NOAA Aircraft: Aging Fleet and Future Challenges Underscore the Need for a Capital Asset Plan
Released: 2014-07-09T00:00:00

Letter

Background

Since NOAA was established in 1970, the agency has operated aircraft to aid in the collection of earth observation data to understand and predict changes in climate, weather, oceans, and coasts; collect data necessary for weather and water forecasts; and help conserve and manage coastal and marine ecosystems and resources. To help NOAA’s line offices accomplish this mission, OMAO—an administrative office organized under NOAA’s Deputy Undersecretary for Operations—is charged with maintaining and operating NOAA’s aircraft as a service to the line offices. The responsibilities of the line offices are widely varied, and their aircraft needs are similarly varied. For example, the National Weather Service relies on NOAA aircraft to determine the water content of snow and collect data to support its forecast and warning responsibilities. In contrast, the National Marine Fisheries Service uses NOAA aircraft to count marine mammals and track the location of whale pods. Table 1 provides information on NOAA’s line offices and how each uses NOAA aircraft to accomplish its work.

To meet the diverse needs of the line offices, OMAO procures, manages, operates, and maintains a fleet of aircraft capable of functioning in demanding environments such as over open ocean, mountains, coastal wetlands, arctic pack ice, and in and around hurricanes and other severe weather systems. NOAA-owned aircraft are unique in that they have been altered to accommodate a wide range of specialized scientific data collection instruments, some of which are specifically designed for use in NOAA aircraft. For example, NOAA’s Gulfstream IV-SP and P-3 Orion planes can carry a tail Doppler radar, which is used to gather information about winds and precipitation within tropical storms and cyclones. These planes are the only government-owned aircraft used for hurricane research to improve the forecasting of a hurricane’s track and intensity. NOAA’s P-3 Orion aircraft also facilitate testing of new scientific instrumentation and data collection strategies. NOAA operates heavy aircraft capable of flying in tropical cyclones; light aircraft that conduct shoreline change assessments, oil spill investigations, snow surveys for spring flood forecasts, and other missions; and unmanned aircraft systems. For fiscal years 2009 to 2013, OMAO’s costs associated with operating and maintaining heavy aircraft accounted for, on average, 85 percent of its total aircraft costs. Figure 1 shows NOAA’s aircraft fleet.

NOAA’s aircraft fly approximately 3,800 to 5,200 flight hours per year. The majority of these hours are funded by OMAO’s budget. However, line offices may also request flight time on NOAA-owned planes that is paid for with line office funds. For example, the National Marine Fisheries Service is funding 210 flight hours to conduct Steller sea lion and harbor seal surveys for June to September 2014. NOAA’s planes conduct missions for other agencies on a reimbursable basis, as well. Figure 2 shows NOAA’s aircraft flight hours and associated costs for fiscal years 2004 to 2013.

As noted, NOAA’s aircraft fleet capacity is limited, and line office needs exceed capacity. When NOAA line office scientists are unable to obtain time on NOAA-owned aircraft, they must wait until NOAA aircraft become available, rely on chartered aircraft, contract for data, or forgo the use of aircraft. NOAA’s ability to meet line office needs for aircraft is further affected by the requirements placed on NOAA’s aircraft by the National Hurricane Operations Plan, which details interdepartmental agreements and responsibilities related to tropical cyclone forecasting. Although most hurricane reconnaissance is conducted by Air Force aircraft, NOAA is required to make its P-3 Orion aircraft available if the Air Force is unable to meet the reconnaissance needs posed by severe weather events. One of NOAA’s two operating P-3 Orion planes must be configured and available to conduct reconnaissance each hurricane season from June 1 to November 30, and the other P-3 Orion must be available from July 15 to September 30. During these months, the P-3 Orion planes are generally not available for other uses. NOAA officials also told us that they expect the line offices’ missions will expand in the future, thereby increasing their need for aircraft services. For example, one National Weather Service official told us that agency has recently been tasked with additional responsibilities related to measuring soil moisture for agricultural purposes, which will require additional aircraft time to carry out. The OMAO strategic plan likewise notes that the agency faces challenges in providing services to meet a growing demand for scientific data.

