National Airspace System: Progress and Ongoing Challenges for the Air Traffic Organization
Published: 2005-04-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress's formation of the Air Traffic Organization (ATO) and the Joint Planning and Development Office (JPDO), both within the Federal Aviation Administration (FAA), represent the latest efforts to address the monumental challenges of modernizing the national airspace system (NAS) during the first quarter of the twenty-first century. For more than two decades, FAA has been working to modernize the air traffic control (ATC) system, but projects have repeatedly missed cost, schedule, and performance targets. Consequently, ATC modernization has been on GAO's list of high-risk federal programs since 1995. The ATO's focus is on a rolling 10- year outlook to operate and modernize the NAS. By contrast, the JPDO's vision is longer term, focused on coordinating the research efforts of diverse federal agencies to achieve a common goal of meeting potential air traffic demands in 2025. This statement discusses (1) GAO's assessment of the ATO's efforts to date in addressing some of the key challenges for the ATC modernization program and (2) challenges that lie ahead for the ATO and options that it could consider in addressing the needs of the NAS over the next decade, as well as longer-term needs defined by the JPDO.
section_title: What GAO Found
paragraphs: The ATO is taking a number of positive steps to address the legacy cost, schedule, and performance problems that have affected the ATC modernization program for the past two decades. For example, the ATO is beginning to involve stakeholders early and throughout a system's development; has demonstrated a willingness to cut major acquisitions that are not meeting their goals, even after investing significant resources; and has improved its management of information technology. However, the ATO does not use a knowledge-based approach to acquisitions, characteristic of best commercial and federal practices, which would help avoid cost, schedule, and performance problems. Additionally, the ATO has used a process improvement model in several software-intensive acquisitions. However, because the ATO has not mandated use of the model in all such acquisitions, it risks taking a major step backwards in its capabilities for ATC systems and software. Finally, the ATO is taking steps to change the culture of its component organizations by, for example, replacing a personality-driven culture with one that is more sustainable and stable. Continued management attention in this area will be important to the organization's success. The ATO faces the challenges of (1) modernizing and expanding NAS capacity to accommodate an expected 25-percent increase in the volume of air traffic over the next 10 years, (2) hiring thousands of air traffic controllers to replace those expected to retire over the next decade, (3) working with the new JPDO to coordinate the research efforts of diverse federal agencies to transform the NAS to meet potential air travel needs of 2025, and (4) addressing aging infrastructure. To fund its major system acquisitions through fiscal year 2009 while remaining within projected budget targets, the ATO has substantially reduced funding for other areas. However, the ATO does not provide administration and congressional decisionmakers with information about the impact of the reduced funding on NAS modernization. To deal with these challenges, some aviation experts suggested options that the ATO could consider, including contracting out more services and incurring debt to obtain multiyear funding for capital investments (an option requiring legislative change). Our work and some experts also suggest clarifying budget submissions to show decisionmakers how constrained budgets affect NAS modernization and how the ATO is working to live within its means.

section_title: Letter
paragraphs: We appreciate the opportunity to participate in today’s hearing to discuss  the implementation of the Federal Aviation Administration’s (FAA) Air  Traffic Organization (ATO) and the new Joint Planning and Development  Office (JPDO). Both organizations represent the latest efforts of Congress  and FAA to address the monumental challenges of transforming the  national airspace system (NAS) during the first quarter of the twenty-first  century. As key organizations for determining how to safely accommodate  projected increases in air traffic demand, the ATO and JPDO are distinct  yet complementary. The ATO’s focus is on a rolling 10-year outlook to  operate and modernize the NAS. By contrast, the JPDO’s focus is longer  term—determining how the NAS will meet possible air traffic demands in  2025.
As brief background: in 1981, over two decades ago, FAA began what it  initially proposed as a 10-year program to replace and upgrade the NAS’s  facilities and equipment. However, systemic management problems  associated with ATC system acquisitions and organizational culture  resulted in cost growth, schedule slippages, and performance shortfalls,  leading us to classify FAA’s ATC modernization program as high risk in  1995. In 2000, the administration issued an executive order that called for  a performance-based air traffic organization to, among other things,  improve the provision of air traffic services and accelerate modernization  efforts, and Congress passed legislation that established an oversight body  and a chief operating officer. FAA hired a chief operating officer in 2003  and in February 2004, formed the ATO, merging its former acquisitions  and air traffic operations offices, to manage FAA’s air traffic control  investments and operations. Congress also directed the Secretary of  Transportation to establish the JPDO to develop a “next generation”  transportation plan to meet air traffic demands by 2025. Located within  FAA and reporting to the FAA Administrator, the JPDO has responsibility  for coordinating the research efforts of several diverse federal agencies to  support the goals of the next-generation plan.
