Next Generation Air Transportation System: Status of the Transition to the Future Air Traffic Control System
Published: 2007-05-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The nation's current air traffic control system is reaching its capacity limits as demand for air transportation grows. The Next Generation Air Transportation System (NextGen) represents a new system that will use state-of-the-art technologies and procedures. Transitioning to NextGen will require the Federal Aviation Administration (FAA) to continue to sustain the current air traffic control system while acquiring new systems on schedule and on budget. In 2003, Congress authorized the creation of the Joint Planning and Development Office (JPDO), housed within FAA, to plan NextGen and coordinate the transition. GAO's testimony focuses on the progress FAA is making in implementing businesslike operations that could provide a foundation for managing the transition to NextGen, the status of JPDO's planning and facilitation of NextGen, and some key challenges that FAA and JPDO need to address in moving toward NextGen. This statement is based on GAO's November 2006 report and recent testimonies as well as ongoing work. GAO's November report recommended that FAA study its technical and contract management expertise and that JPDO take actions to institutionalize its collaborative practices. FAA and JPDO said they would consider our recommendations.
section_title: What GAO Found
paragraphs: During the last few years, FAA has made significant progress in implementing businesslike operations and procedures for managing and acquiring air traffic control systems. These operations and procedures have improved FAA's management of the current system and should better position the agency to manage the enormously complex transition to NextGen. One outcome of these changes is that FAA has reported exceeding its system acquisition goals for the past 3 fiscal years. However, further work remains to fully address past problems in acquiring systems and institutionalizing changes throughout the agency. JPDO has continued to make progress in furthering its key planning documents. JPDO has experienced delays in the release of key documents, but currently plans to have initial versions of these documents released by July 2007. JPDO has been working since 2005 to establish a memorandum of understanding between its partner agencies, although as of May 4, 2007, the memorandum had been signed by the Departments of Transportation and Commerce and NASA, but was not yet signed by the Departments of Defense and Homeland Security. JPDO is also working with the Office of Management and Budget to establish mechanisms to identify NextGen-related projects across the partner agencies and consider NextGen as a unified, cross-agency program for funding decisions. FAA and JPDO continue to face a number of challenges in moving toward NextGen, including questions about FAA's technical and contract management expertise; FAA's ability to maintain a number of existing systems, including monitoring and addressing equipment outages to ensure the safety of these existing systems as it transitions to NextGen; and conducting necessary human factors research. In addition, while JPDO recently estimated that the total federal cost for NextGen infrastructure through 2025 will range between $15 billion and $22 billion, questions remain about which entities will fund and conduct the necessary research, development, and demonstration projects that will be key to achieving certain NextGen capabilities. Also, JPDO faces a continuing challenge in ensuring the involvement of all key stakeholders, such as active air traffic controllers and system technicians, in its NextGen planning efforts.

section_title: Letter
paragraphs: I appreciate the opportunity to testify before you today to discuss the  future of air traffic control modernization. The nation’s current air traffic  control system is reaching its capacity limits as demand for air  transportation continues to grow each year. The Next Generation Air  Transportation System (NextGen) represents a transformation to a new  system that will use satellite-based technologies and state-of-the-art  procedures to handle the increasing volume of air traffic, while further  improving safety and security. Transitioning to NextGen, however, will  require the Federal Aviation Administration (FAA) to continue to operate  and sustain the current air traffic control system while simultaneously  acquiring and deploying the new NextGen systems on budget and on  schedule.
In December 2000, President Clinton signed an executive order, and  Congress passed supporting legislation that, together, provided FAA with  the authority to create the performance-based Air Traffic Organization  (ATO) to administer and improve FAA’s management of its current air  traffic control modernization efforts. In 2003, Congress authorized the  creation of the Joint Planning and Development Office (JPDO), housed  within FAA, to plan for and coordinate a transition to NextGen— envisioned as a move from largely ground-based radars to precision  satellite-based navigation and including digital, networked  communications; an integrated weather system; layered, adaptive security;  and more. In addition to FAA, JPDO operates in conjunction with multiple  federal partner agencies and with the private sector to collaboratively  conceptualize and plan the NextGen system.
The reauthorization of FAA provides an opportunity to examine how the  agency is managing the transformation to NextGen. My testimony today  focuses on the following questions: (1) What progress is FAA making in  implementing initiatives that could provide a solid foundation for  managing the transition to NextGen? (2) What is the status of JPDO’s  planning and facilitation of the transition to NextGen? and (3) What are  some key challenges that FAA and JPDO need to address in moving  toward NextGen? My statement is based on our November 2006 report  and recent testimonies as well as on-going work. We conducted this work  in accordance with generally accepted government auditing standards.
During the last few years, FAA has made significant progress in  implementing businesslike operations and procedures for acquiring and  managing air traffic control systems which have improved FAA’s  management of the current system and should better position the agency  to manage the enormously complex transition to NextGen. However,  further work remains to fully address past problems in acquiring systems  and to institutionalize changes throughout the agency. By creating the Air  Traffic Organization and appointing a chief operating officer, FAA  established a new management structure and adopted more leading  practices of private sector businesses to address the cost, schedule, and  performance shortfalls that have plagued air traffic control acquisitions.  One outcome of these changes is that for the past 3 fiscal years, FAA has  reported exceeding its system acquisition goals. For fiscal year 2006, FAA  reported that its critical acquisitions were 100 percent on budget and over  97 percent on schedule. FAA has also improved its management of the air  traffic control system through increased efforts to achieve cost savings by  outsourcing and consolidating facilities. Currently, FAA is seeking savings  through outsourcing its planned nationwide deployment of a critical  NextGen surveillance technology. To help sustain progress in managing  acquisitions and address remaining program risks, FAA is working with  the Office of Management and Budget (OMB) to develop goals and  milestones for FAA to meet in further reducing acquisition risks. Despite  FAA’s progress, however, the FAA administrator’s term ends in September  2007 and the chief operating officer left in February 2007, after serving 3  years. Thus, FAA will have lost two of its significant agents for change by  the end of September. FAA’s new leaders will need to demonstrate the  same commitment to improvement as the outgoing leaders.
