[Senate Hearing 113-]
[From the U.S. Government Publishing Office]



 
TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2014

                              ----------                              


                        THURSDAY, APRIL 18, 2013

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:07 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Patty Murray (chairman) presiding.
    Present: Senators Murray, Feinstein, Collins, and Moran.

                      DEPARTMENT OF TRANSPORTATION

STATEMENTS OF:
HON. MICHAEL P. HUERTA, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION
HON. CALVIN L. SCOVEL III, INSPECTOR GENERAL, OFFICE OF INSPECTOR 
            GENERAL

               OPENING STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Good morning. The subcommittee will come to 
order.
    Today, we are going to hear testimony from the Federal 
Aviation Administration (FAA) Administrator Huerta and the 
Department of Transportation (DOT) Inspector General Scovel on 
the President's fiscal year 2014 budget request for the Federal 
Aviation Administration. I want to welcome both of our 
witnesses. Thank you both for being here this morning.
    This hearing marks the beginning of our process to build a 
budget for the FAA for fiscal year 2014. But as we take a close 
look at the agency's budget request for the coming year, we 
have to acknowledge where we stand today. For far too long, 
some Members of Congress have been unwilling to reach a fair 
and balanced compromise on deficit reduction, and as a result 
we are now facing drastic and arbitrary cuts to Federal 
spending that is required under sequestration.
    The process of sequestration has slashed the FAA's budget 
by more than $630 million, and it has hit just about every part 
of the agency, its operations and management of air traffic; 
its capital investments, including the Next Generation Air 
Transportation System (NextGen), the modernization of its air 
traffic control system; and its research activities. Some here 
in Washington, DC, claim the effect of such cuts will be 
minimal.
    But Secretary LaHood has spoken out about the real impact 
these cuts will have on the FAA and our aviation system. He 
talked about how sequestration means the FAA will furlough its 
air traffic controllers, close down contract towers, and delay 
NextGen.
    Secretary LaHood made it clear the FAA will not sacrifice 
the safety of our aviation system. Instead, the agency will 
reduce its services while ensuring air travel remains safe. 
However, reductions in air traffic control services will 
translate directly into an increase in travel delays.
    We still need to see the details on how FAA plans to 
implement the cuts required by sequestration. This is important 
information for the subcommittee to consider as it develops a 
funding bill for next year.
    Sequestration and a year-long continuing resolution enacted 
well into the fiscal year have made 2013 a challenging year for 
our agencies. But the fact remains that we have implemented 
large cuts to the funding for the Federal Government, and we 
still don't know exactly what Government services will look 
like after these cuts are implemented.
    For fiscal year 2014, we must take seriously our 
responsibility to pass a budget that not only determines the 
total level of Government spending, but that reflects our 
priorities and puts into place the services we want to see 
fulfilled next year. We also need to make sure any potential 
cuts to the air traffic control system are fair and that FAA's 
process is transparent with adequate consideration given to the 
benefits and costs of specific tower closures.
    Putting together this budget means we must take a hard look 
at the work the FAA has been doing. The FAA manages the most 
complex airspace in the world, and it is a world leader in 
protecting aviation safety.
    Mr. Huerta, I look forward to hearing about your budget 
request and what you want to accomplish in the coming year. But 
we also have to recognize some problems at the FAA. The 
agency's history is filled with capital programs that run over 
budget, pass deadlines, and do not deliver on all of the 
promised capabilities. These problems continue to burden the 
FAA.
    The agency recently awarded its System Engineering 2020 
contract, which has a maximum value of $7.3 billion. For a 
contract of this size, it is disturbing that a recent report 
issued from the Office of Inspector General (OIG) found that 
the FAA cannot track costs accurately.
    NextGen requires the FAA to coordinate the development of 
several complex capital programs. However, another recent 
report from the OIG points out that problems with the En Route 
Automation Modernization (ERAM) program have directly 
contributed to 2 years of delay in the FAA's effort to 
transition from voice to data communication, which is an 
essential part of NextGen.
    Problems continue to plague the FAA's operations as well. 
Just this past February, the OIG issued a report on the 
increase in operational errors by air traffic controllers. The 
FAA is unable to determine whether the increase in errors 
reflects better data collection or an increase in actual errors 
committed by controllers. In addition, the FAA does not have a 
base line that can be used to measure any improvement in 
operational errors.
    The OIG has also reported recently on the FAA's inability 
to develop an effective model for its aviation inspector 
staffing. After spending 7 years developing it, the FAA still 
does not have a model it can use to justify its budget request 
or to place its aviation inspectors efficiently across our 
globe.
    Mr. Scovel, your office has done excellent work on all 
these topics. I look forward to hearing your perspective on 
these issues as we discuss them this morning.
    We do need to hold the FAA accountable for how it spends 
taxpayer dollars. As we move forward in this tight budget 
environment, the FAA cannot afford to continue any kind of 
mismanagement.

                           PREPARED STATEMENT

    At the same time, we need to do our job here in Congress. 
We need the FAA doing its job on aviation, not trying to figure 
out how to move forward without a real budget in place. And 
that's why it's so important for this subcommittee and this 
Congress to return to regular order to pass a full 
appropriations act that reflects the priority of Congress and 
to pass it on time and through the regular process.
    With that, I will turn it over to my ranking member, 
Senator Collins.
    [The statement follows:]
               Prepared Statement of Senator Patty Murray
    The subcommittee will come to order.
    Today we will hear testimony from Federal Aviation Administration 
(FAA) Administrator Huerta and Department of Transportation (DOT) 
Inspector General Scovel on the President's fiscal year 2014 budget 
request for the Federal Aviation Administration. I want to welcome both 
of our witnesses, and thank you for being here this morning.
    This hearing marks the beginning of our process to build a budget 
for the FAA for fiscal year 2014, but as we take a close look at the 
agency's budget request for the coming year, we must acknowledge where 
we stand today.
    For too long, some members of Congress have been unwilling to reach 
a fair and balanced compromise on deficit reduction. And as a result, 
we are now the facing drastic and arbitrary cuts to Federal spending 
that is required under sequestration.
    The process of sequestration has slashed the FAA's budget by more 
than $630 million, and it has hit just about every part of the agency:
  --its operations and management of air traffic;
  --its capital investments, including the Next Generation Air 
        Transportation System (NextGen), the modernization of its air 
        traffic control system; and
  --its research activities.
    Some here in Washington, DC, claim that the effect of such cuts 
will be minimal, but Secretary LaHood has spoken out about the real 
impact these cuts will have on the FAA and our aviation system. He 
talked about how sequestration means that the FAA will furlough its air 
traffic controllers, close down contract towers, and delay NextGen.
    Secretary LaHood made it clear that the FAA will not sacrifice the 
safety of our aviation system. Instead, the agency will reduce its 
services while ensuring air travel remains safe. However, reductions in 
air traffic control services will translate directly into an increase 
in travel delays.
    We still need to see the details on how the FAA plans to implement 
the cuts required by sequestration. We need to know:
  --How the FAA will invest its funding for facilities and equipment;
  --How many furlough days will be imposed on FAA employees; and
  --After delays in the FAA's schedule for closing down contract 
        towers, the status of each and every tower in the coming 
        months.
    This is important information for the subcommittee to consider as 
it develops a funding bill for next year.
    Sequestration and a year-long continuing resolution enacted well 
into the fiscal year have made 2013 a challenging year for agencies. 
But the fact remains that we have implemented large cuts to the funding 
for the Federal Government, and we still don't know exactly what 
Government services will look like after those cuts are implemented.
    For fiscal year 2014, we must take seriously our responsibility to 
pass a budget that not only determines the total level of Government 
spending, but that reflects our priorities, and puts into place the 
services that we want to see fulfilled next year.
    We also need to make sure that any potential cuts to the air 
traffic control system are fair and that FAA's process is transparent, 
with adequate consideration given to the benefits and costs of specific 
tower closures.
    Putting together this budget means that we must take a hard look 
the work that the FAA has been doing.
    The FAA manages the most complex airspace in the world, and it is a 
world leader in protecting aviation safety. Mr. Huerta, I look forward 
to hearing about your budget request and what you want to accomplish in 
the coming year.
    But we must also recognize problems at the FAA. The agency's 
history is filled with capital programs that run over budget, past 
deadlines, and do not deliver on all of the promised capabilities. 
These problems continue to burden the FAA.
    The agency recently awarded its Systems Engineering 2020 contract, 
which has a maximum value of $7.3 billion. For a contract of this size, 
it is disturbing that a recent report issued from the Office of the 
Inspector General (OIG) found that the FAA cannot track costs 
accurately.
    NextGen requires the FAA to coordinate the development of several 
complex capital programs. However, another recent report from the OIG 
points out that problems with the En Route Automation Modernization 
(ERAM) program have directly contributed to 2 years of delay in the 
FAA's effort to transition from voice to data communication, an 
essential part of NextGen.
    Problems continue to plague the FAA's operations as well. Just this 
past February, the OIG issued a report on the increase in operational 
errors by air traffic controllers. The FAA is unable to determine 
whether the increase in errors reflects better data collection, or an 
increase in actual errors committed by controllers. In addition, the 
FAA does not have a baseline that can be used to measure any 
improvement in operational errors.
    The OIG has also reported recently on the FAA's inability to 
develop an effective model for its aviation inspector staffing. After 
spending 7 years developing it, the FAA still does not have a model 
that it can use to justify its budget request or to place its aviation 
inspectors efficiently across the globe.
    Mr. Scovel, your office has done excellent work on all of these 
topics, and I look forward to hearing your perspective on the issues we 
discuss this morning.
    We need to hold the FAA accountable for how it spends taxpayer 
dollars. As we move forward in this tight budget environment, the FAA 
cannot afford to continue this kind of mismanagement.
    At the same time, we need to do our job here in Congress. We need 
the FAA doing its job on aviation, not trying to figure out how to move 
forward without a real budget in place.
    And that is why it is so important for this committee and this 
Congress to return to regular order: To pass a full appropriations act 
that reflects the priorities of the Congress, and to pass it on time 
and through the regular process.

                 STATEMENT OF SENATOR SUSAN M. COLLINS

    Senator Collins. Thank you very much, Madam Chairman.
    Welcome, Administrator and also Inspector General Scovel.
    Mr. Huerta, I understand that this is your first time 
testifying before our subcommittee, so I want to particularly 
welcome you.
    There is another group here today that I would like to 
welcome. You may have noticed, Madam Chairman, as our 
subcommittee convened that there was a group of students in 
bright green tee shirts----
    Senator Murray. Hard to miss.
    Senator Collins [continuing]. Who came into the room. They 
are from the Presque Isle, Maine, Middle School, and they have 
just arrived on a school visit. We were going to meet up 
earlier, but getting into the building is slow, as you know. So 
I invited them to observe a bit of the hearing, and I will 
sneak out into the hall to take a quick picture with them. But 
I am delighted to welcome the Presque Isle Middle School 
students and teachers and chaperones here today to Washington, 
DC.
    It's not the entire school, but I believe we have 58 
students coming. So I knew that that would help increase the 
attendance for our hearing today.
    Senator Murray. Welcome to all of you.
    Senator Collins. Just over 1 year ago, we passed the FAA 
reauthorization bill. I look forward to hearing the testimony 
regarding the status of ongoing initiatives within the agency. 
The challenges that the FAA faces throughout the remainder of 
this fiscal year and into the next fiscal year are truly 
daunting, not only because we are operating under a continuing 
resolution, which was certainly not the choice of the chairman 
or myself, but also coping with the impact of sequestration.
    It's important to remember that the $637 million reduction 
from sequestration must be implemented in a way that ensures 
safety while minimizing the impact to the traveling public. Not 
only do I travel home to Maine every weekend--so this affects 
all Members of Congress personally--but I represent a State 
where tourism is very important, and being able to have an 
efficient air traffic control system is very important to the 
success of the tourism industry, which is a pillar of the 
economy of the State of Maine.
    FAA recently announced its plans to achieve these savings, 
and I very much appreciated the call from the Administrator. 
But I am concerned that the result will be furloughs, the 
closure of contract towers, and the elimination of midnight 
services, among other controversial cuts.
    In my home State of Maine, Bangor International Airport is 
one of the airports that is affected by the elimination of 
midnight tower closures. If the FAA moves forward with this 
plan, it will be very detrimental to airport operations. And 
let me explain why.
    The Bangor Airport is a major port of entry and a diversion 
point for a wide mix of air traffic, including the return of 
our Nation's troops from overseas. Indeed, in the last decade, 
more than 1 million troops have landed at Bangor, Maine, and 
they've been met every single time by local troop greeters, 
even if they arrive in the middle of the night or the middle of 
a snow storm.
    In addition, Bangor is a diversion point for planes with 
troubled passengers. Whenever there is an issue, whether it's a 
medical issue or an unruly passenger, or it is determined that 
an individual is on the no-fly list and should not be admitted 
into the country, the plane inevitably is diverted to Bangor.
    The curtailment of air traffic control services will 
increase operational risk. Presence of a 24/7 FAA tower with 
full terminal radar services was a key determining factor in 
choosing Bangor as a Noble Eagle alert site post 9/11. The 
missions flown in and out of Bangor during these hours by the 
military are not always scheduled to air traffic, and the 
Bangor Air National Guard base, which shares the commercial 
airport space, has the infrastructure and maintenance support 
to handle these short notice transients.
    These diversions, as well as the civil diversions for 
homeland defense, are often circumstances where a pilot needs 
the support of a tower or radar control to help ensure safety. 
So I very much hope that these military and homeland defense 
factors are taken into consideration when the FAA finalizes its 
plans.
    As the chairman mentioned, I know that the FAA is 
undertaking a long-term effort to improve the efficiency, 
safety, and capacity of the aviation system through NextGen. 
This is a critical system, but it has been plagued with some 
delays and cost overruns. It's a multibillion dollar effort 
that is absolutely essential to modernizing our airspace, and 
it will have the benefits of reducing delays and fuel 
consumptions to the nearly 2 million passengers traveling on 
over 50,000 flights controlled each day here in the United 
States alone.
    This obviously has been a complex procurement, and we need 
to ensure that NextGen delivers the promised benefits while 
representing a sound investment of taxpayer dollars. I 
recognize that over the past several years, the aviation 
industry has faced some tough economic decisions. Aviation 
plays a critical role in economic growth, jobs, and investment, 
and the chairman and I share the goals of keeping our national 
aviation system the largest, safest, and most efficient in the 
world.
    There are several other issues that I am going to discuss 
when we get to the questions. For example, I'm concerned about 
the number of runway incursions that have dramatically 
increased in recent years. And that has happened at a time when 
air traffic operations have been declining.
    I am also concerned about the cutbacks in the Airports 
Improvement Program (AIP). I know the airports in my State rely 
heavily upon this program and are concerned with any reduction 
in AIP whether the reductions are made to small, medium, or 
large airports.
    I'll also be asking about the latest developments with 
Boeing's 787 aircraft. I have a feeling that may be of interest 
to the chairman as well.
    It is critical that we work together, and I look forward to 
doing just that. If the chairman will excuse me for just a few 
moments, I am going to go take a quick picture, and I will be 
right back.
    Senator Murray. I noticed your class went out in the hall, 
so they're waiting for you.

                           PREPARED STATEMENT

    Senator Collins. Thank you.
    [The statement follows:]
             Prepared Statement of Senator Susan M. Collins
    Thank you Chairman Murray. Welcome Administrator Huerta and 
Inspector General Scovel. Mr. Huerta, I understand this is your first 
time appearing before this subcommittee.
    Just over 1 year since the final passage of the Federal Aviation 
Administration (FAA) authorization bill, I look forward to hearing the 
testimony regarding the status of the ongoing initiatives within the 
agency.
    The challenges the FAA faces the remainder of this fiscal year and 
into fiscal year 2014 are daunting not only because of operating under 
a continuing resolution but compounded with sequestration. It is 
important that the $637 million reduction from the sequester be 
implemented in a way that ensures safety while minimizing the impacts 
to the traveling public. FAA recently announced its plans to achieve 
this savings, which resulted in furloughs, the closure of contract 
towers, the elimination of midnight services, among other controversial 
cuts.
    In my home State, Bangor International Airport is one of the 
airports affected by the elimination of midnight tower closures. If the 
FAA moves forward with this plan, it will be detrimental to airport 
operations. Bangor Airport is a major port-of-entry and diversion point 
for a wide mix of air traffic, including the return of our Nation's 
troops from overseas and the diversion point for planes with troubled 
passengers.
    The curtailment of air traffic control services will increase 
operational risk. Presence of a 24/7 FAA tower with full terminal radar 
services was a key determining factor in choosing Bangor as a Noble 
Eagle alert site post 9/11. The missions flown in and out of Bangor 
during these hours by the military are not always scheduled air 
traffic, and Bangor Air National Guard Base has the infrastructure and 
maintenance support to handle these short notice transients. These 
diversions, as well as civil diversions for homeland defense, are often 
circumstances where a pilot needs the support of tower/radar control to 
help ensure safety. These military factors must be taken into 
consideration when the FAA finalizes its plans.
    The FAA is undertaking a long-term effort to improve the 
efficiency, safety, and capacity of the aviation system through the 
Next Generation Air Transportation System (NextGen). FAA's recent 
estimate for NextGen's total cost through 2025 is expected to be 
between $15-22 billion, with the private sector contributing an 
additional $5-7 billion. This multi-billion dollar effort to modernize 
the national air space will provide many benefits, such as reducing 
delays and fuel consumption to the nearly 2 million passengers 
traveling on over 50,000 flights controlled each day here in the United 
States alone.
    FAA has been working hard to address the many challenges identified 
with these highly complex initiatives, but much work remains to ensure 
programs are implemented on time and within budget. With this 
undertaking, processes must be improved and updated while eliminating 
duplication and waste in order to make the agency more efficient and 
effective. It is our obligation to ensure NextGen delivers the promised 
benefits and represents the sound investments of taxpayer dollars.
    Over the past several years, the aviation industry, as with many 
other industries, has faced tough economic hardships. Aviation plays a 
critical role in driving economic growth, jobs, and investment across 
the country. Chairman Murray and I share the goals of keeping our 
national aviation system the largest, safest, and most efficient in the 
world.
    While the FAA is continuing efforts to improve safety on the 
Nation's airport runways, the number of runway incursions has 
dramatically increased in recent years. This is particularly alarming 
given that air traffic operations have declined at the same time.
    The fiscal year 2014 budget proposes $15.5 billion for the FAA, 
which is a $312 million increase over the current sequestered levels. 
This provides $9.7 billion for the Operations account, $2.8 billion for 
Facilities and Equipment, $166 million for Research, Engineering and 
Development, and $2.9 billion for the Airports Improvement Program 
(AIP). It is worth noting that the reduction to AIP is coupled with 
removing large airports from the program which will be offset with an 
increase to passenger facility charge fees. I am concerned with this 
proposal as this funding is essential to airports throughout the 
Nation. The airports in Maine rely heavily upon this program and are 
concerned with any reduction to AIP, whether the reductions are made to 
small, medium, or large airports.
    I am also interested in the latest developments with Boeing's 787 
aircraft. FAA has now approved Boeing's proposed certification plan 
that will, I hope, address factors that likely contributed to the 
battery incidents. I understand testing and design modifications have 
been completed and FAA is analyzing the results. I am eager to know 
when FAA anticipates its final approval allowing the 787s to continue 
its operations.
    The future of aviation is in our hands. It is critical that FAA 
remain vigilant in its oversight responsibilities, and I look forward 
to working with you both on these efforts.

    Senator Murray. Thank you very much. And I will turn to Mr. 
Huerta to begin his testimony.
    Again, welcome to our subcommittee.

              SUMMARY STATEMENT OF HON. MICHAEL P. HUERTA

    Mr. Huerta. Thank you very much, Chairman Murray, Ranking 
Member Collins, and members of the subcommittee. Thank you for 
the opportunity to be here today to discuss the FAA's 2014 
budget request. As you are aware, this is my first appearance 
before you as Administrator of the FAA.
    I appreciate the support of the Senate in moving my 
confirmation forward. We have a great number of challenges and 
a great number of opportunities ahead, and I sincerely hope to 
enjoy a long and effective relationship with this subcommittee.
    The FAA's fiscal year 2014 budget request is $15.6 billion. 
The budget upholds our critical safety programs while also 
deploying key NextGen benefits to our stakeholders and 
modernizing our aviation infrastructure. It does this at 
funding levels that are $351 million below fiscal year 2012. 
This is a 2.2-percent decrease, which is part of the 
President's overall effort to reduce our Nation's deficit.
    The FAA's proposed budget for 2014 assumes a long-term 
solution to our Nation's budget deficit and no sequester. The 
2014 proposed budget would allow us to maintain staffing for 
air traffic control and for aviation safety. It would allow us 
to maintain capital investment in both airport infrastructure 
and FAA facilities and equipment and fund research and 
development.
    The budget requests $1 billion for NextGen, which is an 
increase of about 7 percent above 2012, in order to continue to 
support near-term progress. This request would help us continue 
to mitigate congestion in busy airspace above metropolitan 
areas, and it would help us with the continued deployment of 
radio transceivers that allow us to use very precise satellite-
based information to control air traffic.
    The FAA is requesting $9.7 billion in our operations 
account. This represents an increase of just 0.6 percent above 
the fiscal year 2012 enacted level. This request will enable us 
to run the agency on a day-to-day basis and maintain and 
support our air traffic control and air navigation systems.
    It ensures the safe operation of the airlines and the 
certification of new aviation products. It would also enhance 
the safety of the commercial space transportation industry and 
provide overall policy oversight and management of our 
airspace.
    The operations budget includes an additional $30 million to 
maintain and operate the new En Route Automation Modernization 
System, or ERAM, that became operational in the last 2 years. 
ERAM is at the heart of NextGen. It helps us to advance our 
transition from a ground-based system of air traffic control to 
a satellite-based system of air traffic management.
    The 2014 budget allows the FAA to meet the challenge of 
both maintaining the capacity and the safety of the current 
system, while keeping our comprehensive modernization and 
transformation efforts moving forward. The majority of the $2.8 
billion requested for facilities and equipment is to sustain 
legacy areas. This includes aging infrastructure, power 
systems, information technology, navigational aids, and weather 
systems.
    This year's request for research, engineering, and 
development (RE&D) is $166 million, a decrease of 7 percent 
from 2012. Nonetheless, we intend to continue critical research 
in NextGen and other areas such as fire research and safety, 
propulsion and fuel systems, advanced materials research, 
alternative fuels, aging aircraft, and Unmanned Aircraft 
Systems.
    Our budget emphasizes cost efficiency and reflects the hard 
choices we must make to provide the most benefit to the flying 
public. As a result, we're proposing to modify the mix of 
funding available for airport development projects.
    The budget would allow commercial service airports to 
increase the passenger facility charge from the current maximum 
of $4.50 to $8.00. This gives airports greater flexibility to 
generate more of their own revenue, and it allows us to reduce 
our request for the ongoing Airport Grants Program by $450 
million. This change focuses Federal resources on smaller 
airports that don't have the passenger volume to generate their 
own revenue yet are still important to our Nation's air 
transportation network.
    The President's 2014 budget request represents a balanced 
approach to achieving a long-term solution to our Nation's 
budgetary challenges. And this is critical when we consider the 
impact of the sequester on our aviation system in the current 
fiscal year.
    As you noted, the cuts required by the sequester have 
forced us to slash contract expenses and furlough 47,000 of our 
employees. With employees working fewer hours, we will have a 
less efficient air traffic system and less time for safety 
inspectors to certify new aircraft for the market. It's my hope 
that we can work together to rally around our Nation's air 
transportation system and protect the great contribution that 
civil aviation makes to our national economy.

