[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
 THE TRANSITION FROM THE FEDERAL AVIATION ADMINISTRATION TO CONTRACTOR-
           OPERATED FLIGHT SERVICE STATIONS: LESSONS LEARNED

=======================================================================

                                (110-76)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                                AVIATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 10, 2007

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             WAYNE T. GILCHREST, Maryland
JERROLD NADLER, New York             VERNON J. EHLERS, Michigan
CORRINE BROWN, Florida               STEVEN C. LaTOURETTE, Ohio
BOB FILNER, California               RICHARD H. BAKER, Louisiana
EDDIE BERNICE JOHNSON, Texas         FRANK A. LoBIONDO, New Jersey
GENE TAYLOR, Mississippi             JERRY MORAN, Kansas
ELIJAH E. CUMMINGS, Maryland         GARY G. MILLER, California
ELLEN O. TAUSCHER, California        ROBIN HAYES, North Carolina
LEONARD L. BOSWELL, Iowa             HENRY E. BROWN, Jr., South 
TIM HOLDEN, Pennsylvania             Carolina
BRIAN BAIRD, Washington              TIMOTHY V. JOHNSON, Illinois
RICK LARSEN, Washington              TODD RUSSELL PLATTS, Pennsylvania
MICHAEL E. CAPUANO, Massachusetts    SAM GRAVES, Missouri
JULIA CARSON, Indiana                BILL SHUSTER, Pennsylvania
TIMOTHY H. BISHOP, New York          JOHN BOOZMAN, Arkansas
MICHAEL H. MICHAUD, Maine            SHELLEY MOORE CAPITO, West 
BRIAN HIGGINS, New York              Virginia
RUSS CARNAHAN, Missouri              JIM GERLACH, Pennsylvania
JOHN T. SALAZAR, Colorado            MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            TED POE, Texas
DORIS O. MATSUI, California          DAVID G. REICHERT, Washington
NICK LAMPSON, Texas                  CONNIE MACK, Florida
ZACHARY T. SPACE, Ohio               JOHN R. `RANDY' KUHL, Jr., New 
MAZIE K. HIRONO, Hawaii              York
BRUCE L. BRALEY, Iowa                LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          CHARLES W. BOUSTANY, Jr., 
TIMOTHY J. WALZ, Minnesota           Louisiana
HEATH SHULER, North Carolina         JEAN SCHMIDT, Ohio
MICHAEL A. ACURI, New York           CANDICE S. MILLER, Michigan
HARRY E. MITCHELL, Arizona           THELMA D. DRAKE, Virginia
CHRISTOPHER P. CARNEY, Pennsylvania  MARY FALLIN, Oklahoma
JOHN J. HALL, New York               VERN BUCHANAN, Florida
STEVE KAGEN, Wisconsin
STEVE COHEN, Tennessee
JERRY McNERNEY, California
LAURA A. RICHARDSON, California

                                  (ii)

  


                        Subcommittee on Aviation

                 JERRY F. COSTELLO, Illinois, Chairman

BOB FILNER, California               THOMAS E. PETRI, Wisconsin
LEONARD L. BOSWELL, Iowa             HOWARD COBLE, North Carolina
RICK LARSEN, Washington              JOHN J. DUNCAN, Jr., Tennessee
RUSS CARNAHAN, Missouri              VERNON J. EHLERS, Michigan
JOHN T. SALAZAR, Colorado            STEVEN C. LaTOURETTE, Ohio
DANIEL LIPINSKI, Illinois            FRANK A. LoBIONDO, New Jersey
NICK LAMPSON, Texas                  JERRY MORAN, Kansas
ZACHARY T. SPACE, Ohio               ROBIN HAYES, North Carolina
BRUCE L. BRALEY, Iowa                SAM GRAVES, Missouri
HARRY E. MITCHELL, Arizona           JOHN BOOZMAN, Arkansas
JOHN J. HALL, New York, Vice Chair   SHELLEY MOORE CAPITO, West 
STEVE KAGEN, Wisconsin               Virginia
STEVE COHEN, Tennessee               JIM GERLACH, Pennsylvania
NICK J. RAHALL, II, West Virginia    MARIO DIAZ-BALART, Florida
PETER A. DeFAZIO, Oregon             CHARLES W. DENT, Pennsylvania
ELEANOR HOLMES NORTON, District of   TED POE, Texas
Columbia                             DAVID G. REICHERT, Washington
CORRINE BROWN, Florida               CONNIE MACK, Florida
EDDIE BERNICE JOHNSON, Texas         JOHN R. `RANDY' KUHL, Jr., New 
ELLEN O. TAUSCHER, California        York
TIM HOLDEN, Pennsylvania             LYNN A WESTMORELAND, Georgia
MICHAEL E. CAPUANO, Massachusetts    MARY FALLIN, Oklahoma
DORIS O. MATSUI, California          VERN BUCHANAN, Florida
MAZIE K. HIRONO, Hawaii              JOHN L. MICA, Florida
LAURA A. RICHARDSON, California        (Ex Officio)
JAMES L. OBERSTAR, Minnesota
  (Ex Officio)

                                 (iii)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Belger, Monte R., Vice President of Transportation Systems 
  Solutions, Lockheed Martin Air Traffic Management..............    25
Boyer, Phil, President, Aircraft Owners and Pilots Association...    25
Cipriano, Joseph R., President, Lockheed Martin Business Process 
  Solutions......................................................    25
Scovel, III, Hon. Calvin L., Inspector General, U.S. Department 
  of Transportation..............................................     4
Staples, John, Director, Office of Flight Services Program 
  Operations, Federal Aviation Administration....................     4
Washington, James H., Vice President for Acquisition and Business 
  Services, Air Traffic Organization, Federal Aviation 
  Administration.................................................     4
Zuccaro, Matt, President, Helicopter Association International...    25

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Costello, Hon. Jerry F., of Illinois.............................    40
Mica, Hon. John L., of Florida...................................    48
Mitchell, Hon. Harry E., of Arizona..............................    54
Oberstar, Hon. James L., of Minnesota............................    57
Petri, Hon. Thomas E., of Wisconsin..............................    60

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Boyer, Phil......................................................    65
Cipriano, Joseph R...............................................    77
Scovel, III, Hon. Calvin L.......................................    83
Washington, James H..............................................   100
Zuccaro, Matthew.................................................   110

                       SUBMISSIONS FOR THE RECORD

Costello, Hon. Jerry F., a Representative in Congress from the 
  State of Illinois, letter to Hon. Mary E. Peters, Secretary of 
  U.S. Department of Transportation..............................    47

                        ADDITIONS TO THE RECORD

Anonymous letter to the Committee................................   113
Holodick, Daniel, letter to the Committee........................   114
Venable, Robert M., letter to the Committee......................   118
Wade, Jay, letter to the Committee...............................   119

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  OVERSIGHT HEARING ON THE TRANSITION FROM FAA TO CONTRACTOR-OPERATED 
                FLIGHT SERVICE STATIONS: LESSONS LEARNED

                              ----------                              


                      Wednesday, October 10, 2007

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                  Subcommittee on Aviation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:04 a.m., in 
Room 2167, Rayburn House Office Building, the Honorable Jerry 
F. Costello [Chairman of the Subcommittee] presiding.
    Mr. Costello. The Subcommittee will come to order.
    The Chair will ask all Members, staff and everyone to turn 
electronic devices off or on vibrate.
    The Subcommittee is meeting today to hear testimony on the 
Transition from FAA to Contractor-Operated Flight Service 
Stations: Lessons Learned.
    Before we begin, I would ask unanimous consent to allow a 
new Member of our Committee, Ms. Laura Richardson, to 
participate in the Subcommittee hearing today. Hearing no 
objection, so ordered.
    I am prepared to give my opening statement and recognize 
the Ranking Member, Mr. Petri, for his opening statement or 
remarks, and then we will go directly to our first panel of 
witnesses.
    I want to welcome everyone to our Aviation Subcommittee 
hearing on the Transition from FAA to Contractor-Operated 
Flight Service Stations: Lessons Learned.
    The FAA awarded Lockheed Martin a $1.8 billion 
privatization contract to consolidate 58 flight service 
stations nationwide into 18 including 3 new hubs and maintain 
and manage the system. It was during this consolidation that 
pilots started reporting problems: long wait times, dropped 
calls, missing flight plans and specialists ill prepared to 
brief pilots on requested routes.
    An incident this past Sunday illustrates how important it 
is for the FSS to work properly. This past Sunday, October 7th, 
there were several pilots who violated the temporary flight 
restriction over Emmitsburg, Maryland. President Bush was there 
for a firefighters' event and flew from Camp David. There were 
a dozen pilots who violated this restriction, many because of 
incomplete information from an FSS. This is one example of how 
the flaws in the FSS system can adversely affect pilots.
    I will include a firsthand report from one of the pilots 
from this last Sunday's incident into the record, but I will 
briefly summarize:
    A pilot attempted to call an FSS three times before being 
connected. Once connected, the briefer gave incorrect 
information, saying he checked the route and the member would 
not encounter any special use airspace or TFRs. Soon after, the 
pilot was diverted to Hagerstown, Maryland, and interviewed by 
the Secret Service. This situation became worse when the pilot 
contacted an FSS to leave Hagerstown.
    Stories like this one are all too common under the 
contract-out FSS system. We must and we can do better. I 
believe that the FAA needs to do more aggressive oversight of 
this contract.
    After numerous letters and conversations with the former 
Administrator, Marion Blakey, in May of 2007, I am pleased to 
see that the FAA has stepped up its effort to make sure that 
Lockheed Martin is meeting its performance goals required by 
the contract.
    The FAA embarked on this consolidation effort because it 
believed that Lockheed Martin's FS21 would deliver flight 
services with greater efficiency while continuing to provide a 
high level of safety at a reduced cost. Costs continue to 
increase on this contract because of delays and adjustments 
wanted by Lockheed Martin which will reduce the expected cost 
savings. I am interested in hearing from the FAA and the DOT's 
IG whether the expected cost savings anticipated in this 
contract by the FAA are being achieved.
    The DOT IG also released a report of the controls over FSS 
contracts and made a number of recommendations. I am interested 
in hearing from both the FAA and the DOT IG whether these 
recommendations were implemented and what we have learned in 
this process.
    I am also interested in hearing from Mr. Boyer and others 
who represent the users of the FSS. They are here today with 
us, and I hope that they will provide some feedback for us so 
that we can learn what we can continue to do to ensure pilots 
get safety critical services they expect and need.
    Ultimately, regardless of who has the contract for this 
service, the FAA is responsible for ensuring that the users get 
everything they need from the system which includes quality 
customer service and safety. I want to learn more about what 
the FAA is doing to achieve those goals because the lessons 
from this contract will have a huge effect on how we deal with 
contracting out the ADS-B system.
    With that, I again welcome all of our witnesses today, and 
I look forward to hearing their testimony.
    Before I recognize the Ranking Member of the Subcommittee, 
Mr. Petri, for his opening statement or comments, I ask 
unanimous consent to allow two weeks for all Members to revise 
and extend their remarks and to permit the submission of 
additional statements and materials by Members and witnesses. 
Without objection, so ordered.
    At this time, the Chair would recognize the distinguished 
Ranking Member of the Subcommittee, Mr. Petri.
    Mr. Petri. Thank you very much, Mr. Chairman.
    This past summer, Lockheed Martin and the FAA finalized the 
transition of flight service station services from the 
antiquated legacy system to a modernized network integrated 
system. This process was the result of a nearly two year 
transition effort during which 58 facilities were consolidated 
down, as you point out, to 18 modernized facilities providing 
roughly 90,000 briefings per week at an estimated cost savings 
to the Government of roughly $2.2 billion over the life of the 
contract.
    However, as with nearly any transition of this size and 
complexity, problems arose including lost flight plans, long 
hold times and system outages. My office heard complaints in 
this area as yours did. Compounding these problems was the high 
call volume during the busy summertime flying season.
    While this Subcommittee should certainly look into the 
problems that have arisen during the transition period, we 
should also remind ourselves about how quickly the problems or 
most of them have been solved. For instance, there were 
problems with Lockheed Martin's FS21 automated system 
interfacing with FAA legacy systems. Yet, workarounds were 
quickly developed by Lockheed Martin to bring the system back 
online.
    Proper agency oversight of the contract is clearly 
critical. In the case of this contract, the FAA has mechanisms 
built into the contract that incentivize good service and 
penalize poor service. The contract has 21 performance measures 
called Acceptable Performance Metrics and based on these 
metrics, Lockheed Martin is eligible for rewards or for 
penalties.
    Additionally, under the contract, any contract under-run or 
savings is returned to the Government if any one of the 
Acceptable Performance Metrics is not met. Because 
understaffing could lead to missing an APL and thus losing all 
savings, the contract disincentivizes understaffing.
    I look forward to hearing more from our witnesses on these 
and other controls within the contract that ensure quality 
service for the users.
    As with any transition, flight service station briefings 
have changed. Pilots who may have talked to the same briefer 
for 15 years are probably surprised now when they talk to 
someone new. While it may be a little different experience, the 
quality of the briefing is what is most important. Our aviation 
system is modernizing and flight service stations must do so as 
well.
    While the transition to Lockheed Martin's enhanced system 
has been a challenge, surveys from the user community have 
shown satisfaction with how Lockheed Martin has responded to 
the issues that have arisen during the transition and show 
steadily improving grades on the quality of service.
    Now that the busy summer season is wrapping up, I look 
forward to hearing what Lockheed Martin is doing to ensure a 
seamless flying system in 2008.
    I look forward to hearing from our witnesses and yield back 
any time remaining. Thank you, Mr. Chairman.
    Mr. Costello. The Chair thanks the gentleman and, before we 
introduce the first panel, would recognize my friend from North 
Carolina, Mr. Hayes, for brief remarks.
    Mr. Hayes. Thank you, Mr. Chairman. Thank you for holding 
this hearing today.
    I think it is important to note that the concept is very 
sound. It started off very strongly. We developed a series of 
problems that have been pointed out by a number of users and 
user groups. I think Lockheed Martin, hopefully, will move as 
aggressively as possible to correct these problems, to put a 
sound system on a sound footing.
    I thank you for giving us a chance to take a look at some 
of these issues. I yield back.
    Mr. Costello. The Chair thanks the gentleman and at this 
time would introduce and recognize our first panel.
    First, we have the Honorable Calvin Scovel who is the 
Inspector General with the U.S. Department of Transportation; 
Mr. James Washington, the Vice President for Acquisition and 
Business Services, Air Traffic Organization, FAA; and Mr. John 
Staples who is the Director of the Office of Flight Services 
Program Operations for the FAA.
    Gentlemen, your full statement will be entered into the 
record, and we would ask you to summarize your statement.
    Mr. Scovel, you are recognized for five minutes.

