National Airspace System: Current Efforts and Proposed Changes to
Improve Performance of FAA's Air Traffic Control System 	 
(30-MAY-03, GAO-03-542).					 
                                                                 
To accelerate the modernization and improve the performance of	 
the air traffic control system, the Wendell H. Ford Aviation	 
Investment and Reform Act for the 21st Century (AIR-21) created  
the Air Traffic Services Subcommittee (subcommittee) to over see 
the air traffic control system and help the Federal Aviation	 
Administration (FAA) address long-standing weaknesses in its	 
modernization program. The subcommittee is part of an aviation	 
advisory council and consists of five private sector members with
business expertise. AIR-21 gave the subcommittee the authority to
approve strategic plans, budgets, and procurements over $100	 
million. In addition, AIR-21 required the FAA to hire a chief	 
operating officer to manage the day-to-day operations. AIR-21	 
mandated that GAO report on the success of the subcommittee in	 
improving the performance of the air traffic control system.	 
Accordingly, as we agreed with the congressional committees'	 
offices, GAO reviewed the (1) actions taken by the subcommittee  
to carry out its oversight responsibilities and the obstacles	 
that it encountered in doing so and (2) changes to the		 
subcommittees' organization and oversight responsibilities that  
have been proposed to improve the performance of the air traffic 
control system. 						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-542 					        
    ACCNO:   A07047						        
  TITLE:     National Airspace System: Current Efforts and Proposed   
Changes to Improve Performance of FAA's Air Traffic Control	 
System								 
     DATE:   05/30/2003 
  SUBJECT:   Congressional oversight				 
	     Federal agency reorganization			 
	     Internal controls					 
	     Performance measures				 
	     Strategic planning 				 
	     Air traffic control systems			 
	     Congressional committees				 

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GAO-03-542

a

GAO United States General Accounting Office

Report to Congressional Committees

May 2003 NATIONAL AIRSPACE SYSTEM Current Efforts and Proposed Changes to
Improve Performance of FAA*s Air Traffic Control System

GAO- 03- 542

To carry out its oversight responsibilities, the subcommittee has focused
on bringing performance management, accountability, and a more
businesslike structure to the air traffic control system. It is working
with FAA managers to refine and implement performance measures that will
track safety indicators, such as operational errors and runway incursions,
as well as the cost to provide air traffic control services. The
subcommittee also has taken some specific actions, as provided in AIR- 21,
including reviewing and approving a budget request and five large
procurements that FAA had initiated for the air traffic control system.
However, the subcommittee has encountered obstacles in carrying out its
responsibilities, the greatest of which has been FAA*s inability to hire a
chief operating officer. Without a chief operating officer to initiate
actions that the subcommittee is responsible for reviewing and approving,
the subcommittee*s influence has been limited. According to the
subcommittee, a major difficulty in hiring a chief operating officer has
been uncertainty about the position's responsibilities, reporting
relationships, and performance measures. The Congress, the administration,
the subcommittee, and other stakeholders

have proposed changes to the subcommittee*s organization and oversight
responsibilities that they believe would improve the performance of the
air traffic control system. These changes could clarify uncertainties in
the law or would modify the subcommittee's approval authority. For
example, three legislative proposals would designate the FAA Administrator
as the chair of the subcommittee. While this change could eliminate any
uncertainty about the chief operating officer*s reporting relationships
and could make it easier to hire a chief operating officer, it also would
reduce the number of private sector members and give the greatest
authority to the FAA member (see figure). Two of these proposals also
would alter the subcommittee*s

approval authority. For example, one would make the subcommittee an
advisory rather than an oversight body. The merits of these proposals
depend on the extent to which approval authority is considered necessary
or desirable to bring about improvements in the air traffic control
system. Current and Proposed Oversight and Management Structure

Blurred Lines of Authority under AIR- 21 Proposed Lines of Authority

Air Traffic Services Subcommittee

Source: GAO. with

five private sector members

Air Traffic Services Board/ Committee

with the

FAA Administrator as Chair

FAA Administrator FAA Administrator

Chief Operating Officer

Chief Operating Officer

and four private sector members

To accelerate the modernization and improve the performance of the air
traffic control system, the Wendell H. Ford Aviation

Investment and Reform Act for the 21 st Century (AIR- 21) created the Air
Traffic Services Subcommittee (subcommittee) to oversee the air

traffic control system and help the Federal Aviation Administration (FAA)
address long- standing weaknesses in its modernization

program. The subcommittee is part of an aviation advisory council and
consists of five private sector members with business expertise. AIR- 21
gave the subcommittee the

authority to approve strategic plans, budgets, and procurements over $100
million. In addition,

AIR- 21 required FAA to hire a chief operating officer to manage the
system*s day- to- day operations.

AIR- 21 mandated that GAO report on the success of the subcommittee in
improving the performance of the air traffic control system. Accordingly,
as agreed with the congressional committees* offices, GAO reviewed the (1)
actions taken by the

subcommittee to carry out its oversight responsibilities and the obstacles
that it encountered in doing so and (2) changes to the

subcommittee*s organization and oversight responsibilities that have been
proposed to improve the performance of the air traffic control system.
www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 542.

To view the full report, including the scope and methodology, click on the
link above. For more information, contact Gerald L. Dillingham at (202)
512- 2834 or dillinghamg@ gao. gov. Highlights of GAO- 03- 542, a report
to

congressional committees

May 2003

NATIONAL AIRSPACE SYSTEM

Current Efforts and Proposed Changes to Improve Performance of FAA*s Air
Traffic Control System

Page i GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System Letter 1 Results in Brief 3 Background 4 Subcommittee Has
Emphasized Performance- based Management and Carried Out Some
Responsibilities, but Obstacles Have

Hampered Its Progress 8 Proposed Changes to the Subcommittee*s
Organization and Oversight Responsibilities Could Clarify Uncertainties
and Would Modify the Subcommittee*s Authority 14 Agency Comments 20
Appendix I Objectives, Scope, and Methodology 22

Appendix II Subcommittee*s Progress in Implementing Specific
Responsibilities 23

Appendix III Proposed Legislative Changes Affecting the Subcommittee and
the Chief Operating Officer Responsibilities 24

Appendix IV GAO Contacts and Staff Acknowledgments 25 Contacts 25 Staff
Acknowledgments 25 Figures

Figure 1: Organizational Structure Created by AIR- 21 and Executive Order
13180 7 Figure 2: Current and Proposed Oversight and Management

Structure 16 Contents

Page ii GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System Abbreviations

AIR- 21 Wendell H. Ford Aviation Investment and Reform Act for the 21st
Century FAA Federal Aviation Administration IRS Internal Revenue Service

This is a work of the U. S. Government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. It may contain
copyrighted graphics, images or other materials. Permission from the
copyright holder may be necessary should you wish to reproduce copyrighted
materials separately from GAO*s product.

