    National Airspace System: FAA Has Made Progress but Continues to
    Face Challenges in Acquiring Major Air Traffic Control Systems
    (10-JUN-05, GAO-05-331).

    The Federal Aviation Administration's (FAA) multibillion-dollar
    effort to modernize the nation's air traffic control (ATC) system
    has suffered from cost, schedule, and/or performance shortfalls
    in its system acquisitions for more than two decades and has been
    on our list of high risk programs since 1995. FAA's
    performance-based Air Traffic Organization (ATO) was created in
    February 2004, in part, to address these legacy challenges. In
    this report, GAO examined (1) FAA's experience in meeting cost,
    schedule, and performance targets for major ATC system
    acquisitions; (2) steps taken to address legacy problems with the
    program and additional steps needed; and (3) the potential impact
    of the constrained federal budget on this program.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-05-331
        ACCNO:   A26298
      TITLE:     National Airspace System: FAA Has Made Progress but
    Continues to Face Challenges in Acquiring Major Air Traffic
    Control Systems
         DATE:   06/10/2005
      SUBJECT:   Air traffic control systems
    	     Command control communications systems
    	     Cost analysis
    	     Procurement
    	     Procurement planning
    	     Schedule slippages
    	     Strategic planning
    	     Program evaluation
    	     Performance measures
    	     Budget administration
    	     Budgets
    	     Air transportation
    	     FAA Acquisition Management System
    	     FAA Air Traffic Control Modernization
    	     Program

    	     FAA Air Traffic Control System
    	     FAA Capital Investment Plan
    	     FAA National Airspace System Plan

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    GAO-05-331

                     United States Government Accountability Office

    GAO Report to Congressional Requesters

    June 2005

    NATIONAL AIRSPACE SYSTEM

     FAA Has Made Progress but Continues to Face Challenges in Acquiring Major Air
                                Traffic Control Systems

                                           a

    GAO-05-331

    [IMG]

    June 2005

    NATIONAL AIRSPACE SYSTEM

    FAA Has Made Progress but Continues to Face Challenges in Acquiring Major Air
    Traffic Control Systems

    What GAO Found

    The ATO met its acquisition goal for fiscal year 2004. However, prior to
    the establishment of the ATO, FAA had experienced more than two decades of
    cost, schedule, and/or performance shortfalls in acquiring major systems
    under its ATC modernization program. For example, 13 of the 16 major
    system acquisitions that we reviewed in detail have experienced cost,
    schedule, and/or performance shortfalls when assessed against their
    original milestones. These 13 system acquisitions experienced total cost
    growth from $1.1 million to about $1.5 billion; schedule extensions
    ranging from 1 to 13 years; and performance shortfalls, including safety
    problems. We found that one or more of four factors-funding, requirements
    growth and/or unplanned work, stakeholder involvement, and software
    complexity-have contributed to these legacy challenges. While FAA met its
    recent acquisition goal, it is important to note that this goal is based
    on updated program milestones and cost targets for system acquisitions,
    not those set at their inception. Consequently, they do not provide a
    consistent benchmark for assessing progress over time. Also, as indicators
    of annual progress, they cannot be used in isolation to measure progress
    over the life of an acquisition.

    Although additional steps are warranted, FAA has taken some positive steps
    to address key legacy challenges it has had with acquiring major systems
    under the modernization program. For example, the ATO has cut funding for
    some major systems that were not meeting their goals and is reassessing
    all capital investments to help ensure that priority systems receive
    needed funding. The ATO has improved its management of software-intensive
    acquisitions and information technology investments and begun to more
    actively involve stakeholders. As we recommended, the ATO plans to
    establish an overall policy to apply its process improvement model to all
    software-intensive acquisitions. However, additional steps could be taken
    to improve its management of system acquisitions. For example, the ATO
    could use a knowledge-based approach to managing system acquisitions,
    characteristic of best commercial practices, to help avoid cost, schedule,
    and performance problems.

    The ATO will also be challenged to modernize the ATC system under

    constrained budget targets, which would provide FAA with about $2 billion

    less than it planned to spend through 2009. To fund its major system

    acquisitions and remain within these targets, the ATO has eliminated
    planned

    funding to start new projects and substantially reduced planned funding
    for

    other areas. However, when forwarding its budget submission for review by

    senior officials at FAA, DOT, the Office of Management and Budget, and

    Congress, the ATO provides no detail on the impact of the planned funding

    reductions on ATC modernization and related activities to modernize the

    NAS. Our work shows that the ATO should provide these decisionmakers

    with detailed information in its budget submissions about the impact of

    funding decisions on modernization efforts. Without this type of
    information,

    decision-makers lack important details when considering FAA's annual
    budget submissions.

    United States Government Accountability Office

    Contents

    Letter

    Results in Brief
    Background
    FAA Has Had Difficulty Meeting Cost, Schedule, and/or Performance

    Targets for Major System Acquisitions, but Made Progress in Fiscal Year
    2004

    FAA Has Taken Some Positive Steps to Address Key Legacy Challenges, but
    Additional Steps Are Warranted to Reduce Risk and Strengthen Oversight

    A Constrained Budgetary Environment Could Further Challenge the

    ATO's Efforts to Modernize the ATC System Conclusions Recommendation for
    Executive Action Agency Comments

    1 4 7

    11

    24

    30 33 34 34

    Appendixes

    Appendix I:

    Appendix II:

    Appendix III: Appendix IV:

    Background and Status of FAA's 16 Major System
    Acquisitions We Reviewed in Detail 36
    Airport Surface Detection Equipment-Model X (ASDE-X) 36
    Airport Surveillance Radar Model-11 (ASR-11) 38
    Air Traffic Control Radar Beacon Interrogator-Replacement

    (ATCBI-6) 40 Advanced Technologies and Oceanic Procedures (ATOP) 42
    Controller-Pilot Data Link Communications (CPDLC) 45 En Route
    Communications Gateway (ECG) 47 En Route Automation Modernization (ERAM)
    49 Free Flight Phase 2 (FFP2) 50 FAA Telecommunications Infrastructure
    (FTI) 52 Integrated Terminal Weather System (ITWS) 54 Local Area
    Augmentation System (LAAS) 56 Next Generation Air-to-Ground Communication
    (NEXCOM) 59 NAS Infrastructure Management System-Phase 2 (NIMS-2) 61
    Operational and Supportability Implementation System (OASIS) 63 Standard
    Terminal Automation Replacement System (STARS) 66 Wide Area Augmentation
    System (WAAS) 69

    Information on the 39 Additional Systems under the ATC Modernization
    Program 72

    Objectives, Scope, and Methodology 80

    GAO Contact and Staff Acknowledgments 83

                                        Contents

    Tables	Table 1: Table 2:

    Table 3:

    Table 4: Table 5:

    Changes in Cost and Schedule Targets for 16 Major ATC
    System Acquisitions 12
    Four Key Factors Contributing to Cost Growth, Schedule
    Extensions, and/or Performance Problems for 13 ATC
    System Acquisitions 16
    Description and Status of Nine Additional Major ATC
    System Acquisitions with Cost, Schedule, and
    Performance Targets 22
    Cost and Schedule Information for Nine Additional Major
    Systems under the ATC Modernization Program 72
    Cost and Schedule Information for the 30
    Buy-It-by-the-Pound Systems under the ATC
    Modernization Program 74

    Figures Figure 1:

    Figure 2:

    Figure 3: Figure 4: Figure 5: Figure 6:

    Figure 7: Figure 8:

    Figure 9:

