have focused on

′′dealing with the hand they were dealt′′, which was growing operating costs, a very high salary base, reduced funding, and a portfolio of systems that were substantially behind schedule and over

budget. But the backdrop here is that the heavy lifting lies ahead,

because there is an increasing number of passengers and aircraft

operations. The ATO has to do all of this in a cost-effective way.

I would like to look forward and highlight eight big next steps

that I think should be areas of focus.

First, reducing operational errors. This is where planes come too

close in the sky. FAA has made some progress here, but still a good

ways to go. The most serious types of operational error are occurring about once every 9 days. They have to come down. A significant concern here is that FAA was relying on a system of self-reporting these errors, and we have some serious reservations about

the self-reporting system. One facility reported just two operational

errors during the 6-month period from January 2004 following a
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whistle-blower complaint. We identified five operational errors in

May and June alone.

After instituting appropriate use of playback tools last June, the

facility itself recorded 36 operational errors over the next 6 months.

Twenty-eight of those were moderate to severe. I am pleased to say

that the ATO has recently taken steps here by establishing an

audit process at towers and TRACONs. That is a right direction.

The key now will be follow-through.

Getting control of major acquisitions. That is item number two.

For fiscal 2006, the ATO is requesting $2.4 billion for its capital account. That request is slightly less than last year’s $2.5 billion,

but significantly less than fiscal 2004 budget of $2.9 billion. An important point here I would like to make is that the current budget

level of $2.4 billion is not sustainable, and the reason for that is

fairly straightforward. The current systems have experienced so

much cost growth that there is little room for FAA to pay for both

the current systems and simultaneously take on new initiatives.

I also want to point out that we recently reviewed 16 of the

ATO’s major acquisitions; 11 of those projects have experienced cumulative cost growth of about $5.5 billion, which is more than double FAA’s 2006 request for its capital account. Delays for those systems have ranged anywhere from 2 years to about 12 years.

I also want to point out here, though, that the bulk of that cost

growth happened before the ATO’s establishment and is mainly a

reflection of the ATO’s efforts to re-baseline those projects. A lot of

those cost increases were pent up and simply had not been

straightforwardly recognized.

Item three, reducing the cost and development risk of ERAM.

ERAM is an acronym for basically replacing the brain of the air

traffic control system that controls high-altitude air traffic. Current

price tag is $2.1 billion. We are already spending more than $240

million a year on the program. Any cost increase is going to have

major cost cash-flow implications. In the past, FAA has had problems managing these types of contracting vehicles. I think FAA

should look to make these more fixed-price agreements rather than

cost reimbursable agreements, which is where the government absorbs most of the risk.

Fourth item, getting control of support service contracts. I would

like to say several words on these. Over the past 3 years we have

seen an increase in support services contracts involving large contracts. Collectively, they have a value of over $2 billion. We are

having problems telling what these contracts are for. They are

broadly defined, nominally for information technology services, we

found instances where they are used for acquiring services such as

timekeeping. There is a lack of centralized control over them, and

we are having serious questions about exactly how the contractors’

work differs from the work FAA employees do.

One example: We had an FAA employee who was earning

$109,000 at the time of their retirement. They went right from retirement to work for one of these contractors, and the contractor is

getting paid $206,000 for what this employee was getting paid

106,000 for before they retired.

The fifth item is addressing the coming wave of controller retirements. I think the FAA has a good plan here but it is missing two
13

key items. One, numbers by facility. Until you have numbers by facility, you really don’t have ′′rubber-meets-the-road′′ numbers.

Number two, you need cost data. Cost data is not in the current

plan. FAA’s next report, I believe, will have both facility numbers

and budget numbers.

Item number six. This is negotiating a new collective bargaining

agreement with the controllers’ union.

Airspace redesign is item number seven. These are very important when you lay new runways, you spend all that money for a

ground infrastructure, you also have to do airspace redesign. FAA

is working on overcoming problems with delays and budget problems with airspace redesign.

Finally, I would like to say just a couple of words about the

JPDO. This is the office that is charged with developing a vision

for the future. I think looking 25 years ahead, Mr. Chairman, is

important, but I think people need to be able to relate to what is

going to happen in 5-, 10-, and 15-year benchmarks as well. The

big imperatives this year are for the JPDO to determine what level

of funding they actually require, how much other agencies are

going to contribute, what specific capabilities will be pursued, and

when they plan to implement them. Thank you.

Mr. MICA. Thank you. Thank you, Mr. Mead.

Now we will hear from Gerald Dillingham, Director of Physical

Infrastructure Issues with GAO.

Welcome, and you are recognized.

Mr. DILLINGHAM. Thank you, Mr. Chairman, Mr. Costello, and

members of the subcommittee.

As many of you know, the GAO has been reviewing the status

of the ATC modernization program since its inception in 1981. Our

annual reports to Congress have generally contained the same conclusions, that major projects are over budget and behind schedule.

We have also identified some systemic causes of these cost and

schedule problems, such as the influence of its organizational culture and the lack of key business processes. Because of the size and

complexity and history of the program, the GAO included it on its

high-risk list in 1995. We continue to include it on our list of highrisk programs today.

My statement today focuses on two questions:

First, what is GAO’s assessment of the ATO’s efforts to date in

addressing some of the challenges associated with the modernization program?

Second, what are some of the key challenges that lie ahead for

the ATO, and what are some options for addressing those challenges?

Regarding our assessment of ATO’s efforts to date, we think that

we could be at the beginning of a new chapter in the history of

modernization. As you have heard, the ATO is currently implementing a new approach to modernization. It reflects many of the

recommendations that we have made over the years, and includes

many of the key practices that have consistently been associated

with successful organizational and cultural transformation.

We found that the ATO has taken a number of positive steps to

address what we call the legacy cost and schedule problems that

have beset the modernization program for the past two decades.
14

Our current work shows that FAA has made improvements in

these overall investment decisions. The fact that it met its acquisition goals for 2004 with over 90 percent of its major acquisitions

meeting budget and scheduled targets is a very positive sign.

The ATO has also demonstrated a willingness to cut major acquisitions, even after investing significant resources.

The organization is utilizing FAA’s long-awaited cost accounting

system to improve its financial management capabilities.

In addition, the ATO has improved its human capital management by linking individual performance criteria to FAA goals, and

it has also recognized the fundamental importance of changing the

organizational culture and has initiated efforts in this area as well.