                           PREPARED STATEMENT

    Madam Chairman, this concludes my prepared remarks, and I 
would be pleased to answer any questions you might have.
    Senator Murray. Thank you very much.
    [The statement follows:]
              Prepared Statement of Hon. Michael P. Huerta
    Chairman Murray, Ranking Member Collins, members of the 
subcommittee: Thank you for the opportunity to speak to you today. This 
is the first time I am testifying before you as the confirmed 
Administrator of the Federal Aviation Administration (FAA). I sincerely 
hope to enjoy a long and effective relationship with you and this 
subcommittee.
    The FAA's fiscal year 2014 budget request of $15.6 billion strikes 
a balance between maintaining current infrastructure while deploying 
key Next Generation Air Transportation System (NextGen) benefits to our 
stakeholders, upholding our critical safety programs, and modernizing 
our aviation infrastructure at funding levels that are $351 million 
lower than fiscal year 2012. This is a 2.2-percent decrease, which is 
part of the President's effort to reduce the deficit.
    The FAA's Operations request of $9.7 billion represents an increase 
of just 0.6 percent above the fiscal year 2012 enacted budget. This 
funding level includes $30 million to provide maintenance for newly 
transitioned En Route Automation Modernization (ERAM) systems, as well 
as modest inflationary adjustments for FAA's workforce, rent and lease 
increases, and costs for a Service Center building project.
    This budget includes program adjustments of $62 million from the 
fiscal year 2012 level in the Air Traffic Organization (ATO). To 
achieve these savings, ATO will be evaluating cost-savings and 
efficiency gains in the following areas: Contract Weather Observations, 
Facility Realignments and Consolidations, and Very High Frequency 
Omnidirectional Range (VOR) Minimum Operational Network (MON).
    The budget allows FAA to meet the challenge of both maintaining the 
capacity and safety of the current National Airspace System (NAS) while 
keeping our comprehensive modernization and transformation efforts 
moving forward. The Facilities and Equipment (F&E) request of $2.8 
billion represents a 1.7-percent increase from the fiscal year 2012 
enacted level.
    The F&E NextGen portfolio is $928 million in fiscal year 2014, a 
7.5-percent increase above the fiscal year 2012 enacted level. This 
funding provides FAA with the resources needed to continue our ongoing 
NextGen modernization activities, including nationwide Automatic 
Dependent Surveillance-Broadcast (ADS-B) deployment. It also provides 
for follow-on ERAM development for future NextGen capabilities and 
publication and accelerated development of Precision Based Navigation 
(PBN) procedures that will provide greater flexibility in the NAS and 
to facilitate more dynamic management of air traffic. The remainder of 
our investment--representing over $1.8 billion--will be in legacy 
areas, including aging infrastructure, power systems, information 
technology, navigational aids, and weather systems.
    The fiscal year 2014 Research, Engineering, and Development (RE&D) 
request of $166 million is a $1.5 million (1 percent) decrease from the 
fiscal year 2012 enacted level. This supports FAA's continued work in 
both NextGen and other research areas such as fire safety, propulsion 
systems, advanced materials, aircraft icing, and continued 
airworthiness. The RE&D NextGen portfolio is $61.4 million, an increase 
of $1.6 million above the fiscal year 2012 enacted level, and supports 
NextGen-specific research into wake turbulence, human factors, and 
clean aircraft technologies. This includes $12 million for the Joint 
Planning and Development Office (JPDO) to continue their leadership in 
coordinating interagency initiatives.
    The FAA must meet our Nation's growing need for UAS. Our RE&D 
request provides $7.5 million to support this critical area through 
research on UAS technologies which directly impact the safety of the 
NAS. The program is focused on sense and avoid and command and control 
requirements that will support the safe integration of UAS in the NAS 
within the 14 Code of Federal Regulations regulatory framework.
    The NextGen Alternative Fuels for General Aviation program is 
requested at $5.6 million in order to support the recommendations of 
the Unleaded Avgas Transition Aviation Rulemaking Committee. Funding 
for the Environment and Energy program is requested at $33.5 million. 
This program supports a range of activities, including research to 
mature certifiable clean and quiet aircraft technologies, and develop 
sustainable fuels. The program also supports enhanced NextGen 
environmental research via the Continuous Low Energy, Emission and 
Noise (CLEEN) program and other vehicles.
    Airports remain a critical part of the aviation system 
infrastructure. Our fiscal year 2014 request provides the funding 
needed to ensure safety, capacity, and efficiency at our Nation's 
airports through a combination of grant funding and an increase in 
Passenger Facility Charges (PFCs). Our $2.9 billion request supports 
our continued focus on safety-related development projects, including 
runway safety area improvements, runway incursion reduction, aviation 
safety management, and improving infrastructure conditions.
    The fiscal year 2014 budget proposes to lower funding for Airport 
Grants to $2.9 billion by eliminating entitlement funding for large hub 
airports while maintaining discretionary eligibility. To assist the 
airports that need the most help, the budget focuses traditional 
Federal grants to support smaller commercial and general aviation 
airports that do not have access to additional revenue or other sources 
of capital. At the same time, our proposal allows airports to increase 
non-Federal Passenger Facility Charges (PFC) from the current maximum 
of $4.50 to $8 which provides them with greater flexibility to generate 
their own revenue. If all commercial service airports increase the PFC 
collection to $8 they could generate $2.39 billion in additional 
funding for airport projects.
    The fiscal year 2014 budget proposes that we work with the 
insurance companies and air carriers to build private capacity to 
insure against war risk occurrences. Our co-insurance proposal would 
build this private capacity through a transition period where risk is 
shared between the FAA and private insurers. In the first year of 
transition, the FAA would bear the majority of the risk, easing private 
insurers back into the market.
    Private parties would play a large role in setting terms, 
conditions, and pricing of coverage under the proposed arrangement. Air 
carriers and insurers would have flexibility to develop terms and 
conditions that meet the carriers' needs while enabling the insurers to 
offer coverage at affordable prices. The FAA is ready to work with 
insurers and carriers to find parameters that make for viable coverage 
under this proposal.
    Under the co-insurance proposal, FAA and commercial insurance 
providers would jointly underwrite a common policy. In the case of a 
claim, FAA would pay an established fraction of the losses (for example 
80 percent), and a commercial insurance company would pay the 
remainder. Air carriers would be free to negotiate the charge for the 
commercial fraction of the coverage with the insurance company. For 
FAA's share of the risk, FAA would charge the lesser of the current cap 
and a rate proportional to what the commercial insurance company is 
charging under the same policy.
    This budget supports continued progress on our NextGen efforts. The 
entire fiscal year 2014 NextGen portfolio totals $1.002 billion 
distributed among F&E programs ($928.1 million), Research, Engineering 
and Development programs ($61.4 million) and Operations activities 
($12.6 million). This investment portfolio reflects an increase of 
$67.2 million, or approximately 7 percent, above the fiscal year 2012 
enacted level. This level of program funding enables the FAA to 
continue to support near-term NextGen commitments in a budget-
constrained environment.
    While the thrust of our work focuses on U.S. airports, airspace and 
aircraft, the FAA actively engages with global aviation partners to 
ensure operators receive benefits anywhere in the world.
    One immediate benefit to the public is the NextGen Metroplex 
initiative. The FAA is working to improve the efficiency of airspace 
above congested metropolitan areas by designing precise GPS routes that 
will accelerate benefits while reducing bottlenecks and congestion. 
These routes will enhance safety and efficiency, and foster the flow of 
commerce. Satellite-based navigation is expected to cut a total of 7 
million nautical miles from flight plans around these cities each year. 
These routes, together with gradual descents that cut back on engine 
power, are projected to save at least 22 million gallons of fuel. For 
these cities, this represents total reduction in carbon emissions of 
220,000 metric tons. That is the equivalent of removing more than 
43,000 cars from the streets.
    Fiscal year 2014 will see the continuation of NAS-Wide deployment 
of the Automatic Dependent Surveillance-Broadcast (ADS-B), the 
cornerstone of our transformation to satellite enabled, GPS-based 
navigation. We expect the total complement of about 700 radio stations 
to be in place and operating by early 2014. Fiscal year 2014 funding is 
also included for the development of ADS-B software requirements for 
the Advanced Technologies and Oceanic Procedures (ATOP) automation 
platform.
    In December 2011, the FAA announced contract awards to analyze fuel 
quality control procedures, conduct jet engine durability tests with 
alternative fuels and perform key testing to support qualification and 
certification of jet biofuels from alcohols, organic matter, and other 
renewable materials. We expect these activities to support the next 
round of jet fuel approvals, scheduled to begin in 2014.
    NextGen's contribution to our Nation's economic recovery and future 
leadership is critical. We recognize the fiscal challenges our Nation 
faces. America's future demands that we continue to invest in modern 
technologies that pave the way for tomorrow's capabilities. We continue 
to work in full partnership with industry, other agencies and 
departments, and with our labor groups to achieve a shared vision, 
leveraging powerful technologies and setting new standards for the 
future of global aviation.
    Safety has always been FAA's number one mission, and our National 
Airspace System (NAS) has never been safer. There has not been a fatal 
commercial passenger accident in the United States since 2009. That 
represents approximately 39.7 million flights that were operated 
safely. I am proud of the hard work that has gone into providing a 
basis for achieving this level of safety. As we move forward into 2013 
and beyond, U.S. aviation is experiencing its safest period ever, and 
the dedicated men and women of the FAA will continue working diligently 
to maintain safe operations within the NAS.
    We are achieving this next level of safety by making our programs 
smarter and more data-driven. Our Nation's safety record is a direct 
result of an unwavering commitment by Government and industry to work 
together to monitor data and identify trends to prevent accidents. 
Instead of a reactive, forensic approach to safety management, we are 
identifying and mitigating conditions or trends that have potential to 
give rise to safety problems. The only way to prevent accidents before 
they happen is to accurately identify risk areas and work to mitigate 
them. This is possible due, in part, to voluntary reporting for both 
FAA and industry employees, safety management systems (for both FAA and 
industry) and the creation of the Aviation Safety Whistleblower 
Investigation Office. All of these efforts have been providing the 
agency with data and information to which we have never before had 
access. More information results in FAA being able to see trends that 
could lead to accidents, and mitigate the associated risks to prevent 
accidents from happening. Adjusting the safety culture to ensure 
employees that they can provide information without fear of reprisal is 
a cornerstone of our approach to safety.
    In 2012 we continued to expand the Aviation Safety Information 
Analysis and Sharing (ASIAS) system, which now covers 95 percent of all 
commercial flights in the United States. This system allows airlines to 
share operational data and voluntary safety reports with each other and 
the FAA. ASIAS and other data analysis tools are constantly making our 
aviation system even smarter. With these tools, we are able to conduct 
more comprehensive safety and performance analysis, and share this 
information with industry stakeholders.
    With regard to the Boeing 787, last month Boeing redesigned the 
battery system and the FAA approved the company's plan for showing that 
the redesign will work. Approving the certification plan was the first 
step in the process to evaluate the 787's return to flight. Boeing has 
redesigned the internal battery components and added better insulation 
for the battery cells. They have also added a robust battery 
containment and venting system. The company has done extensive testing, 
including limited test flights, without passengers, using the 
redesigned battery prototype. The FAA is reviewing these test reports 
and analysis to make sure that the new battery system ensures the 
safety of the aircraft and its passengers.
    We all know the importance of aviation to America and the global 
economy. Aviation creates jobs and trade, and it connects us to 
destinations near and far. The forecast we released March 6 shows that 
aviation will continue to expand both domestically and internationally 
over the coming decades. And traffic volume for U.S. carriers is 
expected to rise by more than 75 percent in the next two decades.
    Last year, 737 million people flew on U.S. carriers, and we 
anticipate that number to hold steady this year. Our future outlook 
shows continued positive growth. In fact, we can expect roughly 400 
million more people flying 20 years from now, an increase equal to more 
than today's U.S. population.
    It is essential to the effective management of FAA's programs to 
have stability and predictability that can be relied upon. The many 
authorization extensions over the last few years took a toll on FAA's 
work in certain areas until the Federal Aviation Reauthorization 
Modernization and Reform Act of 2012 offered the stability essential to 
our agency's ability to meet the current demands of both air traffic 
and aviation safety. For many years, FAA labored under the uncertainty 
of temporary reauthorizations. Now sequestration places us in an even 
more extreme uncertainty. FAA has worked hard to plan for sequestration 
cuts. Seventy percent of FAA's Operations budget is dedicated to 
employee salaries and benefits, so they must bear a significant portion 
of the cuts. I can assure you that safety is the FAA's top priority. If 
sequestration means fewer flights can be safely accommodated in the 
NAS, then there will be fewer flights.
    On March 5, FAA began issuing furlough notices to over 47,000 
employees. There will be 1 furlough day per biweekly pay period, for a 
maximum of 11 days through September 30. We issued final furlough 
determination notices to employees in early April. We are also planning 
to eliminate midnight shifts in over 70 towers across the country, 
close over 149 air traffic control towers at airports with fewer than 
150,000 flight operations or 10,000 commercial operations per year, and 
reduce preventative maintenance and equipment provisioning and support 
for all NAS equipment. All of these changes are being made in 
collaboration with our stakeholders and our unions.
    As a result of employee furloughs and prolonged equipment outages 
resulting from lower parts inventories and fewer technicians, travelers 
should expect delays. Flights to major cities like New York, Chicago, 
and San Francisco could experience delays of up to 90 minutes during 
peak hours because we will have fewer controllers on staff. We are 
aware that these service reductions will adversely affect commercial, 
corporate, and general aviation operators. We also expect that, as 
airlines estimate the potential impacts of these furloughs, they will 
change their schedules and cancel flights.
    Beyond the impacts to air traffic, aviation safety employees will 
also experience furloughs. This will impact airlines, aviation 
manufacturers, and individual pilots who need FAA safety approvals and 
certifications. While the agency will continue to address identified 
safety risks, a slowed certification and approval process due to 
furloughs could negatively affect passengers and all segments of the 
aviation industry.
    We all want the same things. We want to get better at what we do, 
think smarter, improve safety, streamline certification, and remain the 
agency that can work collaboratively with the world to develop safer 
and more efficient practices. Sequestration will not stop us from 
trying to attain these goals, but it will make it much, much harder.
    Despite these uncertain times, the demand for aviation and its 
services will continue to grow, and that is why it is critical that we 
invest smartly. Our world will continue to be even more interconnected, 
and aviation will continue to be a pillar of the global economy. 
NextGen will help us meet the challenges that lie ahead, as we 
transform from ground-based radar to satellite-based navigation, a work 
we are performing in collaboration with our industry partners. We are 
seeing its benefits already, and will continue to do so in the coming 
years as it becomes an even more integral component of our aviation 
system.
    In 2012 we made several noteworthy strides delivering NextGen 
benefits to operators and the traveling public. Laying the groundwork 
is our En Route Automation Modernization (ERAM) program, the platform 
upon which NextGen capabilities will be realized. This enabler of 
NextGen has been deployed at over half of our facilities controlling 
high-altitude air traffic, and eight En Route centers are now using 
ERAM as their primary means of controlling aircraft. Five NextGen 
transformational programs are now under contract, most recently Data 
Communications and NAS Voice System. We also deployed the Automatic 
Terminal Proximity Alert tool in several locations, which has helped 
air traffic controllers better manage aircraft spacing to safely 
achieve optimal efficiency on final approach. And our System Wide 
Information Management tools are providing National Airspace System 
users with more precise weather information and airport surface data.
    This past year, our deployment of satellite-based Performance Based 
Navigation (PBN) procedures increased both safety and capacity across 
the country as part of our Metroplex initiative. From northern 
California to southern Florida, we are implementing PBN to more 
efficiently use our Nation's airspace for direct routing. In addition, 
through data analysis, procedure improvements, and effective training 
for controllers as well as pilots, we safely modified the separation 
standards for approaches to parallel runways at a number of busy 
airports. Taken together, these initiatives are helping airlines 
improve on-time performance, reduce fuel consumption, and deliver 
travelers to their destinations more efficiently.
    We continue to engage through our work with Optimization of 
Airspace and Procedures (OAPM) initiatives, which are being done in 
close collaboration with industry and stakeholders. OAPM is actively 
working in 9 of the 13 metroplexes identified in Phase 1 of the 
program. Of these, one (Houston) is currently in the implementation 
phase with two additional sites planned to start implementation of the 
new procedures later this summer (DC and North Texas). The metroplex 
initiative optimizes procedures in a geographic area where there are a 
number of airports, rather than focusing on each airport separately. 
Through this initiative, we are untangling our busiest airspace and 
creating more direct routes, cutting fuel usage, and becoming more 
environmentally friendly. In the congested airspace in the skies above 
our busiest metropolitan areas, these new modifications are being put 
in place in 3 years, much more quickly than the 5 to 10 years it had 
taken previously. We are also actively engaged with our industry and 
Government partners in the development of NextGen through, for example, 
the NextGen Advisory Committee (NAC). This group is helping to guide 
many aspects of our air traffic modernization work. The NAC also works 
on developing and recommending NextGen performance metrics.
    Another key component of NextGen is reducing aviation's impact on 
the environment. Last year we advanced a number of critical initiatives 
toward this goal. We made great headway in developing a replacement for 
leaded aviation gasoline through our collaboration with industry and 
technical research. We partnered with industry through our Continuous 
Lower Energy, Emissions, and Noise (CLEEN) program to test aircraft 
with new wing and engine designs, as well as a blended sustainable 
biofuel. And we are collaborating with our Nation's airports to develop 
renewable energy sources and sustainability to reduce emissions. For 
example, this year we provided Airport Improvement Program (AIP) grants 
to Chattanooga Metropolitan Airport for construction of a 4,000 panel 
solar farm, and to Chicago O'Hare International Airport for low-
emission electrical power units used by aircraft parked at the gate.
    While NextGen is delivering benefits now, it also builds for the 
future. Similarly, the past year we made progress toward ensuring 
safety in industry segments where we anticipate significant growth in 
the coming years: Unmanned Aircraft Systems (UAS) and Commercial Space 
Transportation. FAA employees are working creatively with our industry 
partners to meet the challenges of these dynamic sectors.
    We are working to safely integrate Unmanned Aircraft Systems into 
our national airspace. In March 2012, the agency created a new UAS 
integration office. The office serves as the FAA's one-stop portal for 
all matters related to civil and public use of UAS in the NAS. The FAA 
is in the process of drafting the initial Notice of Proposed Rulemaking 
for small UAS. In addition, on February 14, 2013, the FAA released the 
Screening Information Request (SIR) to outline the process in which the 
FAA would collect, evaluate and select six test sites across the 
country to test Unmanned Aircraft Systems. We plan to select those UAS 
test sites by the end of this calendar year.
    Just as with unmanned aircraft, the FAA is working to safely 
integrate commercial space operations into the national airspace system 
as well. To date, the FAA has licensed 215 commercial space launches 
and reentries. They have gone off without a fatality, a serious injury, 
or significant property damage. Last year, we licensed the historic 
launches of the SpaceX Falcon 9 rocket--marking the first time a 
commercial company delivered cargo to the International Space Station. 
Missions like these continue to demonstrate the viability of the 
commercial space industry. The FAA has also licensed a total of eight 
commercial spaceports. In fiscal year 2014, our commercial space 
division is requesting to convert four contract resources to Federal 
employees so they can expand their workload to include responsibilities 
that are inherently governmental. These additional duties would include 
safety inspections, compliance assessments, regulatory activity 
support, and inter-agency coordination efforts to create common safety 
standards.
    Efficiencies are not just for the future. Given the economic 
challenges we are facing, FAA has worked very hard to find cost-savings 
and we have been quite successful. Even before sequestration, we have 
set a target of $91 million in cost-savings for fiscal year 2013. We 
recognize that the status quo is not an option and we will continue to 
strive to achieve additional efficiencies moving forward.
    Last year we made great strides in finding efficiencies, leveraging 
our resources, empowering our employees, and making greater use of 
technology to perform our core mission. Through a congressional 
reprogramming request under our Foundation for Success initiative, we 
streamlined finance, information technology, acquisition, and other 
essential functions within a shared services organization. The results 
included enhancing delivery of information technology services at a 
lower unit cost. Additionally, the FAA's Aeronautical Center, which 
supports the NAS as well as international partners, generated nearly 
$16 million in cost-savings or avoidance last year through streamlining 
processes and continuous improvement initiatives. Overall in 2012, we 
generated nearly $94 million in cost-savings or avoidance through 
control measures and innovative business solutions.
    One of our most significant accomplishments of the year came in the 
wake of one of the Nation's biggest challenges. Hurricane Sandy 
devastated homes and infrastructure throughout the Northeast. Though 
the region's airports experienced flooding and other significant 
damage, our technical staff worked around the clock to restore airfield 
and air navigation systems to operational status. Their hard work and 
dedication to the FAA's mission resulted in the restoration of normal 
air traffic operations just days after the storm. Seeing our 
workforce's efforts to prepare for and rebuild after this unprecedented 
storm is one of my proudest moments as head of the FAA. The agency is 
grateful for the $30 million in emergency relief funding entrusted to 
us by this committee. We are already putting these funds to good use to 
repair roofs and walls at FAA facilities, navigation and landing 
systems, power systems, and other structures and equipment. In total, 
the funds will support 59 repair projects at 21 different locations.
    In the current fiscal climate, we must find ways for FAA's 
employees to work smarter and enhance our productivity. FAA must not 
only meet our day to day responsibilities, we must also look to the 
future and figure out how to shape the agency to meet the demands and 
opportunities of the future. We are actively engaging our employees in 
the development of recommendations for facilities consolidation and 
realignment. As noted earlier, the U.S. aviation system is going 
through significant, even revolutionary changes. NextGen is a major 
transformation which will increase our efficiency and safety, reduce 
delays and reduce fuel consumption. UAS have the potential to change 
the face of aviation. In the midst of these changes, budget pressures 
are making us ask hard questions about what the FAA needs to deliver in 
the coming years to ensure the safety and efficiency of the NAS and how 
to do it most cost-effectively.
    Finally, it is essential that we chart innovative and collaborative 
ways to engage with all segments of the aviation sector, from airlines 
to association groups, to general aviation, to unions. We must embrace 
the opportunity to make long-lasting changes together that ensure a 
vital and vibrant aviation industry that serves the needs of this 
Nation.
    I am extremely proud of our achievements. While I recognize there 
is still much work to be done, I know we are up to the task. In the 
years ahead we will strive to build on these achievements. We will work 
toward making the safest aviation system even safer and smarter; 
accelerate the benefits of new technology; and empower employees to 
increase efficiencies and spur greater innovations. The decisions we 
make over the next few years are going to affect the air transportation 
system in the United States for decades to come, and I am eager to work 
with you and your colleagues to reach the next level of aviation safety 
and efficiency.

    Senator Murray. Mr. Scovel.

             SUMMARY STATEMENT OF HON. CALVIN L. SCOVEL III

    Mr. Scovel. Madam Chairman, Ranking Member Collins, members 
of the subcommittee, thank you for inviting me to testify on 
FAA's fiscal year 2014 budget. Like other agencies across the 
Government, FAA is having to rethink its funding priorities and 
make difficult tradeoffs in a most trying fiscal environment.
    My testimony today will focus on how FAA can achieve 
efficiencies through more effective management of its 
workforce, the agency's largest cost driver, and its 
modernization efforts while not losing sight of its safety 
mission. My office has identified multiple opportunities for 
FAA to reduce costs in managing its controller and inspector 
workforce.
    The agency has been challenged to ensure thousands of newly 
hired controllers have the skills needed to carry out their 
critical role. Cost overruns on FAA's controller training 
contract have reached almost $89 million. And training times 
for newly hired controllers have increased by 41 percent since 
2009. To meet its goals of reducing training costs and times, 
FAA needs to provide stronger contract controls, including how 
it awards incentive fees.
    FAA also needs to rethink its processes for scheduling 
controllers. While air traffic operations have declined by 23 
percent since 2000, FAA today employs slightly more controllers 
than it did then. Improved scheduling, particularly on 
overnight shifts at low activity towers, could enhance 
productivity as well as yield additional cost-savings.
    The agency similarly needs to improve how it allocates its 
4,000 flight standards safety inspectors. FAA has yet to find a 
reliable model for determining how many inspectors it needs and 
where they are needed most to address the greatest safety risks 
and get the best return on investment.
    FAA's second major challenge is effectively managing its 
implementation of modernization projects and protecting its 
airport investments. For example, FAA continues efforts to 
fully implement the En Route Automation Modernization program, 
a system for processing flight data initially priced at $2.1 
billion. While FAA has overcome some technical problems and 
fielded ERAM at 16 facilities, ERAM remains at risk of cost and 
schedule increases as FAA implements the system at the last 
four facilities, including some of the most complex in the 
National Airspace System.
    To set realistic budgets and expectations for its 
modernization and infrastructure efforts, FAA needs to take 
several actions. First, FAA needs to complete an integrated 
master schedule for NextGen's many interdependent programs to 
address operational and technical risks and make informed cost 
and schedule tradeoffs.
    Second, FAA must rein in excessive costs on major 
acquisition contracts. FAA awarded multibillion dollar 
contracts without resolving differences between the agency's 
cost estimates and those provided in contractor proposals. This 
lack of control creates unreal, unreliable budget estimates and 
unnecessary cost increases.
    Third, FAA needs to ensure airport revenues are 
appropriately spent. Over the past 10 years, we have identified 
millions of dollars in airport revenue that, contrary to 
Federal law, were diverted, used for non-airport purposes or 
simply lost. Had these revenues been used for airport 
operations, the airports could have relied less on Federal 
funding.
    As FAA works to control costs, it must not lose sight of 
its number one priority, ensuring the continued safety of the 
National Airspace System. One of FAA's key safety issues 
remains reducing controller errors. FAA statistics show that 
serious operational errors by controllers are on the rise, 
including those associated with runway incursions. Improved 
data collection and analysis would enable FAA to better 
identify the root causes of these safety risks and mitigate 
them.
    Another important safety issue relates to FAA's 
implementation of new pilot qualification requirements, a key 
provision of the Airline Safety Act. FAA is behind schedule in 
finalizing the highly contested rule for pilots, but still 
states it will make the final due date of this coming August.
    Ongoing aviation advancements such as unmanned aircraft 
systems have created new safety challenges for FAA. Safely 
integrating these new systems, which FAA predicts may number 
roughly 10,000 within the next 5 years, will require new 
approaches to managing the Nation's airspace.

                           PREPARED STATEMENT

    Madam Chairman, this concludes my prepared statement. I'd 
be happy to answer any questions you or other members of the 
subcommittee may have.
    Senator Murray. Thank you very much.
    [The statement follows:]
            Prepared Statement of Hon. Calvin L. Scovel III
    Madam Chairman and members of the subcommittee: Thank you for 
inviting me to testify on the Federal Aviation Administration's (FAA) 
fiscal year 2014 budget. As you know, FAA strives to maintain safe 
operation of the National Airspace System (NAS) while ensuring 
efficiency through modernization efforts such as the Next Generation 
Air Transportation System (NextGen). The sequestration's mandated 
budget cuts require agencies across the Federal Government to rethink 
their priorities and make difficult tradeoffs. FAA is no exception. The 
audits conducted by my office aim to improve safety--FAA's number one 
priority--and to control costs, create efficiencies, and assist in 
establishing priorities.
    My testimony today focuses on three significant challenges for FAA: 
(1) more effectively managing its workforce; (2) managing strategies 
for NextGen and modernization; and (3) continuing efforts to ensure the 
safety of the NAS.
                               in summary
    Our recent and ongoing work has identified opportunities for FAA to 
improve the management of its workforce, the agency's largest cost 
driver. Specifically, FAA can increase the efficiency of its air 
traffic controller and safety workforce by strengthening its controller 
training program, revising its controller staffing and scheduling 
practices, and developing an effective method for determining how many 
safety inspectors it needs and where they are most needed. At the same 
time, FAA must protect its investment in its multibillion dollar 
NextGen efforts and infrastructure improvements that are critical to 
ensuring the future viability of the NAS. This will require FAA to set 
priorities and establish sound management strategies to achieve near- 
and long-term benefits, enhance its contract oversight, and prevent 
misuse of airport revenue and Federal grant funds. Finally, FAA must 
not lose sight of its number one priority: ensuring the continued 
safety of the NAS. One of FAA's key safety issues remains effectively 
collecting and analyzing data on air traffic controller errors that 
create air and ground collision risks. FAA also faces new challenges 
with safely integrating unmanned aircraft systems into the NAS, 
implementing a safety data sharing system to proactively assess risks, 
and ensuring effective oversight of its voluntary safety disclosure 
program for air carriers.
                               background
    FAA's budget funds four accounts: Operations; Facilities and 
Equipment (F&E); the Airport Improvement Program (AIP); and Research, 
Engineering, and Development (RE&D).
  --Operations is FAA's largest cost driver and funds most of the 
        agency's day-to-day activities, including safety oversight and 
        air traffic control functions. Salaries and benefits for 
        controllers, safety inspectors, and other FAA personnel make up 
        71 percent of FAA's operations costs.
  --F&E funds the agency's NextGen initiatives and other modernization 
        activities such as improving aging infrastructure, power 
        systems, navigational aids, and weather systems.
  --AIP funds grants to airports to pay for runway construction and 
        other related projects.
  --RE&D provides funds for NextGen and other research areas such as 
        fire research and safety, and aging aircraft.
    FAA's total fiscal year 2014 budget request of $15.6 billion 
represents about a 2-percent decrease from the agency's 2012 budget. 
However, the 2014 request includes $3 billion in Immediate 
Transportation Investments spending for AIP and NextGen programs (see 
table 1). FAA proposes to shift the focus of its AIP account to smaller 
commercial and general aviation airports and eliminate guaranteed AIP 
funding for large hub airports. The proposal would also increase the 
passenger facility charge limit from $4.50 to $8 per enplanement for 
all eligible airports, giving large hub airports greater flexibility to 
generate their own revenue.

                         TABLE 1.--FAA BUDGET, FISCAL YEAR 2012 THROUGH FISCAL YEAR 2014
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                       2013                          Increase/
                                                                    continuing                     decrease from
                     Account                        2012 actual     resolution     2014 request    2012 to 2014
                                                                  annualized \1\                     (Percent)
----------------------------------------------------------------------------------------------------------------
Operations......................................          $9,653          $9,712          $9,707             0.6
F&E.............................................           2,731           2,777           2,778             1.7
AIP.............................................           3,350           3,350           2,900           -13.4
RE&D............................................             168             169             166            -1.2
                                                 ---------------------------------------------------------------
      Subtotal..................................          15,902          16,008          15,551            -2.2
                                                 ===============================================================
Immediate Transportation Investments............  ..............  ..............           3,000  ..............
                                                 ===============================================================
      Total.....................................          15,902          16,008          18,551            16.7
----------------------------------------------------------------------------------------------------------------
\1\ This amount excludes the $637 million reduction in funding due to the sequestration.

Source: FAA.