    Sixteen Major Systems We Examined in Detail by Phase
    of Flight
    ASDE-X Screen Depicting an Airport Layout with Active
    Aircraft Targets
    Changes to ASDE-X Schedule and Cost Targets
    ASR-11 Equipment
    Changes to ASR-11 Schedule and Cost Targets
    ATCBI-6 Screen Display Depicting All
    Transponder-Equipped Aircraft
    Changes to ATCBI-6 Cost and Schedule Targets
    ATOP Equipment Reporting Aircraft Position
    Information
    Changes to ATOP Schedule and Cost Targets

    Figure 10: CPDLC Text Message on an Aircraft Display Figure 11: Changes to
    CPDLC Schedule and Cost Targets Figure 12: ECG Maintenance Workstation
    Display Figure 13: Changes to ECG Schedule and Cost Targets Figure 14:
    Changes to ERAM Schedule and Cost Targets Figure 15: Free Flight Phase 2
    User Request Evaluation Tool Figure 16: Changes to FFP2 Schedule and Cost
    Targets Figure 17: FTI Primary Network Operations Control Center Figure
    18: Changes to FTI Schedule and Cost Targets Figure 19: ITWS Situation
    Display Figure 20: Changes to ITWS Schedule and Cost Targets Figure 21:
    Key Components of LAAS Figure 22: Changes to LAAS Schedule and Cost
    Targets Figure 23: Multimode Digital Radio 10

    36 37 38 39

    40 41

    42 43 45 46 47 48 49 50 51 52 53 54 55 56 57 59

    Contents

    Figure 24: Changes to NEXCOM Schedule and Cost Targets 60 Figure 25: NIMS
    Infrastructure 61 Figure 26: Changes to NIMS-Phase 2 Schedule and Cost
    Targets 62 Figure 27: OASIS Dual Screen Display 63 Figure 28: Changes to
    OASIS Schedule and Cost Estimates 64 Figure 29: STARS Controller
    Workstation 66 Figure 30: Changes to STARS Schedule and Cost Targets 67
    Figure 31: Key Components of WAAS 69 Figure 32: Change to WAAS Schedule
    and Cost Targets 70

    Abbreviations

    ACE-IDS Automated Surface Observing System Controller Equipment

    Information Display System ADL Aeronautical Data Link ADS-B Automatic
    Dependent Surveillance-Broadcast AFSS Automated Flight Service Stations
    ALSIP Approach Lighting System Improvement Program AMS Acquisition
    Management System ARCSCC FAA Air Traffic Control System Command Center
    ARTCC Air Route Traffic Control Centers ARTS Automated Radar Terminal
    System ASWON Aviation Surface Weather Observation Network ASDE-X Airport
    Surface Detection Equipment - Model X ASOS Automated Surface Observing
    System ASR-9 Airport Surveillance Radar - Model 9 ASR-11 Airport
    Surveillance Radar - Model 11 ATC Air Traffic Control ATCBI-6 Air Traffic
    Control Beacon Interrogator Replacement ATCT Air Traffic Control Towers
    ATO Air Traffic Organization ATOP Advanced Technologies and Oceanic
    Procedures AWOS Automated Weather Observing System AWSS Automated Weather
    Sensors Systems C3 Command, Control, and Communications CARTS Common
    Automated Radar Terminal System CCS Command Center Conference Control
    System CDM Collaborative Decision Making CFE Communications Facilities
    Enhancements CMMI Capability Maturity Model Integration CNS
    Communications, Navigation, and Surveillance

    Contents

    CIWS Corridor Integrated Weather System
    COTS Commercial-Off-the-Shelf
    CPDLC Controller-Pilot Data Link Communications
    CTS Critical Telecommunications Support
    DME Distance Measuring Equipment
    DOD Department of Defense
    DSP Departure Spacing Program
    E-Scan Electronic Scan
    ECG En Route Communication Gateway
    ERAM En Route Automation Modernization
    ETVS Enhanced Terminal Voice Switches
    FAA Federal Aviation Administration
    FFP2 Free Flight Phase 2
    FIS Flight Information Service
    FISDL Flight Information Service Data Link
    FTI FAA Telecommunications Infrastructure
    GAO U.S. Government Accountability Office
    GNSS Global Navigation Surveillance Systems
    HAATS Houston Area Air Traffic System
    HOCSR HOST/Oceanic Computer System Replacement
    IATS Initial Academy Training System
    ICAO International Civil Aviation Organization
    iCMM integrated Capability Maturity Model
    ILS Instrument Landing System
    IOC Initial Operating Capability
    IT Information Technology
    ITIM Information Technology Investment Management
    ITWS Integrated Terminal Weather System
    JRC Joint Resources Council
    LAAS Local Area Augmentation System
    LRR Long-range Radar
    NAS National Airspace System
    NDI Non-Developmental Item
    NASR National Airspace System Resources
    NEXCOM Next Generation Air-to-Ground Communication System
    NEXRAD Next Generation Weather Radar
    NIMS-2 National Airspace System Infrastructure Management

    System-Phase 2 NOTAM Notice to Airmen NTSB National Transportation Safety
    Board NWS National Weather Service OASIS Operational and Supportability
    Implementation System

    Contents

    OMB Office of Management and Budget
    ORD Operational Readiness Date
    PRM Precision Runway Monitor
    RFI Radio Frequency Interference
    RIRP Runway Incursion Reduction Program
    RTCA Radio Technical Commission for Aeronautics
    RVR Runway Visual Range
    SAWS Stand-alone Weather Sensors
    SF-21 Safe Flight 21 Program
    SLEP Service Life Extension Program
    STARS Standard Terminal Automation Replacement System
    TDLS Tower Data Link Services
    TFM-I Traffic Flow Management-Infrastructure
    TMA Traffic Management Advisor
    UHF Ultra High Frequency
    URET User Request Evaluation Tool
    VOR Very High Frequency Omni-directional Range
    VORTAC Very High Frequency Omni-directional Collocated with Tactical

    Air Navigation VRRP Voice Recorder Replacement Program VSCS Voice
    Switching and Control System WAAS Wide Area Augmentation System WMSCR
    Weather Message Switching Center Replacement

    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. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    A

    United States Government Accountability Office Washington, D.C. 20548

    June 10, 2005

    Congressional Requesters

    In 1981, the Federal Aviation Administration (FAA) began what it initially
    envisioned as a 10-year modernization program to upgrade and replace the
    National Airspace System's (NAS) facilities and equipment to meet
    projected increases in traffic volumes, enhance the system's margin of
    safety, and increase the efficiency of the air traffic control (ATC)
    system-a principal component of the NAS. To date, FAA has spent $43.5
    billion for its NAS modernization effort1 and plans to spend an additional
    $9.6 billion through fiscal year 2009, primarily to upgrade and replace
    ATC systems and facilities.2 For more than two decades, ATC system
    acquisitions under the NAS modernization program3 have experienced
    significant cost growth, schedule delays, and performance problems. As a
    result, the ATC modernization program has been on our list of high-risk
    programs since 1995. To improve FAA's management of the modernization
    program, Congress, in 1995, gave the agency acquisition and human capital
    flexibilities,4 which FAA has largely implemented.

    In 2000, Congress and the administration took further steps to improve the
    modernization program's management. Through legislation and an executive
    order, they laid the foundation for, among other things, a
    performance-based organization to manage FAA's ATC investments and
    operations and a chief operating officer to lead it. In response, FAA
    hired a chief operating officer in August 2003 and created the Air Traffic

    1For purposes of this report, "NAS modernization" refers to ATC
    facilities, equipment, and related expenses.

    2The estimates are presented in then-year dollars, which means that they
    represent the nominal dollar sum of the estimated spending in different
    years. To estimate future-year spending, FAA incorporates assumptions on
    inflation developed by the Office of Management and Budget (OMB).

    3This report, as well as our work for more than two decades on FAA's ATC
    modernization program, has assessed progress for major ATC system
    acquisitions based on the cost, schedule, and performance goals set at the
    inception of each program.