JPDO has made progress in furthering its key planning documents, but  continues to face challenges in institutionalizing its collaborative  practices. JPDO is developing several key documents—a Concept of  Operations, an Enterprise Architecture, and an Integrated Work Plan— that together form the foundation of NextGen planning. JPDO has missed  earlier milestones regarding the release of its Concept of Operations and  Enterprise Architecture. JPDO currently plans to release initial versions of  all three documents by July 2007. As we noted in November 2006, JPDO is  fundamentally a planning and coordinating body that lacks authority over  the key human and technological resources of its partner agencies. Thus,  institutionalizing the collaborative process between these partner agencies  will continue to be critical to JPDO’s success. However, JPDO still does  not have in place a formal, long-term agreement among its partner  agencies on their roles and responsibilities in planning and facilitating the  transition to NextGen. JPDO has been working since 2005 to establish a  memorandum of understanding between the partner agencies, although as  of May 4, 2007, the memorandum had been signed by the Departments of  Transportation and Commerce and NASA; the Departments of Defense  and Homeland Security had not yet signed. It will also be important for  institutionalizing collaboration to incorporate NextGen goals and activities  into the partner agencies’ key planning documents, as FAA is currently  doing with its Operational Evolution Partnership—FAA’s new  implementation plan for NextGen. JPDO is also working with OMB to  establish mechanisms to identify NextGen-related projects across the  partner agencies and consider NextGen as a unified, cross-agency program  for funding decisions.
FAA and JPDO continue to face a number of challenges in moving toward  NextGen, including determining whether the organizations have the  adequate and appropriate technical and contract management expertise,  managing and sustaining the current system, identifying who will conduct  necessary research and development activities, obtaining stable  leadership, conducting needed human factors research, and ensuring the  involvement of all key stakeholders. In November 2006, we recommended  that FAA examine its strengths and weaknesses with regard to the  technical and contract management expertise that will be required to  define, implement, and integrate the numerous complex programs  inherent in the transition to NextGen. In response to our recommendation,  FAA is working with the National Academy of Public Administration to  explore these issues. JPDO recently estimated that the total federal cost  for NextGen infrastructure through 2025 will range between $15 billion  and $22 billion. However, questions remain over which entities will fund  and conduct some of the necessary research, development, and  demonstration projects that will be key to achieving certain NextGen  capabilities. According to officials at FAA and JPDO, they are currently  studying these issues and trying to assess how much research and  development FAA can assume. Of critical importance in the area of  NextGen research is human factors research given the fundamental  changes that NextGen envisions in the roles of air traffic controllers and  pilots due to automation and changes in surveillance technologies and  communications. JPDO has suffered from a lack of stable leadership and is  now functioning under its third director. This issue is exacerbated by  JPDO’s senior policy committee, which has met only four times and has  not met at all as a formal body since November 2005. Finally, JPDO faces a  continuing challenge in ensuring the involvement of all key stakeholders,  such as active air traffic controllers and technicians. Our work on past air  traffic control modernization projects has shown that a lack of  stakeholder or expert involvement early and throughout a project can lead  to costly increases and delays.
In November 2006, we recommended that the Secretary of Transportation  direct FAA to undertake a formal exploration of the agency’s strengths and  weaknesses with regard to the technical expertise and contract  management expertise that will be required to define, implement, and  integrate the numerous complex programs and systems inherent in the  transition to NextGen. We recommended that the Secretary direct JPDO to  take actions to institutionalize the partner agencies’ collaboration in  supporting NextGen, including action on a memorandum of understanding  among the partner agencies, actions to finalize procedures to leverage  partner agency resources, and actions to develop procedures for dispute  resolution. We also recommended that the Secretary direct JPDO to  determine whether key stakeholders and expertise are not currently  represented in JPDO planning efforts. FAA and JPDO officials neither  agreed nor disagreed with our recommendations, but said they would  consider them.
subsections: section_title: Improved, Businesslike Operations Should Better Position FAA to Implement and Manage NextGen, but Further Work Remains
paragraphs: During the last few years, FAA has made significant progress in  implementing businesslike processes and procedures for managing and  acquiring air traffic control systems. This contrasts with the previous  decade’s air traffic control modernization program which was  characterized by chronic cost and schedule difficulties with systems  acquisitions. The implementation of these businesslike operations has  improved FAA’s management of the current system and should better  position the agency to manage the enormously complex transition to  NextGen. However, further work remains to fully address past problems  and institutionalize these changes throughout the agency, especially given  the changing leadership within both FAA and ATO.
subsections: section_title: Progress Has Been Made but Further Work Remains to Institutionalize Recent Improvements in Management and Acquisition Processes
paragraphs: A successful transition to NextGen will depend, to a great extent, on FAA’s  ability to manage the acquisition and integration of multiple NextGen  systems. In recent years, FAA has made significant progress toward  improving its management of acquisitions. However, FAA’s air traffic  control modernization program remains on our list of high risk programs  because of its history of systemic management and acquisition problems  that contributed to cost growth, schedule slippages, and performance  shortfalls and the relative recentness of the turnaround in the program’s  performance. The realization of NextGen goals could be severely  compromised if FAA’s improved program management and outcomes are  not institutionalized and carried over into the implementation of NextGen,  which is an even more complex and ambitious undertaking than past  modernization efforts.