From the GAO’s perspective, the ATO’s key challenges for the future include finding a way to live within its means while increasing

the capacity to safely and efficiently accommodate the forecasting

increases in traffic. The ATO will also have to repair or replace its

aging ATC facilities. A big issue is the hiring and training of thousands of air traffic controllers in the next decade.

Assuming that the JPDO receives its authorized $50 million annually between now and 2010, the ATO will also need to work with

the JPDO to ensure that research programs led by the diverse

agencies support national goals.

Our research points to a number of options that might be considered to address some of the challenges:

First, the ATO must continue on the path of transformation.

Transformation of the Nation’s transportation system is directly

tied to the Nation’s economy, security, and defense.

Second, it must continue to address both the cost and revenue

sides of the ledger. On the cost side, the ATO must continue its ongoing efforts and initiatives that are aimed at cost reductions. This

would include the ATO’s decision to include the impact on the operations budget when evaluating proposed capital projects.

It is important to point out that the information that we have reviewed to date suggest that the cost-saving initiatives that the

ATO has identified will not even begin to close the reported gap of

about $5 billion over the next 5 years in the operations budget.

For additional potential cost savings, the ATO could evaluate its

experience in outsourcing flight service stations and consider

outsourcing other ATO services such as oceanic.

Second, we find merit in the proposals such as that represented

by Embry-Riddle University that could save millions of dollars annually in the hiring and training of air traffic controllers.

Third, the ATO could evaluate the need for and expense of maintaining existing ground-based NAVAIDS.

On the revenue side, in the short term the ATO must be prepared to live within its existing budget. It may be the case that the

Nation’s fiscal condition may not allow full funding for all needs.

This will mean that some difficult choices will have to be made by

the Agency and the Congress.

In that regard, we believe that it is critical that the ATO increase the degree of transparency for the Congress and other stakeholders in how and why decisions are made regarding the modernization program.
15

For example, the ATO could clarify the trade-offs it is making by

supplementing its budget information with information that discusses the impact of the Agency’s decisions to prioritize certain programs and reduce funding for others in order to reach budget targets. This kind of information will make transparent how the ATO

is managing to live within its budget targets.

Over the longer term, the ATO could choose to pursue a recommendation of the Mineta Commission to develop legislative proposals to allow it to incur debt.

Mr. Chairman, we should recognize that the problems have been

a long time in the developing, and they will not disappear overnight. The transformation that is underway will still require sustained attention of FAA management and the committees of the

Congress to realize its potential.

Thank you, Mr. Chairman.

Mr. MICA. I thank you and I thank all of our witnesses on the

first panel, and we will move right to questions.

Mr. Chew, you have heard it, and Mr. Mead, if you continue to

cut facility levels—and I think we have had a proposal by the administration from 2.9 to 2.4. That is not sustainable, I think, was

his quote. You just heardMr. Dillingham OF GAO say we are looking at an operations budget shortfall of $5 billion.

How do you respond? How are you going to make this work?

Mr. CHEW. Well, when we talk about investing in the new system

and the F&E budget, which is a capital budget to modernize it, I

think it’s important to understand that sometimes making the

wrong investment is worse than making no investment.

Mr. MICA. Making the wrong investment—

Mr. CHEW. Is worse than making no investment. Because you

live with the costs for many, many, many years. Because of that

we have, ever since we started a reassessment of all of our capital

programs, we are actively reviewing them all— and there are hundreds and hundreds—even though we only tend to focus on the

very large ones.

We have actually already reduced spending on more than—well,

several hundred of those capital programs that really couldn’t demonstrate that they could move the dial on safety, capacity, or efficiency.

So focusing on making the right investments is crucial to understanding how to move to what the JPDO will build as a vision.

That period of assessment will take place for the most part for

the remainder of this year, after which we will probably have a

very detailed plan on what investments should be made and what

metrics we will use to ensure that they stay not only on constant

schedule, but they will produce the kind of capacity, the kind of

safety, and the kind of efficiency that we are all looking for.

Mr. MICA. That brings me to my next question. I guess at the

end of last year you all issued this Next Generation Air Transportation System, and in the center there is this sort of general outline

of your plan. You list a number of various activities and goals, and

then a sort of general timetable. It won’t be until the end of the

year that you have specifics on all of these. For example, you have

got to establish a comprehensive proactive safety management ap-
16

proach, develop environmental protection that allows sustained

aviation growth, and establish an agile air traffic system.

All of these objectives are set out generally for 2005. When will

we see the specifics? Can we get something to the subcommittee

that would show us before the end of the year, different activities

here, or objectives and some type of a better timetable? This is

pretty general.

Mr. Shane.

Mr. SHANE. Yes, Mr. Chairman. The intention is to have those

specifics by the end of the year in order to be put into the deliberations over the 2007 budget requests of the administration. That is

what is driving it right now. I don’t want to move into that 2007

cycle without having those specifics, and that is what is driving the

current timetable. So you will see greater specificity.

Mr. MICA. Well, general visions and all of that are great, but specific deadlines and objectives are important.

I don’t want to take away from what you have done, Mr. Chew.

Was I correct in saying you have eliminated 1,000 positions?

Mr. CHEW. That is right. In 2004 we eliminated almost 1,400 positions.

Mr. MICA. Almost 1,400; over 1,000. So it is possible to do at

least the same level—maybe even more—with less, if properly directed?

Mr. CHEW. Very definitely. If we were to focus our capital expenses and our investments on improving productivity, we could

achieve more productivity. In recognition of that, in our review of

our capital programs, our major capital programs, very few if any

were actually aimed at productivity improvement.

Now, it is important that any investment we make focus on safety, capacity, and efficiency in terms of productivity and cost savings. That is how everyone operates in the outside world, and it is

how we are trying to get the ATO to operate as well.

Mr. MICA. Let me ask you another important question. Do you

as COO, or does the FAA have enough authority, and specific authority in regard to your budget and other activities that you plan

to undertake, to make the changes necessary to bring FAA’s costs

under control and also to implement what goals and objectives you

have set for the future?

Mr. CHEW. I think the level of authority that we have affects the

speed with which we can make change, not necessarily whether we

can make change. I think there are things that could help us to go

faster. Being from the private sector, I find many of the government processes that are dictated by law to be very, very restrictive

in my ability to move forward as well.

Mr. MICA. You know that drives me nuts, too. I come from the

private sector. Ii is so frustrating to deal with--anything dealing

with government costs more, takes more people, and there is always some bureaucratic obstacle in the course.