    Due to sequestration, FAA must reduce its remaining fiscal year 
2013 budget by $637 million. The majority of this reduction will be 
absorbed by the Operations account. FAA expects that cuts to the 
Operations account will result in the closure of 149 contract towers, 
and FAA plans to require controllers, technicians, and other employees 
to take up to 11 unpaid furlough days through the end of September. 
Most of the remaining reduction will be absorbed by the F&E account. 
This reduction will require FAA to adjust its cost and schedule 
baselines for individual NextGen and other modernization programs, 
which could delay completion of these projects.
  faa has opportunities to more effectively manage its controller and 
                          inspector workforce
    FAA plans to place thousands of new air traffic controllers at its 
more than 300 air traffic facilities nationwide--a significant 
challenge, as new controllers can require several years of training to 
become certified at their assigned locations,\1\ and each facility has 
unique operations and air traffic volume. Although the agency has had a 
major controller training support contract in place since 2008, the 
contract has experienced cost overruns and has not met its goal to 
reduce total training times. FAA must also continue in its efforts to 
address controller workload issues, particularly in terms of improving 
productivity, which could create cost-savings. Finally, to effectively 
oversee a dynamic aviation industry, it is critical that FAA place its 
approximately 4,000 flight standards safety inspectors where they are 
most needed.
---------------------------------------------------------------------------
    \1\ New controllers achieve certification on each position as they 
move through facility training. After they have certified on all 
positions within their assigned area, they are commissioned as a 
certified professional controller at that facility.
---------------------------------------------------------------------------
Challenges in FAA's Training Programs and Contract Oversight Jeopardize 
        FAA's Efforts To Ensure a Proficient Controller Workforce
    To replace retiring controllers who were hired immediately after 
the 1981 strike,\2\ FAA plans to hire and train more than 11,700 new 
controllers over the next 10 years.\3\ In 2004, we reported that FAA's 
controller training program was extremely decentralized for such a 
large national undertaking and that the efficiency and quality of 
training varied extensively by location. With the large numbers of new 
controllers entering the workforce and veteran controllers retiring or 
eligible to retire, FAA must have reliable information on how many 
certified controllers it needs to effectively manage the NAS. FAA 
executed a contract to train its new controllers; however, it has not 
been effectively managed.
---------------------------------------------------------------------------
    \2\ In 1981, following a period of labor unrest, an overwhelming 
majority of the air traffic control workforce went on strike on August 
3. President Reagan ordered those controllers to return to duty within 
48 hours. When those 10,438 striking controllers did not return to 
work, President Reagan fired them on August 5.
    \3\ Over the past 5 years, FAA has hired more than 6,600 new 
controllers.
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    FAA's $859 million Air Traffic Controller Optimum Training 
Solutions (ATCOTS) contract continues to be a significant issue for the 
agency. FAA awarded the contract in 2008 to provide up to 10 years of 
controller training support and to assist in modernizing the agency's 
training program.\4\ Key ATCOTS goals include reducing total training 
costs, reducing training time, and developing training innovations that 
can be adapted to new technologies--particularly those related to 
NextGen. However, 4 years into the contract, the goals have not been 
achieved. For example, between 2009 and 2012, the average training time 
for newly hired controllers increased 41 percent from 1.9 years to 2.7 
years.
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    \4\ The ATCOTS contract consists of a 5-year base period, worth 
$437 million, and two option periods (a 3-year period and a 2-year 
period) worth $422 million.
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    In 2010, we reported that the ATCOTS contract faced significant 
cost overruns, poor procurement practices, and a lack of effective 
contract oversight.\5\ For example, in its first 2 years, the ATCOTS 
contract exceeded negotiated contract values by $46 million. Our 
current review continues to show that FAA has not implemented 
sufficient changes to improve its program and contract oversight. For 
example, in 2012, after 4 consecutive years of cost overruns (totaling 
approximately $89 million), FAA chose to extend the ATCOTS contract by 
3 years without clearly defining the contract's training requirements 
or ensuring that it can produce sufficient training innovations to meet 
its training goals.
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    \5\ FAA's Air Traffic Controller Optimum Training Solution Program: 
Sound Contract Management Practices Are Needed To Achieve Program 
Outcomes (OIG Report No. AV-2010-126), September 30, 2010. OIG reports 
are available on our Web site at http://www.oig.dot.gov/.
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    Additionally, since awarding the 10 year contract in September 
2008, FAA paid the contractor over $31 million in cost incentive fees 
and award fees that were ineffective at motivating contractor 
performance. For example, to reduce contract costs, FAA paid the 
contractor $19 million in cost incentive fees and award fees related to 
cost containment despite the $89 million in cost overruns. FAA also 
awarded the contractor over $12 million for meeting performance 
measures that do not link to important training goals, such as training 
innovations.
    In May 2011, FAA created an Independent Review Panel of industry 
and academic professionals to evaluate all aspects of how the agency 
hires, assigns, and trains new controllers. To date, the panel has 
identified 49 recommendations, many incorporating actions we previously 
recommended, that could significantly improve FAA's controller hiring 
and training processes. However, most are in the early stages of 
development, and timeframes for actual implementation are not yet 
known.
    We plan to issue reports on FAA's ATCOTS contract and air traffic 
controller facility training later this year and will continue to 
monitor the agency's cost-saving efforts in these areas.
FAA Could Realize Cost-Savings Through Improved Controller Productivity 
        and Scheduling
    Since 1998, FAA has introduced a series of initiatives intended to 
increase controller productivity and reduce operating costs. These 
initiatives include eliminating alternate work schedules, matching 
controller staffing to facility workload, reducing operational overtime 
costs, and developing an automated official time reporting system. 
However, it is unclear whether these initiatives are achieving the 
anticipated productivity gains and cost-savings. FAA data suggest that 
its overall staffing may not be optimal. Since 2000, total air traffic 
operations have declined by 23 percent, while the total number of 
controllers slightly increased. We are currently conducting a review of 
FAA's controller productivity initiatives.
    As directed by the FAA Modernization and Reform Act of 2012,\6\ we 
are also conducting a review of the cost impacts of new FAA controller 
schedules--developed in response to concerns about the impact of FAA 
scheduling practices, particularly during overnight shifts, on 
controller performance and air traffic safety. While most of FAA's new 
controller scheduling policies have not significantly affected costs, 
our ongoing work indicates the agency could realize some cost-savings 
through better scheduling. For example, 72 facilities that do not meet 
the agency's minimum traffic guidelines for continuous overnight 
operations continue to have a minimum of two controllers during the 
midnight shift. Reducing air traffic control services at these 
facilities during a portion of or the entire midnight shift could 
reduce operating costs. However, FAA has not yet calculated the 
potential savings. We expect to report on our reviews of FAA's 
controller productivity and scheduling later this year.
---------------------------------------------------------------------------
    \6\ Public Law 112-95.
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FAA Has Not Developed a Reliable Method for Determining Its Safety 
        Inspector Workforce Needs
    FAA currently employs approximately 4,000 flight standards safety 
inspectors who oversee all facets of aviation safety, from general 
aviation to air carrier operations. However, the agency has not 
determined where these resources are most needed or the extent to which 
there may be a shortfall in its inspector workforce. A 2006 National 
Research Council (NRC) study,\7\ conducted at the direction of 
Congress, found that FAA's methodology for allocating aviation safety 
inspector resources was ineffective. NRC recommended that FAA develop a 
new approach, and, in response, FAA introduced a new staffing model in 
October 2009.
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    \7\ ``Staffing Standards for Aviation Safety Inspectors,'' 
September 20, 2006.
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    We have evaluated the model as part of an ongoing audit of 
inspector staffing, as requested by Congress.\8\ Thus far, FAA 
officials are not confident in the accuracy of the model's staffing 
projections and therefore have not fully relied on the number projected 
by the model when developing plans and annual budget requests. As of 
January 2013, FAA had reported the results of its staffing model six 
times, with each iteration showing very different nationwide employee 
shortages (see figure 1).\9\
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    \8\ Congress directed our office to review inspector and analyst 
staffing issues in section 205 of the Airline Safety and FAA Extension 
Act of 2010, Public Law 111-216, enacted August 1, 2010.
    \9\ Based on our analysis of FAA data, these fluctuations appear to 
be caused by a number of underlying issues such as inaccurate and 
outdated data.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    FAA is working to further refine the model so that it more 
effectively identifies the number of inspectors needed and where they 
should be placed to address the greatest safety risks and get the best 
return on investment. We expect to issue our report on inspector 
staffing later this year.
       sound management strategies are key to the cost-effective 
    implementation of faa's modernization and infrastructure efforts
    FAA has numerous efforts underway to modernize the air 
transportation system and upgrade infrastructure--most notably its 
multibillion dollar NextGen transformational programs.\10\ The success 
of these efforts depends on the agency's ability to set priorities, 
control costs, deliver benefits, and maintain stakeholder support. 
However, FAA has been challenged to maximize near-term benefits through 
its metroplex initiative, while addressing cost and schedule risks 
related to implementing critical automation systems such as the En 
Route Automation Modernization (ERAM) program. In addition, FAA has not 
yet developed an integrated master schedule to help advance and 
prioritize key transformational programs. Other challenges include 
improving contract oversight and management, upgrading aging air 
traffic control facilities, and protecting airport investments.
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    \10\ FAA's transformational programs, defined as programs directly 
related to the delivery of NextGen capabilities, will fundamentally 
change the NAS by enhancing communications, improving the tracking of 
aircraft, and revamping overall air traffic management.
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Integrating New Performance-Based Navigation Routes Is Critical To 
        Maximizing Near-Term Benefits and Ensuring User Support
    In 2010, FAA launched its metroplex initiative--a 7-year effort to 
improve the flow of traffic and efficiency at congested airports in 13 
major metropolitan areas. A key part of this effort and a stepping 
stone for NextGen is the introduction of new performance-based 
navigation (PBN) procedures, such as Area Navigation (RNAV) and 
Required Navigation Performance (RNP),\11\ which can provide 
significant near-term benefits such as more direct flight paths, 
improved on-time aircraft arrival rates, greater fuel savings, and 
reduced aircraft noise. FAA has completed initial studies or begun 
design work at 8 of the 13 metroplex locations but continues to face 
challenges with shifting from planning to implementation. FAA has 
extended the expected completion date for all metroplex sites by 15 
months to September 2017 after determining that its initial schedule 
was too aggressive.
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    \11\ RNAV is a method of navigation in which aircraft use avionics, 
such as Global Positioning Systems, to fly any desired flight path 
without the limitations imposed by ground-based navigation systems. RNP 
is a form of RNAV that adds on-board monitoring and alerting 
capabilities for pilots, thereby allowing aircraft to fly more precise 
flight paths.
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    While the metroplex approach is a step in the right direction to 
achieving the near-term benefits of reduced congestion, we reported in 
August 2012 that industry representatives were concerned that FAA had 
not yet integrated efforts from other related initiatives, such as 
better managing surface operations.\12\ In addition, many airspace 
users that are equipped with advanced avionics would like more advanced 
PBN procedures than FAA's current efforts provide--specifically, those 
that regularly allow for more precise and curved approaches. We also 
identified a number of barriers to FAA's metroplex effort, including 
the need to work across diverse agency lines of business, update 
policies, streamline the process for implementing new flight 
procedures, apply environmental regulations, upgrade controller 
automation tools, and train controllers on new advanced procedures. FAA 
is currently working to address our recommendations, including 
developing milestones for a more integrated metroplex approach and 
addressing barriers in a timely manner.
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    \12\ Challenges With Implementing Near-Term NextGen Capabilities at 
Congested Airports Could Delay Benefits (OIG Report No. AV-2012-167), 
August 1, 2012.
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    FAA has several efforts underway to identify and resolve obstacles 
to PBN use. For example, FAA has tasked MITRE to obtain and analyze 
data to measure the use of PBN procedures and quantify their benefits. 
While our analysis of MITRE's preliminary data shows high RNP use at 
some small- to medium-sized airports, such as Oakland, overall RNP 
usage is low, particularly at busy metroplex airports, such as New 
York.\13\ According to MITRE, one of the obstacles to using the 
procedures in busy metroplex locations is the lack of controller tools 
to manage mixed operations--that is merging aircraft using straight-in 
approaches with those on curved paths.\14\ It is important for FAA to 
use MITRE's data to determine why procedures are not being used and 
what it will take to obtain benefits. FAA currently has a team 
developing an action plan to address obstacles, such as the need to 
update policies and procedures to allow PBN use, and expects to issue a 
report later this year. FAA is also working to streamline its process 
for implementing new procedures in response to recommendations from an 
internal FAA review--the NAV Lean project. However, FAA has only 
implemented 3 of the 21 recommendations thus far and does not expect to 
complete all recommendations until September 2015.
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    \13\ PBN usage data is as of January 2013. MITRE has ongoing 
efforts to update the data and improve the formulas. MITRE is only 
capturing data for RNP procedures with curved approaches because it 
cannot distinguish RNP procedures with straight-in approaches from 
conventional procedures.
    \14\ According to MITRE, other causal factors, such as weather or 
operational conditions that do not necessitate the use of PBN 
instrument approaches, can also affect RNP use.
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Despite Progress, FAA Faces Programmatic and Cost Risks With Automation 
        Systems in the Critical Path of NextGen
    FAA's goals for NextGen ultimately depend on the success of its 
ongoing efforts to deploy ERAM--a $2.1 billion system for processing 
flight data. Without ERAM, the key benefits of FAA's transformational 
programs, such as new satellite-based surveillance systems and data 
communications for controllers and pilots, will not be possible. FAA 
originally planned to complete ERAM by the end of 2010, but significant 
software problems impacted the system's ability to safely manage and 
separate aircraft and raised questions as to what capabilities ERAM 
will ultimately deliver. As a result, FAA rebaselined the program in 
June 2011, pushing its expected completion to 2014 and increasing cost 
estimates by $330 million.
    FAA is making considerable progress toward getting ERAM on track. 
The agency is now using ERAM at 16 of 20 sites either on a full- or 
part-time basis--a significant step forward given the extensive 
problems at the two initial sites. FAA plans for all 20 sites to 
achieve full operational capability and to decommission \15\ the legacy 
system by August 2014. However, as FAA deploys ERAM to the Nation's 
busiest facilities, such as New York and Washington, DC, it expects to 
identify new problems that could impact cost and schedule. FAA is 
currently spending about $12 million a month on the ERAM F&E portion of 
the contract, excluding NextGen efforts funded through the ERAM 
contract. If the current contract burn rate does not decline 
significantly, the agency will need additional funds to complete this 
stage of the program.\16\
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    \15\ Decommissioning involves the disconnection, removal, and 
disposal of the HOST computer system once ERAM has been declared 
operationally ready at a site.
    \16\ The Office of Management and Budget (OMB) approved shifting 
$44 million of ERAM O&M funding to F&E funding, increasing total ERAM 
F&E funding to $374 million. As of February 2013, FAA had spent a total 
of $241.86 million (F&E)--about 64.7 percent of the $374 million in F&E 
funding allocated since the June 2011 rebaseline.
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    Moreover, controllers and experts continue to raise concerns about 
ERAM's capabilities. While these issues are not expected to delay 
ERAM's 2014 implementation, they will need to be addressed for the 
system to support NextGen initiatives.
  --Flight Plan Trajectory Modeler.--This is an ERAM capability that 
        models aircraft flight paths and is used to predict conflicts 
        and ensure accurate handoffs between controllers and other 
        facilities. However, the modeler software has often required 
        adjustments to change the flight plan trajectory to ensure 
        accurate handoffs. According to controllers, improvements are 
        needed in order to support current operations and NextGen 
        capabilities that use trajectory-based operations.\17\
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    \17\ Trajectory-based operations focus on more precisely managing 
aircraft from departure to arrival with the benefits of reduced fuel 
consumption, lower operating costs, and reduced emissions.
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  --Aircraft Tracking and Sensor Fusion.--This capability allows ERAM 
        to integrate--or ``fuse''--multiple radars and satellite-based 
        information for controllers. However, thus far, controllers 
        have not been able to take advantage of this improved 
        capability because of tracking issues. A MITRE analysis found 
        that the ERAM tracker will require adjustments to use the 
        Automatic Dependent Surveillance-Broadcast system (ADS-B) \18\ 
        and radar together to manage air traffic. Until these issues 
        are addressed, it is unlikely FAA will be able to reduce 
        separation between aircraft at high altitudes.
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    \18\ ADS-B, one of NextGen's transformation programs, is a 
satellite-based surveillance technology that combines the use of 
aircraft avionics and ground-based systems.
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    Similar to ERAM, FAA's Terminal Automation Modernization/
Replacement (TAMR) effort is on the critical path to NextGen. FAA's 
TAMR program aims to modernize or replace all of the automation systems 
that controllers rely on to manage traffic at terminal facilities with 
a single automation platform--the Standard Terminal Automation 
Replacement System (STARS) system. If effectively implemented, TAMR is 
expected to reduce agency costs and facilitate the implementation of 
NextGen capabilities.
    TAMR currently involves modernizing automation systems at 11 
terminal facilities, 7 of which are the largest and busiest in the 
Nation. FAA estimates this effort will cost $438 million and be 
completed between 2015 and 2017. However, the agency faces significant 
cost, schedule, and technical risks in this effort. Specifically, FAA 
has yet to identify and finalize all ``gaps''--that is, the software 
and hardware requirements that are needed to successfully replace the 
existing automation system \19\ with STARS. Finalizing these gaps 
requires extensive software development and testing--a lengthy and 
potentially costly process should issues arise in testing. FAA is 
currently developing software to address 94 gaps but anticipates 
identifying more gaps once it begins transitioning to STARS at the 
busiest facilities. Moreover, because full STARS capability at the 11 
sites is still years away, FAA continues to add new capabilities to 
existing systems at select facilities to support air traffic 
operations. The longer FAA must maintain and update existing systems at 
these sites, the greater the implementation and cost risk because FAA 
will have to add the same new capabilities to STARS to maintain 
operations at the sites. To improve FAA's effectiveness in achieving 
terminal modernization, we made a number of recommendations to better 
and more cost efficiently manage this effort. We anticipate receiving 
FAA's response and issuing our final report soon.
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    \19\ Common Automated Radar Terminal System (CARTS-IIIE) automation 
systems currently exist at the 11 large terminal facilities.
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FAA Lacks an Integrated Master Schedule To Manage and Prioritize Key 
        NextGen Programs
    Setting realistic plans, budgets, and expectations for key NextGen 
programs is critical to controlling NextGen costs. FAA now spends 
almost $1 billion annually on NextGen efforts and plans to spend $2.4 
billion between 2013 and 2017 on the six transformational programs that 
will provide NextGen's foundational technologies and 
infrastructure.\20\ These include ADS-B, with a current approved cost 
of $2.7 billion, and Data Communications, with a current approved cost 
of $741.5 million.
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    \20\ These six programs are ADS-B, System Wide Information 
Management, Data Communications, NextGen Network Enabled Weather, NAS 
Voice System, and Collaborative Air Traffic Management Technologies.
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    However, FAA has yet to complete an integrated master schedule to 
manage implementation of these six programs--many of which are 
interdependent. Without a master schedule, FAA will be challenged to: 
(1) fully address operational, technical, and programmatic risks; (2) 
prioritize and make informed tradeoffs for programs' costs and 
schedules; and (3) determine what capabilities should be delivered 
first. In response to a recommendation we made in April 2012,\21\ FAA 
is working on the integrated master schedule and expects to have it 
completed by December 2013.
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    \21\ Status of Transformational Programs and Risks to Achieving 
NextGen Goals (OIG Report No. AV-2012-094), April 23, 2012.
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Ineffective Planning and Oversight Have Contributed to Cost Overruns 
        and Delays for Efforts Needed To Support NextGen
    Since 2005, FAA has experienced cost overruns, schedule delays, or 
both on half of its major air traffic control programs, including ERAM. 
Weaknesses in FAA's contract planning have hindered the agency's 
ability to efficiently and effectively advance programs and protect its 
investments. For example, when designing ERAM's contract structure, FAA 
did not fully adopt best practices for information technology (IT) 
acquisitions--such as modular contracting, which calls for dividing a 
large contract into manageable contract segments delivered in shorter 
increments. In addition, ERAM's cost incentive fee did not motivate the 
contractor to stay below cost targets because FAA simply increased the 
target costs as requirements grew. At the time of our review, FAA paid 
the contractor over $150 million in cost incentives fees even though 
ERAM costs exceeded the budget by at least $330 million. Further, FAA 
did not detect or mitigate significant risks until almost 2 years after 
software problems surfaced at a key test site. In response to our 
recommendations, FAA has modified the ERAM contract to implement a more 
modular structure, revised incentives for new software releases, and 
improved ERAM's risk management process.\22\
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    \22\ Weaknesses in Program and Contract Management Contribute to 
ERAM Delays and Put Other NextGen Initiatives at Risk (OIG Report No. 
AV-2012-179), September 13, 2012.
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    FAA has also awarded contracts without resolving differences 
between the agency's cost estimates and those provided in contractor 
proposals, resulting in unreliable budget estimates. For example, to 
accomplish NextGen and efforts related to maintaining the NAS, FAA 
awarded seven Systems Engineering 2020 (SE-2020) contracts for 
technical and professional support services, which have a cumulative 
maximum value of $7.3 billion--the largest award in FAA history. 
However, when FAA awarded these SE-2020 contracts in 2010, it included 
18 million more labor hours than needed, overstating potential contract 
costs by $2 billion. As a result, FAA cannot be sure that the 
contract's cost baseline is an accurate benchmark for monitoring costs. 
For FAA's ATCOTS contract, FAA did not resolve the 29 percent 
difference between the contractor's proposed costs and FAA's 
independent Government cost estimate. In addition, the contract 
experienced a 35-percent cost increase during the first contract year 
due to underestimating controller training requirements.
    FAA's problems in these areas are further exacerbated by weaknesses 
in its review and approval process for major acquisitions. OMB requires 
Federal agencies to monitor and evaluate performance of IT investments 
through a capital planning and investment control process. In response, 
FAA's Joint Resources Council (JRC) was established to ensure capital 
investments fulfill mission priorities and maximize resources. However, 
JRC sometimes lacks complete information when making investment 
decisions. Further, FAA does not consistently follow the JRC approval 
and oversight process. As a result, FAA risks making investment 
decisions with incomplete information, which could jeopardize the 
success of critical FAA programs. For example, since 2005, FAA has 
experienced cost overruns, schedule delays, or both on 7 of its 14 
major air traffic control IT programs, including the Wide Area 
Augmentation System program, which exceeded original cost estimates by 
$2 billion. FAA has established a new control group within its Program 
Management Office that, once appropriately staffed, will begin to 
assess program planning documentation.
FAA Must Address Key Issues To Achieve Potential Cost Savings Through 
        Facility Realignments and Consolidations
    A critical--and costly--step in FAA's NextGen effort is the extent 
to which it realigns and consolidates its aging infrastructure. To 
sustain its current facility infrastructure, in fiscal year 2014, FAA 
plans to spend $125 million to replace or improve its terminal radar 
approach control (TRACON) facilities and air traffic control towers, 
$53 million to maintain en route centers, and $85 million to sustain 
electrical power systems. The average age of an en route center is 51 
years, while the average age of a TRACON is 29 years. Moreover, many of 
these facilities are in poor or fair condition, and the infrastructure 
at some facilities cannot support NextGen and other modernization 
initiatives.
    FAA's current plans call for an integrated control facility in the 
New York metropolitan area--a significant step in achieving operational 
efficiencies. However, to successfully realign and consolidate 
facilities, FAA needs to make informed decisions regarding cost, 
schedule, technical capabilities, and the impact on the aviation 
workforce. In July 2012, we recommended that FAA develop and regularly 
update comprehensive cost estimates for construction, equipment, 
increased salaries, relocation expenses, and training for its 
consolidation effort.\23\ As FAA's plans evolve, addressing these 
issues early will better position the agency to achieve potential cost 
savings and NextGen benefits. FAA expects to provide a detailed cost 
estimate for the integrated New York facility by the end of 2014. To 
completely implement our recommendation, FAA will need to produce 
detailed financial information for consolidating facilities in other 
locations.
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    \23\ The Success of FAA's Long-Term Plan for Air Traffic Facility 
Realignments and Consolidations Depends on Addressing Key Technical, 
Financial, and Workforce Challenges (OIG Report No. AV-2012-151), July 
17, 2012.
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Further Actions Are Needed To Protect Federal Investment in Airport 
        Infrastructure
    FAA projects that U.S. passenger traffic will grow by 2.6 percent 
annually in the next 5 years, and that by 2033 there will be 1.15 
billion passengers. Ensuring enough capacity at the Nation's airports 
is essential to meeting this demand, reducing delays, and realizing the 
full benefits of NextGen. However, NextGen alone will not address 
capacity constraints at some airports. While FAA has made progress in 
overseeing airport infrastructure improvements at our Nation's 
airports,\24\ including new runways, the agency must ensure that 
current and planned runway projects and their corresponding capacity-
enhancing airspace changes remain on schedule. Moreover, FAA needs to 
improve its grant oversight to protect its significant investments in 
these projects.
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    \24\ According to FAA, since the start of fiscal year 2000, 24 
airfield projects have opened at 20 major airports. These include 16 
new runways, 3 taxiways, 3 runway extensions, 1 airfield 
reconfiguration completed (included relocating a runway and 
constructing a new center taxiway), and 1 airfield reconfiguration to 
be completed this year (includes a runway extension and a new runway 
that have been completed, and another runway due to open in October 
2013).
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    FAA is pursuing several airspace redesign projects nationwide--
including major efforts to revamp airspace in the Atlanta, Chicago, and 
New York-New Jersey-Philadelphia areas. To ensure runways at these 
sites have sufficient capacity to accommodate the additional air 
traffic, FAA must synchronize its airspace redesign and runway efforts, 
as it did at the Chicago O'Hare International Airport. Completing a new 
runway and extending an existing runway in 2008 \25\ allowed FAA's 
airspace redesign efforts in that area to move forward.
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    \25\ Infrastructure projects as part of Phase 1 of the O'Hare 
Modernization Program.
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    However, the remaining infrastructure and related airspace projects 
for O'Hare, as well as the planned infrastructure and related airspace 
projects for the Philadelphia International Airport, are at risk due to 
the uncertain future of these capacity enhancement programs (see table 
2). Although FAA has committed nearly $1.4 billion in AIP funds for the 
next 20 years--with annual outlays of more than $60 million--the agency 
faces multiple implementation challenges. To protect these investments 
and ensure sufficient capacity, FAA needs to work closely with 
airports, airlines, and other stakeholders to resolve differences and 
make decisions about these projects so they can move forward.

                                  TABLE 2.--STATUS OF MAJOR NEW RUNWAY PROJECTS
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                                         Total
                 Airport                               Phase               Estimated completion date      cost
                                                                                                        estimate
----------------------------------------------------------------------------------------------------------------
Chicago O'Hare:
    Runway 10C/28C.......................  Construction.................  September 2013.............     $1,290
    Runway 9R/27L \1\....................  Design \2\...................  2020.......................        520
    Runway 9C/27C........................  Design \2\...................  2020.......................      1,130
    Runway 10R/28L.......................  Construction.................  December 2015..............        516
Philadelphia: Runway 9R/27L, Runway 8/26   Some Site Prep \2\ \3\.......  TBD........................      5,200
 \1\, Runway 9R/27L \1\.
----------------------------------------------------------------------------------------------------------------
\1\ Extension of existing runway.
\2\ Funding for construction has not been secured and is subject to ongoing negotiations with the airlines.
\3\ Extension of runway 9R/27L (which will be renamed 9C/27C when the new runway is built) is in the design
  phase with a 2015 estimated completion date. Due to lack of funding, completion dates for the remaining
  projects have yet to be determined.

