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

       NEXTGEN: THE FEDERAL AVIATION ADMINISTRATION'S AUTOMATIC DEPENDENT
                        SURVEILLANCE-BROADCAST CONTRACT

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

                                    (110-80)

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                                    AVIATION

                                     OF THE

                                  COMMITTEE ON
                       TRANSPORTATION AND INFRASTRUCTURE
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED TENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                OCTOBER 17, 2007

                                   __________

                           Printed for the use of the
                 Committee on Transportation and Infrastructure

                         U.S. GOVERNMENT PRINTING OFFICE

    38-514 PDF                 WASHINGTON DC:  2007
    ---------------------------------------------------------------------
    For sale by the Superintendent of Documents, U.S. Government Printing
    Office  Internet: bookstore.gpo.gov Phone: toll free (866)512-1800
    DC area (202)512-1800  Fax: (202) 512-2250 Mail Stop SSOP,
    Washington, DC 20402-0001

                 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

    Brantley, Tom, President, Professional Airways Systems
      Specialists, AFL-CIO...........................................     5
    Capezzuto, Vincent, Manager, Surveillance and Broadcast Services
      Program Office, Federal Aviation Administration................     5
    Kefaliotis, John, ADS-B Program Director, Defense, ITT
      Corporation....................................................     5
    Scovel, III, Hon. Calvin L., Inspector General, U.S. Department
      of Transportation..............................................     5
    Sinha, Dr. Agam N., Senior Vice President and General Manager,
      Center for Advanced Aviation System Development, The Mitre
      Corporation....................................................     5

              PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

    Costello, Hon. Jerry F., of Illinois.............................    34
    Mitchell, Hon. Harry E., of Arizona..............................    42
    Oberstar, Hon. James L., of Minnesota............................    48
    Salazar, Hon. John T., of Colorado...............................    52

                   PREPARED STATEMENTS SUBMITTED BY WITNESSES

    Brantley, Tom....................................................    54
    Capezzuto, Vincent...............................................    62
    Kefaliotis, John.................................................    76
    Scovel, III, Hon. Calvin L.......................................    83
    Sinha, Dr. Agam N................................................   100

                           SUBMISSIONS FOR THE RECORD

    Capezzuto, Vincent, Manager, Surveillance and Broadcast Services
      Program Office, Federal Aviation Administration, responses to
      questions from the Subcommittee................................    73
    Sinha, Dr. Agam N., Senior Vice President and General Manager,
      Center for Advanced Aviation System Development, The Mitre
      Corporation, responses to questions from the Subcommittee......   110

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        HEARING ON NEXTGEN: THE FAA'S AUTOMATIC DEPENDENT SURVEILLANCE-
                           BROADCAST, ADS-B, CONTRACT

                                  ----------

                          Wednesday, October 17, 2007

                      House of Representatives,
                              Subcommittee on Aviation,
                Committee on Transportation and Infrastructure,
                                                        Washington, DC.
        The Subcommittee met, pursuant to call, at 2:00 p.m., in
    Room 2167, Rayburn House Office Building, the Honorable Jerry
    F. Costello [Chairman of the Subcommittee] presiding.
        Mr. Costello. The Committee will come to order. The Ranking
    Member will be here momentarily, and I will go ahead and get
    started.
        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
    NextGen: The FAA's Automatic Dependent Surveillance-Broadcast
    Contract that was recently entered into by the FAA.
        Before we begin, I ask unanimous consent to allow a new
    Member of our Committee, Ms. Laura Richardson, to participate
    in the Subcommittee hearing. Hearing no objection, so ordered.
        I will begin my opening statement and then recognize the
    opening statement by the Ranking Member or comments or remarks,
    and I see Mr. Hayes is sitting in for Mr. Petri.
        I welcome everyone to the Subcommittee hearing today. A
    major part of the FAA's NextGeneration Air Transportation
    System Plan to transform our air traffic control system is the
    transition from a ground-based radar to a satellite-based
    surveillance system. Automatic Dependent Surveillance-Broadcast
    or ADS-B, as it is commonly known, is key to enabling
    technology for that transition.
        Within the last 60 days, the FAA has taken two major steps
    forward with ADS-B. At the end of August, the FAA awarded a
    performance-based service contract valued at almost $1.9
    billion to a consortium led by the ITT Corporation. The ITT
    team is required to build, own and operate a system that will
    provide nationwide ADS-B surveillance and broadcast services by
    as early as 2013. Earlier this month, the FAA published a
    notice of proposed rulemaking that would require aircraft
    operating in certain classes of airspace to equip with ADS-B
    Out avionics by 2020.
        Over the last several months, the FAA has described ADS-B
    as the cornerstone and the backbone of NextGen and the future
    of our air traffic control system. I agree that ADS-B is
    technology that holds enormous promise.
        It is potentially much more accurate than radar which may
    help the FAA and airspace users utilize our airspace more
    efficiently. It can enhance safety by providing surveillance to
    areas that cannot be covered by radar and by granting pilots
    greater situational awareness. It may also enable the FAA to
    avoid hundreds of millions of dollars in costs by downsizing
    its ground-based infrastructure.
        That said, reasonable expectations must be set about what
    relief ADS-B can realistically provide for the type of meltdown
    and record-setting delays our system has faced this summer.
    Unfortunately, the American people have been led to believe
    that the silver bullet solution for the gridlock that we saw
    this summer is a new satellite-based surveillance system.
        The truth is ADS-B will not provide significant tangible
    benefits for several years and then only in conjunction with
    other NextGen technologies that are many years away from
    implementation now. It is time for the rhetoric to stop and for
    the Administration to start explaining all of the ifs and whens
    about ADS-B and the NextGen system.
        Some have pointed out that ADS-B is a relatively mature
    technology that is not highly complex. We should not
    underestimate the technical challenges of building and
    integrating this new system into the NAS. As with any
    modernization program, there is clearly the potential for
    setbacks and slippage as far as implementation is concerned.
        In addition, even if the ITT team meets the FAA's ambitious
    schedule for deploying ground infrastructure and services, how
    quickly ADS-B can deliver major benefits will be determined
    largely by how quickly users equip. The FAA's proposed rule
    does not mandate ADS-B by users until the year 2020.
        Furthermore, some of ADS-B's most advanced applications and
    capabilities, like reduced separation and standards and
    aircraft self-separation, have received the most public
    attention. However, the FAA first needs to demonstrate that
    ADS-B performs as well as our current radar base system before
    these capabilities can seriously be considered. Moreover, some
    of these advanced capabilities require ADS-B In avionics which
    the FAA did not mandate in its proposed rule.
        Given that, the FAA has advertised ADS-B as the future of
    the air traffic control system. Everyone should understand that
    the FAA has placed a tremendous amount of responsibility in the
    hands of the private sector.
        Instead of adopting a more traditional acquisition strategy
    for ADS-B, the FAA had opted for a service contract approach
    whereby the ITT team will build the ADS-B ground stations and
    own and operate the equipment. The FAA will pay subscription
    charges for ADS-B broadcasts transmitted to aircraft and air
    traffic control facilities.
        The FAA has estimated that its contracting approach will
    save the Government roughly $820 million over the next 30 years
    and cut about five years off of the deployment schedule.
    Regardless, I believe that there are inherent risks in this
    strategy. Both Congress and the FAA must provide vigorous
    oversight over this contract.
        With that, I again welcome all of our witnesses here today,
    and I look forward to hearing your testimony.
        Before I recognize the Ranking Member, Mr. Petri, for his
    opening statement or remarks, 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.
        With that, the Chair recognizes the distinguished Ranking
    Member, Mr. Petri, for an opening statement or his comments.
        Mr. Petri. Thank you very much, Mr. Chairman, and I would
    like to join you in welcoming our panelists here today and also
    thank you for scheduling this hearing.
        Two months ago, as you point out, the FAA awarded the long
    awaited ADS-B contract to the ITT Corporation and published a
    notice of proposed rulemaking on the system ground stations and
    equipage standards. These are two major milestones in the
    transition to a satellite-based surveillance air traffic
    control system, and I certainly would join in applauding all
    involved in the process.
        The new system will improve safety by increasing
    positioning accuracy and, according to our Federal Aviation
    Administration, has great potential to increase our capacity to
    handle the potential three-fold increase in traffic that is
    projected over the next 20 to 30 years.
        As we know, the transition to the new system will not be
    simple. I am glad we have the opportunity today to learn more
    about the contract itself, the contractor, ITT, and what role
    the new system will have in the effort to modernize our air
    traffic system.
        Strong oversight, both internally at the FAA and here in
    Congress, will be critical to the success of the transition. A
    lot is riding on a smooth and hopefully uneventful transition
    to the new system. I look forward to our witnesses identifying
    some of the major issues associated with the transition and
    controls built into the contract to address those issues.
        Input from the national airspace system users will also
    clearly be very important. After all, what good is a new
    surveillance system if it fails to serve the users' needs? To
    that end, I look forward to hearing how the FAA plans to
    utilize technical experts from the aviation community as they
    move ahead with the implementation and transition to the ADS-B
    system.
        While I am pleased with the Federal Aviation
    Administration's progress so far, we have a long way to go
    before we achieve full NextGen. I look forward to working with
    the aviation community as we continue to move toward that goal.
    This new system is the first tangible step in the process, and
    let's make sure that we get it right.
        I yield back.
        Mr. Costello. The Chair thanks the Ranking Member and
    recognizes the gentleman from Colorado, Mr. Salazar, who is
    going to enter a statement into the record and make brief
    remarks.
        Mr. Salazar. I do want to thank you, Mr. Chairman.
        I just wanted to thank the FAA for their forward thinking,
    and I just want you to understand that the State of Colorado is
    fully invested in the NextGen air system.
        I am very concerned, however, about the air safety along
    the mountains and the ski country of Colorado. So I just want
    to make sure whenever we move forward and how we move forward,
    that we take into account the ski areas and the mountainous
    areas and Rocky Mountains area in general of this great Nation.
        Thank you, Mr. Chairman. I appreciate your allowing me to
    make a few comments.
        Mr. Costello. I thank the gentleman, and the Chair now
    recognizes the gentleman from North Carolina, Mr. Hayes.
        Mr. Hayes. Thank you, Mr. Chairman. I truly appreciate what
    you are doing here today.
        I think sometimes you worry about my level of enthusiasm
    about this project being too high, for those of you in the
    audience who don't know, when the Chairman sees me coming.
        We are going to be talking about ADS-B and how we need to
    have a different role here. The FAA has a great product to
    sell, another service to impose on folks.
        When we get through this, my friend, Mr. Salazar, is going
    to get his plane back and he is going to make sure that he has
    ADS-B in it because he doesn't want to live without it. It can
    be that good if all the different components come together and
    make this thing work.
        Mr. Scovel, we are glad to have you here today as the on-
    staff paid skeptic to make sure that we keep track of the
    things as managers and overseers that we need to do.
        I want to be sure that every component of aviation, whether
    it is AOPA, NATCA, Vinny Capezzuto, the technicians, everybody
    sees, appreciates and invests in a cooperative, collaborative
    way in this system that can provide a tremendous boost in
    safety first but in convenience and a whole host of other
    things.
        Don't be misled. This is not the answer to air traffic
    delays. It will be help, but again this is not the answer.
    Here, my enthusiasm comes from the fact that we have something
    here that the flying public and the airlines need to be on
    board and fully invested as quickly as possible. Implementation
    is the key.
        There are 210,000 customers sitting out there, waiting to
    be sold. If we give them a high quality product at the lowest
    possible price, which competition ensures, then not at the day
    but at the beginning of the day, we are gong to have something
    that will dramatically improve safety, convenience and people
    will say, gosh, for once, the Government got it right.
        Mr. Chairman, I got carried away. I yield back.
        Mr. Costello. The Chair thanks the gentleman.
        Let me say both Mr. Hayes and Mr. Salazar have talked to me
    frequently about ADS-B, and they have some very interesting
    ideas and are strong supporters of getting the program moving
    forward and getting to the point of implementation, and I
    appreciate that very much.
        The Chair will now introduce our witnesses in the order in
    which they are seated. Again, we welcome all of you here today.
    We have met in roundtable discussions with, I think, all of you
    in the past more than once about ADS-B, and we are pleased to
    have you here in the Committee hearing.
        First, let me introduce Mr. Vincent Capezzuto who is the
    Manager of the Surveillance and Broadcast Services Program
    Office with the FAA; the Honorable Calvin Scovel who is the
    paid skeptic, I have down here, Inspector General of the U.S.
    Department of Transportation; Mr. John Kefaliotis, who is the
    ADS-B Program Director, Defense with ITT Corporation; and Dr.
    Agam Sinha, who is the Senior Vice President and General
    Manager, Center for Advanced Aviation System Development with
    the MITRE Corporation; and Mr. Tom Brantley who is the
    President of the Professional Airways Systems Specialists.
        Gentlemen, we welcome all of you here today and, as always,
    your full statement will be entered into the record. The Chair
    would ask you to summarize your statement in five minutes or
    less, and we will give Members the opportunity to ask
    questions.
        With that, the Chair now recognizes Mr. Capezzuto.

