Aviation Rulemaking: Further Reform Is Needed to Address Long-standing Problems
Published: 2001-07-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Federal Aviation Administration (FAA) issues regulations to strengthen aviation safety and security and to promote the efficient use of airspace. FAA's rulemaking is a complicated process intended to ensure that all aspects of any regulatory change are fully analyzed before any change goes into effect. During the last 40 years, many reports have documented problems in FAA's rulemaking efforts that have delayed the formulation and finalization of its rules. This report reviews FAA's rulemaking process. GAO reviewed 76 significant rules and found that FAA's rulemaking process varied widely. These rules constituted the majority of FAA's workload of significant rules from fiscal year 1995 through fiscal year 2000.
section_title: What GAO Found
paragraphs: GAO found that FAA had begun about 60 percent of the rulemaking projects by Congress and about a third of the rulemaking projects recommended by the National Transportation Safety Board within six months. For one-fourth of the mandates and one-third of the recommendations however, at least five years passed before FAA began the process. Once the rule was formally initiated, FAA took a median time of two and a half years to proceed from formal initiation of the rulemaking process through publication of the final rule. In 1998, FAA improved the rulemaking process and shortened the time frames for finalizing rules. These reforms included establishing a steering committee and a rulemaking management council to improve management involvement in setting priorities and resolving policy issues. GAO found that after the reforms were implemented, the median time for reviewing and finalizing a rule increased. This suggests that the productivity of FAA's rulemaking process for significant rules decreased after FAA's reforms.

section_title: Letter
paragraphs: In response to your request to conduct a review of the Federal Aviation  Administration’s (FAA) rulemaking process in order to identify ways to  improve its efficiency, we established three research questions:  What are the time frames for FAA’s rulemaking, including the time FAA  took to initiate the rulemaking process in response to statutory  requirements and safety recommendations and, once begun, to develop  and publish significant rules?
What were the effects of FAA’s 1998 reforms on its process and on its  time frames for completing rulemaking?
How effective were FAA’s reform efforts in addressing the factors that  affect the pace of the rulemaking process?
This report contains recommendations to the Secretary of Transportation  on steps that FAA can take to improve the timeliness of its rulemaking  through better management of the process and its participants.
As we agreed with your offices, unless you publicy announce the contents  of this report earlier, we plan no further distribution of it until 30 days from  the date of this letter. We will then send copies to the Secretary of  Transportation and the Administrator of FAA. We will also make copies  available to others who request them.
If you or your staff have any questions about this report or would like to  discuss it further, I can be reached at (202) 512-2834. Key contributors to  this report are acknowledged in appendix VI.
subsections: section_title: Introduction
paragraphs: The Federal Aviation Administration (FAA) is responsible for developing,  administering, enforcing, and revising an effective, enforceable set of  aviation safety regulations that enhance aviation safety and security and  promote the efficient use of airspace. Generally, a regulation is an agency  statement that is designed to implement, interpret, or prescribe law or  policy or to describe procedural requirements. The process by which FAA  and other federal agencies develop regulations is called rulemaking.
FAA’s rulemaking activities encompass all of the agency’s areas of  responsibility, including air traffic control, aviation security, and  commercial space transportation. FAA must address both long-standing  and emerging issues in its rulemaking efforts. For example, questions about  the safety of aging aircraft and the adequacy of flight duty rest  requirements for airline pilots have been debated for decades. In contrast,  the issues of fire safety standards for cargo compartments and the  transport of oxygen generators emerged after the Valujet crash outside of  Miami in May 1996.
Rulemaking can be a complex and time-consuming process, and the  Congress expressed its concerns about the speed of FAA’s rulemaking in  1996, when it enacted legislation that established time frames for steps in  the process. While some rules may need to be developed quickly to address  safety issues or guide the use of new technologies, rules must be carefully  considered before being finalized because they can have a significant  impact on individuals, industries, the economy, and the environment.  Figure 4 provides a case study of FAA’s efforts to address a complex, long- standing aviation safety issue by creating a rule to regulate flight duty and  rest requirements for flight crew members.
subsections: section_title: Federal Rulemaking Process Involves Common Steps and Documents
paragraphs: Rulemaking involves three stages of agency activity. First, an agency  identifies a need for rulemaking. Second, it initiates the rulemaking  process, develops a proposed rule, and publishes it for public comment.  After a public comment period, the agency finalizes the rule by considering  the comments received and drafting and publishing the final rule. Figure 5  provides an overview of the process as it applies to FAA.
A rulemaking issue may be identified internally or externally. For example,  FAA staff may find that changes in aviation technology or operations or the  emergence of a safety problem warrant rulemaking. Alternatively, the  public or the aviation industry may petition the agency to develop a new  rule or provide an exemption from existing rules. At the beginning of fiscal  year 2001, FAA was responding to 57 petitions for rulemaking and 415  petitions for exemptions while reviewing 84 recommendations by its  advisory committee—the Aviation Rulemaking Advisory Committee  (ARAC). In addition, the Congress, the President, or the Secretary of the  Department of Transportation (DOT) may direct FAA to develop a rule, or  the National Transportation Safety Board (NTSB) may issue a safety  recommendation. After a rulemaking issue is identified, an agency must  consider the issue in light of its resources and other rulemaking issues that  may be equally compelling. Some rulemaking issues may require study and  analysis before an agency’s management can decide whether to initiate the  rulemaking process and devote resources to developing a proposed rule.
Once an agency has decided to initiate rulemaking, the basic process for  developing and issuing regulations is spelled out in section 553 of the  Administrative Procedure Act of 1946 (APA). Most federal agencies,  including FAA, use notice and comment rulemaking. Once rulemaking is  initiated, agencies generally must develop and publish a proposed rule or  “notice of proposed rulemaking” in the Federal Register. A public  comment period follows, during which interested persons have the  opportunity to provide “written data, views, or arguments.” After the  comment period ends, the agency finalizes the rule by reviewing the  comments, revising the rule as necessary, and publishing the final rule in  the Federal Register at least 30 days before it becomes effective. Most  rules are later incorporated into the Code of Federal Regulations (CFR).
For the remainder of this report, we will use the term “rulemaking” to refer  to the notice and comment process by which FAA’s rules are developed and  codified in the CFR.
Rules vary in importance, complexity, and impact. Under Executive Order  12866, federal agencies and the Office of Management and Budget (OMB)  categorize proposed and final rules in terms of their potential impact on the  economy and the industry affected. Executive Order 12866 defines a  regulatory action as “significant” if it   has an annual impact on the economy of $100 million or more;   adversely affects the economy in a material way (in terms of  productivity, competition, jobs, environment, public health or safety, or  state, local, or tribal governments or communities);   creates a serious inconsistency or interferes with another agency’s   materially changes the budgetary impact of entitlements, grants, user  fees, or loan programs or the rights and obligations of recipients thereof;  or   raises novel legal or policy issues arising out of legal mandates, the  President’s priorities, or the principles set forth in the order.
Since 1996, significant rulemaking entries have constituted about half of all  of FAA’s rulemaking entries in the Unified Agenda, a semiannual report of  federal regulatory activities.  Figure 6 shows the total number of FAA’s  rulemaking entries and the number of significant rulemaking entries listed  in the October Unified Agendas from 1995 through 2000.
Significant rules often take longer to issue than nonsignificant rules. They  may require extensive regulatory analyses of the potential economic,  social, and environmental impacts of one or more alternatives. These  analyses may take months to complete and are needed to ensure that the  projected economic impact has been correctly quantified and that the costs  the rule will impose on the affected industry and individuals are justified.
Significant rules typically require more levels of review than nonsignificant  rules. Executive Order 12866 requires that OMB review agencies’ proposed  and final significant rules before they are published in the Federal Register.  Moreover, clearances for proposed and final rules may be required at the  departmental level for those agencies that are part of a cabinet-level  department.
To reduce this burden, the Federal Aviation Reauthorization Act of 1996  grants rulemaking authority directly to the Administrator, except that the  Administrator may not issue a proposed or final rule without obtaining the  Secretary’s approval if that rule is significant as defined by statute. The  Wendell H. Ford Aviation Investment and Reform Act for the 21st Century  narrowed the scope of rules that would be considered to be significant,  setting the threshold for economic significance to $250,000,000 and  eliminating inconsistency and interference with other agencies’ actions and  material changes to budgetary impact of entitlements, grants, user fees, or  loan programs and recipients’ rights and obligations as criteria.