    Insufficient oversight of airport revenue and AIP grants further 
jeopardizes FAA's investments. Over the past 10 years, we have 
identified nearly $376 million in airport revenue that was illegally 
diverted, used for non-airport purposes, or was simply lost. Had these 
revenues been used for airport operations, the airports would have been 
more self-sufficient and less reliant on Federal funding. While FAA 
conducts airport revenue reviews, the reviews have been limited to a 
few airports a year. In general, FAA relies primarily on three 
oversight methods that have proven inadequate to prevent the diversion 
and loss of valuable airport revenue: (1) review of airport sponsors' 
annual revenue use reports; (2) single audit reports; and (3) third-
party complaints. At the request of several House members from 
California, we are currently conducting an audit on FAA's oversight of 
Los Angeles International Airport revenue use.
    Finally, reducing and recovering improper AIP grant payments has 
been a longstanding challenge for FAA. In 2010, we reported that FAA 
had made an estimated $31 million in recoverable improper payments \26\ 
during fiscal year 2008 and had not detected them. More recently, we 
reported that FAA's oversight was insufficient to prevent or detect 
more than $1.4 million in recoverable improper American Recovery and 
Reinvestment Act of 2009 (ARRA) grant payments. In particular, we found 
that San Francisco International Airport officials improperly billed 
ARRA for over $832,000 for unapproved taxiway and drainage work, as 
well as ineligible survey equipment. To address this challenge, FAA 
began implementing a new risk-based grant oversight process and an 
electronic grant payment system in 2012. However, it is too soon to 
know whether this additional step will significantly improve FAA's 
ability to prevent or detect future improper payments.
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    \26\ In 2002, Congress passed the Improper Payments Information Act 
(IPIA), providing a framework for agencies to use in testing for 
improper payments, identifying their causes, and implementing solutions 
to reduce them. In August 2006, OMB established detailed requirements 
for complying with IPIA. OMB further clarified that improper payments 
include the following payments to ineligible recipients: duplicate 
payments, payments in incorrect amounts, payments for ineligible 
services or services not received, or payments having insufficient 
documentation.
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   opportunities remain to better ensure the safety of the national 
                            airspace system
    While FAA works to achieve efficiencies in its operations, 
programs, and overall costs, it must continue to address ongoing safety 
concerns. FAA has several opportunities to enhance safety by improving 
its collection and analyses of safety data, including data on air 
traffic controller errors that create air and ground collision risks. 
FAA will need to enhance its oversight of aircraft repair stations and 
implement key provisions of the Airline Safety Act related to pilot 
safety. FAA also faces challenges with safely integrating unmanned 
aircraft into the NAS, developing a safety information sharing system 
to proactively assess risk, and improving its voluntary safety 
disclosure program for air carriers.
Data Collection and Analysis Enhancements Are Needed To Identify and 
        Mitigate the Root Causes of Separation Losses
    A top priority for FAA is to accurately count operational errors--
events where controllers do not maintain safe separation between 
aircraft--and identify trends that contribute to them. FAA statistics 
indicate that reported operational errors rose by 53 percent between 
fiscal years 2009 and 2010. While operational errors remained at these 
levels during fiscal years 2010 and 2011, FAA reports that the most 
serious reported errors continued to rise by 49 percent from fiscal 
year 2009 to fiscal year 2011 (from 37 to 55, respectively).
    In January 2012, FAA issued new policies and procedures for 
collecting, investigating, and reporting separation losses.\27\ 
However, their effectiveness is limited by incomplete data and 
implementation challenges. FAA lacks an accurate baseline on the number 
of separation losses due in part to its limited review of Traffic 
Analysis and Review Program (TARP) data \28\ and exclusion of some 
potential operational errors reported under the Air Traffic Safety 
Action Program (ATSAP) \29\ from its official count. At the time of our 
ATSAP review last year, approximately 50 percent of all ATSAP event 
reports \30\ were classified as ``unknown,'' and therefore some errors 
may have been excluded.\31\ Further, as we reported last month, FAA 
does not analyze and report all separation losses automatically flagged 
by TARP. Instead, FAA investigates losses of separation identified by 
TARP when aircraft come within less than 70 percent of the required 
separation distance.
---------------------------------------------------------------------------
    \27\ Losses of separation occur when aircraft do not maintain the 
minimum required distance apart. Most losses of separation are 
classified as either an operational error (if the controller's actions 
caused the loss) or a pilot deviation (if the pilot's actions caused 
the loss).
    \28\ TARP is an automated system that detects losses of separation 
at air traffic terminal facilities.
    \29\ ATSAP is a voluntary, non-punitive program in which 
controllers can self-report safety incidents and concerns.
    \30\ Event reports identify actual or potential losses of 
separation, including operational errors, or other situations that may 
degrade air traffic safety.
    \31\ FAA changed how it categorizes event reports in January 2012. 
However, the committees that review ATSAP reports still do not contact 
facilities if they believe an event is unknown to management.
---------------------------------------------------------------------------
    In July 2012, we reported a number of management issues with ATSAP 
that the agency must address to correct known deficiencies and realize 
the program's full potential. These include a lack of formal processes 
to review ATSAP committee decisions on errors and enforce key program 
guidelines and requirements. Failure to address these issues not only 
undermines efforts to improve NAS safety but also may lead to the 
perception that ATSAP is an amnesty program that automatically accepts 
reports of serious incidents, regardless of whether they properly 
qualify under the FAA directive establishing the program.
Runway Incursions Continue To Increase
    Runway incursions--potential ground collisions--are a key safety 
concern for FAA that requires heightened attention at all levels of the 
agency. As we noted in July 2010,\32\ the number of the most serious 
runway incursions--incidents in which a collision was barely avoided--
decreased after runway safety initiatives detailed in FAA's August 2007 
Call to Action plan were implemented.\33\ However, shortly after our 
2010 report, the trend reversed dramatically. Between fiscal years 2010 
and 2012, reported runway incursions increased about 19 percent, and 
serious runway incursions tripled (see figure 2)--despite the fact that 
total air traffic operations declined by 1 percent between fiscal years 
2011 and 2012. In addition, for the period of October through December 
2012, total incursions increased by approximately 20 percent compared 
to the same period in 2011. As a result of these concerns, we plan to 
initiate another review of FAA's Runway Safety Program later this year.
---------------------------------------------------------------------------
    \32\ Review of FAA's Call to Action Plan for Runway Safety (OIG 
Report No. AV-2010-071), July 21, 2010.
    \33\ Specifically, these incidents declined from 25 reported in 
fiscal year 2008 to 6 reported in fiscal year 2010.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    To help reverse these trends, FAA deployed the Airport Surface 
Detection Equipment-Model X (ASDE-X) system at 35 major airports in 
fiscal year 2011, at a cost of approximately $550 million. ASDE-X 
enhances runway safety by providing detailed information to air traffic 
controllers regarding aircraft operations on runways and taxiways. 
However, ASDE-X does not directly alert pilots, as recommended by the 
National Transportation Safety Board (NTSB) in 2000. To address this 
shortcoming, FAA plans to integrate the use of ASDE-X with three other 
systems--Runway Status Lights (RWSL), ADS-B, and In-Cockpit Moving Map 
Displays. Integrating various systems to improve surface safety 
requires establishing requirements for technical upgrades, validating 
system performance and integrity, and determining whether ASDE-X 
capabilities can meet FAA's goals for increasing safety and capacity. 
We are currently assessing FAA's progress in integrating ASDE-X with 
other technologies such as RWSL and ADS-B to improve runway safety.
Oversight of Repair Stations Remains a Concern
    According to FAA, there are nearly 4,800 FAA-certificated repair 
stations worldwide that perform maintenance for U.S.-registered 
aircraft. Forecasts show that the maintenance, repair, and overhaul 
industry will grow annually by 4.4 percent over the next 10 years, 
yielding a market value of between $50 billion to $65 billion for this 
segment of the aviation industry. These upward trends are expected to 
continue as airlines look to cut maintenance costs and increase 
profitability. However, since 2003, we have recommended that FAA 
strengthen its oversight of air carriers' contracted maintenance 
providers by developing a comprehensive, standardized approach to 
repair station oversight and targeting inspector resources based on 
risk.
    In 2007, FAA implemented a new risk-based system to target its 
surveillance of repair stations. However, our ongoing review indicates 
that inspectors continue to complete mandatory inspections instead of 
targeting resources to where they are needed based on risk. 
Additionally, some inspectors do not use the risk assessment process at 
all; those that do are hindered in their ability to assess risk, due in 
part to limitations in data availability and quality. As a result, FAA 
has been ineffective at conducting risk-based oversight.
    FAA's surveillance at foreign and domestic repair stations also 
lacks the rigor needed to identify deficiencies and verify they have 
been addressed. Systemic problems we identified during our 2003 
review--such as inadequate mechanic training, outdated tool calibration 
checks, and inaccurate work order documentation--persist at the repair 
stations we recently visited. FAA guidance requires inspectors to 
review these specific areas during repair station inspections, but 
inspectors overlooked these types of deficiencies.
    Given U.S. air carriers' continued reliance on repair stations to 
perform their aircraft maintenance domestically and abroad, it is 
imperative that FAA improve its risk-based system to provide more 
rigorous oversight of this industry. We plan to issue our report on 
FAA's oversight of repair stations this month.
FAA Faces Challenges in Implementing Key Pilot-Related Provisions of 
        the Airline Safety Act
    The fatal Colgan Air crash in 2009 raised concerns about a number 
of pilot performance issues, which culminated in the Airline Safety and 
FAA Extension Act of 2010.\34\ Since the act's passage, FAA has made 
important progress in implementing many of the act's requirements, such 
as advancing voluntary safety programs and improving pilot rest 
requirements. However, FAA has not met the act's timelines for updating 
pilot training standards, implementing pilot mentoring and leadership 
programs, or establishing safety management systems.
---------------------------------------------------------------------------
    \34\ Airline Safety and Federal Aviation Administration Extension 
Act of 2010, Public Law 111-216, (2010).
---------------------------------------------------------------------------
    In addition, FAA missed the act's deadline to substantially raise 
airline pilot qualifications by August 2012. The act mandates that all 
part 121 pilots obtain an Airline Transport Pilot certificate,\35\ 
which requires 1,500 flight hours--six times the current minimum of 250 
hours needed for a commercial pilot's certificate. Although FAA's 
proposed rule would provide some flexibility in meeting these 
requirements for pilots with relevant degrees or military flight 
experience, air carrier representatives remain opposed to the new 
requirement, contending that the quality and type of flying experience 
should be weighted more heavily than the number of flight hours. 
However, if FAA does not issue its final rule, the act's requirements 
will automatically go into effect for air carriers in August 2013, and 
FAA must ensure that carriers make the necessary adjustments to their 
pilot training and qualification programs.
---------------------------------------------------------------------------
    \35\ An Airline Transport Pilot (ATP) Certificate is the highest 
level of pilot certification. Pilots certified as ATP are authorized to 
act as pilot-in-command of an aircraft in commercial airline service. 
Additional eligibility requirements are contained in 14 CFR 61.153.
---------------------------------------------------------------------------
    FAA has also been challenged to develop an act-required pilot 
records database to enhance the screening process for newly hired 
pilots. For example, FAA needs to determine how to incorporate data 
from FAA, air carriers, and the National Driver Registry in a way that 
is accessible for air carriers to review during the pilot hiring 
process. The act did not establish a milestone for when the database 
should be completed, and the agency has yet to make key long-term 
implementation decisions.
FAA's Safety Oversight Role Continues To Expand as New Technologies and 
        Programs Are Introduced Into the NAS
    Over the next several years, FAA will be challenged by the 
introduction of unmanned aircraft, new integrated data systems for 
proactively identifying risk, and further use of voluntary disclosure 
programs.
  --Unmanned Aircraft Systems (UAS).--FAA predicts there will be 
        roughly 10,000 active UAS in the United States in 5 years, with 
        more than $89 billion in worldwide UAS spending over the next 
        10 years. However, FAA has approved these operations on a 
        limited, case-by-case basis, due in part to the safety risks 
        associated with UAS integration into the NAS. While the 
        capabilities of unmanned aircraft have significantly improved, 
        they have a limited ability to detect, sense, and avoid other 
        air traffic. Given the growing interest and potential safety 
        issues associated with UAS flights, Congress recently directed 
        the Secretary of Transportation, through the FAA Modernization 
        and Reform Act of 2012, to develop a comprehensive plan for 
        integrating UAS into the NAS no later than September 30, 2015. 
        At the request of the Chairmen and Ranking Members of the 
        Senate Commerce Committee and the House Committee on 
        Transportation and Infrastructure, as well as their Aviation 
        subcommittees, we are currently assessing FAA's progress in 
        integrating UAS into the NAS. We expect to issue a report later 
        this year.
  --Aviation Safety Information Analysis and Sharing (ASIAS).--In 2007, 
        FAA implemented ASIAS to collect and analyze data from multiple 
        databases and proactively identify and address safety risks. 
        ASIAS enables authorized users to obtain data from confidential 
        databases--including voluntary safety programs such as the 
        Flight Operational Quality Assurance program and the Aviation 
        Safety Action Program--as well as from publicly available data 
        sources such as NTSB's Accident and Incident Reports database. 
        However, access to ASIAS data for FAA and industry 
        representatives has been limited due to airline proprietary 
        concerns.
      In the Airline Safety and FAA Extension Act of 2010, Congress 
        directed our office to assess FAA's ability to establish a 
        comprehensive information repository that can accommodate 
        multiple data sources and be accessible to FAA aviation safety 
        inspectors and analysts who oversee air carriers. Accordingly, 
        we are currently assessing FAA's progress in implementing 
        ASIAS, its process and plan for allowing system access at both 
        field and headquarters levels, and its use of ASIAS data to 
        assist in commercial air carrier safety oversight. We expect to 
        issue our report later this year.
  --Voluntary Disclosure Reporting Program (VDRP).--As mandated in the 
        FAA Modernization and Reform Act of 2012, we are conducting a 
        review of VDRP, a program that allows air carriers to 
        voluntarily report adverse safety issues to FAA without fear of 
        enforcement actions, provided that carriers develop 
        comprehensive solutions to identified safety issues. As part of 
        this review, we are examining whether FAA ensures reports meet 
        VDRP requirements, including the development and implementation 
        of corrective actions, and whether the agency uses VDRP data to 
        identify safety risks.
                               conclusion
    FAA faces many difficult decisions in the months ahead. To resolve 
the complex issues we identified, the agency must think strategically 
to prioritize those programs that can achieve the greatest benefits in 
the most cost efficient and effective manner possible. At the same 
time, FAA needs to protect its investments and assets that are 
vulnerable to misuse and abuse, while remaining focused on safety. 
Fully implementing our recommendations would better position FAA to 
control costs and create efficiencies as it works to enhance 
operations, successfully implement key programs, and address safety 
concerns. We will continue to work with FAA to ensure it meets its 
mission while protecting taxpayer dollars.
    Madam Chairman, this concludes my prepared statement. I would be 
happy to address any questions that you or other members of the 
subcommittee may have.

          BUDGET CONTROL ACT/CONTRACT TOWER PROGRAM/FURLOUGHS

    Senator Murray. Let me begin by asking a question about 
FAA's contract tower program. Under the FAA's original plan to 
comply with sequestration, the FAA said they expected to save 
between $40 million and $50 million by shutting down 173 
contract towers at soon as the first week in April. But under 
the FAA's most recent plans, 149 towers are expected to close, 
and my understanding is that that will start June 15.
    Can you explain to us, Mr. Huerta, what the latest estimate 
is of how much will be saved by closing down those towers, and 
whether those savings will significantly reduce the number of 
furloughs at the FAA?
    Mr. Huerta. Thank you, Madam Chairman. As we look at the 
need to achieve the savings of $637 million that you noted in 
your opening statement, we have to look both at our contract 
expenditures as well as our pay and benefit expenditures. Our 
current estimate of savings from contract towers that we're 
going to be able to achieve based on the June 15 closure date 
is approximately $25 million.
    The savings from furlough days--we have notified our 
employees that they should expect to be furloughed for up to 11 
days.
    Senator Murray. Between now and September 30?
    Mr. Huerta. Between now and September 30. That represents 1 
day per 2-week pay period between now and the end of our fiscal 
year. The total savings associated from those furloughs are 
slightly in excess of $200 million. We have had an extensive 
effort, and it continues, to evaluate and review our ongoing 
expenditures, our contract expenditures, and our information 
technology (IT) expenditures, to find additional areas of 
savings.
    We have significantly reduced travel by 30 percent, 
limiting it to operational travel, for example, when we have to 
send someone to fix a piece of equipment that might have become 
inoperative. Likewise, we have projected, and we expect to 
achieve, savings in our information technology infrastructure 
of approximately $35 million.
    We have focused on reducing our costs associated with 
training. We have canceled a new training program for new 
controllers at the FAA Academy for the summer in order to focus 
our resources on critical personnel needed to operate the 
National Airspace System.
    It's with great regret that we have to look at closing 
lower activity facilities while at the same time reducing hours 
available for our employees. But as we all know, the sequester 
represents a very dramatic and very blunt instrument in terms 
of how we find reductions in expenditures. But in order to 
achieve them, we have to take the actions that we've talked 
about.

                            CONTRACT TOWERS

    Senator Murray. Well, as you know, there's a lot of 
interest in protecting the contract towers in 2014. What will 
it take to get those contract towers back up and running in 
fiscal year 2014?
    Mr. Huerta. It depends on the nature of the specific 
contract tower. We've heard from approximately 50 of the 149 
airport operators that they are exploring opportunities for 
local funding of the expense of the contract towers for some 
period of time. If that were the case for those facilities, it 
would simply be a change in who is paying the cost.
    We have been negotiating with them an orderly handoff so 
that they can take over the facility and assume its cost when 
funding from the FAA would cease on June 15. Should the 
financial picture change in 2014, the handoff would simply work 
as smoothly going the other direction.
    Senator Murray. And what would be the cost of that?
    Mr. Huerta. Well, the cost is they will continue to 
operate, and so it essentially is just a question of who pays. 
As it relates to a facility that may elect to--or for whatever 
reason it might be necessary to close, then what we would need 
to engage in is a process to hire controllers, recertify 
controllers, and get them back up to speed in operating that 
airspace. That would represent an expenditure of both time and 
money in order to make that happen.

                               FURLOUGHS

    Senator Murray. So do you think it makes sense to close 
some down for the summer?
    Mr. Huerta. We have very few choices, and as we've talked 
about repeatedly, we're looking at a series of bad options to 
choose from. The sequester gives us few options but to achieve 
the required savings and to achieve them in this year.
    Senator Murray. So let's talk about the furloughs, because 
we're hearing a lot about that.
    Mr. Huerta. Sure.
    Senator Murray. You said up to 11 days. How many employees?
    Mr. Huerta. It affects 47,000 of our employees, which is 
most of them. The only employees that are exempt under the 
sequester legislation are those in our Airport Improvement 
Program.
    Senator Murray. Right. So that includes air traffic 
controllers, safety inspectors, and we are hearing it's going 
to lead to a lot of delays this summer. What other actions has 
the FAA taken to avoid furloughs, and how did you decide who 
would get furloughed at the agency?
    Mr. Huerta. Let me take first the question, what other 
actions did we take. We started first at our contract 
expenditures and looked across the board at what we could do to 
dramatically reduce contract expenditures. And we focused on 
those activities such as the ones I mentioned that represent 
out-of-pocket cost, travel, information technology, and so 
forth.
    We do have limits on our ability to reduce some contracts, 
though. For example, our single largest contract is the FAA's 
telecommunications infrastructure contract. That is a services 
contract with a private company that provides critical 
communication services between all air traffic facilities. That 
contract is worth about $225 million on an annual basis.
    So we had to focus in those areas that would not at the 
same time seriously cripple the mission. But our contract 
savings alone were not able to get us to our required savings.
    By the way, I'd also like to mention that our third largest 
contract expenditure is for Federal contract towers. These 
facilities are low activity facilities. They have fewer than 
150,000 operations on an annual basis and less than 10,000 
commercial operations.
    I would like to point out that we have thousands of 
airports in the United States that operate every single day in 
a non-towered capacity and operate safely. All but 1 of the 149 
towers that we have slated for closure, in fact, close for a 
significant number of hours during the day. So they have a 
regular process for operating in a non-towered capacity.
    But even looking at all of the contract expenditures, we 
were unable to achieve the full $637 million in savings. So 
that's what led us to the need to furlough our employees. In 
looking across the agency as a whole, we established a 
principle that we needed to find the appropriate balance of 
getting the cost savings that we needed to get, while at the 
same time having the ability to operate the system, maintain 
its safety, and recognizing that we were imposing a significant 
hardship on our employees.
    Eleven furlough days between now and the end of the year 
represents one per pay period. That is a reduction of 10 
percent of the pay of each employee, the 47,000 that are 
affected. From an operational standpoint, it represents a 
reduction of 10 percent of the available hours that employee is 
able to provide.
    Senator Murray. And I'm hearing from some people that some 
air traffic control towers will be hit more in terms of 
operational ability.
    Mr. Huerta. No. We have allocated them equally across the 
whole system. But each facility operates differently, and it 
may have differing impacts, depending on the specific traffic 
conditions at that airport.
    Let me give you a couple of examples, if I might. Chicago's 
O'Hare Airport is a major hub airport. It operates with two air 
traffic control towers, one on the north side of the airport 
and a central tower that operates for the entire airport. In 
order for us to be able to operate the north tower of the 
airport, we have to have a minimum complement of air traffic 
controllers available to staff a minimal number of positions.

                           RUNWAY INCURSIONS

    If we can't staff all of that minimal number of positions, 
then we must consolidate operations to the central tower. The 
airport can continue to operate, but what it means is we lose 
the ability to use one runway, because that north tower is 
essential to control the northernmost runway of the airport. So 
that is an example of how relatively small reductions of hours 
can significantly affect the operations of an airport.
    Senator Murray. And that's Chicago--does LAX----
    Mr. Huerta. The Los Angeles airport is a four-runway 
airport, but it is also a major hub airport for quite a number 
of operators. In the case of the Los Angeles airport, their 
traffic loads are such that they're relatively constant during 
the day. Already at Los Angeles, the north airfield operates 
under significant operational restrictions because of very 
closely spaced parallel runways that exist at that airport. And 
the airport does have a long-term plan to improve that.
    But, again, if I have fewer controller hours available to 
me, then what it affects is the efficiency of the airport. Our 
highest priority is to ensure that it operates safely, but 
where we take a penalty is inefficiency.
    Senator Murray. Okay. And I apologize to the subcommittee 
for running way over time, but this is what we're hearing from 
a lot of our airlines at this point: Some of our airports are 
going to be significantly impacted for reasons they don't 
understand, like vacations and those kinds of things. So I 
think it's really important that everybody understands how you 
got to these decisions and how we're going to move forward on 
that.
    Senator Collins.
    Senator Collins. Thank you, Madam Chairman. As I 
highlighted in my opening statement, the total number of runway 
incursions increased 21 percent between fiscal year 2011 and 
2012 from 954 to an all-time high of 1,150.
    Administrator, what is the FAA doing to reduce this 
alarming increase and ensure the safety of the traveling public 
on our Nation's runways? And to what do you attribute the large 
increase?
    Mr. Huerta. Thank you, Senator Collins. Let me take the 
second part of that first. Reported runway incursions reached 
an all-time high of 1,150 in fiscal year 2012. We believe this 
number is reflective of changes in our reporting culture 
through voluntary safety reporting systems, as well as enhanced 
use of electronic detection systems, expansion of reporting 
requirements and the deployment of new systems that were 
designed to streamline reporting.
    Nonetheless, this is something that we take very, very 
seriously. The fiscal year 2014 budget request supports our 
efforts to reduce runway incursions and to improve airport 
surface safety. Some of the initiatives that we're talking 
about include airport safety reviews. This involves conducting 
airport safety and certification inspections at each of our 
certificated airports to ensure that the signs, the markings, 
and the lighting all meet national standards.
    Also, airport driver training programs and records are 
reviewed as a significant part of this, because, as you know, 
there are a lot of regular vehicles that operate at the 
airport, and they have to understand how to move on the 
airfield.
    We've been conducting runway safety action team (SAT) 
meetings, and our fiscal year 2014 budget request would 
continue to support those. Our SAT meetings improve 
multidisciplinary teams conducting safety reviews at selected 
airports based on analysis of the data.
    The team is there to improve runway safety through 
coordinated actions with all components of the aviation 
community and the FAA lines of business to really understand if 
there's a design issue or if there's a training issue that we 
need to address at a particular airport, which takes me to 
training. There is a significant focus that we've placed on 
conducting training seminars to provide knowledge, guidance, 
outreach, and awareness at all levels, and really focusing on 
if we have the right kind of training in place.
    I'd also like to talk about industry involvement. The 
Runway Safety Council (RSC) consists of officials not only from 
the FAA and other partners in Government, but also industry and 
labor. What we want to do is meet regularly to determine root 
causes of runway incursions. This is part of a collaborative 
decisionmaking process that we're trying to adopt across the 
whole FAA to bring everyone together.
    Senator Collins. Mr. Scovel, do you agree with the analysis 
that the Administrator just gave that this may reflect better 
reporting rather than an increase in the problem?
    Mr. Scovel. Not entirely, Senator Collins. Here's what our 
examination has revealed. There is a better reporting culture 
within the FAA among the controllers, and we certainly 
acknowledge that. The voluntary reporting programs, such as 
ATSAP, the Air Traffic Safety Action Program, has encouraged 
controllers to come forward, knowing that there will be non-
punitive results from their self-disclosures, and that has 
certainly increased, we trust, the number of operational errors 
or reported runway incursions over time.
    However, we also note that better reporting tools, such as 
TARP and the TRACON environment and a longstanding reporting 
tool in the en route environment, have also been capturing more 
and more previously unreported operational errors. And that, 
too, has been driving the number up.
    You asked specifically about runway incursions. Before I 
address that, very quickly, let me note also that the data 
collection across the board and the analysis of that data--we 
have identified areas for improvement for FAA. With regard to 
runway incursions, as the subcommittee will well remember, that 
is the number one item on the National Transportation Safety 
Board (NTSB) most wanted list every single year, and it has 
been for more than a decade.
    Senator Collins. Which troubles me, because it's going up, 
not down.
    Mr. Scovel. It is going up. The subcommittee will remember 
that in 2007, the FAA issued a call to action for runway safety 
in light of a previous rise in runway incursions. And between 
2007 and 2009, 2010, that call to action achieved commendable 
results largely through the measures that Administrator Huerta 
cited just now as those that are returning to emphasis under 
his leadership.
    We believe that the agency's attention perhaps drifted off 
some of those safety measures after the initial successes of 
that 2007 call to action. I commend the Administrator for 
returning the agency's attention to those, because, certainly, 
in our view and the view of the NTSB, those will yield the 
greatest success in terms of reducing runway incursions.
    There are technological innovations as well, runway status 
lights, Automatic Dependent Surveillance-Broadcast (ADS-B), 
SDX, surface protection technology, all of which the agency is 
working to implement, encountering some difficulties on those. 
But we encourage the agency to persist, and we're certain that 
those will yield better results as well.
    Senator Collins. Thank you. I'm just going to ask one quick 
second question. I see we have a lot of members here.

               AIRPORT IMPROVEMENT PROGRAM GRANT FUNDING

    Administrator, I want to ask you about a part of the budget 
that just makes absolutely no sense to me. On the one hand, the 
administration is proposing a $450 million reduction in the 
Airport Improvement Program, while at the same time the 
President's budget proposes what he calls an immediate 
Transportation Investment Program that provides an additional 
$2 billion.
    Could you please explain to us in a brief statement, given 
our other members who are here, the rationale behind what 
appears to be taking away money from the same program with one 
hand and then giving it back with another program? Now, let me 
say I fully understand that you're restructuring AIP to drop 
the larger airports and allow an increase in the passenger 
facility limits. But this still seems to be an odd 
juxtaposition of reducing by $450 million on the one hand and 
then increasing by $2 billion.
    Mr. Huerta. Thank you, Senator Collins. As you point out, 
the two pieces that you referenced are designed to do two 
different things. The first is a restructuring of the AIP 
program. The budget requests a total AIP level of $2.9 billion, 
which is $450 million below our fiscal year 2012 enacted level, 
and it is paired up with an increase in the passenger facility 
charges (PFC).

                       PASSENGER FACILITY CHARGE

    Now, consistent with the recommendations from the 
President's Deficit Reduction Commission, all guaranteed 
funding for approximately 29 large hub airports would be 
eliminated under this proposal, because they would have the 
ability to raise significant funding through the passenger 
facility charges. Medium, small, and non-hub airport passenger 
entitlements as well as non-primary entitlements would then be 
calculated at levels that are consistent with the formulas in 
effect under current law when the total funding level is below 
$3.2 million.
    Now, in terms of the $2 billion proposal, what that 
reflects is an interest on the President's part to catch up on 
the backlog of infrastructure improvements in airports which 
are required. It is a one-time program that would enable us to 
accelerate the development of a large number of projects that 
have been in the pipeline and at the same time create needed 
jobs for the economy.
    Senator Collins. Well, thank you very much, Madam Chairman. 
I would just note that it certainly seems duplicative to me in 
terms of the purpose of the AIP program. Thank you.
    Senator Murray. Senator Feinstein.
    Senator Feinstein. Thank you very much, Madam Chairman.

                       UNMANNED AIRCRAFT SYSTEMS

    Mr. Huerta, I'd like to confine my question time to this 
new area of unmanned aerial vehicles known as drones. And as 
chairman of the Intelligence Committee, I've had an opportunity 
to understand how potentially dangerous these items are and how 
they vary in size and scope and ability.
    I understand that the 2012 reauthorization act orders you 
to develop a comprehensive plan to integrate unmanned aircraft 
into the national airspace no later than September 30, 2015. 
And it's my understanding that, to date, the FAA has permitted 
more than 300 unmanned public aircraft so far. For example, the 
Department of Homeland Security is using surveillance drones to 
monitor the border. These are not armed, we are told.
    Is what I have just said essentially correct?
    Mr. Huerta. That is correct, Senator Feinstein.
    Senator Feinstein. Well, I am very worried about two 
things. One is safety, and the other is privacy. There was a 
hearing in the Judiciary Committee not too long ago on drones, 
and we had one example of a drone that was very small and used 
by a Colorado sheriff's department. I am familiar with drones 
that are quite large, that are armed, and are used in various 
places in the world for various tasks.
    The fact that they're unmanned, the fact that you may 
license them for one use, doesn't mean they can't be converted 
to another use. Has the FAA looked at that and recognized the 
potential danger of the development of drones in commercial 
airspace?
    Mr. Huerta. Thank you, Senator Feinstein. Unmanned aircraft 
is a technological frontier area that we're trying to 
accommodate. The direction that we've received from Congress, 
as you point out, is how we can safely integrate them into the 
National Airspace System by 2015. You're also aware that the 
reauthorization act of last year requires us at the same time 
to designate six test sites to test and understand how this 
technology would be incorporated into the National Airspace 
System.
    The purpose of the test sites is to enable us to develop 
data and information along the lines of what you're talking 
about: How these things are used, what can we learn from them, 
and questions related to other factors as well. As we were 
developing the information request to solicit proposals for the 
test sites, we heard what you heard, which was a lot of public 
concern about privacy and how these particular vehicles could 
be used, and did it raise questions about invasion of privacy.
    Now, privacy is not something that Congress asked us to 
look at, nor is it something that the FAA has the authority to 
regulate. But we did determine that it was important for us to 
frame the question as we were looking at the test site request 
for proposals.
    What we did was at the same time we released the request 
for proposals for the test sites, we also published a notice 
that we would require whoever is designated as a test site 
operator to publish a privacy protection policy and make that 
available to the public so it is out there for everyone to see 
how the data that would be developed through the use of this 
unmanned aircraft would be used, and does it raise any privacy 
questions.
    I think this is a complicated issue. It's new for us. We 
relied on the expertise of people that had regulated this area 
in the past. As an evolving technology, it's one that we're 
going to have to watch very carefully. There is significant 
interest on the part of State and local law enforcement for the 
use of unmanned aircraft for the surveillance purposes that you 
talked about. There are differing laws at the State level about 
how these aircraft might be used.
    I think that as we develop the data and as we do additional 
testing, it's certainly something that we are going to be 
looking at very carefully. But it's not something we have the 
authority to regulate.
    Senator Feinstein. Here's my concern. I understand that. So 
you could have thousands of these things in the air. How do you 
control them? How do you keep them from getting into air 
traffic? And I understand they might have a height limit of 400 
or 500 feet. How do you keep them away from airports? You know, 
there's even a report that a pilot saw one. Was that true or 
false? I don't know whether it is true or false.
    Mr. Huerta. We had the report that a pilot saw what they 
determined to be either a model airplane or an unmanned 
aircraft, yes.
    Senator Feinstein. Is there any more information on that, 
or is that pretty much what it is?
    Mr. Huerta. That's pretty much what it is. But on your 
question of how can we regulate them safely, this is exactly 
what we're trying to determine. Through the use of certificates 
of authorization as well as the test sites, what we need to 
develop a better understanding of is how these aircraft operate 
in ways that are both similar and different from manned 
aircraft that operate in the system every day.
    The direction we've received from Congress is to safely 
integrate unmanned aircraft. And so the thing that we care the 
most about before we allow widespread use of unmanned aircraft 
is to ensure that they can operate safely, both on their own, 
but also in conjunction with other aircraft.
    Senator Feinstein. I've just learned that there's even an 
association promoting drones.
    Mr. Huerta. Yes, that's correct.
    Senator Feinstein. And there's so much that needs to be 
looked at very seriously, I think, before we do this. The 
privacy questions are enormous. Now, I understand that's not 
really your jurisdiction. But in these test sites, which I 
assume are not overpopulated areas, will the people that enter 
into the test have specific privacy policies to which they 
subscribe the use of their drone to?
    Mr. Huerta. The designation of the test sites would need to 
be accompanied by a privacy plan. We're not in a position to 
make a determination of the content of the plan, but what we 
would require is that they develop one, that they make it 
available to the public, and it is available for people to read 
and understand.
    Senator Feinstein. I know they wouldn't legally carry 
munitions. But there's nothing to stop someone from arming one 
with munitions, and that's my big concern.
    Mr. Huerta. Well, to a certain extent, that risk exists 
today with manned aircraft through the extensive use of general 
aviation that takes place----
    Senator Feinstein. Yes, but not in commercial aviation.
    Mr. Huerta. Not in commercial aviation. That is correct.
    Senator Feinstein. But there will be many more drones than 
there are private aircraft, most likely.
    Mr. Huerta. Well, this is something that we're going to 
have to try to understand. You are correct. There are industry 
proponents that really see this as the next frontier of 
aviation and are actively promoting the use of these aircraft. 
There are a lot of beneficial uses that the industry is 
promoting as well, for example, weather surveillance or 
environmental initiatives, where they're examining, for 
example, loss of ice in the Arctic areas or surveying of coast 
lines, mapping activities.
    Senator Feinstein. I think we would all agree with that. 
It's what's outside of that that's of deep concern.
    Mr. Huerta. But this is what we need to focus on, and this 
is what we will need to learn as we develop this information.
    Senator Feinstein. Good. I'm glad to hear that. My time is 
up, and I thank you.
    Senator Murray. Thank you very much.
    Senator Moran.
    Senator Moran. Thank you, Madam Chairman.