My statement today will focus on two key questions: First, what is GAO’s  assessment of the ATO’s efforts to date in addressing some of the key  challenges for the ATC modernization program? Second, what challenges  lie ahead for the ATO, and what options could it consider in addressing the  needs of the NAS over the next decade, as well as the longer-term needs  defined by the JPDO? My statement is based on recently completed and  ongoing studies for this committee and for the House Committee on  Government Reform. We obtained information from FAA officials, an  international panel of aviation experts, and relevant stakeholders on the  ATO’s prospects for addressing the systemic management problems on  which we and others have reported. (See the list of related products at the  end of this statement). Later this year, we expect to issue a detailed report  that will address these and other related issues. We also obtained  information and perspectives from the JPDO and other knowledgeable  sources on its mission and plans for achieving that mission. We performed  our work in accordance with generally accepted government auditing  standards.
The ATO is taking a number of positive steps to address legacy challenges  in system acquisitions and organizational culture that have affected the  ATC modernization program for the past two decades. Our work indicates  that four interrelated factors have contributed to the legacy challenges in  meeting system acquisitions’ cost, schedule, and performance targets: (1)  funding acquisitions at lower levels than called for in agency planning  documents, (2) adding requirements and/or unplanned work, (3)  underestimating the complexity of software development, and (4) not  sufficiently involving stakeholders throughout system development.  Among the positive steps it is taking, the ATO is beginning to include  stakeholders in all phases of system development, so that they can provide  input in response to technical or financial developments. The ATO has  also demonstrated a willingness to cut some major acquisitions that are  not meeting their goals, even after investment of significant resources. And  it has improved its management of information technology investments  and software-intensive acquisitions. However, the ATO does not use a  knowledge-based approach to system acquisitions, characteristic of best  commercial practices for managing commercial and Department of  Defense (DOD) product developments, which would help avoid cost,  schedule, and performance problems. Additionally, because the ATO has  not mandated use of a process improvement model for all software- intensive acquisitions, it risks taking a major step backwards in its  capabilities for ATC systems and software. Finally, the ATO has  recognized the fundamental importance of changing its organizational  culture; it has been working on altering its leadership model and replacing  a personality-driven culture—one that changes as leadership changes— with one that is sustainable and stable. Continued improvement and  management attention will be crucial if the organization’s efforts are to  succeed.
The ATO’s key challenges include modernizing and increasing NAS  capacity to accommodate a 25-percent increase in air traffic operations by  2015, hiring thousands of air traffic controllers to replace those expected  to retire in the next decade, working with the new JPDO to ensure that  research programs led by diverse agencies support national goals, and  repairing or replacing facilities believed to be beyond their useful lives.  The ATO will be further challenged to accomplish these tasks while  remaining within the administration’s future budget targets, which are  lower than those of recent years. To fund its major system acquisitions  while remaining within the budget targets, the ATO has eliminated planned  funding to start new projects and substantially reduced planned funding  for other areas. However, when forwarding its budget submission for  administration and congressional review, the ATO provides no detail on  the impact of the planned funding reductions on ATC or NAS  modernization. Aviation experts and our work have identified options for  the ATO to increase its chances of success. First, some aviation experts  proposed that the ATO evaluate its experience in contracting out flight  service stations and, if positive, consider contracting out other services.  Second, some experts suggested that the ATO be allowed to incur debt so  that it could obtain multiyear funding for capital investments, an option  that would require a legislative change. While we have consistently  maintained that Congress should control new funding sources through the  budget and appropriations processes, these experts believed that giving  the ATO access to multiyear funds for capital investments would increase  its flexibility, thereby allowing it to modernize systems more efficiently.  Third, our preliminary work shows, and some experts agreed, that the  ATO should provide the administration and Congress with detailed  information in its budget submissions about the impact of reduced  budgets on both ATC and NAS modernization. To do so, the ATO should  explicitly identify the trade-offs it is making to reach administration  budget targets, highlighting those programs slated for increased funding  and those slated for reduced funding.
subsections: section_title: The ATO Has Made Progress in Addressing Key Challenges and Needs to Continue
paragraphs: The ATO inherited a decades-long legacy of cost, schedule, and  performance problems in the ATC modernization program. We found that  four interrelated factors contributed to these problems. The ATO has  taken a number of positive steps to address these issues through  improvements in its management of information technology investments  and software-intensive acquisitions, but there is room for further progress.  Additionally, the ATO recognizes that changing its organizational culture is  a key challenge underlying its transition to a highly effective, performance- based organization. Options are available to help the ATO address these  challenges.
subsections: section_title: Four Interrelated Factors Contributed to Acquisitions Missing Cost, Schedule, and Performance Targets
paragraphs: Our research shows that four common factors emerged that contributed to  12 of FAA’s 16 major systems missing their original cost, schedule, or  performance targets. (See table 1.) Appendix I provides the full name and  a description of each of the 16 systems. Appendix II shows changes in cost  and schedule for these systems.
