The Federal Aviation Administration’s (FAA) primary mission is to ensure safe, orderly, and efficient air travel throughout the United States. FAA’s ability to fulfill this mission depends on the adequacy and reliability of the nation’s air traffic control (ATC) system, a vast network of computer hardware, software, and communications equipment. Sustained growth in air traffic and aging equipment have strained the current ATC system, limiting the efficiency of ATC operations. To combat these trends, in 1981 FAA embarked on an ambitious ATC modernization program. FAA estimates that it will spend about $34 billion on the program between 1982 and 2003. Our work over the years has chronicled many FAA failures in meeting ATC projects’ cost, schedule, and performance goals. As a result, we designated FAA’s ATC modernization as a high-risk information technology initiative in our 1995 report series on high-risk programs. Automated information processing and display, communication, navigation, surveillance, and weather resources permit air traffic controllers to view key information, such as aircraft location, aircraft flight plans, and prevailing weather conditions, and to communicate with pilots. These resources reside at, or are associated with, several ATC facilities—flight service stations, air traffic control towers, terminal radar approach control (TRACON) facilities, and air route traffic control centers (en route centers). These facilities’ ATC functions are described below. About 90 flight service stations provide pre-flight and in-flight services, such as flight plan filing and weather report updates, primarily for general aviation aircraft. Airport towers control aircraft on the ground and before landing and after take-off when they are within about 5 nautical miles of the airport, and up to 3,000 feet above the airport. Air traffic controllers rely on a combination of technology and visual surveillance to direct aircraft departures and approaches; maintain safe distances between aircraft; and communicate weather-related information, clearances, and other instructions to pilots and other personnel. Approximately 180 TRACONs sequence and separate aircraft as they approach and leave busy airports, beginning about 5 nautical miles and ending about 50 nautical miles from the airport, and generally up to 10,000 feet above the ground, where en route centers’ control begins. Twenty en route centers control planes over the continental United States in transit and during approaches to some airports. Each en route center handles a different region of airspace, passing control from one to another as respective borders are reached until the aircraft reaches TRACON airspace. En route center controlled airspace usually extends above 18,000 feet for commercial aircraft. En route centers also handle lower altitudes when dealing directly with a tower, or when agreed upon with a TRACON. Two en route centers—Oakland and New York—also control aircraft over the ocean. Controlling aircraft over oceans is radically different from controlling aircraft over land because radar surveillance only extends 175 to 225 miles offshore. Beyond the radars’ sight, controllers must rely on periodic radio communications through a third party—Aeronautical Radio Incorporated (ARINC), a private organization funded by the airlines and FAA to operate radio stations—to determine aircraft locations. See figure 1.1 for a visual summary of the processes for controlling aircraft over the continental United States and oceans. The ATC system of the late 1970s was a blend of several generations of automated and manual equipment, much of it labor-intensive and obsolete. FAA recognized that it could increase ATC operating efficiency by increasing automation. Additionally, FAA forecasted increased future demand for air travel, brought on by airline deregulation of the late 1970s. It also anticipated that meeting the demand safely and efficiently would require improved and expanded services, additional facilities and equipment, improved workforce productivity, and the orderly replacement of aging equipment. Accordingly, in December 1981, FAA initiated its plan to modernize, automate, and consolidate the existing ATC system by the year 2000. This ambitious modernization program includes the acquisition of new radars and automated data processing, navigation, and communication equipment in addition to new facilities and support equipment. FAA estimates that the modernization will cost over $34 billion through the year 2003 and total over 200 separate projects. ATC information systems make up a large portion of this total, accounting for 169 projects costing $20.7 billion. The Congress will have provided FAA with approximately $14.7 billion of the $20.7 billion through fiscal year 1997. Over the past 15 years, FAA’s modernization projects have experienced substantial cost overruns, lengthy schedule delays, and significant performance shortfalls. To illustrate, the long-time centerpiece of this modernization program—the Advanced Automation System—was restructured in 1994 after estimated costs tripled from $2.5 billion to $7.6 billion and delays in putting significantly less-than-promised system capabilities into operation were expected to run 8 years or more. Similarly, increases