By creating ATO and appointing a chief operating officer (COO) to head  ATO, FAA established a new management structure and adopted more  leading practices of private sector businesses to address the cost,  schedule, and performance shortfalls that have plagued air traffic control  acquisitions. ATO has worked to create a flatter organization, with fewer  management layers, and has reported reducing executive staffing by 20  percent and total management by 16 percent. In addition, FAA uses a  performance management system to hold managers responsible for the  success of ATO. More specifically, to better manage its acquisitions and  address problems we have identified, FAA has    undertaken human capital initiatives to improve its acquisition workforce  culture and build towards a results-oriented, high-performing organization;   developed and applied a process improvement model to assess the  maturity of its software and systems capabilities resulting in, among other  things, enhanced productivity and greater ability to predict schedules and  resources; and reported that it has established a policy and guidance on using earned  value management (EVM) in its acquisition management system and that  19 of its major programs are currently using EVM.
One outcome of the implementation of the changes in program  management and operations is that for the past three fiscal years, FAA has  reported exceeding system acquisition goals. FAA’s goals for fiscal year  2006 were to have 85 percent of critical acquisition programs within 10  percent of budget, as reflected in its capital investment plan, and to have  85 percent of critical acquisition programs on schedule. For fiscal year  2006, FAA reported that its critical acquisitions were 100 percent on  budget and over 97 percent on schedule.
section_title: FAA Has Reported Cost Savings through Outsourcing and Facility Consolidations
paragraphs: FAA has also improved its management of its air traffic control program  through increased efforts to achieve cost savings by outsourcing and  consolidating facilities. For example, FAA is outsourcing flight service  stations and estimates a $2.2 billion savings over 12 years. Similarly, FAA  is seeking savings through outsourcing its planned nationwide deployment  of Automatic Dependent Surveillance-Broadcast (ADS-B), a critical  NextGen surveillance technology. FAA is planning to implement ADS-B  through a performance-based contract in which FAA will pay  “subscription” charges for the ADS-B services and the vendor will be  responsible for building and maintaining the infrastructure. (FAA also  reports that the ADS-B rollout will allow the agency to remove 50 percent  of its current secondary radars, saving money in the program’s baseline.  The remaining radars will serve as a back-up system to ADS-B.) As for  consolidating facilities, FAA is currently restructuring ATO’s  administrative service areas from nine offices to three offices, which FAA  estimates will save up to $460 million over 10 years.
We previously reported that FAA should pursue further cost control  options, such as exploring additional opportunities for contracting out  services and consolidating facilities. However, we recognize that FAA  faces challenges with consolidating facilities, an action that can be  politically sensitive. In recognition of this sensitivity, the administration’s  reauthorization proposal presents an initiative in which the Secretary of  Transportation would be authorized to establish an independent, five- member Commission, known as the Realignment and Consolidation of  Aviation Facilities and Services Commission, to independently analyze  FAA’s recommendations to realign facilities or services. The Commission  would then send its own recommendations to the President and Congress.  In the past, we noted the importance of potential cost savings through  facility consolidations; however, any such consolidations must be handled  through a process that solicits and considers stakeholder input throughout  and fully considers the safety implications of both proposed facility  closures and consolidations.
section_title: Mitigating Remaining Risks and Institutionalization of Improvements Will Continue to Be a Challenge for FAA
paragraphs: Sustaining the acquisition progress achieved to date and addressing the  remaining program risks remains a challenge for FAA. FAA’s air traffic  control modernization program has been on GAO’s high-risk list since  1995. In recent years the agency has made measurable improvements in its  acquisition processes. GAO acknowledged those improvements in its 2007  high risk report. In 2005, FAA submitted a plan to OMB for reducing the  risks of cost overruns, schedule slippages, and performance shortfalls with  goals and milestones for FAA to meet in further reducing acquisition risks.  FAA expects to complete the risk mitigation plan by the end of calendar  year 2008.
Additionally, we have an ongoing study that is examining FAA’s  performance and reporting on its critical acquisitions, including applicable  performance measures. We are exploring FAA’s use of the most recently  approved cost and schedule baselines, which may have changed  significantly since the start of an acquisition, to measure and report on  program performance. Rebaselining acquisitions is an accepted practice  and there can be valid reasons for doing so, such as when changes in a  program’s requirements fundamentally alter the acquisition and make the  originally approved schedule unrealistic. Because rebaselining resets the  cost and schedule variances to zero, however, we want to verify that FAA’s  practice is not masking acquisition performance problems and is providing  full disclosure to the Congress. We expect to issue a report on these issues  later this year.
section_title: Institutionalizing Changes Within FAA Will Require Continued Strong Leadership
paragraphs: It will be important, as FAA begins to implement NextGen systems, to  maintain critical acquisitions on schedule and on budget to meet the goal  of transitioning to NextGen by 2025 and to prevent escalation of the costs  of NextGen. While FAA has implemented many positive changes to its  management and business processes in recent years, it currently faces the  loss of key leaders. We reported that the experiences of successful  transformations and change management initiatives in large public and  private organizations suggest that it can take 5 to 7 years or more until  such initiatives are fully implemented and cultures are transformed in a  sustainable manner. Such changes require focused, full-time attention  from senior leadership and a dedicated team. However, FAA will have lost  two of its significant agents for change—the FAA administrator and the  COO—by the end of September 2007. The administrator’s term ends in  September 2007; the COO left in February 2007, after serving 3 years. For  the financial, management, and acquisition improvements to further  permeate the agency, and thus provide a firm foundation upon which to  implement NextGen, FAA’s new leaders will need to demonstrate the same  commitment to improvement as the outgoing leaders. Because this is a  critical time for FAA, the agency needs to move expeditiously to find a  new COO for ATO. A COO who could commit to the current statutory 5- year term also would be useful in providing stable leadership at ATO as  foundational NextGen systems begin to be implemented.
section_title: JPDO Has Made Progress in Planning NextGen, but Continues to Face Challenges with Its Organization
paragraphs: JPDO has continued to make progress in furthering its key planning  documents, but still faces challenges in institutionalizing its collaborative  practices.
subsections: section_title: JPDO Has Made Progress Toward Releasing Key Planning Documents, although Further Work Remains
paragraphs: JPDO’s authorizing legislation requires the office to create a multi-agency  research and development plan for the transition to NextGen. To comply,  JPDO is developing several key documents that together form the  foundation of NextGen planning. These documents include a NextGen  Concept of Operations, a NextGen Enterprise Architecture, and an  Integrated Work Plan.