According to FAA officials, funding gaps contributed to problems in one or  more of three areas—cost, schedule, and performance—for 8 of the 12  system acquisitions. Most major acquisition programs establish a baseline  that describes the programs’ estimated annual costs, planned schedules,  and performance expectations, which is approved by FAA’s Joint  Resources Council—the agency’s executive body responsible for  approving and overseeing major system acquisitions. The estimated cost  for a given year assumes that the program received all funding for prior  fiscal years as described in the baseline. In practice, however, this is not  always the case. For example, when FAA’s budget level does not allow all  system acquisitions to be fully funded at the levels approved in their  baselines, FAA may elect to fully fund higher-priority acquisitions and  provide less funding for lower-priority acquisitions than called for in their  baselines. The ASR-11 acquisition, a digital radar system, illustrates how  reduced funding has resulted in cost growth and schedule delays. FAA  officials stated that because of funding reductions and reprogramming, the  program received $46.45 million less than requested for fiscal years 2004  and 2005. According to FAA officials, total costs may escalate and  schedules may slip under such circumstances.
The stories behind cost and schedule increases for WAAS—a satellite  navigation system—and STARS—new controller and maintenance  workstations—demonstrate how the remaining three contributing factors  can interact. For WAAS, FAA underestimated the complexity of the  software that would be needed to support this system when it reduced, by  3 years, its plans to develop, test, and commission the system. FAA then  tried to accomplish these tasks in 28 months, even though the software  development alone was originally expected to take from 24 to 28 months.  In retrospect, FAA acknowledged that the agency’s in-house technical  expertise was not sufficient to address WAAS’s technical challenges,  particularly the need to warn pilots in a timely manner when a system may  be giving them potentially misleading and therefore hazardous  information. FAA’s efforts to resolve this issue resulted in unplanned  work, which contributed to a $1.5 billion increase over the 1994 baseline  costs and to a 6-year delay in commissioning the system. According to  FAA, adding the cost of satellite leases, formerly listed as an operating  cost, to the capital cost and adding 6 years to the program’s life cycle also  contributed to increased costs.
For STARS, a joint FAA/DOD acquisition, not adequately including  stakeholders in development led to unplanned work, cost growth,  schedule delays, and reduced deployment. Because the program’s  aggressive development schedule allowed for only limited evaluation by  controllers and maintenance technicians, FAA and the contractor failed to  recognize human-factors concerns that these stakeholders later identified.   Restructuring the contract to make up for these oversights contributed to  $500 million in cost growth, a 7-year schedule delay, and a reduction in  deployment from 172 to 47 facilities.
Three of the major ATC system acquisitions are currently operating within  their original cost, schedule, and performance targets, but have exhibited  symptoms of past problems, such as requirements growth or  underestimating the complexity of software requirements. These  acquisitions include a system for processing flight data for oceanic flights  (ATOP), a communications system (gateway) for controlling high-altitude  traffic at 20 en route facilities (ECG), and a replacement for the primary  computer system used for controlling air traffic (ERAM). Despite  successes to date, these acquisition programs will require sustained  management attention to help ensure that they remain within their cost,  schedule, and performance targets.
section_title: ATO Is Taking Some Positive Steps to Address Legacy Acquisition Problems
paragraphs: The ATO has already taken some steps to control the legacy problems  identified with the ATC modernization program. For example, it has  begun to include stakeholders throughout system development, so that  they can provide input in response to technical or financial developments.  Reviews of a precision-landing system augmented by satellites (LAAS), a  digital e-mail-type communication system between controllers and pilots  (CPDLC), and the next generation air/ground communication system  (NEXCOM)—each of which had cost, schedule, and performance  problems to varying degrees—contributed to the ATO’s reducing or  eliminating funding for these systems in FAA’s budget request for fiscal  year 2005. Additionally, the ATO has established collaborative teams of  technical experts and ATC system users, reorganized air traffic services  and the research and acquisition organization along functional lines of  business to bring stakeholders together and integrate goals, rewarded  cooperation by linking investments to operations, started preparing  agency planning documents in a format consistent with that prescribed by  the Office of Management and Budget, begun implementing portions of a  cost accounting system, and reduced layers of management from 11 to 7 to  help address the hierarchical nature of the organization.
These are positive steps. We believe the ATO should continue the phased  approach to acquiring new systems, and involving stakeholders  throughout a system’s development should help avoid the types of  problems that led to cost growth and delays for STARS. Additionally, we  view the decision to cut major systems as an indication that the ATO is  willing to make difficult decisions to suspend major ATC system  acquisitions that are not achieving their intended goals—even after a  substantial investment of agency resources.