To help agencies address capacity limitations such as these, OMB guidance suggests agencies should engage in effective capital asset planning and management to ensure that their assets are acquired, operated, and maintained at the right size, cost, and condition to support agency missions and objectives. Regarding capital asset planning, both OMB guidance and our past work stress the importance of linking capital asset investments to an organization’s overall mission and long-term strategic goals. The guidance also emphasizes evaluating a full range of alternatives to bridge any identified performance gap, informed by agency asset inventories that contain condition information. Further, the guidance calls for a comprehensive decision-making framework to review, rank, and select from among competing project proposals. The ultimate product of the planning phase is a comprehensive capital asset plan, which defines the long-term capital decisions that resulted from the agency’s capital planning process. Both OMB guidance and our past work highlight the importance of developing a capital asset plan. Appendix II provides additional information on the key principles in capital asset planning. Regarding capital asset management, OMB guidance encourages agencies to adopt leading practices such as monitoring of asset inventory, operations, and performance. Table 2 shows examples of OMB leading practices in capital asset management.

NOAA Has Numerous Efforts to Improve Aircraft Asset Planning and Management, but It Is Too Early to Determine Whether They Reflect Leading Practices

NOAA has 34 efforts aimed at improving its aircraft asset planning and management, according to agency officials, some of which are ongoing while others are under way or planned; however, because most of these efforts are not yet fully implemented, it is too early to determine whether they will reflect OMB leading practices in capital asset programming. Many of the efforts are designed to obtain additional or enhanced information about the use or condition of NOAA’s aircraft assets, according to agency officials. For example, NOAA has completed an effort to automate and integrate its various software applications for tracking aircraft use, maintenance, and repair. In addition, according to agency officials, many of NOAA’s efforts are intended to contribute to the development of a capital asset plan for its aircraft—a plan that NOAA does not currently have.

Generally, NOAA’s efforts fall into the following categories:

Assets: NOAA has eight efforts related to upgrading, using, or disposing of certain aircraft assets. For example, in 2013, NOAA completed an extensive multi-year process to identify and validate NOAA line offices’ information needs. NOAA also updated its annual process for scheduling and allocating aircraft flight hours to better prioritize aircraft use in meeting these needs. NOAA is in the process of disposing of a non-operational P-3 Orion aircraft. Other efforts include a project to replace the wings of its two remaining operational P-3 Orion aircraft and upgrade the camera systems on its PUMA unmanned aircraft system.

Collaboration: NOAA has five efforts related to improving collaboration with other federal agencies. For example, NOAA has an effort to improve collaboration regarding the use of unmanned aerial systems and an effort to evaluate opportunities for placing NOAA personnel with other federal agencies, such as the National Science Foundation and the Office of Naval Research, to learn about their operations and gain expertise that could be transferred to NOAA.

Measures: NOAA has three efforts that are intended to improve the quantity or accuracy of performance measures regarding aircraft. For example, NOAA has an effort under way to improve the accuracy and comprehensiveness of the information it gathers and analyzes to measure aircraft performance. Currently, NOAA uses the number of hours flown by its aircraft on missions as its aircraft performance measure, but the agency is working to potentially expand its measures to include the information on the amount and quality of scientific data collected during those hours.

Plans: NOAA has eight efforts involving the creation of long-term plans that together are intended to serve as a comprehensive capital asset plan. For example, NOAA is developing a broad “airborne composition plan” that is being designed to analyze information on future aircraft needs and guide the future composition of NOAA’s fleet. According to NOAA officials, this plan will rely on the recently completed effort that identified the information needs of NOAA’s line offices. The plan is also expected to assess whether these needs can be met with existing assets or whether other options should be considered, such as acquiring additional aircraft or other assets, relying on aircraft operated by other federal agencies, chartering commercial aircraft, or other options. In a related effort, NOAA is also working to develop an analysis of options for repairing or replacing its heavy aircraft in the future. NOAA also intends to develop a plan related to unmanned aircraft systems, as well as workforce plans that will cover aircraft administration, management, and operations personnel.