Page 1 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System May 30, 2003 Congressional Committees The Federal Aviation
Administration (FAA) manages the busiest, most

complex air traffic control system in the world. But the agency has had
difficulty modernizing this system to improve its safety and efficiency
and expand its capacity to accommodate projected increases in air traffic.
Over the past two decades, FAA*s air traffic control modernization program
has had a history of cost overruns and schedule delays. For over a decade,
bipartisan commissions, oversight organizations, and others have
documented problems with the air traffic control modernization program and
have made numerous recommendations, yet the problems continue.

In 2000, the Congress enacted legislation and the administration issued an
executive order that, together, established a new, three- component
structure to accelerate the modernization and improve the performance of
the air traffic control system. The legislation* the Wendell H. Ford
Aviation Investment and Reform Act for the 21st Century (AIR- 21)* defines
the air traffic control system as the equipment, policies, procedures, and
personnel required to deliver air traffic services. 1 AIR- 21 established
two of the new components: (1) a board of five private sector members,
called the Air Traffic Services Subcommittee (subcommittee), to

oversee the air traffic control system and (2) a chief operating officer
to manage the air traffic control system. Executive Order 13180, issued
December 7, 2000, created the third component, a new performance- based
organization within FAA, to be known as the Air Traffic Organization, to
operate the air traffic control system. The subcommittee is part of the
Aviation Management Advisory Council (council), which is responsible for
advising FAA on the perspectives of its aviation industry customers. 2
Under the act, the subcommittee oversees *the administration,

management, conduct, direction, and supervision of the air traffic control
system* and has the authority to, among other things, *review and approve*
strategic plans, large contracts, and budget requests for the air

1 Public Law 106- 181, April 5, 2000. 2 The Congress authorized the
council in 1996 and amended its appointment process and composition
through AIR- 21.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System traffic control system. Under both the act and the executive order,
the chief operating officer reports to the FAA Administrator and, under
the

executive order, heads the new performance- based organization. The
subcommittee members were sworn in on January 31, 2001, and the
subcommittee, which is required to meet at least quarterly, has since held
eight working meetings. The FAA Administrator, who is responsible for

hiring the chief operating officer, has retained two recruiting firms, but
the chief operating officer position has not been filled. Because FAA has
decided to involve the chief operating officer in establishing and
implementing the new performance- based organization, FAA is waiting for
an appointment to be approved before putting the new organization in
place.

Since the enactment of AIR- 21, the Congress, the administration, FAA, and
other stakeholders have raised questions about the implementation of the
legislation and have proposed changes to the subcommittee*s organization
and oversight responsibilities that they believe would address these

questions. In the spring of 2003, the administration, the Senate, and the
House proposed legislation to amend AIR- 21 that would, among other
things, change the organization and responsibilities of the subcommittee.

AIR- 21 requires us to report on the success of the subcommittee in
improving the performance of the air traffic control system. However,
because the success of the subcommittee is linked to its interactions with
the chief operating officer and the new air traffic organization, neither
of which is yet in place, our analysis was limited to the actions of the

subcommittee, and we could not assess the performance of the new structure
as a whole. Accordingly, as agreed with your offices, this report
addresses the following questions:

 What has the subcommittee done to carry out its oversight
responsibilities, and what obstacles has it encountered in attempting to
do so?

 What changes to the subcommittee*s organization and oversight
responsibilities have been proposed to improve the performance of the air
traffic control system?

To address both of these questions, we analyzed AIR- 21 and its
legislative history, the executive order, and the three legislative
proposals that would

Page 3 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System amend provisions of AIR- 21 relating to the subcommittee. We also
analyzed the subcommittee*s August 2002 report 3 and interviewed

stakeholders, including the past and present FAA Administrators; other FAA
officials; past and present members of the Air Traffic Services
Subcommittee; and representatives of several aviation industry
organizations, public policy research organizations, and the two firms
hired to recruit the chief operating officer. We did not address changes
to FAA*s* as opposed to the subcommittee*s* organization that some
stakeholders maintain are essential to improve the performance of the air
traffic control system. See appendix I for a more detailed discussion of
our scope and methodology. To carry out its oversight responsibilities,
the subcommittee has focused

on bringing performance- based management to the air traffic control
system and has taken some of the actions specified in AIR- 21, but several
obstacles have hampered its progress. Defining its role as bringing
measurements, accountability, and a more businesslike structure to air
traffic services, the subcommittee has worked with FAA managers to refine
and implement performance measures that will track safety indicators, such
as operational errors and runway incursions, as well as track the cost to
provide air traffic control services so that FAA can better monitor,
improve, and hold its managers accountable for the performance of the air
traffic control system. The subcommittee also has accomplished some of the
specific responsibilities set forth in the act, such as reviewing and
approving budget requests and five large procurements that FAA initiated
for the air traffic control system. However, the subcommittee has
encountered several obstacles that have impeded its progress, the greatest
of which, according to our analysis and discussions with stakeholders, has
been FAA*s inability to hire a chief operating officer. Without a chief
operating officer to initiate actions that the subcommittee is responsible
for reviewing and approving, the subcommittee*s influence has been
limited. According to the subcommittee, a major difficulty in hiring a
chief operating officer has been uncertainty about how the chief operating
officer would interact with the FAA Administrator and the subcommittee and
how the incumbent*s performance would be measured. Other obstacles that
the subcommittee has encountered include its members* limited experience
with aviation and with FAA*s acquisition and budget

3 Air Traffic Services Subcommittee, Report of the Air Traffic Services
Subcommittee (Aug. 28, 2000). Results in Brief

Page 4 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System processes; turnover on the subcommittee; and, according to the
subcommittee, FAA*s lack of flexibility to move funds between and within

accounts. The Congress, the administration, the subcommittee, and other
stakeholders have proposed changes to the subcommittee*s organization and
oversight responsibilities that they believe would improve the

performance of the air traffic control system. These changes could clarify
uncertainties in the law or would modify the subcommittee*s approval
authority. For example, the administration, the Senate, and the House have
proposed legislation to separate the subcommittee from and make it
independent of its parent organization, the Aviation Management Advisory
Council. These three legislative proposals also would designate the FAA
Administrator as the chair of the subcommittee. While this change could
make it easier to hire a chief operating officer by eliminating any
uncertainty about how the incumbent would interact with the Administrator
and the subcommittee, it also would reduce the number of private sector
members from five to four and give the greatest authority to the FAA
member. Two of the three proposals also would alter the

subcommittee*s approval authority: the administration*s proposal would
eliminate the subcommittee*s approval authority entirely and make the
subcommittee an advisory body, while the House proposal would eliminate
the subcommittee*s authority to approve the budget request for the air
traffic control system but would retain the subcommittee*s other approval
authorities. The Senate proposal would make no changes in the
subcommittee*s approval authority. Our analysis indicates that the merits
of the proposed changes depend, in large part, on the extent to which
approval authority is viewed as necessary or desirable to bring about
improvements in the performance of the air traffic control system. The
upcoming reauthorization of FAA creates opportunities to consider the
merits of these and other proposed changes and to determine whether or how
changes should be made.