       TESTIMONY OF VINCENT CAPEZZUTO, MANAGER, SURVEILLANCE AND
          BROADCAST SERVICES PROGRAM OFFICE, FEDERAL AVIATION
    ADMINISTRATION; THE HONORABLE CALVIN L. SCOVEL, III, INSPECTOR
     GENERAL, U.S. DEPARTMENT OF TRANSPORTATION; JOHN KEFALIOTIS,
     ADS-B PROGRAM DIRECTOR, DEFENSE, ITT CORPORATION; DR. AGAM N.
     SINHA, SENIOR VICE PRESIDENT AND GENERAL MANAGER, CENTER FOR
     ADVANCED AVIATION SYSTEM DEVELOPMENT, THE MITRE CORPORATION;
         TOM BRANTLEY, PRESIDENT, PROFESSIONAL AIRWAYS SYSTEMS
                          SPECIALISTS, AFL-CIO

        Mr. Capezzuto. Thank you, Chairman Costello and Congressman
    Petri.
        At this point, I would like to show you a quick video that
    will illustrate how ADS-B functions.
        Well, I thought I was going to show you a quick video.
        Mr. Costello. Now this was not covered under the ADS-B
    contract, was it?
        [Laughter.]
        Mr. Capezzuto. It was not, and it is also not biting into
    my five minutes. We will just move on if that is okay.
        Mr. Costello. Very good.
        Mr. Capezzuto. Thank you again, Mr. Chairman, Congressman
    Petri and Members of the Subcommittee.
        I am pleased to appear before you today to discuss the
    FAA's contract for Automatic Dependent Surveillance-Broadcast
    System or ADS-B, the cornerstone of NextGen. As the Director of
    Surveillance and Broadcast Services in the Air Traffic
    Organization at the FAA, I have responsibility for oversight of
    this performance-based contract.
        ADS-B is a new service for the FAA and has the potential to
    transform the NAS. In order to develop this service, we have
    crafted an innovative and closely monitored contract with the
    ITT Corporation.
        We appreciate the role that Congress has already played in
    developing this contract. In fact, our confidence in this
    contract is directly due to Congress' oversight and input as
    well as contributions from other Government entities and
    participation by the gamut of other industry stakeholders such
    as the pilots, the airlines and the manufacturers, to name a
    few. We welcome the Members' continued oversight to help us
    manage the contract moving forward.
        The ADS-B contract has scalability and flexibility which
    leads to greater service availability in the NAS.
        ADS-B equipped aircraft receive satellite signals and
    transmit the aircraft's precise locations to air traffic
    controllers and pilots. Both pilots and controllers will, for
    the first time, be able to see similar real-time displays of
    air traffic. Pilots will know with greater accuracy where their
    own aircraft are, and the displays will show them all the
    aircraft in the air and on the ground around them.
        In addition to improved safety in the sky, ADS-B can help
    reduce the risk of runway incursions. Additionally, ADS-B has
    the capability of increasing efficiency and capacity in the NAS
    which, in turn, helps to reduce the delay problem. With this
    technology, we will be able to provide services to the people
    and places that we never have before.
        The scalability of ADS-B allows us to adapt the technology
    for a variety of purposes. The contract also gives us greater
    flexibility because it allows us to deploy the technology more
    rapidly and more easily than we could have on our own and in
    areas where we have never had radar.
        General aviation pilots will have enhanced safety features
    in their cockpits. Pilots in Alaska will be able to navigate
    the rough terrain there more easily. Aircraft over the Gulf of
    Mexico will have greater flexibility to use different altitudes
    and have reduced separation minimums.
        With the greater coverage and accuracy of ADS-B, we will be
    able to predict where aircraft are and we will be making the
    NAS that much more reliable.
        The contract requires ITT to have the system ready for use
    by 2010 and expand coverage nationwide by 2013. The first stage
    of the contract is worth $207 million with options worth an
    additional $1.6 billion.
        With a system as important as ADS-B and the price tag that
    comes with it, we want to make sure that we are working
    responsibly with the taxpayers' dollars. We are keenly aware of
    the risks inherent to new technology and new procedures, and we
    are safeguarding against them as best as we can.
        ADS-B's potential is enormous. It is integral to our
    ability to achieve NextGen and to handle the tripling of
    today's air traffic predicted by 2025, but we do not want to
    oversell these capabilities. The only way we can present a
    realistic picture of our goals is to double-check our
    accomplishments along the way.
        We have designed the contract to include several required
    milestone events that will help us track progress and test the
    system as each piece is completed. Further, we have created
    additional incentives and disincentives throughout the contract
    to maximize the contractor's commitment to success.
        Finally, we have a building block plan for the contract.
    First, we build. Then, we test while we create the appropriate
    procedures for use, and only after the groundwork has been
    laid, do we deploy the technology nationwide.
        If the contractor is unable to achieve certain milestones,
    the FAA may consider it in default of the contract and may
    cancel the remainder of the contract.
        The first milestone is set for May 2008, when the
    contractor is to test the uplinking of traffic and weather
    information to pilots. With this aggressive time line, we are
    not wasting any time in requiring our contractor to deliver.
    These milestones give us concrete measures of the contractor's
    progress and if needed, allow the FAA to adjust the program
    early on or redirect resources as needed.
        Our goal is not only to test technical performance but also
    to test business performance. We also have other oversight
    measures built into the contract to include preliminary design
    reviews and critical design reviews that enable us to track the
    contractor's progress and success. We also have risk mitigation
    procedures in place, which require ITT to work with the FAA to
    resolve any issues that might arise in the course of the
    contract.
        Some of the major incentives for our contractor are
    embedded in the additional $1.6 billion options that the FAA
    can choose to exercise or not. Depending on proven contractor
    performance or if the FAA does not receive the benefits
    anticipated in a particular area, these options would allow the
    FAA to unilaterally stop the contract in whole or in part.
        Additionally, the contractor is allowed, subject to FAA
    approval, to develop the data for other aeronautical uses,
    which would result in a reduction of the costs of the contract
    to the FAA while allowing the contractor to recoup its
    investments.
        We are confident that this system of carrots and sticks
    will afford the FAA considerable oversight of the contract,
    encourage the contractor to excel in performance and allow
    seamless integration of this important new technology.
        FAA is a safety oversight agency first and foremost, and
    the certification of the data is critical to our mission to
    ensure safety is maintained and enhanced for the flying public.
        Mr. Chairman, this concludes my prepared statement. I would
    be happy to answer any questions that you or the other Members
    of the Committee may have.
        Mr. Costello. Thank you, Mr. Capezzuto.
        The Chair now recognizes the Inspector General, Mr. Scovel.
        Mr. Scovel. Chairman Costello, Ranking Member Petri,
    Members of the Subcommittee, we appreciate the opportunity to
    testify on the FAA's efforts to develop and deploy ADS-B. At
    the request of the Chairman, we are examining the risks to this
    important effort and FAA's contracting approach.
        We recognize that ADS-B has enormous potential to enhance
    capacity, improve safety and fundamentally change the way air
    traffic is managed. However, a full disclosure of costs,
    expected benefits and risks is needed. This is a complex, long
    term effort that requires significant investments from both
    Government and airspace users.
        Given FAA's history with developing new technologies and
    its approach for ADS-B, we believe that an extraordinary level
    of oversight will be required.
        Today, I will discuss three major points. First, realistic
    expectations need to be set for the benefits ADS-B will deliver
    in terms of capacity and reducing delays. ADS-B will not
    provide near term capacity benefits or relief from record level
    delays at the Nation's most congested airports.
        FAA's plans call for the ADS-B ground infrastructure to be
    in place by 2013, and airspace users are not expected to be
    equipped with new avionics until 2020.
        FAA does expect to see benefits in the 2009 time frame in
    the Gulf of Mexico from ADS-B where radar coverage is limited.
        We note that FAA intends to mandate ADS-B Out, the
    broadcast of aircraft information to ground systems, but the
    majority of benefits rely on ADS-B In and the display of this
    information in the cockpit. However, costs and requirements for
    ADS-B In and cockpit displays, which could shift more
    responsibility to the pilot, are not well understood.
        We think FAA needs to provide Congress and stakeholders
    with a much clearer path for moving forward with ADS-B and
    realizing much needed capacity improvements.
        Second, ADS-B has demonstrated important benefits in Alaska
    where radar coverage is limited. However, ADS-B implementation
    in the continental United States, which involves supplementing
    and ultimately replacing radar, is a complex undertaking.
        The widespread introduction of ADS-B faces a number of
    risks. They include user acceptance, frequency congestion
    concerns, development and approval of procedures that can
    capitalize on ADS-B and software modifications to existing
    controller displays and automation systems. All these risks
    could materially affect the cost schedule and expected benefits
    of ADS-B.
        Finally, FAA has decided to rely on a service contract
    approach for ADS-B. This means that the Government will not own
    the ground infrastructure but will pay for broadcast services.
    A heretofore unseen level of FAA contract oversight will be
    needed.
        Over the years, we have documented numerous problems with
    FAA's major acquisitions that resulted in million dollar cost
    increases and schedule slips measured in years. Problems are
    directly traceable to, among other things, poor contract
    oversight. FAA has never before relied on a service contract to
    introduce a revolutionary technology into the NAS.
        As we testified last week, the experiences with flight
    service stations underscore the importance of strong oversight
    of contractor efforts. Important lessons learned focus on
    greater insight into contractor efforts and how problems are
    solved. The stakes are much higher with ADS-B and the need for
    oversight greatly amplified.
        To FAA's credit, the Agency intends to use several controls
    to help manage the contract, including techniques for measuring
    cost and schedule changes and performance metrics. However,
    these controls are not fully in place. Once established, FAA
    must execute them properly and hold the contractor accountable.
        An important oversight mechanism is the establishment of a
    performance control board. This board, comprised of FAA and
    contractor personnel, is expected to monitor ADS-B performance,
    review changes to the system and mutually resolve
    disagreements, all very important responsibilities.
        This board is not yet in place, and its charter is not
    finalized. The overall comfort level with FAA's approach will
    increase only when this board is firmly established, and roles
    and responsibilities clearly defined.
        Key watch items for FAA oversight going forward include
    managing requirements and having the right in-house expertise
    and skill mix for effective management and oversight. It cannot
    be business as usual with ADS-B. A different model of oversight
    is needed. The Air Traffic Organization must shift its role
    from providing a service to maintaining direct, sustained
    oversight.
        We are concerned that FAA could find itself in a situation
    where it knows little about the system that is expected to be
    the foundation of NextGen. FAA must take steps to ensure it
    effectively addresses this risk.
        This concludes my statement, Mr. Chairman. I would be
    pleased to answer any questions you or other Members of the
    Subcommittee might have.
        Mr. Costello. The Chair thanks you, Mr. Scovel, and now
    recognizes, for five minutes to summarize his testimony, Mr.
    Kefaliotis.
        Mr. Kefaliotis. Thank you, Chairman.
        ITT wishes to thank the Committee for the opportunity to
    testify about ADS-B, the vital program which is an essential
    building block of the NextGen air transportation system. We