Policies and data: NOAA has 10 efforts related to updating existing policies and conducting data analysis. For example, NOAA has an effort to revise its safety management policies and is working to analyze the organizational structure of OMAO to identify opportunities for improving its ability to deliver aircraft services.

Regarding the status of these 34 NOAA efforts aimed at improving aircraft asset planning and management, 5 efforts have been completed, 23 efforts are ongoing, and 6 efforts are scheduled to begin within the next 3 years. NOAA expects to complete all 34 efforts by fiscal year 2017. Figure 3 shows the status of NOAA’s 34 efforts aimed at improving aircraft capital asset planning and management.

Given the preliminary or planned status of many of NOAA’s efforts, we cannot determine the extent to which these efforts, once completed, will reflect leading practices. For example, NOAA’s effort to create a capital asset plan through the development of several separate planning efforts may give the agency the information and analysis it needs to identify potential gaps between capacity and needs and evaluate the cost- effectiveness and performance implications of various alternative strategies, two areas discussed in OMB guidance. However, until all of the component plans have been completed, NOAA’s plans cannot be evaluated against OMB leading practices. Similarly, OMB leading practices in capital asset management discuss the importance of continuous monitoring of agency operations and assets to ensure that assets are used efficiently and effectively in support of its mission. NOAA’s efforts to improve its aircraft performance measures may provide the agency with additional information with which to monitor its assets, but these efforts have not been fully implemented—and thus cannot be evaluated against leading practices as of the time of this report.

NOAA Faces Challenges in Improving Its Aircraft Asset Planning and Modernizing Its Fleet

In its efforts to improve aircraft asset planning and management, NOAA faces challenges related to the development of a comprehensive and integrated capital asset plan, and decisions regarding the modernization of its fleet. Without a comprehensive and integrated capital asset plan, NOAA risks not having sufficient analysis or justification to make sound critical decisions.

NOAA’s approach to capital asset planning presents challenges. As noted, NOAA does not currently have a capital asset plan for aircraft even though leading practices OMB has identified encourage agencies to have capital asset plans as a part of their strategic planning efforts. Leading practices for capital decision making note the importance of a long-term capital plan as the central document an agency uses for its capital decision making; as such, it should be comprehensive in nature and include information on all planned assets. As noted, NOAA is working to develop a capital asset plan through an approach under which it is creating multiple stand-alone plans that together are intended to serve as the agency’s capital asset plan for aircraft. Under this approach, each individual planning effort has a different schedule and scope of assets. For example, NOAA is separately working to develop (1) an airborne composition plan that covers its entire fleet, which it expects to complete in 2014; (2) an analysis of alternatives for its heavy aircraft, expected by 2016; and (3) a plan to guide the use of unmanned aircraft systems, expected by fiscal year 2017. In addition, some of these planning efforts are being led by OMAO, while others (such as the unmanned aircraft systems plan) are agency-wide efforts, according to NOAA officials. These differences in schedule, scope, and responsibilities add to the overall complexity of NOAA’s approach to capital asset planning for aircraft. In addition, critical planning information and analysis on different types of assets will be spread across different documents, which may add to NOAA’s challenge of ensuring that information is sufficiently linked and integrated to serve as a single comprehensive plan. NOAA is in the early stages of some of these planning efforts and has not yet determined how, or whether, it will link and integrate the plans with one another. Without such integration, it will be difficult for NOAA to use these plans for defining long-term decisions about assets because important information will be located within different plans and plans may contain varying levels of detail. NOAA faced challenges in finalizing a planning effort in the past; in 2009, OMAO developed a draft “aircraft recapitalization plan” intended to address the agency’s future aircraft needs. However, NOAA leadership did not approve the recapitalization plan and suspended this planning effort in order to incorporate additional information NOAA had received, according to NOAA officials. The agency began its current planning effort 4 years later, in 2013.