Department of Transportation officials generally agreed with the facts
presented in this report and made technical and clarifying comments, which
we incorporated as appropriate. The Air Traffic Services Subcommittee did
not provide comments beyond those provided by department officials.

More than 20 years ago, FAA began a modernization program to replace and
upgrade the nation*s air traffic control equipment and facilities to meet
expected increases in air traffic, enhance aviation safety, and Background

Page 5 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System increase efficiency. We and others have identified shortcomings in
FAA*s management of the air traffic control modernization program,
primarily

problems in meeting cost, schedule, and performance goals. For example,
the centerpiece of FAA*s modernization program* the Advanced Automation
System* was restructured in 1994 after (1) the costs of developing the
system, estimated in 1983 to be $2.5 billion, tripled to $7.6 billion and
(2) the implementation of significantly less- than- promised capabilities
was projected to take 8 years or longer than originally estimated. FAA
attributed many of these problems to federal procurement and personnel
constraints. In 1995, the Congress exempted FAA from many federal
procurement and personnel statutes and allowed the agency to develop its
own systems, which FAA implemented in 1996. However,

problems with the management of the air traffic control modernization
program continue. 4 Recently, for example, we reported that the Standard
Terminal Automation Replacement System, which was estimated in 1996 to
cost $940 million, was expected in March 2002 to cost $1.33 billion, take
4 years longer than originally scheduled to be implemented, and be

deployed at 74 rather than 172 facilities. 5 To better understand and
resolve these problems, the Congress created a number of bipartisan
commissions to review aspects of FAA*s operations, including the provision
of air traffic services. These commissions made recommendations to the
Congress to help FAA accelerate the modernization and improve the
performance of the air traffic control system. For example, in 1997, the
National Civil Aviation Review Commission, also known as the Mineta
Commission, reported that FAA must become a performance- based
organization to make the best possible use of the personnel and
procurement flexibilities that the Congress had granted to it. 6 The
Commission said that air traffic services should be overseen by a board of
directors and managed by a chief operating officer.

4 U. S. General Accounting Office, Air Traffic Control: FAA*s
Modernization Investment Management Approach Could Be Strengthened, GAO-
99- 88 (Washington, D. C.: Apr. 30, 1999).

5 U. S. General Accounting Office, National Airspace System: Better Cost
Data Could Improve FAA*s Management of the Standard Terminal Automation
Replacement System,

GAO- 03- 343 (Washington, D. C.: Jan. 31, 2003). 6 National Civil Aviation
Review Commission, A Consensus for Change: Avoiding Aviation Gridlock and
Reducing the Accident Rate (Washington, D. C.: December 1997).

Page 6 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System AIR- 21 incorporated key suggestions from the Mineta Commission,
including creating both the subcommittee to oversee the air traffic
control

system and the position of chief operating officer within FAA to manage
the system. The subcommittee is generally responsible for overseeing the
administration and management of the air traffic control system and is
specifically responsible for reviewing and approving (1) strategic and
major organizational plans, (2) methods of accelerating the modernization
of the air traffic control system and improvements in aviation safety
related to air traffic control, (3) contracts of more than $100 million,
(4) the FAA Administrator*s appointment of a chief operating officer, (5)
cost accounting and financial management systems, and (6) budget requests.
7 The chief operating officer is responsible for implementing the tasks

delegated by the Administrator. Executive Order 13180, issued on December
7, 2000, directed FAA to merge two of its organizations* Research and
Acquisitions, which develops and acquires air traffic modernization
equipment, and Air Traffic Services, which uses the equipment to provide
air traffic services* to form the new performance- based Air Traffic
Organization and designated the

chief operating officer as the head of that organization. Under the
executive order as well as the act, the chief operating officer reports to
the FAA Administrator. According to the executive order, the new
organization would improve FAA*s ability to make use of its procurement
and personnel flexibilities and would focus on achieving results through
consultation with its customers (the traveling public), direct users (e.
g., airlines and airports), and federal and local agencies (see fig. 1).

7 The subcommittee also has meeting and reporting requirements and is
compensated at the rate of $40,000 a year for the chairperson and $25,000
a year for the other members.

Page 7 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System Figure 1: Organizational Structure Created by AIR- 21 and Executive
Order 13180

The provisions of AIR- 21 that apply to the subcommittee are modeled on
1998 legislation that created the Internal Revenue Service Oversight Board
to oversee the Internal Revenue Service*s (IRS) administration,
management, conduct, direction, supervision, execution, and application of
tax laws. The Congress established the board to help IRS overcome

long- standing difficulties in modernizing its information systems and
improving customer service* difficulties that were viewed as broadly
analogous to those affecting the air traffic control system. However, the
board differs from the subcommittee in that it includes the Secretary of
the Treasury and the IRS Commissioner, whereas the subcommittee, as
provided in AIR- 21, consists entirely of private sector representatives.

In July 2002, the Subcommittee on Aviation, House Committee on
Transportation and Infrastructure, held a hearing on FAA*s progress in
hiring a chief operating officer and the role of the subcommittee. During
this hearing, the former FAA Administrator and the former subcommittee
chairman testified that a lack of clarity in the act on the relationship
of the chief operating officer to the subcommittee and the FAA
Administrator had made it difficult to hire a chief operating officer.
This spring, the administration, the Senate, and the House have proposed
legislation to reauthorize FAA*s programs that would amend AIR- 21 to,
among other things, clarify this relationship. 8 8 The administration
submitted its reauthorization proposal to the Congress on March 25,

2003; S. 824 was introduced in April 2003; and H. R. 2115 was introduced
in May 2003.