I would welcome any suggestions, anything you can give the subcommittee that we might incorporate in any of these processes. The

acquisition process drives me crazy, and watching the acquisition—

well, development of air traffic control modernization efforts. It

took so long to get a request for proposal out. Then, by the time

you did that and we had the competition and then we awarded it,
17

we end up changing the specs, and we have everybody and his

mother changing the specs. No vendor accountability. By the time

this whole process of development takes place, the private sector

has moved ahead and checked technology development. We have

spent all this money chasing our tail and have nothing.

Dillingham stole my line—that all the programs are over budget

and behind schedule. Anything you can do to give us—to give you

the authority to move forward on making these changes we would

appreciate both from you, Mr. Shane, or you, Mr. Chew. Okay.

Well, I have got a whole list of questions, but I am going to defer

to Mr. Costello. Some we may submit. Maybe we will do another

round.

Mr. Costello.

Mr. COSTELLO. Mr. Chairman, thank you.

Mr. Chew, let me follow up on the Chairman’s questions and

your comment. If I understood you correctly, you indicated that if

you had more authority—that the lack of authority—you would be

able to make more progress if you had more authority and get

things done faster; is that correct?

Mr. CHEW. That is right.

Mr. COSTELLO. Can you be more specific; what authority are you

looking for that you currently do not have?

Mr. CHEW. Well, I think if you look at the personnel reform and

the acquisition reform that was put in place many years ago, because the ATO had not yet been formed, the treatment of it was

aimed at accelerating certain things that held those processes back

in the old organization.

When you turn an organization from being input-oriented to output-oriented and performance-oriented, the types of changes that

we want actually shift, and those kinds of authorities that you

would need would accelerate those areas that you are trying to

make change. Some of those areas would include the very mundane

things that you might consider are not glamorous, but are as simple as human resources and basic administrative tasks, that government processes require but they are not very streamlined. So by

being able to streamline that, we can actually move an organization faster.

In the case of the ATO, when traffic literally changes every 30

to 60 days, our ability to be flexible and move not only our resources, but move our technologies and move our people quickly,

are somewhat impeded by the traditional administrative processes

that the government requires.

I would be happy to provide more specific information to you, as

I was really not prepared to answer these particular questions.

Mr. COSTELLO. I found it interesting that you had brought that

up, and I would like to follow up on that and ask you, if you would,

to submit specifics to the subcommittee, if you would.

[The information follows:]
18
19

Mr. COSTELLO. Another question I had for you and Mr. Shane as

well, if I could ask both of you. Maybe Mr. Shane first; and you,

Mr. Chew, second.

Dr. Dillingham in his prepared statement recommends that the

FAA should give detailed information to the Congress about their

budget submission and the impact that the budget will have on the

FAA’s modernization program. Dr. Dillingham states specifically

that the FAA should identify trade-offs.

But if we are going to go forward with the modernization program, as we need and want to move forward with your budget submission, what are the trade-offs in order to accomplish the modernization? What are you going to give up? What are you going to

cut?

Mr. Shane, I wonder if you would go first, and then Mr. Chew.

Mr. SHANE. Yes, Congressman. I don’t have specifics as to what

the trade-off would be right now. I would just note that what you

heard emphasized throughout Mr. Chew’s presentation and his answers to questions are constant references to metric.

This is something that we really have no press department for

in the FAA as far as I can tell. Russ is bringing a measure of quantification to his assessment of what the FAA is doing now and what

it will have to do in the future that really is unprecedented. And

it is going to facilitate us making those trade-offs, I think, in a very

precise way, even in an era of unlimited sources. And none of us

should pretend we will not be in that period for a long period to

come.

It is going to be possible to maximize the bang we get for every

dollar. That is what the ATO is doing. That is why it was the right

thing for Congress to do, to create the organization, and again,

without overdoing it, why we are so delighted that somebody with

Mr. Chew’s background, coming from industry in the way he did,

is able to quantify this issue in a way we have never seen before.

Mr. COSTELLO. But you would agree that there have to be budget

trade-offs within the FAA?

Mr. SHANE. Absolutely. Absolutely. I think, in fairness, one of the

big problems the FAA has had, and one of the things that has led

to the kind of results that the subcommittee has referred to over

and over again is the lack of sufficient predictability in the funding

stream. Mitre Corporation did a study a while back that attributed

something like 50 percent of the cost overruns to that lack of predictability, that lack of stability in the availability of finances for

capital investment and for maintaining the system.

Those are issues that this administration wants to work with the

subcommittee on. We need to figure out better ways of providing

that predictability, such that the system can be modernized with

deliberation in keeping with a strategic plan.

Mr. COSTELLO. Mr. Chew, let me move on to another question before I run out of time here.

You have previously stated that there is a $5 billion gap in oper- ations funding and a $3.2 billion gap in capital funding. And I wonder if you might tell the subcommittee how you and the FAA intend to close those gaps.

Mr. CHEW. The gap is the difference between the funding as it

is today, and if we did business as usual, what it would be in 5
20

years. Of course, we have already started taking action on that

gap, everything from trying to manage our premium pay practices,

our paid leave practices, looking at the way we manage schedules,

and things like that. Also, what would contribute to closing that

gap would be the A-76 Flight Service Stations competitive sourcing

project.

So all those cost saving things will, in fact, contribute to closing

the gap substantially. However, we are still continuing to look, because we—over that 5-year period, we still have not identified everything we would need to do to close that gap, and we have a

number of things that we are looking at that will also help that.

Unfortunately, again, we are in a fledgling stage with regard to

our implementation of our accounting systems, so running the

numbers to see how far out they will close the gap is still in

progress.

Mr. COSTELLO. You heard the Inspector General, Mr. Mead, testify that the FAA’s current capital budget is not sustainable. Would

you agree?

Mr. CHEW. Well, it depends. With technology moving as fast as

it is, I think we have to change our thinking a little bit, in that,

yes, we have an old air traffic control system. We have, for instance, 40-year-old en route centers, but they have brand new

pieces of automation in them. So rather than thinking of the system as one entity, think of the system as something that needs to

be in a continuous state of refreshment as time goes on.

As we showed in our first chart, there are 41,000 systems that

make up the air traffic control system and they do not all age and

expire at the same time. So the amount of capital we will need, and

the capital budget forward, will be dependent on what needs to be

replaced and when it needs to be replaced.

We are looking very, very hard at that to see whether or not we

can further reduce costs even more by potentially spending more

capital in the early years instead of less.