FAA has made progress in addressing long-standing problems with  managing the risks associated with acquiring major ATC systems, many of  which are software-intensive, but further improvement is possible. For  example, FAA has established some discipline for acquiring these systems  through the Acquisition Management System that it began implementing  after Congress exempted the agency from federal acquisition regulations  in 1995. Also, FAA has begun basing funding decisions for system  acquisitions, in part, on their contribution to reducing the agency’s  operating costs while maintaining safety. Currently, FTI, a new  telecommunications system, is the only acquisition that will reduce FAA’s  operating costs. Most of FAA’s major system acquisitions are aimed at  increasing NAS capacity and delivering benefits to users.
However, as we reported last fall, the Acquisition Management System still  does not ensure that FAA uses a knowledge-based approach to acquisition  that is characteristic of the best procurement practices used in  commercial entities or by DOD. Capturing specific knowledge and using it  to determine whether a product has reached a level of development  (product maturity) sufficient to demonstrate its readiness to move forward  in the acquisition process helps to avoid cost overruns, schedule slips, and  performance shortfalls that can occur if decision-makers commit to a  system design before acquiring critical technology, design, or  manufacturing knowledge.
FAA has reported that it met its annual acquisition performance goal for  fiscal year 2004—to meet 80 percent of designated milestones and  maintain 80 percent of critical program costs within 10 percent of the  budget, as published in its Capital Investment Plan. In our opinion, having  and meeting such performance goals is commendable, but it is important  to note that these goals are updated program milestones and cost targets,  not those set at the program’s inception. Consequently, they do not  provide a consistent benchmark for assessing progress over time.  Moreover, as indicators of annual progress, they cannot be used in  isolation to measure progress in meeting cost and schedule goals over the  life of an acquisition. Finally, given the problems FAA has had in acquiring  major ATC systems for over two decades, it is too soon to tell whether  meeting these annual performance goals will ultimately improve the  agency’s ability to deliver system acquisitions as promised.
FAA has made considerable progress in managing its information  technology investments. FAA recently informed us that it has taken a  number of steps aimed at achieving a higher maturity level, including  establishing service-level mission need statements and service-level  reviews, which address operational systems to ensure they are achieving  the expected level of performance. While these steps could resolve some  of the deficiencies that we previously reported, we have not yet performed  our own evaluation of these steps. FAA could realize considerable savings  if these reviews result in the discontinuation of some investments, since  operating systems beyond their second year of service accounted for 37  percent of FAA’s total investment in information technology in fiscal year  2004.
Finally, FAA has made progress in improving its process for acquiring  software-intensive systems. The quality of these systems and software,  which are essential to FAA’s ATC modernization program, depends on the  value and maturity of the process used to acquire, develop, manage, and  maintain them. In response to our previous recommendations, FAA  developed an FAA-integrated capability maturity model (iCMM). Since  FAA implemented the model, a growing number of system acquisitions  have adopted the model, and its use has paid off in enhanced productivity,  higher quality, greater ability to predict schedules and resources, better  morale, and improved communication and teamwork. However, while  FAA has encouraged process improvement through iCMM, use of the  model has remained voluntary, and the agency’s future commitment to this  initiative is not certain. Unless FAA demonstrates a strong commitment to  process improvement and establishes a consistent, institutional approach  to implementing and evaluating this process improvement, the agency  risks taking a major step backwards in its capabilities for ATC systems and  software.
FAA has also continued to develop an enterprise architecture—a blueprint  of the agency’s current and target operations and infrastructure. However,  this architecture is still not complete and compliance is not yet enforced.  We have ongoing work evaluating what the agency needs to do to develop  and enforce its enterprise architecture.
section_title: ATO Recognizes the Importance of Organizational Culture for Facilitating Transition
paragraphs: Recognizing that cultural factors can play a critical role in an  organization’s success, the ATO has initiated organizational changes that  are designed to create a foundation for cultural change in the acquisitions  and operations workforces, which FAA combined to form the new  organization. For example, the ATO is giving high priority to changing its  leadership model by linking top management more closely to operations in  the field and by replacing “command and control” with communication  across organizational levels. In the past, according to the chief operating  officer, FAA’s management culture was “intensely hierarchical, risk  averse,” and “reactionary.” But now, he said, FAA is attempting to foster  “results-focused, proactive and innovative behavior.” Changing the  agency’s leadership model is also designed, he said, to replace a  “personality-driven culture” with a viable, stable, and sustainable  organization that can make rational decisions that transcend changes in  leadership.
To further support cultural change, the ATO is emphasizing accountability  and other core values. For example, it is holding managers accountable for  managing their budgets and in fiscal year 2006, it plans to include financial  management among the pay-for-performance criteria for its managers.  Additionally, the ATO is using the results of the most recent Employee  Attitude Survey to set a baseline for cultural improvement in five core  areas—(1) integrity and honesty, (2) accountability and responsibility, (3)  commitment to excellence, (4) commitment to people, and (5) fiscal  responsibility. FAA’s Civil Aerospace Medical Institute analyzed the survey  results by grouping three to seven survey items under each of these areas.  For example, FAA placed the survey item “We are encouraged to express  our concerns openly” with four other items under the Integrity and  Honesty core value. For many items, across all core values, fewer than 40  percent of ATO employees indicated agreement or strong agreement. We  are comparing the results of FAA’s Employee Attitude Survey with our  1996 findings identifying culture as a problem in the acquisition workforce,  which is now within the ATO. We plan to report our findings later this  year.