    recognize the critical role of the Committee in exercising
    program oversight and in authorizing the necessary taxpayer
    dollars to make the program viable.
        ITT, along with our teammates, is honored to have been
    selected to be the FAA's partner in the ADS-B program and,
    through this program, to serve the Nation's air traffic control
    needs.
        ITT believes the FAA is to be commended for the efficient
    and professional manner in which this procurement was
    conducted. Salient elements of the FAA's procurement process
    were open and frequent communications with industry, adherence
    to the process and schedule promulgated early and procurement
    activities, and an effective statement of Government
    requirements.
        ITT believes the contracting approach developed by the
    Government strikes a proper balance between allowing contractor
    efficiency and providing solid means for FAA oversight and
    control of ITT activity.
        Notably, the contract provides a period and processes to
    ensure that the developed service fully meets defined
    requirements to include safety, security and radio frequency
    spectrum constraints, allows for continuous Government
    monitoring of deployed service, and provides significant
    financial incentives for contractor team performance. Finally,
    an FAA-defined performance control board allows continuous
    involvement of the FAA in system development, deployment and
    operation.
        The contracting approach has also provided a mechanism to
    ensure the continuity of the service for which ADS-B assets are
    deployed. The FAA required vendors to submit succession plans
    as a part of their proposals. ITT's plan appoints AT&T a
    successor for the very unlikely contingency of a triggering
    event.
        In closing, I would like to reiterate that ITT is proud to
    have been chosen to be the FAA's partner in this vital
    initiative and state that ITT and its contractor team are fully
    committed to the success of this program.
        Thank you again for the opportunity to appear before you
    today, and I would be pleased to respond to any questions you
    may have.
        Mr. Costello. Thank you.
        The Chair now recognizes Dr. Sinha.
        Mr. Sinha. Good afternoon, Chairman Costello, Congressman
    Petri and Members of the Subcommittee.
        ADS-B is a well defined, tested and globally accepted
    system concept for air traffic control surveillance. Although
    first made operational in the United States, specifically in
    Alaska, ADS-B now is being accepted and introduced around the
    world for ATC applications.
        It is used for tracking aircraft, both while in flight and
    on the airport surface. Aircraft pilots and ground vehicles'
    drivers also use ADS-B to monitor positions and velocities of
    other aircraft and ground vehicles.
        ADS-B provides highly accurate, plus or minus three feet,
    position of aircraft; faster update, one second, for better
    tracking; speed and direction data of the aircraft and the
    ground vehicles. In addition, ADS-B ground stations can be
    sited and installed more easily than radars, permitting
    aircraft surveillance in heretofore inaccessible geographic
    locations such as the Gulf of Mexico and Alaska.
        There are two fundamentally distinct types of ADS-B
    avionics configurations, commonly known as ADS-B Out and ADS-B
    In. With ADS-B Out, an aircraft or ground vehicle transmits
    ADS-B reports but does not receive reports from other ADS-B
    sources. With ADS-B In, they can not only transmit reports but
    also receive reports from other aircraft, ground vehicles or
    ADS-B ground stations.
        These reports can include graphical and textual weather
    information as well as other flight information such as pilot
    reports and Notice to Airmen.
        The improved surveillance, accuracy, integrity, latency and
    availability made possible by ADS-B will enable reduced
    aircraft separation standards to improve NAS capacity;
    comprehensive tracking of aircraft and vehicles operating in
    the air and on the airport surface to improve safety, security
    and operational effectiveness; improved access to under-
    utilized airspace and airports; improved four-dimensional
    trajectory information for better gate to gate airport
    operating efficiency and flight path conformance monitoring;
    flexible assignment of responsibilities on the ground and in
    the cockpit as needed to support decision-making and workload
    balancing; adaptive flexible spacing and sequencing of
    aircraft; improved collaborative air traffic management among
    flight and airport operators, service providers and other
    stakeholders.
        Add to these improvements, the reduced weather impacts to
    traffic flow and airport access made possible by the use of an
    accurate weather picture and other advisory information; and we
    can see that ADS-B is an enabler of several key NextGen
    capabilities. However, the extent of ADS-B's benefits mentioned
    earlier will vary depending on the environment, whether it is
    radar or non-radar, and the aircraft equipage, ADS-B Out or
    ADS-B In, and how many aircraft are equipped.
        Additional ADS-B benefits are possible based on new
    concepts in varying stages of exploration such as improved
    approach operations in instrument conditions due to the ability
    to electronically see proximate aircraft.
        This can help us increase the capacity for paired
    approaches to closely spaced parallel runways as well as
    independent approaches to parallel runways down to 2,500 feet;
    improved departure operations in the most congested terminal
    areas by reductions in departure spacing afforded through
    delegation to flight crews; improved safety in the air through
    enhancements to onboard collision avoidance systems and on the
    airport surface through direct cockpit warnings of potential
    conflicting traffic; reduced controller workload through more
    equitable sharing of spacing and separation assurance
    responsibilities between ATC and pilots.
        In closing, let me summarize my main messages. ADS-B is a
    well defined, tested and globally accepted surveillance
    technology that provides better performance than legacy
    technologies. ADS-B offers benefits from both mandated ADS-B
    Out and voluntary ADS-B In capabilities, and they accrue to
    both the FAA and NAS users.
        The timely realization of ADS-B benefits is dependent on
    achieving appropriate ground automation system upgrades. This
    is beyond other ground automation systems like ERAM, avionics
    equipage and operational procedures.
        ADS-B is a cornerstone capability for NextGen as several of
    the key NextGen improvements require it. It is imperative that
    ADS-B associated research and program implementation as well as
    the other NAS systems it leverages be managed closely so that
    the full set of projected benefits can be achieved.
        Mr. Chairman, this concludes my testimony. I would be happy
    to answer any questions the Committee may have.
        Mr. Costello. Thank you.
        The Chair now recognizes Mr. Brantley.
        Mr. Brantley. Chairman Costello, Congressman Petri and
    Members of the Subcommittee, thank you for inviting PASS to
    testify on the ADS-B contract.
        PASS represents more than 11,000 FAA employees throughout
    the United States and overseas including the employees who
    install, repair and certify the systems making up our air
    traffic control system.
        When fully implemented, ADS-B can be a useful tool for
    pilots and air traffic controllers to use in maintaining proper
    separation of aircraft while allowing more efficient use of our
    Nation's airways. PASS and the employees we represent welcome
    this advancement in air traffic control technology, but we will
    not give up our focus on safety in all modernization efforts.
        It is our understanding that the FAA plans that ADS-B,
    unlike our current radar systems, will not be properly
    certified and all maintenance will be the responsibility of the
    contractor. Certification is a process in which a certificated
    FAA technician checks and tests systems or equipment
    periodically to ensure that the systems or equipment can safely
    remain in service and provide the advertised service while not
    negatively impacting any aspect of the NAS. Certification is
    also performed before returning a repaired system to service.
        The FAA's own orders label certification as an inherently
    governmental function and, as such, it can only be accomplished
    by FAA employees. For decades, all NAS systems and services
    directly affecting the flying public were required to be
    certified.
        However, shortly after the ADS-B contract was awarded, the
    FAA made changes to its time-tested certification program. In
    its update to the maintenance handbook effective October 1st,
    2007, the FAA changed the order so that only FAA-owned systems
    can be certified. In other words, the FAA has not only changed
    the criteria to allow ADS-B to be deployed without requiring
    certification but actually went so far as to prohibit full and
    appropriate certification of all systems it does not own.
        PASS has learned that the FAA intends to perform what it is
    calling service certification on ADS-B which would allow the
    FAA to certify the service based on users telling the Agency
    that the service works. In other words, the controllers will
    have to rely on the users_pilots and vendors_to tell the FAA
    that there is a problem. There will be no internal FAA quality
    checks as there are today.
        PASS is certain that ADS-B must be fully and appropriately
    certified to ensure its safe operation. In the opinion of the
    experts, FAA technicians in the field, with the complete
    elimination of system certification for systems not owned by
    the FAA, there will be no way to independently determine if the
    system is safe.
        It should also be noted that this new interpretation of the
    Agency's certification criteria would apply not only to ADS-B
    but also to any system or service that is not owned by the FAA.
    Any future contract awarded by the Agency that provides for
    vendor-owned equipment or services would be barred from the FAA
    certification program.
        The NAS is not just one piece of equipment but rather a
    complex, integrated system that includes thousands of distinct
    smaller systems, all of which interface with one another, and
    aviation safety depends on oversight of the entire system. FAA
    employees are the only people anywhere with such a detailed
    knowledge of the intricacies associated with NAS systems and
    operations. Placing responsibility for a system as vital to air
    traffic as ADS-B entirely in the hands of the private sector
    threatens the safety of the flying public.
        Furthermore, in order to have sufficient redundancy to
    avoid service interruptions, there also must be employees
    present who fully understand the different types of service.
    Since ADS-B will be an entirely vendor-run operation, the
    Agency will be held hostage to the vendor's response time which
    will, at the very least, result in longer delays and will leave
    the FAA with no in-house capability should the vendor fail to
    live up to the contract.
        PASS strongly supports modernization of the NAS but never
    in a manner that compromises the very foundation of safety upon
    which our current system is based. PASS asks that Congress
    direct the FAA to fully and appropriately certify all NAS
    systems and services, including ADS-B, that meet the criteria
    for certification as defined by the Agency prior to October
    1st, 2007, without regard for ownership of such systems and
    services.
        Thank you, Mr. Chairman, and I would entertain any
    questions that anyone may have.
        Mr. Costello. I thank you, Mr. Brantley.
        Mr. Scovel, in my opening statement, I raised concerns, as
    you did, with the issue of raising unrealistic expectations on
    the part of the Administration.
        I am not here today to beat up on the Administration. I
    support ADS-B. I think we are moving in the right direction,
    but when the Administration came out with their budget proposal
    on February the 14th and throughout the process until we passed
    the House bill, the message to the American public and to the
    Congress was pass our budget proposal because we have to move
    forward with NextGen.
        As we went through the busiest season that we have seen in
    recent history, this summer, and had unprecedented delays and
    cancellations, the people kept hearing, well, we need NextGen,
    and it was like we are going down to Target or Wal-Mart or some
    place and buy something off the shelf, plug it in and our
    problems are going away.
        One, you raised the same issue in your statement that we
    need to be realistic as to what NextGen can deliver in terms of
    delays and capacity and so on. I wonder if you might elaborate
    on your statement.
        Mr. Scovel. Thank you, Mr. Chairman.
        You mentioned the term, realistic expectations, and we