                        CONTRACT CONTROL TOWERS

    Administrator Huerta, I want to focus on the control 
towers. Has there been a safety analysis completed on each one 
of the 149 towers that you propose to close?
    Mr. Huerta. Senator Moran, yes. We did conduct an analysis 
and determined that it was feasible for each of these towers to 
operate safely. That was the first decision. The second 
decision----
    Senator Moran. It was capable for each of these towers to 
operate safely.
    Mr. Huerta. Correct.
    Senator Moran. The towers are operating safely?
    Mr. Huerta. No, for the airport to operate safely----
    Senator Moran. In the absence of a tower?
    Mr. Huerta [continuing]. In the absence of a tower. The 
second part of the question then becomes how we get there. It 
was for that reason in working through with our local sponsors 
and partners that we decided to introduce the delay to June 15 
to ensure that everyone fully understood how that transition 
would work.
    As I mentioned in my earlier remarks--this was before you 
arrived, sir--every one of these towers except one operates in 
a non-towered capacity for some portion of the day. So there 
are well-established rules of how the airport operates in a 
non-towered capacity. The tradeoff is in order to maintain a 
safe operation, what you might sacrifice is efficiency. So they 
may operate less efficiently in a non-towered capacity, but 
they will certainly operate safely.
    Senator Moran. So the 149 air traffic control towers that 
potentially will be closed were never necessary for safety 
reasons?
    Mr. Huerta. We have thousands of airports that operate in 
the country every day that----
    Senator Moran. That's not my question. Are the airports 
that we've had towers at--were those towers placed there 
because they were important for safety?
    Mr. Huerta. The towers were placed there for a variety of 
reasons. But my point is that we are not doing anything that is 
not safe. The airport can continue to operate in a non-towered 
capacity safely, just as they do for many hours of the day.
    Senator Moran. Do the airports then operate in a less safe 
manner? You're saying they're safe, but how can they be as safe 
without a tower as they are with a tower?
    Mr. Huerta. What we do is we transfer responsibility to the 
pilots, and we limit and separate traffic greater distances to 
ensure added margins of safety if there is not a tower right on 
the airport.
    Senator Moran. Can you provide the subcommittee with the 
separate analysis of each airport of the 149?
    Mr. Huerta. There is different analysis that we have done, 
and we can certainly provide that to the subcommittee.
    [The information follows:]

    Safety analyses were conducted for each airport subsequent to the 
development of a safety case that looked into airport standards, 
equipment, procedures, provision of critical information to 
stakeholders and pilots, and impact on neighboring facilities. This 
process identified 20 mitigations required for the withdrawal of funds. 
These requirements were then applied to each facility and a mitigation 
implementation plan developed for each airport. We have provided the 
subcommittee with the FAA safety risk management document that contains 
all of this information.

    Senator Moran. When did you do the analysis?
    Mr. Huerta. We did the analysis as part of our overall 
review where we looked at the activity levels associated with 
these towers, we consulted with our partners in the Defense 
Department and the Department of Homeland Security, and then 
once we made the decision, we've been consulting with local 
airports.
    Senator Moran. What was the timeframe in which the analysis 
was done, and how long did it take?
    Mr. Huerta. The analysis was done over the earlier part of 
this year. We spent several weeks looking at this question of 
how we would close these facilities.
    Senator Moran. Were there any airports that you determined 
needed a control tower to remain safe within that program?
    Mr. Huerta. Yes.
    Senator Moran. How many were they?
    Mr. Huerta. I will get you an exact number for the record.
    [The information follows:]

    As a result of the safety analyses we determined that 19 facilities 
needed to remain open for an additional period of time in order to 
evaluate the impact on neighboring air traffic control facilities in 
the event those towers did close and did not continue operating as non-
Federal contract towers.

    Mr. Huerta. But in general, if two characteristics were 
met, they were located in busy congested airspace adjacent to a 
major commercial airport and so the handling of those 
activities in conjunction with the major airport was a factor 
to consider; or, secondarily, based on discussions with the 
Defense Department, where it served a significant national 
security purpose.
    Senator Moran. Is that the analysis that was done by the 
airports that requested they not be closed because of national 
interest? Is that the ones that you were then----
    Mr. Huerta. That was part of it, yes, sir.
    Senator Moran. But there were airports that had air traffic 
control towers before the request for demonstrating a national 
importance, a national need, that were determined--that a 
control tower needed to be there for safety in this instance. 
But in other instances, the control tower was not necessary for 
safety.
    Mr. Huerta. It's a function of configuration and traffic 
and efficiency of the airport. We're not doing anything that is 
not safe, and each airport operates under different conditions.
    Senator Moran. Do you disagree with the testimony of the 
NTSB at the Commerce hearing that you were at earlier this week 
that talked about the importance of the redundancies that the 
air traffic control tower provides and the safety that's 
necessary, that follows that redundancy?
    Mr. Huerta. I think what the chairman said was that they 
had not done a specific analysis of towered versus non-towered 
airports. She did note that safety is a function of many layers 
of safety. As I've said, we are not doing anything that would 
make the airports operate unsafely. In the event there is any 
tension between safety and efficiency, what will suffer is 
efficiency. But the airports will operate safely.
    Senator Moran. I have a series of questions, but my time 
has expired on my first question.
    Mr. Huerta, let me make sure that I understand what you're 
saying is that none of the airports are any less safe when the 
tower is closed than they were when the tower was there. You 
say they're all operating safely. But my question is has safety 
been reduced?
    Mr. Huerta. It is not, because the nature of the operation 
changes in a non-towered capacity. They operate less 
efficiently. We put more separation--pilots are required to 
communicate with each other, and that compensates for the lack 
of a tower.
    Senator Murray. Thank you very much.

                       FURLOUGH IMPACT ON NEXTGEN

    I wanted to ask you about the furlough's effect on the 
FAA's ability to move forward on NextGen. Even if a capital 
program is fully funded, FAA still needs to have engineers 
there and traffic controllers on the job in order to get the 
work done.
    Mr. Huerta, talk with us about the impact the furloughs are 
going to have on NextGen and especially on ERAM, which provides 
a foundation for FAA's modernization.
    Mr. Huerta. The most significant problem with the furloughs 
and how it affects NextGen is how it affects what we call the 
collaborative workgroups. These are workgroups that are made up 
of stakeholders, controllers, management in facilities, and 
these workgroups are essential for us to work through 
deployment problems associated with new technologies and 
ensuring that we're able to address training and development 
issues associated with the deployment of new technologies.
    We have a large number of these workgroups. They tend to be 
very site specific. For example, as we're deploying ERAM in a 
given air traffic center, there will be a collaborative 
workgroup that supports that deployment. Likewise, in our 
Airspace Modernization Program, such as our Greener Skies Over 
Seattle initiative that you're familiar with, we would have a 
collaborative workgroup that would work on the design of those 
procedures.
    As a result of the reduction in controller hours, we have 
found it necessary to pull back people that would otherwise be 
working on collaborative workgroups to their home facilities so 
that they can deal with day-to-day operations to mitigate the 
impacts that we would otherwise have on day-to-day operations. 
And so that, of necessity, is going to introduce some delay in 
the continued rollout.
    The deployment of ERAM--I feel we are in a very good place, 
where we are right now, as a result of the use of these 
collaborative workgroups. But I can envision a situation until 
we can restart them that some of the later sites may be delayed 
for final deployment.
    Senator Murray. Mr. Scovel, you've done a lot of analysis 
on the ERAM program and its progress. And your most recent 
audit recognizes the FAA has improved its management of ERAM 
and turned it around but said there's still some risks. In 
particular, you said the program is spending its money quickly 
and some of the hardest work is still ahead.
    What does the FAA need to do to manage these risks? And, in 
particular, do you think sequestration cuts will add to the 
FAA's challenges?
    Mr. Scovel. To your last point, Madam Chairman, 
sequestration will certainly add to FAA's challenges in dealing 
effectively with ERAM. What we have learned over the last 
several weeks is that FAA will continue to support facilities 
that use ERAM on a full-time basis. Those are currently 10: 
Salt Lake City, Seattle, Minneapolis, Albuquerque, Denver, 
Chicago, Los Angeles, Oakland, Houston, and Kansas City.
    But the program will halt activities for five facilities 
that were working to transition from part-time use of ERAM to 
full time. And those facilities would be Memphis, Cleveland, 
Washington, New York, and Boston. In addition, the agency will 
stop plans for the last four sites that are currently using 
Host, the legacy system, full time to control air traffic, and 
they have not yet begun transitioning to ERAM. Those would be 
Atlanta, Miami, Jacksonville, and Fort Worth.
    The reason for all of this is precisely what Administrator 
Huerta outlined. The collaborative workgroups that involve a 
significant number of controllers have had to be reduced or, in 
some instances, eliminated from the group of four or the group 
of five in order to ensure that those controllers are available 
for their primary duties.

                   EN ROUTE AUTOMATION MODERNIZATION

    This will have an impact on ERAM, certainly, through the 
rest of this fiscal year, the year in which sequestration is 
fully upon us. But because of the ripple effect of suspending 
transition operations at these other nine centers, we can 
expect that into fiscal year 2014, ERAM will similarly be 
hobbled--perhaps that is the right word. It would not be, 
certainly couldn't be, as far along as it would had 
sequestration not impaired the agency's ability to use 
controllers in these workgroups.
    The agency through dint of main effort has set August 2014 
as the firm and fast deadline for implementation of this 
initial phase of ERAM. I caution the subcommittee, however--and 
the industry is certainly well aware--that whatever state ERAM 
is in in August 2014 will not be what was fully envisioned when 
ERAM was first contracted some years ago.
    It will also necessitate further software releases for 
several years thereafter. In fact, one is planned for fiscal 
year 2014 and thereafter to the tune of close to $1 billion. 
That will, again, position ERAM to most effectively support 
NextGen--impact on NextGen most certainly because of the impact 
of sequestration on ERAM.
    Senator Murray. I've gone over, but I want to ask you one 
additional question, Mr. Huerta. I may have to run to another 
hearing, and in a truly bipartisan fashion, Senator Collins has 
agreed to chair if I have to leave. But I did want to ask you 
one additional question.

                         ALTERNATIVE JET FUELS

    I'm really pleased that FAA has been working hard on making 
air traffic more sustainable, and there are a lot of ways to 
tackle that problem. I am particularly interested in the 
potential of alternative jet fuels. My home State of Washington 
is making some really great strides in research and development 
of some really promising technologies that will help us move 
toward some alternative jet fuels.
    We've got industry, nongovernmental organizations, 
universities. They've all joined together in a consortium--
Sustainable Aviation Fuels Northwest--to evaluate some of these 
opportunities and challenges around alternative jet fuels. As 
you know, the FAA has created a Center of Excellence on this.
    Can you tell us a little bit, real quickly, in a short 
amount of time--and maybe answer me offline as well--about your 
vision for these centers?
    Mr. Huerta. The vision for the new Center of Excellence is 
to help us tackle the energy and environmental challenges 
facing aviation and to ensure sustained aviation growth but in 
a sustainable manner. Aviation has always faced challenges with 
energy, noise, air quality, and climate, and what this really 
says is you need an integrated approach to look at how all of 
these things relate to one another.
    The idea is that the center would help us through research 
and development activities to develop a much better 
comprehensive understanding. The focus of the new center will 
help us achieve our aspirational goal of having 1 billion 
gallons of alternative jet fuel in use in aviation by 2018 and 
ensuring the widespread use of these fuels in the longer term.
    Now, we've received proposals and we're reviewing them in 
response to the competitive solicitation that we put forward, 
and this should be completed in the next few months, at which 
time we will provide a formal notification.
    Senator Murray. I very much appreciate that.
    I'm going to turn to Senator Collins, and, again, I may 
just leave in just a short minute. But, again, thank you, 
Senator Collins for taking over for me on the subcommittee and 
to our subcommittee members.
    Senator Collins [presiding]. I'm honored to do so and 
pleased that you trust me to do so, Madam Chairman.
    First, let me associate myself with Senator Murray's 
comments about alternative jet fuels. We have some really 
interesting research going on at the University of Maine in 
this area. And I, too, think that it holds great potential, and 
I hope this is something that we will see the administration 
continue to encourage and fund some of the basic R&D that is 
necessary.

                  AIRPORT IMPROVEMENT PROGRAM FUNDING

    I want to return to the Airport Improvement Program and ask 
some basic questions of you. First of all, what percentage in 
dollar amounts of the Airport Improvement Program grants 
currently go to small airports? And, second, under the budget 
proposal for AIP, will there be an increase or a decrease in 
funding to go to small airports? I understand what you're doing 
with the big airports, so I don't want you to take the time up 
on that.
    Mr. Huerta. In fiscal year 2013, we estimate that the small 
airports would receive about $2 billion or 63 percent of the 
$3.2 billion in total AIP grant funding. This includes 
entitlement and discretionary spending, but does not include 
entitlements that may have been carried over from previous 
years.
    Under the fiscal year 2014 budget proposal, small airports 
would be expected to receive about $1.9 billion or 69 percent 
of the $2.75 billion in total AIP grants. So that's an 
estimated decrease of about $121 million.
    Now, while small airports would receive less AIP funding 
overall, the programmatic changes that accompany this in the 
budget would increase the amount of discretionary dollars that 
are available to small airports because of the suspension of 
the large airports from the AIP program. So, therefore, that 
means that the small airports would have more access to the 
$801 million in fiscal year 2014 discretionary spending.
    Senator Collins. So for the small airports, overall, 
there's an estimated decrease of $121 million from fiscal year 
2013. You're pointing out that the small airports would have 
more access to the $801 million in discretionary funding. But 
isn't it accurate to say that they are not guaranteed the same 
level of funding that they had received from the entitlement 
part of the program, the formula part?
    Mr. Huerta. It is true that the formula would be reduced. 
But since we are excluding their large competitors for the 
discretionary program, I would feel confident that they would 
be able to get back to those levels through the discretionary 
program.

                             787 DREAMLINER

    Senator Collins. Thank you. I want to talk about the 787 
Dreamliner. Some experts have contended that the Dreamliner 
incidents have revealed that the FAA lacks the expertise to 
effectively test and evaluate new technologies such as the 
lithium batteries, and thus is relying too heavily on Boeing to 
vouch for the safety of the system. What's your response to 
that concern? Do you agree with that?
    Mr. Huerta. I don't. For 50 years, the FAA has relied on a 
system of shared technical expertise being brought together, 
where we assemble the best technical experts both from inside 
the Government as well as from industry to make determinations 
on how we set the highest levels of safety. But the FAA always 
retains the ultimate responsibility to make the call and to 
issue the certification.
    Aviation by its very nature is about pushing technological 
boundaries, and so when a new technology is presented as part 
of a new aircraft or a new piece of equipment, we bring 
together technical experts that understand that technology and 
its interactions in an operating context. Based on that 
process, we set certification standards, and that was the case 
for the 787. It's a process that has served us very well for 50 
years, and it will continue to serve us well in the future.
    Senator Collins. Mr. Scovel, do you agree with that? Does 
FAA have the expertise in-house that it needs, or is it too 
reliant on trusting the contractor? I'm just using Boeing as an 
example. There, undoubtedly, are others.
    Mr. Scovel. I understand. I need to start by issuing a 
caveat, and that is we don't have current work, any work, 
specifically, examining the 787 question and supposed over-
reliance by the agency on Boeing's own engineering expertise. I 
can say that we have examined certain facets of the FAA's 
certification program.
    One that we expressed concern about in a report a couple of 
years ago was FAA's reliance on organizational designation 
representatives. These are company airline manufacturers, 
representatives, employees, who are detailed, in effect, to the 
agency. They remain on the manufacturer's payroll, but they are 
performing the certification responsibilities that 
Administrator Huerta outlined.
    Over the development of that program in more recent years--
and it's been in effect for a long, long time, so it's not a 
new development--but as the program has been refined in more 
recent years, the ability of FAA to review the qualifications, 
performance, or even the conduct of those company employees who 
are performing FAA responsibilities has been diminished by 
mutual agreement between the agency and the manufacturers 
involved to include Boeing.
    We are concerned that that relinquishment of overall 
supervisory authority over such designees by the agency may, in 
effect, at some point raise the question of whether the agency 
is properly exercising its certification responsibilities.
    Senator Collins. Thank you.
    Senator Feinstein.
    Senator Feinstein. Thanks very much, Madam Chairman. I 
appreciate it.

                     HELICOPTER OPERATING PRACTICES

    I want to raise an old saw, and it's unregulated use of 
helicopters. As you know, this is a source of major concern to 
millions of Angelinos, and I understand the same thing is true 
in New York City. And these are helicopters flying low and 
spying on prominent people, particularly in the Los Angeles 
area.
    Our fiscal year 2013 bill directed the FAA to complete a 
report on the subject. It's my understanding that your regional 
administrator, Bill Withycombe, has held public hearings and is 
looking at the problem and has committed to releasing a report 
in May of this year. That report is meant to evaluate a full 
set of voluntary and regulatory options to reduce helicopter 
noise and address the safety issues, as well as, candidly, 
privacy issues.
    Is that report going to be released in May of this year, 
Mr. Huerta?
    Mr. Huerta. Yes. In response to the congressional request, 
we have, indeed, undertaken LA helicopter noise initiative, and 
we are intending to release it to Congress in May of this year.
    Senator Feinstein. Good. Do you have any indications of 
what might be forthcoming?
    Mr. Huerta. Well, these are always very complex issues. As 
a result of this noise initiative, community interests, 
helicopter operators, have been meeting regularly under the 
leadership of our regional administrator there in Los Angeles. 
The purpose of this is to identify very specific noise 
sensitive locations that exist there, helicopter operating 
practices, and other things which contribute to the residents' 
concern about noise pollution that exists in the neighborhoods.
    It's a group that we're finding to be very committed to 
finding solutions that provide noise relief while not degrading 
or eroding the business operations that exist there. I think 
it's fair to say that we would place a greater emphasis on 
working this out locally and reaching agreements. The reason 
for that is it gets you to solutions more quickly than a 
traditional rulemaking might.
    If the operators can develop a much better understanding 
and through the use of such things as notices to airmen or 
NOTAMs and outreach to the helicopter operators, engaging the 
local officials--for example, a lot of the concerns might come 
through the use of police helicopters or news organizations--
and you bring the parties together and work through how they 
actually operate, often that will get us to solutions. But this 
is all the stuff that we're looking at there in Los Angeles.
    Senator Feinstein. I think if you just kept them out of 
residential areas and maybe with a waiver for police, that 
might solve the problem. But as you know, Los Angeles has a 
large Hollywood community, and these helicopters regularly are 
a problem in these residential areas. The question is do they 
really belong there to kind of be spying on people, and that's 
not a legitimate business interest.
    Mr. Huerta. Well, I think that, clearly, there is 
significant concern about helicopters that are, in the views of 
the residents, just there to make mischief. But I think the 
distinction that I was drawing was regulatory versus non-
regulatory approaches. If we can solve the problem through non-
regulatory approaches, it happens much more quickly. If we 
still have a problem as a result of those efforts, then it is 
something that we have to take another look at.
    Senator Feinstein. Well, let me say that I appreciate that, 
and I appreciate the action. I know it's controversial, but I 
can tell you the complaints are large and the distress is 
large. So I'm very grateful for that.
    Mr. Huerta. Well, Senator Feinstein, as a Californian, I 
hear from your constituents.
    Senator Feinstein. Yes. One other thing. Is there any 
reason why a drone pilot should not be certified and licensed?
    Mr. Huerta. This is actually one of the questions that we 
are examining as part of our overall review of how we 
incorporate them into the National Airspace System: What should 
be the requirements of an operator of an unmanned aircraft?
    Senator Feinstein. Because they also ought to be 
identifiable. If I understand what's coming down the pipe, it's 
hundreds of thousands of these things flying everywhere. And I 
think it's a real hazard and that we really need to be able to 
identify abhorrent behavior, that the pilots who pilot them, 
whether they're crop dusting or doing anything else, should 
have a specific legal responsibility.
    Mr. Huerta. Well, that is one of the questions that we are 
examining as part of safe integration.
    Senator Feinstein. Well, I'm going to introduce legislation 
to require it. So I don't know where that will go, but I have 
real concerns, and I would hope that the FAA could understand 
this, because the first big accident we have is going to change 
the whole dynamic, and it will happen.
    Is there a limit on size that the FAA certifies?

                        UNMANNED AIRCRAFT SYSTEM

    Mr. Huerta. There are different operating characteristics 
for very small unmanned aircraft systems (UAS). Essentially, 
what we're trying to do is draw a distinction between what is a 
modeler, who might be flying a model airplane--as long as 
they're flying at very low altitudes and not interfering with 
any kind of commercial aircraft--that's a category where we 
have much less concern.
    But as you pointed out in your previous statements, 
unmanned aircraft that operate for a wide variety of purposes 
at higher altitudes can be of very different sizes, and our big 
concern is how do we safely integrate them with other aircraft.
    Senator Feinstein. Well, you know, one of the things I'm 
familiar with is the real-time video that can be taken off of 
these.
    Mr. Huerta. Sure.
    Senator Feinstein. Consequently, they are real spy 
machines. Now, is that something we want in commercial service 
in the United States of America? And I think that's a very real 
question with which the industry has to grapple.
    Mr. Huerta. That's a fair question, and I think that's one 
of the things that we will learn more about as a result of 
these test sites and data gathering that we're going to be 
doing.
    Senator Feinstein. Well, let me ask you this. Can this get 
ahead of you?
    Mr. Huerta. It's a very rapidly evolving technology.
    Senator Feinstein. Yes.
    Mr. Huerta. And I think it's fair to say that the public is 
only now coming to grips with what the full implications of 
that are. I have stressed to the industry associations the 
importance of them being very transparent about what the 
potential for these activities needs to be. But I think that we 
as a country need to look at this technology very carefully, 
and while we're very focused on how we safely integrate them, 
larger questions are raised that we and our Government partners 
will need to consider in the months and years ahead.
    Senator Feinstein. And exactly--you know, I can envision 
drone fights in the air, drones cracking into each other. So I 
think they have to be identifiable. I think the pilots have to 
be certified. We have to know who's doing this, because it 
doesn't take much to put a munition on it once you've got the 
know-how.
    So I know the company that makes most of these, I visited 
in California, and it's certainly a first-rate company, but 
that also troubles me because their ability to innovate is so 
great. So I would just like to urge you to give your attention 
to this subject, because what we do is going to make a huge 
difference down the stream, even before we know the full 
implications of this.
    Mr. Huerta. That's very good counsel, Senator.
    Senator Feinstein. Thank you. Thank you very much.
    Senator Collins. Senator Moran.
    Senator Moran. Senator Collins, thank you very much.
    Administrator, I want to go back to something I raised with 
you in my earlier round of questioning, and I want to make sure 
we have an understanding of what you're going to do in 
providing copies of the analysis. Those words, analysis, study, 
exam, review, have different meanings. We use those words many 
times, and I'm not sure they always mean the same to each 
person using those words.

                        CONTRACT CONTROL TOWERS

    So I'm really interested in seeing what kind of analysis, 
study, exam, review that the FAA did to demonstrate the safety 
of your decision. And as I understand it, you did an analysis 
of each one of the 149 control towers and reached a conclusion 
in each instance that it would be safe to eliminate the control 
tower. I want to confirm with you that you will provide that 
analysis on each one of those towers to the subcommittee and 
then ask you what kind of timeframe that will take.
    Mr. Huerta. I'll need to provide a response for the record 
in terms of what kind of a timeframe that will take.
    [The information requested by the subcommittee was 
submitted by the Federal Aviation Administration on CD media on 
June 10, 2013.]
    Mr. Huerta. The analysis that we conducted was a function 
of what is the level of activity of these facilities, and then 
its relationship to the surrounding environment and other 
airports that might exist in those facilities, national 
defense, and so forth. I think that it's fair to say that the 
analysis did, for example, consider questions. Does the tower 
close at night?
    Therefore, that tells us there are specific operating 
procedures for that airport to operate in a non-towered 
capacity. And we can provide you all of that information.
    Senator Moran. That's interesting to me, and I hadn't 
thought of that point. But it's interesting to me that there 
was no analysis that would say that perhaps it's safer if we 
had air traffic control towers operating 24 hours a day. You 
reached the conclusion that it was safe because they weren't 
operating certain hours of the day. But there's also an 
analysis that could show that they could be valuable in 
improving safety if they were operating more hours.
    Mr. Huerta. Senator Moran, as I said in response to your 
earlier question, what changes when an airport operates in a 
non-towered capacity is how it operates.
    Senator Moran. And, again, I don't mean to be redundant, 
but you will provide that information to the subcommittee and 
you will let us know how much time it takes to get it to us?
    Mr. Huerta. Yes, sir.
    Senator Moran. Thank you very much. You may be aware of my 
effort on the Senate floor with Senator Blumenthal and nearly 
30 of my colleagues, Republicans and Democrats, to try to 
alleviate this problem by shifting some funding within the 
debate of the continuing resolution from unobligated balances 
in research and facilities accounts. Did you oppose that effort 
to transfer or to change those monies from being spent in the 
unobligated accounts and facilities manner to providing money 
for control towers?
    Mr. Huerta. I think it was quite clear that the 
administration's position was that we were looking for a global 
resolution to the sequester issue. As it relates to our ability 
to deal with the impacts of the sequester, as you know, it's a 
blunt instrument, and we are implementing the law as it has 
been enacted. Should different laws be enacted, we will 
implement them.
    Senator Moran. You know, that standard was not applied 
uniformly during the continuing resolution debate, and I don't 
expect you to have an answer for why that would be the case. I 
visited, as you may know, with Secretary LaHood, who told me 
that he would like to be helpful in the cause, but indicated 
the administration opposed my amendment.
    His explanation was that the administration wanted to have 
a--different than what you just said, but what he indicated was 
the administration does not want to solve this problem on a 
short-term basis. I should tell you that I didn't vote for 
sequestration. I think across-the-board cuts are irresponsible. 
I'm not defending sequestration. I am criticizing the manner in 
which you're implementing sequestration, because I don't think 
it's required under the circumstances.

                             SEQUESTRATION

    But, again, I share the view, I suppose, of the 
administration that sequestration is not a manner by which we 
should find savings. Having said that, Secretary LaHood said 
the administration opposes my amendment because it is not a 
long-term solution to the problem. Everything, Administrator, 
within the continuing resolution was a short-term solution. 
It's a continuing resolution that gets us through until 
September 30.
    I couldn't find a single Senator, Republican or Democrat, 
who opposed the amendment. All of them spoke to me in favor of 
the amendment, could not understand why we couldn't transfer 
money that was unobligated and unused to a higher priority. And 
so it is still confusing to me, even with your answer.
    I can't solve in the continuing resolution the issue of 
sequestration. I'm interested in solving the issue of 
sequestration, but it looks to me like you would allow us to 
help you at the FAA solve a problem in a way that is less 
damaging to the traveling public. So I remain confused by the 
suggestion that we want to solve a longer-term problem with 
sequestration. So do I.
    But it does seem odd to me and it seems inappropriate to me 
that you're unwilling to solve a problem that you're presented 
with, one problem at a time as they come up. Unfortunately, 
that's the circumstance in which we find ourselves. You're not 
interested in solving this problem until we solve the larger 
problem?
    Mr. Huerta. Well, Senator Moran, these are all not optimal 
decisions. I've said repeatedly that these are all very 
difficult choices. Every dollar that I am unable to save 
through the Federal contract tower program is a dollar that I 
need to find in employee furloughs. And there's a tension and a 
tradeoff between lower activity facilities, higher activity 
facilities. This is an extremely difficult statute to 
implement, but it is the law and we're forced to implement it.
    Senator Moran. And let me make sure that I understand that 
answer, which is you do have the discretion to decide where the 
cuts would occur, because you're choosing to cut the control 
tower program and perhaps not furloughing air traffic 
controllers at more high volume airports. So the suggestion 
that has been made--I don't know if by you or not--that we have 
no choice--it is a choice, but it's a choice that you describe 
as difficult, but you made a choice. Is that true?
    Mr. Huerta. Well, the choice that we made is to minimize 
impact on the maximum number of travelers. I'd like to share 
with you a specific example. Many of these smaller facilities 
have very low activity of all flights. So if I'm looking at the 
tradeoff between closing a tower which can operate safely where 
the maximum number of commercial activity flights might be, 
say, two or three a day versus affecting the arrival rate at a 
large facility, I'm going to err on the side of ensuring that I 
protect the maximum number of travelers.
    Senator Moran. Administrator, that's exactly what I would 
want you to do. And what's disturbing to me is the continual 
suggestion that we don't have the discretion to do that. What 
you're saying to me is exactly what I've been saying on this 
issue, which is why can't we prioritize? You prioritized. You 
decided that this is more important for safety than this. Why 
isn't spending money on control towers more important than 
unobligated balances?
    Mr. Huerta. Because the unobligated balances are in a 
different funding source which I am not permitted to transfer 
money from.
    Senator Moran. But I was giving you the authority to do 
that.
    Mr. Huerta. But it's authority that I don't have.
    Senator Moran. But you opposed me giving you the authority 
to do that. It doesn't make sense to me. I'm still baffled by 
this. Mr. Administrator, it does seem to me that you have 
indicated there was discretion, or, at least, you have the 
opportunity to prioritize. You have the discretion because 
you've now decided to keep some towers open or keep towers open 
for another couple of months, and you added some towers back to 
the list that wouldn't be closed.
    So it does seem that there's some opportunity for you to 
utilize that discretion, and I wish you would support us giving 
you the opportunity to have more discretion. One of the things 
that caught my attention, and I assume that you said this. It 
comes from a newspaper in Frederick, Maryland. And you were 
quoted at the time when the stimulus dollars were made 
available, $5.3 million at Frederick, Maryland, for an air 
traffic control tower.
    This was just a few years ago, and I read the article that 
said that by the time the air traffic control tower was open 
for business, you made the decision to close the tower. But 
back during sequestration, this is what you reported as saying 
in the local newspaper.
    ``More than 300 aircraft are based at the airport. It has 
two runways and handles 130,000 aircraft operations annually, 
Huerta said. It is estimated that the number will increase to 
165,000 by 2025. Huerta had to almost shout above the noise to 
say he came to make the case that the airport is so busy that 
it needs a tower.'' Quoting you, ``I think the case has been 
made, Huerta said. This has become a very busy airport,'' and 
yet it's one that is being closed.
    Mr. Huerta. And its current rate of activity is less than 
150,000 operations. As I've said, these are difficult choices.
    Senator Moran. Madam Chairman, I was asked by Senator Blunt 
to ask a question in a different vein, although it's along the 
same topic. Our colleague, Senator Blunt, has introduced a bill 
earlier this week that would ensure that essential employees 
upon whom public safety depends can continue to work without 
furlough.
    During a Senate Commerce Committee hearing earlier this 
week, you asked for the opportunity to review the bill. And 
Senator Blunt asked me to ask you if you had reviewed the bill 
and now had an opinion.
    Mr. Huerta. We have reviewed the bill. The administration 
has not taken a position on it at this point.
    Senator Moran. I think, Madam Chairman, that's all I have.