  TESTIMONY OF THE HONORABLE CALVIN L. SCOVEL, III, INSPECTOR 
     GENERAL, U.S. DEPARTMENT OF TRANSPORTATION; JAMES H. 
    WASHINGTON, VICE PRESIDENT FOR ACQUISITION AND BUSINESS 
     SERVICES, AIR TRAFFIC ORGANIZATION, FEDERAL AVIATION 
   ADMINISTRATION; JOHN STAPLES, DIRECTOR, OFFICE OF FLIGHT 
  SERVICES PROGRAM OPERATIONS, FEDERAL AVIATION ADMINISTRATION

    Mr. Scovel. Chairman Costello, Ranking Member Petri and 
Members of the Subcommittee, I appreciate the opportunity to 
testify today regarding the conversion of FAA's flight service 
stations to contract operations.
    On February 1st, 2005, FAA awarded a 10 year contract to 
Lockheed Martin to operate the Agency's flight service stations 
in the continental United States, Puerto Rico and Hawaii.
    FAA anticipates that it will save $1.7 billion by 
contracting out flight service facilities over the 10 year life 
of the agreement. These savings are based on consolidating the 
58 FAA-operated flight service stations into 18 sites, 
deploying FS21, Lockheed Martin's new flight services operating 
system, and reducing flight service specialist staffing levels, 
approximately 1,900 to 1,000 specialists.
    At this point, the consolidation is nearly complete, and 
FS21 is operational. The transition was not an easy one. 
Hindsight is 20-20 but, clearly, deploying a new operating 
system and debugging it during live operations while 
consolidating 58 locations down to 18 and acclimating an entire 
workforce to a new system all within a 6 month period was a 
very ambitious undertaking. Significant problems in providing 
services to users occurred during the transition including long 
wait times, dropped phone calls, lost flight plans and poor 
briefings.
    In May, we issued an interim report on this outsourcing 
effort. Our testimony today is based on that audit work and 
ongoing work to monitor the transition. Today, we would like to 
discuss three issues regarding this undertaking.
    First, we found that FAA established a series of effective 
management controls over the initial transition from FAA to 
contract operations. For example, FAA used a contract 
mechanism, fixed price plus incentive fee, that allows for 
careful monitoring of the contractor's performance.
    FAA also implemented a series of internal controls to 
enforce the contract. For example, at the onset of the 
contract, FAA realigned its existing headquarters flight 
services office to oversee the transitional, operational and 
financial aspects of the flight services contract.
    FAA maintained an evaluation group to conduct operational 
reviews of flight service stations, and FAA included 21 
performance measures in the contract against which Lockheed 
Martin is evaluated. Lockheed can earn up to $10 million 
annually in bonuses for meeting those measures but can also be 
financially penalized for not meeting them.
    In our opinion, these controls are important mechanisms to 
manage the contract going forward.
    Second, while the Agency implemented effective management 
controls over the initial transition, Lockheed Martin 
experienced significant problems during the consolidation phase 
of the outsourcing effort. Lockheed experienced a 10 month 
delay in developing FS21 which led to a very aggressive 
consolidation schedule during the busy summer flying season.
    In addition, because of the delay in development, Lockheed 
began installing and using the system in live operations with 
known deficiencies. As a result, significant problems occurred 
in providing services to users. It appears that many of those 
problems have now been resolved.
    However, for future undertakings of a similar nature, 
several lessons learned can be gleaned from this experience. 
They include ensuring that new systems are fully developed 
before being deployed, paying sufficient attention to human 
factor issues such as acclimating a workforce to new systems, 
and taking swift and decisive intervention actions when 
outcomes, even intermediate ones, fail to meet requirements.
    Third, key watch items going forward. With the 
consolidation now behind us, Lockheed and FAA must focus on 
three key issues:
    One, meeting acceptable levels of performance over the next 
several months. Currently, Lockheed is not meeting 13 of 21 
performance measures. It is important to recognize, however, 
that most of the problems occurred in the second and third 
quarters of fiscal year 2007 while the transition was ongoing. 
With the transition ending, we would expect performance to 
improve.
    An important point, Mr. Chairman, is that if the 
contractor's performance does not improve over the next several 
months, it could indicate fundamental problems with how 
Lockheed Martin operates flight services. FAA must closely 
monitor the contractor's performance in terms of the APLs.
    Two, achieving the anticipated savings. Ensuring that 
savings estimates are being met each year is critical because 
most of the anticipated savings are expected to be achieved in 
the out years of the contract.
    Three, maintaining adequate staffing levels and providing 
sufficient training of flight service specialists to meet 
users' needs. A significant concern is that Lockheed expected 
to have 1,000 specialists on board at the end of the 
transition. As of September 1st, 2007, they had only 842 
specialists.
    That concludes my statement, Mr. Chairman. I would be 
pleased to answer any questions you or Members of the 
Subcommittee may have.
    Mr. Costello. Thank you, Mr. Scovel.
    The Chair now recognizes Mr. Washington.
    Mr. Washington. Good morning, Chairman Costello, 
Congressman Petri and Members of the Subcommittee. I welcome 
the opportunity to appear before you today to discuss the FAA's 
transfer of automated flight service stations to a contractor-
operated system.
    My name is Jim Washington. I am the Vice President for 
Acquisition and Business Services. I also serve as the 
Acquisition Executive for the FAA and accompanying me is John 
Staples who is our Director of Flight Service Program 
Operations.
    As we plan for the transition to the next generation of air 
traffic control, we continue to manage to the FAA's first 
priority which is safety. As the flight service program 
proceeds, we and our contract partner, Lockheed Martin, 
continue to ensure that this responsibility is not compromised.
    Let me take a moment to quickly review the history of the 
automated flight service contract. On February 1st, 2005, the 
FAA awarded a performance-based contract to Lockheed Martin to 
provide flight services to general aviation pilots. The 
contract was awarded following a 15 month feasibility study 
which we began in 2003.
    The total cost of the award was $1.8 billion covering an 
initial performance period of 5 years with consecutive options 
for a total of a 10 year contract term. FAA expects to save 
$2.2 billion in capital and labor over 13 years.
    The contract contains 21 metrics known as Acceptable 
Performance Levels. Those performance metrics allow the 
Government to measure contract performance and quality of 
service to the customer.
    On February 22nd, 2007, Lockheed Martin began the process 
of implementing their FS21 program. The end state configuration 
for the automated flight service stations in the continental 
United States including Hawaii and Puerto Rico will ultimately 
be 18 facilities.
    As is typical with the deployment of a new system, issues 
developed. Many of these were anticipated and mitigations put 
in place prior to the start of the transition. However, some 
system impacts were more significant than anticipated.
    Pilots began reporting excessive call wait times, dropped 
calls, lost flight plans and specialists who were unfamiliar 
with the expanded area of knowledge. Additionally, reports of 
problems with issuing, disseminating and coordinating notices 
to airmen were reported.
    FAA has taken timely action in response to these problems. 
We are holding Lockheed Martin accountable for meeting the 
requirements of the contract. Lockheed continues execution of a 
corrective action plan outlining the steps to be taken in each 
of the deficient areas that have been identified.
    At the FAA, we review recordings of air to ground radio and 
telephone communications between pilots and Lockheed flight 
service personnel to validate their performance data. FAA 
performs facility inspections at Lockheed Martin flight service 
stations. This includes over 2,100 quality assurance calls 
placed to Lockheed facilities.
    The National Weather Service also examines Lockheed weather 
briefers and provides results of those examinations to the FAA.
    Call hold times and abandoned calls have decreased over the 
past several weeks. While pilots may still experience longer 
wait times during peak periods, the average call wait time is 
now consistently below 45 seconds, down from the 8 minute hold 
times experienced in mid-May.
    Ongoing analysis and oversight continues in order to 
determine if additional corrective actions by Lockheed Martin 
are necessary.
    Contingent upon Lockheed's meeting the specified 
performance levels, the contract allows for either a financial 
incentive from the FAA or a penalty against Lockheed Martin for 
failure to meet an Acceptable Performance Level. A penalty is 
charged unless Lockheed Martin's corrective action plan is 
accepted by the FAA. Quarterly and more frequent executive 
level meetings provide the venue for performance discussions 
between Lockheed and the FAA.
    To date, FAA has levied approximately $12.2 million in 
financial penalties to Lockheed Martin in cases where 
performance levels were not met. Where Lockheed met or exceeded 
the performance levels, awards totaling $6 million were paid by 
the FAA.
    Actions taken by the FAA and Lockheed Martin are showing 
results. We continue to monitor Lockheed Martin's operational 
performance by conducting internal evaluations and requesting 
feedback from users such as the Aircraft Owners and Pilots 
Association as well as results of evaluations conducted by the 
Office of the Inspector General.
    Congress provided the FAA with the authority to establish 
the Air Traffic Organization as a performance-based 
organization. FAA is committed to meeting our responsibility by 
providing appropriate oversight and management of this 
performance-based contract for flight services. We continue to 
be responsive to our customers, and we continue to work with 
Lockheed Martin to provide the level of service which our 
customers expect.
    I thank the Subcommittee for the opportunity to discuss 
this important issue. This concludes my testimony, and I would 
be glad to answer any questions.
    Mr. Costello. The Chair thanks you and recognizes Mr. 
Staples at this time.
    Mr. Staples. I have no formal statement at this time, Mr. 
Chairman.
    Mr. Costello. Very good.
    Mr. Scovel, let me ask you just a few questions. Obviously, 
in your testimony, both your written testimony and your summary 
this morning, clearly you had questions as to the effectiveness 
of the FAA managing the transition.
    What have we learned from this as we move forward with 
another outsource contract on ADS-B? What are the lessons 
learned here in the transition?
    Mr. Scovel. Good morning again, Mr. Chairman.
    Let me begin by noting that FAA is justifiably proud of its 
role in the department as one of the components that actually 
operates things as opposed to other modes which serve as a 
conduit for funds and grants and which have some limited 
oversight responsibility. FAA is proud of its role as an 
operator.
    However, when it undertakes an effort like this or in the 
upcoming ADS-B effort, it must change its role from one of 
being an operator to one of being an overseer, engaging in 
oversight. The formula for oversight is pretty simple: monitor 
performance, evaluate effectiveness, implement lessons learned.
    We believe that using this as a case study, FAA initially 
implemented this contract effectively but going forward its 
execution was lacking, and let me draw a couple of key 
examples.
    First, in this one, we knew that FS21 was a key to the 
consolidation effort, yet that system was not entirely debugged 
before it was put into operation. It was debugged during live 
operations, in fact, and that was a key part of many of the 
complaints by private pilots as they tried to engage flight 
services.
    Second, attention to human factor issues, in this case, we 
had a consolidation effort that required a workforce being 
relocated from outlying facilities to some hub facilities and 
other consolidated locations. They were undergoing training in 
new geographic locations and a new operating system at the same 
time. We think that perhaps oversight of that aspect was 
lacking.
    Third and perhaps most telling, we think that swift and 
decisive and early intervention was lacking on FAA's part once 
severe problems were noted during the early spring and summer 
flying season, and a flood of complaints and calls began to 
reach FAA from disgruntled private pilots.
    That leads to me one final point, and that is getting input 
from users, sir. We think that while AOPA and other users had 
some input at the beginning of the process, clearly as the 
contract was moving forward, FAA's approach, we believe, was 
one of we will hold them. We will hold Lockheed to the terms of 
the contract.
    They were slow in responding to complaints from the users, 
and we think had they paid key attention earlier, that would 
have given FAA a much stronger role in overseeing the 
implementation of the contract.
    Mr. Costello. You talked a little bit in your testimony 
about the staffing levels. You mentioned the key points that we 
have to move forward on, and the third point was staffing.
    It is apparent to me and I would just ask you the question 
in reviewing and preparing for this hearing. The fact that 
Lockheed only had 800 specialists on staff, it is pretty clear 
that they did not have the manpower to adequately respond to 
the number of inquiries and the services that were required by 
the users. Would you agree?
    Mr. Scovel. Manpower is key. In fact, in our May report, we 
identified staffing as a key concern of ours, and we 
recommended at that time that FAA undertake a more detailed 
examination of Lockheed's staffing effort. FAA initially 
disagreed with that recommendation.
    However, in early September, it too recognized the severity 
of the staffing problem because at that point, as of September 
1st, staffing which was supposed to be at 1,000 had fallen to 
842. On September 7th, FAA sent a letter to Lockheed, 
requesting a plan of action and milestones so that FAA could 
better monitor Lockheed's implementation of the staffing 
requirements.
    Mr. Costello. Based upon what we know today, do you believe 
that the FAA will achieve the $1.7 billion in savings that was 
promised under this contract?
    Mr. Scovel. We believe $1.7 billion is achievable. However, 
it is too early at this point to say whether it will actually 
be reached. Keep in mind, please, sir, that we are talking 
about a 10 year contract. We are in the very early years of it.
    Many of the savings, the great bulk of the savings are 
estimated to be achieved in the out years of the contract. For 
instance, the first two years of the contract, savings of $5.3 
million have been estimated. In the last two years of the 
contract, savings of $434 million are estimated.
    There is a lot of time between now and then, and there is a 
lot of time for extra expenses and costs to eat into the 
estimated savings that will hopefully be achieved in the last 
years of the contract. It will require detailed examination and 
oversight by FAA throughout the entire contract in order to 
achieve that whole $1.7 billion in savings.
    Mr. Costello. Well, that is one of the issues that concerns 
me about ADS-B and the contract, aggressive oversight.
    Let me move on to Mr. Washington.
    Mr. Washington, Lockheed Martin has requested, I think, 
close to $150 million in adjustments to the contract based 
upon, I think, significantly higher wages than what the FAA 
instructed the bidders that the wages would be.
    I would like you to comment on the labor rates that the FAA 
gave to the bidders at the time that they were bidding. Was 
there a difference or a misunderstanding on wage rates?
    Mr. Washington. Thank you, Mr. Chairman.