    would certainly second the use of that term. As you and other
    Members of the Subcommittee have noted, ADS-B will have no
    impact on delays at the Nation's busiest airports in the near
    term.
        As Mr. Capezzuto and others have stated today, the contract
    between FAA and ITT calls for installation of the ground
    infrastructure by the year 2013. FAA has mandated, or proposes
    to mandate, the initiation of ADS-B Out aboard user aircraft
    not until the year 2020. Clearly, that is a long time from
    where we stand today in late 2007.
        I should also note, however, that ADS-B Out, which is the
    initial part of the system that will be implemented, does not
    propose to have the promise to address congestion and delays at
    the Nation's busiest airports. It is only the second part of
    the ADS-B system, the ADS-B In system, that will allow aircraft
    and other users conceivably to reduce separation standards and
    increase capacity.
        So we would urge caution on the part of the Committee and
    other members of the aviation industry and the traveling public
    before they invest too much unrealistic expectations in ADS-B
    itself.
        Mr. Costello. I also noted in your statement and I think
    Mr. Brantley as well--and I will ask you, Mr. Brantley to
    comment on this--one is that you are concerned that the FAA may
    find itself in a situation where ITT knows a lot about the
    system and the FAA knows very little about the system.
        I made note in my opening statement that we are all aware
    that under the contract, that ITT will build, own and operate
    the system and will have a contractual arrangement where they
    will actually purchase for transition.
        I just wonder if you will elaborate, Mr. Brantley as well,
    your concerns about the FAA, at some point, knowing very little
    about this new system and ITT folks knowing a lot about it
    which might imply to some that ITT would have a monopoly on
    this system.
        Mr. Scovel. Yes, Mr. Chairman, we should note that our
    assessment at this time indicates that FAA has negotiated a
    very robust and aggressive contract with ITT. It has been
    successful in that regard. The skill set that it brought to the
    contracting process up to this point has given it this enviable
    position.
        The contract as it goes forward, however, will unroll in a
    series of phases, and certainly the initial phase between now
    and 2013 presents the need for FAA to have a skill set. As ADS-
    B Out unrolls to 2020, perhaps a different skill set will be
    needed, and certainly with the advent of ADS-B In and full
    implementation throughout the NAS of ADS-B's capability, yet
    another skill set may be needed.
        Given the length of time between 2007 and when full ADS-B
    capabilities may be realized, 2020 or in the years immediately
    following that, skills currently available in FAA may move out.
    They may retire. They will move on. Certainly, FAA will be
    challenged at each step along the way to acquire the skills
    that will be necessary to give it the robust contractual
    oversight capability that it will need.
        Currently, we see going forward, and this would be for the
    immediate future, that a skill set would be needed along these
    lines: telecommunications expertise, signals processing, and
    systems engineering and integration. Finally, when we are
    talking about user involvement and potentially the use of
    pilots and human factors needed in order to fully implement
    ADS-B, FAA will need to have expertise in that area in order to
    ensure that the contract can be properly executed.
        Mr. Costello. Mr. Brantley, would you briefly follow with
    your concerns?
        Mr. Brantley. Yes, Mr. Chairman. In addition to what Mr.
    Scovel said, and I do agree with his assessment on the
    assumption that everything works well and that the vendor
    remains in place, my concern is, however unlikely or remote the
    chance, if the Agency found itself in a position where it had
    to take over the ground stations--either the vendor defaulted
    or the Agency decided that they weren't performing and they
    canceled the contract or whatever the case--the Agency would
    not have the in-house capability to do so.
        So, at that point, they would no longer have a choice. They
    would be essentially stuck even if they felt that the vendor
    couldn't perform.
        Mr. Costello. Mr. Capezzuto, would you like to respond to
    the concerns expressed by Mr. Scovel and Mr. Brantley on that
    issue?
        Mr. Capezzuto. Yes, sir. Thank you.
        As I understand it, I just want to point out that the
    contract let to ITT is really a sub-element of a full system.
    As was mentioned by Mr. Scovel, the avionics is the driving
    force behind this. It is really about having the aircraft with
    the proper avionics, and that is where the accuracy and
    integrity information is actually collected.
        So this is the inverse of looking at radar. Where radar
    derives the information, now the information comes from GPS and
    avionics. That information is transferred to the ITT sub-
    element which is then brought to our service delivery points
    where the FAA is playing the systems integrator. Our role is to
    pull this together, collect the data, submit that data to our
    regulator to get approval to use it for air traffic controllers
    to separate air traffic with.
        To do any of this, we are governed by our safety management
    system, and that is first and foremost to us. Whenever we build
    a system, we are governed by the safety management system and
    we put the proper controls in place.
        Mr. Costello. What does that mean, the proper controls in
    place?
        Mr. Capezzuto. The way this contract was developed, we have
    three years to develop it co-jointly with ITT. I know we call
    it a service contract, but we are actually going through design
    reviews with them. We have designed the performance
    specifications and provided it to them. We are doing the
    oversight as they develop the system so that we build in
    security and safety up front.
        After the deployment of this, we will have the capability
    to recognize what that proper data is at the service delivery
    point, and these are quantified requirements, things like
    availability or latency. These are things that can be measured,
    and you use those for certification of that information.
        Mr. Costello. So those who may be concerned, as Mr. Scovel
    just mentioned and Mr. Brantley, about turnover as time goes
    on, you have no concerns about that?
        Mr. Capezzuto. I think the other piece that is missing in
    this conversation is that the radar that we are going to keep
    in there as the backup. As part of this investment, we are only
    really removing 50 percent of our secondary surveillance
    radars, which essentially are overlapped right now and not used
    as a redundant function.
        So what we are doing is slimming our particular inventory
    of secondary surveillance radars, but we have two things going
    for us. One, we are keeping all the primary radars, and we are
    keeping 50 percent of the secondary surveillance radars in our
    inventory as the capability of a backup. Then, additionally, we
    have in the specification of the contract that the provider has
    to have an independent validation of the information that is
    coming from ADS-B or the avionics. So, in all cases, we have
    the capability.
        Then, finally, as we do today, we have procedural backups.
        Mr. Costello. We have other Members here who have
    questions. I have a final question, and then I will come back.
    I do have a few others.
        Mr. Brantley, you talked about the certification process
    and that the FAA came back and changed it. I wonder if you
    might elaborate on the current system as far as certification
    is concerned versus what the FAA has proposed or what the
    change has done.
        Mr. Brantley. Certainly, thank you, Mr. Chairman.
        Currently, any system, there are several criteria, but the
    two main ones, any system that is providing real-time
    positional information or that is providing data that is used
    by pilots or air traffic controllers, that is going to affect
    what a plane does, anything that meets those criteria has to be
    certified. Now that had no restrictions based on who owned the
    system or service.
        However, the change that the Agency made seems specifically
    targeted, at least in part, to allow the approach the Agency
    has chosen to take with ADS-B. I think it would be hard to
    argue that ADS-B won't meet that criteria. It may be a matter
    of time. The argument may be over when it meets the criteria,
    but it will. So I think that is at least part of what is
    driving the change in certification.
        I think also we need to keep in mind while the Agency talks
    about verifying or certifying the data, that is one step in
    certifying a system or service today. There are many other
    things that are checked. There are tests run on the systems
    themselves. There are system parameters checked. There are
    interfaces with other system. So it is not just the data that
    comes out the end that is checked to certify something today.
        Apparently, the approach that is going to be taken here is
    the Agency will verify just the data and based on that, without
    having any knowledge of what is going on with the system
    itself, they will certify the service.
        Mr. Costello. The Chair now recognizes the Ranking Member,
    Mr. Petri.
        Mr. Petri. Thank you very much.
        It is fascinating. I wonder if maybe you, Mr. Capezzuto or
    one of the other panel members could discuss this from the
    point of view not of the FAA or the contractors but from the
    point of view of the pilots or the airline companies, the
    users. How is this?
        They have to make expenditures and buy some equipment or
    rent it. At what stage is it going to make sense for them to do
    it if there is a dual system out there and we are phasing this
    in? How is this really going to work? Could you discuss that?
    Is there a plan?
        I am thinking in the back of my mind we are going to
    digital TV, and everyone is saying out there that they are
    going to send coupons eventually to people to equip it. Maybe
    it is different than that.
        Maybe the pilots and the industry is already way ahead of
    the Government, and they have the stuff in their boxes already.
    Could you discuss how the two things are going to work
    together?
        Mr. Capezzuto. Let me start by saying that ADS-B has been
    in the Agency's research and development area for probably nine
    years. The cargo airline industry, a series of other airlines,
    pioneer airlines have basically participated in the development
    and testing and demonstration of this technology over those
    nine years.
        We have essentially accelerated this or moved to the next
    phase with implementation based on those successes both up in
    Alaska and right here in the Ohio River Valley. So there were a
    lot of demonstrations that proved where the technology was.
        We are essentially right now working on what is called an
    Air Traffic Management Advisory Council. We have an ADS-B
    Working Group that will have access to the aviation industry as
    the customer of the NAS where they understand the development
    of the strategy of this program, where we discuss some of the
    issues, such as the backup analysis which was done in concert
    with aviation industry, so they understood what we were
    delivering and what the decision meant.
        In fact, they also participated in the development of the
    business case that we put forward to go through the investment
    analysis that concluded in awarding this contract. So I would
    say that the industry has been involved.
        I think what we recently chartered this summer was an
    Aviation Rulemaking Committee as part of doing the Notice of
    Proposed Rulemaking. Again, many of the same members from the
    ATMAC ADS-B Working Group were involved, but now it has
    expanded even further. In that group, we were chartered with
    our first deliverable, which was a report to talk about how you
    can early incentivize the operators such that they wouldn't
    wait until 2018 or 2019 to comply to the 2020 rule.
        In that report, which is now out on the web, it represented
    the aviation industry's desire to see incentives, either in the
    form of manufacturers being provided incentives or tax rebates
    where they could lower the cost of ADS-B. Likely that would
    increase equipage at an earlier rate and at a higher magnitude
    and then we would also look at incentives for the airlines in
    such a way that they would also be incentivized to acquire ADS-
    B at an earlier state.
        Just one other thing to point out is we are working also
    with our international partners. In Canada, they deploying ADS-
    B in the Hudson Bay. In Australia, they are using ADS-B right
    now to separate air traffic in the en route or high altitude.
    Europe currently has a program under SESAR. CASCADE is the name