Air Traffic Services Subcommittee: Private sector members (5) 13
representatives: Aviation industry (10)

FAA labor (1) Department of Transportation (1) Department of Defense (1)

Aviation Management Advisory Council 18 members:

Source: GAO. FAA Administrator

Chief Operating Officer

Air Traffic Services Research and Acquisitions

Air Traffic Organization

advice oversight

Page 8 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System Under AIR- 21, the Air Traffic Services Subcommittee has multiple
responsibilities, but it thus far has focused on assisting FAA in moving

toward performance- based management. Specifically, the subcommittee has
defined its role as bringing measurements, accountability, and a more
businesslike structure to air traffic services. It also has accomplished
some of the specific responsibilities set out in the act, such as
approving budgets and large procurements, but it has encountered obstacles
that have limited its progress. The greatest obstacle has been the lack of
a chief operating officer to provide senior leadership for implementing
change.

Other obstacles include the subcommittee members* general inexperience
with aviation and with FAA*s acquisition and budget processes; turnover on
the subcommittee; and, according to the subcommittee, FAA*s lack of
flexibility to move funds between and within accounts.

In its first annual report, issued in August 2002, the subcommittee
expressed the view that *setting the proper performance measures and then
accurately and relentlessly using them to improve the quality and safety
of the air traffic system will form the foundation of the new

organization.* Even without a chief operating officer to develop a
strategic plan for the air traffic control system, including measures of
safety, efficiency, and productivity, as provided in the act, the
subcommittee has been working with FAA to identify appropriate measures in
each area. Specifically, in March 2002, the subcommittee tentatively
approved draft performance measures outlined by the FAA Administrator in
10 areas,

including operational errors, runway incursions, delays, and financial
performance. 9 The subcommittee*s report noted that FAA has developed more
detailed and useful performance measures in some areas, such as runway
incursions, and therefore can collect better data for measuring its
performance. For example, FAA now measures the severity as well as the
number of runway incursions, and it is better able to target and take
action to prevent the serious incursions that could cause accidents. The
subcommittee is continuing to emphasize performance measures, making sure
that they measure outcomes that are within FAA*s control and can be used
to hold FAA managers accountable. The subcommittee*s goal is to

help FAA refine and link its performance measures to FAA*s and the
Department of Transportation*s strategic plans.

9 Operational errors can occur when a controller does not maintain the
required separation between two aircraft or between an aircraft and
terrain and/ or obstacles. A runway incursion is an incident on the
runway, involving an aircraft, vehicle, or object, which creates a
collision hazard. Subcommittee Has Emphasized

Performance- based Management and Carried Out Some Responsibilities, but
Obstacles Have Hampered Its Progress

Subcommittee Is Moving FAA toward Performancebased Management

Page 9 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System In addition to focusing on performance management, the subcommittee
has carried out several of the specific responsibilities assigned to it
under

AIR- 21. For example, to date, the subcommittee reviewed and approved 
five air traffic procurement projects of more than $100 million, 10  the
FAA Administrator*s implementation of a cost accounting system,

and  the Administrator*s plans to reorganize major parts of the air
traffic

control system. In each of these areas, the subcommittee*s input was
limited because the work was largely completed before the subcommittee
became involved. For example, all of the key acquisition milestones had
been completed for

two of the five procurements, and for the other three, the subcommittee
did not make any substantive changes. Similarly, the subcommittee noted
with approval in its report that the cost accounting system implemented

by the Administrator was tracking 70 percent of FAA*s personnel, overhead,
and other costs for the air traffic control system, but the subcommittee
did not address problems with tracking the remaining 30 percent of these
costs, most of which are for labor. As Transportation*s Office of
Inspector General has reported, problems with FAA*s labor distribution
system, which is part of the cost accounting system, limit FAA*s ability
to monitor air traffic controllers* productivity. 11 Because of the
problems with this system, FAA cannot track the hours worked by individual
controllers or assign the hours worked to specific functions or
facilities. According to the Inspector General, the Administrator has
directed that appropriate internal controls be incorporated into the labor
distribution system to track the hours worked by all employees. While
noting that most of the important decisions on reorganizing the air
traffic control functions will not be made until a chief operating officer
is hired, the subcommittee approved FAA*s preliminary plans for merging
the acquisition and operating functions of the agency. 10 Next- Generation
Air/ Ground Communication, Oceanic Air Traffic Control Services, En

Route Communications Gateway, En Route Automation Modernization, and User
Request Evaluation Tool. 11 Department of Transportation, Office of
Inspector General, Reauthorization of the Federal Aviation Administration,
CC- 2003- 058 (Washington, D. C.: Feb. 12, 2003). Subcommittee Has Carried

Out Other Specific Responsibilities, but Its Input Has Been Limited

Page 10 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System AIR- 21 gives the subcommittee broad authority to influence the
budget for the air traffic control system, but the subcommittee has not
fully exercised

that authority. Specifically, the act makes the subcommittee responsible
for reviewing and approving the annual air traffic control budget request,
submitting this budget request to the Secretary of Transportation, and
ensuring that it supports the annual and long- range strategic plans for
the air traffic control system. Additionally, the act requires the
Secretary to transmit the budget request approved by the subcommittee to
the President, who is then directed to transmit that request to the House
and Senate authorizing and appropriations committees *without revision,*
together with the President*s annual budget request for the rest of FAA.
It is not clear what role this process allows for Transportation and the
Office of Management and Budget in developing the budget request for the
air traffic control system. The IRS Oversight Board has similar authority
over the IRS budget. The fiscal year 2003 budget for the air traffic
control

system was already under development when the subcommittee was
established. The subcommittee*s first annual report makes no mention of
actions taken on that budget; however, discussions with FAA officials
indicated that the subcommittee reviewed and approved the budget requests
prepared by the FAA Administrator for fiscal years 2003 and 2004.
Nevertheless, to our knowledge, the subcommittee did not recommend any
changes to these budget requests or determine whether the budget requests
supported the long- range plans for the air traffic control system. In a
few other areas, the subcommittee did not need to carry out its

specific responsibilities because FAA did not initiate an action. For
example, the subcommittee could not review and approve the Administrator*s
appointment of a chief operating officer because no candidate was
appointed, and it could not review and approve bonus payments for the
Administrator and senior FAA executives because no bonus payments were
made for fiscal year 2001. 12 Appendix II summarizes our analysis of the
subcommittee*s progress in carrying out its specific responsibilities.

Now that the subcommittee has been in place for more than 2 years, it is
beginning to exercise more influence. For example, according to FAA
officials, the subcommittee raised questions about the funding, timing,
and 12 According to the FAA officials, the subcommittee has reviewed
bonuses for fiscal year

2002.

Page 11 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System intellectual property rights for one recent procurement it
approved. 13 Applying its private sector knowledge of intellectual
property rights, the subcommittee asked FAA staff about the potential for
the government to

earn money from equipment or materials it has furnished to developers of
the system. According to an FAA official, these questions led to informal
discussions about the feasibility of exploring this option.