                              COST-SAVINGS

    Senator Collins. Thank you very much, Senator Moran. I want 
to recognize your very strong leadership on the contract tower 
issue. This is an issue that is of great concern to many of our 
colleagues on both sides of the aisle. And I personally believe 
that had you been able to get a vote on the Senate floor that 
you would have won overwhelmingly.
    Mr. Attorney General--Inspector General--maybe you'd like 
to be Attorney General--maybe not.
    In your statement, you talked about that the FAA could 
realize cost savings through improved controller productivity 
and scheduling. And you talk about that since 2000, total air 
traffic operations have declined by 23 percent while the number 
of air traffic controllers has actually increased. I mention 
this because I think the furloughs are a very blunt and harmful 
instrument that does not set priorities.
    But it seems to me that in your excellent testimony and the 
audits and reports that you've done that you've suggested other 
ways that savings could be achieved and that the targets under 
sequestration could be met. So could you talk to us a little 
bit more about your comment that FAA could realize cost savings 
with better scheduling and higher productivity?
    Mr. Scovel. Yes. Thank you, Senator Collins. It is true 
that air traffic operations since 2000 have decreased about 23 
percent with slightly more controllers on duty today than there 
were then. We've been asked by the House to undertake a review 
of air traffic controller productivity, and that review is 
underway, and we don't have conclusions yet that I can share 
with you.
    However, what we have identified through a number of audits 
of FAA's air traffic controller scheduling practices as well as 
training is that there are a number of towers--and that's been 
the subject of discussion off and on between Senator Moran and 
the Administrator--but a number of towers that maintain at 
least two air traffic controllers on duty through the nighttime 
hours when, by virtue of FAA's own threshold requirements in 
terms of operations, those towers should be closed.

                     CONTROLLER TRAINING AND SAFETY

    There are opportunities for savings if FAA were to apply 
its own thresholds to those particular towers and leave those 
towers unmanned during the nighttime hours. We defer to the 
agency in terms of the safety question, and we are very 
cognizant of Senator Moran's concern with safety as well as the 
testimony of the NTSB chairman on Tuesday, in which she offered 
the view that redundant safety systems, safety layers, can only 
enhance safety rather than decrease it.
    Senator Collins. Well, I think part of that also was in 
response to the very unfortunate incidents where the air 
traffic controller had fallen asleep during the nighttime 
shift----
    Mr. Scovel. Exactly.
    Senator Collins [continuing]. Which is obviously 
unacceptable. I'm not sure the answer is to have a second 
person there to wake the person up. But I do think that that's 
probably why two are on duty.
    Mr. Scovel. It is in some instances as a result of the 
concern over fatigued controllers from several years ago. A 
decision was made by the agency and, in fact, the Department to 
put a second controller on duty at those locations, 
notwithstanding the fact that nighttime operations were below 
the threshold that had been specified by FAA for manning the 
tower in the first place.

                             SEQUESTRATION

    Senator Collins. The reason I mention this issue, 
Administrator, is that I would encourage you to go back and 
really scrutinize your budget--I'm not saying that you 
haven't--but to look at the contract towers issue, the post 
midnight issue, particularly when you're dealing, as we are in 
Bangor, with a dual use airport that has military operations as 
well as civilian, and to also take a look at the furlough 
issue. I'm worried about the impact on morale. I'm worried 
about the impact on operations.
    I've met just in the last couple of weeks with high-level 
Navy officials and National Guard officials, and they have both 
been able to work through this in a way that has either greatly 
lessened the number of furlough days that will be required by 
DOD's civilian employees within their departments or eliminated 
altogether. And the disturbing thing is I'm also hearing that 
the White House is putting pressure on the Navy, the Coast 
Guard, and the National Guard to do furloughs anyway. I don't 
think we ought to be trying to enhance the pain of 
sequestration.
    I agree that sequestration was a terrible policy. It 
doesn't set priorities. It treats programs as if they're of 
equal worth, and it is a very poor way to legislate. But here 
we are, and it seems to me that we've got to work together to 
try to figure out ways to minimize the impact on operations and 
on the workforce.
    I personally believe we're going to end up paying more 
later in a lot of these cases as we delay contracts and cause 
problems in the supply chain and take other actions as a result 
of sequestration. So I would encourage you to go back and take 
another really close look at your budget.

                               FURLOUGHS

    Mr. Huerta. Senator Collins, I can't speak to what's going 
on in other agencies, but I will give you my assurance that we 
are in a continuous evaluation of where we can achieve cost 
savings. I will say that when we first began our initial 
planning, we actually thought that we were going to have a much 
larger number of furlough days. And through our very aggressive 
efforts to reduce spending in other areas, we're able to get 
that down to the 11 that we're currently working with, and we 
will continue to work on that.
    I have with my staff weekly reports on how we're doing with 
contract expenditures, what we're seeing with respect to our 
actual performance. This is something that we will continue to 
manage throughout the fiscal year as long as the sequester is 
in place.
    As you know, and as I've said repeatedly, these are 
difficult choices, and we're forced to choose between very 
unattractive options. But nothing would be better news for me 
than a situation where we would be able to relax these 
draconian measures. But it all depends on how the financial 
performance plays out in the weeks ahead.

                      ELECTRONIC DEVICES ON PLANES

    Senator Collins. Let me just ask two final questions. One, 
Administrator, what progress has the FAA made in reviewing 
airline procedures governing the use of portable electronic 
devices such as smart phones and tablet computers in flight? 
It's not that I'm seeking being on a flight where everybody's 
on a phone having a conversation. But, obviously, there's a 
great deal of interest in being able to use devices on these 
flights and a great deal of skepticism, I would say, among the 
traveling public about whether this really is a safety issue.
    Mr. Huerta. Sure. Let me draw the distinction between the 
use of phones and the use of other electronic devices.
    Senator Collins. Yes, a valid distinction.
    Mr. Huerta. The use of phones is regulated by the Federal 
Communications Commission (FCC), and right now their current 
rules prohibit the use of phones on aircraft in flight. The 
FAA, for other electronic devices, recently committed at the 
start of this year an Aviation Rulemaking Committee (ARC) to 
advise us on whether we should revise the regulations that we 
currently have in place that restrict the use of these devices 
during critical phases of flight.
    This rulemaking committee is made up of representatives not 
only of the device manufacturers, but also representatives of 
crews, and of aircraft operators. These members will have the 
full scope of perspectives that would come into play as we 
consider how to look at these things, as well as the research 
and technology community so that we can really understand what 
the challenges are with respect to electronic performance.
    Current law provides that any airline could do an analysis 
of devices on their aircraft, and if they determine there is no 
interference, then they could be allowed. We recognize, though, 
that there has been an explosive growth in the type and variety 
of electronic devices. So it was for this reason that I made it 
a personal initiative to really try to convene this group to 
consider what a way forward would look like.
    We're expecting the work of the ARC to be concluded this 
summer, and at that time they will make recommendations to us 
on what a way forward might look like. The balance they have to 
achieve is what's technologically feasible, but also what can 
be enforced in an operational context by crews and operators of 
airlines.
    Senator Collins. Thank you.

               AUDIT OF LOS ANGELES INTERNATIONAL AIRPORT

    And, finally, Mr. Scovel, I know that the inspector 
general's office is conducting an audit of the Los Angeles 
International Airport's (LAX) revenue use as a result of a 
particular incident where revenue was diverted for purposes not 
allowed under the law. Two questions: What is the status of 
that audit? And, second, has your office uncovered revenue 
diversion incidents--that's a bureaucratic term for it--at 
other airports throughout the country, in other words, misuse 
of revenues?
    Mr. Scovel. Senator Collins, our review of supposed revenue 
diversion at Los Angeles International Airport is underway. We 
haven't completed it yet. So I'm not in a position to speak 
specifically to that, except to note that we are conducting 
that review in response to a request from three Members of the 
House.
    We have also received information independently through 
third party sources affiliated with LAX. Some of those 
allegations we referred to FAA for their review, and they have 
conducted that. And my staff together with FAA is in the 
process of reviewing those conclusions. But the larger piece 
has fallen to one of our audit groups, and that effort is still 
underway.

                      AUDITS OF REVENUE DIVERSIONS

    To your other question, the nature of revenue diversion at 
airports nationwide, unfortunately, it is--I can only call it 
pernicious and persistent. It is required by Federal law that 
revenues generated by airports be used for airport purposes. To 
use it for anything else, such as police or fire services off 
the airport, as we have found happened--the parking fees 
generated in lots and garages on the airport to be used for 
off-airport services--we have found numerous instances of that.
    Both my office and Administrator Huerta's agency have 
groups that have long experience in investigating and 
attempting to resolve instances of revenue diversion. His group 
as well as mine are tremendously under-resourced. We could 
probably dedicate double figure FDEs nationwide to try to track 
all of this down.
    I can give you a very short list--and I won't take too much 
of your time--but just some of the more recent projects that 
we've had underway. Dating back to 2003, we looked at incidents 
at Pittsburgh, Cleveland, San Antonio, Miami, Detroit; 2004, 
San Francisco; 2005, Bellingham, Charlotte, Cincinnati, 
Detroit, Las Vegas, Reno, Tucson; 2006, Orlando; 2011, Denver; 
2011, Venice, and most recently, Los Angeles.
    Over the course of the last 10 years, our office alone has 
identified well in excess of $400 million of revenue diversion 
or lost revenues. For instance, airport real estate sold for 
less than fair market value. That's money that, had the sale 
been conducted properly, should have been devoted to airport 
purposes under Federal law. But all of that happened.
    That's not to say that those revenues, in some instances, 
could ever be recovered either by the agency or by the airport. 
But, in some instances, they can, and we and FAA try to track 
those instances down.
    Senator Collins. Well, that's a very disturbing list of 
airports, because that suggests a widespread problem and with 
real money, hundreds of millions of dollars. That's the sort of 
thing we have to make sure we're providing enough resources for 
on the investigative front so that we can catch and deter that 
kind of activity.
    Senator Moran, do you have anything further?
    Senator Moran. No. Thank you for the indulgence.
    Senator Collins. Thank you.
    I want to thank both of our witnesses for testifying today.
    And, Administrator, I particularly want to recognize your 
first appearance before our subcommittee.

                     ADDITIONAL COMMITTEE QUESTIONS

    I would announce that we will leave the hearing record open 
for 1 week for any additional questions for the record and 
would ask our witnesses to respond to those as quickly as 
possible.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted by Senator Patty Murray
                        nextgen master schedule
    Question. I continue to be concerned by the Federal Aviation 
Administration's (FAA's) track record with capital programs. Too many 
FAA programs go over budget, exceed their schedule, and do not deliver 
on all of their promises. This past year, the FAA proposed changes with 
the goal of improving program management. I was happy to approve FAA's 
reorganization that created the Program Management Office (PMO), which 
is designed to focus the agency on good management practices. Mr. 
Scovel, in your testimony, you discuss the need for FAA to integrate 
all of its Next Generation Air Transportation System (NextGen) 
programs. One year ago, the FAA concurred with your recommendation that 
it produce an integrated master schedule. By what date will the FAA 
produce this master schedule?
    Answer. Consistent with Mr. Scovel's recommendation, the FAA is 
developing an Integrated Master Schedule (IMS). The NextGen IMS will 
track progress activities and milestones monthly for the pre-
implementation and implementation programs.
    By December 2013, the FAA IMS will include the linkages and 
dependencies among NextGen programs. This capability will strengthen 
program synchronization and alignments along with capturing the 
timeline for maturity of the NextGen programs. Further, we will 
continue to enhance the IMS as we revalidate the NextGen schedules and 
definitions of capabilities. In parallel, we will continue our effort 
to align the IMS with the NAS Enterprise Architecture (EA). This 
alignment will include all implementation activities through 2020.
                         acquisitions workforce
    Question. The Inspector General has issued many recommendations on 
the importance of having an FAA workforce with expertise in 
acquisitions. This kind of expertise means hiring the right people and 
giving them the training they need. How will sequestration affect your 
ability to support the PMO and develop a strong acquisitions workforce?
    Answer. The Federal Aviation Administration (FAA) continues to 
prioritize training and certification for the FAA's acquisition 
workforce. The agency views it as a necessary investment to ensure the 
FAA has a strong cadre of skilled acquisition professionals in order to 
effectively manage cost, schedule, and performance of agency 
acquisitions and contracts. The FAA has reduced training and travel 
budgets but is still supporting core training that is required for 
certification of contracting officers and specialists, contracting 
officer representatives, and program/project managers. The FAA is also 
continuing to offer core training to other acquisition specialists, 
such as system engineers, test and evaluation specialists, cost 
estimators, and integrated logistics specialists. However, reduced 
travel budgets are impacting the ability of some field personnel to 
attend training; local training is not available or there is an 
insufficient population to bring training onsite. Additionally, 
diminishing staffing levels and support contractor resources are 
impacting the availability of personnel to attend training due to 
increasing job demands.
    While the FAA remains committed to strengthening the skillsets of 
onboard acquisition staff, sequestration is impacting the FAA's ability 
to hire. The FAA has had to impose restrictions that broadly curtail 
hiring, including backfill hiring and career ladder promotions. While 
there are provisions for exceptions for critical needs, the expectation 
is that these will be very limited. Similarly, there is a general 
freeze on reassignment increases, performance awards, and retention 
incentives. A consequence of these restrictions is difficulty retaining 
staff. Experienced acquisition professionals are in high demand and FAA 
is beginning to see an increase in attrition. Losing highly skilled and 
experienced professionals, and staff managing increasingly complex 
acquisitions, erodes morale and puts the agency at risk for increased 
costs, disruptions, and delays. In addition to a shortage of senior, 
experienced professionals, a thinning pipeline of talent can have long 
term impacts.
    To manage under these circumstances, the FAA is focused on 
developing current, available staff to best meet highest priority needs 
and strategies to retain personnel and organizational knowledge/
expertise.
    The FAA's Acquisition Workforce Council oversees planning and 
development of the acquisition workforce. The Council is in the process 
of updating FAA's Acquisition Workforce Plan. Through this process the 
FAA will reassess current and projected workload and staffing 
(including retirement and attrition data) and strategies to address 
requirements based on assumptions and constraints. The Acquisition 
Workforce Plan update is expected to be published in September 2013.
                          runway status lights
    Question. Recently, the FAA has recognized cost increases with the 
Runway Status Lights program. And I understand that the FAA may 
consider installing these lights at fewer locations in order to keep 
within the programs budget. What is the FAA doing to ensure that it 
delivers on all of the promises of the Runway Status Lights program? 
Under what circumstances would the agency decide to cut back on this 
program instead of making other adjustments to its budget?
    Answer. Runway Status Lights (RWSL) is a costly system because it 
involves cutting into runways and taxiways in order to install the 
field lighting system. In addition, the FAA must rely on the airport to 
make the runways and taxiways available for suitable lengths of time so 
that construction costs don't become unwieldy.
    At the time of the RWSL Final Investment Decision (FID) in January 
2010, based on the economic analysis, only 13 airports provided a 
positive net present value; however, 23 airports were selected based on 
the cumulative program net present value. Moving forward, FAA is 
focusing on getting positive net present value for each airport 
installation both for this program and other capital investments.
    In the time since the FID, the program experienced cost growth due 
to:
  --changes in construction methods to costlier techniques;
  --requests for additional light arrays;
  --limited runway and taxiway availability; and
  --additional development for supportability enhancements.
    Cost containment measures were taken to address the cost growth and 
an affordability analysis was initiated. The affordability analysis 
included implementation progress to date, funds spent to date, life 
cycle costs, and the benefit cost ratio.
    Taking into account all the relevant factors, the agency is 
considering a two-step approach to complete the deployment of RWSL. 
First, execute a plan to achieve operational status at the appropriate 
number of airports based on the affordability constraints and approved 
by the FAA Joint Resources Council. Second, develop a business case to 
address the remaining airports.
    Employing good business practices, the approach forward for the 
remaining airports will take advantage of all methods of reducing 
runway incursions targeted at the specific airport environment. The 
agency is institutionalizing a new process that will be inclusive of 
airport partners to develop a comprehensive plan that will include a 
combination of innovative non-technology and technology solutions 
tailored for each airport environment. In order to achieve this 
tailored approach, the FAA has chartered a Surface Safety Team to, 
along with stakeholders:
  --Evaluate the current set of surface technologies and risk 
        assessment capabilities;
  --Conduct additional risk analysis based on additional information 
        available through voluntary reporting systems and Aviation 
        Safety Information Analysis and Sharing (ASIAS);
  --Develop portfolios of solutions to address identified causal 
        factors; and,
  --Identify funding solutions, including conditions for PFC and Grant 
        eligibility, and cost sharing opportunities.
    This Surface Safety Team began its work in February and is expected 
to complete its work by December 2013.
                       787/aircraft certification
    Question. Given the size of the aviation industry in the United 
States, it is not possible for FAA employees to personally oversee 
everything that happens in the industry every day. To make the best use 
of its resources, the FAA has been moving to a risk-based approach. The 
agency has also taken advantage of employees who work in the aviation 
industry, but perform oversight work on behalf of the FAA. As part of 
its investigation into recent events with lithium batteries on the 787, 
the FAA has reviewed its own oversight of aircraft certification. What 
lessons has FAA learned from this review?
    Answer. As part of our certification processes, the FAA determines 
its level of involvement in a given aspect of the design based on a 
number of risk-based factors, including the safety criticality of the 
design feature, the clarity of the requirements and guidance, and the 
experience/competency level of the applicant and their delegation 
system. Our level of involvement is not an ``all-or-nothing'' 
proposition. Rather, we fine tune our participation to match the 
specific situation. In the case of the 787 lithium batteries, our 
experienced electrical engineers maintained a high level of 
involvement, even in those cases where the formal test witnessing and 
documentation sign-off was delegated to the Boeing organization. 
Overall, we believe our certification processes are sound and effective 
in supporting our safety objectives.
    There are two on-going 787 related activities we are involved with: 
National Transportation Safety Board (NTSB) investigation of the in-
service battery events; and 787 Special Review Team which is conducting 
a comprehensive review of the Boeing 787 critical systems, including 
design, manufacture, assembly and coordination activities between 
Boeing and 787 suppliers.
    We will carefully evaluate any recommendations from these 
activities with regard to further improvements to our overall 
certification processes and oversight methods.
                         aircraft certification
    Question. The aviation industry continues to grow and innovate. The 
FAA's highest priority must always be safety, but its oversight still 
has to keep up with industry--making sure that new products meet the 
same standards for safety, but not at the expense of unreasonable 
delay.
    What is the average time today to review and approve new proposals? 
Has this time increased or decreased in recent years?
    Answer. Certification projects involve multiple milestones spanning 
the time period from initial proposal through FAA approval. The 
duration of each project is unique, with some being as short as one 
week and others spanning 6-8 years.
    One area that has been a challenge for FAA has been the ability to 
take on numerous new projects. Since 2005, the FAA Aircraft 
Certification Service has used a process to prioritize the initiation 
of projects based on a number of considerations including the safety 
significance of the project, scope of the project and degree of FAA 
involvement.
    Section 312 of the FAA Modernization and Reform Act of 2012 
identified six areas for assessment and improvement. The FAA developed 
an implementation plan consisting of 14 initiatives to address the six 
areas. One of the initiatives seeks to improve the process and 
timeliness to initiate certification projects. The FAA developed the 
new process based on industry comments that better balances industry 
needs with FAA priorities and resources. The new process has been 
posted on the FAA Web site and the public comment period is open 
through July 2, 2013. Several industry representatives and associations 
have expressed favorable comments regarding the new process based on 
their initial review.
    Question. Given what you have learned with the 787, how do you see 
the FAA continuing to improve aircraft certification?
    Answer. While we believe our certification processes are effective 
in supporting our safety mission, we are always looking for ways to 
improve them. For that purpose, we plan to use the recommendations and 
lessons learned that will come from NTSB's investigation of the 787 
battery and the 787 Special Review Team.
    We believe any recommendations that come from these activities will 
strengthen the work that has been underway for several years within the 
Aircraft Certification Service to build a stronger, system-based 
approach to our certification, continued operational safety, and 
oversight processes. These efforts fully support the FAA commitment to 
develop and implement an overall Safety Management System.
    Question. The FAA Modernization and Reform Act of 2012 required the 
FAA to assess its certification process and report on the FAA's 
recommendations. That report was due 180 days after enactment. What is 
the status of this effort?
    Answer. The Aircraft Certification Process Review and Reform 
(ACPRR) Aviation Rulemaking Committee (ARC) submitted the following 
recommendations to the Director of Aircraft Certification on May 22, 
2012:
  1. Development of Comprehensive Means To Implement and Measure the 
        Effectiveness of Implementation and Benefits of Certification 
        Process Improvements;
  2. Enhanced Use of Delegation;
  3. Integrated Roadmap and Vision for Certification Process Reforms;
  4. Update Part 21 To Reflect a Systems Approach for Safety;
  5. Culture and Change Management; and
  6. Process Reforms and Efficiencies Needed for Other Aircraft 
        Certification Service (AIR) Functions.
    Recommendations from the ARC were included in a report provided to 
Congress on August 13, 2012. The FAA fully supports these 
recommendations and developed a comprehensive implementation plan 
consisting of 14 initiatives addressing each item. Implementation 
actions began in 2012, in advance of the act requirement to begin 
implementation no later than February 14, 2013.
    Question. Will you be able to make these improvements in time to 
develop the fiscal year 2015 budget request? Or even the fiscal year 
2016 budget request?
    Answer. The fiscal year 2015 budget request will use existing model 
formulas to forecast resource requirements. As we improve and revise 
the model for these labor challenges, these will be incorporated in the 
fiscal year 2016 request.
    For fiscal year 2016, the Flight Standards portion of the model 
will incorporate improvements that will provide more accurate staffing 
forecasts. The Aircraft Certification Service portion of the model does 
not require algorithm revisions for staffing forecast. Aviation Safety 
(AVS) will use December 2012 and 2013 Flight Standards Service (AFS) 
Staffing Tool and Reporting System (ASTARS) model data results to 
formulate our fiscal year 2015 and 2016 budget requests respectively.
                      performance-based navigation
    For the past couple of years, the FAA has been working on its 
metroplex initiative. This initiative brings teams of FAA employees to 
major airports across the country to work with local stakeholders and 
develop better procedures. These procedures rely on performance-based 
navigation, which means that each and every aircraft must be equipped 
with the right technology. Some of these avionics are more advanced and 
can take advantage of more precise procedures. The FAA has been 
developing these procedures for a long time, but with the metroplex 
initiative, the FAA has finally shown that it is placing a priority on 
procedures that will be used after these teams leave the airport. A key 
element of NextGen has been the idea that the best equipped aircraft 
will be able to take advantage of the best procedures. But to ensure 
that procedures are being used, they need to accessible to the largest 
number of aircraft.
    Question. Can the FAA develop procedures that will be used on a 
regular basis and also follow a policy of ``best equipped-best 
served''?
    Answer. The Federal Aviation Administration (FAA) has developed, 
published, and maintained over 20,812 conventional and Area Navigation 
(RNAV) Standard Instrument Approach Procedures (i.e., ILS/VOR/RNAV/RNP 
AR/WAAS/GLS), Standard Instrument Departures and Standard Terminal 
Arrivals, and 1,193 low and high altitude routes (i.e., Victor Airways, 
Jet Routes, Q, T, and TK) for use by users (i.e., airlines, business, 
general aviation, Department of Defense (DOD)) of the National Airspace 
System (NAS).
    These public procedures are available for use by all entities 
identified above, provided that aircraft are properly equipped and 
maintained, the aircrew is properly trained and certified, and the 
flight operations to be performed are authorized and conducted in 
accordance with various FAA directives and other documents, as 
appropriate.
    While these procedures are not segregated or developed in a manner 
that follows a policy of ``best equipped-best served'' per se, aircraft 
and aircrews that meet the aforementioned criteria can certainly take 
advantage of operational and economic benefits provided by more 
advanced Performance Based Navigation routes and procedures. This 
promotes the drive for greater investment in upgrades to flight 
planning capability, equipage and training on the user side, as the FAA 
continues to modernize the NAS through its efforts under NextGen.
    Question. Two years ago, FAA data showed a dramatic increase in 
operational errors made by its air traffic controllers. That year, the 
FAA had also been making changes in how such errors were reported, so 
FAA has never been able to determine how many of those errors were due 
to better data collection and how many were due to an actual increase 
in controller errors. But even today, the FAA has not been able to 
establish a new baseline that it can use to measure any improvement in 
its performance. When will the FAA be able to establish a baseline for 
operational errors?
    Answer. As a result of FAA improvements in reporting and monitoring 
systems during the last 2-plus years, the agency has indeed experienced 
a significant increase in the number of reported operational incidents. 
While the FAA cannot prove with 100 percent certainty that the entire 
increase in reporting is related to improvements in policy, procedures, 
and tools, those increases occurred concurrent to the deployment of 
those improvements and the likelihood of the associated increases is 
statistically high.
    Those new capabilities were implemented methodically throughout the 
National Airspace System beginning on January 30, 2012, and we are 
nearly finished with the implementation of all planned improvements. 
For example, the implementation of electronic radar monitoring in the 
terminal environment via the Traffic Analysis and Reporting Program 
(TARP) was rolled out from January to September 2012. The last program 
to be implemented is TARP for en route facilities which we began 
deploying in May 2013, and expect to be fully implemented by September 
2013.
    Best practices for performance measurement typically use 2 full 
years of good data to establish a new baseline; meaning that the FAA 
will have a new official baseline for Operational Incidents in October 
2015. However, by October 2014, the FAA expects to have 1 full year of 
full reporting and will establish new goals for the current System Risk 
Event Rate (SRER) metric.
    As part of its strategy to move beyond traditional reporting of one 
dimensional safety metrics, in 2011, the FAA introduced a new metric: 
the System Risk Event Rate (SRER). The SRER represents a move away from 
legacy safety indicators consisting of merely counting losses of 
separation and a move toward a metric that illuminates, with far 
greater precision, the frequency and rate of high-risk events across 
the NAS. The SRER is a 12-month rolling rate that compares the number 
of high-risk Risk Analysis Events (RAEs) with the total number of 
validated losses of standard separation that have occurred. As 
expected, the vast increase in reported safety data in 2012 has 
resulted in an increase in the overall number of events and RAEs 
reported. However, it is notable that even with a significantly greater 
number of recorded events and a higher number of reported RAEs, the 
total number of high-risk events has remained low.
                           retention bonuses
    Question. Please provide a table for fiscal year 2012, and another 
for fiscal year 2013, listing the title, office, and salary of each FAA 
employee that received a retention bonus during that year, as well as 
the amount of the retention bonus itself.
    Answer.