Nevertheless, agencies that report to the Office of the Secretary of  Transportation (OST), including FAA, have also been required by the  Secretary to submit for review all rules deemed significant under the  executive order as well as rules that OST has indicated are to be considered  to be “significant” under supplemental guidelines. These additional criteria  increase the number of rules for which agencies within DOT are expected  to complete regulatory analyses. For example, FAA published a significant  rule in April 2000 that limited the number of commercial air tours permitted  in the Grand Canyon. While the rule was not considered a significant  regulatory action under Executive Order 12866, and would not have been  significant under the statute, it was considered significant under the  Department’s supplemental guidelines because the rulemaking had a  potentially substantial economic impact on Native American tribes.  Specifically, the rule was expected to have a significantly adverse impact  on the Hualapai Tribe’s economic development and self-sufficiency, since  the trive relied on income from air tour operations and tourist dollars  brought to the reservation by the air tours.
The additional analyses and reviews required for significant rules are  incorporated into the basic process that all federal agencies use for  rulemaking: developing a proposed rule, releasing the proposed rule for  public comment, and developing a final rule.
Various offices within FAA conduct the required analyses and reviews of  rulemaking documents, as shown in table 1. In the early stages of  rulemaking, each rule is the responsibility of a program office with  technical expertise in a specific area. This office develops the initial  rulemaking documents, as indicated in table 1. Depending on the content of  the rule, the program office may be a staff office, like the Office of Chief  Counsel, that also has the additional responsibility of reviewing all  significant rules. Alternatively, it may be an office with responsibility for a  technical area, such as the Office of Civil Aviation Security Policy and  Planning. Each of these offices has managers who can become involved in  the rulemaking process by reviewing the work of its representatives on a  rulemaking team. Generally, FAA’s rulemaking teams consist of  representatives from the program office, the Office of Rulemaking, the  Office of Aviation Policy and Plans, and the Office of the Chief Counsel. In  addition to significant and nonsignificant rulemaking, the staff in these  offices also work on other projects, including airworthiness directives,  airspace actions, and responses to petitions and exemptions.
section_title: Prior Studies of Federal Rulemaking Have Found Similar and Persistent Problems
paragraphs: The ultimate goal of the federal rulemaking process is to develop and issue  a quality rule in a timely and efficient manner. Time is of particular  importance when safety is at stake or when the pace of technological  development exceeds the pace of rulemaking. Many of the problems  federal agencies face in developing and publishing rules are long-standing  and similar across agencies, and they have been cited in studies and  discussions of the process since at least the 1970s. For example, a Senate  study in July 1977 cited deficiencies in decisionmaking, planning, and  priority-setting by top management as causes of delay in federal  rulemaking. In July 2000, DOT’s Office of the Inspector General (OIG)  reviewed the Department’s rulemaking process and found that the  Department had taken as long as 12 years to issue significant rules. The  OIG attributed the lack of timeliness of the Department’s rulemaking partly  to a lack of timely decisionmaking and prioritization.
Studies specifically targeting the efficiency of FAA’s rulemaking process  over almost 40 years have also identified similar problems. Figure 7  provides a list of key studies on FAA’s rulemaking process.
The central findings of the most recent study of FAA’s rulemaking process,  published in 1997, echoed the findings of past studies. For this report, we  grouped the problems identified by the 1997 study into three areas:  management involvement, administration of the rulemaking process, and  human capital.
subsections: section_title: Problems With Management Involvement, Process Administration, and Human Capital Impaired FAA’s Rulemaking
paragraphs: In terms of management involvement, FAA’s 1997 study of its rulemaking  process found that problems related to shifting priorities, the timing of  management involvement, and the willingness of management to delegate  authority all caused delays. Inconsistent and changing priorities among  FAA offices caused false starts, delays in the process, and wasted  resources. Inadequate or ill-timed involvement by FAA’s senior  management hindered the agency’s ability to make timely decisions. As a  result, rule drafters frequently worked without adequate direction or buy-in  from policymakers, causing extensive queuing, delays, and rework. The  reluctance of FAA’s rulemaking management to delegate authority caused  problems in internal coordination and accountability and created extensive  layers of review that delayed the rulemaking process. Rulemaking projects  were also often delayed because no one was held accountable for keeping  projects on schedule. The lack of coordination resulted in “finger-pointing”  as to why problems remained unsolved. FAA’s 1997 study identified similar  concerns with the timeliness of rulemaking efforts by FAA’s industry  advisory committee. For example, the committee had too many projects,  some of which were duplicative or overlapping. A lack of coordination and  accountability between FAA and the committee also impaired the  effectiveness of the advisory committee.
In terms of process administration, FAA’s 1997 study found that confusion  concerning the roles and responsibilities of rulemaking participants at FAA  created difficulties in determining who had responsibility for what actions,  led to breakdowns in coordination and communication, and resulted in  inadequate supervision. Multiple information systems also hampered  coordination and led to inaccurate tracking records and databases, as well  as to information that was hard to access (e.g., archives of decisions made).  Without reliable records, FAA often could not pinpoint where problems and  backlogs occurred. Moreover, even when it did identify weaknesses, it  lacked systems with which to evaluate and improve the process.
In terms of human capital management, the 1997 study found that FAA had  not established systems for selecting and training personnel involved in  rulemaking. Rulemaking teams at FAA typically did not observe project  schedules, which they regarded as unrealistically optimistic. Measures of  timeliness were not consistently used to measure and evaluate the  performance of rulemaking participants. FAA’s rulemaking process lacked  a system for consistently tying incentives and rewards to specific measures  of performance.
section_title: Concerns About the Efficiency of FAA’s Rulemaking Prompted Congressional Action and the Latest FAA Review
paragraphs: Responding to concerns about the efficiency of FAA’s rulemaking process  and in particular the time required for departmental review by OST, the  Congress enacted legislation in 1996 designed to speed FAA’s efforts to  develop and publish final rules. The Federal Aviation Reauthorization Act  of 1996 amended section 106 of title 49 U.S.C. to establish a 16-month time  limit for FAA’s finalization of rules after the close of the public comment  period and a 45-day requirement for OST’s review of FAA’s significant  proposed and final rules (see ch. 2). (The act also established a 24-month  time limit for finalization of rules after publication of an advanced notice of  proposed rulemaking, a request for information that FAA may issue in  developing a proposed rule. Because this notice is not always issued, we  did not use it as a measure in our analysis.)
In response, FAA reviewed its rulemaking process, established its own  suggested time frames for completing steps in the process (see ch. 3), and  identified potential improvements to its process in the general areas of  management involvement, process administration, and human capital  management. These improvements are discussed in chapter 3.
section_title: Objectives, Scope, and Methodology
paragraphs: The Chairman of the Subcommittee on Aviation, House Committee on  Transportation and Infrastructure, asked us to review FAA’s rulemaking  process to determine whether FAA could improve the efficiency of its  rulemaking process. Specifically, we addressed three main questions in our  review:   What are the time frames for FAA’s rulemaking, including the time FAA  took to initiate the rulemaking process in response to statutory  requirements and safety recommendations and, once begun, to develop  and publish significant rules?
What were the effects of FAA’s 1998 reforms on its process and on its  time frames for completing rulemaking?
How effective were FAA’s reform efforts in addressing the factors that  affect the pace of the rulemaking process?
To determine the time frames for FAA’s rulemaking, we created a database  of proposed and final rules that constituted the agency’s significant  rulemaking workload from fiscal year 1995 through fiscal year 2000. We  focused our analysis on 76 significant rulemaking actions identified by FAA  in the semiannual editions of the Unified Agenda or identified in our search  of the Federal Register. This consisted of rulemaking actions that had  either been published for public comment or were initiated but had not yet  been published for public comment. The initiation dates and dates of  published actions for the 76 rules are provided in appendix I. These rules  constituted most (about 83 percent) of FAA’s significant rule workload and  were more likely to be complex and/or the subject of controversy and  potential delay. Our database contained data obtained from FAA’s  Integrated Rulemaking Management Information System and from our  review of proposed and final rules published in the Federal Register. In  creating our database, to determine the dates that rulemaking projects  were initiated, we used the dates recorded in FAA’s information system. For  the dates of the publication of proposed and final rules, we used the dates  of publication in the Federal Register. To determine the extent to which  FAA’s rulemaking met statutory time frames, we compiled information  from our database of rulemaking actions and applied standards established  by the Congress in 1996.
To determine the effects of FAA’s 1998 reforms on the agency’s rulemaking  process, we reviewed the 1997 report on FAA’s rulemaking process and  discussed the 1998 reforms with FAA staff and management from the  working team that participated in the study. We discussed rulemaking  reforms with rulemaking officials from several other federal regulatory  agencies the Animal and Plant Health Inspection Service (APHIS), the  Environmental Protection Agency (EPA), the Federal Highway  Administration (FHWA), the Federal Motor Carrier Safety Administration  (FMCSA), the Food and Drug Administration (FDA), the National Highway  Transportation Safety Administration (NHTSA), and the Nuclear  Regulatory Commission (NRC) to identify what steps they had taken to  improve their rulemaking processes and to discuss their efforts to improve  rulemaking. We selected these agencies because they had developed  significant rules that were potentially technically complex and have an  impact on public safety (e.g., regulation of nuclear power, environmental  concerns, and food safety). We also compared FAA’s time frames for  responding to public comment and finalizing significant rules with that of  other federal regulatory agencies by collecting data from the Federal  Register on the time spent processing significant rules by APHIS, EPA,  FDA, and NHTSA. To determine the extent to which FAA’s rulemaking met  FAA’s suggested time frames for steps in the process before and after the  reforms, we compiled information from our database of rulemaking actions  and applied it to the time frames suggested in FAA’s rulemaking guidance.  We also reviewed the number of significant rules FAA published before and  after implementing its reforms as a measure of improvement in the  rulemaking process.