Mr. COSTELLO. When will we be at a point where either you or

Mr. Shane or others can come before this subcommittee and put a

price tag on the Next Generation System?

Mr. SHANE. We can’t do it today, that is quite clear. I believe

that as we move into that 2007 budget cycle that I referred to earlier, we will have a better handle on what we think the overall

costs are going to be and precisely how we plan to budget for it

going forward.

One of the real, I think, wins in the way we have structured the

Next Generation plan is that we are finding money in the budget.

We have pulled together all of these agencies that have been doing

aeronautical research forever, but in a way that has not been sufficiently coordinated, and in some cases not coordinated at all with

what the FAA has needed. That era has ended, and now every dollar that we are spending on aviation research, whether it is in

NOAA on weather, whether it is in NASA, whether it is in the Department of Defense, it is being targeted at what the Next Generation System will look like.

Mr. COSTELLO. But to be specific, when can the subcommittee expect a deployment schedule and cost estimates?
21

Mr. SHANE. I would think you will see the specificity you are

looking for for the first time in the 2007 budget submission.

Mr. COSTELLO. So in the 2007 budget submission we will know

at that time the estimated cost and the deployment schedule?

Mr. SHANE. Yes, sir.

Mr. COSTELLO. Thank you.

Thank you, Mr. Chairman.

Mr. MICA. Thank you.

Are there members with questions? Mr. Hayes.

Mr. HAYES. Thank you, Mr. Chairman. A couple of questions for

Mr. Chew.

Some people are arguing that the general aviation component of

air traffic imposes a significant cost on the system. As you know,

general aviation has been banned from Washington Reagan National Airport for several years. While we want to restore the access for general aviation, how much money has the FAA saved

while providing air traffic control service in DCA during the 3-1/

2-year absence of general aviation?

Mr. CHEW. Actually, I’m not sure I can answer that question.

Mr. HAYES. Sounds like a trick question, doesn’t it?

Mr. CHEW. That is a good question, because we have never measured the access to DCA by general aviation in terms of cost. In

working with our counterparts in security, the quantification of

that has never risen as an issue. I do know that because of this

latest activity, there is now some active scrutiny on this particular

issue, and I know that there is optimism that things can move forward.

Mr. HAYES. Well, I think the answer is clearly, it hasn’t cost anything, and it hasn’t saved anything because the system is still up

and working.

Those controllers are some of my favorites in the world, and they

can obviously handle the traffic. But you see my point?

How is general aviation involved in the modernization and the

transformation? Are you consulting with GA, and what specific considerations are being used or given, Mr. Chew, or anyone else who

would like to comment?

Mr. CHEW. Well, I can start. We work very closely with those

who represent general aviation. The Aircraft Owners and Pilots Association was very supportive, for instance, of the A-76 Flight Service Stations process. I think it was because they have been asking

for a long time for more and more support in terms of the services

they were getting.

It is interesting that from 2003 to 2004 the number of actual contacts at our Flight Service Stations dropped by 12 percent, yet the

activity of many of our other general aviation types of automated

services actually increased. So I think where we are headed with

that—and we are working very closely with Aircraft Owners and

Pilots Association—will yield even better services over time with

our general aviation population.

Mr. HAYES. I want to be sure and remind you, although I am

sure you know this, that general aviation is GAMA, MBAA, AOPA

and others, and I think what you are saying is, people like me have

to learn to use that machine and quit calling up on the phone.
22

It is good to say we are planning for 20 to 25 years out, but are

we hearing from the ATO that there is—we are hearing there is

an immediate need to invest in new technology and facilities.

How are you keeping the processes properly aligned?

Mr. CHEW. What is interesting about that is the most important

part of investing in new facilities or new equipment is that they actually do something positive for the operation, for the controllers

who use them and for the customers who interact with them. That

was the reason we moved our acquisition unit, which was standalone, into the actual operating service units. So whether it is en

route or terminal, the acquisition processes now occur under that

service unit.

So that the conversion of an investment in technology results is

a change to the operation. That was the reason they would so immediately be able to actually reduce spending on so many programs, because with so many, you were buying something, but it

actually didn’t change the operation. So that is our primary first

step in ensuring that the things on which we do spend, whether

new facilities or new equipment, actually result in a better, safer

operation.

Mr. HAYES. I am really proud of our air traffic controllers and

the job they do. I still continue to be concerned about their numbers and retirements and making sure that we are fully staffed

there.

Is that factored into the equation long range, as well as shortterm planning?

Mr. CHEW. In fact, our 10-year controller workforce plan was

really a hallmark and one of the first plans we put together that

included better workforce models.

I actually share your concern a great deal. When I look at the

challenge ahead with the number who are retiring, and being able

to properly staff our facilities forward and have trained controllers

in place, we must not deviate from the need to hire those controllers along that plan.

The plan makes some very key assumptions: that the traffic

grows at the rate we think it will grow; that the retirements occur

at the rate they will occur; and that the training will happen in a

way that is even throughout the year. So you can’t just hire everybody in the last month of the year, because the training pipeline

can’t hold that many all at once. So we must train throughout the

year.

That is one of the reasons why stability of funding forward is important, because regardless of whether we are in a continuing resolution or not, I must hire those controllers to make sure I keep that

pipeline full.

Mr. HAYES. Thank you, gentlemen.

Thank you, Mr. Chairman.

Mr. MICA. Thank you.

Mr. Holden.

Mr. HOLDEN. Mr. Chew, as I mentioned in my opening remarks,

I am concerned about the FAA’s proposal to close 42 towers overnight, specifically at Harrisburg International Airport in my district. I mentioned two reasons in my opening statement, the fact

that they control the airspace at two nuclear power plants, and
23

they are also responsible for the air traffic at three other airports,

Reading Regional at Lancaster and Capital City. I would just like

to give you a few other facts before I ask you a few questions that

I think the FAA needs to consider as they are looking at their final

decision here.

The Harrisburg tower controls all ground movements on the airport of both aircraft and vehicles. And that is important because

HIA is the maintenance facility for Piedmont-Allegheny, and they

are constantly testing the engines during the evening.

Harrisburg International Airport has also become a main diversion airport for Philadelphia, Baltimore, Ronald Reagan-National

and Dulles Airport, so I think you need to take that into consideration, as well as the fact that the 193rd Air Wing of the Air National Guard is based at HIA. And that is the Special Ops unit for

the Air National Guard, and there is no telling when they would

be called into service and they would need control help.