    4Department of Transportation Appropriations Act, Pub. L. 104-50, S: 348
    (1995).

    Organization (ATO)5 in February 2004. The ATO inherited the decades-long
    legacy of cost, schedule, and/or performance problems with major ATC
    system acquisitions and at the same time received $400 million less for
    fiscal year 2005 than it had planned to spend for ATC modernization. In
    addition, projected funding levels from the administration are about $2
    billion less than FAA had planned to spend for fiscal years 2005 through
    2009.

    The ATC modernization program is critical to meeting future air traffic
    safety, capacity, and efficiency needs. FAA reported that U.S. airlines
    carried nearly 690 million passengers in 2004 and that it expects the
    number of passengers to reach 1 billion by 2015. According to FAA, the
    agency has spent about 58 percent, or $25.1 billion, of the $43.5 billion
    total for NAS modernization on system acquisitions designed to replace or
    upgrade various ATC systems.

    In light of past problems with and continuing concerns about funding major
    ATC system acquisitions under the ATC modernization program, you asked us
    to examine (1) FAA's experience in meeting cost, schedule, and/or
    performance targets for major system acquisitions under its ATC
    modernization program; (2) the steps FAA has taken to address longstanding
    challenges with the ATC modernization program and additional steps that
    are needed; and (3) the potential effects of the constrained budget
    environment on FAA's ability to modernize the ATC system. To address these
    objectives, we reviewed in detail 16 of the 55 system acquisitions6 under
    the ATC modernization program, primarily by interviewing FAA officials and
    obtaining and analyzing key acquisition

    5Wendell H. Ford Aviation Investment and Reform Act for the 21st Century,
    Pub. L. 106-181, S: 303 (2000); E.O.13180. Under the executive order, part
    of the ATO's purpose is to "develop methods to accelerate air traffic
    control modernization and to improve aviation safety related to air
    traffic control."

    6According to FAA officials, the number of system acquisitions in the ATC
    modernization program can vary annually, when Congress earmarks funds for
    a specific system acquisition. As of March 2005, the number of system
    acquisitions under the program was 55.

    documents.7 We selected these 16 systems in July 2004, when this review
    was still a part of our broader work on FAA's efforts to modernize the
    NAS.8,9 Specifically, we selected the 16 ATC system acquisitions with the
    largest life-cycle costs that met the following criteria: each system had
    cost, schedule, and performance targets; was discussed in prior GAO and
    Department of Transportation Inspector General (DOT IG) reports, had not
    been fully implemented or deployed by 2004, and received funding in 2004.
    We reviewed this list with FAA officials to ensure that we did not exclude
    any significant system. In fiscal year 2005, these 16 major ATC system
    acquisitions account for about 36 percent of FAA's facilities and
    equipment budget.10 (See app. I for additional information on these 16
    systems.) We also collected information on the remaining 39 system
    acquisitions under this program, which account for about 19 percent of
    FAA's facilities and equipment account for fiscal year 2005.11 (See app.
    II for additional information on these 39 systems.) In addition, we
    reviewed past GAO and DOT IG reports. We interviewed FAA officials within
    the recently created ATO and collected and analyzed the documents they
    provided. We also interviewed officials with the Aircraft Owners and
    Pilots Association, Air Transport Association, Department of Defense
    (DOD), National Air Traffic

    7At the time of our audit, FAA planned to deploy 64 Operational and
    Supportability Implementation Systems (OASIS) to automated flight service
    stations by 2005. However, after deploying 19 such systems in 2004, FAA
    discontinued the system's deployment, pending a decision about whether to
    contract out the operation of automated flight service stations. In
    February 2005, FAA awarded a contract to Lockheed Martin to operate these
    stations.

    8Our methodology for selecting the 16 system acquisitions to review in
    detail was based on the fiscal year 2004 appropriation for FAA's
    facilities and equipment budget, which was available when the engagement
    was designed. However, to make the report as current as possible, we have
    used fiscal year 2005 funding levels where appropriate, including the
    status sheets for each of the 16 systems in appendix I. See app. III for
    additional information on our methodology.

    9Our review of FAA's NAS modernization efforts will be issued later this
    year.

    10FAA does not have a formal definition of "major" systems under its
    Acquisition Management System; however, agency officials told us that if a
    system acquisition has a formally approved baseline, we could consider it
    "major." Using this definition, 25 of the 55 system acquisitions under the
    ATC modernization program are major.

    11The remaining 45 percent of the facilities and equipment budget for
    fiscal year 2005 will be spent on facilities, mission support, and
    personnel-related activities.

    Controllers Association, and RTCA.12 Furthermore, we convened a panel of
    international aviation experts.13 Our review did not focus on FAA's
    efforts to modernize its airports and other agency facilities. We
    conducted our review from November 2004 through May 2005 in accordance
    with generally accepted government auditing standards. (See app. III for
    additional information on our objectives, scope, and methodology.)

    Results in Brief	The ATO has shown progress during its first year of
    operation by meeting its acquisition goal for fiscal year 2004. However,
    for more than two decades, FAA has experienced cost growth, schedule
    extensions, and/or performance problems in acquiring major systems under
    its ATC modernization program and has been on our list of high-risk
    programs since 1995.14 Since their inception, 13 of the 16 major system
    acquisitions that we reviewed in detail for this engagement have
    experienced cost, schedule, and/or performance shortfalls when assessed
    against their original baselines or performance targets. Specifically, the
    total cost for these 13 major system acquisitions ranged from $1.1 million
    to about $1.5 billion over their original cost targets. In addition, these
    13 system acquisitions also experienced schedule extensions that ranged
    from 1 to 13 years15 over their original schedule targets. Furthermore,
    several of these 13 system acquisitions experienced performance shortfalls
    related to

    12Organized in 1935 and once called the Radio Technical Commission for
    Aeronautics, RTCA is today known just by its acronym. RTCA is a private,
    not-for-profit corporation that develops consensus-based performance
    standards for ATC systems. RTCA serves as a federal advisory committee,
    and its recommendations are the basis for a number of FAA's policy,
    program, and regulatory decisions.

    13GAO, Experts' Views on Improving the U.S. Air Traffic Control
    Modernization Program, GAO-05-333SP (Washington, D.C.: April 2005).

    14GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January
    2005); GAO, Air Traffic Control: FAA Needs to Ensure Better Coordination
    When Approving Air Traffic Control Systems, GAO-05-11 (Washington, D.C.:
    Nov. 17, 2004); GAO, Air Traffic Control: FAA's Acquisition Management Has
    Improved, but Policies and Oversight Need Strengthening to Help Ensure
    Results, GAO-05-23 (Washington, D.C.: Nov. 12, 2004); GAO, Information
    Technology: FAA Has Many Investment Management Capabilities in Place, but
    More Oversight of Operational Systems Is Needed, GAO-04-822 (Washington,
    D.C.: Aug. 20, 2004); and GAO, Air Traffic Control: System Management
    Capabilities Improved, but More Can Be Done to Institutionalize
    Improvements, GAO-04-901 (Washington, D.C.: Aug. 20, 2004).

    15Schedule extensions were calculated based on the date FAA plans to
    deploy the last system.

    safety. Our work indicates that one or more of the following four factors
    have contributed to the legacy challenges FAA has experienced in meeting
    system acquisitions' cost, schedule, and/or performance targets: (1)
    receiving funding for acquisitions at lower levels than called for in
    agency planning documents, (2) adding requirements and/or unplanned work,
    (3) not sufficiently involving stakeholders throughout system development,
    and (4) underestimating the complexity of software development. Three of
    the major 16 ATC system acquisitions we reviewed in detail are currently
    operating within their original cost, schedule, and performance targets,
    despite challenges that are symptomatic of past problems. To its credit,
    the ATO has reported that it met its annual acquisition performance goal
    for fiscal year 2004: to meet 80 percent of designated milestones and
    maintain 80 percent of critical program costs within 10 percent of the
    budget as published in its Capital Investment Plan. However, in our
    opinion, having and meeting such performance goals is commendable, but it
    is important to note that these goals are updated program milestones and
    cost targets, not those set at the program's inception.16 Consequently,
    they do not provide a consistent benchmark for assessing progress over
    time. Moreover, as indicators of annual progress, the goals cannot be used
    in isolation to measure progress in meeting cost and schedule targets over
    the life of an acquisition. Finally, given the problems FAA has had in
    acquiring major ATC systems for over two decades, it is too soon to tell
    whether meeting these annual performance goals will ultimately improve the
    agency's ability to deliver system acquisitions as promised.