To determine the effectiveness of FAA’s reform efforts in addressing the  factors that affect the pace of the rulemaking process management  involvement, process administration, and human capital management we  considered case studies of specific rules, as well as the views of rulemaking  officials and other stakeholders in the rulemaking process, including  representatives of NTSB, OST, and OMB . We also surveyed 134 FAA  employees who had served as rulemaking team members on significant  rules listed in FAA’s Unified Agendas since the beginning of fiscal year 1994.  We chose these employees for our survey because these staff had recent  experience and were likely to be familiar with changes in the reformed  process. We mailed a survey to rulemaking staff to obtain their views on the  status of the rulemaking process and the impact of rulemaking reforms. We  received 109 responses (a response rate of about 81 percent). A copy of the  survey instrument that summarizes the responses we received is provided  in appendix II. We supplemented our survey results with semistructured  interviews of rulemaking team members involved in four rulemaking  projects. For our semistructured interviews, we asked a series of questions  designed to elicit staff members’ views on the results of the reform efforts  and suggestions for improving the process.
We conducted our work from April 2000 through March 2001 in accordance  with generally accepted government auditing standards.
section_title: FAA Took Varying Times to Complete Steps of the Rulemaking Process, Meeting Legislative Requirements in One-Half or Less of Cases
paragraphs: The time FAA took to formally initiate rulemaking in response to a  congressional mandate or a recommendation by the National  Transportation Safety Board (NTSB) varied widely. Between fiscal year  1995 and fiscal year 2000, FAA initiated most rulemaking efforts in  response to mandates and safety recommendations within 2 years, but  some were initiated many years later. Once FAA formally initiates  rulemaking, the time it takes to complete the process depends on many  factors, including the complexity of the issue. FAA finalized and published  in the Federal Register 29 significant rules over the 6-year period from  fiscal year 1995 through fiscal year 2000. It took a median of about 2 ½  years to proceed from formal initiation through publication of the final  rule, ranging from less than 1 year to almost 15 years. Twenty percent of  these final rules took 10 years or more to complete. During this same time  period, departmental review, one step in the process for both proposed and  final rules, took a median time of about 4 months. FAA’s median pace for  finalizing a rule after the close of the public comment period about 15  months was comparable to that of four other federal agencies. However,  FAA met the 16-month statutory requirement for finalizing a rule after the  close of the public comment period in less than half of the cases since the  legislation was passed and other mandated time limits in only 2 of 7 cases.
subsections: section_title: FAA Initiated Most Rulemaking in Response to Mandates and Safety Recommendations Within 2 Years
paragraphs: FAA initiated most rulemaking actions in response to safety  recommendations from the NTSB and mandates from the Congress within  2 years. Of the 76 significant rulemaking actions we reviewed, 32  rulemaking actions (or about 42 percent) were the subject of a  congressional mandate or recommendation by the NTSB. While  congressional mandates may require that FAA take rulemaking actions,  NTSB’s recommendations do not. However, FAA is required to respond  formally to the recommendation and specify what action is or is not being  taken and why. As shown in figure 8, FAA formally initiated about 60  percent of mandated rulemaking actions and about one-third of NTSB’s  recommendations within 6 months.
However, FAA sometimes took many years to respond to a mandate or  recommendation. For example, figure 8 also shows that in one-fourth of the  mandated cases and one-third of the recommendations we examined, FAA  took more than 5 years to initiate rulemaking. Figure 9 provides a case  study of a rulemaking issue with safety implications aviation child safety  seats—in which more than 7 years passed between NTSB’s  recommendation and FAA’s initiation of the rulemaking process. In this  case, the delay occurred because of policy-related disagreements between  FAA and NTSB. After receiving NTSB’s recommendation to require child  safety seats on aircraft, FAA studied the issue. It issued a related technical  order and rule but decided not to pursue rulemaking to require child safety  seats on aircraft. In part, its decision was based on a study it presented to  the Congress that concluded that if child safety seats were required on  aircraft, passenger diversion to other transportation modes could cause a  net increase in fatalities. FAA eventually changed its policy position and  initiated rulemaking after the White House Commission on Aviation Safety  recommended that FAA make child-restraint systems mandatory on  aircraft.
In contrast to the lengthy period of time that sometimes occurs between  NTSB’s recommendations and FAA’s initiation of rulemaking, FAA  responded within 1 month to an NTSB recommendation in 1999 to require  flight data recorders on Boeing 737 aircraft. Figure 10 provides a case study  of this rulemaking effort.
section_title: Time FAA Took to Complete Steps in the Rulemaking Process Varied
paragraphs: For significant rules published during the 6-year period from fiscal year  1995 through fiscal year 2000, FAA took a median time of about 2 ½ years to  proceed from the formal initiation of the rulemaking process to the  publication of the final rule in the Federal Register. This time period ranged  from less than 1 year to almost 15 years. Six of the 29 final rules (or 20  percent) took 10 years or more to complete. FAA took a median time of  about 20 months to proceed from initiating the process to proposing the  rule for public comment. It took a median time of about 15 months to  finalize the rule after the close of the public comment period.
The time taken for one step of the rulemaking process that occurs in FAA’s  development of both proposed and final rules departmental review and  approval—has been of particular concern to the Congress. In the Federal  Aviation Reauthorization Act of 1996, the Congress addressed its concern  by establishing a time frame for this step. The act requires the Secretary of  DOT to review proposed and final significant rules and respond to FAA,  either by approving them or by returning them to FAA with comments,  within 45 days after receiving them.
While FAA’s information system tracked the date of OST’s approval of some  significant rules, it did not track the date of OST’s response to FAA’s  transmittals of significant rules when it sent them back to FAA with  comments rather than approving them. We were therefore unable to  measure the extent to which the Department had met the 45-day  requirement set forth in the 1996 act. FAA rulemaking officials said that  they did manually track this information for individual rules and planned to  incorporate this capability into the next upgrade of the information system.  FAA’s information system did contain the dates that some rules were  submitted by FAA to OST and the dates of OST’s final approval. We used  these dates to measure the time it took for OST to approve FAA’s significant  proposed and final rules from fiscal year 1997, when the legislation went  into effect, through fiscal year 2000. Overall, for both proposed and final  rules, the median time OST took to approve the rules (including review,  comment, and FAA’s response, if any) was 4.1 months (124 days).  Measuring proposed and final rules separately, we found that the median  time OST took to approve proposed rules was 4.7 months (140 days), while  the median time OST took to approve final rules was 2.3 months (69 days).  In chapter 4, we discuss the views of departmental and FAA staff on issues  that impact the time required for departmental approval.
In a more recent effort to reduce delays related to OST’s review, on April 5,  2000, the Wendell H. Ford Aviation Investment and Reform Act for the 21st  Century amended title 106 of 49 U.S.C. by raising the dollar threshold  required for secretarial approval and eliminating several criteria that  triggered departmental review of significant rules. The Congress included  this language to, among other things, streamline FAA’s rulemaking process  by reducing the number of significant rules that had to be submitted for  departmental review and approval. Because the legislation preempts DOT’s  Order 2100.5 (which defines what rules FAA and other DOT modal  administrations are to submit to OST for review, as discussed in ch. 1), FAA  is required to submit to OST only those significant rules that meet the  criteria defined in the act. At the time of our review, FAA and OST had not  yet implemented the provisions of the act. As a result, the number of FAA’s  significant rules that met the criteria for OST review had not been reduced.
section_title: Time FAA Took to Finalize Rules After the Comment Period Was Comparable to That of Four Other Agencies
paragraphs: Although we did not compare the time frame of FAA’s entire rulemaking  process to that of other agencies, we did find that the time FAA took to  finalize rules after the close of the public comment period was comparable  to that of four other federal agencies. We selected four regulatory  agencies—APHIS, EPA, FDA, and NHTSA and compared the time they  took to finalize rules from fiscal year 1995 through fiscal year 2000. The  results are presented in figure 11. The figure shows that, except for APHIS,  which finalized all of its significant rules within 2 years of the close of the  public comment period, agencies generally finalized between two-thirds  and three-fourths of their significant rules within 24 months of the close of  the public comment period.
section_title: FAA Met Legislative Requirements in Half or Less of Its Rulemaking Efforts
paragraphs: The Federal Aviation Reauthorization Act of 1996 established a 16-month  time frame for FAA’s finalization of rules after the close of the public  comment period. From October 1996 through March 2001, FAA met this  deadline in 7 of 18 cases by either publishing a final rule in the Federal  Register or taking other final action within 16 months of the close of the  public comment period. Figure 12 provides a case study of FAA’s  rulemaking to prohibit the transportation of discharged or unfilled oxygen  generators in aircraft. This effort exceeded the congressional time frame by  about 11 months. (See app. III for a complete list of rules subject to the  act’s time frames.)