It is incumbent upon the ATO, as it moves forward, to follow through with  its commitment to transform the culture of its component organizations.  Our studies suggest that transformations need focused, full-time attention  from a dedicated team. The team must have vested authority and  resources from top management to set priorities, make timely decisions,  and move quickly to implement decisions. Such a team provides a visible  signal that the transition is being undertaken with the utmost seriousness  and commitment. Having a dedicated transition team is just one of several  practices that we have identified, such as setting implementation goals and  a timeline and establishing a communication strategy, that are key to  successful mergers and organizational transformations. (See app. III for a  complete list.)
section_title: To Address the Challenges of Modernizing and Expanding the NAS While Living within Its Means, the ATO Has a Number of Options
paragraphs: The ATO faces multiple challenges: (1) expanding and modernizing the  NAS to accommodate an expected 25-percent increase in the volume of air  traffic over the next 10 years; (2) hiring thousands of air traffic controllers  to replace those expected to retire over the next decade; (3) working with  the new JPDO to coordinate the research efforts of diverse federal  agencies to transform the NAS to meet potential air travel needs of 2025;  and (4) addressing aging infrastructure. The ATO faces the additional  challenge of accomplishing these tasks with less funding than it has  received in the past. A number of options are available for the ATO to  consider in addressing these challenges.
The ATO plans to continue modernizing and expanding the capacity of the  NAS to accommodate an expected 25-percent increase in air traffic volume  over the next 10 years. Even after cuts to the LAAS, CPDLC, and NEXCOM  budgets, the remaining major ATC systems would consume $4.4 billion, or  45 percent of FAA’s total planned funding (excluding personnel and travel)  for fiscal years 2005 through 2009. The funding situation is further  exacerbated by the ATO’s need to hire and train thousands of air traffic  controllers to replace those reaching retirement eligibility over the next  decade. (See fig. 1.)
Additionally, as the ATO works with the JPDO to address the NAS’s  potential needs 20 years into the future, it will need to ensure linkage to  and continuity with its own 10-year plans. The JPDO is responsible for  developing a national vision and plan that will prepare the NAS to meet an  assumed tripling of air traffic demand by 2025. In its first report, in  December 2004, the JPDO concluded that meeting this demand would  require a complete transformation of the NAS. It also predicted that fossil  fuels would become less available and more costly, and global travel and  commerce would become more interdependent. As one senior JPDO  official suggested, if we fail to consider these issues now, future  passengers may not be able to fly to their destinations in a single day and  overnight package delivery may become a thing of the past. While the  JPDO’s plan did not discuss costs, the Vision 100—Century of Aviation  Reauthorization Act authorized $50 million annually for fiscal years 2004  through 2010 for the JPDO.
The ATO will be challenged to harness the efforts of the diverse agencies  that participate in the JDPO, including DOD, the Department of Homeland  Security and the National Aeronautics and Space Administration, and to  align these efforts with the goals of the national plan. Although a relatively  new organization, the JPDO has defined eight interdependent strategies to  guide its work towards transforming the NAS and has established  integrated product teams, each led by a participating federal agency, to  address each of these strategies. These agencies have historically “gone  their own way,” with little thought given to coordinating with other  agencies and moving toward a common goal. Aviation experts told us that  within FAA, there is resistance to having outside organizations, rather than  FAA, develop new procedures and systems for FAA to approve and  institute. This will have to change under the JPDO paradigm.
Additionally, the ATO has cited the need to renew its aging infrastructure.  The ATO estimates that such renewal will require an annual investment of  $2.5 billion, assuming a $30-billion value of its assets and 7- to 12-year  useful lives. According to the ATO, much of its physical infrastructure,  including the buildings and towers that house costly ATC systems, is over  30 years old on average. (See table 2.)
subsections: section_title: Continued Reductions in Funding Levels Will Challenge the ATO’s Ability to Live within Its Means
paragraphs: Because Office of Management and Budget funding targets for fiscal years  2005 through 2009 are lower than those for recent fiscal years, the chief  operating officer predicts a cumulative $5-billion gap in operations funding  and a $3.2-billion gap in capital funding. He said that, in effect, remaining  within these lower targets would require a 21-percent reduction in costs  and a 9-percent increase in productivity. The chief operating officer also  predicts that currently planned cost-saving measures would produce only  half of the needed savings. One aviation expert predicted that the gaps  would more likely have a gradual effect, rather than an immediately  catastrophic effect, manifested by a slow but sure increase in air traffic  delays.