And, lastly, in calendar year 2004, 39 lifetime flight operations

took place at HIA between the hours of midnight and 5 a.m. So I

assume that you are early on in the process, and I am just curious

exactly where you are in the process, if you can tell me that.

Mr. CHEW. I would be happy to answer that. Let me just clarify

a couple of things.

Everyone, I am sure, knows that when the tower is closed, the

airport is not closed. It is a common misunderstanding by many

who hear that the tower won’t have controllers in it from midnight

to 5 a.m.

The second one is, we didn’t release the list, and the reason we

don’t is that four operations per hour is just the starting point.

That threshold was set back in the early 1990s as a threshold at

which you begin to look at the airports. The reason is, there are

more than 5,000 airports in the United States, and only about 10

percent have control towers.

Now, it is important for us to maintain the highest level of safety

standards that we do; that we apply a very strict discipline on applying standards of service and standards of safety, and we set

thresholds so that we can begin to look at a situation, but there

are a lot of other factors. Once any airport drops below that threshold, we look at the type of factors you talk about.

We look at whether the pilots can control the lighting or not. We

look at whether the weather services can be provided. We look at

who is going to provide the crash fire and rescue services for the

airport.

As a pilot for American Airlines, I flew into airports with closed

towers from time to time. And under the right conditions, it is perfectly safe. But it is up to us to make sure we evaluate all the special circumstances, such as the ones that you articulate, before we

take any action. And, in fact, we will make sure to coordinate, as

a standard practice, with the airport operator and local community

and the representatives thereof.

Mr. HOLDEN. Okay, so operations per hour are not the only criteria you are looking at. And it is true that the airport would not

be closing, but there would be no air coverage under 5,000 feet if

we went to New York Central. And that is a concern because of the
24

nuclear power plants, and I think that, you really need to take a

good, hard look at.

Assuming that all 42 of those proposed would be shut down,

what would be the savings annually for the FAA?

Mr. CHEW. The savings exceed—of the direct operating costs, the savings would be $6 million a year.

Mr. HOLDEN. And what percentage would that be of your total

budget?

Mr. CHEW. About a tenth of 1 percent.

Mr. HOLDEN. A tenth of 1 percent. Well, I know we just had several questions about the need to tighten our belt and so forth, but

I think if you would look at the savings of a tenth of a percent and

then compare that to security and safety, I think we really need

to take a good hard look at it.

And I look forward to working with you as we move forward in

this process.

Thank you, Mr. Chairman.

Mr. MICA. Thank you.

Mr. Ehlers.

Mr. EHLERS. Thank you, Mr. Chairman, and thank you for holding this hearing. I think this is one of the most important, if not

the most important, issues facing us and the FAA over the next 20

years.

I apologize I wasn’t here to hear all the testimony. I had a meeting at the White House and I have two other committee meetings

going on. But my lack of attendance is not because of lack of interest or because I do not think it is important. I believe it is extremely important.

I would like to ask what is going on in our shop that is comparable to what Europe is doing today to try to build their new air

traffic control system? Are we in touch with that? Are we going to

be a participant in that at some point? Are we developing the same

technology that they are using or are we working with them jointly

to develop technology?

Could you just give me an overview of that issue?

Mr. CHEW. I would be happy to.

We work, as we have historically, very closely with our European

air traffic counterparts in many, many ways. We have just recently

expanded and signed an agreement with Euro Control, too, from

just research to also operational cooperation, as all of these things

unfold for Europe.

Europe’s Single Sky Program is advised by an industry consultation board, and the FAA holds a seat on that board. We have a

counterpart advisory committee called the Air Traffic Management

Advisory Committee, and the European Commission holds a seat

on our Air Traffic Management Committee, as well. That is to enhance the communication across the ocean, across the Atlantic

Ocean, on not only their Single Sky activities, but also their consultation board as advised by their new industry consortium, which

are going to be suggesting technologies and operational changes to

their system.

We, in fact, are engaged in discussions with the European Commission in considering whether or not it makes a lot of sense for

us to coordinate and synchronize our modernization activities with
25

them, since most of their larger airplanes, in fact, fly to the United

States and most of our U.S. carriers fly to Europe. So that is a

very, very important focus for us on an international basis.

Mr. SHANE. If I could supplement that, Congressman, because

what you have here is the immediate here and now, and I am looking at talking about some of the things we are planning for the

more distant future.

Europe is engaged in its own next-generation effort, if you will,

which they call SESAME, and we anticipate that we are going to

be in a lot of direct communication with Europe as these two efforts move forward in tandem. There is no question, and both of us

understand this, of course, that we have to have a global system.

Airplanes are flying globally, and they cannot have a proliferation

of black boxes in each aircraft and make any sense to the system.

So we will be talking to them as we move forward even in the

longer term.

Mr. EHLERS. A related question to that. It seems to me they are

proceeding more rapidly and are further ahead on the curve than

we are. My concern would be that they develop a system, and we

end up basically having to purchase the same thing.

The question is, where do our electronics folks in this country

come into this equation?

I am not talking so much about the businesses, but obviously,

the manufacturers are going to be involved, you are going to be involved. If, in fact, we are behind the curve and we are going to end

up buying their products, we once again do damage to the American aerospace industry when, in fact, we should be leading the

curve and trying to help market our products in other countries.

A response to that.

Mr. CHEW. I share exactly your concern. Our goals are not to follow them. Our goal is to maintain the global leadership for the

United States.

Mr. EHLERS. What are you doing to accomplish that?

Mr. CHEW. Well, I think the JPDO is one of those first steps to

establish the vision in order to maintain the direction for our modernization activities because, to date, without that vision, we could,

in fact, fall behind.

Mr. EHLERS. You talk about maintaining your leadership. Are

you sure that you are still the leader? I am not at all sure that you

are.

Mr. SHANE. As a going-in proposition, I wouldn’t accept that we

are behind the curve, Congressman. I know there is a concern

about it, and we should stay on our toes about that. Europe is proceeding ahead. But I think we are still very much leaders, and everything that we are doing right now is for the purpose of maintaining that leadership; working cooperatively with our friends

across the Atlantic, ensuring that we have a coherent system by

the time everything emerges, but not following at any point.

Mr. EHLERS. Well, I hope you are right. I will be watching that

with great interest.