                                   FISCAL YEAR 2012 RETENTION INCENTIVES--FAA
----------------------------------------------------------------------------------------------------------------
                                                                                         Retention    Retention
               Organization                         Position title            Salary      percent       amount
----------------------------------------------------------------------------------------------------------------
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....      $85,356           10   \1\ $8,536
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       84,006           10    \1\ 8,401
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       86,037           10    \1\ 8,604
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....      106,684           10   \1\ 10,668
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       67,780           10    \1\ 6,778
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       85,356           10    \1\ 8,536
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       85,788           10    \1\ 8,579
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       42,319           10    \1\ 4,232
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC \2\.       43,589           10    \1\ 4,359
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  AVIATION ASSISTANT...........       43,102           10    \1\ 4,310
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       84,006           10    \1\ 8,401
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  SUPV AIR TRAFFIC CONTROL SPEC      119,972           10   \1\ 11,997
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       89,879           10    \1\ 8,988
ATCT PORTLAND, ME.........................  AIR TRAFFIC CONTROL SPEC \2\.       89,879           20       17,976
HQ-AIR TRAFFIC ORG WASHINGTON, DC.........  DEPUTY CHIEF OPERATING             179,700        24.38       42,500
                                             OFFICER \3\.
HQ-HUMAN RESOURCE MGT WASHINGTON, DC......  SUPV HUMAN RESOURCES SPEC....      161,736           25       40,434
SSC NANTUCKET, MA.........................  AIRWAY TRANSP SYS SPEC.......      103,830           20   \1\ 20,766
SSC NANTUCKET, MA.........................  AIRWAY TRANSP SYS SPEC.......       79,026           20   \1\ 15,805
HQ-HUMAN RESOURCE MGT WASHINGTON, DC......  MGT & PROG ANALYST...........      141,735  ...........          \4\
----------------------------------------------------------------------------------------------------------------
\1\ Denotes continuation of a group incentive authorized to supplement the pay of employees at an
  extraordinarily high cost location (Nantucket Island) that is included in the ``Rest of U.S.'' locality pay
  area.
\2\ Denotes the same employee as row directly above this one--location changed or modified agreement.
\3\ Retired 9/30/12.
\4\ Denotes an incentive that was stopped upon expiration or review showing incentive no longer needed.


                                   FISCAL YEAR 2013 RETENTION INCENTIVES--FAA
----------------------------------------------------------------------------------------------------------------
                                                                                         Retention    Retention
               Organization                         Position title            Salary      percent       amount
----------------------------------------------------------------------------------------------------------------
ATCT NANTUCKET, MA........................  SUPV AIR TRAFFIC CONTROL SPEC      $90,478           10   \1\ $9,048
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       84,006           10    \1\ 8,401
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC \2\.       76,267  ...........      \1\ \3\
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       86,037           10    \1\ 8,604
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....      106,684           10   \1\ 10,668
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       20,324           10    \1\ 2,032
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       85,356           10    \1\ 8,536
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       85,788           10    \1\ 8,579
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       67,780           10    \1\ 6,778
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  MGT & PROGRAM ASSISTANT......       46,550           10    \1\ 4,655
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       84,006           10    \1\ 8,401
ATCT NANTUCKET, MA........................  AIR TRAFFIC CONTROL SPEC.....       76,267           10    \1\ 7,627
ATCT NANTUCKET, MA........................  SUPV AIR TRAFFIC CONTROL SPEC      119,972           10   \1\ 11,997
SSC NANTUCKET, MA.........................  AIRWAY TRANSP SYS SPEC.......      103,830           20   \1\ 20,766
SSC NANTUCKET, MA.........................  AIRWAY TRANSP SYS SPEC.......       79,026           20   \1\ 15,805
ATCT PROVIDENCE, RI.......................  AIR TRAFFIC CONTROL SPEC.....       83,375  ...........          \3\
TRACON CAPE, OTIS AFB, MA.................  AIR TRAFFIC CONTROL SPEC.....       87,753  ...........          \3\
HQ-HUMAN RESOURCE MGT WASHINGTON, DC......  SUPV HUMAN RESOURCES SPEC....      166,265           25   \4\ 41,566
----------------------------------------------------------------------------------------------------------------
\1\ Denotes continuation of a group incentive authorized to supplement the pay of employees at an
  extraordinarily high cost location (Nantucket Island) that is included in the ``Rest of U.S.'' locality pay
  area.
\2\ Denotes the same employee as row directly above this one--location changed or modified agreement.
\3\ Denotes an incentive that was stopped upon expiration or review showing incentive no longer needed.
\4\ Retention payments terminated 6/3/13.

    Question. Please describe the FAA's process for approving retention 
bonuses.
    Answer. An employee's manager may request a Retention Incentive 
when the employee has unique qualifications or there is a special need 
for the employee's services which makes it essential to retain the 
employee. The employee must be likely to leave the Federal service in 
the absence of a retention incentive and have a performance rating of 
acceptable. The employee must have completed a minimum of 1 year of 
continuous service with FAA, immediately prior to receiving the 
incentive, or have been employed by FAA for a period established under 
a service agreement resulting from the payment of a recruitment or 
relocation incentive, whichever is longer.
    The requesting office must complete an Authorization Request form. 
The form has the employee's position information, salary, requested 
amount, and other information required to process the incentive 
request. It also includes sections for narrative justification that are 
designed to present the business reasons for the incentive and to 
address the various factors prescribed by the Department of 
Transportation policy, Departmental Personnel Manual (DPM), chapter 
575, Recruitment, Relocation, and Retention Incentives. Finally, the 
form has a concurrence/approval section with signature blocks to 
facilitate the review and approval process.
    Along with the form, any supporting documentation that may be 
necessary to support the request is added to the package. This may 
include the employee's latest performance assessment, documentation of 
an outside job offer, or documentation of any other expression of the 
employee's intention to leave Federal service absent an incentive. The 
package will also usually include an FAA Retention Incentive Service 
Agreement that outlines the conditions that the employee must agree to 
while receiving the incentive, such as the payment method, agreement 
termination and repayment liability rules, and specific performance 
objectives that the Line of Business or Staff Office (LOB/SO) has 
identified to be achieved or maintained in exchange for the retention 
incentive.
    Requests are initiated by the employee's manager and forwarded 
through channels to the head of the employee's LOB/SO within the FAA. 
If the Head of the LOB/SO concurs, the request is forwarded for review 
by the servicing Human Resource Management Office to validate any 
staffing information outlined in the request and to ensure compliance 
with FAA policy. The request is then presented to the Assistant 
Administrator for Human Resource Management for concurrence.
    The FAA administrator considers the request as the Reviewing 
Official. Only requests approved by the FAA administrator are forwarded 
to the Department of Transportation, Office of the Secretary for 
consideration. At the Department, the request first goes to the 
Departmental Office of Human Resource Management (DOHRM) for technical 
review to ensure it meets the requirements outlined in DPM-575 and FAA 
policy. The DOHRM office forwards each request to the Assistant 
Secretary for Administration for consideration. When the requested 
incentive amount is 25 percent or less of the employee's basic salary 
rate times the number of years required by the service agreement, the 
Assistant Secretary for Administration makes the final decision and 
serves as the Approving Official. If the amount requested exceeds that 
25 percent amount, the request must be forwarded to the Deputy 
Secretary of Transportation for decision as the Final Approving 
Official.
    The DOHRM notifies the FAA's Assistant Administrator for Human 
Resource Management of the final decision.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
                       unmanned aircraft systems
    Question. Under the 2012 Federal Aviation Administration (FAA) 
Modernization and Reform Act, the FAA is directed to develop a 
``comprehensive plan'' to integrate unmanned aircraft into the national 
airspace. The law sets a deadline for the integration of ``civil'' 
drones--those in private hands--by ``no later than September 30, 
2015.'' It also instructs the FAA to integrate ``public'' drones--those 
in Government hands--on an expedited basis.
    I believe the integration of drone technology poses serious privacy 
risks--especially the danger of unwanted surveillance of the 
individual.
    Will you assure this subcommittee that the FAA will work with other 
appropriate agencies and Congress to establish rules protecting 
Americans' privacy before drones are integrated into the national 
airspace?
    Answer. The FAA engaged our interagency partners (including the 
National Aeronautics and Space Administration (NASA), the Department of 
Defense (DOD), and the Department of Homeland Security (DHS)) and 
sought input in the development of the FAA proposed privacy approach 
for the Unmanned Aircraft Systems (UAS) test sites.
    The FAA is analyzing the public input received regarding its 
proposed approach to include terms and conditions in the ``other 
transaction agreement'' (OTA) that would, among other things, require 
operators to develop privacy policies and make them publicly available. 
By the end of July 2013, the FAA plans to finalize the terms to include 
in the OTAs with the test site operators. The FAA will continue to work 
with appropriate agencies on the issue of privacy protection.
                 unmanned aircraft systems test ranges
    Question. Under the 2012 FAA Modernization and Reform Act, the FAA 
is directed to select six ``test ranges'' for the integration of drones 
into the national airspace. These test ranges are supposed to help 
develop certification standards, air traffic requirements, and to 
provide for verification of the safety of unmanned aircraft before 
their integration into the national airspace.
    What specifically does the FAA plan to test at these test ranges?
    Answer. We will consider how well an applicant's research goals 
align with the overarching goal of safely integrating UAS into the 
National Airspace System. In order to be selected as a site operator, 
the applicant must have a sound research plan consistent with the 
minimum areas identified in the FAA Modernization and Reform Act of 
2012.
    Question. Where will these drones fly when they are being tested? 
Will they be flown over populated areas?
    Answer. The exact location of the test ranges will not be known 
until the six test sites are selected. However, the selection process 
takes into consideration the test site operator's ability to assure the 
safety of people and property on the ground. The Screening Information 
Request contains nine specific safeguards to protect persons and 
property that must be addressed by the applicants. The FAA plans to 
complete the test site selection process by the end of 2013.
    Question. How can we be sure that these drones will not interfere 
with manned aircraft traffic?
    Answer. The evaluation will assess the applicant's ability to 
protect the safety of manned aircraft operations in or near the test 
range. Only sites with sound methods for protecting the safety of 
manned aircraft and people and property on the ground will be selected. 
The sites will not be authorized to operate until the FAA evaluates and 
approves the safety system.
    Question. I assume these test ranges will not be placed in highly 
populated areas--where the issues of safety and privacy would be most 
acute. Is that correct?
    Answer. The exact location of the test ranges will not be known 
until the six test sites are selected. However the selection process 
takes into consideration the test site operator's ability to assure the 
safety of people and property on the ground. The Screening Information 
Request contains nine specific safeguards to protect persons and 
property that must be addressed by the applicants.
    Question. Sites all across the country, including two in 
California, are competing to be these ``test ranges.'' Press reports 
say there are as many as 50 applicants in 37 States. The solicitation 
document (``Screening Information Request'') includes a number of 
factors for the FAA to consider in deciding where to put these test 
sites. I am deeply concerned that it accords no weight to whether an 
applicant has a better approach to privacy. Instead, the FAA put out 
its own privacy document for notice and comment. This simply says that 
applicants will be required to have a ``privacy policy,'' without 
specifying what (if anything) that policy must contain.
    Why has privacy been omitted as a factor in choosing these test 
ranges?
    Answer. The selection criteria incorporate factors that Congress 
directed the FAA to consider in the FAA Modernization and Reform Act: 
geographic and climatic diversity, location of ground infrastructure, 
and research needs. In March 2012, the FAA published a request for 
comments in the Federal Register, and in April 2012, FAA hosted two 
public webinars to obtain public input on the FAA proposed selection 
criteria. Although there was substantial public participation, the FAA 
did not receive comments advocating that privacy should be used as a 
factor in choosing the test sites.
    Subsequently, the FAA determined that it should address privacy 
considerations at the six test sites. The FAA elected to do so by 
proposing that the test sites comply with all applicable privacy laws 
and policy that they establish privacy policies that are informed by 
Fair Information Practice Principles--an approach that has been 
successfully applied by Government agencies in other contexts.
    Question. The FAA has already amended its solicitation document--
most recently on March 20. Will FAA amend the solicitation again to 
make sure privacy is included as a factor in choosing the test sites? 
If not, why not?
    Answer. The FAA engaged our interagency partners (including NASA, 
DOD, and DHS) and sought public input in the development of the FAA 
proposed privacy approach for the UAS test sites.
    Rather than address privacy issues in the solicitation, each 
selected operator will be required to enter into an Other Transaction 
Agreement (OTA) with the FAA, which will set out the terms and 
conditions under which the entity will operate the UAS Test Site. The 
agreement will include a requirement for each operator to publish and 
comply with its privacy policy as it relates to the test sites.
    Question. You testified at the hearing: ``we're not in a position 
to make a determination of the content of the [privacy] plan, but what 
we would require is that [a test range] develop one, that they make it 
available to the public, and it is available for people to read and 
understand.'' Thus, according to your testimony, a privacy policy could 
essentially be devoid of content and still qualify. Why not--perhaps in 
consultation with the Federal Trade Commission or privacy advocates--
make sure that the privacy policies adopted by the test ranges are 
strong, not weak?
    Answer. FAA will require the site operator to develop a privacy 
policy that is informed by Fair Information Practice Principles.
    The FAA has required each test site operator to be a public 
(governmental) entity and to publicly post its privacy policy. This 
promotes transparency and allows local stakeholders to ensure that the 
public entity operating the site develops privacy policies that address 
local concerns. The FAA believes that a public entity will be 
responsive to local stakeholder concerns.
    Question. You testified at the hearing: ``privacy is not something 
Congress asked us to look at, nor is it something that the FAA has the 
authority to regulate.'' But the portion of the 2012 FAA Modernization 
and Reform Act directed at unmanned aircraft clearly recognizes that 
unmanned aircraft have unique attributes that demand separate 
attention. One of those attributes is the unique privacy risks they 
pose. The law directs FAA to develop a ``comprehensive plan to safely 
accelerate the integration of civil unmanned aircraft systems into the 
national airspace system,'' which will then form the basis for final 
regulations. A plan that is ``comprehensive'' would include the 
paramount issue of privacy. In addition, the law lists a variety of 
broadly-phrased issues (mostly related to safety) that must be 
accounted for in the plan--but it also clearly says that these are the 
absolute ``minimum'' of what the plan must contain. It does not prevent 
FAA from considering the issue of privacy. Finally, the FAA's approach 
to date seems inconsistent with your statement. So far, FAA has put out 
a privacy document for notice and comment with respect to the six test 
ranges. This is supposed to result in a privacy strategy incorporated 
into FAA's agreement with the test ranges that are selected. Is it 
truly FAA's view that it has no authority over the issue of privacy and 
unmanned aircraft?
    Answer. The FAA has authority in 49 U.S.C. 106(l)(6) to issue the 
site operators an ``other transaction agreement'' (OTA) that will 
contain the legally binding terms and conditions under which the entity 
will operate the UAS site. That statute provides, in pertinent part:

    ``The Administrator is authorized to enter into and perform such . 
. . other transactions as may be necessary to carry out the functions 
of the Administrator and the Administration. The Administrator may 
enter into such . . . other transactions with . . . any State, 
territory, or possession, or political subdivision thereof . . . on 
such terms and conditions as the Administrator may consider 
appropriate.''

    Due to the concerns relating to privacy at the test sites, the FAA 
has proposed including terms in each OTA that will require site 
operators to establish a privacy policy.
    Although the authority in 49 U.S.C. 106(l)(6) allows the FAA to set 
the terms under which the test sites will operate, it does not 
authorize the FAA to establish privacy policy for manned or unmanned 
aircraft operations generally.
          unmanned aircraft systems airworthiness certificates
    Question. There are many FAA regulations that apply to private 
aircraft, which are called ``civil aircraft'' under FAA regulations. 
These regulations include the requirement that a civil aircraft be 
certified as airworthy, as well as the requirement that a civil 
aircraft be operated by a licensed airman. However, a great many of 
these regulations do not apply to ``public aircraft''--meaning those 
operated by government agencies like a local police or fire department. 
Thus, FAA regulation of police and other public aircraft generally is 
quite limited. For example, as I understand it, public aircraft are not 
required to have FAA airworthiness certificates, and those who fly them 
are not required to have FAA airman certificates. This regulatory 
approach is especially problematic with respect to drones, which raise 
a whole host of safety and privacy issues that are not raised by 
ordinary manned aircraft. Section 334 of the 2012 FAA Modernization and 
Reform Act can be read to address this issue. It specifically provides 
the FAA with authority over ``public unmanned aircraft systems,'' 
meaning those operated by governmental agencies. It specifically 
directs the FAA to ``develop and implement operational and 
certification requirements for the operation of public unmanned 
aircraft systems.''
    Can you confirm that FAA intends to require (1) airworthiness 
certificates and (2) airman certificates with respect to the operation 
of civil unmanned aircraft?
    Answer. Acceptable standards for civil unmanned aircraft systems 
are under development in concert with the Radio Technical Commission 
for Aeronautics (RTCA) under the new special committee (SC) 228. 
Requirements for certificate of authorization/experimental category 
have already been published.
    Question. Will these requirements--in particular the airman 
certificate--be different for the operation of an unmanned aircraft, 
which in many respects is unlike an ordinary manned aircraft?
    Answer. The FAA will work with industry to develop standards for 
licensing civil pilots of unmanned aircraft. FAA is in the process of 
determining whether or not any regulatory changes are possibly needed.
    Question. Does FAA believe it possesses the authority to require an 
airworthiness certificate or an airman certificate with respect to 
public unmanned aircraft operations under section 334 of the 2012 act? 
If so, does FAA intend to use that authority?
    Answer. The FAA intends to comply with the provisions of the FAA 
Modernization and Reform Act's section 334 on Public Unmanned Aircraft 
Systems. The current regulatory structure requires public operators to 
make their own finding of compliance using their processes. FAA will 
issue guidance regarding a public entity's responsibility when 
operating an unmanned aircraft without a civil airworthiness 
certificate issued by the FAA. FAA is in the process of determining 
whether or not any regulatory changes are possibly needed.
  government accountability office report on unmanned aircraft systems
    Question. There remain serious concerns about whether drones can be 
safely integrated into the national airspace. I direct your attention 
to a September 2012 Government Accountability Office (GAO) report, 
which noted the following:

    ``GAO Reported in 2008 that UAS could not meet the aviation safety 
requirements developed for manned aircraft and that this posed several 
obstacles to safe and routine operation in the national airspace 
system. These obstacles still exist. . . .''

    The report, beginning at page 14, goes into detail about the 
serious issues that remain to be considered and addressed. As it notes: 
``To date, no suitable technology has been deployed that would provide 
UAS with the capability to sense and avoid other aircraft and airborne 
objects.''
    The report also cites other issues, including vulnerabilities in 
command and control, unreliable UAS performance, the issues created by 
the separation of pilot and aircraft, and the transition to Next 
Generation Air Transportation System (NextGen).
    Is there currently technology that would allow a drone to detect, 
sense, and avoid other aircraft?
    Answer. Air Force Research Labs and NASA have demonstrated new 
technologies that are capable of detecting proximate aircraft and 
avoiding them. A standard to allow the certification of these 
technologies is under development by RTCA. The schedule for completion 
of the standard is mid-2016.
    Question. How are the other issues discussed in the GAO report 
being addressed?
    Answer. The FAA has tasked RTCA to develop standards for radios 
used in command and control functions in the portion of the spectrum 
allocated to safety of life uses. These standards will address many of 
the issues identified in the GAO report and allow for civil aircraft 
certification. The radio standards are scheduled for mid-2016.
    Question. If sense-and-avoid technology is not in place and other 
safety issues highlighted by GAO are not addressed, would FAA 
nevertheless proceed with full integration of UAS into the national 
airspace system?
    Answer. The primary mission of the FAA is safety. The FAA will only 
proceed with integration of UAS once safety issues have been 
appropriately addressed.
                              armed drones
    Question. The question of armed drones has, as you may know, gotten 
a great deal of attention in Congress lately. One issue that appears 
unsettled is whether current FAA regulations prohibit the arming of a 
civilian aircraft, including a drone. Under FAA regulations, 14 CFR 
section 91.15: ``No pilot in command of a civil aircraft may allow any 
object to be dropped from that aircraft in flight that creates a hazard 
to persons or property. However, this section does not prohibit the 
dropping of any object if reasonable precautions are taken to avoid 
injury or damage to persons or property.''
    This regulation has been cited as authority for the point that FAA 
would not allow a civil unmanned aircraft to have a weapon affixed to 
it. Is this correct?
    Answer. FAA Regulation 14 CFR section 91.15 is used to determine 
the safety of installed equipment. This regulation currently prohibits 
the use of weapons on an aircraft.
    Question. Will FAA be more explicit in regulations that civil 
unmanned aircraft may not have weapons affixed to them?
    Answer. FAA Regulation 14 CFR section 91.15 is used to determine 
the safety of installed equipment. This regulation prohibits the use of 
weapons on an aircraft. However, FAA continues to evaluate whether or 
not regulatory changes are needed.
                       grants-in-aid for airports
    Question. The FAA's Grants-in-Aid for Airports, or the Airport 
Improvement Program (AIP), is the primary FAA program investing in 
runways, taxiways, and airport infrastructure. In fiscal year 2012, 
Congress appropriated $3.35 billion. The President's budget proposes to 
cut this to $2.9 billion.
    The needs of our commercial airports substantially outpace these 
resources. But a disproportionate amount of this program's funding (25-
35 percent) is spent at airports without any commercial service on 
which almost all Americans travelers depend.
    25 to 35 percent is spent at noncommercial airports even though 
noncommercial aviation fuel taxes account for about 1 percent of the 
total Airport and Airway trust fund revenues each year.
    Unfortunately, the FAA's fiscal year 2014 budget proposes to 
prioritize airports without commercial service for Airport Improvement 
Program funds. The budget proposes that large hub airports cover their 
infrastructure costs by raising passenger facilities charges.
    Is it fair that only 65-75 percent of AIP funding is spent at 
airports with commercial service when commercial aircraft account for 
99 percent of revenue to the Airport and Airway Trust Fund?
    Answer. This is fundamental to the safety, efficiency and 
sustainability of the air transportation system. The perceived 
disparity between the source of Trust Fund revenues and the types of 
facilities it supports reflects the fundamental structure of the 
overall U.S. system of airports. Since the early 1900s, Federal policy 
has determined it is in the public interest to support a nationally 
integrated aviation system citing the benefits derived from maintaining 
a diverse geographic network of airports. Such a system facilitates 
rural and remote access, supports military and law enforcement needs, 
expedites emergency and disaster response, and ensures the timely 
transport and delivery of commercial goods. Moreover, many of the 
smaller, non-commercial facilities provide alternatives to airports 
handling commercial passengers, thereby reducing congestion and delay 
at commercial service airports. The functions supported by these 
smaller airports are critical. In 2012, the FAA published a study 
outlining a broad range of critical roles and functions the smaller 
airports serve, from basic access to flight training, emergency 
response, agricultural support, aerial firefighting, and many others.
    The larger commercial airports, especially large hub airports, have 
access to other means of capital, including, airport bonds and 
passenger facility charges (PFCs), not available to the smaller 
airports.
    For more than 30 years, the Airport Improvement Program (AIP) has 
helped State and local governments plan, develop, improve, and maintain 
a broad-based system of integrated airport facilities. The AIP provides 
capital funding to support 3,330 public use airports, heliports, 
seaplane bases, and landing areas included in the federally-mandated 
National Plan of Integrated Airport Systems (NPIAS).
    Question. Would the FAA support a provision requiring that at least 
75 percent of Airport Improvement Program Funding be spent at 
commercial airports?
    Answer. The FAA does not support either limiting the number of 
airports funded or the reducing the minimum level of funding provided 
to airports that are classified as non-commercial service airports.
    Question. Which investment is likely to benefit the greatest number 
of Americans: improving airports with commercial service or improving 
airports without any commercial service?
    Answer. The national integrated system needs to be maintained as a 
whole, with both categories of airports (commercial and non-commercial) 
able to meet the needs of the users that rely upon them, both directly 
and indirectly. While people are most familiar with the commercial air 
travel benefits offered at the 511 commercial service airports in the 
United States, nearly 3,000 smaller general aviation airports form an 
extensive airport network and make important social and economic 
contributions to society. In 2009, non-airline operators at general 
aviation airports flew an estimated 27 million flights for emergency 
medical services, aerial fire-fighting, law enforcement and border 
control, agricultural functions, flight training, time-sensitive air 
cargo services, search and rescue, and business travel. Many of these 
functions cannot be safely, efficiently, or economically supported at 
larger commercial service airports.
    In addition to providing unique general aviation benefits, non-
commercial service airports provide a critical safety and efficiency 
complement to commercial service airports. Because of their sheer 
number and geographic distribution, general aviation airports provide a 
safety net to support commercial operators in the event of emergency 
aircraft diversions, medical emergencies, deteriorating weather 
conditions, or mechanical failures. In high-density metropolitan areas, 
general aviation airports act as ``relievers'' for congested commercial 
service airports by supporting high-volume activity by smaller and 
slower aircraft.
    In summary, it is crucial to our national life and economy that we 
continue to support both commercial-service and general aviation 
airports. The Airport Improvement Program has evolved over more than 30 
years to achieve precisely that goal.
                            helicopter noise
    Question. The fiscal year 2013 Senate Transportation, Housing and 
Urban Development, and Related Agencies (THUD) report stated: ``The 
Committee recognizes that the use of helicopters in Los Angeles County 
produces quality of life and safety impacts, prompting requests for FAA 
action. The Committee directs the FAA to solicit the views of 
interested parties, including representatives of local communities, 
regarding helicopter noise and safety issues in Los Angeles County no 
later than 90 days after the enactment of this act. The committee 
further directs the FAA to lead a collaborative effort with community 
representatives, elected officials, helicopter operators, and other 
affected interests to: (1) identify specific concerns with helicopter 
operations, including noise; (2) evaluate options that would respond to 
identified concerns including, but not limited to routes, operating 
altitudes, and hovering practices; and (3) develop solutions to the 
identified issues consistent with the FAA's statutory responsibilities. 
Potential solutions should not restrict helicopter operations needed 
for emergency, law enforcement, or military purposes. The committee 
directs the FAA to submit a report to the House and Senate 
Appropriations Committee within 12 months of enactment of this act 
regarding the helicopter concerns in Los Angeles County that have been 
identified, the progress in addressing these concerns including reasons 
why some measures were not retained for further study, and the 
mechanisms for implementing measures and monitoring their continuing 
effectiveness.'' In response, FAA Regional Administrator Bill 
Withycombe has held public hearings and is studying the problem. He has 
committed to releasing a report in May 2013 evaluating a full set of 
voluntary and regulatory options to reduce helicopter noise and address 
safety issues. The report is a necessary first step. But it must be 
followed by effective regulations.
    During the hearing, we were able to discuss this. You indicated 
that ``non-regulatory'' approaches to this problem were preferable 
because they could be implemented more quickly. However, I am very 
concerned that voluntary efforts are less effective than regulatory 
approaches. For instance, on Long Island, New York, FAA established 
voluntary routes for helicopters in 2008 without success. The FAA 
finally completed regulations imposing mandatory routes in 2012.
    If past voluntary efforts to curb helicopter noise above both Los 
Angeles and Long Island failed, why does the FAA believe that ``non-
regulatory'' options will succeed above Los Angeles as a result of this 
latest effort?
    Answer. The FAA has had decades of success with fixed-wing 
aircraft, voluntary noise abatement measures that can be applied to 
noise abatement measures for helicopters. The FAA does not regard the 
voluntary efforts in New York or Los Angeles as a failure. In fact, the 
voluntary route along the north shore of Long Island, which was 
developed with input from local helicopter operators and airports, 
reportedly had a high rate of compliance and formed the basis for the 
regulation adopted last year.
    In contrast with the north shore of Long Island, the density of 
land use and the diversity of helicopter activity in Los Angeles make 
it difficult to identify noise abatement routes that would avoid 
residential areas. Some efforts to revise Visual Flight Rules (VFR) 
helicopter approach and departure tracks for Los Angeles-area airports 
to minimize noise have not yet produced feasible noise abatement 
routes. This reflects the challenges of safely routing aircraft in an 
urbanized environment rather than a failure of the collaborative 
process used to develop routes. These challenges make it more important 
to fully engage both the residents and helicopter operators in 
addressing noise issues in Los Angeles.
    A significant positive development of the current Los Angeles 
Helicopter Noise Initiative is that it has brought together community 
representatives and helicopter operators to consider, in conjunction 
with the FAA, specific noise-sensitive locations and helicopter 
operating practices that contribute to noise concerns on a regional 
scale. The group is committed to identifying measures that will provide 
noise relief without degrading safety or eroding business 
opportunities. This initiative has already identified targeted measures 
that can provide noise relief to residents. The FAA recommends the 
continued engagement of a robust local process and is prepared to 
support such a process to pursue remedies that will reduce helicopter 
noise, are responsive to community quality-of-life and economic 
interests, and are consistent with National Airspace System safety and 
efficiency.
    Question. Which approach to helicopter noise is most likely to 
reduce noise disturbance on the ground: regulatory or non-regulatory 
options?
    Answer. Success in reducing noise on the ground is directly related 
to the availability of effective noise abatement procedures, rather 
than the implementation mechanism. If a procedure can be designed to 
minimize noise impacts on residential or other noise-sensitive areas, a 
non-regulatory approach can provide just as much noise relief as a 
regulatory approach.
    The most effective and widely-accepted noise abatement measures are 
those that are developed in collaboration with stakeholders and are 
supported by local consensus. The FAA's experience is that voluntary 
noise abatement procedures have a high degree of compliance when 
operators can use them safely and efficiently. The current Los Angeles 
Helicopter Noise Initiative identifies actions and flexible approaches 
that offer the best opportunity to address helicopter noise issues 
within the Los Angeles County.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg
                    furloughs' impacts on facilities
    Question. The airspace over New Jersey is among the most congested 
in the country, with Newark Liberty Airport serving more than 33 
million passengers each year. The Federal Aviation Administration (FAA) 
has said it intends to apply sequestration in a way that prioritizes 
safety and impacts the fewest air travelers. I have long been concerned 
with the understaffing of air traffic controllers at Newark Liberty and 
I am concerned the sequestration-imposed air traffic controller 
furloughs will disproportionately impact this airport.
    In applying furloughs for air traffic controllers, did you account 
for the additional impact on facilities that are already understaffed 
prior to sequestration, such as the Newark Liberty tower?
    Answer. Yes. Individual facilities were able to determine how best 
to implement the furloughs to minimize disruption based on their shift 
scheduling and staffing requirements.
    Question. Newark Liberty has the highest washout rate of any air 
traffic tower in the country, so it recently had a simulator installed 
to help trainee performance. Will furloughs impact training time on the 
simulator?
    Answer. The funding relief provided by the Reducing Flight Delays 
Act of 2013 will enable the restoration of key support activities, 
including training simulation at Newark Liberty.
                      operations in newark airport
    Question. The fiscal year 2014 budget request proposes to transfer 
the responsibility for staffing the exit lanes adjacent to passenger 
screening checkpoints from the Transportation Security Administration 
(TSA) to commercial airport authorities. This issue is of particular 
concern to me because Newark Airport has seen numerous security 
breaches over the past few years. In 2010, a man breached an exit lane 
at Newark Airport without being screened and shut down the airport for 
more than 6 hours, affecting 16,000 passengers around the world.
    What impact could this transfer have on airport budgets and other 
operations funded by airports?
    Answer. The Transportation Security Administration determines the 
staffing levels, qualifications, and operational requirements necessary 
to meet Federal standards for airport exit lane staffing. TSA would be 
in the best position to quantify the operational and other related 
costs airports would assume in order to comply with TSA requirements. 
The FAA would not be in a position to determine the impacts of such 
decisions on a specific airport's operating budget.
    Question. What challenges would this transfer in responsibility 
present to Newark Airport and Atlantic City Airport?
    Answer. The TSA and operators of Newark Airport and Atlantic City 
are in the best position to provide specific details on the costs, 
personnel, and related operating expenses that would result from the 
transfer of specific TSA operations to the airport operator.
                     remote highjacking of aircraft
    Question. A German security consultant recently claimed to have 
developed technology that could be used to remotely hijack an airplane, 
alleging that current security systems do not have adequate 
authentication methods to ensure commands are from a legitimate source. 
The FAA released a statement saying it is aware of this claim and has 
said it does not pose a threat on actual commercial flights.
    What steps has the FAA taken to determine and ensure this is not a 
problem on commercial flights?
    Answer. The FAA along with Honeywell, the U.S. manufacturer of the 
system that was allegedly threatened, worked together to investigate 
the technical threat immediately after learning about the allegation. 
Honeywell quickly discerned and verified the methods and tools the 
hacker used to create the experiment. The theoretical threat was based 
entirely within a training system that runs on a desktop personal 
computer (PC) whose hardware and software differed significantly from 
actual aircraft equipment. A later version of the consultant's 
experiment, which appeared in media coverage, used a mobile phone 
application to communicate with his desktop PC. None of the experiments 
involved communication with an actual airplane.
    The FAA determined that the hacking technique described during the 
recent computer security conference does not pose a flight safety 
concern because it does not work on any actual, certified aircraft 
hardware or software.
    Question. When did the FAA become aware of this application?
    Answer. The FAA first learned of the alleged threat on March 22, 
2013, when the security consultant was preparing a briefing for a 
computing conference in Amsterdam, the Netherlands. Our investigation 
was completed before the conference began. Honeywell, the European 
Aviation Safety Authority, and the German Police made the consultant 
aware of the deficiencies in his allegations before the conference. The 
consultant chose nevertheless to deliver his presentation on April 8, 
2013.
    Question. Will you commit to reviewing the potential threat and 
updating me on steps being taken to address any deficiencies in our 
security systems that could leave an aircraft open to an attack of this 
nature?
    Answer. We have reviewed the threat, determined it to be false, 
and, as a result, plan no further action at this time. The FAA provided 
this information to foreign civil aviation authorities and to the 
public in press releases. Our investigation, using all information 
available to us from the consultant and from Honeywell, has been 
completed to our satisfaction, with no credible threat found. The 
German consultant promised to provide more information to the FAA and 
Honeywell in support of his claim, but none has been received.
    Question. Are current laws, specifically on cyber security, 
sufficient to address the nature of this threat?
    Answer. The FAA believes current laws are sufficient to address the 
nature of this threat. Aircraft certification regulations under title 
14 Code of Federal Regulations, including special conditions we levy on 
new aircraft programs which use networked or accessible computing 
systems, require aircraft manufacturers to design security features 
into their on-board systems. Numerous other Federal laws, outside the 
scope of our certification mandate, would forbid and impose punishments 
for the act by a hacker of attempting an attack against an aircraft.
                       contract weather observers
    Question. Major airports, such as Newark Liberty, are required to 
employ certified contract weather observers to ensure the accuracy of 
weather reports provided to the airlines and the public. Due to 
sequestration, we have heard concerns that the FAA may consider closing 
down the contract weather observation program and transferring the 
observation responsibilities to air traffic controllers.
    Is the FAA proposing to eliminate the contract weather observation 
program?
    Answer. The fiscal year 2014 President's budget request includes 
sufficient funding to continue the contract weather observation 
program.
    Question. If so, what would be the impact of transferring weather 
observing responsibilities to air traffic controllers? Specifically, 
what would the implications be at Newark Airport, given that the Newark 
air traffic control tower is already understaffed?
    Answer. The fiscal year 2014 President's budget request includes 
sufficient funding to continue the contract weather observation 
program.
               next generation air transportation system
    Question. To upgrade the air traffic control system, the FAA is 
implementing the Next Generation Air Transportation System (NextGen) to 
reduce gridlock, delays, and safety concerns through a satellite-based 
system. The William J. Hughes Technical Center in New Jersey--the 
Nation's premier facility for aviation research, development, and 
testing--currently conducts NextGen research.
    How will NextGen research and implementation be impacted by the 
fiscal year 2014 budget?
    Answer. The fiscal year 2014 NextGen investment portfolio totals 
$1.002 billion, of which $928.1 million is allocated to Facilities and 
Equipment (F&E), $61.4 million to Research, Engineering and Development 
(RE&D), and $12.6 million to Operations activities.
    The fiscal year 2014 NextGen F&E budget request is $928.1 million, 
an increase of $65.3 million above the fiscal year 2012 enacted level. 
This level of F&E program funding enables the agency to continue 
support of near-term NextGen commitments. The funding allows the 
migration of pre-implementation activities from NextGen-Reduced Weather 
Impact solution set into an implementation program beginning in fiscal 
year 2014.
    The fiscal year 2014 NextGen RE&D budget request is $61.4 million, 
an increase of $1.7 million above the fiscal year 2012 enacted level. 
This allows us to continue the progress we've made in NextGen-specific 
research into wake turbulence, human factors, and clean aircraft 
technologies.
    The fiscal year 2014 NextGen Operations budget request is $12.6 
million; an increase of $0.2 million above the fiscal year 2012 enacted 
level. This level of Operations activities continue to support the 
dedicated full-time equivalents (FTEs) required to implement NextGen.
    The NextGen investment portfolio enables the implementation of 
Performance Based Navigation (PBN) procedures. The PBN is an aircraft 
navigation capability which allow for greater operational flexibility. 
An example is reducing the environmental footprint of greenhouse gas 
emissions and noise created by the aviation industry.
    Finally, the FAA NextGen capabilities continue to provide 
significant improvement to the aviation industry; such as:
  --System Wide Information Management (SWIM).--Allows operators to 
        make better-informed decisions that improve their efficiency. 
        This capability has been demonstrated by receiving surface 
        movement data through this single portal at 19 external 
        consumers.
  --Automatic Dependent Surveillance-Broadcast (ADS-B).--Transform the 
        Nation's air traffic system by utilizing global satellites to 
        provide more precise location data. This capability has been 
        demonstrated by supporting surface advisory services at 24 
        airports.
                                 ______
                                 