To provide the $4.4 billion needed for its major system acquisitions while  remaining within its budget targets through fiscal year 2009, the ATO has  made significant cuts elsewhere in its capital funding plans. For example,  the ATO eliminated all of the $1.4 billion that it had set aside for what it  calls the “architecture segment.” (See fig. 2.) These funds would have been  used to perform about 2 years’ worth of early research on new programs  before they are mature enough to receive formal Joint Resources Council  approval. The ATO also made significant reductions in planned  investments for facilities—an action that runs counter to its reported need  to refurbish or replace its physical infrastructure.
Such reductions reflect the end result of difficult decisions about which  programs to fund and which to cut in order to remain within the  administration’s budget targets. However, when forwarding its budget  submission for administration and congressional review, the ATO does not  highlight the programs slated for increased or reduced funding and does  not identify the impact of these decisions on ATC and NAS modernization.  Such information would make clear how constrained budgets will affect  NAS modernization and how the ATO is working to live within its means.
section_title: The ATO Has Options to Increase Its Prospects for Success
paragraphs: Contracting out more services and proposing legislation to provide  borrowing authority are two options proposed by aviation experts to  improve the ATO’s chances of success. A third option, providing more  clarity in budget submissions, is supported by our work and some experts.
First, some members of our expert panel suggested that the analysis  performed on contracting out flight service stations could be extended to  other functions, such as oceanic or en route air traffic control, or  nighttime operations. Under this option, experts said that ongoing  government oversight could ensure the safety of contracted operations,  and such a “staged outsourcing” of the NAS’s functions might build  confidence in the private sector’s ability to provide air traffic services  safely and efficiently. We view the agency’s decision to study the  contracting out of flight services as a significant step towards cost  reduction and one that could be selectively expanded to other services if  the current experience proves positive.
Second, some experts suggested that the ATO finance its capital  investments by incurring debt through private capital markets, rather than  relying on annual appropriations. While we have consistently maintained  that Congress should control new funding sources through the budget and  appropriations processes, these experts believed that debt financing  would increase the ATO’s flexibility by providing a dedicated, multiyear  source of funds that it could manage as program needs dictate, thereby  allowing it to modernize more efficiently. A legislative change would be  required to give the ATO borrowing authority.
Our preliminary work shows, and some aviation experts maintain, that the  ATO needs to prioritize its capital investments, as well as its investments  in operating systems, with affordability in mind. These experts believe that  the ATO needs to review all of its spending plans for modernization,  determine which programs can realistically be funded, and select  programs to cut. They also indicated that the ATO should have a  mechanism to explain to Congress the implications that cutting the  funding for one system has on other systems. Indeed, the ATO appears to  be prioritizing its investments, as indicated by the varying percentage  reductions in various planned capital investments. We believe that the  ATO could clarify how these trade-offs affect progress in modernizing the  ATC system and related components of the NAS in the near, mid-, and  longer term. Such transparency would provide senior agency officials and  Congress with a clear view of how the ATO is working to live within its  means.
In summary, we believe that the ATO has taken a number of positive steps.  With continued management attention and focus to carry the momentum  forward, the ATO has an opportunity to address its heretofore intractable  problems with ATC modernization.
This concludes my statement. I would be pleased to respond to any  questions that you or other Members of the Subcommittee may have at  this time.
section_title: Contact and Acknowledgements
paragraphs: For further information on this testimony, please contact Dr. Gerald L.  Dillingham, at (202) 512-2834 or by e-mail at dillinghamg@gao.gov.  Individuals making key contributions to this testimony include Tamera  Dorland, Seth Dykes, Bess Eisenstadt, Maren McAvoy, Edmond Menoche,  and Beverly Norwood.
section_title: Appendix I: Major ATC System Acquisitions
paragraphs: Air Traffic Control Radar Beacon Interrogator – Replacement  (ATCBI-6)
ATCBI-6 is a replacement radar capable of determining both range and  direction to and from the aircraft. It can also forward this information to  the appropriate air route traffic control centers. It will replace radars that  have exceeded their life expectancy and have proved extremely vulnerable  to outages and critical-parts shortages.
Advanced Technologies and Oceanic Procedures (ATOP)
ATOP is an integrated system of new controller workstations, data- processing equipment, and software that will enhance the control and flow  of oceanic air traffic to and from the United States. ATOP is planned for  the three sites that control oceanic air traffic: Anchorage, Alaska; New  York, New York; and Oakland, California.
Airport Surface Detection System – Model X (ASDE-X)
ASDE-X is an airport surveillance system that enables air traffic  controllers to track the surface movement of aircraft and vehicles. The  detection system automatically predicts potential conflicts and seamlessly  covers airport runways, taxiways, and other areas.
