Next Generation Air Transportation System: Progress and Challenges in Planning and Implementing the Transformation of the National Airspace System
Published: 2007-03-22T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The skies over America are becoming more crowded every day. The consensus of opinion is that the current aviation system cannot be expanded to meet this projected growth. Recognizing the need for system transformation, in 2003 Congress authorized the Joint Planning and Development Office (JPDO) and requires the office to operate in conjunction with multiple federal agencies, including the Departments of Transportation, Commerce, Defense, and Homeland Security; the Federal Aviation Administration (FAA); the National Aeronautics and Space Administration (NASA); and the White House Office of Science and Technology Policy. JPDO is responsible for coordinating the related efforts of these partner agencies to plan the transformation to the Next Generation Air Transportation System (NextGen): a fundamental redesign of the national airspace system. FAA will be largely responsible for implementing the policies and systems necessary for NextGen, while safely operating the current air traffic control system. GAO's testimony focuses on (1) the progress that JPDO has made in planning NextGen and some challenges it continues to face and (2) the challenges that FAA faces transitioning to NextGen. GAO's statement is based on our recent reports as well as ongoing work, all of which has been conducted in accordance with generally accepted government auditing standards.
section_title: What GAO Found
paragraphs: JPDO has made substantial progress in planning NextGen, but continues to face several challenges. JPDO has established a framework to facilitate federal interagency collaboration and is involving nonfederal stakeholders in its planning efforts. JPDO has begun leveraging the resources of its partner agencies and is finalizing key planning documents such as the concept of operations and the enterprise architecture. The draft concept of operations has been posted to JPDO's Web site for public comment and the enterprise architecture is expected to be completed in the next few months. JPDO and FAA have improved their collaboration and coordination by expanding and revamping FAA's Operational Evolution Plan--renamed the Operational Evolution Partnership--which is intended to provide an implementation plan for FAA for NextGen. Among the challenges JPDO faces are institutionalizing the interagency collaboration that is so central to its mission, developing a comprehensive cost estimate, and addressing potential gaps in research and development for NextGen. In transitioning to NextGen, FAA faces several challenges. Although FAA has taken several actions to improve its management of current air traffic control modernization efforts, institutionalizing these improvements will require continued strong leadership, particularly since the agency will have lost two of its key agents for change by September 2007. Costs are another challenge facing FAA as it addresses the resource demands that NextGen will likely pose, while continuing to maintain the current air traffic control system. Finally, determining whether it has the technical and contract management expertise necessary to implement NextGen is a challenge for FAA.

section_title: Letter
paragraphs: I appreciate the opportunity to testify before you today on efforts to  transform the current national airspace system to the Next Generation Air  Transportation System (NextGen). The skies over America are becoming  more crowded every day. Demand for air travel has increased in recent  years, with over 740 million passengers flying in fiscal year 2006, climbing  toward an estimated 1 billion passengers per year in 2015, according to  FAA estimates. The consensus of opinion is that the current aviation  system cannot be expanded to meet this projected growth. In 2003,  recognizing the need for system transformation, Congress authorized the  creation of the Joint Planning and Development Office (JPDO) and  required the office to operate in conjunction with multiple federal  agencies, including the Departments of Transportation, Commerce,  Defense, and Homeland Security; the Federal Aviation Administration  (FAA); the National Aeronautics and Space Administration (NASA); and  the White House Office of Science and Technology Policy. JPDO is  responsible for coordinating the related efforts of these partner agencies  to plan the transformation to NextGen: a fundamental redesign of the air  transportation system that will entail precision satellite navigation; digital,  networked communications; an integrated weather system; layered,  adaptive security; and more. FAA will be largely responsible for  implementing the policies and systems necessary for NextGen, while  safely operating the current air traffic control system 24 hours a day, 7  days a week.
My testimony today addresses issues concerning both JPDO and FAA as  the NextGen effort begins to move from conceptualization and planning to  implementation of systems and procedures. Specifically, my testimony  focuses on (1) the progress that JPDO has made in planning the NextGen  system and some challenges it continues to face and (2) the challenges  that FAA faces in transitioning to NextGen. My statement is based on our  recent reports as well as ongoing work for this subcommittee. We  conducted this work in accordance with generally accepted government  auditing standards.