The Congress has also mandated time frames for steps in FAA’s rulemaking  on specific issues. The agency did not meet many of these legislated time  frames. Specifically, of the 20 congressionally mandated rules that were  part of FAA’s workload between fiscal year 1995 and fiscal year 2000, 7  included a time frame for agency action. FAA met the time frame in only 2  cases, both of which called for initiating the rulemaking process by a  certain date. Appendix IV provides additional information regarding the  current status of the seven rules with congressionally mandated time  frames. Figure 13 provides a case study of FAA’s proposed rule to revise  procedures for aircraft registry to assist drug enforcement efforts that  exceeded a specific legislative mandate by more than 10 years.
section_title: FAA’s Reforms Addressed Long-standing Rulemaking Problems but Did Not Reduce Rulemaking Times
paragraphs: To respond to congressional concerns about the timeliness of its  rulemaking process and address long-standing problems (see ch. 1), FAA  began implementing reform initiatives in January 1998 to improve the  process in two of the three central areas we have identified: management  involvement and process administration. FAA considered but did not  implement most initiatives to improve human capital management. Other  agencies have also implemented reforms to address similar types of  problems. FAA’s median times to proceed from initiation of rulemaking  through the release of the proposed rule for public comment and to finalize  the rule after the close of the public comment period did not improve after  FAA implemented its 1998 reforms. Despite FAA’s reforms, the time taken  for departmental review and approval of FAA’s significant rules was not  reduced. In addition, fewer rules were published while proposed and final  rules remained in the rulemaking process for longer periods of time.
subsections: section_title: FAA’s 1998 Efforts to Improve Rulemaking Addressed Long- standing Problems
paragraphs: FAA began implementing reform initiatives in January 1998 to improve its  rulemaking process in two of the three central areas we have identified:  management involvement and process administration. FAA considered but  did not implement most initiatives to improve human capital management.
subsections: section_title: FAA Took Steps to Improve Management Involvement in Process
paragraphs: “With the direct involvement of senior-level management in the rulemaking process, I  anticipate a dynamic rulemaking program that more directly meets the safety and  technology challenges of a rapidly evolving aviation industry.”
In particular, to address long-standing concerns about delays that occurred  during departmental review and approval of its significant rules (see ch. 2),  FAA included a representative from OST on its rulemaking steering  committee and management council, hoping that improved coordination  would reduce the time taken for OST’s review. Table 2 shows the members  and duties of FAA’s steering committee and management council.
To formalize the new process and provide consistent and comprehensive  guidance to rulemaking staff and management, FAA also developed a new  rulemaking manual. Among other things, this manual suggested time  frames for steps in the rulemaking process and established a system for the  steering committee to follow in prioritizing rulemaking projects, as shown  in table 3.
Finally, to maximize the efficient use of employees’ and management’s  time, FAA planned to limit reviews to those that added value and to  delegate more responsibility for rulemaking decisions to rulemaking teams.  Prior to the reforms, both nonsignificant and significant rules went through  multiple layers of internal review. This practice stemmed more from agency  protocol than from necessary oversight. For example, a team member’s  decision could pass through sequential reviews by his or her immediate  managers, office directors, associate administrators, and the Office of the  Administrator. FAA proposed eliminating intermediate manager and  director-level review and approval for both nonsignificant and significant  rules so that rules could pass directly from teams to associate  administrators. In doing so, FAA hoped to use available resources more  efficiently, improve team members’ morale, and reduce delays. However,  the agency stopped short of eliminating review and approval of significant  rules by associate administrators, as was recommended in studies of FAA’s  rulemaking in 1988, 1996, and 1997. According to officials from the Office  of Rulemaking, the revised process was designed to enable the  management council to delegate coordination and approval of  nonsignificant rules to managers below the associate administrator level  and the reform was intended to allow teams to act with the full knowledge  of their respective associate administrator’s position on important issues.
section_title: FAA Took Steps to Administer the Process More Efficiently
paragraphs: To address problems in administering the rulemaking process, FAA  implemented a series of reforms. These reforms were primarily designed to  clarify the extent and limitations of each team member’s roles and  responsibilities, to improve the monitoring of rules and the management of  rulemaking documents throughout the process, and to ensure ongoing  evaluation of the process. Given the potential complexity of rulemaking  issues, inconsistent and unclear lines of responsibility between policy,  technical, legal, and economic reviews have historically slowed the  rulemaking process. In its reform, FAA documented in the rulemaking  manual the roles and responsibilities for each member of the rulemaking  team. Specific appendixes in this manual detail the purpose, intent, and  limitations of legal and economic reviews.
FAA also created a new system for monitoring rule status and document  management, the Integrated Rulemaking Management Information System,  which was designed to increase the use of automation in the rulemaking  process. According to FAA’s Office of Rulemaking, its new system  consolidated the functions of the existing rulemaking tracking and  document management systems. The new system was designed to also  provide access to a regulatory guidance library and the DOT’s Docket  Management System.
Finally, FAA developed rulemaking quality standards and established a  continuous improvement team and a quality team to ensure ongoing  evaluation of the rulemaking process, monitor the quality of rulemaking  documents, and provide recommendations on potential improvements to  the process. FAA’s rulemaking quality standards are documented in an  appendix to its rulemaking manual, Rulemaking Quality Standard and  Guide. The guide offers practical tips, provides techniques, and suggests  references and examples for rulemaking writers. FAA’s continuous  improvement team—envisioned as a staff-level team—was established to  review the evaluations from rulemaking teams in order to provide  recommendations to the rulemaking management council on  improvements to the process to be incorporated into the rulemaking  manual. Similarly, the role of the rulemaking quality team—envisioned as a  management-level team— was to continually monitor and improve the  quality of rulemaking documents and provide recommendations to the  rulemaking management council on improvements to the process. These  two teams were consolidated in 1999 because FAA management concluded  that the two functions were difficult to separate and that both functions  would benefit from both staff- and management-level participation.
section_title: FAA Considered but Did Not Fully Implement Recommendations to Improve Human Capital Management
paragraphs: To promote accountability in the rulemaking process, the working team for  the 1997 study recommended a number of human capital management  strategies to improve the training, evaluation, and rewarding of rulemaking  staff. The team recommended that FAA provide orientation training on the  new rulemaking process to all staff involved in rulemaking efforts. It also  recommended skills assessment and additional ongoing training on  functional skill development, conflict resolution, facilitation and  consensus-based decisionmaking, project management, and team leader  training. To measure efficiency and reward performance more consistently,  the team recommended that FAA establish performance measures in the  areas of rule-processing times, rule quality, and rulemaking productivity, as  well as systems for performance evaluation. It also recommended that FAA  develop a guide to clarify to supervisors the conditions to consider when  granting rewards for good performance in rulemaking and to specify  possible rewards. As discussed in chapter 4, FAA considered but did not  take steps to formally implement these recommendations related to  performance evaluation and rewards. According to the Office of  Rulemaking, the staff resources needed to develop and implement these  initiatives were not available because rulemaking staff and management  were fully occupied with the day-to-day management of the rulemaking  process. As a result, FAA relied on existing training and rewards systems.
section_title: Other Federal Agencies Have Undertaken Reforms to Address Similar Problems
paragraphs: During our investigation, we also discussed rulemaking reform with  rulemaking officials from several other federal regulatory agencies whose  rules involved public safety to identify what steps they had taken to  improve their rulemaking processes. Although an evaluation of the  effectiveness of the reforms undertaken by other regulatory agencies was  beyond the scope of this review, the results of our discussions with the  other rulemaking officials showed that the reforms other agencies have  proposed or implemented are in some cases similar to those proposed by  FAA, and they generally address the same types of problems faced by FAA.