In closing, let me just associate myself with the remarks of my

good friend, Mr. Hayes, who is a far, far better pilot than I could

ever hope to be. But I am just totally befuddled. We have tried everything possible to get Reagan reopened for general aviation. I
26

know that those of you sitting at the table play a small part in that

decision, but let me once again go on the record and say, I think

it is one of the most absurd things we have done, probably equaled

only by the absurdity of requiring DCA passengers inbound and

outbound to sit in their seats for 30 minutes beforehand.

That is so obviously inane. If, in fact, we need that security

measure, then the people departing Dulles should stay in their

seats for at least 20 minutes, because in 10 minutes our plane has

passed over Dulles. Or, in fact, eastbound Dulles passengers probably should sit in their seats for 40 minutes.

And I have to blame you for part of that. Where do these inane

ideas and regulations come from? But particularly keeping the GA

out of Reagan Airport is a real disservice not just to the aviation

industry, but to the government—because a lot of Members, such

as Mr. Hayes, would like to be able to fly their airplanes into

Reagan—but also the disservice to people who do fly into Reagan.

We are costing them an extra hour, hour and a half of time every

time they come in.

It just does not make sense, and I want to add my voice to the

comments that Mr. Hayes made.

One thing I have always liked to do in government is to try to

have government make sense. I am totally frustrated by this because it makes absolutely no sense, from any perspective, including

security. And I just wanted to register my protest once again.

Thank you, Mr. Chairman. Yield back.

Mr. MICA. Thank the gentleman.

Mr. Costello, you had additional questions?

Mr. COSTELLO. I do, Mr. Chairman, just two quick questions. But

before I ask the questions, let me say that I agree with my friend

from Michigan, and Mr. Hayes as well. That is one of the reasons

why Chairman Mica and I, and Mr. Oberstar and Mr. Young have

sent a letter to the FAA and introduced legislation saying that it

is time to change this crazy policy and begin to let general aviation

come back into Reagan.

Quickly, two questions.

Mr. Mead, you heard me ask the question about your testimony

about the current budget level for the capital accounts not being

sustainable. Last week, Mr. Oberstar and I sent a letter to the FAA

expressing our concern that the administration’s cuts to the FAA’s

F&E account, we are concerned that it is going to undermine the

transformation of the air traffic control system. And I want to ask

you specifically: Do you believe that the FAA can successfully

transform the air traffic control system with a $2.4-billion-a-year

capital budget?

Mr. MEAD. The direct answer to that question is no. And the reason why is that they have a portfolio of systems that the FAA is

now buying.

The cash flow requirements of those come very close to the $2.4

billion mark. So if you are going to start new initiatives, you are

going to have to get the money from somewhere, and it isn’t there.

That is not to say there are not some opportunities for savings at

FAA, but you are not going to be able to save your way out of this

problem.
27

Mr. COSTELLO. Mr. Shane, you heard Mr. Mead’s opinion, ′′You

are not going to be able to save your way out of the problem,′′ and

I wonder if you would like to respond.

Mr. SHANE. I hearken back to my reference to the way in which

we are planning for the transformation of the system involving in

a much more coherent way all of the agencies of government that

do aeronautical research. So while we have, for example, only

about $28 million allocated to the JPDO right now—that is $10

million from NASA, $18 million from FAA—if you total up the

amount of money being spent on aviation research among all these

agencies, you get pretty close to a $1.5 billion that would have been

spent anyway. It just would not have been spent in a way that I

am now treating as coherent. When you add that $1.5 billion of research and you focus it in

the way we are doing through the JPDO process, you do begin to

see real possibilities of transformation, notwithstanding the

amount of money that is being made available to the FAA each

year.

Mr. COSTELLO. Mr. Chew, the GAO’s statement that was submitted to the subcommittee indicates that the funding gaps contribute

to the cost schedule and performance problems for eight of your

major system acquisitions; and my question is—specifically to you,

are the annual budget and appropriations process undermining

your modernization efforts, and will it undermine the FAA’s efforts

to transform the system?

Mr. CHEW. I think I would have to answer this way: I think

there are elements of the acquisition process and the appropriations process that make it difficult to sustain constant schedule and

performance over time for many of the projects, because the

projects, particularly the ones that are multiyear and are very

large, and they go on literally for 5, 6, 7, 8, 9 years. Our process

of phasing some of those into useful segments will help.

However, were there to be potential changes to the appropriations process or the way monies are allocated multiyear, that could

serve to help stabilize the kind of funding and the kind of capital

programs that we would need to impose in the system in the years

forward.

Mr. COSTELLO. Mr. Chairman, thank you.

Mr. MICA. Thank you. I have additional questions for Mr. Shane

and Mr. Chew, which I will submit in writing and ask that we keep

the record open for 3 weeks.

Without objection, and Mr. Costello moves, without objection, so

ordered.

I want to thank our witnesses for their participation today,

thank Mr. Chew and Mr. Shane for their service. You have a pretty

daunting task ahead, and you are constrained by some of the resources we provide, so we wish you well.

We hope to get some more specific details on time lines and

costs. I think you heard that. It is sort of a unanimous concern

from the panel today.

Again, we will excuse this panel. Thank you for being with us

and for your responses to our questions.

We will call our second panel of witnesses this morning, which

consists of Mr. John Douglass, President and CEO of Aerospace In-
28

dustries Association; Mr. John Carr, President of the National Air

Traffic Controllers Association; and Mr. Thomas Brantley, President of the Professional Airways Systems Specialists.

I think all of you have been before us before, so you know the

routine. If you have any lengthy documents or statements you

would like to be made part of the record, please request that

through the Chair.

TESTIMONY OF JOHN DOUGLASS, PRESIDENT AND CEO, AEROSPACE INDUSTRIES ASSOCIATION; JOHN CARR, PRESIDENT,

NATIONAL AIR TRAFFIC CONTROLLERS ASSOCIATION; AND

THOMAS BRANTLEY, PRESIDENT, PROFESSIONAL AIRWAYS

SYSTEMS SPECIALISTS

Mr. MICA. Welcome again, gentlemen, and let me first recognize

Mr. John Douglass, President and CEO of Aerospace Industries,

and then we will hear from our other two witnesses.

Mr. Douglass, welcome.

Mr. DOUGLASS. Thank you, Mr. Chairman.

First of all, let me begin by thanking you for your leadership, Mr.

Chairman, as we have gotten into this issue, and for calling this

important hearing today. I ask that my full statement be included

in the record.

Mr. MICA. Without objection, so ordered.