In summary:    JPDO has made substantial progress in planning NextGen, but continues  to face several challenges. JPDO has established a framework to facilitate  the federal interagency collaboration that is central to its mission, and is  involving nonfederal stakeholders in its planning efforts. JPDO has begun  leveraging the resources of its partner agencies and finalizing several key  documents that form the fundamental plan for NextGen, including a  concept of operations and an enterprise architecture.  The draft concept of  operations has been posted to JPDO’s Web site for public comment and  the enterprise architecture is expected to be completed in the next few  months. JPDO and FAA have improved their collaboration and  coordination by developing an expanded and revamped Operational  Evolution Plan intended to provide a NextGen implementation plan for  FAA. JPDO has faced a continuing challenge in institutionalizing  interagency collaboration. JPDO also faces challenges in developing a  comprehensive cost estimate, exploring potential gaps in research and  development for NextGen, incorporating the expertise of all major  stakeholders, researching human factors issues, and establishing  credibility among stakeholders.
FAA faces challenges in institutionalizing recent management  improvements and controlling costs as it begins the transition to NextGen.  By creating the Air Traffic Organization (ATO) in 2003, and appointing a  Chief Operating Officer (COO) to head ATO, FAA established a new  management structure and adopted more leading practices of private  sector businesses to address the cost, schedule, and performance  shortfalls that have plagued its air traffic control modernization efforts.  For example, FAA has taken steps to improve its acquisition workforce  culture and work toward a results-oriented, high-performance  organization. However, institutionalizing these changes will require  continued strong leadership, particularly since the agency will have lost  two of its significant agents for change—the FAA Administrator and the  COO—by September 2007. Additionally, the costs of operating and  maintaining the current air traffic control system while implementing  NextGen will be another important challenge for FAA, as will having the  technical and contract management expertise needed to implement a  system as complex as NextGen.
subsections: section_title: JPDO Has Made Progress in Planning NextGen, but Faces Several Challenges
paragraphs: JPDO has made progress in planning NextGen by facilitating collaboration  among its partner agencies, working to finalize key planning documents,  and improving its collaboration and coordination with FAA. Among the  challenges JPDO faces are institutionalizing collaboration among the  partner agencies, and identifying and exploring questions related to which  entity will fund and conduct the research and development needed to meet  NextGen requirements.
subsections: section_title: JPDO Has Made Progress in Planning NextGen by Facilitating Collaboration Among Partner Agencies, Working to Finalize Key Planning Documents, and Improving Coordination with FAA
paragraphs: JPDO has made progress in many areas in planning NextGen, as we  reported in November 2006. I will highlight just a few of those areas in this  testimony. First, JPDO has taken several actions that are consistent with  practices that facilitate interagency collaboration—an important point  given how critical such collaboration is to the success of JPDO’s mission.  For example, the JPDO partner agencies worked together to develop a  high level plan for NextGen along with eight strategies that broadly  address the goals and objectives for NextGen. JPDO has since issued two  annual updates to this plan, as required by Congress. Also, JPDO’s  organizational structure involves federal and nonfederal stakeholders  throughout. This structure includes a federal interagency senior policy  committee, an institute for nonfederal stakeholders, and eight integrated  product teams that bring together federal and nonfederal experts to plan  for and coordinate the development of technologies that will address  JPDO’s eight broad strategies. JPDO has also begun leveraging the  resources of its partner agencies in part by reviewing their research and  development programs, identifying work to support NextGen, and working  to minimize duplication of research programs across the agencies. For  example, one opportunity for coordination involves aligning aviation  weather research across FAA, NASA, and the Departments of Commerce  and Defense, developing a common weather capability, and integrating  weather information into NextGen.
In addition to developing and updating its high-level integrated plan, first  published in December 2004, JPDO has been working to develop several  critical documents that form the foundation of NextGen planning,  including a draft concept of operations and an enterprise architecture.   The concept of operations describes how the transformational elements of  NextGen will operate in 2025. It is intended to establish general  stakeholder buy-in to the NextGen end state, a transition path, and a  business case. The enterprise architecture follows from the concept of  operations and will describe the system in more detail (using the federal  enterprise architecture framework). It will be used to integrate NextGen  efforts of the partner agencies. The draft concept of operations has been  posted to JPDO’s Web site for stakeholder review and comment.   According to JPDO, an expanded version of the enterprise architecture is  expected in mid-2007.