NOAA faces critical decisions regarding the composition of its aircraft fleet. NOAA faces challenges in determining how to optimize the composition of its fleet to obtain the right mix of heavy, light, and unmanned aircraft systems for meeting mission needs. For example, NOAA’s two operational P-3 Orion planes are in high demand for hurricane work. At nearly 40 years of age, these aircraft are also the oldest planes in the fleet. According to NOAA officials, the useful life expectancy for the P-3 Orion aircraft will be another 15 years once re- winging is completed in fiscal year 2017 as planned. However, even with the re-winging, NOAA officials noted that the ongoing operation and maintenance costs of these aircraft may increase. The manufacturer will not be constructing new P-3 aircraft in the future. Because large capital assets such as aircraft may take many years to acquire, NOAA faces decisions about whether to invest in additional costly service life extensions or replace the two operational P-3 Orions and another aging plane in its fleet, one of its de Havilland Twin Otter aircraft. NOAA also faces decisions about the use of unmanned aircraft systems. Demand for these systems is expected to increase for use in scientific research. According to NOAA officials, unmanned aircraft systems may be an alternative to existing aircraft in some situations, but their cost-effectiveness is not yet proven, and there are uncertainties regarding the situations in which they may be used. NOAA has faced similar decision points in the past without the benefit of a capital asset plan to aid decision making. For example, NOAA purchased a third P-3 Orion aircraft for approximately $9 million to meet additional agency needs that NOAA officials said could not be met with its two existing P-3 Orion planes. Subsequently, NOAA learned that both of its existing P-3 Orion planes needed new wings sooner than previously expected, and that the newly purchased plane could not become operational without new wings. However, NOAA had not anticipated or planned for these additional expenses and determined that the investment in re-winging the newly acquired P-3 Orion plane was not feasible, according to NOAA officials; as a result, the plane was never put to use and NOAA is currently attempting to dispose of it.

Collectively, the expected increase in NOAA line offices’ needs for aircraft, the aging of NOAA’s aircraft fleet, and the need to address coming changes in technology underscore the importance of NOAA completing a comprehensive, integrated capital asset plan that reflects leading practices. Linking and integrating its multiple planning efforts could help NOAA demonstrate that it has a capital asset plan consistent with these leading practices. Without such a plan, NOAA risks making decisions that will make it difficult for the agency to effectively address future challenges.

Conclusions

Recognizing the critical importance of aircraft to help accomplish its mission, NOAA has developed an ambitious approach to improving the efficiency and effectiveness of its aircraft management through 34 improvement efforts that it expects to complete by fiscal year 2017. A key component of these efforts is the development of several separate long- term plans that together are intended to represent NOAA’s aircraft capital asset plan—a critical tool for equipping agencies with information and analysis to make long-term decisions. Developing a comprehensive plan is especially important in light of the decisions NOAA will face in the future regarding the composition of its aircraft fleet and how best to incorporate new technologies. The potential usefulness of such a plan can be seen in NOAA’s decision—made without a capital asset plan—to purchase a third P-3 for $9 million. That plane was never put into operation and is currently being disposed of. NOAA’s complex approach to developing a capital asset plan presents challenges. Each plan requires the approval of NOAA leadership, which was difficult to obtain as part of a prior planning effort. Further, it is important that the individual plans collectively reflect OMB leading practices to be most useful to the agency, and that the plans each contain sufficient clarity and detail, as well as being linked and integrated with one another. Without taking these steps, NOAA may find itself with a capital asset plan of limited comprehensiveness and usefulness, and may consequently struggle to address its future needs.

Recommendation for Executive Action

To ensure that NOAA has sufficient information and analysis to guide long-term decisions regarding its aircraft, we recommend that the Secretary of Commerce direct the NOAA Administrator to ensure that the agency links and integrates its multiple planning efforts as it finalizes a capital asset plan for aircraft.

Agency Comments and Our Evaluation

We provided the Department of Commerce with a draft of this report for its review and comment. In its written comments, reprinted in appendix III, NOAA, responding on behalf of the Department of Commerce, concurred with our recommendation and provided a technical comment that we incorporated.