Not having a chief operating officer has hindered the subcommittee in
carrying out its responsibilities. For example, without a chief operating
officer, FAA has not moved forward with the new air traffic organization
that is supposed to bring together the air traffic control system*s

acquisition and operating functions. To date, the subcommittee has spent a
portion of each of its working meetings discussing the effort to hire a
chief operating officer. In addition, it recently worked with FAA and the
current recruiting firm to revise and streamline the position description,
but until the position is filled, the new three- component structure will
not be fully functional. For the subcommittee, the chief operating officer
is the *lynchpin* of the new performance- based air traffic organization*
the *change agent* responsible for improving the performance and delivery
of air traffic services. The subcommittee believes that not having a chief
operating officer has seriously impeded its progress.

The subcommittee and FAA agreed that uncertainties about the position*s
responsibilities, reporting relationships, and measurement criteria for
performance are major factors that have hampered the hiring of a chief
operating officer. Under AIR- 21, the FAA Administrator *may* delegate
responsibility to the chief operating officer for developing a strategic
plan and a budget request for the air traffic control system and for
*reviewing* operational functions, including the modernization of the air
traffic control system, measures for increasing productivity or
controlling costs, and training and education. Candidates were unsure what
specific duties the Administrator would delegate to the chief operating
officer or what the chief operating officer should do to implement the
delegated duties. Additionally, it was unclear how the chief operating
officer would interact with the Administrator and the subcommittee,
especially if there were differences of opinion between them. Although the
chief operating officer

13 FAA is implementing the En Route Automation Modernization program,
which replaces the HOST computer system software and hardware and the
backup system hardware and software. Not Having a Chief

Operating Officer Has Been the Greatest Obstacle to the Subcommittee*s
Progress

Page 12 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System reports to the Administrator under the act, the subcommittee also
*has broad powers to oversee the work and budget of the air traffic

organization.* This, according to the subcommittee*s first annual report,
*creates organizational confusion that has been a factor in dissuading
some candidates from accepting the position.* Furthermore, candidates
expressed concern about a lack of criteria for measuring and evaluating
the chief operating officer*s performance. Without specific criteria, some
stakeholders suggested, the chief operating officer could be working at

odds with the Administrator and the subcommittee. Candidates also wanted
to know what criteria would be used to determine their eligibility for a
bonus of up to 30 percent of their salary. While the act spells out the
specific duties of the chief operating officer, and the criteria for
evaluating his or her performance would be spelled out in the annual
performance

agreement between the Administrator and the chief operating officer,
candidates wanted a better idea, in advance, of what they would be doing
and how their performance would be judged.

Other factors have also made it difficult to hire a chief operating
officer, some of which have now been resolved or are no longer relevant.
One ongoing factor is the reservation that candidates and stakeholders
have expressed about the likelihood of cultural change in FAA*s air
traffic services organization. According to one of the recruiting firms
retained by FAA, candidates have questioned whether a regulatory agency
with an

entrenched bureaucracy will embrace the cultural change necessary to
transform air traffic services into a performance- based organization in
which individuals will be held accountable for specific goals, such as
implementing timely technological improvements.

In response to the revised, streamlined position description that it
developed with the subcommittee and the second recruiting firm, FAA
received several applications for the chief operating officer position. In
March 2003, the recruiting firm gave the Administrator a slate of
candidates for the position. However, the administration*s proposal
narrows the scope of the chief operating officer*s responsibilities, so
that the position would now be responsible for *implementing* the
Administrator*s direction and for managing the day- to- day operations of
the air traffic control system, but not for *developing* policy tools,
such as strategic plans and budget proposals. FAA considers such policy-
making

functions appropriate for a chief executive officer* that is, for the
Administrator* but not for a chief operating officer. Other stakeholders
have agreed with FAA, maintaining that AIR- 21 created confusion by
bestowing policy- making functions on the chief operating officer
position. While these changes, if implemented, may eliminate this
confusion in the

Page 13 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System future, it is unclear how the candidates who applied for the
position as described in the act and the executive order will respond to
FAA*s

proposed changes to the position*s responsibilities. According to FAA
officials, proposed changes were discussed with prospective candidates.

Inexperience with FAA*s acquisition and budget processes has further
hampered the subcommittee*s progress. AIR- 21 requires the subcommittee
members, collectively, to have experience and expertise in the management
of large service organizations, customer service, the management of large
procurements, information and communications technology, organizational
development, and labor relations so that the subcommittee can help FAA
address long- standing weaknesses in its air traffic modernization
program. Additionally, the act prohibits the subcommittee members from
having any financial ties to any aviation or aeronautics business or
lobbying firm. As a result, the subcommittee members have faced a steep
and time- consuming learning curve to understand FAA*s acquisition and
budget processes as they relate to the air traffic control system. To
acquire the basic understanding they needed to carry out their review and
approval functions, for example, they initially spent portions of their
quarterly or bimonthly meetings on briefings from FAA staff and others on
these processes.

Turnover on the subcommittee also has slowed its progress. Since the
original five subcommittee members were sworn in, in January 2001, three
have resigned and two of the three have been replaced, leaving four
current members. The new members have had to go through a timeconsuming
learning process, just as the original members did. The Secretary of
Transportation has not appointed a fifth member to the subcommittee
because he is waiting to see whether the administration*s reauthorization
proposal, which would make the FAA Administrator the chair of the
subcommittee, is approved. The congressional proposals would likewise make
the Administrator the chair of the subcommittee.

Still another obstacle to the subcommittee*s progress, according to the
subcommittee, is FAA*s lack of flexibility to move funds within and
between accounts. The subcommittee told us that project oversight requires
the ability to recommend such moves, but congressional budget guidelines
restrict FAA*s ability to move funds. Therefore, according to the
subcommittee, these guidelines hinder FAA*s ability to take advantage of
the subcommittee*s expert business advice and counsel. Both FAA and the
subcommittee agree that acquisition project management is an area in which
FAA could use flexibility. For example, FAA officials indicated that Other
Obstacles Have

Slowed the Subcommittee*s Progress

Page 14 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System they would like the flexibility to adjust to changing circumstances
by shifting money within the facilities and equipment account from a
project

that is delayed to a project that is on track and could be cost-
effectively accelerated. The agency is putting together a paper that will
expand on the need for this flexibility.