For example, officials at several agencies we talked with considered  management involvement a crucial element of an efficient rulemaking  process. They used a variety of ways to improve management involvement,  including the use of senior management councils and rulemaking  coordinators. For example, EPA told us they established a regulatory policy  council of senior management, as well as regulatory coordinators across  EPA to manage priorities and resources. Other approaches cited by  regulatory agencies we contacted included the use of agency ombudsmen  and “senior champions.” Officials at the FMCSA said a regulatory  ombudsman outside of agency program offices is responsible for moving  rules through the process and tracking rules against established  milestones. According to FMCSA officials, the ombudsman has the  authority to resolve disagreements affecting timely processing; ensure  sufficient staffing to meet statutory and internal deadlines; and represent  FMCSA in discussions about individual rulemakings with other  organizations, including OST, OMB, and other federal agencies.  Rulemaking officials at FDA told us they assign a “senior champion” from  the agency’s program offices to be responsible for scheduling rulemaking  actions and ensuring that timely actions are taken. FDA officials said that  the senior champion concept improves accountability by establishing a  single point of responsibility. To reduce layers of internal review, other  federal agencies have taken steps to delegate authority by limiting the  amount of sequential review that takes place. For example, FDA officials  said they limit a program office’s concurrence procedures and sign-off  requirements to include only necessary staff. Rulemaking officials of the  APHIS said that, in April 1999, they began limiting all staff organizations’  reviews of regulatory packages to 2 weeks. Finally, senior managers at the  EPA said they provide flexibility to associate and regional administrators to  determine what procedures to follow on a rule-by-rule basis, allowing  managers more autonomy to tailor procedures to fit different needs.
To better administer the rulemaking process, other federal agencies have  developed automated tracking systems to monitor the progress of  regulations under development, established evaluation systems for  learning about delays in the process, and initiated appropriate actions to  overcome internal delays. For example, FDA uses a tracking system to  monitor the progress of all regulatory documents, which helps expedite the  internal clearance process for regulations under development. FDA  officials said that the tracking system has saved FDA time in processing  regulations but had not estimated the amount of time saved.
In the area of human capital management, other federal agencies cited a  number of initiatives for training and performance measurement and  evaluation. For example, to provide regulation writers with the training  necessary to adequately prepare draft regulations, officials from APHIS  encourage rulemaking staff to attend available courses and conferences or  advisory committee meetings on the relevant subjects. The officials also  encourage staff to seek technical support in drafting regulations and said  that agencies could encourage, through incentives, technical staff to  provide technical assistance to regulation writers. In addition, FDA  officials suggested using a mentor program for new staff or existing staff to  encourage them to consult with experienced regulation writers. Other  agencies have established quality standards for their rulemaking to  measure the performance of their rulemaking processes. For example, EPA  measures the quality of regulatory documents and holds senior managers  accountable for ensuring that regulatory actions meet the definition of a  quality action. When program offices at EPA are unable to demonstrate that  they can develop quality actions, fewer rulemaking actions will be assigned  to them. According to EPA regulatory officials, this is an incentive for  senior managers to develop quality rules. At FMCSA, officials said they had  a formal structure of accountability of rulemaking products and dates in  performance agreements that involve the head of the agency down to  division directors. These performance agreements have specific  rulemakings that include dates for which the staff is held accountable. In  addition, FMCSA has a supplemental statement to the performance  agreement for every staff member for rulemaking work products and dates.
section_title: Despite Reforms, FAA’s Rulemaking Times Did Not Improve
paragraphs: The median time FAA took to proceed from formal initiation of rulemaking  through publication of the final rule increased from about 30 months in the  3-year period prior to the reform (fiscal years 1995 to 1997) to 38 months in  the 3-year period following the reform (fiscal years 1998 to 2000). FAA’s  median times for proceeding from initiation through release of the  proposed rule for public comment and for proceeding from the close of the  public comment period through publication of the final rule both increased  by more than 3 months after the reforms. Specifically, the median time FAA  took to proceed from initiation through the release of the proposed rule for  public comment increased from 16.5 months in the 3-year period prior to  the reforms to 20.4 months in the 3-year period following the reforms. The  median time FAA took to finalize the rule after the close of the public  comment period increased from 14 months to 16.3 months during the same  time periods, as shown in figure 14.
subsections: section_title: Rulemaking Reforms Did Not Reduce the Time Taken for Departmental Review and Approval of FAA’s Significant Rules
paragraphs: The time OST took to review and approve rules did not improve after FAA  reformed its rulemaking process in 1998. Overall, for both proposed and  final rules, the median time OST took to approve rules (including review,  comment, and FAA’s response, if any) increased from about 125 days before  FAA’s reforms to about 130 days after the reforms, an increase of about 5  days after the reforms. Measuring the proposed and final rules separately,  we found that the median time taken for OST’s approval of proposed rules  increased by 2 days, while the median time taken for OST’s approval of  final rules decreased by 1 day, as shown in figure 15.
section_title: The Number of Significant Rules Published Declined as Proposed and Final Rules Remained in the Process Longer
paragraphs: Since 1998, FAA has published fewer rules. As shown in figure 14, FAA  finalized 18 significant final rules in the 3-year period prior to implementing  its reform. In the 3-year period following the reform, FAA finalized only 11  significant final rules. FAA rulemaking officials attributed the change in  productivity of significant rules to the agency’s efforts to classify more  rulemakings as nonsignificant and, thus, to decrease levels of evaluation  and review within FAA, as well as to eliminate review by the Department  and OMB. However, the number of nonsignificant rules the agency  published from 1995 to 2000 do not reflect this. For example, FAA  published almost 50 nonsignificant proposed and final rules each year in  1995 and 1996, as compared to less than 30 nonsignificant proposed and  final rules each year in 1999 and 2000.
In the years since FAA’s reforms, the median time that initiated significant  rulemaking projects had remained in the process without being released  for public comment (the proposed rule stage) increased  by more than 4  years from the end of fiscal year 1997 to the end of the fiscal year 2000. At  the same time, the median time that FAA’s unpublished significant final  rulemaking projects remained in the process after going through the public  comment period also increased, by about 5 months. This is shown in figure  16.
section_title: FAA’s Suggested Time Frames Often Not Met
paragraphs: As part of its rulemaking reform in January 1998, FAA established its own  time frames for developing and publishing proposed and final rules, as  shown in figure 17.
Although these time frames were established as a part of FAA’s reforms and  were, thus, not an applicable standard for rulemaking efforts prior to the  reforms, we compared processing times for the 3-year period preceding  FAA’s reforms to processing times for the 3-year period following FAA’s  reforms to measure the extent of the change. The percentage of FAA’s  proposed rules that proceeded from initiation through release for public  comment within FAA’s suggested time frames dropped from 47 percent  prior to the reforms to 19 percent after the reforms. The percentage of rules  that proceeded from the close of the public comment period to publication  as a final rule within FAA’s suggested time frames dropped from 39 percent  to 36 percent in the same time periods. Overall, FAA did not meet time  frames suggested in its rule making guidance for more than half of its  proposed and final rules published, as shown in figure 18.
section_title: Incomplete Implementation of FAA's Reforms Impaired Efforts to Address Long-standing Rulemaking Problems
paragraphs: Despite the reforms FAA made to its rulemaking process, many of the  problems that have historically impeded the efficiency of rulemaking at  FAA continued. Our survey of FAA rulemaking staff showed that less than  20 percent agreed that FAA has made the changes necessary to improve the  rulemaking process. In addition, only about 20 percent of the staff  surveyed agreed that the rulemaking process has become more efficient  and effective in the last 2 years. (A copy of the survey is provided in app.  II.) Our interviews with FAA rulemaking staff and management and our  observations of specific rulemaking projects supported the staff's  perception and confirmed that problems in the three central areas of  management involvement, the administration of the rulemaking process  (process administration), and human capital continued to slow the process.
subsections: section_title: Problems Related to Management Involvement Continued to Slow the Process
paragraphs: Problems related to three general areas of management involvement  continued to slow the process. Multiple, shifting priorities made it difficult  to allocate resources effectively and often disrupted the timing of the  rulemaking process. Too often, policy issues were not resolved in a timely  manner. Finally, multiple layers of review continued to contribute to delays.
subsections: section_title: Numerous and Shifting Priorities Created Staffing Resources Problems That Slowed the Rulemaking Process
paragraphs: An excessive number of rulemaking priorities continued to impair the  efficiency of the process. The number of projects on FAA's top priority list  grew from 35 in February 1998, when FAA established the priority list after  implementing its reforms, to 46 in April 2000. At that time, the Associate  Administrator for Regulation and Certification said it was critical to  shorten that list to a more manageable number. However, the number of  top rulemaking priorities continued to increase, to 49 rules by March 2001.  According to the Director of the Office of Rulemaking, the maximum  number of rulemaking projects that can be effectively managed is about 30  to 35 projects. Rulemaking officials cited external and internal pressures to  add rules to its priority list, noting that the agency's priorities change due to  external influences such as accidents, NTSB recommendations and  congressional actions and mandates. Internally, they attributed the growth  in the number of priority rulemaking projects in part to a lack of  commitment to the reformed process of some participants and to what they  described as “parochial” views of priorities that resulted in efforts to  circumvent the decisions of the rulemaking steering committee. For  example, officials said that some program offices circumvented the  approval process for adding rulemaking projects to the top priority list by  adding projects to their own short-term incentive plans, creating pressure  on the steering committee to add the rules to the top priority list. Our  survey of rulemaking staff showed that less than one-third (29 percent) of  the staff agreed that senior managers supported the steering committee's  decisions regarding priorities.