The Concept of Operations is the most fundamental of JPDO’s key  planning documents, as the other key documents flow from it. Although an  earlier version was delayed so that stakeholder comments could be  addressed, Version 1.2 of the Concept of Operations is currently posted on  JPDO’s Website for review and comment by the aviation community. This  226-page document provides written descriptions of how the NextGen  system is envisioned to operate in 2025 and beyond, including highlighting  key research and policy issues that will need to be addressed. For  example, some key policy issues are associated with automating the air  traffic control system, including the need for a backup plan in case  automation fails, the responsibilities and liabilities of different  stakeholders during an automation failure, and the level of monitoring  needed by pilots when automation is ensuring safe separation between  aircraft. Over the next few months, JPDO plans to address the public  comments it receives and issue a revised version of the Concept of  Operations.
In addition to the Concept of Operations, JPDO is working on an  Enterprise Architecture for NextGen—that is, a technical description of  the NextGen system, akin to blueprints for a building. The Enterprise  Architecture is meant to provide a common tool for planning and  understanding the complex, interrelated systems that will make up  NextGen. According to JPDO officials, the Enterprise Architecture will  provide the means for coordinating among the partner agencies and  private sector manufacturers, aligning relevant research and development  activities, and integrating equipment. JPDO plans to issue an early version  of its Enterprise Architecture next month, although three previous release  dates—March 2006, June 2006, and September 2006—were not met.  According to JPDO officials, until the Enterprise Architecture is released,  precise cost estimates cannot be developed and the partner agencies’  research plans cannot be coordinated.
Finally, JPDO is developing an Integrated Work Plan that will describe the  capabilities needed to transition to NextGen from the current system and  provide the research, policy and regulation, and acquisition timelines  necessary to achieve NextGen by 2025. The Integrated Work Plan is akin  to a project plan and will be critical for fiscal year 2009 partner agency  budget and program planning. According to a JPDO official, the office  intends to issue its initial draft of the Integrated Work Plan in July 2007.
We have discussed JPDO’s planning documents with JPDO officials and  examined both an earlier version of JPDO’s Concept of Operations and  the current version that is out for public comment. As we previously  testified, JPDO is focusing on the right types of key documents for the  foundation of NextGen planning. As for the Concept of Operations, the  current version is improved from the prior version due to additional detail.  Nonetheless, we believe that it still does not include key elements such as  scenarios illustrating NextGen operations, a summary of NextGen’s  operational impact on users and other stakeholders, and an analysis of the  benefits, alternatives, and trade-offs that were considered for NextGen. In  addition, it lacks an overall description that ties together the eight key  areas that the document covers. As noted earlier, JPDO does plan to  release another version of the Concept of Operations later this year.
In fact, JPDO plans further versions of all of its key planning documents.  We see the development of all three of JPDO’s key documents as part of an  iterative and evolutionary process. Thus, it is unlikely that any of these  documents will ever be truly “finalized,” but rather will continue to evolve  throughout the implementation of NextGen to reflect, for example, the  development of new technologies or problems uncovered during research  and development of planned technologies.
Finally, while each of the three key documents has a specific purpose, the  scope and technical sophistication of these documents makes it difficult  for some stakeholders to understand the basics of the NextGen planning  effort. To address this issue, JPDO is currently drafting what the office  refers to as a “blueprint” for NextGen, meant to be a short, high-level, non- technical presentation of NextGen goals and capabilities. We believe that  such a document could help some stakeholders develop a better  understanding of NextGen and the planning effort to date.
section_title: Institutionalizing the Collaborative Process Will Continue to be Critical to JPDO’s Facilitating NextGen
paragraphs: In our November 2006 report, we noted that JPDO is fundamentally a  planning and coordinating body that lacks authority over the key human  and technological resources of its partner agencies. Consequently,  institutionalizing the collaborative process with its partner agencies will  be critical to JPDO’s ability to facilitate the implementation of NextGen.  JPDO, however, has not established some practices significant to  institutionalizing its collaborative process. For example, at a fundamental  level, JPDO does not have formal, long-term agreements among its partner  agencies on their roles and responsibilities in creating NextGen. There is  no mechanism that assures that the partner agencies’ commitment will  continue over the 20-year timeframe of NextGen or that ensures  accountability to JPDO. According to JPDO officials, they are working to  establish a memorandum of understanding (MOU), signed by the Secretary  or other high-ranking official from each partner agency, which will broadly  define the partner agencies’ roles and responsibilities. JPDO first informed  us of the development of this MOU in August 2005; in November 2006 we  recommended that JPDO finalize the MOU and present it to JPDO’s senior  policy committee for its consideration and action. Nonetheless, according  to a JPDO official, as of May 4, 2007, the MOU has been signed by the  Departments of Transportation and Commerce and NASA, but remains  unsigned by the Departments of Defense and Homeland Security.
Another key method for institutionalizing the collaborative effort is  incorporating NextGen goals and activities into the partner agencies’ key  planning documents. For example, we noted in November 2006 that NASA  and FAA had incorporated NextGen goals into their strategic plans. These  types of efforts will be critical to JPDO’s ability to leverage its partner  agency resources for continued JPDO planning efforts. Even more  importantly, these efforts will be critical to helping ensure that partner  agencies—given competing missions and resource demands—dedicate the  resources necessary to support the implementation of NextGen research  efforts or system acquisitions.