    FAA has taken a number of positive steps, primarily through the ATO, to
    address key legacy challenges it has had with acquiring major systems
    under its ATC modernization program; however, additional steps are
    warranted to reduce risk and strengthen oversight. Some of the positive
    steps taken directly address the four factors we identified as
    contributing to cost, schedule, and/or performance problems, while others
    support more general efforts to improve the modernization program's
    management. For example, the ATO has demonstrated a willingness to cut
    some major acquisitions that are not meeting their performance targets,
    even after investments of significant resources, and is reassessing all of
    its capital investments to help ensure that high-priority system
    acquisitions receive needed funding. The ATO has also improved its
    management of information

    16Our statements about cost, schedule, and/or performance in this report
    and in our past reports are based on the original targets that FAA
    established and approved at the start of its acquisition programs.

    technology investments and software-intensive acquisitions; these efforts
    are positive steps toward minimizing growth in requirements and unplanned
    work and better assessing the complexity of software development. For
    example, on a number of software-intensive acquisition projects, the ATO
    has applied a process improvement model that resulted in positive outcomes
    such as enhanced productivity and greater ability to predict schedules and
    resources. As we recommended, FAA plans to institutionalize the use of
    this model by establishing a policy to define the ATO's expectations for
    process improvements and a plan to address and coordinate process
    improvement activities throughout the organization.17 The ATO has also
    begun to include stakeholders in all phases of system development, so that
    they can provide input in response to technical or financial developments.
    However, we have identified additional steps that are needed to reduce
    risk and strengthen oversight. For example, we found that the ATO does not
    use a knowledge-based approach to system acquisitions, characteristic of
    best commercial practices for managing commercial and DOD product
    developments, which would help avoid cost, schedule, and/or performance
    problems.18 We recommended, among other things, that FAA take several
    actions to more closely align its acquisition management system with
    commercial best practices. FAA said that our recommendations would be
    helpful to them as they continue to refine this system. Continued
    improvement and management attention will be crucial if the organization
    is to succeed in addressing key legacy challenges.19

    The current constrained budget environment, which includes lower future
    budget targets than those of recent years, poses further challenges to the
    ATO as it attempts to modernize the ATC system. FAA plans to spend $4.4
    billion from fiscal year 2005 through fiscal year 2009 to fund key
    modernization efforts; however, this funding level is about $2 billion
    less than the agency had expected in appropriations for this 5-year
    period. To fund its major system acquisitions while remaining within the
    budget targets, the ATO has eliminated planned funding to start new
    projects and reduced planned funding for other areas. However, when
    forwarding its budget submission for review by senior FAA, DOT, and OMB
    officials and by Congress, the ATO provides no detail on the impact of the
    planned funding reductions on ATC modernization and related activities to

    17GAO-04-901. 18GAO-05-23. 19GAO-05-207.

    modernize the NAS. Our work shows that the ATO should provide these
    officials and Congress with detailed information in its budget submissions
    about the impact of reduced budgets on both ATC and NAS modernization. To
    do so, the ATO should explicitly identify the trade-offs it is making to
    reach budget targets, highlighting those programs slated for increased
    funding and those slated for reduced funding. Without this type of
    information, decision-makers lack important details when considering FAA's
    annual budget submissions. We are recommending that FAA provide this
    information to Congress annually.

    In commenting on draft of this report, DOT, FAA, and ATO generally agreed
    with the report and provided technical comments, which we incorporated as
    appropriate. The FAA officials said they are continuing to consider our
    recommendation and indicated they would provide a written statement
    required by 31 U.S.C. 720.20

    Background	The mission of FAA, as a DOT agency, is to provide the safest,
    most efficient aerospace system in the world. To fulfill its mission, FAA
    must rely on an extensive use of technology, including many
    software-intensive systems. FAA constantly relies on the adequacy and
    reliability of the nation's ATC system, which comprises a vast network of
    radars; automated data processing, navigation, and communications
    equipment; and ATC facilities.21 Through this system, FAA provides
    services such as controlling takeoffs and landings and managing the flow
    of traffic between airports.

    FAA is organized into several staff support offices and five lines of
    business, which include Airports, Aviation Safety, Commercial Space

    2031 U.S.C. S: 720 requires, in part, that agencies report the actions
    taken on our recommendation to the Senate Committee on Homeland Security
    and Governmental Affairs and to the House Committee on Government Reform
    not later than 60 days from the date of the report.

    21FAA uses three types of facilities to control traffic: airport towers,
    terminal radar approach control facilities, and en route centers. Airport
    towers direct traffic on the ground, before landing, and after takeoff
    within 5 nautical miles of the airport and about 3,000 feet above the
    airport. Terminal radar approach control facilities sequence and separate
    aircraft as they approach and leave airports, beginning about 5 nautical
    miles and ending about 50 nautical miles from the airport and generally up
    to 10,000 feet above the ground. Air route traffic control centers, called
    en route centers, control aircraft in transit and during approaches to
    some airports, generally controlling air space that extends above 18,000
    feet for commercial aircraft.

    Transportation, the Office of Security and Hazardous Materials, and the
    newly formed ATO.22 The ATO was formed in February 2004 to, among other
    things, improve the provision of air traffic services and accelerate
    modernization efforts. To create the ATO, FAA combined its Research and
    Acquisition and Air Traffic Services into one performance-based
    organization, bringing together those who acquire systems and those who
    use them, respectively. The ATO is led by FAA's chief operating officer,
    consists of 10 service units,23 and has 36,000 of FAA's 48,000 employees.

    The ATO is the principal FAA organizational unit responsible for acquiring
    ATC systems through the use of the agency's Acquisition Management System
    (AMS). Because FAA formerly contended that some of its modernization
    problems were caused by federal acquisition regulations, Congress enacted
    legislation in November 1995 that exempted the agency from most federal
    procurement laws and regulations and directed FAA to develop and implement
    a new acquisition management system that would address the unique needs of
    the agency. In April 1996, FAA implemented AMS. AMS was intended to reduce
    the time and cost of fielding new system acquisitions by introducing (1) a
    new investment system that spans the life cycle of an acquisition, (2) a
    new procurement system that provides flexibility in selecting and managing
    contractors, and (3) organizational and human capital reforms that support
    the new acquisition system.

    AMS provides high-level acquisition policy and guidance for selecting and
    controlling ATC system acquisitions through all phases of the acquisition
    life cycle, which is organized into a series of phases and decision points
    that include (1) mission analysis, (2) investment analysis, (3) solution
    implementation, and (4) in-service management. To select system
    acquisitions, FAA has two processes--mission analysis and investment
    analysis-that together constitute a set of policies and procedures, as
    well as guidance, that enhance the agency's ability to screen system
    acquisitions submitted for funding. Also through these two processes, FAA
    assesses and ranks each system acquisition according to its relative
    costs, benefits,

    22Executive Order 13180 created the ATO. The executive order was later
    amended by Executive Order 13264, which removed the description of air
    traffic services as an "inherently governmental function."