    Yes, we are in receipt of a formal claim from Lockheed 
Martin for just over $100 million, and the central issue there 
is about the wage determination associated with the salaries 
for specialists in the operating flight service stations.
    The initial award of the contract was based on a formal 
wage determination that was established by the Department of 
Labor in addition to the actual salary payments to flight 
service specialists at the time they were still employed by the 
FAA.
    A combination of the Department of Labor information as 
well as the actual salary payments to the workforce that was 
available to Lockheed Martin at the time we initiated the 
contract award provided the overall set of information related 
to the projected costs of paying the salaries for flight 
service operators.
    There is some discussion about the extent to which there 
was either misunderstanding or misinformation provided in the 
formal contract communications between the FAA and Lockheed 
Martin. So we fully intend to resolve that difference.
    Mr. Costello. Is the adjustment somewhere in the 
neighborhood of $100 million to $150 million that Lockheed is 
requesting?
    Mr. Washington. I believe it is, Mr. Chairman.
    Mr. Costello. What point do you expect that you will 
resolve that issue?
    Mr. Washington. We are in the process of conducting 
discussions with our counsel at the FAA and intend to address a 
schedule for resolution of that claim in the next weeks.
    Mr. Costello. You heard, Mr. Washington, the Inspector 
General testify that in certain aspects of the contract, that 
the FAA has not provided proper oversight. I want your comment. 
Would you agree with that?
    Are there areas that if you could go back and do it over 
again, specifically, what would you do better regarding 
oversight?
    Mr. Washington. Yes, Mr. Chairman, in the context of 
lessons learned, we have absolutely stepped into a very complex 
oversight responsibility which, I might add, combines the fact 
that FAA retains ultimate responsibility for assurance of 
safety in the system. The difference here is that we rely on 
the service provider and Lockheed Martin who actually owns and 
operates that system to provide both the equipment and the 
appropriate trained expertise in terms of people to provide 
that quality of service which the customers expect.
    In our oversight experience, we have discovered some 
lessons learned in two particular categories, and one of those 
happens to be the testing routines that lead up to the actual 
implementation or the operational use of new automation which 
is relied on by specialists in order to provide briefings to 
pilots. The level of detail that is associated with that 
testing routine prior to operational use is what the FAA would 
apply a greater level of rigor around than what occurred in the 
recent transition.
    Another specific area of lessons learned is related to 
staffing. In that discussion, I would suggest that it is a 
combination of the total number of operational staff 
specialists who are available in the system in addition to the 
availability by a facility to address specific demands on the 
system and address the more complex airspace situations around 
the national airspace.
    So the availability of specialists while training is going 
on on a new automation platform is where we would apply greater 
oversight and advice than what may have been exchanged between 
the FAA and Lockheed Martin.
    I would also add that we increased our level of 
surveillance and executive level of contract oversight when it 
became apparent that problems were arising in the system which 
exceeded the expectations of both Lockheed and the FAA.
    Lockheed had presented a plan to us that essentially 
provided for procedural workarounds in the event that some of 
the capabilities of the automation, which was planned to occur 
in future time frames, was not available. So FAA accepted their 
transition plan based on the workarounds that were presented to 
us. In specific cases, those workarounds were insufficient to 
meet the demand without significant call wait times and lost 
calls and other concerns that you have heard addressed in this 
discussion this morning.
    Mr. Costello. Based upon lessons learned here in the early 
stages and the issue concerning wages regardless of if it was a 
miscommunication or whatever it may have been, do you 
anticipate that the Government and the taxpayers will achieve 
the $1.7 billion in savings that the FAA told us that they 
would achieve?
    Mr. Washington. Yes, Mr. Chairman, I am confident that our 
projected savings will meet that target over the lifetime of 
the contract.
    We have already experienced significant savings. In fact, 
we were more than $50 million ahead of our budget target for 
the very first year of this contract award. In fiscal year 
2007, we are making significant progress as well in terms of 
the actual costs of the contract as compared to our 
projections.
    So we are off to an encouraging start, and certainly these 
future adjustments that are required will have some impact on 
the total cost of the contract, but we do not expect that to 
have a significant impact on our projected total savings.
    Mr. Costello. We are obviously concerned about savings, but 
we are more concerned about safety and making certain that the 
pilots get the information that they need when they need it and 
that the services are provided either by the contractor or, as 
I pointed out in my opening statement and as you pointed out, 
the FAA has the ultimate responsibility regardless of who is 
holding the contract.
    At this time, the Chair recognizes the distinguished 
Ranking Member, Mr. Petri, for questions.
    Mr. Petri. Thank you, Mr. Chairman.
    I am interested if anyone on the panel really would 
comment. Mr. Scovel mentioned that the FAA has been an 
operating agency, and this is a major contract with contract 
oversight responsibility over a period of years which is 
probably not going to be unique as we go forward with the new 
technology and a pretty sophisticated series of technologies 
for the new satellite-based system.
    Do you feel that FAA either in-house has adequate expertise 
to manage this process or the ability to contract out with 
people who can inform them as to things that they need to know 
to manage the process, or are there any changes we should be 
making or thinking about making in the legally authorized tools 
that the Agency could have to make sure that people from the 
user community and the catering community making all this 
equipment and understanding the technologies help inform the 
Country as how to do it best by advising the FAA or working 
with them?
    Do you have any comment on any of that?
    Are we okay? Is the Government able to manage these 
multibillion dollar projects without any risk that they will 
lose control of the process?
    Mr. Scovel. Thank you, Mr. Petri.
    I think there is always risk, naturally. However, I would 
think that, using this again as a case study, I would note that 
in our opinion FAA did a good job in the initial phases of the 
contract in structuring it, in identifying performance measures 
and through at least the first fiscal year in monitoring the 
execution.
    It was only later, after the delay in the implementation of 
the development of the operating system and then the rushed 
consolidation schedule, that FAA began to run into problems. We 
attribute that more to a mind set, to an attitude, if you will, 
rather than to a deficiency in any expertise, technical 
expertise or in manpower on the part of the Agency.
    We are confident that the Agency, of course, can learn from 
experiences like this and apply it, hopefully, to upcoming 
projects like ADS-B, but it will require dedicated attention 
from top level leadership at FAA in order to drive these 
lessons home.
    Mr. Petri. Another area that I wonder if you could comment 
on, a lot of Members of the Committee have been hearing there 
were some 1,600 people who had to go through this transition. I 
guess there was an indication that there would be every effort 
made to find other assignments for people within the FAA and 
manage this transition, but there are evidently some 300 or 
more people who have not found another assignment.
    I just wonder if either of you could comment on this or 
what, if there is something, that still remains to be done that 
we can be helpful with or what lessons have been learned from 
handling the individuals involved in this whole situation.
    Mr. Scovel. Mr. Petri, I will defer to FAA here in a 
moment, but I will note that in any transition like this from a 
Government-operated system to a contractor system, there will 
be dislocations. I know that is an unfortunate sounding 
antiseptic term when we are talking about the impact on people.
    I will note too, and I think it is included in my 
statement, that Congress made the policy determination to 
protect FAA employees who were within two years of retirement 
at the time this outsourcing was first initiated by providing 
that those employees within two years of retirement, Government 
retirement, could continue as FAA employees. Any time a line 
like that is drawn, some will fall outside the line and some, 
regrettably, will be very, very close to qualifying and being 
included in that line.
    My office hasn't had an opportunity to study in detail the 
impact on individuals and the decision making process that went 
into that part of the contract, but we do note that the 
Congress did do what we believe was certainly its best at the 
time.
    Mr. Petri. Excuse me. Go ahead.
    Mr. Washington. Thank you, Mr. Petri.
    Let me address the complexity of this contract arrangement 
because the FAA Administrator, Marion Blakey, at the time and 
those of us in senior positions of responsibility did not 
approach this anticipated competition lightly. We understood 
that the single most significant challenge in this outsourcing 
process would be the impact to the people and their careers and 
lives in the process of awarding an outsourced contract.
    So, at the time that we announced the competitive process 
back in July of 2005, we had some 2,300 specialists on board, 
currently FAA employees. We extended early retirement 
opportunities to that workforce in the hopes of allowing people 
an opportunity to exercise an additional option that would not 
have otherwise been available to them, stepping into a 
reduction in force process in October of that year.
    Out of those 2,300, more than 1,200 employees ended up 
retiring from that affected workforce. We were successful in 
achieving reassignments to other FAA positions for some 456 of 
those affected employees, and that was directly related to the 
FAA Administrator's special policy that was put in place, 
offering these affected employees special placement 
opportunities.
    In addition to that, in their wisdom, the opportunity that 
Congress extended to the FAA, which I believe is unprecedented, 
which Mr. Scovel referenced a minute ago, allowed some 99 
individuals an opportunity to be re-employed with the FAA, most 
of which had taken on positions with Lockheed Martin in order 
to reach their retirement eligibility.
    I think that is a very significant step which adds to the 
measures which FAA was able to initiate within our own 
authority and control. That also allowed us to reduce the 
impact on more than 500 individuals that actually experienced a 
reduction in force.
    Now, keep in mind that at the time we initiated this RIF 
process in October, 2005, the Lockheed Martin extended 
employment opportunities to 100 percent of the operating 
specialists, administrative personnel, secretaries and managers 
that were currently on board at flight service stations. So 
there was an opportunity for all of those individuals to choose 
to take on employment with Lockheed Martin with the receipt of 
a recruitment bonus in addition to the potential for future 
benefits related to health and 401(k) retirement savings 
opportunity as well.
    What I am suggesting is that between the FAA and Lockheed 
Martin, that there was a combination of factors that provided 
for some mitigation of the impact to those personnel as we 
stepped into this outsourcing event which we understand had 
significant impact on the lives of those individuals.
    Mr. Petri. Thank you, Mr. Chairman.
    I think others may have questions on this process and other 
aspects. I yield back.
    Mr. Costello. The Chair thanks the gentleman and now 
recognizes Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chairman.
    The first question is for Mr. Washington. I thought it 
might be appropriate to ask you since your last name is 
Washington. I am from Washington, and the question is about 
Washington.
    In talking to the pilots in my area, one of the more 
unusual complaints but relatively common for them is that the 
voice recognition system that is being used for some reason 
does not adequately identify or adequately hear Washington when 
they call in and they are asked what State are they from. I 
don't know if it is because of Washington State versus 
Washington, D.C., and so they end up in this voice mail hell 
that a lot of us get into.
    I am curious if you have heard that complaint and if 
something is being done or can be done about that.
    Mr. Washington. Thank you, Congressman.
    I have not heard about that specific complaint in the 
system, and I would respectfully request that you may pose that 
question to Lockheed Martin in the following panel.
    We follow up on specific complaints about problems in the 
system, and we have a very dynamic process between the FAA and 
Lockheed Martin to ensure timely resolution of the complaints 
once they are validated. This particular one, however, I am not 
familiar with.
    Mr. Larsen. It is fairly usual and probably isolated to 
Washington.
    What steps are you taking to reduce or eliminate the 
problems, specifically, call wait times and dropped flight 
plans?
    Mr. Washington. There have been a number of significant 
improvements in the automation system that Lockheed Martin has 
brought into use at all the flight service stations, and so 
that is the primary improvement factor that has allowed us to 
experience fewer complaints overall and specifically 
significant improvement in call wait times and lost calls over 
the duration of this contract.
    So it is a combination of the automation improvement and 
introducing specific new capabilities to the automation 
platform which have been done in several sequences, and there 
are two or three additional system improvements that are 
scheduled to be installed by Lockheed Martin which will add 
corrections to the system that don't presently exist.
    Mr. Larsen. What are those improvements?
    Mr. Washington. I will ask Mr. Staples to pitch in here, if 
I may.
    Mr. Larsen. Fine.
    Mr. Staples. There have been a series of software drops to 
the FS21, and four of those remain to be implemented. The call 
wait time that you referred to, specifically, has gone down 
significantly and continues to drop to less than about 40 
seconds average wait time across the system at this point.
    I think that in the longer term, looking toward this, the 
major improvements will be incremental in terms of more 
specialists being trained, the end of the training on the FS21 
system, increased proficiency on the use of the FS21 system 
which will lower the briefing times, now at approximately five 
minutes to something less than four. At least that is what we 
believe is going to occur, and that is what Lockheed is trying 
to make happen.
    So, technological improvements have largely made the 
difference so far, but in the longer term this is really an 
operational air traffic kind of environment that needs to work 
on these kinds of problems, not only on the hold time but on 
the local area knowledge, efficiency of the system, utilization 
and the correct employment of staffing across the multiple 
flight areas that Lockheed Martin is operating.
    Mr. Larsen. With regards to staffing and local area 
knowledge, there are a couple of major events, probably several 
major events that happen in the U.S. One of them is in my 
district as well. It is the Experimental Aircraft Association 
Fly-In, the third largest in North America behind Wisconsin's 
and I think maybe Hattiesburg's if I am not mistaken.