In general, the Congress restricts an agency*s ability to move funds
within and between accounts to help ensure that funds are spent on the
programs and activities for which they were appropriated. Guidelines from
FAA*s Senate Committee on Appropriations require FAA to seek congressional
approval for any reprogramming that would increase or decrease funding for
a project within the facilities and equipment account by more than 15
percent. 14 Transfers between appropriations accounts must be specifically
authorized by law. If the Appropriations Committee saw a need to provide

FAA with more flexibility, it could consider raising the reprogramming
threshold or the Congress could enact legislation to allow FAA to transfer
money between accounts on a trial basis.

The Congress, the administration, and other stakeholders have proposed
changes to the subcommittee*s organization and oversight responsibilities
that they believe would improve the performance of the air traffic control
system. These changes could clarify some uncertainties in AIR- 21 and
would modify the subcommittee*s approval authority. According to our
analysis, the merits of the proposed changes depend, in large part, on the
extent to which the subcommittee*s current approval authority is viewed as
necessary or desirable to improve the performance of the air traffic
control system.

The three legislative proposals that addressed the subcommittee*s
organization and responsibilities would separate the subcommittee from the
Aviation Management Advisory Council and rename the subcommittee. Under
the Senate proposal, the new organization would be called the Air

14 Current guidelines for reprogramming are included in Senate Report 101-
398, July 27, 1990. Proposed Changes to

the Subcommittee*s Organization and Oversight Responsibilities Could
Clarify Uncertainties and Would Modify the Subcommittee*s Authority

Legislative Proposals Agree on Organizational Changes

Page 15 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System Traffic Services Committee; under the House and the administration
proposals, it would be called the Air Traffic Services Board. This change

would elevate the subcommittee from a subordinate organization to an
organization independent of the council to oversee air traffic services,
just as the Mineta Commission envisioned. The new organization also would
be structurally similar to the IRS Oversight Board and to a board of
directors for a private organization. According to the administration
proposal, this change would improve the functioning of both the council
and the subcommittee by *simplifying and clarifying their respective
missions,* enabling the council to focus on providing *user/ customer*
input and the subcommittee to *target the safe and efficient operation of
the air traffic control system.*

The three legislative proposals also would make the FAA Administrator a
member and the chair of the new organization. According to FAA and other
proponents, this change would streamline and clarify the lines of
authority between the chief operating officer, the Administrator, and the
subcommittee, eliminating the *confusion* and *blurring* of the lines of
authority that, according to the subcommittee*s first annual report, was a
factor in dissuading some candidates from accepting the job of chief
operating officer (see fig. 2). Hence, this change could make it easier to
hire a chief operating officer. According to the subcommittee, which also
recommended in its first annual report that the FAA Administrator chair

the subcommittee, the *outside oversight* envisioned under the statute
would be preserved by this proposal because the four private sector
members would still constitute a majority and the Administrator would need
two of their votes for approval of any items. However, this change also
would reduce the number and influence of the private sector

members and could affect the subcommittee*s potential for accomplishing
change.

Page 16 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System Figure 2: Current and Proposed Oversight and Management Structure

Two of the three legislative proposals and some stakeholders* proposals
would, to varying degrees, curtail the subcommittee*s authority to approve
strategic plans, contracts, and budget requests for the air traffic
control system. These proposals are designed to address challenges to the
administration*s policy- making functions that the administration and some
other stakeholders see in the subcommittee*s approval authority*
especially in the subcommittee*s authority to approve a budget request for
the air traffic control system. Specifically, the administration has
proposed to eliminate all of the subcommittee*s approval authority, making
the new body strictly advisory, and the House and other stakeholders have
proposed to eliminate some of the subcommittee*s approval authority.
Neither the Senate nor the subcommittee has recommended any changes in the
subcommittee*s approval authority.

Under the administration proposal, the subcommittee would no longer
approve strategic plans, contracts, and budget requests for the air
traffic control system. Instead, it would *make recommendations*
consistent with its expertise in management, customer service, information
and communications technology, organizational development, and labor
relations. Furthermore, the Secretary of Transportation would no longer be
responsible for initiating any process that would transmit a document
reflecting the subcommittee*s views on the budget to the congressional
authorizing and appropriating committees. These changes would alleviate
concerns about the subcommittee*s usurping the executive branch*s policy-
making responsibilities, especially the executive branch*s prerogative to
submit a budget that reflects its priorities. According to the Proposals
Would Alter the

Subcommittee*s Approval Authority to Varying Degrees

Blurred Lines of Authority under AIR- 21 Proposed Lines of Authority

Air Traffic Services Subcommittee

Source: GAO. with

five private sector members

Air Traffic Services Board/ Committee

with the

FAA Administrator as Chair

FAA Administrator FAA Administrator

Chief Operating Officer

Chief Operating Officer

and four private sector members

Page 17 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System administration*s reauthorization proposal, the subcommittee*s
review and recommendations on the budget for the air traffic control
system would then be *based on Department of Transportation and Office of
Management and Budget budget levels and within the normal procedures

for developing the President*s Budget.* We are not aware of any efforts by
the subcommittee to challenge the executive branch*s authority. However,
the former chairman of the subcommittee noted that AIR- 21, as written,
could be interpreted as enabling the subcommittee to circumvent major
policy decisions of the administration through its authority to approve
the air traffic organization*s budget, major contracts, and major
personnel decisions. According to the former chairman, the possibility of
such an interpretation, while probably not intended, pointed to a need for
greater clarity in the law.

Under the House proposal, the subcommittee would lose its authority to
approve the budget request for the air traffic control system, but it
would retain its other approval authorities. The subcommittee could make
recommendations on the budget request, which the Secretary of
Transportation would be responsible for submitting to the President. The
President would then be responsible for transmitting these recommendations
to the congressional authorizers and appropriators. While this proposal
appears to respond, in part, to the administration*s concerns about
challenges to the executive branch*s policy- making authority, especially
the executive branch*s prerogative to submit a budget that reflects its
priorities, it retains AIR- 21*s means of communicating

views on an executive branch agency*s budget directly to the Congress.
Even with the Administrator as chair, if at least three members of the
subcommittee disagreed with the administration, they could formally
communicate their views to the congressional committees. Appendix III
summarizes the changes that the three proposals would make to the
subcommittee*s organization and oversight responsibilities and to the
chief operating officer*s responsibilities.

Several stakeholders have proposed to eliminate the subcommittee*s
authority to approve a budget request and large contracts but to preserve
its authority to approve strategic plans and performance measures. This

proposal reflects the view that the subcommittee*s authority should be
aligned with its expertise and that the subcommittee cannot realistically
be expected to make meaningful contributions to all of the areas under its
purview, given that most of its members lack experience with aviation
issues. However, eliminating the subcommittee*s authority to approve a

budget request and large contracts could limit its ability to (1) help
ensure that FAA*s strategic plan for the air traffic control system is
aligned with

Page 18 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System the budget and (2) oversee procurement costs and schedules. While
acknowledging that the scope of the subcommittee*s responsibilities is

very large, others maintain that with a staff to provide technical
support, including analyses of budgets and procurements, the subcommittee
could be expected to carry out its current responsibilities.