Recognizing that JPDO does not have authority over partner agency  resources, FAA and JPDO have initiated several efforts to institutionalize  NextGen. First, JPDO is working with FAA to refocus one of FAA’s key  planning documents on the implementation of NextGen—an effort that  also appears to be improving the collaboration and coordination between  JPDO and ATO. FAA has expanded and revamped its Operational  Evolution Plan (OEP)—renamed the Operational Evolution Partnership— to become FAA’s implementation plan for NextGen. The OEP is being  expanded to apply to all of FAA and is intended to become a  comprehensive description of how the agency will implement NextGen,  including the required technologies, procedures, and resources. (Figure 2  shows the new OEP framework.) An ATO official told us that the new OEP  is to be consistent with JPDO’s key planning documents and its budget  guidance to the partner agencies. According to FAA, the new OEP will  allow it to demonstrate appropriate budget control and linkage to  NextGen plans and help ensure that FAA’s research and development is  relevant to NextGen’s requirements. According to FAA documents, the  agency plans to publish a new OEP in June 2007.
In addition, to further align FAA’s efforts with JPDO’s plans for NextGen,  FAA has created a NextGen review board to oversee the OEP. This review  board is co-chaired by JPDO’s director and ATO’s vice president of  operations planning services. Initiatives, such as concept demonstrations  or research, proposed for inclusion in the OEP now need to go through the  review board for approval. These efforts are assessed for relation to  NextGen requirements, concept maturity, and risk. An ATO official told us  that the new OEP process should also help identify some smaller  programs that might be inconsistent with NextGen and which could be  discontinued. Additionally, as a further step towards integrating ATO and  JPDO, the administration’s reauthorization proposal calls for the JPDO  director to be a voting member of FAA’s joint resources council and ATO’s  executive council.
While progress is being made in incorporating NextGen initiatives into  FAA’s strategic and planning documents, more remains to be done with  FAA and the other JPDO partner agencies. For example, one critical  activity that remains in this area will be synchronizing the NextGen  enterprise architecture—once JPDO releases and further refines it—with  the partner agencies’ enterprise architectures. Doing so should help align  agencies’ current work with NextGen while simultaneously identifying  gaps between agency plans and NextGen plans. Also, while FAA is making  significant progress toward creating an implementation plan for NextGen  with its OEP, the other partner agencies are less far along or have not  begun such efforts. JPDO’s lack of authority over partner agency  resources will be minimized as a challenge if the partner agencies commit  to NextGen goals and initiatives at a structural level. By further  incorporation of NextGen efforts into strategic planning documents, the  partner agencies will better institutionalize their commitments to JPDO  and the NextGen initiative.
Finally, JPDO has made progress in establishing mechanisms for  leveraging partner agency resources—another important practice for  institutionalizing JPDO’s collaborative effort. As we noted in our  November 2006 report, JPDO is working with OMB to develop a process  that would allow OMB to identify NextGen-related projects across the  partner agencies and consider NextGen as a unified, cross-agency  program. We recommended that JPDO develop written procedures that  formalize agreements with OMB regarding the leveraging of partner  agency resources and the identification of NextGen-related programs  within agency budgets. We recently met with OMB officials who said that  they felt there has been significant progress with JPDO over the last year.  JPDO is now working on an OMB Exhibit 300 form for NextGen that will  allow JPDO to present OMB a joint business case for the NextGen-related  efforts within the partner agencies and will be used as input to funding  decisions for NextGen research and acquisitions across the agencies.  This Exhibit 300 will be due to OMB in September 2007 to inform  decisions about the partner agencies’ 2009 budget submissions.
Ultimately, the success of JPDO will have to be measured in the efforts of  its partner agencies to implement policies and procedures, conduct  research, and acquire systems that support NextGen. For example, JPDO  is currently working to establish a joint weather office involving FAA and  the Departments of Defense and Commerce. The goal of this joint office is  to eliminate redundancies in weather research and leverage the resources  of these partner agencies to implement a joint weather product by 2012,  according to a senior JPDO official. Similarly, JPDO has secured a  commitment from the Departments of Defense and Homeland Security  and FAA to jointly fund the developmental testing of scenarios for  network enabled operations.
With regard to implementation of NextGen technologies, JPDO can point  to its success in collaborating with FAA to fund and speed FAA’s rollout of  two systems considered cornerstone technologies for NextGen: ADS-B  and System Wide Information Management (SWIM). ADS-B will replace  many existing radars with less costly ground-based transceivers. SWIM  will provide an initial network centric capability to all the users of the air  transportation system. This means that the FAA and the Departments of  Homeland Security and Defense will eventually share a common, real- time, secure picture of aviation operations across the airspace system.  Identifying such NextGen programs across the partner agencies and  establishing implementation plans for them in JPDO’s Integrated Work  Plan will be critical going forward to creating performance metrics for  JPDO.
section_title: FAA and JPDO Continue to Face a Number of Challenges in Moving Toward NextGen
paragraphs: FAA and JPDO continue to face a number of challenges as they move  toward the implementation of NextGen systems and procedures, including  assessing FAA’s technical and contract management expertise, sustaining  the current air traffic control system, identifying which entities will handle  necessary research and development, addressing JPDO’s leadership  challenges, conducting human factors research, and ensuring the  involvement of all key stakeholders.
subsections: section_title: FAA Needs to Explore Whether It Has the Technical and Contract Management Expertise Necessary to Implement NextGen
paragraphs: In the past, a lack of expertise contributed to weaknesses in FAA’s  management of air traffic control modernization efforts, and industry  experts with whom we spoke questioned whether FAA will have the  technical expertise needed to implement NextGen. In addition to technical  expertise, FAA will need contract management expertise to oversee the  systems acquisitions and integration involved in NextGen.