Not only were too many rules given top priority, but changes in the relative  ranking of “top” priorities created problems in managing staffing resources,  thereby increasing the processing time for significant rules. Eighty-three  percent of the survey respondents agreed that changing priorities in the  rulemaking process caused delays in the process. Team members said they  were frequently pulled off of top-priority rules to work on other projects  that their management considered higher priority. They noted that these  disruptions created delays.
It is important to note that, while some of the causes of shifting priorities  stem from the current rulemaking process and can be changed, others  relate to events that FAA cannot control. For example, new safety issues  may emerge whenever there is an aviation accident. In addition,  rulemaking efforts in progress that are related to issues such as safety  threats can be overtaken by new events that then drive the agency's  priorities. While the agency can monitor the effects of outside situations,  there is little it can do to control them. Figure 19 provides an illustration of  the impact of events on FAA's development of a proposed rule on aviation  security.
Although FAA cannot prevent unexpected events from influencing its  rulemaking priorities, FAA's system for prioritizing rules established as  part of its 1998 reform lacks explicit criteria to guide rulemaking  management in establishing and ranking the priority of projects and  assigning available resources. While FAA's rulemaking manual describes  factors that must be considered in prioritizing rulemaking projects—such  as the legislative time frames established by the Congress and projects  initiated in response to special commissions and the NTSB—the policy  does not define how these criteria should be ranked in order of importance.
Identifying and ranking the agency's top rulemaking priorities is important  because FAA's “A” list includes the Administrator's priorities as well as  other top priority rules sponsored by different offices. The FAA  Administrator's set of rulemaking priorities constitute about half of the “A”  list of projects that are actively worked on. For example, in July 2000, 21 of  the agency's 45 top priority rules were on the Administrator's list. Yet FAA's  policy for determining rulemaking priorities does not establish the relative  importance of the different factors that rulemaking managers must  consider in determining the priority of rules within the “A” list of top  priority projects. Without clear criteria for determining the rules' relative  ranking and consensus among all offices involved in rulemaking,  rulemaking managers may have difficulty in objectively determining, for  example, whether legislated time frames take precedence over the  Administrator's priorities or the safety recommendations of the NTSB.  Thus, a final ranking is de facto left to the steering committee, which is  made up of managers whose priorities are tied to the functions of their  individual offices. One result is that managers from different offices may be  more likely to allocate their staff resources on an ad-hoc, short-term basis,  rather than in a strategic fashion to complete the agency's highest priority  rules.
During our review, the Office of Rulemaking suggested that one way of  allocating staff resources to ensure that top priority rules are completed is  to “dedicate” team members to work on rules until they are completed.  This approach was recommended in previous reviews of FAA's rulemaking  process and is used in FAA's acquisitions of air traffic control equipment.  According to the Office of Rulemaking, if this approach was put into place,  managers of offices involved in rulemaking activities, including the offices  involved in legal, technical, and economic analyses as well as the Office of  Rulemaking, would ensure that rulemaking team members worked only on  the highest priority rule by dedicating their staffs to that project. FAA  successfully used this approach to develop its “commuter rule” in 1995, as  shown in figure 20.
The Office of Rulemaking, which also cited changing priorities as an  ongoing problem, noted that a continuing lack of realism in prioritizing  fostered a sense of overload on the part of rulemaking staff. Our survey of  rulemaking staff showed that only about 17 percent agreed that the amount  of work was reasonable, allowing team members to produce high-quality  products and services. Furthermore, less than one-third (about 30 percent)  agreed that management from their office provided sufficient staff and  resources to support and promote improvement in the rulemaking process.
section_title: Management Difficulties in Resolving Complex Policy Issues Continued to Slow the Rulemaking Process
paragraphs: On some rulemaking projects, the time FAA management took to resolve  complex policy issues added years to the overall time taken to complete  the rule. Based on findings that sequential review and decisionmaking by  management late in the process had previously caused problems such as  extensive backlogs, rework, and delays, FAA intended in its reform to  promote a proactive management approach in which policy decisions  would be made early in the process. However, only about 28 percent of the  rulemaking staff we surveyed agreed that senior management focused on  the prevention of problems rather than on the correction of problems, and  only 11 percent of the staff surveyed agreed that sequential processing does  not impact the timeliness of the rulemaking process. Figure 21 provides a  case study of a rulemaking effort related to Flight Operational Quality  Assurance (FOQA) Programs in which management's inability to resolve  difficult policy issues early in the process contributed significantly to the  overall time the rule has been in the process. This rule has taken years to  develop because of complex policy issues that at the time of our review still  had not been resolved. The policy issues concern the waiving of  enforcement actions for violations discovered through FOQA data  voluntarily provided by airlines. Agency officials said that the reason this  issue has been so difficult to resolve is that the rule could set a precedent  that would affect other regulatory agencies' enforcement efforts, and it  therefore has ramifications beyond the Department's efforts to improve  aviation safety. As a result, they considered their rulemaking efforts to be a  management success.
section_title: Multiple Levels of Management Review Continued to Slow the Process
paragraphs: Delays in the process caused by multiple layers of review within the agency  continued despite FAA's reform efforts because the reduction in layers of  review and the level of employee empowerment envisioned in FAA's  reform did not materialize. In reviewing approved project records, we  found that delegation of authority beyond the director's office had not been  achieved in spite of FAA's plans to do so. (FAA's plans are detailed in ch. 3.)  For example, in reviewing projects approved since the reform was  implemented in January 1998, we found that in five of six projects not only  did the directors of team members' offices review and approve team  members' decisions, but so did their immediate managers and other  managers. In 1997, FAA had concluded that multiple layers of review  fostered a lack of accountability in the rulemaking process and that this, in  turn, led to milestones that were unrealistic or not observed because final  responsibility for the project was unclear.
Our survey of rulemaking team members showed that few (4 percent)  agreed that layers of review did not interfere with the timely processing of  rules. As noted above, only 11 percent agreed that sequential processing  does not impact the time required to complete the rulemaking process.  Finally, a minority of the respondents agreed they had the ability to  establish realistic schedules; 36 percent of the survey respondents agreed  that rulemaking teams set realistic schedules, and 19 percent of rulemaking  staff agreed that rulemaking teams have sufficient control over the  rulemaking process to set realistic milestones.
Senior rulemaking managers at FAA said that there was a fine line between  employee empowerment and the need for adequate oversight, particularly  for rules that were likely to have a significant economic or other impact on  the aviation industry. They said that FAA's reform was not intended to  eliminate managers from decisionmaking in the rulemaking process or give  rulemaking teams total independence, noting that the primary focus of the  rulemaking reform effort was to reduce the levels of review for  nonsignificant rules. According to officials from the Office of Rulemaking,  review and approval of certain nonsignificant rules that would harmonize  certification requirements for passenger aircraft established by the Joint  Aviation Authorities (FAA's European counterpart) have already been  delegated below the level of associate administrators.
Our discussions with rulemaking staff revealed a variety of reasons why  they strongly disagreed that rulemaking teams had enough control over the  process to set realistic milestones. Staff noted that internal management  decisions to change rulemaking priorities before a project was completed  and external reviews by OST caused process delays and were beyond their  control. Less than 2 percent of the rulemaking team members agreed that  departmental reviews improved the timeliness of the rulemaking process,  and less than 15 percent agreed that departmental reviews improved the  quality of rulemaking. Figure 22 shows the impact of coordination with  OST on FAA's time frames in its rulemaking efforts to revise regulations  governing the standards for aircraft repair stations.
FAA's internal review process reflects the lack of empowerment as well.  Officials from OST and the Office of Rulemaking said that the requirement  for numerous layers of review reflects FAA's hierarchical management  structure and that the lack of empowerment is embodied in FAA's “grid  sheet” for signing off on a proposed rule. The grid sheet can involve 20  different signatures, each indicating a different layer of review. Moreover,  they said that these extensive reviews can reduce accountability, noting  that, because FAA requires a lot of signatures, rulemaking documents are  sometimes passed through the process without FAA officials reading them.  Figure 23 illustrates the multiple layers of review that occurred in reaching  team concurrence for a proposed rule to require that emergency medical  equipment be carried aboard certain passenger aircraft.