The proposals for eliminating or curtailing the subcommittee*s approval
authority could strengthen the accountability of the Administrator and of
the chief operating officer by increasing their responsibility for
improving the performance of the air traffic control system. These
proposals also would remove any ambiguity about the reporting relationship
of the chief operating officer and the Administrator. However, eliminating
the subcommittee*s approval authority also would limit the subcommittee*s
power and fundamentally alter its role. It is unclear how the subcommittee
without approval authority could carry out its *general responsibility*
for *oversight* under AIR- 21* to *oversee the administration, management,
conduct, direction, and supervision of the air traffic control system.*

The head of the Aviation Management Advisory Council proposed to eliminate
the subcommittee*s approval authority and merge the subcommittee with the
council. The rationale for this proposal is that the resulting expanded
advisory council could provide the FAA Administrator with both aviation
industry and management expertise, as the Mineta Commission recommended,
and that this cross pollination could lead to a fertile exchange of ideas
and prevent aviation representatives from being too insular and
nonindustry representatives from being too naive. However, like the
administration proposal, it would eliminate the subcommittee*s approval
authority.

To help the subcommittee better understand aviation issues, some
stakeholders have suggested that at least one member should have expertise
in aviation. Other stakeholders have disagreed, noting that FAA is
expected to serve as a resource for the subcommittee, and that the

members of the council have experience in aviation. These stakeholders
believe that having a member with expertise in aviation would, therefore,
be redundant and could dilute the subcommittee*s potential to bring

expertise in performance management to air traffic services. Other
stakeholders have suggested that the subcommittee hire a staff to provide
them with expertise in aviation technology, federal budgeting, finance,
and contracting. The purpose of such a staff would be to give the

subcommittee an independent perspective and to ensure continuity when
Stakeholders Have

Proposed Other Changes That Would Affect the Subcommittee*s Organization
and Ability to Carry Out Its Responsibilities

Page 19 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System turnover in the subcommittee*s membership occurs. AIR- 21
authorizes the chair of the subcommittee to appoint *any personnel that
may be

necessary to enable the subcommittee to perform its duties,* but the act
does not authorize an appropriation for a staff. To date, the subcommittee
has relied on FAA staff for information and analysis. The original
subcommittee members voted to hire staff, and the fiscal year 2002 budget
provided about $850,000 for that purpose. However, with the resignation

of two of the original members and the first chairman*s imminent
departure, the hiring did not occur. According to FAA*s records, the money
was divided between the council and the subcommittee, and a portion of the
funding that remained with the subcommittee was used to pay part of the
salary and benefits of the FAA staff who assisted both the council and the
subcommittee.

According to FAA officials, neither the fiscal year 2003 budget nor the
fiscal year 2004 budget request provides any funds for a staff or other
outside resources for the subcommittee. FAA officials stated that when,
and if, it became necessary for the subcommittee to have staff, FAA would
seek the necessary funds. Until then, FAA will staff the subcommittee.
According to FAA officials and the current subcommittee chairman, hiring a
staff would be an unnecessary expense at this time. In addition, the
current chairman views the work that FAA staff do for the subcommittee as
educational for the staff, improving their ability to understand the
subcommittee*s approach to performance management.

We agree that FAA is the logical source of much of the information that
the subcommittee may need. However, relying exclusively on FAA for
information and analysis may not provide the subcommittee with an
independent perspective. Moreover, as our work has shown, FAA*s
information may not always be reliable or complete. For example, our
recent work on the Standard Terminal Automation Replacement System, one of
FAA*s major modernization projects, showed that the reliability of FAA*s
life- cycle cost estimates is uncertain, in part because FAA was

relying on data from the contractor that did not reflect the current
status of the project and had not been independently analyzed as FAA*s
guidance requires. 15 Because the subcommittee members are generally not
experts in aviation technology, federal budgeting, finance, and
contracting, they may not be ideally qualified to evaluate the
independence, reliability, and

15 GAO- 03- 343.

Page 20 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System completeness of the information they are provided for overseeing
the air traffic control system. We provided a draft of this report to the
Department of Transportation and

the Air Traffic Services Subcommittee for review and comment. On May 16,
2003, we received E- mail comments from the department. Department
officials generally agreed with the facts presented in the draft report
and made technical and clarifying comments, which we incorporated in this
report as appropriate. The Air Traffic Services Subcommittee did not
provide comments beyond those provided by department officials.

We are sending copies of this report to interested Members of Congress,
the Secretary of Transportation, and the FAA Administrator. We will also
make copies available to others upon request. In addition, this report
will be available at no charge on the GAO Web site at http:// www. gao.
gov. Should you or your staff have any questions about this report, please
contact me at (202) 512- 2834. I can also be reached by E- mail at
dillinghamg@ gao. gov. Key contacts and contributors to this report are
listed in appendix IV.

Gerald L. Dillingham Director, Physical Infrastructure Issues Agency
Comments

Page 21 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System List of Committees

The Honorable John McCain Chairman The Honorable Ernest F. Hollings
Ranking Minority Member Committee on Commerce, Science, and Transportation
United States Senate

The Honorable Trent Lott Chairman The Honorable John D. Rockefeller IV
Ranking Minority Member Subcommittee on Aviation Committee on Commerce,
Science, and Transportation United States Senate

The Honorable Don Young Chairman The Honorable James Oberstar Ranking
Democratic Member Committee on Transportation and Infrastructure House of
Representatives

The Honorable John Mica Chairman The Honorable Peter A. DeFazio Ranking
Democratic Member Subcommittee on Aviation Committee on Transportation and
Infrastructure House of Representatives

Appendix I: Objectives, Scope, and Methodology

Page 22 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System The Wendell H. Ford Aviation Investment and Reform Act for the 21st
Century (AIR- 21) requires us to report on the success of the Air Traffic

Services Subcommittee in improving the performance of the air traffic
control system. Accordingly, this report addresses the (1) actions the
subcommittee has taken to carry out its oversight responsibilities and the
obstacles it has encountered in attempting to do so and (2) changes to the
subcommittee*s organization and oversight responsibilities that have been
proposed to improve the performance of the air traffic control system.