    23The 10 service units that make up the ATO include Safety,
    Communications, Operations Planning, Finance, Acquisition and Business
    Services, En Route and Oceanic Services, Terminal Services, Flight
    Services, System Operations Services, and Technical Operations Services.

    risks, and contribution to FAA's mission; a senior, corporate-level
    decisionmaking group then selects system acquisitions for funding. After a
    system acquisition has been selected, FAA officials are required to
    formally establish the life-cycle cost, schedule, benefits, and
    performance targets- known as acquisition program baselines,24 which are
    used to monitor the status of the system acquisition throughout the
    remaining phases of its life cycle.

    Through its NAS modernization program, FAA is upgrading and replacing ATC
    facilities and equipment to help improve the system's safety, efficiency,
    and capacity. These systems involve improvement in the areas of
    automation, communication, navigation and landing, surveillance, and
    weather to support the following five phases of flight (see fig. 1):

    o 	Preflight - The pilot performs flight checks and the aircraft is
    pushedback from the gate. For preflight, we looked at Collaborative
    Decision Making (CDM) and OASIS.

    o 	Airport Surface - The aircraft taxis to the runway for takeoff or,
    after landing, to the destination gate to park at the terminal. For
    airport surface, we examined the Airport Surface Detection Equipment -
    Model X (ASDE-X).

    o 	Terminal Departure - The aircraft lifts off the ground and climbs to a
    cruising altitude. For terminal departure, we examined the following
    systems: Airport Surveillance Radar (ASR-11), Integrated Terminal Weather
    System (ITWS), Local Area Augmentation System (LAAS), Standard Terminal
    Automation Replacement System (STARS), and Traffic Management Advisor
    (TMA).

    o 	En route/Oceanic --The aircraft travels through one or more center
    airspaces and approaches the destination airport. For en route and
    oceanic, we examined the following systems: Air Traffic Control Radar
    Beacon Interrogator-Replacement (ATCBI-6), Advanced Technologies and
    Oceanic Procedures (ATOP), Controller-Pilot Data Link Communications
    (CPDLC), and User Request Evaluation Tool (URET).

    24In December 2004, FAA revised its Acquisition Management System,
    including changing the name Acquisition Program Baseline to Exhibit 300
    Program Baseline.

    o 	Terminal Arrival --The pilot lowers, maneuvers, aligns, and lands the
    aircraft on the destination airport's designated landing runway. For
    terminal arrival, we looked at the systems already listed under terminal
    departure: ASR-11, ITWS, LAAS, STARS, and TMA.

    In addition, for the major ATC systems that support multiple phases of
    flight, we examined the following systems: En Route Communications Gateway
    (ECG), En Route Automation Modernization (ERAM), Next-Generation
    Air-to-Ground Communication (NEXCOM), and Wide Area Augmentation System
    (WAAS). Furthermore, for major ATC systems that support NAS
    infrastructure, we examined FAA Telecommunications Infrastructure (FTI)
    and NAS Infrastructure Management System (NIMS)- Phase Two.25 (See app. I
    for additional information on these 16 systems.)

    Figure 1: Sixteen Major Systems We Examined in Detail by Phase of Flight

             Preflight  Airport                    En route/   Terminal   Airport
                        surface Terminal departure  oceanic     arrival   surface
                                 ASR-11 ITWS LAAS   ATCBI-6   ASR-11 ITWS
             CDMa OASIS ASDE-X      STARS TMAa     ATOP CPDLC LAAS STARS  ASDE-X
                                                     URETa       TMAa
                                Multiple stages of flight ECG, ERAM, NEXCOM, WAAS
                                                         Infrastructure FTI, NIMS

    Source: FAA.

    aCDM, TMA, and URET are decision support tools that fall under the Free
    Flight program, which is currently called Free Flight Phase 2 (FFP2). We
    reviewed FFP2 as a single system acquisition.

    25Air Traffic Control involves a number of other systems, such as the
    Common Automated Radar Terminal System, used in the terminal arrival and
    terminal departure phases.

    FAA Has Had Difficulty Meeting Cost, Schedule, and/or Performance Targets
    for Major System Acquisitions, but Made Progress in Fiscal Year 2004

    For more than two decades, FAA has experienced cost growth, schedule
    extensions, and/or performance problems in acquiring major systems under
    its ATC modernization program and has been on our list of high-risk
    programs since 1995. For example, 13 of the 16 major system acquisitions
    we reviewed in detail continue to experience cost, schedule, and/or
    performance shortfalls when assessed against their original baselines. The
    three other major system acquisitions that we reviewed in detail are
    currently operating within their original cost, schedule, and performance
    targets, but are experiencing challenges symptomatic of past problems. Of
    the remaining 39 system acquisitions within the ATC modernization program,
    few have had problems meeting cost and schedule targets.26 However, the
    ATO made progress during its first year of operation by meeting its
    acquisition goal for fiscal year 2004.

    Thirteen of the 16 Major ATC System Acquisitions We Reviewed in Detail
    Continue to Experience Shortfalls When Assessed against Original
    Performance Targets

    Thirteen of the 16 major system acquisitions that we reviewed in detail
    for this engagement under the ATC modernization program have continued to
    experience cost growth, schedule delays, and/or performance problems when
    assessed against their original performance targets (see table 1). These
    major system acquisitions had total cost growth ranging from $1.1 million
    to about $1.5 billion over their original cost targets. In addition, these
    systems required extensions in their initial deployment schedules ranging
    from 1 to 13 years. Furthermore, several systems experienced
    safety-related performance problems.

    26Many of these systems are referred to as "buy-it-by-the-pound" systems,
    which, generally, are commercially available at a set level of
    performance, and, therefore, do not have performance goals per se.

         Table 1: Changes in Cost and Schedule Targets for 16 Major ATC System
                                      Acquisitions

    Dollars in millions

                     Cost targets Last-site implementation targets

    ATC system Original date

    Original cost

    Current cost (as of March 2005) Change

    Original date

    Current date

    Change (in years)

    Airport Surface Detection September $424.3 $510.2 $85.9a 2007 2009b
    Equipment - Model X 2001
    (ASDE-X)

    Airport Surveillance November $743 $916 $173 2005 2013 Radar Model - 11
    (ASR-1997

    11)

        ATC Radar Beacon    August        $281.8   $1.10     2004    2008
                                          $282.9
         Interrogator -      1997
           Replacement
            (ATCBI-6)
            Advanced       June 2001      $548.2    None     2006    2006    None
          Technologies                    $548.2
           and Oceanic
           Procedures
             (ATOP)
        Controller-Pilot     1999      $166.7 To           June     To be
            Data Link                         be     N/A   2005               N/A
         Communications               determined                  determined
             (CPDLC)
            En Route         March        $245.2    None     2005    2005    None
                                          $245.2
         Communications      2002
          Gateway (ECG)
    En Route Automation June 2003      $2,150    None December  December  None
                                          $2,150
          Modernization                                      2010    2010
             (ERAM)
                           June 2002      $546.2    None     2006    2007
    Free Flight Phase 2                $546.2
             (FFP2)
               FAA                        $205.7 $104.5c     2008    2008    None
    Telecommunications  July 1999      $310.2
         Infrastructure
              (FTI)
                           June 1997      $276.1   $10.0   July     2009+      6+
    Integrated Terminal                $286.1           2003
         Weather System
             (ITWS)
           Local Area                     $530.1 $166.0      2006   To be
          Augmentation      January       $696.1                              N/A
          System (LAAS)      1998                                 determined
         Next Generation                  $405.7 $580.7      2008   To be
             Air-to-       September      $986.4                              N/A
                                       (First
             Ground          1998      segment                    determined
          Communication                (First
                                       segment
            (NEXCOM)                 only) only)
    NAS Infrastructure                 $172.9    None     2005   2010d       5
                           May 2000       $172.9
    Management System -
        Phase 2 (NIMS-2)

          Operational and     April 1997  $174.7  $155.50  ($19.2)  2001  2004  3
           Supportability
    Implementation System
              (OASIS)

    (Continued From Previous Page)

    Dollars in millions

                     Cost targets Last-site implementation targets

    Original cost

    Current cost (as of March 2005) Change

    Original date

    Current dateATC system Original date

    Change (in years)

          Standard Terminal     February    $940 $1,460      $520   2005    2008
        Automation Replacement    1996     (Phase 1 only)
            System (STARS)
        Wide Area Augmentation    1994     $509 $2,036e   $1,527  December  2013
            System (WAAS)                                           2000

    Source: GAO presentation of FAA data.