DOT officials said that the time needed for their review and approval of  FAA's significant rules can be lengthy if FAA's position is not thoroughly  evaluated in terms of departmental policy early in the rulemaking process.  DOT officials also cited lack of coordination among FAA's program offices  and a lack of empowerment and accountability of rulemaking teams as  problems that continued to contribute to delays in the process. They said  that departmental review served a valuable role in ensuring that OMB's  concerns were adequately addressed and noted, for example, that OST's  efforts to coordinate proposed changes were hindered when FAA staff did  not have the authority to make the suggested changes.
section_title: Problems in Process Administration Continued to Impair Rulemaking
paragraphs: Problems in three central areas related to the administration of the  rulemaking process continued to contribute to delays. Significant  confusion persisted regarding the roles and responsibilities of rulemaking  team members. Information systems lacked complete, accurate, or current  data and were inconsistently used. Finally, key elements of a continuous  improvement program to identify and correct problems in the process were  not in place.
subsections: section_title: Confusion Remained Regarding the Roles and Responsibilities of Participants
paragraphs: Although FAA attempted to address confusion over roles and  responsibilities in its reforms, our survey indicated that only about 40  percent of the individuals we surveyed agreed that the “roles and  responsibilities are clearly understood.” In addition, less than half (47  percent) of the survey respondents agreed that “roles and responsibilities  are clearly established.”
The effort by the Office of Rulemaking to define roles and responsibilities  for rulemaking participants in its rulemaking manual did not appear to have  eliminated confusion. As we indicated in chapter 3, the manual describes  the specific roles of legal and economic reviewers. According to FAA's  guidance, legal reviews should focus on the legal authority for the action  proposed, compliance of the proposal with applicable laws, and whether  the requirements being imposed are stated with sufficient clarity and  justification to be enforced and defended in court, if need be. Economic  reviews should estimate the costs and benefits of a proposed or final  rulemaking. However, rulemaking management said that legal reviews  continued, in some cases, to focus on nonlegal issues and that the scope of  economic reviews could potentially be reduced. Senior legal staff involved  in the rulemaking process noted that FAA's Chief Counsel is a political  appointee whose role as advisor to the Administrator can result in the  office's involvement in policy issues, as well as assessments of the quality  of analyses conducted to support rules.
section_title: Information Systems Consistently Track Only “A” List Rules and Are Not Consistently Used
paragraphs: In September 2000, we reported on the importance of information  technology resources for federal agencies to gather and share information,  and FAA officials cited the development of a rulemaking management  information system as a major element of its rulemaking reforms.  According to FAA's Office of Rulemaking, its new automated system  consolidated the functions of the existing project-tracking and document- management systems. FAA's tracking of its 24 “A” list significant rules on  this system has established data on rulemaking times for specific steps that  should help it to monitor the rulemaking process. However, the small  number of rules that it consistently tracks and a lack of agencywide  implementation has made the system less useful than it could potentially  be.
Because FAA used the project-tracking portion of the automated system  only for its “A” list of priority projects, including 24 significant rules, the  system was missing complete and accurate data for many of the remainder  of FAA's significant rulemaking projects. FAA rulemaking officials said that  they did not have the resources available to complete, correct, or update  records of rules that were not being actively worked on from the agency's  “A” list of rules, citing resource limitations. However, since previously  initiated rulemaking projects may be shifted onto the “A” list, historical  data could be useful for measuring the performance of the rulemaking  process over time.
FAA rulemaking officials also noted that FAA's rulemaking policy allows  teams to select milestones on a case-by-case basis. However, continuing to  consider some milestones in the system voluntary may result in a lack of  consistent and comparable information on rules. Without complete,  accurate, and consistent data on all FAA's rulemaking projects, FAA  managers will not be able to use the information system to its fullest  capacity—to measure the time elapsed between specific steps in the  process to identify where and to what extent delays occur over time. Since  the rulemaking process can take years to complete, a longer-term  management perspective on the performance of the process is essential.
FAA agreed that additional performance and statistical measures should be  incorporated into the reporting system to enhance its ability to manage the  process and said it had begun making changes to the system.
The document management portion of the automated system was limited in  its usefulness because it had not been fully implemented across all offices  involved in rulemaking. FAA's technology plan called for an “automation  champion” to lead the initiative across all of the affected offices. However,  according to the Office of Rulemaking, FAA had not designated a champion  or developed a plan or goals for an integrated system outside the Office of  Rulemaking. As a result, offices outside of the Office of Rulemaking had  not fully implemented the new system. Although all rulemaking team  members received initial training on the new system, only 26 percent of the  respondents to our survey agreed that rulemaking team members were  provided with training when new technologies and tools were introduced.  After the initial training, we found that the system was not effectively  implemented outside of the Office of Rulemaking.
We reviewed the rulemaking documents in the system for four significant  safety-related rules and found that since FAA's reforms in 1998, only 1 of 27  rulemaking staff outside of the Office of Rulemaking on the 4 rulemaking  teams had used the automated system. This staff person used the system  only twice, on the same day in February 1998. Although officials from the  Office of Rulemaking said that the new system was available to all  rulemaking staff, only about 23 percent of the survey respondents agreed  that their coworkers used FAA's automated capabilities to record  rulemaking actions. Individuals from the Office of the Chief Counsel said  that they either did not have access to the automated system or that their  computers were not capable of using the rulemaking software. While  economists in the Office of Policy and Plans with whom we spoke had  access to the system, they said that the software was too cumbersome. One  economist said that he preferred to develop rulemaking documents that  were inaccessible to change by other team members in order to maintain  the integrity of his work product.
section_title: FAA's Implementation of Continuous Improvement Efforts Was Incomplete
paragraphs: Despite explicit efforts in the rulemaking reform to establish systems to  evaluate the new process and establish quality standards and guidance,  FAA had not fully implemented a continuous improvement or quality  review program. The concept of continuous improvement is embodied in  quality management principles as well as the Government Performance and  Results Act. Continuous improvement efforts are essential for identifying  problems in the rulemaking process. However, continuous improvement  and quality management teams established in FAA's reforms reported  problems in attempting to implement review systems.
In the fall of 1999, members of the continuous improvement team  expressed concerns about the purpose and authority of the team related to  management's participation in establishing and supporting the evaluation  function. To improve the effectiveness of the system, FAA combined the  teams to include both staff and management. Despite the reorganization,  little substantive work had been done in the area of process improvement  at the time of our review. For example, project teams are to complete a  “lessons learned” evaluation after publication of a proposed rule to  document practices and procedures that worked well, identify problem  areas, and determine opportunities to improve the entire rulemaking  process. However, since the process was reformed in January 1998 through  fiscal year 1999, we found that FAA had not documented any evaluations.
The quality and continuous improvement teams were also expected to  review sample rulemaking documents during the progress of a selected  project, perform periodic quality assurance reviews with selected  rulemaking teams, and make recommendations to the management council  regarding their findings. However, none of these quality review functions  had been accomplished. No evaluations or recommendations had been  documented, and the rulemaking manual had not been updated since its  publication in December 1998. In discussing the issue at a steering  committee meeting, members of the management council attributed the  lack of implementation of process improvement efforts to an inadequate  level of organizational commitment to the reformed process. Rulemaking  officials said that, although the continuous improvement team met on a  regular basis to discuss lessons learned, the team had not documented the  results of their discussions. They said they planned to incorporate the  ability to document lessons learned in the next version of the management  information system and that they were updating the rulemaking manual.  They also said that another team, made up of managers from key offices,  has met monthly and sometimes weekly to implement and improve the  reformed process.
section_title: Human Capital Management Initiatives for Rulemaking Activities Were Overlooked
paragraphs: Human capital management initiatives focusing on training, performance  measurement and evaluation, and rewards for rulemaking efficiency and  quality work were generally not implemented at the time of our review.  According to the National Performance Review, which made  recommendations regarding federal agencies' rulemaking processes in  1993, proper training, performance measurement, and performance  incentives are needed to ensure that the agency officials involved in  regulatory activities work as effectively as possible. We reported on the  importance of training, performance measures, and performance  incentives as key elements of an effective human capital strategy in  September 2000. In preparing its 1997 report, FAA's working team  recommended a series of human capital management initiatives to help  rulemaking participants adjust to the revised process and foster change  throughout FAA. These areas included training and skills assessment as  well as performance measurement, evaluation, and rewards for rulemaking  participants.
subsections: section_title: Recurring Rulemaking Training Was Limited to the Office of Rulemaking Staff
paragraphs: Although FAA's reform plan called for orientation training on the new  rulemaking process and ongoing training in a wide range of areas for all  staff involved in rulemaking, rulemaking participants outside the Office of  Rulemaking generally received training only on the information system  software and an introduction to the new process. A formal program for  continuing the training of all rulemaking team members in the areas of  functional skill development, conflict resolution, facilitation of and  consensus-based decisionmaking, project management, and team-leader  training was not implemented. About 50 percent of the staff surveyed  agreed that they received the training they needed to perform their jobs.  Similarly, although FAA's reforms called for the analysis of the skills  needed to function in the revised rulemaking process and to establish a  mentoring program, the Office of Rulemaking had not conducted a formal  analysis, and we found no evidence of such an analysis in the other offices  involved in rulemaking. Only the Office of Rulemaking had established a  mentoring program. Representatives from the Office of Policy and Plans  and the Office of the Chief Counsel said that they had recurring training  programs, but they agreed that these programs did not include a formal  segment devoted to training to support the rulemaking process, as  envisioned by the reform.