Progress has also been made in improving the collaboration and  coordination between JPDO and FAA—the agency largely responsible for  the implementation of NextGen systems and capabilities. FAA has  expanded and revamped its Operational Evolution Plan (OEP)—renamed  the Operational Evolution Partnership—to become FAA’s implementation  plan for NextGen. The OEP is being expanded to apply to all of FAA and  is intended to become a comprehensive description of how the agency will  implement NextGen, including the required technologies, procedures, and  resources. An ATO official told us that the new OEP is to be consistent  with JPDO’s key planning documents and partner agency budget guidance.  According to FAA, the new OEP will allow it to demonstrate appropriate  budget control and linkage to NextGen plans and will force FAA’s research  and development to be relevant to NextGen’s requirements. According to  FAA documents, the agency plans to publish the new OEP in June 2007.
In an effort to further align FAA’s efforts with JPDO’s plans for NextGen,  FAA has created a NextGen Review Board to oversee the OEP. This  Review Board will be co-chaired by JPDO’s Director and ATO’s Vice  President of Operations Planning. Initiatives, such as concept  demonstrations or research, proposed for inclusion in the OEP, will now  need to go through the Review Board for approval. Initiatives are to be  assessed for relation to NextGen requirements, concept maturity, and risk.  An ATO official told us that the new OEP process should also help identify  some smaller programs that might be inconsistent with NextGen and  which could be discontinued.  Additionally, as a further step towards  integrating ATO and JPDO, the administration’s reauthorization proposal  calls for the JPDO Director to be a voting member of FAA’s Joint  Resources Council and ATO’s Executive Council.
section_title: Challenges for JPDO Include Institutionalizing Interagency Collaboration and Exploring Potential Gaps in Research and Development Needs for NextGen
paragraphs: Although JPDO has established a framework for collaboration, it has faced  a challenge in institutionalizing this framework. As JPDO is a coordinating  body, it has no authority over its partner agencies’ key human and  technological resources needed to continue developing plans and system  requirements for NextGen. For example, JPDO has been working to  establish a memorandum of understanding (MOU) with its partner  agencies to more clearly define partner agencies’ roles and responsibilities  since at least August 2005. As of March 16, 2007, however, the MOU  remained unsigned. Another key activity for strengthening the  collaborative effort will be synchronizing the NextGen enterprise  architecture with the partner agencies’ enterprise architectures. These  types of efforts, which would better institutionalize JPDO’s collaborative  framework throughout the partner agencies, will be critical to JPDO’s  ability to leverage the necessary funding for developing NextGen.  Institutionalization would help ensure that, as administrations and staffing  within JPDO change over the years, those coming into JPDO will have a  clear understanding of their roles and responsibilities and of the time and  resource commitments entailed.
JPDO faces a challenge in developing a comprehensive cost estimate for  the NextGen effort. In its recent 2006 Progress Report, JPDO reported  some cost estimates related to FAA’s NextGen investment portfolio, which  I will discuss in more detail later in this statement. However, JPDO is still  working to develop an understanding of the future requirements of its  other partner agencies and the users of the system. JPDO stated that it  sees its work in estimating costs as an ongoing process. The office notes  that it will gain additional insight into the business, management, and  technical issues and alternatives that will go into the long-term process of  implementing NextGen as it continues to work with industry, and that it  expects its cost estimates to continue to evolve.
Another challenge facing JPDO is exploring potential gaps in the research  and development necessary to achieve some key NextGen capabilities and  to keep the development of new systems on schedule. In the past, a  significant portion of aeronautics research and development, including  intermediate technology development, has been performed by NASA.  However, our analysis of NASA’s aeronautics research budget and  proposed funding shows a 30 percent decline, in constant 2005 dollars,  from fiscal year 2005 to fiscal year 2011. To its credit, NASA plans to focus  its research on the needs of NextGen. However, NASA is also moving  toward a focus on fundamental research and away from developmental  work and demonstration projects. FAA is currently assessing its capacity  to address these issues. Currently it is unknown how all of the significant  research and development activities inherent in the transition to NextGen  will be conducted or funded.