    N/A: Not applicable.

    aAccording to FAA officials, the change in cost target for ASDE-X was due
    to an increase in the scope of the project.

    bFAA plans to extend ASDE-X's current deployment target from 2007 to 2009
    because the project's budgets were cut in fiscal years 2004 and 2005.

    cThe increased costs were for requirements which, while included in the
    original baseline, were unknown at the time the original baseline was
    prepared.

    dIn light of reduced funding, FAA is revising NIMS-2's targets; a Joint
    Resource Council decision is planned for May 2005.

    eSeptember 1999 and May 2004 estimates for WAAS development exclude $1.3
    billion in satellite communications leases.

    For 12 of the 13 major system acquisitions27 we reviewed in detail with
    cost, schedule, and performance shortfalls, one or more of the following
    four key factors contributed to these shortfalls:

    (1) The funding level received was less than called for in agency planning
    documents. Most major ATC system acquisitions have cost, schedule, and
    performance baselines that are approved by FAA's Joint Resources
    Council--the agency's body responsible for approving and overseeing major
    system acquisitions. Each baseline28 includes annual funding levels that
    the council agrees are needed for a system acquisition to meet its cost,
    schedule, and/or performance targets. The estimated cost for a given year
    assumes that the program received all funding for prior fiscal

    27FAA Telecommunications Infrastructure was not directly affected by these
    four factors, but did experience cost growth.

    28In December 2004, FAA revised its acquisition management system policy
    by replacing the requirement for an acquisition program baseline with a
    requirement for preparing an OMB Exhibit 300 Baseline, which includes
    additional information required for FAA's annual budget formulation and
    submission process.

    years as described in the baseline. In practice, however, this is not
    always the case. For example, when FAA's budget level does not allow all
    system acquisitions to be fully funded at the levels approved in their
    baselines, FAA may elect to fully fund higher-priority acquisitions and
    provide less funding for lower-priority acquisitions than called for in
    their baselines. When a system acquisition does not receive the annual
    funding levels called for in its baseline, its ability to meet cost,
    schedule, and/or performance targets can be jeopardized, for example, by
    requiring the agency to defer funding for essential development or
    deployment activities until sufficient funding becomes available, which,
    in turn, could require FAA to maintain costly legacy systems until a new
    system is deployed. Receiving less funding than the agency approved for a
    given acquisition was a factor contributing to the inability of 8 of the
    16 major system acquisitions we reviewed in detail to meet their cost,
    schedule, and/or performance targets. The ASR-11 acquisition, a digital
    radar system, illustrates how reduced funding has resulted in schedule
    delays. FAA officials stated that because of funding reductions and
    reprogramming, the program received $46.45 million less than requested for
    fiscal years 2004 and 2005 and program officials plan to request that the
    program's deployment schedule be extended to 2013.29 According to FAA
    officials, in general, schedules for system acquisitions may slip under
    such circumstances (e.g., the rate of software development may be reduced
    and planned hardware and software deployments may be delayed). The ATO's
    chief operating officer testified in April 2005 that receiving multiyear
    rather than annual funding from Congress for system acquisitions would
    help FAA to address this problem by providing funding stability for system
    acquisitions. In addition, according to a senior DOT official, 50 percent
    of cost growth is a result of an unstable funding stream.

    (2) The system acquisition experienced requirements growth and/or
    unplanned work. Requirements that are inadequate or poorly defined prior
    to developing a system may contribute to the inability of system
    acquisitions to meet their original cost, schedule, and/or performance
    targets. In addition, unplanned development work can occur when the agency
    misjudges the extent to which commercial-off-the-shelf (COTS)/

    29The ASR-11 program is scheduled to go to the Joint Resources Council in
    fiscal year 2005 to extend the program's schedule to 2013 and to revise
    the baseline funding.

    nondevelopmental item (NDI)30 solutions, such as those procured by another
    agency, will meet FAA's needs. Requirements growth and/or unplanned work
    contributed to the inability of 7 of the 16 major system acquisitions we
    reviewed in detail to meet their cost, schedule, and/or performance
    targets.

    (3) Stakeholders were not sufficiently involved in design and development:
    Insufficient involvement of relevant stakeholders, such as air traffic
    controllers and maintenance technicians, throughout the development and
    approval processes for a system acquisition can lead to costly changes in
    requirements and unplanned work late in the development process. Not
    involving stakeholders sufficiently contributed to the inability of 4 of
    the 16 major system acquisitions to meet their cost, schedule, and/or
    performance targets.

    (4) The complexity of software development was underestimated.31
    Underestimating the complexity of developing software for system
    acquisitions or the difficulty of modifying available software to fulfill
    FAA's mission needs may contribute to unexpected software development,
    higher costs, and schedule delays. Underestimation contributed to the
    inability of 3 of the 16 major system acquisitions we reviewed in detail
    to meet their cost, schedule, and/or performance targets. (See table 2.)

    30FAA defines a COTS item as a product or service that has been developed
    for sale, lease, or license to the general public. The product is
    currently available at a fair market value. FAA defines a NDI as an item
    that was previously developed for use by a government (federal, state,
    local, or foreign) and that requires limited further development. For
    example, the Army's SINCGARS radio is the core of FAA's NEXCOM radio, and
    the software FAA selected for ATOP was NDI software from New Zealand's air
    navigation system.

    31For purposes of this report, the underestimation of software complexity
    refers to poor estimation of the level of effort that would be required to
    modify software to meet requirements (e.g., COTS or NDI).

    Table 2: Four Key Factors Contributing to Cost Growth, Schedule
    Extensions, and/or Performance Problems for 13 ATC System Acquisitions

                The funding
                   level
                received was      The system
                    less          acquisition
                than called  experienced           The complexity of Stakeholders
                   for in    requirements                                    were
                   agency    growth and/or         software              not
                  planning   unplanned             development       sufficiently
    Name of   documents           work          was                 involved
        system                                     underestimated
        ASDE-X       X
        ASR-11       X                 X
    ATCBI-6       X
        CPDLC                          X
         FFP2        X
         ITWS        X                 X                   X
         LAAS                          X                   X              X
        NEXCOM       X                 X
        NIMS-2       X                 X
        OASIS        X                 X                                  X
        STARS                          X                                  X
         WAAS                                              X              X

    FTIa

    Source: GAO presentation of FAA data.

    Note: Blank spaces in the chart denote that the specific factor was not a
    key contributor to a program's inability to meet cost, schedule, or
    performance targets.

    aFTI was not directly impacted by any of these four factors, but did
    experience cost growth.

    Several of the 16 major systems acquisitions we reviewed in detail
    effectively illustrate how these four factors can interact to contribute
    to cost growth, schedule extensions, and performance problems. For
    example, for WAAS, a precision approach and landing system augmented by
    satellites, two of the four key factors came into play: underestimation of
    software complexity and insufficient stakeholder involvement.
    Specifically, FAA underestimated the complexity of the software that would
    be needed to support this system when it accelerated the implementation of
    performance targets, which included moving up the commissioning of WAAS by
    3 years. FAA originally planned to commission WAAS by 2000; however, at
    the urging of government and aviation industry groups in the 1990s, it
    decided to change the commissioning date to 1997. FAA then tried to
    develop, test, and deploy WAAS within 28 months, although the software
    development alone was expected to take 24 to 28 months.