Recognizing the complexity of the NextGen implementation effort and the  possibility that FAA may not have the in-house expertise to manage it  without assistance, we have identified potential approaches for  supplementing FAA’s capabilities. One of these approaches is for FAA to  contract with a lead systems integrator (LSI). Generally, an LSI is a prime  contractor that would help to ensure that the discrete systems used in  NextGen will operate together and whose responsibilities may include  designing system solutions, developing requirements, and selecting major  system and subsystem contractors. The government has used LSIs before  for programs that require the integration of multiple complex systems. Our  research indicates that although LSIs have certain advantages, such as the  knowledge, understanding, skills, and ability to integrate functions across  various systems, their use also entails certain risks. For example, because  an LSI may have significantly more responsibility than a prime contractor  usually does, careful oversight is necessary to ensure that the  government’s interests are protected and that conflicts of interest are  avoided. Providing the oversight that is needed, however, can be  compromised when government expertise is lacking. Consequently,  selecting, assigning responsibilities to, and managing an LSI could pose  significant challenges for JPDO and FAA.
Another approach that we have identified involves obtaining technical  advice from federally funded research and development corporations to  help the agency oversee and manage prime contractors. These nonprofit  corporations are chartered to provide long-term technical advice to  government agencies in accordance with various statutory and regulatory  rules to ensure independence and prevent conflicts of interest.
In November 2006, we recommended that FAA examine its strengths and  weaknesses with regard to the technical expertise and contract  management expertise that will be required to define, implement, and  integrate the numerous complex programs inherent in the transition to  NextGen. In response to our recommendation, FAA has contracted with  the National Academy of Public Administration (NAPA) to determine the  needed skill mix and the number of those skilled persons, such as  technical personnel and program managers, that would be necessary to  implement the new OEP and to compare those requirements with current  FAA staff resources. According to FAA, the next step in this process would  be to contract with NAPA or another organization for advice on how best  to fill any skills gaps and how to proceed with management and oversight  of the implementation of NextGen. We believe this is a reasonable  approach that should help FAA begin to address this challenge.
section_title: Although FAA Is Now Focusing on NextGen, It Must Continue to Manage and Sustain the Current System
paragraphs: While FAA works to acquire and deploy NextGen technologies, it will be  equally important that FAA maintain many existing systems and, for those  systems that FAA determines should be phased out, that the agency do so  using a risk-based approach. The adequacy of FAA’s maintenance of  existing systems was raised following a power outage and equipment  failures in Southern California that caused hundreds of flight delays during  the summer of 2006. Investigations by FAA and the Department of  Transportation Inspector General into these incidents identified a number  of underlying issues, including the age and condition of equipment.  Nationwide, the number of scheduled and unscheduled outages of air  traffic control equipment and ancillary support systems has been  increasing. Increases in the number of unscheduled outages indicate that  systems are failing more frequently. It will be critical for FAA to monitor  and address equipment outages to ensure the safety and efficiency of the  legacy systems, since they will be the core of the national airspace system  for a number of years and, in some cases, will become part of NextGen.
section_title: FAA and JPDO Have Begun to Release Early Cost Estimates for NextGen, but Questions Remain Over Who Will Conduct Necessary Research and Development
paragraphs: In our November report, we noted that JPDO had not yet developed a  comprehensive estimate of the costs of NextGen. Since then, in its  recently released 2006 Progress Report, JPDO reported some estimated  costs for NextGen, including specifics on some early NextGen programs.  JPDO believes the total federal cost for NextGen infrastructure through  2025 will range between $15 billion and $22 billion. JPDO also reported  that a preliminary estimate of the corresponding cost to system users, who  will have to equip with the advanced avionics that are necessary to realize  the full benefits of some NextGen technologies, produced a range of $14  billion to $20 billion. JPDO noted that this range for avionics costs reflects  uncertainty about equipage costs for individual aircraft, the number of  very light jets that will operate in high-performance airspace, and the  amount of out-of-service time required for installation.
FAA, in its capital investment plan for fiscal years 2008-2012, includes  estimated expenditures for 11 line items that are considered NextGen  capital programs. The total 5-year estimated expenditures for these  programs is $4.3 billion. In fiscal year 2008, only 6 of the line items are  funded for a total of roughly $174 million; funding for the remaining 5  programs would begin with the fiscal year 2009 budget. According to FAA,  in addition to capital spending for NextGen, the agency will spend an  estimated $300 million on NextGen-related research and development  from fiscal years 2008 through 2012. The administration’s budget for fiscal  year 2008 for FAA includes a total of $17.8 million to support the activities  of JPDO.
While FAA and JPDO have begun to release estimates for FAA’s NextGen  investment portfolio, questions remain over which entities will fund and  conduct some of the necessary research, development, and demonstration  projects that will be key to achieving certain NextGen capabilities. In the  past, a significant portion of aeronautics research and development,  including intermediate technology development, has been performed by  NASA. To its credit, NASA plans to focus its research on the needs of  NextGen. However, NASA is also moving toward a focus on fundamental  research and away from developmental work and demonstration projects,  which could negatively impact NextGen if these efforts are not assumed  by others.
In addition, JPDO will need to conduct modeling for NextGen and may  look to its partner agencies to provide modeling capabilities and support.  For example, NASA’s NAS-wide modeling platform, the Airspace Concepts  Evaluation System (ACES), permits JPDO to, among other things,  evaluate alternative research ideas and assess the performance of  competing vendors. According to a JPDO official, this capability, which is  critical to NextGen research, is eroding as JPDO’s investment simulation  requirements are expanding. As part of its fundamental research mission,  NASA intends to upgrade to ACES-X (a more sophisticated representation  of the national airspace system), but not for another two years. Until then,  JPDO’s investment modeling capability will be constrained unless the  office or another partner agency can assume the modeling work. For  example, the Department of Defense has detailed aircraft models and the  Department of Homeland Security has detailed models of airport terminals  that are relevant for JPDO’s simulations. This is an issue that needs to be  addressed in the short-term.