We are sending copies of this report to the Secretary of Commerce, the NOAA Administrator, the appropriate congressional committees, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff members have any questions about this report, please contact me at (202) 512-3841 or fennella@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix IV.

Appendix I: Objectives, Scope, and Methodology

This report examines (1) the status of the National Oceanic and Atmospheric Administration’s (NOAA) efforts to improve its aircraft asset planning and management and the extent to which these efforts reflect leading practices and (2) the challenges NOAA faces in improving its aircraft asset planning and management.

To examine the status of NOAA’s efforts to improve its aircraft asset planning and management, we identified and reviewed relevant agency project and strategy documents detailing their improvement efforts, encompassing all projects and activities undertaken in support of the agency’s strategic planning objectives laid out in the Office of Marine and Aviation Operations (OMAO) 2012 strategic plan. We reviewed these documents to identify efforts specific to aircraft asset management and excluded efforts related to other aspects of NOAA’s operations, such as efforts related to its ship fleet. We identified efforts that were completed, ongoing, or planned as of fiscal year 2013, when we initiated our work. Altogether, we identified 34 efforts related to aircraft asset planning management. For each improvement effort, we reviewed associated goals, methods, estimated schedules, and progress made to date. Based on the descriptions of the efforts found in NOAA documents we reviewed, and in consultation with NOAA officials, we grouped these into one of five categories related to: (1) assets—upgrading, using, or disposing of certain aircraft assets; (2) collaboration—improving collaboration with other federal agencies; (3) measures—improving the quantity or accuracy of performance measures; (4) plans—creating long-term plans; or (5) policies and data—updating existing policies and conducting data analysis. To determine the extent to which NOAA’s efforts reflect applicable guidance and leading practices, we reviewed Office of Management and Budget (OMB) guidance to identify leading practices that are important for effective asset planning and management. These leading practices are primarily found in OMB’s Circular A-11 and the supplemental Capital Programming Guide. In addition, we reviewed OMB’s Circular A-76, which provides guidance to federal agencies regarding the use of services provided by the private sector to meet agency needs, and Circular A-126, regarding the use of government aircraft. To obtain additional insight into leading practices, we also reviewed previous GAO reports that discuss the application of these leading practices by various agencies. We then analyzed NOAA’s improvement efforts and compared them to leading practices.

To identify the challenges NOAA faces in improving its aircraft asset planning and management, we reviewed relevant agency documents, including the NOAA strategic plan, the OMAO strategic plan, and documents related to NOAA’s improvement efforts, and we interviewed NOAA and OMAO officials responsible for implementing these efforts. We also interviewed officials in NOAA’s six line offices: the National Environmental Satellite, Data, and Information Service; the National Marine Fisheries Service; the National Ocean Service; the National Weather Service; the Office of Oceanic and Atmospheric Research; and Program Planning and Integration. In these interviews, we discussed NOAA’s long-term strategic planning and management for aircraft, NOAA’s previous efforts to issue an aircraft capital asset plan, and NOAA’s work to complete and implement the 34 aircraft planning and management efforts, among other things. From these discussions, we identified two key challenges related to NOAA’s approach to capital asset planning and the critical decisions NOAA faces regarding the composition of its aircraft fleet.

We conducted this performance audit from July 2013 to July 2014 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Key Principles in Capital Asset Planning

While there are four phases in capital programming—planning, budgeting, acquiring, and managing—we previously noted that planning is the most important phase in the capital decision-making process. Because the results of the planning phase are used throughout the remaining phases, not following key principles during this phase may have repercussions on agency operations if poor capital investment decisions are made. Table 3 further elaborates on the five key capital asset planning principles highlighted in Office of Management and Budget guidance and our previous work.

Appendix III: Comments from the Department of Commerce

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the individual named above, Steve Gaty (Assistant Director), Cheryl Arvidson, Casey L. Brown, Antoinette Capaccio, Nicole Dery, and Richard P. Johnson made key contributions to this report. Important contributions were also made by Mark Braza, Carol Henn, Armetha Liles, Melissa Swearingen, and Kiki Theodoropoulos.