section_title: Lack of Rulemaking Performance Measurement, Evaluation, and Rewards Hinders Effectiveness of Reforms
paragraphs: As we reported in January 2000, a key element of human capital  management is the use of performance management systems, including pay  and other incentives, to link performance to results. However, in the area of  rulemaking, FAA has not consistently done so for rulemaking staff and  management. Although FAA's reform effort included recommendations to  measure and evaluate team and individual team member performance and  to develop an associated rewards system, these human capital  management efforts were not implemented on a consistent, agencywide  basis. According to rulemaking officials, the staff resources needed to  develop and implement these initiatives were not available because  rulemaking staff and management were fully occupied with the day-to-day  management of the rulemaking process. As noted above, we found  evidence that some individual senior managers' performance evaluations  included rulemaking projects specific to their program areas. The  Government Performance and Results Act of 1993 requires agencies to  pursue performance-based management including results-oriented goal  setting and performance measurement. Although the act gives agencies the  impetus for tailoring their human capital systems to their specific missions  and objectives, it is up to agencies, like FAA, to follow through on the  opportunity. FAA implemented an agencywide effort to link performance  with rewards in April 2000. FAA's new core compensation plan provides for  pay increases tied to performance and individual contributions. Despite the  opportunities provided by the new compensation system, as well as  personnel reforms enacted in 1996 to provide FAA with greater flexibility in  human capital management, FAA management has not established systems  to measure and reward performance in rulemaking based on the quality or  timeliness of the process.
One measure of rulemaking performance is the time taken to complete  steps in the process to develop and issue a rule. To implement rulemaking  reforms, senior managers involved in FAA's rulemaking agreed that  process milestones were appropriate measures of rulemaking  performance. However, results from our survey of rulemaking staff indicate  that, while slightly more than one-half (51 percent) agreed that milestones  are used to assess the overall performance of teams, team members did not  believe that using milestones is an accepted or acceptable means of  measuring performance. For example, less than one half of the respondents  (about 48 percent) agreed that senior management holds team members  accountable when teams do not meet milestones. Only 20 percent agreed  that senior management is held accountable when teams do not meet  milestones. Less than 20 percent agreed that rulemaking teams have  sufficient control over the rulemaking process to set realistic milestones.  Only 36 percent of the staff agreed that teams set realistic schedules. Only 8  percent agreed that their offices provide incentives based on the  milestones of the rulemaking process. Officials in the Office of Rulemaking  suggested that one method to provide agencywide incentives for timely  rulemaking would be to include a goal for the agency's timely rulemaking in  the short-term incentive plans for all senior managers involved in  rulemaking.
The Office of Rulemaking did not develop a separate rulemaking award  system as recommended by the working team. They said rulemaking  awards were given based on the preexisting agency award system in which  individuals and teams are recognized for outstanding performance on  various projects. Although about 70 percent of the staff surveyed agreed  that management from their offices provides an environment that  “supports my involvement, contributions, and teamwork on the rulemaking  team,” few rulemaking staff that responded to our survey agreed that  teamwork is rewarded. Specifically, only 28 percent of rulemaking staff  agreed with the statement “I am appropriately rewarded for teamwork in  the rulemaking process (e.g., performance ratings, cash awards,  certificates, or public recognition).”
section_title: Conclusions
paragraphs: FAA's reforms of its rulemaking process have not fully addressed the long- standing problems that can lead to unnecessary delays because the  initiatives have either not been fully implemented or their implementation  has been impaired by a lack of management commitment and support.  Management's attention to factors critical to achieving desired results— establishing baseline data, priorities, a plan for addressing root causes, and  an evaluation system to measure the agency's progress—would facilitate  effective implementation of the reform initiatives begun in 1998.
FAA's management committees that were established as a part of the  reform are a step in the right direction in FAA's efforts to improve  management involvement, encourage timely resolution of policy issues,  and reduce layers of review. Clarifying staff and management's roles in the  process and including performance expectations, measures, evaluations,  and rewards based on these roles is an essential step in establishing a  performance system for rulemaking that emphasizes accountability and  results. The system must hold staff and managers accountable for  producing timely, quality rules that are needed to improve aviation safety  and security. Equally essential are automated information systems to  monitor the performance of the individuals and offices in the process and  provide information to continually evaluate and improve rulemaking. A  performance management system is a key element of an effective human  capital strategy that is the best, and perhaps the only, means of obtaining  the needed level of commitment and support from FAA management and  staff. FAA's new Core Compensation Plan that provides for pay increases  tied to performance and individual contributions offers the agency an  opportunity to establish new systems for performance measurement,  evaluation, and rewards based on timeliness and quality in rulemaking for  all offices involved in the process. Finally, the Wendell H. Ford Aviation  Investment and Reform Act for the 21st Century provides an as yet  unrealized opportunity for FAA to reduce the number of rules that must go  through one of the levels of review—the review by the Office of the  Secretary of Transportation. Adhering to the provisions of the act could  reduce the processing time for selected significant rules that meet the  criteria established in the act.
section_title: Recommendations
paragraphs: To improve the efficiency of its rulemaking process and reap the maximum  benefits from its rulemaking reform efforts, we recommend that the  Secretary of Transportation direct the FAA Administrator to take steps to  improve management involvement in the rulemaking process by   reducing the number of top-priority projects to a manageable number  over time by limiting the number of projects added until existing  projects are completed and establishing criteria for ranking the highest  priority rules so that the lowest ranked of these priority rules may be  tabled if necessary to allow sufficient resources to be applied to  emerging, higher-priority projects;  providing resources sufficient for rulemaking teams to meet the  agency's suggested time frames. One approach, suggested by the Office  of Rulemaking, is to prototype the use of dedicated rulemaking teams by  assigning staff for the duration of rulemaking projects. This approach  would give the teams the ability to focus their efforts and manage  projects to completion;  holding managers at the director and associate administrator level  accountable for making and supporting policy decisions as early as  possible in the rulemaking process; and   empowering team members by giving them the authority to coordinate  with their associate administrators so that they can represent the  associate administrator's policies, thus eliminating the need for the  separate step of associate administrator's review and approval;  empowering team members by permitting them to set their own  schedules and deadlines; and holding staff and management  accountable for ensuring that schedules are realistic.
In addition, the Secretary of Transportation should direct the FAA  Administrator to take steps to improve administration of the rulemaking  process by   clearly communicating the roles and responsibilities of program and  support staff on rulemaking teams and holding team members and their  managers accountable for limiting their reviews to established criteria;  ensuring that information systems used for rulemaking tracking and  coordination contain current, complete, and accurate data on the status  of all significant rulemaking projects, including the time elapsed  between FAA's transmission of rules to OST and the receipt of OST's  comments or approval; and   implementing elements of its proposed continuous improvement  program and using the resulting information to identify problems in the  process and potential solutions.
Finally, the Secretary of Transportation should direct the FAA  Administrator to take steps to improve human capital management of the  rulemaking process by establishing a human capital management strategy  for offices involved in rulemaking that includes   providing training and support to all participants that promotes use of  the agency's automated information system and collaborative, team- based decisionmaking skills, and assessing the skills of rulemaking staff  and developing targeted training to better enable them to fulfill their  rulemaking roles; and   establishing and implementing performance measures based on  expectations, evaluations, and incentives that promote timely, quality  rules. One approach suggested by the Office of Rulemaking would be to  include a goal for the agency's timely rulemaking in the short-term  incentive plans for all senior managers involved in rulemaking.
In addition, we recommend that the Secretary revise departmental policies  to make them consistent with the provisions of the Wendell H. Ford  Aviation Investment and Reform Act for the 21st Century and reduce the  number of FAA's significant rules subject to its review.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Office of the Secretary of the  Department of Transportation and FAA for their review and comment. In  following discussions, departmental and FAA officials indicated that they  agreed with a number of the draft report's recommendations.
For example, they said that FAA will take steps to ensure that the  rulemaking tracking system is completely accurate and up-to-date, and  includes all appropriate tracking milestones. Furthermore, they agreed that  FAA will use its continuous improvement program to identify potential  process improvements and will hold senior management accountable for  providing policy input as early as possible in the rulemaking process. These  officials also indicated that some of the draft report's recommendations  will require further consideration, and that a specific response to each of  the report's recommendations will be provided in the Department's  response to the final report.
FAA officials provided technical comments, which we incorporated into  the report. The Department also provided written comments on the report,  which discussed four main points about the results of the review. The full  text of FAA's written comments is provided in appendix V, along with our  detailed response to these comments.