Mr. DOUGLASS. I have several key points that I would like to

make that I would summarize from my written statement. My first

and most important point is that the successful implementation of

the Next Generation Air Transportation System will not be possible

without the clear and consistent support of the legislative and executive branches of our government. The complexity and scope of this

effort cannot be overstated.

In regards to the legislative branch, I am referring specifically to

the men and women who make up this subcommittee. Without

your leadership, this project will languish in a manner that will ultimately do harm to our national security and to our economy.

The current U.S. Air transportation system, designed in the

1960s, is rapidly growing obsolete. Today, the system is stretched

to its limit. It is clear it cannot handle the dramatic increases in

traffic projected for the years ahead. The FAA and industry estimate, for example, a tripling of air passengers by 2025. The impact

of this obsolescence is already costly. According to the Air Transport Association, delays due to equipment, runways, volume, and

weather cost the airline industry $6.2 billion last year alone, and

have been estimated to cost the economy as much as $30 billion a

year by the President’s Commission on the Future of the Aerospace

Industry. It is clear that the time for government action to put a

new system in place is now.

My second point, Mr. Chairman, is that the leadership of this

committee has gotten us off to a good start on the development of

a new ATM system. This committee showed its leadership by requiring the administration to set up a joint planning and development office that can tap into the combined technological resources

of the various departments of the Federal Government. This was

one of the recommendations of the President’s Commission, and

you promptly implemented it.
29

The JPDO, although still in its early stages, clearly shows promise. With the creation of its eight integrated product teams, or

IPTs, the organization has established the necessary framework to

allow for appropriate technical input into the air transportation development process from across the government. The access to this

technology is critical.

Furthermore, with the creation of the Next Generation Air

Transportation System Institute, or NGATS, via AIA’s affiliate, the

National Center for Advanced Technologies, the JPDO has fulfilled

an Aerospace Commission recommendation to make industry a

partner in shaping the architecture of a modernized, integrated, air

traffic management system. This will be critical for making sure

that the architecture is one that will last a long time. And it is also

going to be critical, Mr. Chairman, to getting industry investment

in the system.

These mechanisms will allow the JPDO to develop an adaptable,

widely accepted plan that increases the security, safety, and speed

of air travel for all Americans. To underscore the need for an

adaptable and scalable system, one only has to open their mind to

the volume of traditional air traffic the system will have to handle.

And the new system is likely to emerge in the next 20 years. Reuseable space vehicles, unpiloted vehicles of all types, air taxis, advanced vertical lift concepts, new kinds of recreational air vehicles,

and who knows what else will enter the system during this period.

My third point addresses the need for a reliable and consistent

funding stream for this new program. For the Next Generation

Transportation System to materialize, we must have clear direction

from this committee, the Congress, and the administration that

modernization of our air traffic system is a national priority. In

particular, we must ensure that funding for NASA, the Department

of Defense, FAA, and the other agencies required for the development and deployment of this new system remains a national priority through what we know will be a number of Congresses and future administrations.

Our European competitors understand these facts and are moving ahead with the idea of deploying their new system ahead of

ours and thus becoming a new global standard. Mr. Ehlers, this is

the point you were making a few minutes ago.

At the end of March, the Advisory Council for Aeronautics Research in Europe released a revised blueprint for improved management of the European air traffic management system and called

for a $221 billion funding for this program over the next 20 years

on five highly focused projects. At the same time, NASA funding

for aeronautics programs here in the United States is moving in exactly the opposite direction, with proposed cuts of approximately 25

percent of its total aeronautics budget over the next 4 years.

In closing my opening statement, Mr. Chairman, let me return

to my first point: leadership. Due to the complexity of this task and

the agencies involved, your leadership will be essential. Congress’

role is always important. In this venture, it is going to be crucial.

I will be glad to answer any questions, sir, at the appropriate

time.

Mr. MICA. Thank you, and we will hold questions. We will try to

hear our next two witnesses before we go and vote.
30

Mr. Carr.

Mr. CARR. Mr. Chairman and members of the subcommittee,

thank you for the opportunity to testify today as you review the

ATO and the JPDO. I want to concentrate my remarks, if you will,

on the ATO, and ask that my complete written statement, as well

as the JPDO, be made a part of the record.

Mr. MICA. Your entire statement will be part of the record.

Mr. CARR. Thank you, sir.

The ATO has made major strides in structural change. However,

from inside of the ATO organization we have found significant barriers to continued success. We believe there is still an opportunity

to correct these fundamental problems before they become institutionalized, and I am very pleased to have the opportunity to share

our concerns with you.

The COO for any major organization is responsible for managing

the day-to-day operations of that organization. I believe that that

is occurring today on the acquisition side of the ATO. However,

when it comes to matters relating to personnel, that has not occurred.

For those of us working inside the FAA, it seems that the COO

is subordinate to the Human Resource Management staff when it

comes to personnel matters. Considering that more than 36,000

FAA employees, or 76 percent of the FAA workforce, is in the ATO,

no rational organizational structure would keep Human Resources

outside of the new organization.

The current relationship between ATO and Human Resources

creates excessive bureaucracy for even the simplest of tasks. The

problem is structural, but the solution is not difficult. Congress

took direct action in clarifying those lines of authority by making

the COO subordinate only to the FAA Administrator. I do not believe it was the intent of the Congress to make the COO subordinate to the Assistant Administrator for Human Resource Management in every matter regarding personnel.

As an example, the current air traffic controllers collective bargaining agreement was signed by FAA Administrator Blakey in December of 2003, and by the Agency’s own estimates, currently saves

them $40 million. If this agreement is reopened this summer, the

chief negotiator will not be anyone from within the COO’s chain of

command. It will be someone from FAA human relations. Since this

collective bargaining agreement deals primarily with technical

issues related to the day-to-day operations of our Nation’s air traffic control facilities, this persistent confusion in the lines of authority will increase the likelihood that these negotiations will take

longer than necessary and lead to an agreement that does not even

meet the needs of those charged with administering it.

The biggest challenge, we believe, facing the ATO in the immediate future is addressing the staffing crisis that you have all

heard about and spoken about. If the ATO is truly committed to

ensuring that the right people are in the right place, it is essential

to eliminate regional or service area boundaries that place artificial

caps on transfers.

FAA data will tell you that air traffic controllers who transfer to

higher-level facilities qualify in half as much time as new hires,

particularly in the terminal option. And there is currently a consid-
31

erable willingness and desire within the existing controller workforce to transfer to fill vacancies at short-staffed facilities, but

many of these transfers have been blocked due to artificial bureaucratic barriers.