in per-unit costs for five other major ATC projects have ranged from 50 to 511 percent, and schedule delays have averaged almost 4 years. Our past work on the ATC modernization raised a number of concerns, including concerns about the reliability of projects’ cost estimates. For example, our review of FAA’s Oceanic Display and Planning System found that cost and schedule estimates were questionable because they were based solely on managers’ judgments and were not revised to reflect changing project demands and conditions. Also, our work on AAS highlighted that FAA underestimated the complexity of the system development and relied on its contractor’s deficient cost estimating systems. In its internal risk management guidance, FAA acknowledges that it has a history of unreliable project cost estimates, attributing some of its unenviable record in ATC projects’ cost growth to setting unrealistically low cost estimates, either because of poor cost estimating processes or inadequate system descriptions. Two major FAA organizations play key roles in the modernization and evolution of ATC systems—the Office of the Associate Administrator for Research and Acquisitions (ARA) and the Office of the Associate Administrator for Air Traffic Services (ATS). The first, ARA, manages the research, development, and acquisition of modernization projects. Within ARA, two groups are responsible for acquiring systems, while the others handle cross-cutting management functions (e.g., budget formulation, cost estimation, and program evaluation). Also, the William J. Hughes Technical Center is the ATC system test and evaluation facility and supports ATC systems’ research, engineering, and development. ARA employs an Integrated Product Development System (IPDS) approach. A key component of IPDS is the use of Integrated Product Teams (IPT), which are cross-functional teams aligned with major business and functional areas (i.e., en route, terminal, weather and flight services, air traffic management, oceanic, communications, navigation, surveillance, infrastructure, and information systems). IPT members include systems and specialty engineers, logistics personnel, lawyers, contract specialists, and representatives from the organization responsible for the system’s operations and maintenance. IPTs are responsible for systems research, development, acquisition, and installation. Product teams within these IPTs are responsible for individual ATC system acquisitions or projects. For example, the en route IPT has product teams for the Display Channel Complex Rehost, the Display System Replacement, the Voice Switching and Control System, and several other en route systems. Air Traffic Control: Status of FAA’s Modernization Program (GAO/RCED-94-167FS, Apr. 15, 1994). The second major organization involved with ATC systems is ATS. ATS is responsible for directing, coordinating, controlling, and ensuring the safe and efficient utilization of the national airspace system. Organizations within ATS are responsible for planning, operating, and maintaining ATC systems. Responsibility for managing ATC systems is transferred from the IPT to ATS once the systems have been installed and are operational. See figure 1.2 for a visual summary of the ATC modernization and maintenance management structure. During our review, we assessed six major modernization projects. These projects were the Voice Switching and Control System (VSCS), which provides air-to-ground voice communication services and ground-to-ground voice communication services between controllers, other ATC personnel, and others at the same and different en route centers and other ATC facilities; Standard Terminal Automation Replacement System (STARS), which is to replace critical air traffic control computers with new traffic computers, displays, and software in TRACON facilities and towers; Display System Replacement (DSR), which is to replace air traffic controllers’ existing display-related systems in each of the en route centers; Airport Surveillance Radar-9 (ASR-9), which monitors aircraft movement and position within a radius of 60 miles of an airport terminal; Wide Area Augmentation System (WAAS) for the Global Positioning System (GPS), which is to provide augmentations to the Department of Defense’s GPS in order to allow improved navigation on domestic and oceanic air routes; and Display Channel Complex Rehost (DCCR), which is an interim replacement to the mainframe computer system that processes radar and other data into displayable images on controllers’ screens. The FAA organization responsible for estimating costs on the projects we assessed varied depending on the project’s stage in its life cycle. According to FAA acquisition rules in place when the latest life cycle cost estimate for the projects we assessed were developed, FAA’s Investment Analysis and Operations Research organization (ASD-400), which is one of the groups within ARA that handles cross-cutting management functions, developed life cycle cost estimates early in the project life cycle—both when mission needs were evaluated and again when evaluating the costs, benefits, and feasibility of project alternatives. Once the decision was made to invest in a given alternative, the IPTs assumed responsibility for updating the cost estimates.