    We had some problems over the last two years. In talking 
with the director of the fly-in, I think she is still trying to 
sort out who is she supposed to be talking to, whether it is 
FAA in planning for this or if it is Lockheed in planning for 
this fly-in which takes place in July every year.
    I will grant that perhaps with the transition taking place 
at the most inopportune time of the year, during the springtime 
when the flying season really begins, certainly in the 
Northwest when it begins, that there was some major hiccups the 
first time around. But the second time around, this last year, 
they continued to have problems in who they were supposed to 
speak to.
    Can you speak to, in planning for large-scale planning 
events like this, who are folks supposed to be speaking with 
and planning with? Is it the contractor or is it FAA?
    Mr. Staples. Congressman Larsen, the FAA is the initial 
contact for this kind of request, and you can send those 
requests. Just have your director contact my office of Flight 
Service Program Operations in Washington, D.C., and we will 
take them through the process.
    This is a special service kind of piece of the contract. 
Lockheed has paid separately for each one of these events. The 
FAA approves them. There is essentially a contract negotiation 
that takes place with Lockheed Martin, and then Lockheed Martin 
executes. That is a separate piece to the contract.
    Mr. Larsen. So the FAA approves the contractor, approves 
the step that the contractor will take to manage the activities 
for that particular event, but it goes through the FAA first?
    Mr. Staples. Yes, Mr. Congressman, it starts with the FAA. 
If it is not on a list that we have already told Lockheed that 
they have to do like the Albuquerque Balloon Festival, the 
Oshkosh Fly-In, those kinds of things, the request comes to us. 
We approve it and pay for it. Essentially, that is the 
individual contract for that event.
    Mr. Larsen. Okay. I see my time is up, Mr. Chairman. I 
would just make one more comment about local knowledge. It is 
important.
    We have a specific weather pattern in the Northwest called 
the convergence zone, the Pacific Northwest Convergence Zone, 
that nobody in Phoenix or Denver knows about. But when my 
pilots call and get transferred over to Phoenix and Denver and 
have to try to get weather briefings from them, they are 
talking to the wrong people.
    So I think it is important that, and we will talk to 
Lockheed about this too as well, certainly about improving 
local knowledge wherever that person who takes a call is 
sitting because this is a particular weather event that really 
does wreak havoc at certain times of the year including major 
fly-in times of the year. That is very important for our folks 
for flying to be able to access weather information on.
    Mr. Costello. The Chair thanks the gentleman from 
Washington and recognizes the gentleman from North Carolina, 
Mr. Hayes.
    Mr. Hayes. Thank you, Mr. Chairman.
    Mr. Staples, if I could zero in on your for a minute, Mr. 
Larsen spoke about a problem that has been consistent 
throughout and that is quality of briefing as it relates to 
local area and general knowledge. What is the relationship that 
you and the FAA have between yourselves and Lockheed to solve 
the problem of local knowledge on the part of the briefer and 
quality of that briefing?
    In other words, you know the problem. How do you go at it 
since Lockheed holds the contract? What is the process?
    Mr. Staples. Congressman Hayes, we have no specific metric 
associated with that, but it is a recognized problem. So the 
way we would deal with it is by collecting complaints from the 
user community.
    This, of course, is a well known problem that was pointed 
out by AOPA early on and one that has been exacerbated by the 
fact that when Lockheed consolidates, in many cases, flight 
station specialists that were in a given area don't transition 
to the hubs, especially if the facility is a closing one and is 
not a continuing facility. So this causes an immediate shortage 
in local area knowledge for the area that was operated by that 
flight service station.
    This is one that we monitor and will continue to monitor in 
our staffing oversight initiative that we just started 
recently. This is a thing that we had not expected to have to 
do, but it is clear to us that we are going to have to step 
into this area and make sure that on a flight plan area by 
flight plan area basis, that Lockheed is providing enough 
trained specialists. So that is going forward, what we intend 
to do.
    What has past, in my belief, created this situation or 
exacerbated it was when they consolidated into larger hubs and 
closed many of the facilities.
    Mr. Hayes. What sort of training program does Lockheed have 
in place to correct those deficiencies and how are you 
following up with that?
    Mr. Staples. The Lockheed Martin training program thus far 
has been focused on bringing people into general familiarity of 
the FS21 system and bringing new specialists into the flight 
service workforce. I think it is approximately 100 people that 
they have brought into that area now.
    Their local area training that you specifically asked about 
is not encountered until they go to the area where they are 
being assigned and, at that point in time, start to learn the 
anomalies of the specific conditions associated with that 
flight plan area.
    We will monitor it by looking at the amount of people that 
they have trained in any given flight plan area.
    Another thing that contributes or has contributed to this 
problem in the past, which Lockheed seems to have made pretty 
good strides in fixing, is getting a pilot caller to the right 
specialist. They are reporting to us that they are between 86 
and 88 percent in that area now.
    In other words, if a pilot wanted the Raleigh area, he 
would get that 86 or 88 percent of the time. If the hold time 
for that specific area looked like it was going to be too long, 
the pilot can opt to just take the first briefer that is 
available in the system. So I think that technology piece has 
been helping.
    I think the longer term is a training issue, specifically, 
and it is a focus area that Lockheed Martin has to continue to 
flesh out.
    Mr. Hayes. I would encourage you to encourage them to be 
very aggressive in stepping that process up. It is interesting 
to note how much technology is available now.
    Again, speaking to Mr. Larsen's issue, there are a number 
of things that no matter where you are, the same person can be 
looking at the same information but the local knowledge issue, 
because of the needs of that specific pilot, are very 
important.
    Last but certainly not least, what is the aggressive plan, 
Mr. Washington and then Mr. Staples, that the FAA has to use 
this particular process to transition into Next Generation and 
ADS-B, lessons learned, so that transition can be as smooth as 
possible and again the FAA can help people understand that 
equipping is good for them and good for the system?
    Mr. Washington. Thank you, Mr. Congressman.
    We are certainly aware of the challenges as we step into 
NextGen transition on a larger scale and have applied those 
lessons in the dynamic process of awarding new contracts 
including the most recent action related to ADS-B. We are 
constantly sharing lessons learned within the program 
management workforce at the FAA and looking at the planning and 
the implementation details that are appropriate to apply to the 
next challenges.
    I would also suggest that each of these initiatives takes 
on a unique set of concerns and issues, and so while we have 
one set of complexities associated with this particular flight 
service outsourcing, that this is quite unique to what we are 
addressing in the set of challenges in front of us for ADS-B. I 
anticipate we will have a much more detailed discussion on that 
subject here later this month.
    Mr. Hayes. Thank you, Mr. Chairman.
    I might ask unanimous consent to enter Mr. Mica's statement 
into the record.
    Mr. Costello. Without objection.
    Mr. Hayes. One other request for Mr. Washington and the 
FAA, would you just give the Committee the aviation side, a one 
pager with a proposal going forward? Okay, this is what we have 
learned, and this is how we are going to apply it successfully 
to help ADS-B and have people understand there are more 
opportunities than there are challenges. We are going to be 
different in the way we do this.
    Thank you, Mr. Chairman.
    Mr. Costello. The Chair thanks the gentleman and now 
recognizes the gentleman from Wisconsin, Mr. Kagen.
    Mr. Kagen. Thank you very much, Mr. Chairman.
    It is a pleasure for me to be here and nearly represent 
Oshkosh, Wisconsin. It is just out of my range, but my dear 
colleague, Tim Petri, represents them very well.
    I just have a few questions. Which one of the three of you 
are responsible for overseeing this privatization effort and 
privatization contract with Lockheed Martin?
    Mr. Staples. Mr. Congressman, I am responsible for that as 
the Director of Flight Services Program Operations.
    Mr. Kagen. Very good. So you are responsible for examining 
not just the contract but its execution?
    Mr. Staples. That is correct.
    Mr. Kagen. Okay. In the report offered by Mr. Scovel, in 
the exhibit which I have here, there are test scores, 
measurements of how the contractor is doing. If I read it 
correctly, 13 out of 20 measurements have the score of failed.
    How are they really doing if they failed in 13 out of 20 
and what are the 3 most critical failures that you would 
identify that would be important for this Congress to 
understand with regard to the traveling public's safety and 
also the aircraft owners? What are the three greatest failures 
that have occurred so far?
    Mr. Staples. As the Director of Flight Services Program 
Operations, my focus has always and will continue to be on 
safety. So anytime we are failing, the operational error, the 
operational deviation kind of Acceptable Performance Level, 
then that is something that we need to focus on first.
    I understand that long wait times are inconvenient and they 
have an economic impact, but the safety ramifications for 
errors in the system is of the greatest concern.
    Now I have to say that Lockheed Martin has been operating 
the system for seven fiscal quarters now, and for the first 
sixteen months they did extremely well. Most of those 
Acceptable Performance Levels, I believe, they only failed 
three in the first quarter of this past year.
    It wasn't until the transition to the FS21 system and the 
aggressive nature of that where they really started 
encountering many more problems than we had expected. We knew 
that there were going to be some difficulties with the 
workaround, but this far exceeded what we expected to happen.
    I guess I provided you the answer with the first two. I 
guess I am not sure I can answer the third one off the top of 
my head, but there are some.
    Anything that is associated with safety and their safety 
evaluations, in particular, are done by our FAA safety 
oversight organization which is independent from my 
organization.
    The quality of briefings that the pilots receive, that is 
measured by my office which is listed on the sheet that you 
showed as Acceptable Performance Level 2A. That is the most 
heavily weighted aspect of the performance measures. They are 
not all equal.
    So after the safety evaluations, I would say the facility 
evaluations and our evaluations of the pilot briefing.
    Mr. Kagen. Let me ask you about one issue I take rather 
personally. I can recall when I was flying into an airport in 
my district and, when we came in, suddenly there was a 
construction truck pulling across the runway. We did a Sky King 
maneuver and avoided impact, but airport managers reported that 
they couldn't file notices to airmen to alert pilots about 
runway closures or lighting outages.
    What, specifically, has taken place by you or Lockheed 
Martin to correct this?
    Mr. Staples. The processing of aeronautical information, 
specifically notices to airmen that you talk about, has been a 
problem for several weeks now. This, although it is not 
specifically measured by the metrics, falls into one of the 
areas of where we had to change and make more aggressive our 
kind of oversight.
    This is an area where we had to specifically contact 
Lockheed Martin and ask for a corrective action plan in this 
area because of the communication, we believe it is 
communications internal to the Lockheed Martin system and the 
way that they were handling those communications that created 
the initial NOTAM problem.
    In the last three or four weeks, we have been getting 
reports of improvements in that area. So I think what they have 
done in terms of some of the technological routing of their 
calls, which was the primary thing that they did, and also 
establishing a process for talking to the FAA as one of the 
primary sources of getting this aeronautical information to the 
system by the air traffic control.
    Mr. Kagen. You are working hard to improve communications.
    Mr. Staples. We are, absolutely.
    Mr. Kagen. I realize my time has expired, but if I may ask 
the Chairman just if I could inquire because I haven't read the 
contract. Are there any economic or punitive damages that take 
places in this contract if they don't execute it properly?
    Does it cost them money? Do we get any taxpayer money back?
    Mr. Staples. Yes, we absolutely do. The first seven 
quarters, we have assessed them what we call credits which is 
financial penalty, something over the order of $12 million.
    Mr. Kagen. Thank you very much and I yield back my time.
    Mr. Costello. The Chair thanks the gentleman and recognizes 
gentlelady from California, Ms. Richardson.
    Ms. Richardson. Yes, thank you, Mr. Chairman.
    My questions are actually going pretty much on the line of 
my colleague who just started here. When you say--excuse me, 
sir, Mr. Staples, over here.
    When you say, $12 million in credits, when I look at a 
contract that was supposed to achieve savings of $1.7 billion, 
$12 million really doesn't sound like a lot of money. I think 
this Committee probably would be appropriate to know in line 
what percentage of those credits are in line of what is 
actually being paid because my guess would be that is a pretty 
low percentage.
    A couple questions in addition to that that I would have: 
Originally with this contract, how many contractors responded 
and how close were they in terms of the bid? Was it a decision 
of expense? Was it a decision of capabilities? What was that 
decision?
    Mr. Staples. Congresswoman Richardson, I would like to 
answer the second half of that first. I can't. I don't really 
have any knowledge.
    There were five bidders--one of them was the Government--
for this service. I wasn't part of that, so I can't really 
answer that question. I will have to answer that for the 
record, I believe.
    In regards to your first point, the Acceptable Performance 
Levels and the metrics and the financial penalties associated 
with that are a percentage of the target profit that Lockheed 
Martin has on this contract. For example, if they had 10 
percent of the contract value for a year was their target 
profit, the Acceptable Performance Levels are taken against 
that amount.
    I think that might put it in context in terms of your 
question. At least, I hope so.
    Ms. Richardson. Well, I think it would be appropriate, if 
the Chairman would allow, that you would provide this Committee 
with what those details are.
    I would venture to say that it shouldn't be based upon 
profit. It should be based upon the work that was performed 
which based on the testimony and the reports that we have, that 
was inadequate.
    My next question is Lockheed Martin was entitled, in turn, 
to earn $10 million annually in terms of bonuses. Were those 
provided last year and also is it projected to be supplied this 
year?
    Mr. Staples. Ten million dollars is the maximum amount that 
they can earn in any year for exceeding performance levels. Of 
that $10 million, in their first year of operation where 
reportedly they received a B plus from the user community in 
terms of their operation, they were awarded $6 million in 
awards.