Still another challenge facing JPDO is ensuring that all relevant  stakeholders are involved in the effort. Some stakeholders, such as current  air traffic controllers and technicians, will play critical roles in NextGen,  and their involvement in planning for and deploying the new technology  will be important to the success of NextGen. In November 2006, we  reported that air traffic controllers were not involved in the NextGen  planning effort. Controllers are beginning to become involved as the  controllers’ union is now represented on a key planning body. However,  technicians are currently not participating in NextGen efforts. Input from  current air traffic controllers who have recent experience controlling  aircraft and current technicians who will maintain the new equipment is  important is considering human factors and safety issues. Our work on  past air traffic control modernization projects has shown that a lack of  stakeholder or expert involvement early and throughout a project can lead  to cost increases and delays.
Addressing human factors issues is another key challenge for JPDO. For  example, the NextGen concept of operations envisions that pilots will take  on a greater share of the responsibility for maintaining safe separation and  other tasks currently performed by controllers—raising human factors  questions about whether pilots can safely perform these additional duties.  According to JPDO, the change in the roles of controllers and pilots is the  most important human factors issue involved in creating NextGen but will  be difficult to research because data on pilot behavior are not readily  available for use in creating models.
Finally, we reported in November 2006 that establishing credibility was  viewed by the majority of the expert panelists we consulted as a challenge  facing JPDO. This view partially stems from past experiences in which the  government has stopped some modernization efforts after industry  invested in supporting technologies. Stakeholders’ belief that the  government is fully committed to NextGen will be important as efforts to  implement NextGen technologies move forward. Another credibility  challenge for JPDO is convincing stakeholders that the collaborative effort  is making progress toward facilitating implementation. To address this  challenge, the new Director of JPDO is planning to implement some  structural and procedural changes to the office. For example, the Director  has proposed changing JPDO’s integrated product teams into “working  groups” that would task small teams with exploring specific issues and  delivering discrete work products. These changes have not yet been  implemented at JPDO and it will take some time before the effectiveness  of these changes can be evaluated.
section_title: FAA Faces Challenges in Transitioning to NextGen
paragraphs: FAA is a principal player in JPDO’s efforts and will be the chief  implementer of NextGen. Successful implementation will depend, in part,  on how well FAA addresses its challenges of institutionalizing its recent  improvement in managing air traffic control modernization efforts,  addressing the cost challenges of implementing NextGen while safely  maintaining the current air traffic control system, and obtaining the  expertise needed to implement a system as complex as NextGen. I turn  now to these challenges.
subsections: section_title: FAA Faces the Challenge of Institutionalizing Recent Progress in Managing Air Traffic Control Modernization Efforts
paragraphs: A successful transition to NextGen will depend, to a great extent, on FAA’s  ability to manage the acquisition and integration of multiple NextGen  systems. Since 1995, we have designated FAA’s air traffic control  modernization program as high risk because of systemic management and  acquisition problems. In recent years, FAA has taken a number of actions  to improve its management of acquisitions. Realization of NextGen goals  could be severely compromised if FAA’s improved processes are not  institutionalized and carried over into the implementation of NextGen,  which is an even more complex and ambitious undertaking than past  modernization efforts.
To its credit, FAA has taken a number of actions to improve its acquisition  management. By creating the Air Traffic Organization (ATO) in 2003, and  appointing a Chief Operating Officer (COO) to head ATO, FAA established  a new management structure and adopted more leading practices of  private sector businesses to address the cost, schedule, and performance  shortfalls that have plagued air traffic control acquisitions. ATO has  worked to create a flatter organization, with fewer management layers,  and has reported reducing executive staffing by 20 percent and total  management by 16 percent. In addition, FAA uses a performance  management system to hold managers responsible for the success of ATO.  More specifically, to better manage its acquisitions and address problems  we have identified, FAA has    established strategic goals to improve its acquisition workforce culture  and build towards a results-oriented, high-performing organization;   developed and applied a process improvement model to assess the  maturity of its software and systems acquisitions capabilities resulting in,  among other things, enhanced productivity and greater ability to predict  schedules and resources; and reported that it has established a policy and guidance on using Earned  Value Management (EVM) in its acquisition management system and that  19 of its major programs are currently using EVM.