To accomplish both of our objectives, we analyzed AIR- 21 and its
legislative history; Executive Order 13180; and proposals of the
administration, the Senate, and the House that would amend provisions of
AIR- 21 relating to the subcommittee and the chief operating officer. We
also reviewed the initial and the revised profiles for the chief operating
officer*s position and legislation and other documents that created a
similar oversight structure at the Internal Revenue Service. We analyzed
the Air Traffic Services Subcommittee*s annual report and the minutes from
the subcommittee*s meetings, as well as congressional testimony on the
status of the subcommittee and our reports on transforming federal
agencies. In addition, we interviewed Federal Aviation Administration

(FAA) officials, including the past and present Administrators; past and
present members of the subcommittee; the head of the Aviation Management
Advisory Council; and representatives of aviation industry organizations,
including the American Association of Airport Executives, Airport Council
International* North America, National Association of State Aviation
Officials, Air Transportation Association, National Air Traffic
Controllers Association, Airline Pilots Association, and Cargo Airline
Association. We also analyzed documentation from FAA officials, research
organizations, and the two firms hired to recruit the chief operating
officer. We did not address changes to FAA*s* as opposed to the
subcommittee*s* organization that some stakeholders maintain are essential
to improve the performance of the air traffic control system.

We performed our work from October 2002 through May 2003 in accordance
with generally accepted government auditing standards. Appendix I:
Objectives, Scope, and

Methodology

Appendix II: Subcommittee*s Progress in Implementing Specific
Responsibilities

Page 23 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System a Because of the events of September 11, 2001, the FAA
Administrator did not give bonuses to executives; therefore, the Air
Traffic Services Subcommittee did not review this issue. b The
subcommittee was formed after the fiscal year 2003 budget process was
under way.

Appendix II: Subcommittee*s Progress in Implementing Specific
Responsibilities

Strategic plans * Review, approve, and monitor the strategic plan for the
air traffic control system, including the establishment of (1) a mission
and objectives, (2) related standards of performance, and (3) annual and
long- range strategic plans

 Reviewed and approved draft measures in 10 areas (e. g., operational
errors, runway incursions, delays, and airport arrival capacity) 
Evaluating constraints to managing and achieving long- range plans (e. g.,
budget flexibility issues)

Chief operating officer * Review and approve the appointment of a chief
operating officer  Led revision of the position description for the chief
operating officer to advance the hiring process

Senior executives * Review the selection, evaluation, and compensation of
senior executives who have program management responsibility over
significant functions of the air traffic control system a

 Reviewed short- term incentives packages for the heads of the Air
Traffic Services and Research and Acquisitions

Reorganization * Review and approve plans for any major reorganization
that would have an impact on the management of the air traffic control
system  Reviewed and approved plans to merge the air traffic control
system*s capital planning (Research and Acquisitions) and operational
functions (Air Traffic Services) within the air traffic organization (the
new performance- based organization)  Reviewed and approved plans to
create a terminal business unit that combines terminal services, terminal
facilities, automation, and surveillance

Financial management * Review and approve a cost accounting and financial
management structure and technologies to help ensure efficient and cost-
effective air traffic control operation

 Reviewed and approved the cost accounting system that tracks 70 percent
of the costs to provide specific services

Reports * Report annually on the results of the Subcommittee*s activities
 Issued an annual report in August 2002

Completed In progress Source: GAO.

Performance and compensation * Review performance and compensation of
managers responsible for major acquisitions  Reviewed short- term
incentives packages for the heads of Air Traffic Services and Research and
Acquisitions

Budget request * Review and approve the budget request for the air traffic
control system, making sure that it supports annual and long- range
strategic plans  Approved the fiscal year 2003 budget b

Meetings * Meet at least quarterly  Held four working meetings in
calendar year 2001, two in calendar year 2002, and two as of April 2003;
two other meetings were scheduled

but canceled following September 11, 2001

Methods and improvements * Review and approve (1) methods to accelerate
air traffic control modernization and (2) improvements in aviation safety
related to air traffic control

 Reviewed draft measures for improvements in aviation safety related to
air traffic control

Procurements * Review and approve procurements of air traffic control
equipment in excess of $100 million  Approved five procurement projects

Operational plans * Review the operational functions of the air traffic
control system  Evaluating budget flexibility issues

Subcommittee*s specific responsibilities Implementation status Planning

Modernization and improvement Management

Budget Administrative requirements

Appendix III: Proposed Legislative Changes Affecting the Subcommittee and
the Chief Operating Officer Responsibilities Page 24 GAO- 03- 542 Improve
Performance of FAA*s Air Traffic Control System Initiator of proposed
change Legislative proposal Administration a Senate b House c Modify
subcommittee*s structure

 Separate subcommittee from the Aviation Management Advisory Council

X X X

 Designate the FAA Administrator as chairperson X X X

 Reduce the number of private sector members from five to four X X X
Modify subcommittee*s approval authority

 Eliminate all approval authority, but allow recommendations X 
Eliminate budget approval authority,

but allow recommendations on the budget

X

 Eliminate budget transmittal requirement X d e

 Eliminate additional reporting requirement X Make other changes to
subcommittee

 Rename subcommittee X X X

 Eliminate compensation for members X f X

 Authorize an appropriation for activities X X Modify chief operating
officer*s responsibilities

 Oversee day- to- day operations rather than review operations X X X

 Implement rather than develop strategic plan X X X

 Report performance to authorizing committees rather than entire Congress

X X X

 Review management of cost- reimbursable contracts X

 Submit budget to subcommittee/ board rather than Secretary of
Transportation X Source: GAO. a As of March 25, 2003.

b S. 824. c H. R. 2115. d Specifies that the budget request for the air
traffic control system that is to be transmitted without revision by the
President to the congressional authorizing and appropriating committees is
the preOffice of Management and Budget budget request for the air traffic
control system. e Requires the transmission without revision of budget
recommendations related to the air traffic

control system, rather than transmission of a budget request for the
system, to the congressional authorizing and appropriating committees
along with the annual budget request of FAA. f Eliminates compensation for
the chair and vice chair but retains compensation of $25,000 per year

for members. Appendix III: Proposed Legislative Changes Affecting the
Subcommittee and the Chief

Operating Officer Responsibilities

Appendix IV: GAO Contacts and Staff Acknowledgments

Page 25 GAO- 03- 542 Improve Performance of FAA*s Air Traffic Control
System Gerald Dillingham (202) 512- 2834 Belva Martin (202) 512- 2834

In addition to those individuals named above, Geraldine Beard, Elizabeth
Eisenstadt, Dave Hooper, Elizabeth Marchak, Kieran McCarthy, and Richard
Scott made key contributions to this report. Appendix IV: GAO Contacts and
Staff

Acknowledgments Contacts Staff Acknowledgments

(540066)

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