    That amount for the fiscal year 2007 won't be calculated 
until next March, and that is directly related to the 
Acceptable Performance Levels that they exceed and those which 
they fail.
    Ms. Richardson. So you mean to tell me that based upon the 
reports that we have in addition to the amount that Lockheed 
Martin was paid for the contract, they received an additional 
bonus of $6 million?
    Mr. Staples. That is correct.
    Ms. Richardson. Have you been required to provide 
additional oversight based upon some of the problems that have 
occurred with this contract?
    Mr. Staples. We have absolutely had to change our 
oversight. The concept of putting measures in place and 
monitoring those and taking action as a result of those 
failures, inadequate in some areas, are an operational kind of 
situation. This included not only system development but 
operation of the system, and we had to have some management 
indicators that are much more real time.
    Ms. Richardson. Has that been billed back to the 
contractor?
    Mr. Staples. I am sorry?
    Ms. Richardson. Have those expenses been billed back to the 
contractor?
    Mr. Staples. This is really a redirection of my workforce 
and has minimal financial impact, but no. The answer to your 
question is no, we have not billed them for that. We do that 
internally.
    Ms. Richardson. Thank you, Mr. Chairman.
    Mr. Costello. The Chair thanks the gentlelady and 
recognizes the gentleman from Pennsylvania, Mr. Dent.
    Mr. Dent. Thank you, Mr. Chairman.
    I guess my question really would probably be best directed 
to our friends at FAA. How many outages of service occurred in 
2005 while FAA managed the flight service stations and did the 
Government keep records on that. If so, how do these outages 
compare to those experienced by Lockheed Martin?
    Mr. Staples. I actually don't have the information for 
2005. We would like to take that for the record if we could.
    Mr. Dent. If you would be kind enough to provide that 
information to the Committee, it would appreciated.
    I yield back.
    Mr. Costello. The Chair thanks the gentleman and recognizes 
the distinguished Chairman of the Full Committee, Chairman 
Oberstar.
    Mr. Oberstar. Well, thank you, Mr. Chairman and Mr. Petri, 
for joining together to hold this hearing. It has been a long 
time in the coming.
    We have waited patiently while FAA moved ahead with the 
privatization scheme, get an opportunity to put it in place and 
see what the effect is, all the while being besieged by the 
general aviation community about the problems with the startup. 
Of course, they were holdover problems from the previous system 
that was not operating well.
    The stories that we have heard of pilots being put on waits 
for as long as 15 minutes, in some cases, longer and then 
hanging up, flying without the weather information, not getting 
NOTAMs, not being to get route of flight briefings and filing 
their flight plans and then finding that they were lost or they 
weren't received or they were improperly entered. There are all 
sorts of these problems that you can expect with a startup but 
not in aviation, not when service is so crucial.
    I remember the era of consolidation from the hundreds, 330 
or so flight service stations. That was, if you can believe it, 
an era before Phil Boyer. It is hard for many to believe there 
was a general aviation before Phil Boyer, but there was, even 
before Monte Belger came to his ascendence within the FAA.
    There was just calamity through the general aviation 
community. Oh, my God, this is going to be terrible. It is not 
going to work. We will be up there in the sky, and we won't get 
the information.
    In fact, I won't mention his name but a pilot with whom I 
flew as a contract service, said, this is just going to be 
terrible in Minnesota, and I am going to show you. We are 
flying from Ely to Duluth, and a line of thunderstorms is out 
there on the horizon.
    He kept flying toward it and saying, now when this new 
system goes in and I call for information about that weather 
system out there and I don't get it, we are going to be in the 
soup and I am going to show you.
    I said, Eddie, cut the BS out. Turn the God damn plane 
around and miss that storm.
    Now, just as Mr. Larsen pointed out a little while ago, 
there are many places in the Country and northern Minnesota 
being one of them, Washington being another, where there are 
unique local weather systems that the local observers 
understood, and they were very good at warning pilots. They 
didn't have the fast-moving technology and the equipment that 
they needed to stay on top, stay ahead of fast-moving weather 
systems, but they knew the locality and they gave people right 
information.
    If you are up in Washington and you call in--and that was 
the fear early on in this conversion to automated flight 
service stations--and you get somebody from Phoenix, they don't 
know what the weather is in Washington and you get bad 
information. So that transition was long and painful.
    But in its early stage, the consolidation, in Minnesota, I 
went from Minnesota to, oh, at least a dozen other States as 
the Chair then of the Aviation Subcommittee and found pretty 
much the same thing. It was like the neutron bomb had gone off. 
The facility was built. The equipment was installed, but there 
were no people.
    Eventually, we got the people trained. Air traffic 
controllers, weather specialists put in place, and then the 
equipment was outdated. The FAA simply wasn't making the 
investment, wasn't making the budget requests. They weren't 
keeping up with what needed to be done to keep those facilities 
at the cutting edge of state of the art.
    I plugged in at several places and listened to controllers. 
A DC-10 overhead, calling in, asking for weather information 
and the poor, harried controller saying, look, I don't have 
time to deal with you. Call in to the en route center. Here is 
their number. Get the information. I am overloaded here--and 
they were.
    But at the start of this new contract system, you had 2,200 
controllers. They went down to 850, and Lockheed says they need 
to grow to 1,100.
    I want to get back. Mr. Scovel and Mr. Washington. What 
were the specific assumptions upon which FAA based its decision 
to privatize?
    The next question, you know, is going to be have they met 
those assumptions?
    Mr. Washington. Thank you, Mr. Chairman, and it is a 
pleasure to see you again. I recall the remarks that you shared 
with our ATO leadership summit here in town recently, and a lot 
of the discussion there was associated with improvements that 
are needed in the system which we all care about very much.
    I would suggest that this was an outsourcing action which 
is distinct from privatization in one very significant way, 
which is that the FAA and the Federal Government continue to 
have the ultimate responsibility to ensure that the quality of 
service is what the customers expect.
    We have not turned this over lock, stock and barrel to a 
private entity to own, operate and run on their own. This is 
very clearly an oversight responsibility the FAA continues to 
have, and so we take that responsibility very seriously.
    As you indicated a moment ago, Mr. Belger and Mr. Boyer are 
two of the folks who have had a significant part in addressing 
the multiple concerns as we stepped into this plan for an 
outsourcing award, and so the competition resulted in the FAA 
making a best value determination.
    That is to say the proposal which we received from Lockheed 
Martin and which the FAA accepted resulted in the best 
combination of a technical concept to provide services as 
distinct from FAA continuing to own and operate the system in 
addition to the total cost of providing that service over and 
over again.
    Mr. Oberstar. It was cost and service, but the cost part of 
it was driven by the budget reality that OMB wasn't giving FAA 
the funds it needed, or DOT, or FAA wasn't asking for the funds 
that they needed to upgrade the technology of the automated 
system, isn't that correct?
    Mr. Washington. That is absolutely correct, Mr. Chairman. 
That is a significant factor that contributed to a feasibility 
decision which the FAA Administrator reached.
    I would suggest there was another significant factor which 
is that in addition to our inability to keep modern technology 
and tools available for specialists to use, that we were simply 
unable to make fast enough changes in terms of the service 
improvements. So the service improvements that we anticipate 
achieving as a result of this contract, ultimately for the 
users of the system, will really be the greatest value as a 
result of that contract award.
    The FAA allowed for a three year transition period from the 
time of contract award to achieving the end state configuration 
of Lockheed Martin's new system. What Lockheed has done is to 
accelerate their schedule with the hopes of delivering improved 
services to the users more quickly than that three year 
schedule.
    Mr. Oberstar. Mr. Scovel, do you agree with that 
assessment?
    Mr. Scovel. Somewhat, sir, if I can address this perhaps 
from a different angle.
    You asked about assumptions. Rather than addressing the 
political reality that perhaps drove the decision, which I 
fully acknowledge is beyond my purview, looking rather at the 
operational assumptions, I think first of those would have been 
the need for a new operating system, FS21, in this case, which 
it was further assumed if implemented on a national basis would 
permit consolidation and eliminate the need and expense for 
many of the local facilities that you mentioned earlier.
    The second operational assumption would be sufficient 
staffing, properly trained, to take full advantage of that 
operating system and provide the desired level of service to 
the user.
    I think experience has shown us that there have been gaps, 
deficiencies in both of those assumptions over the last two 
years.
    Mr. Oberstar. Mr. Washington, you are right. I wrote in my 
notes, decision to privatize by outsourcing. The saving grace 
is that FAA does hold ultimate responsibility.
    What I want to know now is has Lockheed Martin made the 
investments in technology, in the equipment to upgrade the 
service from what FAA had in place previously?
    Secondly, then, what authority do you have over Lockheed 
Martin to prod them to keep upgrading, to keep investing if 
that is the principle of outsourcing?
    Mr. Washington. Thank you, Mr. Chairman.
    Yes, Lockheed has been quite responsive to our concerns 
that we have identified, in many cases, in advance of 
operational issues showing up. We have conducted executive 
level conversations on a frequent basis in addition to sending 
formal contract communications to Lockheed that require them to 
identify corrective actions, and indeed they have been 
responsive in each of those cases.
    We are in constant dialogue, and there is a continuous 
process that involves the partnership that FAA and Lockheed 
have for ensuring this quality of service factor is actually 
delivered.
    Now, yes, there have been gaps as Mr. Scovel and others 
have identified, and we acknowledge that the operational 
impacts exceeded what we expected to occur during the actual 
transition period that began last spring. We redoubled our 
efforts in the oversight responsibility that Mr. Staples leads 
for the FAA, and we believe we have been more timely as a 
result of doubling those efforts and specific oversight steps.
    Lockheed has been responsive by making specific technology 
corrections in addition to procedural steps which I believe 
they are prepared to discuss in more detail later this morning.
    Mr. Oberstar. Lockheed says that they have handled some six 
million calls in their testimony later on. That is about what 
the AFSS were doing in 2005 and 2006. What are the savings?
    On the savings side of this outsourcing, how much do you 
attribute to cost savings to FAA in equipment acquisition and 
how much in cost savings on personnel not having these people 
on the public payroll?
    Mr. Staples. Mr. Chairman, I can answer that specifically 
for you for the record, but in general I would like to say that 
the vast majority of savings associated with this contract are 
the cost avoidance associated with staffing reductions. My 
guess is approximately $150 million of that savings would be 
associated with capital investment that we didn't have to make, 
that we were in the process of making.
    Mr. Oberstar. Mr. Scovel, have you validated these cost 
savings on equipment side and on personnel side?
    Mr. Scovel. I don't believe my staff has, sir. I would need 
to check with them in order to get back with you on the record.
    Mr. Oberstar. I would ask you to do that, to provide that 
information for the Committee. I think it is very important for 
our understanding.
    FAA, as you observed in your opening remarks, is an 
operating agency and one of relatively few that we have in the 
Federal Government. There are many other opportunities for 
outsourcing that would trouble me and to which I would take 
great objection.
    Unfortunately, I have to say that over a long period of 
time, the flight service activity has been sort of a stepchild 
of the Agency. It has not been given the status and the 
standing that it deserves. We have the most robust general 
aviation system in the world.
    There are some scattered ones elsewhere. China, with its 
great opportunity for growth and growth in commercial aviation 
that it is now experiencing, still has not developed a general 
aviation concept.
    In fact, there is a great story. As far as a great story, I 
don't know. It is an astonishing story of a flight attendant 
for a Chinese airline company--I don't need to mention which 
one--who worked 20 years, saved her money and then retired.
    Stayed in the U.S. Went to flight training school. Got her 
pilot's certificate. Bought an aircraft. Bought a single engine 
general aviation aircraft. I won't say which company.
    Crated it up and shipped it to China where it still remains 
in a crate because she can't get permission to fly because the 
flight service management, their equivalent of FAA, is run by 
the military and they don't know what to do with general 
aviation. Even though it is a very different regime than 
Europe, they don't have a fraction of the GA operations we have 
in the United States.
    So we are going to watch this very, very carefully.
    Our newest Member suggested having a report by FAA to the 
Congress. We will hold hearings every three months if we have 
to and have you come back and personally report to us to 
monitor the progress, but we are going to stay on top of this
    Thank you. Thank you, Mr. Chairman.
    Mr. Costello. The Chair thanks Chairman Oberstar and let me 
thank our witnesses from the first panel today.
    Let me say to Mr. Scovel, Mr. Washington and Mr. Staples 
that we intend to aggressively provide oversight to the Agency 
and to make certain that you are providing oversight over the 
contract with Lockheed Martin.
    I can assure you that we intend to follow up with 
additional hearings concerning this contract to make certain 
that Lockheed is performing as they should and that the Agency 
is enforcing the contract and when there are incidents where 
they are not performing, that we in fact penalize Lockheed and 
do as you have done in assessing over $12 million in penalties 
or whatever the term is you call it.
    We thank you, and at this time we would dismiss the first 
panel and ask the second panel to come forward. As you are 
coming forward, I will introduce the witnesses on the second 
panel.
    Mr. Phil Boyer who is the President of the Aircraft Owners 
and Pilots Association, who has testified before this 
Subcommittee many times; Mr. Matt Zuccaro who is the President 
of the Helicopter Association International; Mr. Joseph 
Cipriano, the President of Lockheed Martin Business Process 
Solutions; and Mr. Monte Belger who is the Vice President of 
Transportation Systems Solutions for Lockheed Martin Air 
Traffic Management.
    With that, gentlemen, as you are coming forward and taking 
your chairs, as you get ready to testify, let me say that your 
entire statement will be included in the record. We would ask 
you to summarize your statement in five minutes.
    With that, the Chair recognizes, for five minutes, Mr. 
Boyer.