Institutionalizing these improvements throughout the agency (i.e.,  providing for their duration beyond the current leadership by ensuring that  reforms are fully integrated into the agency’s structure and processes and  have become part of its organizational culture) will continue to be a  challenge for FAA. For example, the agency has yet to implement its cost  estimating methodology, although, according to the agency, it has  provided training on the methodology to employees.  Furthermore, FAA  has not established a policy to require use of its process improvement  model on all major acquisitions for the national airspace system. Until the  agency fully addresses these legacy issues, it will continue to risk program  management problems affecting cost, schedule, and performance. With a  multi-billion dollar acquisition budget, addressing these issues is as  important as ever.
section_title: Institutionalizing Change within FAA Will Require Continued Strong Leadership
paragraphs: While FAA has implemented many positive changes to its management  processes, it currently faces the loss of key leaders. We have reported that  the experiences of successful transformations and change management  initiatives in large public and private organizations suggest that it can take  5 to 7 years or more until such initiatives are fully implemented and  cultures are transformed in a sustainable manner. Such changes require  focused, full-time attention from senior leadership and a dedicated team.  FAA’s management improvements are relatively recent developments, and  the agency will have lost two of its significant agents for change—the  Administrator and the COO—by the end of September. The administrator’s  term ends in September 2007; the COO left in February 2007, after serving  3 years. This situation is exacerbated by the fact that the current Director  of JPDO is also new, having assumed that position in August 2006. For the  management and acquisition improvements to further permeate the  agency, and thus provide a firm foundation upon which to implement  NextGen, FAA’s new leaders will need to demonstrate the same  commitment to improvement as the outgoing leaders. This continued  commitment to change is critical over the next few years, as foundational  NextGen systems begin to be implemented. Expeditiously moving to find a  new COO will help sustain this momentum.
section_title: FAA Faces a Cost Challenge of Implementing NextGen while Sustaining the Current Air Traffic Control System
paragraphs: JPDO recently reported some estimated costs for NextGen, including  specifics on some early NextGen programs. JPDO believes the total  federal cost for NextGen infrastructure through 2025 will range between  $15 billion and $22 billion. JPDO also reported that a preliminary estimate  of the corresponding cost to system users, who will have to equip with the  advanced avionics that are necessary to realize the full benefits of some  NextGen technologies, ranges between $14 and $20 billion.  JPDO noted  that this range for avionics costs reflects uncertainty about equipage costs  for individual aircraft, the number of very light jets that will operate in  high-performance airspace, and the amount of out-of-service time required  for installation.
In its Capital Investment Plan for fiscal years 2008-2012, FAA includes  estimated expenditures for eleven line items that are considered NextGen  capital programs. The total 5-year estimated expenditures for these  programs are $4.3 billion. In fiscal year 2008, only six of the line items are  funded for a total of roughly $174 million; funding for the remaining five  programs would begin with the fiscal year 2009 budget. According to FAA,  in addition to capital spending for NextGen, the agency will also spend an  estimated $300 million on NextGen-related research and development  from fiscal years 2008 through 2012. Also, the administration’s budget for  fiscal year 2008 for FAA includes $17.8 million to support the activities of  JPDO.
It is important to note that while FAA must manage the costs associated  with the NextGen transformation, it must simultaneously continue to fund  and operate the current national airspace system. In fact, the Department  of Transportation’s Inspector General has reported that the majority of  FAA’s capital funds go toward the sustainment of current air traffic  systems and that, over the last several years, increasing operating costs  have crowded out funds for the capital account. Efforts to sustain the  current system are particularly important given the safety concerns that  could be involved with system outages—the number of which has  increased steadily over the last few years as the system continues to age.