    In retrospect, FAA acknowledged that the agency's in-house technical
    expertise was not sufficient to address WAAS's technical challenges and
    that expert stakeholders should have been involved earlier. Although WAAS
    was being developed by an integrated product team that included
    representatives from several FAA offices, the team did not effectively
    resolve problems in meeting a required performance capability-that pilots
    be warned in a timely manner when a system may be giving them potentially
    misleading and therefore hazardous information. Consequently, in 2000, FAA
    convened a panel of expert stakeholders to help it meet this requirement.
    These actions resulted in unplanned work and contributed to the rise in
    WAAS's cost from the original estimate of $509 million in 1994 to $2.036
    billion in 2005, and to a 6-year extension in its commissioning date.
    According to FAA, adding 6 years to the program's life cycle also
    contributed to increased costs.32

    Another example involves STARS, a joint program of FAA and DOD that
    replaced outdated monochromatic controller workstation monitors with
    multicolor monitors in ATC facilities. While joint FAA and DOD
    acquisitions offer the opportunity to leverage federal resources, in the
    case of STARS, the interaction of insufficient stakeholder involvement and
    subsequent unplanned work contributed to cost growth and schedule
    extensions. Specifically, FAA and DOD decided to acquire COTS equipment,
    rather than developing a new system. This strategy envisioned immediately
    deploying STARS to the highest priority ATC facilities and making further
    improvements later, thereby avoiding the increasing cost of maintaining
    the legacy system. However, this strategy provided for only limited
    evaluation by FAA and DOD controllers and maintenance technicians during
    the system's development phase, although these employees were identified
    as stakeholders in developing the system's requirements. While DOD
    controllers adopted and began using the original COTS version of STARS,
    FAA elected to modify the acquisition strategy and suspended the STARS
    deployment to address FAA controller and technician concerns with the new
    system. These concerns included, for example, that many features of the
    old equipment could be operated with knobs, allowing controllers to focus
    on the screen. By contrast, STARS was menu-driven and required the
    controllers to make several keystrokes and use a trackball, diverting
    their attention from the screen. The maintenance

    32FAA also transferred $1.3 billion--the cost of satellite leases--from
    the operations account to the facilities and equipment account, bringing
    the total estimate at completion cost to $3.3 billion.

    technicians also identified differences between STARS and its backup
    system that made it difficult to monitor the system. For example, the
    visual warning alarms and the color codes identifying problems were not
    the same for the two systems.

    According to FAA, the original COTS acquisition strategy that limited the
    involvement of controllers and maintenance technicians to just prior to
    deployment caused unplanned work for the agency because it had to revise
    its strategy for acquiring and approving STARS; this contributed to an
    increase in the overall cost of STARS of $500 million and a schedule
    extension of 5 years to deploy the system to its first site. The
    interaction of these factors also contributed to the agency's ability to
    deploy STARS at only 47 of the 172 facilities initially planned. As of
    February 2005, FAA was developing a long-term acquisition plan to
    modernize or upgrade the highest-priority Terminal Radar Approach Control
    facilities that direct aircraft in the airspace that extends from the
    point where the tower's control ends to about 50 nautical miles from the
    airport. The plan consists of alternatives to STARS, including the
    existing Common Automated Radar Terminal System (CARTS), which STARS was
    designed to replace.33 Finally, to help avoid similar problems in the
    future, stemming from the insufficient involvement of stakeholders during
    critical phases of a system's design, development, and implementation, FAA
    has been more proactive in involving the stakeholders that will operate
    and maintain system acquisitions.

    A final example of how these factors can interact is FAA's acquisition of
    OASIS, which is designed to replace outdated technology in FAA's automated
    flight service stations. The new system is intended to improve the ability
    of air traffic specialists34 to process flight plans, deliver weather
    information, and provide search and rescue services to general aviation
    pilots. In August 1997, FAA awarded a contract to replace the Flight
    Service

    33FAA began fielding CARTS in 1997, as the interim primary terminal
    automation system until it was replaced with STARS. To date, the agency
    has not ruled out keeping CARTS as an alternative, if STARS proves to be
    unaffordable or does not perform as expected. CARTS was not one of the
    systems FAA was acquiring in fiscal year 2004, when we designed our
    methodology.

    34Air traffic specialists are controllers and automation specialists who
    work at flight service stations throughout the United States and provide,
    among other things, briefings of weather conditions along a pilot's route
    of flight and information on traffic conditions for landing and departing
    at airports where there is no control tower and no restrictions on the use
    of airspace.

    Automation System and console workstations. However, unplanned work,
    insufficient involvement of stakeholders, and lower funding than the
    agency had determined was needed to meet cost, schedule, and performance
    targets have together contributed to cost growth and schedules extensions.
    For example, the agency saw the system acquisition schedule slip because
    of a larger-than-planned development effort. According to the DOT IG, FAA
    identified a number of significant concerns, including the inadequate
    weather graphics capabilities for air traffic specialists. In our view,
    this indicates that stakeholders were not sufficiently involved throughout
    the system's design and development phases. As a result, FAA eliminated
    the option of COTS procurement. In addition, the OASIS program was
    rebaselined in March 2000, when the system acquisition received only $10
    million of the $21.5 million called for in its baseline for that year.
    This reduction in funding reduced the rate of software development,
    delayed and reduced the rate of planned hardware and console deployments,
    and led to the incremental deployment of operational software. This
    contributed to a delay in the first-site implementation from July 1998 to
    July 2002. According to FAA officials, because OASIS received less funding
    than the agency had approved for fiscal year 2004 and 2005, its deployment
    to automated flight service stations was postponed.

    As of February 2005, FAA had deployed 19 OASIS units: 16 at automated
    flight service stations and 3 at other sites. Software upgrades that are
    under way will be completed by June 2005. FAA plans neither installations
    nor software upgrades beyond those at the automated sites, because the
    agency awarded a contract to a private vendor in February 2005 to operate
    flight service stations. Until then, FAA has directed the program to
    remain within its current Capital Investment Plan funding levels for
    fiscal years 2004 through 2006.35 According to FAA, since it completed its
    evaluation of OASIS in February 2005, planning for the program's
    implementation and baseline remain unchanged. FAA plans to phase out OASIS
    between March 2006 and March 2007 in accordance with the new service
    provider's transition plan.

    35The Capital Investment Plan, a 5-year financial plan, allocates funds to
    NAS projects on the basis of a detailed analysis of project funding by FAA
    functional working groups. The plan includes estimates for the current
    fiscal-year budget and for 4 future-year expenditures for each line item
    in the facilities and equipment budget.

    Three of the Major ATC System Acquisitions We Reviewed in Detail Currently
    Operate within Their Original Cost, Schedule, and Performance Targets,
    Despite Challenges

    Three of the 16 major ATC system acquisitions we reviewed in detail are
    currently operating within their original cost, schedule, and performance
    targets; however they have experienced challenges, including symptoms of
    one or more of the four factors cited earlier, such as requirements
    growth. These system acquisitions include (1) ECG, a communications system
    gateway that serves as the point of entry and exit for data used by FAA
    personnel to provide air traffic control at 20 en route facilities; (2)
    ERAM, a replacement for the primary computer system used to control air
    traffic; and (3) ATOP, an integrated system for processing flight data for
    oceanic flights.