TESTIMONY OF PHIL BOYER, PRESIDENT, AIRCRAFT OWNERS AND PILOTS 
 ASSOCIATION; MATT ZUCCARO, PRESIDENT, HELICOPTER ASSOCIATION 
 INTERNATIONAL; JOSEPH R. CIPRIANO, PRESIDENT, LOCKHEED MARTIN 
BUSINESS PROCESS SOLUTIONS; MONTE R. BELGER, VICE PRESIDENT OF 
 TRANSPORTATION SYSTEMS SOLUTIONS, LOCKHEED MARTIN AIR TRAFFIC 
                           MANAGEMENT

    Mr. Boyer. Thank you, Mr. Chairman.
    My gosh, Chairman Oberstar, I can't imagine a Country 
without general aviation. Who would the airlines have to blame 
for not paying their fair share, clogging the system, 
congesting the major airports and everything else? They need 
general aviation over there.
    I am here to talk about what you mentioned as a matter of 
fact, the flight service system changes that were needed. We 
feel it was the right thing to do and the right time to do it. 
We had a very antiquated system, as you said, and while I 
wasn't in the seat at AOPA when we consolidated from 317 
stations to 61, I was a pilot then.
    Prior to the change of the decade, we produced the largest 
book we have ever put together, and it is called AOPA's Roadmap 
to Flight Information Services for the Future. We never showed 
it to anyone other than the Inspector General of the DOT, and 
we are waiting to figure out. Here is a service that is 
primarily used by general aviation.
    As a matter of fact, the consultant we used for the book 
wrote this quote: ``Never before has AOPA or any organization 
undertaken a study such as this.''
    We came up with seven different scenarios on how flight 
service may be modernized for the future. We live in a world of 
the Weather Channel, radar in the airplane, all kinds of 
changes, and were still well aware we had an antiquated system 
with years and years of trying to upgrade it.
    Well, along came this process called the A76, and that is 
what created a catalyst for us to turn to this book and say we 
should support this, once again, not privatization, the 
outsourcing. We started educating our members long before the 
FAA even put out bids for contracts, saying, look, it is time. 
We have to change. We tried this within Government. It isn't 
working.
    Lockheed Martin was selected for this process. You know 
what? Our role changed. Our role changed from supporter to 
watchdog.
    Yes, we supported Lockheed Martin. It is a company with a 
proven air traffic record. They run oceanic services. This is 
kindergarten compared to what we face in ADS-B and other things 
which are graduate school.
    We gave them all the feedback we had gotten over the last 
few years, this book and others, in terms of what could be done 
with the system, and we emphasized from the first meeting on 
local knowledge was going to be the key. Yes, you could 
consolidate down, but you still have to take care of those 
unique weather patterns.
    Well, the transition began. You know what? I have to 
compliment them. They took over an existing system, and we got 
through Katrina better than we would have under the old system, 
but the transition really began in April when they started 
switching over to their own new equipment.
    It was probably too aggressive on consolidation, but I will 
let them speak to that. Too aggressive, I know from the users 
of the system.
    There is a promised web portal coming where you can go and 
get information. We are still waiting on that. I got a, thank 
goodness--and you do remember back to here, Mr. Chairman--
DUATs, the Direct Users Access Terminal where you can brief by 
computer. The DUATs numbers have soared because people had 
problems with the flight service station system.
    Well, FAA oversight, that is what we have been talking 
about today. FAA announced the contract. Well, we are done with 
flight service now. We don't have to worry about it any 
longer--and literally walked away.
    I applaud you for this because finally we are beginning to 
see them coming back. I will never forget a call on Sunday 
after your letter to Marion Blakey about this. Phil, what is 
going on here? Why haven't you called me sooner on this?
    Marion, we have been telling your people including your 
deputy for weeks, there is a problem.
    Well, you are just doing this to posture because the FAA 
financing bill.
    I said, I am not. My members hate this. Over 400,000 
members, and you know what? They are mad as hell at me for 
supporting this change and then getting them into the system 
they are today.
    Don't believe me. These are quotes from 10 days ago on the 
screen right now. If you see, these are members. They are in 
your district, Congressman Larsen, at least I know for the 
Arlington Show and others.
    These are 10 day old quotes: I cannot trust the briefers. 
They don't have the background or aviation knowledge that we 
need. FSS briefing is a thing of the past.
    A recent AOPA survey, we just did this about 10 days ago, 
of the customer. Is the customer the FAA or is the customer the 
pilots for Lockheed Martin?
    In a brief survey of the customers, 64 percent were 
satisfied or very satisfied with the service. Gee, in the IG 
statement, they show 84 percent as an acceptable level of 
performance, and yet they have not done that yet because they 
are still putting together the survey.
    Under FAA standards, if you were to take a written test at 
the FAA, 70 percent is a passing grade. Below that is failure.
    Where do we go now? Well, you have heard from the FAA.
    I believe they should give you maybe not a hearing every 90 
days but at least a report to this Committee and remember the 
words, Chairman Oberstar, equal or better. We heard those in 
the eighties as the transition went. Until we get equal or 
better service because if we keep getting less service, 
eventually there will be no flight service.
    The FAA must demonstrate stricter oversight. Let's look at 
these performance metrics. You set those in cement early. Are 
they the right ones? Are these 21 the right ones and shouldn't 
we relook at those? Let's seek more aggressive feedback from 
our pilot community.
    Where do we go now with Lockheed Martin? Well, continued 
service improvements, briefer local area knowledge, you have 
heard it here. That has to be improved. Measure the quality of 
the briefing, not just the phone metrics, not how fast the 
phone is answered. You could wait five, ten minutes if you want 
a briefer from Minnesota or you can wait twenty seconds so they 
make the metric and get anyone, anywhere.
    Fulfill the promise of this web portal that they put out 
there and let's get more pertinent information on their own web 
site right now, not just the successes they have had.
    We are a part of this. We were a part of making it happen. 
We weren't a part of selecting Lockheed Martin or a part of the 
A76 process, but you know we are a part of this. We tried to 
educate ahead of time. We tried to keep our head up high during 
this process.
    Next month, in 500,000 copies of our magazine will go a 
card that indicates to pilots how to brief under the new 
system. There are changes. Congressman, there is a number your 
pilots can punch in instead of speaking the word, Washington, 
but they don't have the information. So that will be here.
    We have an online course at significant expense. It is in 
the works now. It will be up and ready at the end of the year, 
20 minutes online web, how to brief under the new flight 
service station system.
    We have been sharing and will continue to share our pilot 
surveys with Lockheed Martin and the FAA, but we will keep 
wearing our hard hats until ``equal or better'' service is 
really put out there.
    Thank you.
    Mr. Costello. The Chair thanks you, Mr. Boyer.
    At this time, the Chair recognizes Mr. Zuccaro.
    Mr. Zuccaro. Good morning, Chairman Costello, Congressman 
Petri, Chairman Oberstar and the rest of the Members of the 
Committee.
    My name is Matt Zuccaro, and I am President of the 
Helicopter Association International. We are a professional 
trade association whose members operate over 5,500 helicopters 
flying in excess of 2.3 million flight hours each year across a 
wide spectrum of uses.
    Obviously, we are here this morning to discuss the FAA 
transition to the contractor-operated flight service stations 
and hopefully to draw valuable lessons to be applied to similar 
FAA initiatives such as the recently awarded Automatic 
Dependent Surveillance-Broadcast or ADS-B contract.
    As Members of this Committee are aware, helicopters play a 
critical role in the Gulf of Mexico energy exploration and 
production process, transporting supplies and employees to and 
from over 5,000 oil platforms within an area that extends 500 
miles along the Gulf shoreline and 200 miles out over the 
water.
    The helicopter activity and operational complexity of these 
operations is comparative to some of the most congested 
airspace in the Country. Each year, nearly three million 
passengers are transported and over 4,000 flight hours are 
flown by helicopters. Each day, an average of 650 plus 
helicopters conduct over 5,000 flights, transporting 
approximately 10,000 passengers at altitudes normally below 
5,000 feet.
    Currently, within this operating environment, the FAA air 
traffic control system cannot see and cannot communicate with 
the helicopters operating in the offshore environment. 
Accordingly, with ever changing weather that occurs in the Gulf 
area and the critical nature of the mission, reliable, timely 
and accurate communications with the flight service stations 
are critical to flight safety and operational efficiency.
    Earlier this year, helicopter traffic in the Gulf Region 
was negatively impacted when transition to contractor-operated 
flight service stations resulted in the closure of several 
flight service stations in the Gulf Region. The flight service 
contractor, apparently unfamiliar with the unique aspects of 
the offshore environment, underestimated the negative impact 
that these closures would have on our industry.
    As a result, helicopter pilots immediately experienced 
delays of 30 to 45 minutes when filing flight plans, resulting 
in excessive hold times. Furthermore, even when the flight 
plans were filed, they were lost by the contractor or missing 
when the pilot made a call for the clearance.
    The contractor personnel manning the flight service 
operation centers were unfamiliar with the particular flight 
protocols for the Gulf of Mexico and appeared to lack knowledge 
of the special instrument flight bridge structure for the 
helicopter flight plans in the Gulf. In some instances, the 
operators were connected with flight service personnel located 
thousands of miles away from the local area.
    The situation resulted in significant delays, loss of 
operational efficiency and a potential negative safety of 
flight impact, especially when one considers how this situation 
could have affected thousands of offshore workers on the rigs 
had the 2007 hurricane season brought forth a major storm to 
the area.
    To accomplish the mission that the helicopter pilots are 
tasked with each day, it is essential that seamless and 
uninterrupted service be provided by the vendor. Flight delays 
and cancellations cost the energy industry lost production and 
millions of dollars. Simply stated, the Gulf of Mexico is 
indeed unique and requires special procedures along with 
dedicated and knowledgeable personnel staffing the flight 
service stations.
    Unfortunately, during the transition to the contractor-
operated flight service stations, tremendous FAA institutional 
knowledge regarding helicopter operations in the Gulf of Mexico 
was lost, and the plea of our members fell on deaf ears.
    Only after direct intervention by the FAA senior management 
and Members of this Committee did Lockheed Martin sit down with 
our industry in Houston to address the concerns, develop 
procedures and processes to meet the needs of the members, 
familiarize themselves with the operations in the Gulf and, 
most importantly, to ensure safety of operations from the 
Panhandle of Florida down to Corpus Christi, Texas.
    I am happy to inform the Committee of the positive results 
of that meeting. Local Gulf of Mexico operating procedures have 
indeed now been written and a dedicated direct phone line with 
calls restricted to Gulf of Mexico operators has been 
established by Lockheed Martin. It eased the operator and pilot 
difficulties when contacting the flight service station. 
Additionally, the personnel staffing the flight service station 
now appear to be more knowledgeable of the local operations and 
requirements and the environmental protocols within the Gulf of 
Mexico.
    Our concerns are now focused on the recently awarded ADS-B 
contract which is similar in scope and concept to the flight 
service program. As part of the NextGen initiative, ADS-B will 
usher in a new system that will dramatically change how air 
traffic is controlled.
    Under the ADS-B initiative, the prime contractor, ITT, not 
the FAA, will build the ADS-B ground stations, own and operate 
the equipment with the FAA paying a subscription charge for the 
broadcast service transmitted to the properly equipped aircraft 
and air traffic control facilities.
    As many on the Committee know, HAI has partnered with the 
FAA in the form of a memorandum of agreement to facilitate 
Phase I implementation of the national ADS-B initiative in the 
Gulf of Mexico which also includes low altitude weather and 
communications capabilities. The helicopter industry has made a 
significant commitment to assist the FAA with Phase I by 
providing in kind services valued in excess of $100 million 
over the life of the project.
    To date, the approach of the FAA's taking and laying out 
this program with ADS-B Phase I, we consider to be 
unprecedented. The Agency is, in fact, listening and working 
closely with the helicopter industry as this initiative moves 
forward.
    Now that the vendor for the ADS-B project has been 
selected, we look forward to working with them on a most 
exciting endeavor. I sincerely hope that as we move forward 
with ADS-B and the serious work gets underway that I will not 
have to return to your doorstep, seeking assistance again. I am 
optimistic that initiatives such as this hearing will avert 
such a situation with regard to the implementation of ADS-B 
technology, the first phase of the NextGen system.
    I thank you for providing me the opportunity to speak with 
you this morning.
    Mr. Costello. The Chair thanks you, Mr. Zuccaro, and the 
Chair now recognizes Mr. Cipriano.
    Mr. Cipriano. Thank you, Mr. Chairman. Chairman Costello, 
Ranking Member Petri, Members of the Committee, my name is Joe 
Cipriano. I am President of Lockheed Martin Business Process 
Solutions. I am joined by my colleague, Monte Belger, Vice 
President of Lockheed Martin Transportation Security Solutions.
    Monte represents the technology elements of our AFSS 
program, and I represent the business, process and people 
elements of the program. We both thank you for the opportunity 