For example, the adequacy of FAA’s maintenance of existing systems was  raised following a power outage and equipment failures in Southern  California that caused hundreds of flight delays during the summer of  2006. Investigations by the DOT Inspector General into these incidents  identified a number of underlying issues, including the age and condition  of equipment. Nationwide, the number of scheduled and unscheduled  outages of air traffic control equipment and ancillary support systems has  been increasing (see fig. 1). According to FAA, increases in the number of  unscheduled outages indicate that systems are failing more frequently.  FAA also notes that the duration of unscheduled equipment outages has  also been increasing in recent years from an average of about 21 hours in  2001 to about 40 hours in 2006, which may indicate, in part, that  maintenance and troubleshooting activities are requiring more effort and  longer periods of time. However, the agency considers user impact and  resource efficiency when planning and responding to equipment outages,  according to an FAA official. As a result, although some outages will have  longer restoration times, FAA believes that they do not adversely affect air  traffic control operations. It will be important for FAA to monitor and  address equipment outages to ensure the safety and efficiency of the  legacy systems and a smooth transition to NextGen.
As part of managing the costs of system sustainment and system  modernization, FAA is seeking ways to reduce costs by introducing  infrastructure and operational efficiencies. For example, FAA plans to  produce cost savings through outsourcing and facility consolidations. FAA  is outsourcing flight service stations and estimates a $2.2 billion savings  over 12 years. Similarly, FAA is seeking savings through outsourcing its  planned nationwide deployment of Automatic Dependent Surveillance- Broadcast (ADS-B), a critical surveillance technology for NextGen. FAA is  planning to implement ADS-B through a performance-based contract in  which FAA will pay “subscription” charges for the ADS-B services and the  vendor will be responsible for building and maintaining the infrastructure.  (FAA also reports that the ADS-B rollout will allow the agency to remove  50 percent of its current secondary radars, saving money in the ADS-B  program’s baseline.) As for consolidating facilities, FAA is currently  restructuring its administrative service areas from nine offices to three  offices, which FAA estimates will save up to $460 million over 10 years.
We have previously reported that FAA should pursue further cost control  options, such as exploring additional opportunities for contracting out  services and consolidating facilities. However, we recognize that FAA  faces challenges with consolidating facilities, an action that can be  politically sensitive. In recognition of this sensitivity, the administration  has proposed in FAA’s reauthorization proposal that the Secretary of  Transportation be authorized to establish an independent, five-member  Commission, known as the Realignment and Consolidation of Aviation  Facilities and Services Commission, to independently analyze FAA’s  recommendations to realign facilities or services. The Commission would  then send its own recommendations to the President and to Congress. In  the past, we have noted the importance of potential cost savings through  facility consolidations; however, it must also be noted that any such  consolidations must be handled through a process that solicits and  considers stakeholder input throughout, and fully considers the safety  implications of any proposed facility closures or consolidations.
section_title: FAA Needs to Explore Whether It Has the Technical and Contract Management Expertise Necessary to Implement NextGen
paragraphs: In the past, a lack of expertise contributed to weaknesses in FAA’s  management of air traffic control modernization efforts, and industry  experts with whom we spoke questioned whether FAA will have the  technical expertise needed to implement NextGen. In addition to technical  expertise, FAA will need contract management expertise to oversee the  systems acquisitions and integration involved in NextGen. In November,  we recommended that FAA examine its strengths and weaknesses with  regard to the technical expertise and contract management expertise that  will be required to define, implement, and integrate the numerous complex  programs inherent in the transition to NextGen. In response to our  recommendation, FAA is considering convening a blue ribbon panel to  study the issue and make recommendations to the agency about how to  best proceed with its management and oversight of the implementation of  NextGen. We believe that such a panel could help FAA begin to address  this challenge.
To conclude, transforming the national airspace system to accommodate  much greater demand for air transportation services in the years ahead  will be an enormously complex undertaking. JPDO has made strides in  meeting its planning and coordination role as set forth by Congress, and  FAA has taken several steps in recent years that better position it to  successfully implement NextGen. If JPDO and FAA can build on their  recent achievements and overcome the many challenges they face, the  transition to NextGen stands a much better chance for success.
Mr. Chairman, this concludes my statement. I am pleased to answer any  questions you or members of the Subcommittee might have.
section_title: GAO Contact and Staff Acknowledgements
paragraphs: For further information on this testimony, please contact Susan Fleming at  (202) 512-2834 or flemings@gao.gov. Individuals making key contributions  to this testimony include Gerald Dillingham, Matthew Cook, Anne Dilger,  Sharon Dyer, Colin Fallon, Heather Krause, Edmond Menoche, Faye  Morrison, and Carrie Wilks.
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