    of the program, in which they are looking to develop pioneer
    programs and move forward with this.
        We are working in concert with the rest of the world so
    that we globally can implement this properly.
        Mr. Petri. With the international carriers, there will be
    continuity. So when they fly from one airspace to another, it
    will be compatible or the same system?
        Mr. Capezzuto. Yes, sir. We have been working closely with
    them to ensure that we have total global interoperability.
        Mr. Petri. Do you have an idea of what kind of investment
    we are talking for different categories of plane users?
        Mr. Capezzuto. Yes, sir. If you are talking about the total
    cost, as you are calling it, for the user it is approximately
    $6.9 billion, and that captures the 210,000 aircraft. Most of
    the 200,000 are general aviation, and you are looking at about
    10,000 in the air transport category.
        Mr. Petri. A person who is buying a Piper, well, probably
    not a Piper. They wouldn't participate in this necessarily.
    They would use a smaller system.
        If you are buying one of these corporate jets, how much
    would that cost?
        Mr. Capezzuto. The price varies as a function of if you are
    buying a brand new corporate jet and it already has a multi-
    function type display, already has GPS on board. So you can see
    prices for the general aviation community. It ranges from
    $10,000 to $15,000. When you are looking at the air transport,
    it is upwards of $40,000, $50,000, and it can go upwards of
    $160,000.
        It depends on the vintage of the aircraft. As you know, if
    you are doing retrofits versus it coming off the assembly line
    as a forward fit, then you really get a huge reduction in the
    cost. The prices I was giving you were the capture, acquire,
    acquisition costs and then implementation of it into your
    aircraft.
        Mr. Petri. The new planes are already having it or it is on
    the drawing board?
        Mr. Capezzuto. Well, by putting out the Notice of Proposed
    Rulemaking, what we have done is sent a strong signal of what
    the standards are for the development of ADS-B Out is.
        What has been going on are some of the manufacturers have
    been going on risk and building it into the system. So, today,
    there are aircraft with ADS-B in it. Europe, as well, has
    enforced this through some of their rules. What is happening is
    people are deploying with a version of the standard.
        What we just did by putting out the Notice of Proposed
    Rulemaking is we clarified what version of the standard we are
    interested in at the FAA.
        Mr. Petri. Thank you.
        Mr. Capezzuto. You are welcome, sir.
        Mr. Costello. The Chair recognizes the gentleman from
    Colorado, Mr. Salazar.
        Mr. Salazar. Thank you, Mr. Chairman.
        I have the same concerns as Mr. Petri has. Most of us that
    own small planes outfit them with a 430 Garmin. Is that going
    to be usable in this case? Would it be part of the system or
    are we going have to scrap that and toss it out and put
    something else into our airplanes, Mr. Capezzuto?
        Mr. Capezzuto. I understand your concern, sir.
        I mean what we are looking at right now is that the
    aviation manufacturers are looking to combine the avionics so
    that if you have a current mode A/C type transponder, what you
    can do is remove that and replace it with a unit that does the
    same function as well as ADS-B. So right now, Garmin does
    produce a system that is available, and it is ADS-B capable.
    Also, that is what they are using up in Alaska right now, and
    it is very successful.
        Mr. Salazar. If someone isn't equipped with this equipment,
    he won't be allowed to fly into certain airspace, is that
    correct?
        Mr. Capezzuto. Correct. The rule is an airspace rule. If we
    move forward with this, it would go into effect in 2010. You
    would have to comply by 2020. So, essentially, you are
    operating up until 2020 without it or you choose to equip
    early.
        You mentioned that we would deploying ADS-B ground
    infrastructure by 2013. As part of that infrastructure, we
    would be providing an uplink capability, which essentially will
    allow weather to be viewed in the cockpit, and so we are
    looking at that as one of the ways to incentivize the general
    aviation community, such that they can acquire weather in the
    cockpit if they would buy the ADS-B equipment.
        Mr. Salazar. Thank you.
        I have a question that Dr. Kagen wanted to ask. I hope I
    can read his writing here: Privatization of essential safety-
    oriented programs does not allow for our Government to walk
    away from its responsibilities. How will the FAA control a
    private corporation without owning it?
        Mr. Scovel, would you like to respond to that?
        Mr. Scovel. Yes, sir, let me give it a try. As I understand
    the question, how will FAA control a private organization, a
    private company?
        Through the contract mechanism, and our review indicates to
    date that FAA has negotiated a robust contract. Through
    controls in that contract, FAA will attempt to control the
    performance and cost and schedule metrics. It has indicated
    that it will require ITT to use the earned value management
    system, which is a process developed by DOD to keep contracts
    on schedule and on budget.
        Perhaps, most important, FAA indicates that it, along with
    ITT, will comprise a performance control board which will
    monitor progress and evaluate effectiveness of execution of the
    contract as it goes along.
        If I can borrow Mr. Hayes' term for myself, as the paid
    skeptic, we think at this point that all of those are to be
    commended, and we want to give due credit to FAA for inserting
    in the contract at this point those controls. If we have
    skepticism, it is due to the need to see proper execution and
    management of that contract as we go forward.
        We stand right now really at the starting line. Much needs
    to be done very quickly, even in the next few months. So we
    will have a track record built very soon and, at that point, we
    and you should be able to reach a plenary opinion, at least, as
    to FAA's success on contract execution.
        Mr. Salazar. Thank you, Mr. Chairman.
        I yield back.
        Mr. Costello. Thank you.
        The Chair now recognizes the gentleman from North Carolina,
    Mr. Hayes.
        Mr. Hayes. Thank you, Mr. Chairman.
        I hope you took my comment as a compliment, Mr. Scovel,
    because we need some skeptics around here when Government is at
    their work.
        Several questions here, Vinny, you can do a seven-minute
    statement in five minutes. When you and I first met, I had to
    get you to talk southern and slow you down.
        I did the math. Just so people understand, in my basic
    math, you could equip every one of those airplanes today for
    $1,260,000. Now that is oversimplification, but the point is
    the technology, given the competition and the desire of the
    part of the aviation community to use it because it is a tool
    that makes them safer and saves them fuel and all kinds of
    things, is the key for Mr. Salazar and my friend, Leonard, and
    others to getting this thing done.
        We have to reverse the role of Government. You have kind of
    done it by the way you have done this very innovative contract.
        Mr. Kefaliotis, we are really depending on you to
    demonstrate how well private industry can mesh with Government.
    As we have done with the RCI program for military housing, it
    can be done and should be done.
        Having said all that, we are going to reverse it now. It is
    not the Government mandating you do something. The Government
    has come up with a way to do something that is so much better,
    people need to be lining up to get it like they did for iPhone
    at 4:00 in the morning.
        We have gone from NDBs and ADFs--which are just way needle
    ball, and air speed--to something that is incredibly easy to
    use, incredibly accurate.
        Mr. Brantley has very good foresight into what we are dong
    here, and we are certainly not ignoring him. I would ask FAA,
    as in the past with the very important relationship there, to
    make sure that everybody understands what is going on.
        Let me get over here to a question before my time runs out.
    When we first started talking about this, my greatest criticism
    of the FAA is they came in selling the price, not the product.
    I finally figured out what the product was. I have been to
    Alaska twice, flown with it.
        I have been to China. A couple of guys, a Navy pilot and
    two former FAA employees, are building the system, selling it,
    installing it and maintaining it in China out of their hangar
    which is about like a garage.
        So the simplicity and the effectiveness is there. It is
    proven. It is not something that just appeared today. Those are
    the things that give me reason to be encouraged, enthusiastic
    and optimistic if we can look into the future.
        Vinny, you talked about the mode C transponders. Can you
    update folks on where we are now?
        When we first started, you had to have a box up in the
    plane, but six months ago that was the box. Now the box is
    integrated into a transponder. What do you see as the potential
    for the industry to bring in new technologies, smaller,
    lighter, less expensive? Give us a peek into that.
        Mr. Capezzuto. I think this is exciting for the
    manufacturing industry, and they have been waiting for us to
    send that signal that we are moving forward with this. The
    contract award and the NPRM are certainly two strong signals to
    them. In fact, I just briefed the GA Manufacturers Association
    last week. In there, we are basically opening up the doors and
    allowing them to see what this contract is about.
        I will tell you there was a proposal. As part of the
    proposal process, ITT offered to spend corporate dollars, not
    out of our contract, but they will provide us insight and they
    will, at the Performance Control Board, provide us with status
    on how they are doing with this. What they have done is
    partnered through their Memorandum of Agreement with avionics
    manufacturers.
        Essentially, they realize that the worth of this contract
    is tied to avionics and people equipping early, and so to do
    that they are investing their own dollars in the development of
    a joint avionics package that basically combines ADS-B with the
    current mode A/C transponders. Therefore, it now allows these
    new radios to replace your old radios, be interoperable with
    TCAS, the Traffic Collision Avoidance System, and be
    interoperable with our radar as we go through the transition
    point.
        I think those are innovations that we will see other
    avionics manufacturers jump on.
        Mr. Hayes. Absolutely. Let me cut you off just a minute
    before my time runs out and bring Mr. Kefaliotis in.
        Speak to Mr. Brantley's concerns and Mr. Scovel's and also
    to the issue of what is in this for private industry in terms
    of the incentives for being really successful and the new
    equipment and processes that can be developed out of this.
        Mr. Kefaliotis. Congressman Hayes, on our side, we are
    installing a highly robust redundant architecture, a highly
    reliable system. The Government has as, I think, another
    innovation, specified technical performance measures against
    which the Government will judge the quality of the service we
    provide.
        We, IIT, have instrumented our system such that those
    technical performance measures will be constantly monitored. We
    will provide data to the Government, to the FAA through an
    interface, so the FAA can also constantly monitor our
    performance parameters.
        We have proposed, and the Government has accepted, an
    aggressive financial incentives penalties clause in the
    operational phase such that if we deliver services that do not
    meet the technical performance standards defined in the
    contract, we suffer pretty significant financial penalties.
        So, in terms of what the contract has done and what we plan
    on deploying, we are deploying a highly robust, scalable, safe
    and secure architecture that will meet the Government's needs.
        In regard to certification, the FAA has specified, and
    again we are independently instrumenting our system and will
    constantly monitor the technical performance of our system. The
    Government has required us to independently deliver to a
    certification server in FAA premises, data relevant to the
    performance of our system with which the Government can
    independently evaluate and monitor our performance and
    certified data. So we feel very good about what we are doing,
    and we think the Government has done a very good job of
    ensuring that they can monitor us.
        We believe significantly in ADS-B technology. We believe it
    will deliver a significant benefit to the flying public and
    promises a potential for eventually dramatically enhancing the
    capabilities of the national airspace system. Thank you.