Airport Surveillance Radar Model-11 (ASR-11)
ASR-11 is a digital radar that replaces aging analog radars, such as ASR-7  and ASR-8, with a single, integrated digital radar system. ASR-11 reduces  operational costs, improves safety, and can accommodate future capacity  increases.
Controller-Pilot Data Link Communications (CPDLC)
CPDLC is a communication system that will allow pilots and controllers to  transmit digital data messages directly between FAA automated ground  computers and aircraft.
En Route Automation Modernization (ERAM)
ERAM will replace software and hardware in the host computers at FAA’s  20 en route air traffic control centers, which provide separation, routing,  and advisory information. It provides a flexible and expandable base to  facilitate further national airspace system (NAS) modernization initiatives.
En route Communications Gateway (ECG)
ECG provides a communications interface between radar sites and en  route centers, and is a precursor to ERAM. The system has an open and  expandable platform that allows for new connectivity and functionality as  the NAS evolves. It replaces the interim Peripheral Adapter Module  Replacement Item that has been operating for 10 years and has exceeded  its life expectancy.
FAA Telecommunications Infrastructure (FTI)
FTI is FAA’s new telecommunications system. It will replace costly  networks of separately managed systems and services—both leased and  owned—by integrating advanced telecommunications services within  FAA’s NAS and non-NAS infrastructures.
Free Flight Phase 2 (FFP2)
FFP2 is a suite of air traffic control tools and subsystems that allows air  traffic controllers to move gradually from a highly structured system,  based on elaborate rules and procedures, to a more flexible system  wherein pilots, within limits, can change their route, speed, and altitude  while keeping air traffic controllers informed of such changes. It includes  the Traffic Management Advisor, Collaborative Decisionmaking, User  Request Evaluation Tool, and the Surface Management Advisor.
Integrated Terminal Weather System (ITWS)
ITWS is a weather information system that furnishes air traffic controllers  and supervisors with full-color graphic displays of weather conditions that  need no meteorological interpretation. It provides a comprehensive  representation of the current weather situation and precise 20 minute  forecasts (to be increased to 60 minutes in 2006) of convective weather  conditions.
Local Area Augmentation System (LAAS)
LAAS is a landing guidance system that would use global positioning  satellites and would be installed at airports to allow aircraft to execute  precision instrument approaches and landings in all weather conditions.  LAAS would eliminate the need for multiple instrument landing systems at  airports where it is installed.
NAS Infrastructure Management System—Phase 2 (NIMS-2)
NIMS is a centralized system to help manage and schedule maintenance on  the NAS infrastructure, including its facilities, systems, and equipment.  NIMS will decrease the number of en route delays by reducing the time  required to restore systems to full operation following maintenance. NIMS  Phase 1, already complete, provides initial Operational Control Center  capability, along with remote monitoring and control functionality, to  3,700 NAS facilities and 5,800 deployed maintenance data terminals.  Phase 2 will fully implement resource management and enterprise  management software and focus on increasing workers’ productivity in  receiving orders and managing resources.
Next Generation Air/Ground Communications (NEXCOM)
NEXCOM is a digital communications system, consisting of multimodal  digital radios, avionics, and ground stations, which will improve air traffic  control communications by replacing old analog communication systems.  Segment 1A will replace 30- to 40-year-old radios, deploying 6,000 new  radio sets that use analog and digital communications with aircraft.  Segment 1B will create ground stations to communicate with aircraft  equipped with digital capability.
Operational and Supportability Implementation System (OASIS)
OASIS a system used at flight service stations to assist general aviation  pilots with flight planning. The system provides up-to-the-minute weather  graphics by integrating real-time weather and flight planning data with  overlays of flight routes. It replaces the Flight Services Automation system  for which spare parts and hardware support have been difficult for FAA to  obtain.
Standard Terminal Automation Replacement System (STARS)
STARS is workstation to allow civilian and military air traffic controllers  to direct aircraft near major U.S. airports and will replace aging  workstations at certain facilities. It has an open and expandable terminal  automation platform that can accommodate air traffic growth, as well as  new hardware and software that is designed to promote safety, maximize  operational efficiency, and improve controllers’ productivity.
Wide Area Augmentation System (WAAS)
WAAS is a navigation and landing guidance system that uses global  positioning satellites to provide precise navigation and landing guidance at  all airports, including thousands that have no ground-based instrument  landing capability.
section_title: Appendix II: Changes in Cost and Schedule Targets for 16 Major ATC System Acquisitions
paragraphs: Current  cost (as of  March  2005) years) only) only) ($19.2) only)
section_title: Appendix III: Key Practices and Implementation Steps for Mergers and Organizational Transformations
subsections: section_title: Ensure top leadership drives the transformation.
paragraphs: Define and articulate a succinct and compelling reason for change.
Balance continued delivery of services with merger and  transformation activities.
Establish a coherent mission and integrated strategic goals to  guide the transformation.