to share the progress we have achieved in this unprecedented 
competitively-sourced program.
    Flight services are intended to help promote safe flight 
operations, and safety is our highest priority. Many general 
aviation pilots rely on the knowledge and skills of flight 
service personnel. These personnel provide pilots with 
information such as pre-and in-flight weather briefings, flight 
planning assistance and aeronautical notices. They can also 
provide in-flight support to pilots who are lost or in need of 
assistance.
    In February of 2005, the FAA awarded Lockheed Martin the 
contract to consolidate 58 legacy sites in the continental 
United States, Puerto Rico and Hawaii into 18 upgraded 
automated flight service stations with estimated savings to the 
taxpayers of $2.2 billion over 13 years.
    In October of 2005, Lockheed Martin took over the operation 
of the existing flight service stations and began the process 
of modernizing the facilities and equipment, relocating over 
400 flight specialists, training over 1,000 flight specialists 
and introducing new services to the pilot community.
    Since February of this year. Lockheed Martin flight 
services has provided six million flight services. We have 
handled approximately 80,000 preflight calls per day with wait 
times averaging less than 45 seconds. In-flight calls have 
virtually no wait time.
    During the early phases of transition, we experienced 
unacceptable service problems. These problems resulted in call 
waiting times that were too long and flight plans that 
sometimes became lost in the automated system. We also received 
an unacceptable number of complaints that flight service 
personnel were not sufficiently familiar with local areas they 
were briefing.
    We have given high priority to addressing these issues and 
have seen the results in improved services. Pilot complaints 
have decreased to less than one tenth of 1 percent. Each 
complaint is carefully analyzed and the pilot filing the 
complaint contacted within 72 hours. Problems are addressed 
through equipment upgrades, procedures changes and training.
    I would like to now briefly share some of the lessons 
learned over the course of this transition.
    First, a baseline review of legacy system documentation 
should be accomplished prior to establishing program schedules. 
A significant early challenge we faced was acquiring 
documentation for interfaces with the national airspace. 
Documentation was inadequate to support systems engineering 
efforts and ultimately had to be developed by the program team.
    The team's time spent to complete this work decreased the 
time available for systems transition and shifted the 
transition period into a time of high demand for flight 
services.
    Second was overstaffing during transition. In spite of 
making job offers to all the legacy FAA flight specialists 
including incentives, our initial workforce was significantly 
smaller than expected. The lower than expected number of 
trained legacy staff proved insufficient to support transition 
during a high workload period.
    Ultimately, adjustments to the transition schedule, 
accelerated hiring and rehiring retirees allowed staffing to 
catch up with the workload. We learned that overstaffing during 
major transitions is a good investment.
    Third, regularly communicate with all stakeholders and 
assure that effective outreach programs are in place to capture 
local area knowledge. The universe of interested people is 
large, and we need to set appropriate expectations with each 
group as well as keep everyone advised of progress.
    In response to what we have learned during transition, we 
have made improvements to respond to local requirements. For 
example, we have created dedicated phone service for pilots 
flying within the Washington, D.C. restricted flight area, Gulf 
of Mexico helicopter pilots and medical emergency flights. In 
short, we learned to architect nationally but to implement 
locally.
    Fourth, the FAA and Lockheed Martin must work together in 
partnership. Integrating the nationally-architected FS21 system 
with a regional legacy system flushed out a number of issues. 
To address concerns as they arise, we have now established 
weekly joint operations review meetings to ensure a smooth 
working interface between Lockheed Martin's services and FAA 
air traffic operations.
    In conclusion, today the transition is nearing complete, 
but we are not slowing down improvements in process, training 
or technology. We continually work with the FAA and 
stakeholders to improve services to general aviation pilots, 
and we will apply best practices from lessons learned.
    Thank you again for the opportunity to be here today, and 
we are pleased to answer any questions you may have.
    Mr. Costello. Thank you.
    The Chair now recognizes Mr. Belger.
    Let me announce to everyone that we have four votes pending 
on the floor of the House. We have about five minutes. So we 
will hear Mr. Belger's testimony, recess and come back after 
the last vote which I would expect we would ask everyone to be 
back around 12:30.
    Mr. Belger. Thank you, sir. I have no additional statement.
    Mr. Costello. Well, the Chair then would take a few minutes 
to ask a few questions at this time.
    Mr. Boyer, you state in your written testimony that the FAA 
should have focused more on a qualitative performance 
assessment as opposed to the metrics system that they used. I 
wonder if you might elaborate more on that.
    Mr. Boyer. Well, I think you can work hard to use a call 
director and the metrics that come off of abandon rate, time to 
answer, et cetera. But, once again, what is the quality of the 
briefing?
    The best way you are going to find that out is by talking 
to customers of the service through some kind of satisfaction 
rating and to listen to them and their arguments as you have 
heard in your districts for members, I am sure, who are pilots. 
We need to put some subjective evaluations to this besides just 
the quantitative ones.
    Mr. Costello. I am going to go to Mr. Cipriano at this 
time.
    We all have concerns, because of the experience with this 
contract, about ADS-B. You heard that from Mr. Boyer, Mr. 
Zuccaro, the Chairman of the Full Committee and many others. 
You have talked about lessons learned in your written 
testimony.
    I wonder if you might tell us why Lockheed had such an 
aggressive schedule in April of this year, moving forward with 
the site consolidations schedule before you fully developed and 
worked out all of the kinks and errors, to correct them, and 
why you chose to undertake the task during the busiest time of 
year, during the summer.
    Mr. Cipriano. Yes, sir, I will try to answer that question. 
Certainly, we would have rather not have done the transition 
during the busiest flying time, but we had two things that were 
driving.
    One, there was a need. There were facility leases that the 
FAA owned that were expiring on the 1st of October and 
equipment leases as well. We needed to be able to get out of 
those facilities and turn them back to the FAA. So we had that 
deadline facing us.
    Secondly, and this is probably the biggest issue, the 
workforce that we had was attrited. The workforce, when we 
acquired it, first of all, we started out with less people than 
we would have liked to have had. Then as the schedule slipped, 
the people had made plans to retire, to move on, to do other 
things, and we were losing folks.
    We could not operate the system with the number of people 
we were having. The FS21 allowed us to operate the system with 
half as many people. So the faster we could get to the FS21 
system, the easier it would be to deal with this personnel 
problem.
    We were also hiring people and training them as quickly as 
we could and took other measures to deal with the workforce 
issue, but the problem was we had a diminishing workforce. The 
best way to address that was with a system that took less 
people.
    Mr. Costello. A couple of other quick questions and I would 
ask you to be brief in your answer.
    On September 22nd, the system crashed. The FS21 system 
crashed on September 22nd, and it went down for a four hour 
period nationwide. I wonder if you could tell us the cause and, 
number two, what is the backup system when a crash like this 
happens.
    Mr. Cipriano. Yes, we do have a backup system, AISR, which 
is used, and we can do weather briefings and file flight plans 
when the system is down.
    September 22nd, I don't recall a crash of the system on 
September 22nd.
    Mr. Costello. You don't recall?
    Mr. Belger. August 9th, we had a relatively significant 
outage. We had a communication outage a couple weeks ago.
    Mr. Cipriano. September 22nd doesn't ring a bell with me. 
If it did occur, we can certainly give you for the record the 
details.
    Mr. Costello. I would ask you to submit that for the 
record.
    Also, you heard in my opening statement what took place 
this past Sunday. Do you have any information to share with us 
as to the cause of the lack of information on the part that the 
pilots received?
    Mr. Cipriano. Well, we don't have all the details yet. We 
are reviewing the tapes of all of the pilots that we talked to. 
The FAA has an investigation, as you know, underway. Regarding 
the pilots, we are cooperating with the FAA.
    At this point, we think we talked to four of the pilots at 
least, and we are reviewing the tapes and the information. When 
those details are known, I mean they will be known.
    Mr. Costello. Last question before we have to break, Mr. 
Cipriano, you talked about lessons learned. Tell us about what 
you have learned and what you would do differently if you had 
to do it over again.
    Mr. Cipriano. I think the biggest thing we would do 
differently if we were to do this over again would be to work 
the people problem. In other words, try and expand the 
workforce before we started the transition process, so we would 
have a sufficient number of people to operate the existing 
system while we were training for the new system. That caused a 
great deal of our problems, the lack of trained workforce.
    Mr. Costello. Let me say before we have to break here and 
take a short recess, I said to the first panel and I will say 
to you and I want Lockheed to know this. The FAA heard it, and 
I want you to hear it.
    This is not going to be the last hearing that we are going 
to hold on this subject, and we want to make certain that 
Lockheed performs to the best of its ability under the terms of 
the contract and that the FAA is doing their job to enforce the 
contract. We find the best way of making certain that those 
things happen is to continue to hold people accountable, and 
that is what we intend to do. That is the purpose of this 
hearing, to learn information, find out what needs to be done 
in order to provide the services that the users are entitled 
to.
    With that, the Chair will call a recess. When we return, 
the Ranking Member, Mr. Petri, or his designee will be 
recognized to ask questions.
    The Chair will recess until 12:30. We stand in recess.
    [Recess.]
    Mr. Larsen. [Presiding.] I will call the Committee back to 
order. Where we left off was with questions from Mr. Petri.
    Mr. Petri. Thank you very much.
    Thank you all for your testimony. I had one really not 
particularly formal question, just sort of an information 
question for Mr. Boyer.
    I am not a licensed pilot. I have, obviously, as everyone 
else, a lot of friends who are.
    People in our part of the world do a lot of sailing and do 
all over the Country too. There are always wonderful aids now 
that people buy, services on their BlackBerry or various other 
types of arrangements, weather channels and so on and so forth. 
I am just curious to know how all this fits in with that.
    We have this Government system. People are required 
evidently to check in and to get updates.
    But in the real world, people have now a number of 
different sources, and they probably often will check them, put 
in their flight plan. There may even be services that will give 
them, through some sort of weather channel or some other type 
of source of information, peril information. Sometimes it will 
agree. Sometimes it will be different but satellite-based and 
other information.
    Can you comment on all of that and if we maybe should be 
looking at trying to take advantage of some of these open 
source type things that exist or if it is not invented here and 
not done by the Government, then it is not right or whatever?
    Mr. Boyer. No. It is a very good comment, and I probably 
glossed over it when I said times are changing. That is one of 
the prime reasons we supported this and did our own study.
    When we set up the existing antiquated flight service 
station system in the eighties that the Chairman was mentioning 
before, there weren't all those things there.
    You just talked about some enhancements. There are now 
boxes for $2,400. Put it on the plane or on your boat, and you 
can see the radar picture. You can tell if you are going into 
those storms that Chairman Oberstar was talking about.
    I think it is one of the reasons that we shouldn't be too 
alarmed about staff reductions to a certain level because in a 
modern system you are not going to need all the same 
explanations.
    The portal that we asked that we finally get up and running 
is going to allow the pilot to be looking at their computer 
screen--we didn't have that back in the seventies with the 
original system--and the briefer to be looking at the screen 
and talking about the picture they are both seeing. So today's 
system, what Lockheed has put in place and what we have 
endorsed as far as an overall system is taking advantage of 
those things.
    Nothing, however, beats an official briefing sanctioned by 
the FAA. Some of these things like the electronic system called 
DUATs are official briefings, but watching the weather channel 
does not give you that the President is going to be in 
Emmitsburg on Sunday and that there will be a restricted piece 
of airspace. So you do need that phone call, and you do need to 
talk to a briefer on certain pieces of information.
    Mr. Petri. But the underlying technology is basically the 
same, the satellite system that everyone is plugging into. The 
idea of having the requirement that people check with the FAA 
or the now contracted out system is so to get specific 
information for that flight and also to get a more professional 
read on that weather information.
    Mr. Boyer. I was looking at our survey earlier, and that is 
exactly right. It is basically the same information. There are 
some things in the flight service station system that really 
only they have. Some of the NOTAMs, they are able to interpret 
their gobbledygook to the average person who gets it on a 
little PDA because a lot of it is encoded.
    I was noticing that a lot of the use of the system is the 
private pilot, the less sophisticated pilots. It is people 