        Mr. Hayes. Thank you, Mr. Chairman. Sorry, I ran over.
    Maybe we will get another crack at it.
        Mr. Costello. Thank you.
        The Chair now recognizes the gentleman from Washington, Mr.
    Larsen.
        Mr. Larsen. Thank you, Mr. Chairman.
        Mr. Kefaliotis, under the contract that ITT has with the
    FAA, is there anticipation of any use of the GPS system, of the
    current system, or you are anticipating changes made to the GPS
    system that will increase the capacity of the GPS system?
        Right now, in the Armed Services Committee, we are
    struggling with do we go to 3F or stick with what we have. I am
    wondering what is your assumption about the capacity that that
    ADS-B will use of the GPS system and what is your assumption of
    the future of the GPS system and increased capacity within it.
        Mr. Kefaliotis. Our design for the ground infrastructure
    takes advantage of airborne GPS receivers and the data linking
    of position data from aircraft to our ground system. So, in
    that sense, just as an adjunct, the navigation system onboard
    doesn't have to be GPS. It just has to be a navigation system
    that meets the performance requirements.
        But that said, GPS is the system that will meet performance
    requirements, and a robust GPS network is essential to the
    successful operation of this system.
        Mr. Larsen. I would agree with that statement. My question
    is the assumption that the contract makes about the available
    capacity as we roll out ADS-B in the use of GPS.
        Mr. Kefaliotis. Congressman, I apologize. I am not sure I
    understand the question. In terms of the number of satellites
    and the constellation and the robustness of the GPS
    constellation?
        Mr. Larsen. Yes.
        Mr. Kefaliotis. Our contract assumes the baseline GPS
    constellation. The rulemaking requires navigational accuracy
    for a position parameter that is quite stringent, and a robust
    constellation will dramatically aid in achieving that
    parameter.
        Mr. Larsen. Okay. Well, it is an important question because
    we are walking through this in the Armed Services Committee as
    well.
        Mr. Capezzuto, what incentives do either GA pilots or
    transport airlines have to install the avionics between 2013
    and 2020 or between now and 2020 other than that they damn well
    better?
        Mr. Capezzuto. Okay, so, again working closely with the
    aviation community is a recognition that we believe there will
    be some benefits essential to the operations of the NAS, which
    translates into their operational capabilities. When we did the
    business case for this, it identifies pretty deep benefit pools
    in certain areas, and some of them are really ADS-B Out only,
    which I can say is in the economic analysis of the Notice of
    Proposed Rulemaking.
        Essentially, the translation of air traffic control
    efficiency is a function of having more accurate information,
    higher update information, which translates into less
    deviations, which again is fuel savings. That is a pretty big
    thing, but it also translates into emissions as well. When you
    look at the concept of emissions, noise and fuel savings, we
    make a pretty good, robust case for just ADS-B Out.
        Certainly, in the en route environment, high altitude
    airspace and some in the terminal environment, and in the non-
    radar airspace is really where we get to see some of those
    benefits earlier, such as the Gulf of Mexico, Alaska and
    Colorado. Those are primary areas where we could exploit this
    earlier on.
        Fundamentally, putting this building block in place allows
    us to have a stable baseline to build ADS-B In. That is the key
    to NextGen.
        Mr. Larsen. Sure. Is FAA then planning on proposing any
    specific set of incentives to enhance deployability of ADS-B In
    to get them all right here?
        Mr. Capezzuto. Yes, and the example I will use would be in
    Alaska. In our business case, we have outlined where you will
    have better access to certain airports. This is not just about
    ADS-B. We are also providing weather at the destination
    airport.
        In some cases in the Gulf of Mexico, we are putting in
    surveillance, communications and weather, so it is a full
    service provision to deliver to the Houston center. In that
    case, we are able to develop new routes. We are calling them
    performance routes.
        Mr. Larsen. Sure. So what kind of discussions have you had
    with larger aircraft regarding the--sorry, I am getting
    distracted by that vote call.
        What specific conversations have you had with larger
    aircraft like the Boeings of the world about retrofitting as
    well as discussions about putting them in on the front end?
        Mr. Capezzuto. We have had some very robust discussions
    with Boeing and Airbus. We have been involved with the
    manufacturers of the actual equipment like Rockwell Collins.
        Mr. Larsen. Can you give us a flavor of the content of
    those discussions?
        Mr. Capezzuto. Sure. They are members of this ATMAC, Air
    Traffic Management Advisory Council, ADS-B Work Group. We,
    essentially, have been developing the strategy for execution
    for the last 16 months. In those discussions is the challenge
    of what is out there today and can you use what is out there
    today.
        As I indicated earlier, people have been deploying ADS-B to
    a lesser standard. The question is, in the time frame over the
    next 10 years, are there things we can do with that to keep
    continue leveraging of the ADS-B, traction, if you want to call
    it that, but, essentially, also we were able to acquire those
    costs and embed them into the economic analysis both for the
    business case and the NPRM.
        We have worked closely with the industry to make sure that
    we have certainty around the numbers that you see, and so
    therefore you are looking at what I would say is a very strong
    business case in the sense that we believe the data that is in
    there.
        The return on investment time frame is a little scary when
    you look at it, but this is a building block. It is an
    infrastructure improvement, and those have long returns on
    investment. Essentially, we are not taking credit for all the
    future capabilities that are out there either, and that is
    really the place that we want to explore.
        Mr. Larsen. I would enjoy exploring that with Mr. Scovel
    when I have another five minutes. Thank you.
        Mr. Costello. I thank the gentleman.
        The Chair will announce that we have two votes on the
    floor. We have about 13 minutes left.
        At this time, I will recognize Mr. Duncan from Tennessee.
    After his questioning is over, then we will recess, go to the
    floor, vote and be back in approximately 30 minutes. So we
    would ask the witnesses to stay, if you would, and we have at
    least one other round of questions.
        Mr. Duncan is recognized.
        Mr. Duncan. Well, thank you, Mr. Chairman. I don't believe
    I am going to have enough time to really get into this, so
    maybe I can come back and do this, but I will start with this.
        Mr. Capezzuto, I don't think there is anybody in the
    Congress, even the pilots, who have the details or maybe even
    the capability to really do the rigorous analysis of this deal
    that we have to hope that your team has done. So we have to
    rely on you.
        But, in the hopes that maybe I can understand it a little
    bit better, it says in one of our papers on this: The total
    value of the contract, which has a number of options extending
    through 2025, is $1.86 billion. Segment one is a $207 million
    cost plus incentive fee contract.
        Can you tell me, $207 million, is that the maximum cost of
    Segment one or will the incentives add a lot of money to that?
    I am not really clear from that sentence.
        Mr. Capezzuto. That 207 represents a target fee of 8
    percent that is included in that number. I just want to point
    out this is a cost plus incentive fee with a cost-share clause
    as well. So, if they overrun, not only does the fee go down, it
    can go as low as 4 percent, but they will also start paying for
    the cost overrun as well.
        Mr. Duncan. In your team's analysis of this, how much
    markup or how much profit do you think is in there for this?
        I have never seen a team quite this elaborate, involving
    this many big companies and so forth, anyway.
        Mr. Capezzuto. That fee translates to $15 million out of
    $207 million.
        Mr. Duncan. Fifteen million.
        Mr. Capezzuto. Yes, sir.
        Mr. Duncan. Is that pretty consistent through the remaining
    $1.86 billion, would you say?
        Mr. Capezzuto. No. We broke this up into like a hybrid set
    of contracts. What you have for the first one is a cost plus
    incentive fee with a cost-share because it is a development
    contract. So there is some risk there, and we want to make sure
    we design in the safety and security we mentioned earlier. We
    participate in that.
        All the other deliverables are firm fixed price, and they
    are pre-negotiated, and they are in the contract now.
        Mr. Duncan. Then I am also curious. It says the total value
    of the contract is $1.86 billion, yet we are talking about a
    contract that extends to 2025.
        Now in the STARS program and some of these programs in the
    past, we have had huge cost overruns. How did you analyze it
    because we don't really know where we are going to be in 2020,
    financially?
        I mean we don't know what inflation is going to happen or
    going to have occurred in all that time. What has gone into
    that? How did you arrive at that $1.86 billion?
        Maybe I just better come back for this.
        Mr. Costello. We have a little over nine minutes left, so
    if you want to take that.
        Mr. Duncan. Okay, well, go ahead. You see what I am getting
    at, I think.
        Mr. Capezzuto. I do. Essentially, what we do is we
    negotiate with the vendor, and we look at their outlay versus
    what we had done in our independent Government cost estimate.
    We negotiate those prices.
        We set up option break points. So the subscription charges
    they would be applying to us are on an annual basis.
    Essentially, what we do is we would be paying them on an annual
    basis once we prove the design works.
        Just to point out, the FAA would own the paper design of
    this system. At the end of the day, the configuration of that
    system is ours. We manage it.
        As we move forward, we essentially would be turning on
    service volume. We are buying this like you buy cable TV or a
    cell phone. You are turning on service volumes, and once you
    turn them on, you pay annual prices on it.
        What we do is we have break points. At 2016, is a decision
    point on whether or not we continue paying those subscriptions
    for all the service volumes because they should all be turned
    on, and then another break point at 2021.
        Mr. Duncan. How confident are you that by the year 2025, we
    have spent no more than $1.86 billion on this contract?
        Mr. Capezzuto. Well, the reason we have a lot of confidence
    in this is we built in penalties as well. So it is a function
    of them delivering the service as we measure.
        Mr. Duncan. Let me ask one more quick question. We read all
    the time that in these defense contractors, they hire all the
    retired admirals and generals, and then, boy, they get just
    exorbitant, whopping profits in almost all these big defense
    contracts.
        Mr. Scovel, have you looked into how many former FAA
    employees or would you look into that sometime and see how many
    are working for these companies that are involved in these
    contracts? I think it would be something interesting for you to
    look at sometime.
        I yield back, Mr. Chairman.
        Mr. Costello. I thank the gentleman.
        At this time, the Subcommittee will stand in recess for 30
    minutes. We would ask the witnesses to be back at the table.
        We do have three votes now. It was two votes a minute ago.
    Now it is three. So it is about 30 minutes.
        The Subcommittee stands in recess.
        [Recess.]
        Mr. Costello. The Subcommittee will come to order.
        It looks like we have a few Members that are coming back.
    We will start on a second round of questions.
        Vinny, let me ask you why the rulemaking is at 2020 as
    opposed to 2019 or 2021. How did you arrive at the year 2020?
        Mr. Capezzuto. Essentially, we took a look at the amount of
    aircraft that would have to be retrofitted. If you look at the
    GA community with 200,000 aircraft, even with 10 years, that is
    20,000 aircraft a year that would have to be retrofitted. So
    that is a fairly aggressive schedule actually. That was pretty
    much one of the drivers.
        The other component was we wanted to work with industry and
    demonstrate that we were going to make this investment and not
    pull away. This has been brought to our attention as something
    that they were concerned with. So we did the best we could to
    lay out an aggressive schedule to put that ground