Adopt leading practices for results-oriented strategic planning and  reporting.
Focus on a key set of principles and priorities at the outset of  the transformation.
Embed core values in every aspect of the organization to reinforce  the new culture.
Set implementation goals and a time line to build momentum  and show progress from day one.
Make public implementation goals and time line.
Seek and monitor employee attitudes and take appropriate follow- up actions.
Identify cultural features of merging organizations to increase  understanding of former work environments.
Attract and retain key talent.
Establish an organizationwide knowledge and skills inventory to  allow knowledge exchange among merging organizations.
Dedicate an implementation team to manage the transformation  process.
Establish networks to support the implementation team.
Select high-performing team members.
Use the performance management system to define  responsibility and ensure accountability for change.
Adopt leading practices to implement effective performance  management systems with adequate safeguards.
Establish a communication strategy to create shared  expectations and report related progress.
Communicate early and often to build trust.
Ensure consistency of message.
Encourage two-way communication.
Provide information to meet specific needs of employees.
Involve employees to obtain their ideas and gain ownership for  the transformation.
Use employee teams.
Involve employees in planning and sharing performance  information.
Incorporate employee feedback into new policies and procedures.
Delegate authority to appropriate organizational levels.
Adopt leading practices to build a world-class organization.
section_title: Related GAO Products
paragraphs: High Risk Series: An Update, GAO-05-207. Washington, D.C.: January  2005.
Air Traffic Control: FAA Needs to Ensure Better Coordination When  Approving Air Traffic Control Systems. GAO-05-11. Washington, D.C.:  November 17, 2004.
Air Traffic Control: FAA’s Acquisition Management Has Improved, but  Policies and Oversight Need Strengthening to Help Ensure Results. GAO- 05-23. Washington, D.C.: November 12, 2004.
Information Technology: FAA Has Many Investment Management  Capabilities in Place, but More Oversight of Operational Systems Is  Needed. GAO-04-822. Washington, D.C.: August 20, 2004.
Air Traffic Control: System Management Capabilities Improved, but  More Can Be Done to Institutionalize Improvements. GAO-04-901.  Washington, D.C.: August 20, 2004.
FAA Budget Policies and Practices, GAO-04-841R. Washington, D.C.: July  2, 2004.
Federal Aviation Administration: Challenges for Transforming into a  High-Performing Organization. GAO-04-770T. Washington, D.C.: May 18,  2004.
Air Traffic Control: FAA’s Modernization Efforts—Past, Present, and  Future. GAO-04-227T. Washington, D.C.: October 30, 2003.
Aviation Safety: Information on FAA’s Data on Operational Errors at  Air Traffic Control Towers. GAO-03-1175R. Washington, D.C.: September  23, 2003.
National Airspace System: Current Efforts and Proposed Changes to  Improve Performance of FAA’s Air Traffic Control System. GAO-03-542.  Washington, D.C.: May 30, 2003  National Airspace System: Reauthorizing FAA Provides Opportunities  and Options to Address Challenges. GAO-03-473T. Washington, D.C.:  February 12, 2003.
National Airspace System: Better Cost Data Could Improve FAA’s  Management of the Standard Terminal Automation Replacement  System. GAO-03-343. Washington, D.C.: January 31, 2003.
Air Traffic Control: Impact of Revised Personnel Relocation Policies Is  Uncertain. GAO-03-141. Washington, D.C.: October 31, 2002.
National Airspace System: Status of FAA’s Standard Terminal  Automation Replacement System. GAO-02-1071. Washington, D.C.:  September 17, 2002.
Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of  Controller Attrition. GAO-02-591. Washington, D.C.: June 14, 2002.
National Airspace System: Long-Term Capacity Planning Needed  Despite Recent Reduction in Flight Delays. GAO-02-185. Washington,  D.C.: December 14, 2001.
National Airspace System: Free Flight Tools Show Promise, but  Implementation Challenges Remain. GAO-01-932. Washington, D.C.:  August 31, 2001.
Air Traffic Control: Role of FAA’s Modernization Program in Reducing  Delays and Congestion. GAO-01-725T. Washington, D.C.: May 10, 2001.
National Airspace System: Problems Plaguing the Wide Area  Augmentation System and FAA’s Actions to Address Them.  GAO/T-RCED-00-229. Washington, D.C.: June 29, 2000.
National Airspace System: Persistent Problems in FAA’s New  Navigation System Highlight Need for Periodic Reevaluation.  GAO/RCED/AIMD-00-130. Washington, D.C.: June 12, 2000.
Air Traffic Control: Status of FAA’s Implementation of the Display  System Replacement Project. GAO/T-RCED-00-19. Washington, D.C.:  October 11, 1999.
Air Traffic Control: FAA’s Modernization Investment Management  Approach Could Be Strengthened. GAO/RCED/AIMD-99-88. Washington,  D.C.: April 30, 1999.
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