flying VFR. It is a large amount of student pilots. These are 
the people who really need some assistance in getting a 
briefing, and these certified briefers do provide that 
assistance.
    Mr. Petri. But we don't require this for people who are 
piloting boats. I guess they are on their own, but people 
piloting planes get this service from the Government.
    Mr. Boyer. Well, I think piloting a plane gives you that 
added dimension of you are not on the water, the same as you 
are not driving a car. You can't pull off the side, pull up to 
the shore and wait out a thunderstorm. You better darn well 
know where you are, and you are obviously dealing with that 
dimension which is extremely important.
    Mr. Petri. Thank you.
    I really would like to get the take from our panelists from 
Lockheed Martin on the questions to the previous panel on the 
personnel situation and your sense as to how it was handled and 
what lessons were learned and what maybe improvements could be 
made. There are a number of unhappy folks out there who don't 
feel the system worked for them, and I wonder if you could 
comment on that.
    Mr. Cipriano. I know there are some folks that feel like 
they may have been impacted. All I can do is answer for what we 
did.
    What we did was match the benefit program and match the 
401(k) program that the Government had for their employees, and 
we offered that package to 100 percent of those people that 
were impacted by the outsourcing. We also offered relocation 
packages. We offered employment bonuses, retention bonuses, all 
sorts of things to try to make that transition to the private 
sector as easy as possible.
    I can't talk to what the Government did or didn't do 
relative to the Government retirement piece of it.
    Mr. Petri. Finally, and I suspect Mr. Larsen will want to 
add something, could you comment on what you are doing--I guess 
it is a training curve for many of your people with fewer 
centers and with new personnel in many cases--about the local 
knowledge question and interpreting the data to be most useful 
and relative for pilots in different parts of the Country?
    Mr. Cipriano. Correct. To the extent that local knowledge 
was documented in a notebook or something, we captured that 
during our due diligence phase and made that information 
available on the computer to people that are briefing that 
particular area.
    But a lot of the local knowledge is in the heads of the 
briefers, and that is why we offered jobs to them and we tried 
to capture those people. Even though they might be briefing 
helicopters in the Gulf from Dallas-Fort Worth, they are people 
that we hired from Louisiana that were doing that same thing, 
that same job.
    Now we lost some of them because some of them didn't want 
to move to Dallas-Fort Worth or were ready to retire and so 
forth. So there was a decrease in the number of those folks 
that resulted in some of the problems we saw in the reduction 
in local knowledge. But we captured that knowledge, and we 
incorporated it in training courses.
    We certify our specialists to be specialists in a 
particular local, area of operation, and we incentivize them to 
get certified. They have to be certified in at least one area, 
and we give them incentives to be certified in multiple areas 
with increased pay.
    Mr. Petri. One last question, I am kind of curious on this. 
If it is working off of a common platform, and I know my travel 
agent works from home and interacts. Is there a reason why 
people have to be in a particular center if they have access to 
all the same knowledge?
    Then you can have call forwarding and do all kinds of 
things. Maybe you could have kept some of these people by 
letting them do this sort of thing.
    Mr. Cipriano. That is why we kept open the 20 locations 
instead of closing down to 1 or 2 because from a technical 
standpoint, you could have supported all the operations out of 
1 large place. And so, we picked the places that we retained 
open in order to retain as many people as possible at the 
locations that had large numbers of people and that were in 
areas where people like to live where it was easy to recruit, 
good cost of living and so forth.
    But you are right, it could have been done. We could have 
done this and not closed any of the stations and retained all 
those people, but the costs would have been higher. We were in 
competition for a solution, and the solution we came up with, 
we believe, was the right compromise between all the different 
factors involved.
    Mr. Larsen. Thank you.
    Unless another Member shows up, this will be the last set 
of questions unless Mr. Petri would like to do some follow-up.
    With regard to some staffing issues, I am assuming still 
your desire and your stated goal is to get to about 1,000 
staff, and you are at about 850 or so. Is that about right?
    Mr. Cipriano. We are actually at 912 right now, and we have 
another 60 or so in training. So we are well on the way to get 
to 1,000, but we are not staffing to a number. We are staffing 
to performance, and so we will add staff as necessary the meet 
those performance measures.
    Mr. Larsen. This then gets to another set of questions. 
With the transition over the last couple of years, you 
mentioned there were some folks who were close to retirement or 
at retirement, so they took retirement.
    Do you have demographics on your current workforce then to 
indicate how many folks do you anticipate might be leaving 
within the life of the first five years of the contract and 
what is your plan to do further recruitment to replace those 
folks?
    Mr. Cipriano. We expect that we are going to continue to 
have significant attrition over the next several years because 
although we have added people.
    Mr. Larsen. How would you define significant attrition?
    Mr. Cipriano. I would say greater than 15 percent a year.
    Mr. Larsen. Fifteen; one, five?
    Mr. Cipriano. Yes.
    Mr. Larsen. Okay.
    Mr. Cipriano. Because the average experienced age of our 
workforce is still 20 years even though we have been adding new 
people out of school, but we have created relationships and 
created a training academy to deal with this issue. We have 
classes going on all the time, and we also have arrangements 
with Embry-Riddle and other universities that graduate students 
that have the basic knowledge necessary to go in this kind of 
work.
    We hire them, put them into our training academy and then 
we are flowing them as quickly as we can into the workforce to 
try to get ahead of this retirement wave.
    Mr. Larsen. Just to summarize, paraphrase, that is, what I 
heard is you are going to staff up to a number. It is going to 
be around 1,000, but it will be more focused on the performance 
level required.
    Your attrition rate is about 150 folks per year. You are 
anticipating about 150 folks per year based on an 1,000 base.
    Mr. Cipriano. Yes, sir.
    Mr. Larsen. Your plan then is to use the training academies 
and the training courses to fill those spots as you move 
forward.
    Mr. Cipriano. That is correct.
    Mr. Larsen. Mr. Belger, good to see you again and maybe you 
can answer a question about the internet portal. When do you 
anticipate that being operational and available?
    Mr. Belger. Our plan is to put it out for initial use in 
December of this year. We want to get some real world 
experience with pilots. AOPA has offered graciously to help us 
get some pilots throughout the Country to have hands-on 
experience with it.
    We will learn from that experience, and we hope to have it 
out in the field next year after we go through this hands-on 
exposure later this year.
    Mr. Larsen. So you will do a beta test not just on a region 
but as best you can an objective sample of pilots throughout 
the Country with AOPA?
    Mr. Belger. Yes, sir. We would like to get a very objective 
sample of different types of pilots, pilots who use it in 
different ways, different parts of the Country, different times 
of day, different types of flight plans and really stress it 
before we put it out for the general use.
    Mr. Larsen. Mr. Boyer, any thoughts on that?
    Mr. Boyer. I think it is a good idea. We all do that when 
we have a new site, and it can't come fast enough.
    We offered the best of our best. Actually, our air safety 
foundation, because this is such a safety of flight issue, is 
going to be using some of their contacts to supply whatever 
number of names they need.
    Mr. Larsen. Great. Have the problems in quickly issuing 
NOTAMs been corrected?
    Mr. Cipriano. Yes, sir, we believe they have. The reports 
we are getting back is there is a much, much improved 
situation.
    Mr. Larsen. You mentioned the incentives that you providing 
to briefers. Can you talk through with us what the incentives 
specifically are with regards to local knowledge?
    Mr. Cipriano. Yes. I will have to get back to you on the 
record with the exact amount, but if you are certified in more 
than one region in terms of local knowledge, it means you 
passed the test and your supervisor certifies you. Then you get 
more pay.
    I don't know exactly what the amount is, but it is enough 
to encourage people to do that so that we have a bigger pool of 
people that are certified in local knowledge to route a call to 
in the busier areas.
    Mr. Larsen. Is that the plan or is that happening? Are you 
seeing more people, more of your employees trying to get that 
second certification?
    Mr. Cipriano. Yes, we are. I believe as they become more 
familiar with the new FS21 system and are more comfortable with 
it, then we will see even more people participate in that.
    Mr. Larsen. When a pilot calls in and is routed to the next 
available specialist, if that specialist is in a distant 
geographical location from where the pilot is, it seems to me 
we can't be guaranteed that that person is certified for the 
area. Is that right?
    Mr. Cipriano. That is correct. If you select next available 
specialist, then it is possible, about 12 percent of the time 
right now, you would get somebody that was not trained in the 
area that you are interested in. You can select a particular 
area, and you will talk to someone from that area that has a 
certification.
    Mr. Larsen. But you will be in line, in the queue, until 
such time that person is available.
    Mr. Cipriano. Correct, but those queue times are coming 
down and, like I say, they are averaging 45 seconds.
    Mr. Larsen. On the average of 45 seconds, is that on the 
initial call or is that on any call from beginning to when the 
pilot hangs up? That is does it include the transfer or just 
include the pickup in the first location?
    Mr. Cipriano. It includes from the time the pilot calls in 
until he is connected with a specialist.
    Mr. Larsen. Okay, alright.
    Mr. Boyer, I think in your testimony you had some thoughts 
about changes in the geographical location. It is better to 
hold on, be on hold for X number of minutes and get your answer 
versus 45 seconds and not get your answer?
    Mr. Boyer. I think there has to be some education to that, 
so the pilot has a selection. There are a lot of things a pilot 
needs to do.
    Mr. Petri, you mentioned it. There are a lot of just 
transactional things that don't need that, that knowledge. They 
don't need that knowledge of, let's say, Puget Sound where 
there are different weather patterns and just different areas 
of the Sound. And so, you can make that selection yourself.
    I know things have probably been, shame on us. I think our 
card will help with that, to get out that fact.
    I think the Achilles' heel in this whole thing from the 
very start has been local knowledge. I was talking when you 
were out on the break. We have to look at how you impart that.
    I mean just consider yourself right here in Washington. 
Local knowledge: restaurants to go to, who is open when, what 
parking lots close at what time. That is local knowledge that 
is here in the head.
    The same thing goes to weather patterns, where those 
thunderstorms exist over, let's say, the Blue Ridge Mountains 
or this or that. There has to be a better way to take that and 
translate it and then train pilots on it because I don't know 
at the moment somebody who has been through the certification 
course--and we have them and we get them--that they always have 
what we really look at as pilots as the local knowledge that we 
need.
    Mr. Larsen. In my initial round of questions earlier, I 
brought up some issues specific to Washington State, and I can 
do some follow-up with you all after the hearing on that 
specifically. But there is an additional issue, and I am 
wondering who we are going to handle that.
    The 2010 Winter Olympics are in Vancouver, British 
Columbia, in February and then followed up by the Paralympics 
in March. With any Olympics, there are a lot of issues, a lot 
of issues on the ground obviously with border crossings, and 
much of the U.S. traffic is anticipated to fly into, say, 
SeaTac or maybe into Bellingham and then drive across.
    That being said, in that same area, there are 33 to 40 
individual airstrips or airports. You will have a lot of people 
flying around. The security shed during the Olympics is going 
to have an impact not just on the B.C. side of the border but 
certainly on the Washington State side.
    Are you anticipating that? Are you making plans for that 
with the FAA in terms of how to address the specific issues 
that will be involved with presumably flight restrictions in 
that area during that period of time?
    Mr. Cipriano. At this time, I don't think we have started 
those discussions, but we certainly will in sufficient time to 
deal with it. There are a number of things that happen during 
the course of a year, airshows, even holidays when the traffic 
patterns change dramatically. I expect the campaign season that 
is going to come up is going to increase the number of 
restricted zones and so forth.
    We are always working those with the FAA to determine what 
the appropriate response and the appropriate staffing is, so we 
can get the right number of people dedicated to support those 
special situations.
    Mr. LaTourette. It seems to me that folks in the flight 
stations will have to be trained specifically to the specific 
conditions surrounding this three to four weeks in February and 
two to three weeks in March of 2010. Based on my experience so 
far as a co-chair of our own Governor's task force on the 
Olympics, starting today is about three years late in planning 
for this. I would just encourage you to that, and we have been 
encouraging FAA as well as all the other Federal Agencies to 
keep this on the radar.
    Mr. Cipriano. I have it noted, sir.
    Mr. LaTourette. All right, thanks. Those are all the 
questions I have.
    Mr. Petri?
    With that, I want to thank the panelists on panel two and, 
of course, panel one as well, and this hearing is adjourned.
    [Whereupon, at 1:05 p.m., the Subcommittee was adjourned.]

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