We have offered the ATO an innovative nationwide bidding process to allow the FAA to identify facilities where their need is greatest and to prioritize those transfers for maximum efficiency nationwide. This proposal does nothing more complicated than centralizing the bidding process to eliminate duplication of work across regional boundaries, while it allows the FAA to better manage their

staffing on a national level. To date, neither the FAA nor the ATO

has been able to take advantage of this simple idea.

Another key area of inefficiency lies in the administration of

training. The FAA has determined that the FAA Academy in Oklahoma City is no longer used as an applicant screening program. As

NATCA testified before this committee last year, students who

have graduated from FAA-approved Collegiate Training Initiative

schools need not attend the FAA Academy for training purposes.

There is absolutely no reason for either the FAA or the student to

incur the delay and the expense of this additional training.

I have personally visited CTI schools. I visited the University of

North Dakota. I visited Embry-Riddle Aeronautical University, and

I can tell you unequivocally that we would gratefully accept any of

their graduates directly into any of our air traffic control facilities.

These schools do a remarkable job. If CTI students are able to bypass academy training, the FAA could substantially revise the cost

that they gave you in their workforce plan and reprogram those

funds to accelerate facility-specific training. In fact, we believe the

Agency could save upwards of $45 million per year by this zero-cost

policy decision alone.

NATCA has always been willing to contribute our efforts to solving problems such as these. And while we continue to work within

the FAA and the ATO to make the system as efficient as possible,

no discussion of the ATO would be complete without addressing the

emerging funding debate.

We are very concerned that the current rhetoric is preventing a

factual discussion of the issue. I have submitted NATCA’s trust

fund research with my written testimony, but I want to address a

few key points.

First, it is true the trust fund revenue did experience a temporary and quite predictable period of decline from 2000 to 2003.

However, we saw those revenues rebound in 2004. It serves no useful purpose to cloud the issue by discussing trust fund balances in

decline or policy choices or framing the issue in terms of revenue

per flight.

To be perfectly honest with you, the cost of providing air traffic

control service does not fluctuate on a per-flight basis. Costs are

relatively constant until you reach the point of sector saturation,

when you must open additional sectors or personnel are needed to

expand capacity.

Projected growth in trust fund revenues currently outpaces the

projected growth in operations costs. These are not our numbers,

they come from the FAA, they come from the Inspector General,

and they come from the GAO. Trust fund revenues are increasing
32

and growth is projected to continue. These are the facts. If we are

to discuss changes to tax structures or how revenues are distributed, it is essential that we consider substantive data and not the

rhetoric that continues to distract us from this important policy

discussion.

We have grave concerns with the headlong rush into changing

decades-old funding mechanisms. We believe the safety of our skies

is a sacred public trust, and it is the role of our elected officials to

protect that trust.

I have heard it said that our current funding system is the worst

funding system in the world, with the possible exception of every

other funding system in use. That, by the way, has also been said

about our current system of government.

In transforming the FAA, this committee has created a sound

statutory framework and a sound financial vehicle. We applaud

your efforts to continue to maintain vigilant oversight, to promote

the transformation needed and to continue to provide the American

people with the air traffic control system that leads the world.

That concludes my statement, and I will be happy to answer any

questions you may have.

Mr. MICA. Thank you.

We will try to hear now from Thomas Brantley.

Mr. BRANTLEY. Thank you. Mr. Chairman, Congressman

Costello, and members of the subcommittee, thank you for inviting

us to testify today on the ATO and the JPDO.

The ATO was designed to bring a cost and performance management approach to the FAA. PASS strongly supports efforts aimed

at increasing the FAA’s focus on efficiency and effectiveness, and

we believe that this must not be done at the expense of safety.

When contemplating changes of this magnitude, the FAA should

build on its strengths and look at sweeping changes where it is

weakest.

For the ATO to be successful, the Agency must hire enough technical employees to safely maintain and certify the national air

space system. The Agency is currently over 400 below the minimum technical employee staffing level of 6,100, which the FAA

agreed was the absolute minimum.

Because of inadequate staffing, these employees are being forced

to work longer hours and accumulate more overtime. Instead of

hiring additional employees, however, the FAA is turning away

from a maintenance and certification program, that has been in

place for 30 years and has been a key element in maintaining the

safest and most reliable air transportation system in the world.

The new concept is to move away from a proactive maintenance

philosophy towards a reactive one. Among the major consequences

will be more unplanned outages and longer recovery times when

equipment fails.

Several years ago, the FAA attempted this approach under the

corporate maintenance philosophy in Alaska, with less than favorable results. Under CMP, as with the new ATO concept, maintenance was eliminated, certification intervals were extended and

staffing was reduced. The eventual rise in operational problems resulted in an increase in work beyond the capacity of the few re-
33

maining technicians. In PASS’s view, if implemented nationally,

the results will be the same as what occurred in Alaska.

In addition, PASS believes that the future of the ATO is directly

tied to adequate training of the technical workforce. Both the FAA

and the Congress agreed that the most efficient method for training of FAA employees was to employ a decentralized model rather

than the centralized training method that involves sending employees to Oklahoma City. Unfortunately, the FAA has since decided to

return to the inefficient centralized approach.

A focus on decentralized and on-the-job training would not only

reduce the impact on operations caused by requiring employees to

be away from facilities, but it would also save on the costs associated with a centralized training model, such as travel, per diem,

and overtime. PASS believes the Agency can restructure and improve efficiency if it focuses on providing the services needed by

users of the NAS.

Among the FAA’s greatest strengths are its safety record and the

availability of services to customers. Combine this reputation for

safety and service with a skilled and dedicated workforce, and you

have the United States aviation system, the safest system in the

world.

PASS is interested in working closely with the FAA to realize a

successful future for the Agency that is more cost effective and capable, while continuing to provide the highest level of safety and

service to the American flying public.

Thank you for allowing me to present our views, and I would be

happy to answer any questions.

Mr. MICA. Thank you. We have had a chance to hear all three

witnesses from this panel. I want to thank you for your testimony.

We are not going to ask you questions, because I have just been

handed a note that we have three votes, and some parliamentary

antics coming up, that will probably take about an hour. So what

we are going to do is the same thing as we offered with the last

panel, which is to submit questions in writing. We are leaving the

record open, and your responses will be made a part of the record.

So there being no further business before this subcommittee, we

thank you again for participating. This hearing is adjourned.

[Whereupon, at 11:53 a.m., the subcommittee was adjourned.]
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