                Questions Submitted by Senator Mark Kirk
                            contract towers
    Question. The Federal Aviation Administration (FAA or 
Administration) issued an appeals process for contract towers slated 
for closure and established four criteria for national security 
concerns that the FAA would evaluate.
    Did the Administration rank all the appeals in order of national 
security importance? If not, how were decisions made regarding what met 
the FAA's criteria? If they were ranked, please provide the list of 
airports and towers in order of national security interest priority for 
all airports that appealed the closure decision.
    Answer. The FAA did not rank the airports by order of national 
security. The FAA considered all of the input provided by the 
Department of Defense (DOD) and other agencies during the review 
process. FAA coordinated with the DOD, and the DOD provided FAA with 
feedback on their top priorities. In addition, the FAA coordinated with 
the Transportation Security Administration (TSA), the United States 
Coast Guard (USCG), the United States Secret Service (USSS), the 
Federal Bureau of Investigation (FBI) and the U.S. Marshal Service.
    Question. Did FAA conduct a separate and distinct safety management 
assessment for each impacted contract tower prior to the closure 
announcements?
    Answer. The FAA conducted a safety assessment for each tower prior 
to implementation of any proposed change as required by FAA 
regulations. In accordance with Air Traffic Organization (ATO) Order JO 
1000.37, the Air Traffic Organization Safety Management System, and the 
Air Traffic Organization Safety Management System Manual (SMS Manual): 
all proposed changes to the National Airspace System (NAS) require 
Safety Risk Management (SRM) evaluation. SRM is broadly applied to 
changes that may affect the NAS to ``ensure that hazards are identified 
and unacceptable risk is mitigated and accepted prior to the change.''
    This includes ``any change to or modification of airspace; 
airports; aircraft; pilots; air navigation facilities; air traffic 
control (ATC) facilities; communication, surveillance, navigation and 
supporting technologies and systems; operating rules, regulations, 
policies, and procedures; and the people who implement, sustain, or 
operate the system components.''
    The level at which an SRM is conducted varies by organization, 
change proponent and/or type of change. In some cases, SRM Panels will 
perform SRM at the national level, and in other cases, SRM Panels will 
perform SRM at the service area or local level. There are five phases 
of a SRM safety analysis, which culminates in a Safety Risk Management 
Document (SRMD). A SRMD describes the safety analysis for a proposed 
change and documents the evidence to support whether the proposed 
change is acceptable from a safety risk perspective. The SRMD is 
intended to enable the relevant management officials to understand the 
proposed change, its associated risks, and corrective steps taken (or 
proposed) to reduce the initial and subsequent residual risks to an 
acceptable level.
    Prior to the decision or announcement to withdraw funds from 
Federal contract towers, subject matter experts (SME) from the Air 
Traffic Organization (ATO) and other FAA offices, namely Flight 
Standards and Airports, conducted a thorough review of the safety 
implications and determined that the FAA had adequate and long-standing 
controls to address the risk associated with the potential closure of 
towers and the transfer of airspace among facilities. In fact, all but 
one of the identified towers close for several hours each day; so, the 
FAA was assured that any potential closure or airspace transfer 
procedures and processes are exercised daily; although a permanent 
closure might require additional planning requirements. Additionally, 
there are approximately 5,000 non-towered public use airports in the 
United States with daily operations; which validates the safety of 
those environments.
    Following the determination that sufficient and long-standing 
safety standards and processes exist to operate at both towered and 
non-towered environments, ATO convened an SRM Panel from April 2-4, to 
ensure that stakeholders had an opportunity to address hazards and/or 
potential mitigations assuming a worst case scenario where all 149 
towers would close and transition to non-towered operations; and, to 
develop additional risk controls and, if needed, implement them before 
any tower closures.
    Question. Why did the FAA choose to cut specific towers completely 
from the program instead of reducing contract support for the entire 
program?
    Answer. The FAA guiding principle, as we planned for sequester, was 
to minimize the impact to the greatest numbers of passengers. 
Therefore, initial plans impact smaller, lower activity locations more 
significantly than locations serving larger blocks of passengers. The 
criteria used identified towers that had less than 150,000 total 
operations and 10,000 commercial operations annually.
                         sequester coordination
    Question. You have obviously been working on a sequestration plan 
for some time and have known the potential impacts have a cascading 
effect. Air travel is a joint effort between several agencies including 
FAA, TSA and Customs.
    Given your travel prognosis, what type of coordination have you 
done with TSA and Customs?
    Answer. As part of sequestration planning efforts, numerous 
operational components of the FAA, TSA, and Customs and Border 
Protection (CBP) participated in several interagency telecons to 
discuss possible trans-agency impacts and mitigation strategies. 
Additionally, there was frequent contact between the FAA, TSA, and CBP 
at the managerial and executive levels to exchange information and 
discuss ways to synchronize mitigation efforts.
    Question. If no coordination occurred, why didn't the 
Administration work out a strategy in advance? There have been several 
weeks of lead-up to this situation; why would you wait until the last 
minute to release your plan to the industry and Congress?
    Answer. As we have planned for and implemented measures to achieve 
the mandatory sequester reductions, we have consistently shared the 
potential impact that sequester could have on the National Airspace 
System with Congress, the aviation sector, our employees, and the 
traveling public. As early as February, we advised that we expected the 
automatic cuts to have a significant adverse impact on the aviation 
system and air travelers. We urged our stakeholders to work with us to 
minimize these impacts to the extent possible. Our outreach included 
written communications, congressional briefings, meetings, and 
testimony on Capitol Hill.
                                 ______
                                 
              Questions Submitted by Senator John Boozman
                   general aviation alternative fuels
    Question. The administration included funding in the fiscal year 
2014 budget for an Alternative Fuels for General Aviation program that 
seeks to move the work of the Federal Aviation Administration (FAA) and 
industry from research to a phase focused on coordinating and 
facilitating the fleet-wide evaluation, certification and deployment of 
an unleaded fuel in piston engine aircraft. Why is this program 
important?
    Answer. The intent of this initiative is to implement an unleaded 
fuel for piston-powered aircraft engines to replace the current leaded 
aviation gasoline (avgas) 100 low lead (100LL). The continuation of FAA 
research is necessary to test, identify, and approve a replacement fuel 
that can be safely used by as much of the existing fleet of aircraft as 
possible. This program is important for human health impacts, fuel 
security, and the continued viability of the general aviation 
community.
    Aviation gasoline (avgas) is a vital element of the piston engine 
aircraft safety system. Approximately 167,000 aircraft in the United 
States and 230,000 worldwide rely on 100LL avgas for safe operation. 
100LL is the only remaining transportation fuel that contains the 
additive tetraethyl lead (TEL). TEL has been used as an avgas additive 
for decades to create the high octane levels required to prevent 
detonation (engine knock) in high power aircraft engines. Operation 
with inadequate fuel octane can result in engine failure in flight and 
aircraft accidents.
    The U.S. Environmental Protection Agency (EPA) is currently 
evaluating the health and environmental impacts of lead emissions from 
aircraft, and has identified that general aviation contributes to 
possible violations of ambient air quality lead standards. Petitions 
and litigation from environmental organizations have called for the EPA 
to consider regulatory actions to eliminate or reduce lead emissions 
from aircraft. These activities raise concerns about the continued 
availability and use of leaded avgas.
    Equipment manufacturers, owners and aircraft operators fear that 
the uncertainty about the future availability of a safe fuel for their 
airplanes is affecting the value of existing aircraft, impacting new 
aircraft development, and affecting the growth of the general aviation 
market. In response to the rapidly increasing concerns expressed by the 
general aviation community regarding the continued availability of 
100LL, the Unleaded AVGAS Transition Aviation Rulemaking Committee (UAT 
ARC) was chartered on January 31, 2011, by the Federal Aviation 
Administration (FAA) Administrator. The final report of the UAT ARC can 
be found on the FAA Avgas Web site at the following URL: http://
www.faa.gov/about/initiatives/avgas/ in the Archived Articles section.
    The UAT ARC recommended that the FAA collaborate with industry to 
establish an unleaded avgas testing and evaluation program that would 
facilitate the development, approval and deployment of a replacement 
fuel for 100LL that would have the least possible impact on the 
existing fleet of aircraft. It was recommended that this program rely 
on the vast experience of the FAA William J. Hughes Technical Center to 
perform this testing. The research to be conducted at this facility 
will shift from developing a drop-in unleaded fuel to testing and 
identifying the best possible replacement unleaded fuel.
    In addition, section 910 of the 2012 FAA Modernization and Reform 
Act specifies Research, Engineering and Development (RE&D) requirements 
to facilitate the transition to unleaded avgas. The FAA has developed a 
plan to implement the recommendations of the UAT ARC and will integrate 
the fuel evaluation and testing program with the requirements of 
section 910.
    Finding a safe, high octane unleaded replacement for leaded avgas 
is an ongoing technical challenge that can benefit greatly from 
continued FAA research. Piston engine aircraft are used for many 
purposes including business and personal travel, aerial surveys, 
agriculture, firefighting, law enforcement, medical emergencies, 
express freight, and instructional flying. The collective, continued 
service of piston engine aircraft in an operationally safe manner is 
essential. This program, to develop and promote an unleaded replacement 
avgas, will address environmental concerns associated with leaded fuels 
and provide a safe option for the general aviation industry.
                         certification process
    Question. In the last FAA reauthorization, Congress included 
language to identify some needed reforms in the certification process. 
These reforms would focus FAA resources more effectively on safety 
critical activities and also begin to address the certification backlog 
that threatens the competitiveness of the U.S. aviation industry.
    Are you moving forward with implementation of these reforms?
    Answer. Yes. The Aircraft Certification Service (AIR) developed an 
implementation plan, issued on August 13, 2012, to address the reforms 
identified in section 312 of the FAA Modernization and Reform Act of 
2012. The implementation plan addresses each of the six recommendations 
developed from an industry and FAA assessment of the existing 
certification and approval processes. As individual projects or 
improvements from the implementation plan are completed, we will 
measure how effective the change was in addressing specific goals. This 
will allow us to iterate the process to continue the improvement until 
the goal has been fully met.
    Question. What is the most challenging aspect of these 
improvements?
    Answer. The Aircraft Certification Process Review and Reform 
(ACPRR) Aviation Rulemaking Committee (ARC) submitted the following 
recommendations to the Director of Aircraft Certification on May 22, 
2012:
  1. Development of Comprehensive Means To Implement and Measure the 
        Effectiveness of Implementation and Benefits of Certification 
        Process Improvements;
  2. Enhanced Use of Delegation;
  3. Integrated Roadmap and Vision for Certification Process Reforms;
  4. Update Part 21 To Reflect a Systems Approach for Safety;
  5. Culture and Change Management; and
  6. Process Reforms and Efficiencies Needed for Other Aircraft 
        Certification Service (AIR) Functions.
    Recommendations from the ARC were included in a report provided to 
Congress on August 13, 2012. The FAA fully supports these 
recommendations and developed a comprehensive implementation plan 
consisting of 14 initiatives addressing each item. Implementation 
actions began in 2012, in advance of the act requirement to begin 
implementation no later than February 14, 2013.
    There are two large and comprehensive rulemaking projects to update 
part 21 and reorganize part 23. These are multi-year projects that 
require extensive coordination within the Government and with industry. 
Another challenge is to streamline the adoption of airworthiness 
directives issued by other civil airworthiness authorities. This 
initiative includes an evaluation of statutory impediments.
    Question. Do you have the resources to manage these changes?
    Answer. In fiscal year 2013 we have allocated sufficient resources 
to initiate certification process reforms. The 2014 budget request also 
fully supports this work. However, this is a difficult budgetary 
environment. In fiscal year 2013 under sequestration, we instituted a 
hiring freeze for FAA beginning March 1. Staffing levels can impact 
progress on our implementation plan, and as a result we are closely 
monitoring attrition and overall staffing levels.
                            contract towers
    Question. Congress recently enacted legislation giving the FAA 
flexibility to: (1) end furloughs that threaten to disrupt our economy 
and destroy jobs that depend on air travel; and (2) prevent the planned 
closure of 149 contract towers.
    When will you announce your plan to carry out the clear, 
unambiguous intent of Congress and forestall the planned closure of 149 
towers that had been schedule to start on June 15, 2013?
    Answer. Secretary LaHood announced on Friday, May 10, 2013, that 
the Department of Transportation (DOT) has determined that the recently 
enacted Reducing Flight Delays Act of 2013 will allow the FAA to 
transfer sufficient funds to end employee furloughs and keep the 149 
low-activity contract towers, originally slated for closure in June, 
open for the remainder of fiscal year 2013.
      business aviation and general aviation--economic impact and 
                             opportunities
    Question. Aviation manufacturing and businesses that utilize 
general aviation (GA) are critical to economic opportunity in Arkansas 
and across our country. General aviation pumps more than $1 billion 
into the Arkansas economy every year, and our State is a proud home to 
large and small manufacturers that serve the general aviation sector, 
as well as other businesses that service and/or rely on GA aircraft. 
Our country is a leader in aviation manufacturing and technology, and 
this sector provides tremendous opportunities for growth and export. GA 
is a diverse sector that includes medical transport, business aviation, 
agricultural aviation, search and rescue, recreational flying, aerial 
firefighting, air charter, bush flying, and a variety of other 
activities.
    I remain concerned about political rhetoric that castigates 
business aviation and general aviation to score cheap political points. 
Do you believe that business aviation is essential to economic strength 
and job opportunities in our country, and do you believe that it should 
not be unfairly targeted as an activity deserving disparate treatment 
under Federal law?
    Answer. The FAA recognizes the critical role general aviation (GA) 
plays in supporting jobs and generating significant economic activity 
for the country. FAA's latest aviation forecast sees growth in business 
aviation demand over the long term driven by a growing U.S. and world 
economy especially in the turbo jet, turboprop and turbine rotorcraft 
markets. As the fleet grows, the number of general aviation hours flown 
is projected to increase an average of 1.5 percent a year through 2033.
    Support for GA is part of the administration's goal to invest in 
the Nation's transportation infrastructure. The U.S. Department of 
Transportation and the Federal Aviation Administration (FAA) continue 
to invest in and improve GA and airports that serve GA through ongoing 
initiatives including direct support to airports, Next Generation Air 
Transportation System (NextGen) safety enhancements, and improving 
access to data.
    Question. Will you address the importance of general aviation to 
our economy?
    Answer. According to a study done by the FAA in 2011, general 
aviation operations added nearly $39 billion and approximately 496,000 
jobs to the United States economy. To support the Nation's GA airports, 
FAA awards an average of $1 billion in Airport Improvement Program 
(AIP) grants annually. These grants help GA airports fund safety, 
capacity, standards and environmental improvements. Moreover, under the 
State Block Grant Program, participating States are allowed to 
administer AIP funds at non-primary airports. In addition, FAA has been 
working with the GA community on an ongoing study to develop a 
strategic plan for GA airports in the United States.
    Through NextGen, the FAA has demonstrated its commitment to 
ensuring improved access and level of service for GA operators. For 
example, with the implementation of new technologies and procedures for 
the Wide Area Augmentation System (WAAS), and Localizer Performance 
with Vertical Guidance (LPV), GA operators have unprecedented access to 
airports where no ground-based instrument landing systems exist. Using 
these technologies and procedures, GA aircraft can land at airports 
even when visibility is limited. As of February 2012, there were nearly 
2,800 WAAS LPV approach procedures to more than 1,400 airports 
throughout the United States.
    Enhancing safety in GA operations is an FAA priority and is 
critical to supporting the growth of GA. Reducing the fatal accident 
rate for GA is one of the agency's strategic goals. We are also 
improving tracking of aircraft position and providing GA operators with 
tools that provide increased awareness of weather, terrain, aircraft 
and other conditions in the national airspace. Through another NextGen 
technology, Automatic Dependent Surveillance-Broadcast (ADS-B), GA 
pilots will have greater situational awareness.
    To further enhance access and capabilities of GA aircraft and 
pilots, the FAA is currently developing technologies and policies that 
make FAA data more accessible to GA pilots through Internet-based 
portals. These portals support open government initiatives and will 
enable individual pilots to access new sources of information. The FAA 
is also making data and services more accessible through the use of new 
tools like the Apple iPad, which, when used as an Electronic Flight 
Bag, can be used for viewing navigational charts and approaches to 
airports.
    Through these initiatives, FAA continues its active support of the 
GA industry.
                               user fees
    Question. The administration's use-fee proposal could potentially 
levy a fee on aircraft used to conduct aerial application activities by 
thousands of dollars per day, since they take off and land frequently 
to treat farmers' crops. This would cause great harm to farmers, aerial 
applicators, and food consumers.
    Are you concerned about the impact this proposal would have on 
agricultural aviation and other users that require frequent take offs 
and landings?
    Answer. This proposal would create a per flight fee by aviation 
operators who fly in controlled airspace. Military aircraft, public 
aircraft, recreational piston aircraft, air ambulances, aircraft 
operating outside of controlled airspace, and Canada-to-Canada flights 
would be exempted. Aircraft conducting aerial application activities 
and that fly outside of controlled airspace, like those used in 
agricultural aviation, would not pay the flight surcharge fee.
       agricultural aviation and low-level airspace safety issues
    Question. Agricultural aviation is extremely important to many 
Arkansas farmers. Do you recognize the importance of this niche sector 
in the aviation community, and will you commit to work with 
stakeholders and with my office to address the unique needs and 
concerns of this sector?
    Answer. The Federal Aviation Administration recognizes the vital 
link between the agricultural aviation industry and American farmers, 
including those in the State of Arkansas. In order to communicate with 
this specific industry segment, we have participated in meetings hosted 
by the Arkansas Agricultural Aviation Association. In addition, we have 
a long-standing partnership with the director for the Arkansas 
Department of Aeronautics, including meetings on at least a quarterly 
basis to exchange updates on aviation topics of interest at the State 
and/or Federal levels.
    At the regional level, our staff performs regularly scheduled 
outreach efforts with congressional staff to address any identified 
State-level issues of interest and share updates on agency efforts 
related to local areas of interest including NextGen, Unmanned Aircraft 
Systems, and obstacle evaluation, marking and lighting efforts.
    Question. The FAA is rightly working to integrate Remotely Piloted 
Aircraft (RPAs) into the airspace. As this work continues, what is the 
Administration doing to ensure other, long-standing users of low-level 
airspace, such as aerial applicators, are protected from mid-air 
collisions and other operations that may prevent them from safely and 
effectively treating crops, protecting the public health, and combating 
forest fires at low levels?
    Answer. The integration of Unmanned Aircraft Systems (UAS) into the 
National Airspace System (NAS) will require the FAA to carefully 
evaluate safety impacts on current NAS users, regardless of their 
altitude, size, or mission. Once the FAA has evaluated the safety 
impacts for a specific type of UAS operation, we will develop the 
appropriate regulatory requirements and risk mitigation strategies. We 
will ensure that UAS operations do not diminish safety or increase risk 
to persons or property in the air or on the ground.
    Question. What is the status of the feasibility study FAA is 
conducting on the development of a database that would show the 
location of free-standing and guy-wired towers below 200 feet?
    Answer. The FAA has completed the analysis as directed in section 
219 of the FAA Modernization and Reform Act (Public Law 112-95). Our 
report is in final executive review and will be delivered to Congress 
in the near future.
    Question. Does FAA believe it possesses the authority to require an 
airworthiness certificate or an airman certificate with respect to 
public unmanned aircraft operations under section 334 of the 2012 act? 
If so, does FAA intend to use that authority?
    Answer. The FAA intends to comply with the provisions of the FAA 
Modernization and Reform Act's section 334 on Public Unmanned Aircraft 
Systems. The current regulatory structure requires public operators to 
make their own finding of compliance using their processes. FAA will 
issue guidance regarding a public entity's responsibility when 
operating an unmanned aircraft without a civil airworthiness 
certificate issued by the FAA. FAA is in the process of determining 
whether or not any regulatory changes are possibly needed.
    Question. I am told that agricultural aviation interests have 
requested that the FAA expand Advisory Circular (AC) No. 70/7460-1 to 
include marking guidance not just for meteorological evaluation towers 
under 200 feet but for all towers--freestanding and guy-wired. Is the 
FAA considering this expansion of the AC?
    Answer. Requirements to file notice under 14 CFR part 77 generally 
do not apply to structures at heights lower than 200 feet unless they 
are close to an airport environment. Meteorological evaluation towers 
(METs) under 200 feet do not meet the provisions of part 77 and the FAA 
does not conduct aeronautical studies to determine whether these 
structures are obstructions or whether they adversely impact air 
navigation. However, the FAA acknowledges that METs in remote, rural 
agricultural areas may be difficult to see by low-level agricultural 
flights operating under visual flight rules. It was the combined 
factors of these structures being in rural, remote areas, the speed of 
their construction, and skeletal composition that led to additional, 
limited marking guidance. Guidance was not applicable to METs that are 
erected in urban areas and far removed from rural agricultural spraying 
operations.
    The request to expand marking guidance for structures other than 
METs is not based on safety of flight issues. The guidance used for 
METs is not feasible or warranted for other structures under 200 feet. 
Other structures do not carry the same visibility concerns of skeletal 
METs, and additional marking guidance may cause an undue burden on the 
public.

                          SUBCOMMITTEE RECESS

    Senator Collins. This hearing is recessed.
    On next Thursday, April 25, at 10 a.m., we will hold a 
hearing on the Federal Housing Administration. Thank you all.
    [Whereupon, at 11:56 a.m., Thursday, April 18, the 
subcommittee was recessed, to reconvene at 10 a.m., Thursday, 
April 25.]





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