JPDO faces the challenge of determining the nature and scope of the  research and technology development necessary to begin the transition to  NextGen, as well as identifying the entities that can conduct that research  and development. According to officials at FAA and JPDO, they are  currently studying these issues and trying to assess how much research  and development FAA can assume. An FAA official recently testified that  the agency proposes to increase its research and development funding by  $280 million over the next 5 years. However, a draft report by an advisory  committee to FAA stated that FAA would need at least $100 million  annually in increased funding to assume NASA’s research and  development work, and establishing the necessary infrastructure within  FAA could delay the implementation of NextGen by 5 years. JPDO’s  Integrated Work Plan will permit NASA and the other partner agencies to  assess the research and development needs of NextGen, determine  funding, and conduct the necessary initiatives. The Integrated Work Plan  is critical for the timely completion of research and testing of proposed  NextGen systems and keeping NextGen on schedule.
section_title: JPDO’s Lack of Stable Leadership and the Authority to Enforce Accountability Threaten the Credibility of Organization
paragraphs: While basic organizational structure of JPDO has been in place for several  years (see app. 1), it has suffered from a lack of stable leadership. As  JPDO begins its fourth year in operation, it is functioning under its third  director and operated for much of 2006 under the stewardship of an acting  director. The current director of JPDO has held the position since August  2006. The Next Generation Air Transportation System Institute (the  Institute), created to facilitate the participation of nonfederal stakeholders  in the NextGen effort, noted in its recent annual report that JPDO’s  leadership turnover had made it a challenge for JPDO to move out more  aggressively on many goals and objectives, as the office waited on a full- time director. The Institute also stated that JPDO’s leadership turnover  had limited the ability of the Institute’s executive committee to forge a  stronger relationship with JPDO leadership and work jointly on strategic  issues and challenges. These fundamental leadership issues are  exacerbated by the lack of meetings of JPDO’s senior policy committee.  Although JPDO has been functioning for just over 3 years, the senior  policy committee has met only four times, and has not met at all as a  formal body since November 2005.
In addition to the lack of stable leadership, JPDO’s management lacks the  authority to hold much of JPDO’s staff accountable for their performance.  As we noted in November 2006, JPDO has staffed the various levels of its  organization with employees from its partner agencies and this practice  helps to leverage partner agency human resources. However, a drawback  of such staffing is a lack of real or perceived accountability to JPDO.  According to JPDO officials, the JPDO workforce consists largely of part- time partner agency personnel who have been detailed to JPDO and part- time private sector volunteers. Only a few permanently-assigned FAA staff  have their performance appraised by JPDO management, although the  director does provide input to the performance appraisals of some of the  managers detailed to JPDO from partner agencies. We have noted in  previous studies that improved performance has been linked to  accountability.
Similarly, although the organizational structure of the Institute has been in  place for 2 years, the Institute is currently led by an acting director while a  search is being conducted for the Institute’s third executive director. Some  Institute Management Council (IMC) members with whom we spoke  believed that this turnover might be indicative of problems with the  structure of the Institute and a need for greater clarity in roles and  responsibilities. For example, these IMC members noted that there were  stresses placed on the Institute’s executive director resulting from the  need to meet the competing demands of the IMC, the IMC executive  committee, and JPDO management. Other IMC members attributed the  stresses on the executive director to the lack of clarity in the Institute’s  role. These members noted that while the Institute is clearly charged with  selecting private sector participants for JPDO’s work groups, the  Institute’s role of conducting research for the JPDO could be viewed as  overlapping with other advisory organizations such as RTCA. Two IMC  members believed that the Institute’s award of only two research contracts  in two years illustrates that the Institute is not yet functioning as intended.  Some IMC members also pointed out that a formal mechanism for  providing industry input to JPDO on NextGen concepts and issues has not  yet been fully established, even though this is one of the missions of the  Institute. Although the Institute is currently seeking a new executive  director, some IMC members felt that the IMC would do better to first try  and gain a better understanding of the factors that have led to the turnover  in the executive director position.
section_title: Human Factors Research Is Critical to Some Fundamental NextGen Capabilities
paragraphs: Among the central assumptions of the NextGen system is a concept of  operations that envisions an increased reliance on automation, which  dramatically changes the roles and responsibilities of both the air traffic  controllers and the pilots. In such an automated environment some of the  controller’s responsibilities will shift from air traffic control to air traffic  management and pilots will take on a greater share of the responsibility  for maintaining safe separation and other tasks currently performed by  controllers. These changes in roles and responsibilities raise significant  human factors issues for the safety and efficiency of the national airspace  system.
Although JPDO has begun to model how shifts in air traffic controllers’  workloads would affect their performance, it has not yet begun to model  the effect of how this shift in workload to pilots would affect pilot  performance. According to a JPDO official, modeling the effect of changes  in pilot workload has not yet begun because JPDO has not yet identified a  suitable model to incorporate into its suite of modeling tools. According to  a JPDO official, the evolving roles of pilots and controllers is the NextGen  initiative’s most important human factors issue, but will be difficult to  research because data on pilot behavior are not readily available for use in  creating models. In addition to the study of changing roles, JPDO has not  yet studied the training implications of various systems or solutions  proposed for NextGen. For example, JPDO officials said they will need to  study the extent to which new air traffic controllers will have to be trained  to operate both the old and the new equipment as the concept of  operations and enterprise architecture mature.
section_title: JPDO Faces A Continuing Challenge in Ensuring the Involvement of All Key Stakeholders
paragraphs: Some stakeholders, such as current air traffic controllers and technicians,  will play critical roles in NextGen, and their involvement in planning for  and deploying the new technology will be important to the success of  NextGen. In November 2006, we reported that active air traffic controllers  were not involved in the NextGen planning effort and recommended that  JPDO determine whether any other key stakeholders and expertise were  not represented on its integrated product teams, divisions, or elsewhere  within the office. Since then, the head of the controllers’ union has taken a  seat on the IMC. However, no active controllers are yet participating at the  more detailed group planning level. Also, aviation technicians do not  participate in NextGen efforts. Input from current air traffic controllers  who have recent experience controlling aircraft and current technicians  who will maintain NextGen equipment is important when considering  human factors and safety issues. Our work on past air traffic control  modernization projects has shown that a lack of stakeholder or expert  involvement early and throughout a project can lead to costly increases  and delays.