    infrastructure in place, and the best we came up with was 2013.
        Technically, you would equip. You would want to see that
    ground infrastructure in place as well, so the capabilities are
    there starting in 2010. We will be putting in the ground
    infrastructure--this is the uplink capability--but by 2013, it
    will be completed. So, really, you are looking at seven years
    of using the service nationwide.
        Mr. Costello. I am going to ask you a couple of questions
    about how Mr. Scovel complimented the FAA for the contract and
    said it is a robust contract, and I want to talk a little bit
    about that in a second.
        Just for the record and so the Subcommittee Members know,
    in putting the contract together as far as ITT's
    responsibilities and what needs to be accomplished and time
    lines and targets, who else was consulted in the process?
        PASS is represented here, Mr. Brantley at the table. He has
    11,000 members that he represented. The air traffic controllers
    are an integral part of operating this system once it is up and
    running. I wonder if you would tell how much input the agencies
    and stakeholders here were involved?
        Mr. Capezzuto. Sure. As I mentioned earlier, when we set up
    the program office for implementation which was approximately
    January 2006, one of the first things we did was develop a
    governance structure.
        In that governance structure, we have stakeholders which
    essentially are internal to the FAA both on the regulatory side
    and the Air Traffic Organization. So you have people from
    airports involved. We have our safety oversight organization,
    the people that put together the economic analysis, our policy
    people for the NPRM and, on the ATO side, essentially, all the
    vice presidents for the Air Traffic Organization. Once a month,
    we meet. We, essentially, bring the program issues to the table
    and we discuss things and consolidate on an answer.
        The other piece of that governance structure is also the
    ATMAC which started in February 2006. The Air Traffic
    Management Advisory Council, essentially the steering group,
    established us as a work group and then that is where we meet
    once a month over at RTCA.
        Typically, what we are doing is we develop the strategy.
    Those strategies are basically the interdependencies of the
    program, and the things that were in the contract basically are
    peeled out from that.
        Additionally, what we did is by June 2006, we had gone for
    our first investment analysis, which really was a strong signal
    that we were funded to move forward with ADS-B. Starting at
    that point in June, 2006, we had our first industry day, and we
    had three of those industry days where we worked with the
    manufacturers, the people that came to the industry days and
    solicited information. We presented and had dialogue and all
    this kind of merged together to create the product as you see
    in the contract.
        Mr. Costello. Mr. Brantley, we would like to hear from you
    as well. Were either you, personally, or your organization or
    your members consulted?
        Mr. Brantley. No, Mr. Chairman, we weren't. With respect to
    modernization efforts, we would very much like to be involved.
    I think our members have a lot to offer the Agency, but
    beginning about four years ago the Agency informed us that our
    participation was no longer welcome or needed and we have not
    been involved since. Prior to that, we were involved in the
    ADS-B program.
        Mr. Costello. But somewhere around three or four years ago,
    you were told that you were no longer welcome.
        Mr. Brantley. Yes, sir.
        Mr. Costello. I wonder if you would respond to that.
        Mr. Capezzuto. Sure, I would like to actually. Prior to the
    implementation phase, moving forward, so September 2005, was a
    key decision point for the FAA to select ADS-B as the
    technology and move forward. Prior to that was the test and
    demonstration work that occurred up in Alaska. In fact, what we
    developed there is certified by PASS.
        Our employees were involved with the development of
    certification process and procedures for those particular
    elements that validated the requirements. That is what
    basically gave the confidence in moving forward in selecting
    ADS-B over radar and over multilateration at that point in
    time. Those were the three alternatives.
        At the conclusion of that investment decision, we moved
    forward, and basically they moved into implementation and set
    up a program office. So we have been in, I would say, a
    planning state since January 2006, up until this point. We have
    gone through three additional joint resource councils, which
    are investment decisions, that acquired the funding for the
    full program to award the contract.
        So, all the requirements that we are talking about were
    validated in the test and demonstration phase with the use of
    the employees of the FAA.
        Mr. Costello. It is troubling to me, personally, and I
    think to other Members of this Committee. We have held hearings
    on the flight service station contract with Lockheed Martin. We
    have held hearings on the issue of safety in the workplace and
    air traffic control towers and other FAA facilities.
        It has been apparent in the past that when the
    Administration is making decisions that they are not consulting
    with all of the stakeholders, and I think that was noted by
    both the GAO and I think maybe even Mr. Scovel's predecessor
    and maybe even Mr. Scovel. I don't want to speak for you.
        There is a disconnect, and I just had that discussion with
    a few Members of this Subcommittee earlier today. You are not
    the person that can correct that problem, but certainly we need
    to take that up with the Acting Administrator. It is troubling,
    and it is not in the best interest of what we want as the final
    product in improving, in this case, the air traffic control
    system.
        Let me ask Mr. Scovel a final question. In your testimony,
    you indicate that ITT will have a monopoly over providing ADS-B
    services for the next 18 years. I wonder if you might talk a
    little bit about your concerns regarding competition and
    consumer issues as a result of one contractor that will be in
    charge and have, I think in your words, a monopoly over the
    ADS-B services for the next 18 years.
        Mr. Scovel. Yes, Mr. Chairman, ITT will have virtually a
    monopoly over the service, the information that is generated
    through the ADS-B system.
        FAA owns the data, but through the contract, FAA has
    consented to ITT being able to market, to package, to sell that
    data to users who might be interested. They might include air
    carriers. Our information is that UPS indicated they would
    certainly be interested, airports as well. Then they would find
    a multitude of uses, and we know that ITT is certainly looking
    on that prospect favorably.
        As a policy decision, the FAA and the Administration are
    certainly free to enter into a contract with these terms. We do
    have concerns about the nature of the data that is being
    transmitted, that is being permitted to be used in this
    fashion, perhaps marketing concerns as well with competition
    factors. We would urge FAA to examine and carefully regulate,
    if appropriate, this use of data generated by the contract as
    it goes forward.
        Mr. Costello. I thank you.
        The Chair now recognizes the Ranking Member, Mr. Petri.
        Mr. Petri. Thank you very much.
        I am not sure if more than one member of the panel may want
    to address this subject, but we are all pretty familiar with
    the radar-based system and all of the NORAD and all the
    different things that we have in place to try to provide
    security in our airspace. How will this new system work? Is
    there a separate system.
        Has this been scrutinized? Are there ways this will enhance
    our security or help us to deal with unauthorized entrance into
    our airspace more effectively and this kind of thing?
        Mr. Capezzuto. As part of the governance structure I
    mentioned earlier, DoD participates at the stakeholders'
    meeting that we discussed, and our involvement with them is
    looking at ways that we could exploit the technology.
        Specific applications that have been coming up are right
    here in the ADIZ, the Air Defense Identification Zone, where if
    you are ADS-B equipped, it is obvious who you are. You have
    your identification, and therefore you can exploit that as
    knowing they are friendly as opposed to worrying if they are
    foe, the same thing in their special use airspace or the
    military operations area. So there are ways of exploiting the
    capability of identification coming off the aircraft now and
    being able to take advantage of it.
        Mr. Petri. Staff tells me they are worrying about people
    pretending to be someone else or spoofing, I guess. I guess we
    don't want to go into what you do, but do you have ways of
    dealing with spoofers?
        Mr. Capezzuto. Correct. In the specification, it is called
    out that you have to have a means for independent validation of
    the actual aircraft that we are surveilling. So that means they
    have to have another method that is independent of using ADS-B.
        The concern with spoofing deals with the power level of the
    signal that comes down from the satellite, which is very low,
    and you can perturb it and you can make it to look like
    something else. So it is vulnerable from that angle.
        What we have requested in the specification is that we have
    independent validation of those targets. To point out, they can
    do that with their own means, the contractor can, but we also
    have our radars in place. When you combine all that
    information, you are able to validate that that target truly is
    who they are.
        Mr. Costello. The Chair recognizes the gentleman from North
    Carolina, Mr. Hayes.
        Mr. Hayes. I will pass.
        Mr. Costello. The gentleman from Michigan is recognized,
    and we will just give him his time and not yours, Mr. Hayes.
    How is that?
        Mr. Ehlers is recognized?
        Mr. Ehlers. Thank you, Mr. Costello. I apologize for the
    late arrival, but I was at another Committee meeting where I am
    the Ranking Member, and I had to be there. Fortunately, they
    gave up when votes came, so I dashed over here.
        Mr. Hayes, I understand has already played his usual role
    as a staunch defender of general aviation, but there is one
    specific question I wanted to ask to see if you have any
    guidance on.
        There are a great many older general aviation planes
    around, Cessnas 152, 172, 182, some older and some more recent.
    I think ADS-B is a great thing and, as a student pilot, I would
    love to have it because it is very hard today to operate the
    aircraft and be aware of all the airplanes around you.
        But I am concerned about the cost. If you have a airplane
    that is worth only twenty to forty thousand dollars, you think
    twice about adding to much to it. Plus, many of these planes
    are owned by individuals who don't have high incomes. If they
    had higher incomes, they would buy better airplanes. Can you
    give me a ballpark figure of what the cost is going to be for
    someone trying to put an ADS-B unit in an older airplane like
    that?
        I know that it will be easy to make the transition, but I
    still worry about the cost. Can you give me any figures on
    that?
        Mr. Capezzuto. I understand your concerns on that. In fact,
    Alaska probably provides us with the best image of what that
    was because there were over 400 aircraft that got retrofitted,
    and some of these were the type that it wasn't just about
    putting in a new piece of equipment. You had to make major
    modifications to the panel, wiring, antennas. So all that
    provided us with rich information to get a good feel for it.
        You hear us using numbers that are like 10K to 18K, and
    when we say the 18K, you are really pushing that. That is the
    ones that were more invasive to the actual aircraft.
        Also, I would suggest that as we start this off, the early
    adopters are going to end up probably paying a little bit more,
    but over time I think the market forces will lower those
    prices. We are speculating somewhere on the order of 30 percent
    reduction.
        Mr. Ehlers. Are you saying that about 10K would put the
    basic unit in the average plane?
        Mr. Capezzuto. For the general aviation type aircraft.
        Mr. Ehlers. Yes, right. Okay, so the 30 percent off that
    would get it down to roughly $7,000. Okay. Thank you very much.
    That is helpful.
        I will be happy to yield the remainder of my time to Mr.
    Hayes.
        Mr. Hayes. Thank you, Mr. Chairman and Mr. Ehlers.
        Vinny, you are working for the Government. We don't want
    any more $600 hammers now.
        Six thousand dollars you can get the box six months ago. It
    has gone down since then. We don't want to mislead people.
        Vinny, what I want you to talk about is the level of
