[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
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

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

                                  (ii)

  


                        Subcommittee on Aviation

                 JERRY F. COSTELLO, Illinois, Chairman

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

                                 (iii)





















                                CONTENTS

                                                                   Page

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

                               TESTIMONY

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.]


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