In addition, we found that some private sector stakeholders have  expressed concerns that participation in the Institute might either  preclude bidding on future NextGen acquisitions or pose organizational  conflicts of interest. FAA’s acquisition process, generally, precludes bids  from organizations that have participated in, materially influenced, or had  prior knowledge of the requirements for an acquisition. The Institute was  aware of this concern and attempted to address it through an amendment  to its governing document that strengthened the language protecting  participants from organizational conflicts of interest for participation in  the NextGen initiative. However, while the amendment language currently  operates to protect stakeholders, the language has never been tested or  challenged. Thus, it is unclear at this time whether any stakeholder  participation is being chilled by conflict of interest concerns.
Mr. Chairman, this concludes my statement. I would be pleased to respond  to any questions from you or other Members of the Subcommittee.
section_title: GAO Contacts and Staff Acknowledgment
paragraphs: For further information on this testimony, please contact Dr. Gerald L.  Dillingham at (202) 512-2834 or dillinghamg@gao.gov. Individuals making  key contributions to this statement include Kevin Egan, Jessica Evans,  Colin Fallon, Ed Menoche, Faye Morrison, Taylor Reeves, and Richard  Scott.
section_title: Appendix I: JPDO’s Organizational Structure Facilitates Collaboration, but Continues to Evolve
paragraphs: In November 2006, we reported that the Joint Planning and Development  Office’s (JPDO) organizational structure incorporated some of the  practices that we have found to be effective for federal interagency  collaborations—an important point given how critical such collaboration  is to the success of JPDO’s mission. For example, the JPDO partner  agencies have worked together to develop key strategies for the Next  Generation Air Transportation System (NextGen) and JPDO has leveraged  its partner agency resources by staffing various levels of its organization  with partner agency employees. Also, our work has shown that involving  stakeholders can, among other things, increase their support for a  collaborative effort.
Vision 100 includes requirements for JPDO to coordinate and consult with  its partner agencies, private sector experts, and the public. JPDO’s  approach has been to establish an organizational structure that involves  federal and nonfederal stakeholders throughout the organization. This  structure includes a federal interagency senior policy committee. JPDO’s  senior policy committee is headed by the Secretary of Transportation (as  required in Vision 100) and includes senior-level officials from JPDO’s  partner agencies. The JPDO board is an adjunct to the senior policy  committee and is composed of at least one senior representative from  each of the partner agencies.
The Next Generation Air Transportation System Institute (the Institute)  was created by an agreement between the National Center for Advanced  Technologies and the Federal Aviation Administration to meet Vision  100’s requirement that JPDO coordinate and consult with the public. The  Institute incorporates the expertise and views of stakeholders from private  industry, state and local governments, and academia. In addition, the  Institute arranges for the participation of nonfederal stakeholders in  JPDO’s planning efforts, reviews and selects private sector organizations  to conduct research studies needed by JPDO, and holds public meetings to  obtain the views of the aviation community. The Institute held its first  public meeting in March 2006 and plans to hold another public meeting in  May 2007. The Institute is directed by an Institute Management Council  (IMC), which consists of top officials and representatives from the  aviation community. The IMC oversees the policy, recommendations, and  products of the Institute and provides a means for advancing consensus  positions on critical NextGen issues. An executive committee, consisting  of the IMC’s two co-chairs and three members selected by them, conducts  business on behalf of the IMC. The Institute is managed on a day-to-day  basis by an executive director, who reports to the IMC and the executive  committee, and works closely with JPDO management.
Recently, JPDO announced they are in the process of implementing  several structural and operational changes to improve the efficiency of the  organization (see fig. 3). JPDO’s structure used to include eight integrated  product teams (IPT), which was where the federal and nonfederal experts  came together to plan for and coordinate the development of capabilities  for NextGen. The eight IPTs were linked to eight key strategies that JPDO  developed early on for guiding its NextGen planning work. The IPTs were  headed by representatives of JPDO’s partner agencies and include more  than 200 nonfederal stakeholders from over 100 organizations.
JPDO recently converted each IPT into a “working group” with the same  participants as the former IPT, but with each working group led by a joint  government and industry steering committee. These steering committees  will oversee the creation of small, ad hoc subgroups that will be tasked  with short-term projects exploring specific issues and delivering discrete  work products. Under this arrangement, working group members will be  free of obligations to the group when not engaged in a specific project.  According to JPDO officials, they believe the working groups will be more  efficient and output- or product-focused than the former IPTs. JPDO  officials noted that they are also in the process of staffing a new, ninth  working group to address avionics issues.
We believe that these changes could help address concerns that we have  heard from some stakeholders about the productivity of some IPTs and  the pace of the planning effort at JPDO. However, it will be important to  monitor these changes to ensure that the participation of stakeholders is  neither decreased nor adversely affected. Maintaining communications  within and among work groups could increase in importance if, as work  group members focus on specific projects, they become less involved in  the overall collaborative planning effort. The effectiveness of the changes  to JPDO’s organizational structure will need to continue to be evaluated  over time. Currently, we have on-going study examining the views and  concerns of JPDO’s federal and nonfederal stakeholders about the office  and its performance. We expect to issue a report on our findings later this  year.
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