    equipage. You can equip so that you can transmit. You don't
    have to have an extensive multifunction display to receive.
    There is a lot of angst among the aviation community because of
    what the FAA has done to them in the past. We better not do it
    to them again here.
        So talk about the levels of equipage, if you are going to
    be a transmitting ADS-B guy, transmit and receive and on up, if
    you would talk about that a little bit.
        Mr. Capezzuto. You have heard the terms earlier called ADS-
    B Out and ADS-B In. ADS-B Out is you can just have the pure
    function of transmitting your information. The new services
    that can be provided are basically expanding our service
    volume.
        So today radars have floors, and they don't see below the
    floors. In places like Alaska, we learned that you can't see
    below the radar. You are basically doing procedural separation.
        With ADS-B and the way we deploy the infrastructure, ADS-B
    Out can now feed the air traffic controllers where they can
    provide air traffic control separation services. So that is an
    example of just utilizing ADS-B Out.
        Other examples of applications for ADS-B Out would be
    search and rescue. There is definitely improvement in that
    case. In Embry-Riddle, they could use it just strictly for
    collecting the data on the ground and then replaying it for
    looking at how their student pilots are doing and use it for
    training purposes.
        Now you bring it to the next level, ADS-B In is, if I am
    transmitting out information, that is an enabler for other
    aircraft to receive it and display it. That is where you get
    that increased situational awareness. So not only can you see
    traffic, but now we have the opportunity to upload weather to
    the cockpit, and so you are talking about the ADS-B components
    essentially providing more information into the cockpit to
    increase the situational awareness, which translates into
    safety.
        Mr. Hayes. Thank you, Mr. Chairman. Can I carry on?
        Vinny, you are talking over our heads again. What I am
    looking for is a handheld unit for $1,295, out and in. It is
    certainly possible.
        This is a BlackBerry, sitting out there on the ground at
    National Airport, looking at the weather over at Montebello,
    knowing exactly what is going on despite what the guy in the
    front is telling us.
        This kind of technology, given competition, is absolutely
    in my opinion, if handled properly, again because people want
    it and because Mr. Kefaliotis and other manufacturers have a
    220,000 customers base that they want to sell to. That is what
    I am anticipating that we want to do. Again, the various ways
    that we can incentivize folks to equip, AOPA was talking during
    our break period about ways that we can use the system more
    effectively.
        My question for you and Mr. Kefaliotis is under the
    contract, it doesn't speak directly to the fact that if you
    want another unit in Grand Rapids, a ground station, and they
    don't have one, what would be the process and does the contract
    allow for that increased coverage using the same ADS and AWARS
    and all that routine?
        Hey, we need it. FAA, can you help us? How would you deal
    with that under the contract?
        Mr. Capezzuto. The contract was set up in a very flexible
    manner. Two things that occurred this year:
        In some of the reauthorization language, there was
    discussion about using airport improvement funds for airports
    to acquire the ground infrastructure. What that does is provide
    the expansion of our ground infrastructure beyond our baseline.
    It also would accommodate possibilities of acquiring the radios
    that you would use in vehicles such as your fire trucks and
    safety vehicles.
        Then the contract has in it what we call generic service
    volumes. So we would be able to use funds from other sources to
    essentially purchase this capability, and then we have multiple
    ways of taking airport improvement funds and funneling it
    through this contract vehicle so that you can open new service
    volumes.
        Mr. Hayes. So 220,000 customers just went almost into
    infinity. I mean basically in terms of users. Of course, for a
    ground vehicle, you wouldn't have the same requirements as a
    multifunction display.
        I was giving Mr. Petri a hard time about high definition
    TV. I don't have one of those. I don't know how to work it.
        I do know you don't need a multifunction display in your
    pickup truck that is on the airport, but if you want it, you
    could put it there. So folks that are sport pilots and things
    like that, they should be able to transmit for a very
    inexpensive figure. Everybody agree with that?
        Again, Mr. Brantley, we have not forgotten you. The
    Chairman was absolutely correct. We got to have everybody
    onboard if the general public, and that is who is involved
    here, is going to benefit to the maximum amount.
        I don't know whether the clock is going up or down. I yield
    back, Mr. Chairman.
        Mr. Costello. I thank the gentleman.
        Just a final question for Mr. Scovel and I guess too, Mr.
    Capezzuto, maybe you can comment as well.
        Mr. Scovel, in your written testimony, you have a chart in
    here, Table 1 ADS-B Key Milestones. Of course, you have project
    completion date of October, 2007 for the NPRM issued and second
    is February of 2008, critical design review for the ground
    system. Then August of 2008, the key site initial operating
    capacity of broadcast service at Fort Myers.
        From your standpoint, when is the next major project or the
    next major step in the completion of ADS-B that the FAA needs
    to be watching carefully and this Subcommittee needs to be
    watching carefully to see if, in fact, the contractor is
    performing as the contract calls for.
        Mr. Scovel. Mr. Chairman, I would pick the very first item
    that you mentioned off the list that appears in the chart in
    our written testimony. The notice of proposed rulemaking was
    issued a short while ago. The comments to that rule are due
    from industry in early January. Those comments should give us a
    pretty good indication of how industry views the long term
    prospects for this program.
        We know and FAA itself has identified for us, in its view,
    its primary risk being user acceptance and aircraft equipage.
    If those comments in response to the notice of proposed
    rulemaking come back and really hit that point hard and pound
    it home, then we will know that FAA has an uphill job in
    properly executing the contract.
        We are confident that industry recognizes the potential,
    but it is rather the timetable, the mandate and the
    articulation of the user benefits, long term, which really will
    result from ADS-B In. We should see some of those indications
    in their comments to the proposed rule.
        Mr. Costello. In the legislation that we passed out of the
    House, H.R. 2881, in that legislation, we asked the IG's Office
    to submit an annual report to the Congress concerning ADS-B. I
    am wondering when is the next scheduled report that you are to
    submit to the Congress on ADS-B?
        Mr. Scovel. I will need to check with my staff, sir, and
    get back with you on that. I don't have it readily available.
    We are certainly prepared and look forward to meeting the
    Committee's requests.
        Mr. Costello. I thank you.
        Mr. Hayes, if you have further questions, I would be happy
    to allow you more time.
        Mr. Hayes. Thank you, Mr. Chairman.
        I think it would be very instructive for those of us who
    remain for this video to be shown. It graphically demonstrates
    the space and the time savings involved in ADS-B, so if you
    wouldn't mind.
        The other thing is when I was in Alaska the last time, is
    it Dan Hill in Alaska, Vinny, that is supervisor at Anchorage,
    or Jim Hill?
        Jim Hill, he took me through and met with the controllers
    and supervisors and the FAA. It was fascinating because the
    test area initially is in Bethel, Alaska. If you will put up a
    map of Alaska in your mind, it is a huge area in the Yukon and
    Kuskokwim delta area, a tremendous amount of fishing, a lot of
    airplanes, fish spotting.
        One of the controllers' brother works there in an airplane.
    So the combination of the controller seeing it from the inside
    and the brother with the airplane and the difference in time
    with the airplane that is equipped in being able to land under
    low visibility conditions was dramatic. These are real world
    examples.
        Again, where we are in uncontrolled airspace like Mr.
    Salazar was talking about in Colorado, it gives you a shot in
    the arm, not a NASCAR shot, just a shot in the arm. I think
    this would be very helpful.
        Could you run that for us, Vinny, and tell us what you are
    showing us?
        [Referenced video played.]
        Mr. Capezzuto. Okay, what you are looking at is basically
    the airspace that is considered oceanic. As you look at that
    light shaded, blue area, that is about 100,000 square miles of
    what we call oceanic airspace.
        And so, as you see aircraft leaving either out of Mexico,
    what you are seeing is that is radar coverage up to the light
    blue area. Once they go into that light blue area, what we do
    is we sanitize the airspace around the aircraft because we
    really don't have any surveillance capability.
        That is about 120 miles behind an aircraft and then 50
    miles on either side of it. So that is a fairly large volume of
    airspace that is considered sanitized. From a safety
    perspective, that is great, but we could make better use of
    that airspace.
        As they approach on the United States coast, you will also
    notice that we pick them up in radar coverage. This gives you
    an example of the capacity constrained by our separation
    standards as a function of keeping safe separation between the
    aircraft.
        Then to point out, there is also a whole lot of low
    altitude activity going on, and it goes pretty far out as well
    because they are doing deep oil exploration. There are a lot of
    platforms on the base underneath this, and we would like to
    exploit those platforms and deploy our ADS-B infrastructure.
    Again, that is something we could not accomplish with radars.
        We have these nice, tight, small units that can be deployed
    on the oil platforms, providing services now that you can see
    that we can clearly put five mile separation. So you have
    increased capacity. You have reduced ground delays. You provide
    surveillance not only for the high altitude but you are also
    providing it for the low altitude.
        Now we can provide or extend our surveillance capabilities
    offshore, 200 miles out and provide the helicopter operators
    with surveillance. As I mentioned, this was kind of a win-win
    situation. We worked closely with the Helicopter Association
    International to get access to those platforms. In kind
    contributions from them are providing the transportation, the
    electricity, the telecommunications and the space, and that is
    probably some of the most highly priced real estate in the
    world plus getting access on those platforms.
        It worked out to be a pretty good deal where they gave us
    access. We were able to deploy our infrastructure or will be
    able to deploy our infrastructure. It will give us high
    altitude capability and low altitude capability.
        Mr. Hayes. You can do that in other places where you don't
    have radar as well.
        Mr. Capezzuto. That is correct.
        Mr. Hayes. Pacific, Atlantic, Colorado, Alaska.
        Mr. Capezzuto. Absolutely.
        Mr. Costello. Very good. Mr. Ehlers, any other comment or
    question?
        Mr. Ehlers. As soon as they get down to 500 bucks, I will
    be first in line to buy one, but I first have to buy the
    airplane too.
        [Laughter.]
        Mr. Costello. We thank all of you for being here to testify
    and to answer our questions. This is an issue that we will be
    following very closely as I know the Inspector General and the
    FAA will. We, of course, all have the same goal in mind, and
    that is to get the system up and running, implement it and get
    the maximum use of it as early as we possibly can.
        The FAA, quite frankly, not only this Administration but
    previous administrations, they do not have the best track
    record in following through on contracts and monitoring them.
    We hope that will not be the case with ITT and with ADS-B.
        It will be the responsibility of the FAA to monitor it, to
    make sure that ITT is performing. It will be our responsibility
    in this Subcommittee to provide aggressive oversight to make
    certain that the contract is being followed and implemented as
    it is spelled out and to make certain that the FAA is providing
    the right oversight as well.
        With that, we thank the witnesses, and the Subcommittee
    stands adjourned.
        [Whereupon, at 4:25 p.m., the Subcommittee was adjourned.]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]