    While ECG has not exceeded its original cost, schedule, and performance
    targets, it encountered requirements growth when FAA added a new
    capability to address a security weakness. According to FAA officials,
    correcting this weakness cost about $25,000, and an additional $480,000
    will likely be needed to improve the monitoring capability for this
    system's operation. However, these cost increases will not exceed the
    system's cost or schedule targets. ERAM and ATOP also have areas that
    warrant attention. For example, ERAM is a high-risk effort because of its
    size and the amount of software that needs to be developed-over 1 million
    lines of code are expected to be written for this effort. In addition, the
    DOT IG reports that, to date, ERAM has experienced software growth of
    about 70,000 lines of code. While the DOT IG considers this amount of
    software growth to be modest, given FAA's long-standing difficulties with
    developing this volume of software for system acquisitions while remaining
    within cost, schedule, and/or performance targets, sustained management
    attention is warranted. For ATOP, when FAA tried to accelerate the initial
    deployment of this system by 14 months, it was unable to do so, because of
    poorly defined requirements, unrealistic schedule estimates, and
    inadequate evaluation by the contractor. In addition, according to
    contract provisions, FAA assumed responsibility in February 2005 for the
    cost of resolving any additional software problems it identifies.

    Overall, although these system acquisitions are currently operating within
    their cost, schedule, and performance targets, the challenges they have
    experienced thus far indicate that they will require the sustained
    attention of FAA's senior managers to help ensure that they stay on
    track.36

    36GAO-05-207.

    FAA Has Experienced Cost Growth and Schedule Extensions for the Remaining
    39 System Acquisitions under the ATC Modernization Program

    For the 39 system acquisitions that make up the balance of FAA's ATC
    modernization program, only 9 are considered "major" or directly
    comparable to the 16 major ATC system acquisitions we reviewed in
    detail.37 (See table 3.) Of these 9 major systems, 2 have required changes
    in their cost targets. For example, for an automated weather observation
    system, the Aviation Surface Weather Observation Network,38 the cost has
    increased by 15 percent because of system capacity issues, among other
    things. For another system that will be used on an interim basis for
    managing air traffic until the new primary computer system is available,
    the Host and Oceanic Computer System Replacement, the cost has decreased
    by 13 percent because the agency determined that parts of the existing
    system could be sustained through fiscal year 2008, which is within the
    scope of the program.39 The remaining 30 systems are not directly
    comparable, because they do not involve acquiring a new system. Instead,
    they are what FAA terms "buy-it-by-the pound" purchases-systems that are
    commercially available and ready for FAA to use without modification, such
    as a landing system purchased to replace one that has reached the end of
    its useful life. (See app. II for additional information on these 39
    systems.)

    37As mentioned previously, FAA does not have a formal definition of
    "major" systems, but suggested that we consider a system as major if it
    has a baseline for cost, schedule, and performance formally approved by
    senior agency officials. Using this definition, we consider 9 of the
    remaining 39 systems major. These 9 major systems bring the total number
    of major systems under the ATC modernization program to 25.

    38Aviation Surface Weather Observation Network (ASWON) automates surface
    weather observation information, replacing labor-intensive and high-cost
    manual surface weather observations.

    39The Host and Oceanic Computer System Replacement (HOCSR) is an interim
    upgrade and modernization program designed to replace the En Route Host
    Computer hardware, software, and peripheral equipment to reduce delays and
    improve reliability.

    Table 3: Description and Status of Nine Additional Major ATC System
    Acquisitions with Cost, Schedule, and Performance Targets

    Dollars in millions

    Development costs Deployment schedule ATC system acquisition and system
    description Original Current Original Current

    HOST/Oceanic Computer System $424.10 $368.50 Start: December Start:
          Replacement (HOCSR) -                                     December
        The HOCSR program replaces
          the main ATC computer                          1998           1998
              processor and
         some peripherals, while                                    Finish: April
    ensuring the supportability                    Finish:June            2004
           of other peripherals
        until they are replaced by
           En Route Automation                           2004
              Modernization
                 (ERAM).

          Command Center Conference     12.70 12.70 Start: Fiscal   Start: Fiscal
        Control System (CCS) -Replace                                        Year
          OTS -This ongoing program
    involves replacing the existing                Year 2005         2005
                  telephone
        system at the FAA Air Traffic               Finish: Fiscal Finish: Fiscal
        Control System Command Center                                        Year
         (ARCSCC) in Herndon, Va. The
         existing telephone system is                 Year 2005         2005
                   becoming
    unsupportable and can no longer
            perform ARCSCC command
                  functions.

    Ultra High Frequency (UHF) Radio  85.15 85.15 Start: Fiscal  Start: Fiscal
          Replacement -The UHF radio                                         Year
         replacement project replaces
            aging equipment used to                    Year 2003        2010
                  communicate
    with DOD aircraft. FAA maintains                 Finish:        Finish:
           the UHF air and/or ground
         communication service for air               Fiscal Year    Fiscal Year
          traffic control of military                2010           2010
               operations in the
                United States.

         Capstone Phase 1 -Capstone is a    18.55 18.55 Start: Fiscal  Start: N/A
             congressionally directed
         demonstration program primarily                  Year 2000     Finish:
    intended to improve aviation system
           safety in Alaska through the                    Finish:        N/A
    introduction of new communications,
           navigation, and surveillance                 Fiscal Year
        technologies. The Capstone program              2003
                       is a
        part of a larger program known as
    the Safe Flight 21 Program (SF-21),
          which is designed to establish
           pockets of broadcast service
                    technology
           enhancements to support the
               demonstration of new
                technology-driven
         safety and efficiency benefits.

    ASR-9 / Mode S Service Life
         Extension Program (SLEP)   186.50 186.50   Start: TBD      Start: TBD
                   -The
          ASR-9 program provides
          aircraft detection and                     Finish:         Finish:
          separation services at
        congested airports, which
    reduces aircraft delays and                     TBD             TBD
             improves safety.
         Precision Runway Monitor
    (PRM) - The PRM system is an 145.80 145.80 Start: October  Start: October
                accurate,
        electronic scan radar that
           tracks and processes                        1997            1997
         aircraft targets at a 1-
           second update rate.                       Finish:     Finish: January
                                                       2007            2007
    En Route System Modification
    - This program will replace  201.90 201.90
                 obsolete                           Start: N/A      Start: N/A
    en route components, such as
         processors; upgrade the                   Finish: May     Finish: N/A
               controllers'
             displays and the
    infrastructure that supports                    2009
           those displays; and
        configure the consoles to
          accommodate additional
               processors.
         Initial Academy Training
           System (IATS) - This     23.35   23.35     Start:
          high-fidelity training                                 Start: September
        system for the FAA Academy
    will enable the training of                September 2005       2005
              an increasing
        number of new air traffic                                         Finish:
    controllers as the existing                   Finish:            September
            workforce retires.
                                                  September 2005       2005

    (Continued From Previous Page)

    Dollars in millions

    Development costs Deployment schedule ATC system acquisition and system
    description Original Current Original Current

         Aviation Surface Weather
    Observation Network (ASWON)  $350.90 $403.80     Start:     Start: Unknown
                  - The
    primary purpose of ASWON is
    to support FAA and National                  September 2002    Finish:
                 Weather
    Service (NWS) modernization
          by automating surface                        Finish:        Unknown
                 weather
         observation to meet the
    needs of pilots, operators,                  September 2010
             and air traffic
    personnel without incurring
            the high costs of
          labor-intensive manual
             surface weather
              observations.

    Source: GAO presentation of FAA data.

    To its credit, FAA has reported that it met its annual acquisition
    performance goal for fiscal year 2004--to meet 80 percent of designated
    milestones and maintain 80 percent of critical program costs within 10
    percent of the budget as published in its Capital Investment Plan.40
    Specifically, it set annual performance cost goals and schedule milestones
    for 41 of the 55 system acquisitions under the ATC modernization program.
    For these 41 system acquisitions, FAA set 51 schedule milestones and met
    46 of them-with "meeting the goal" defined as achieving 80 percent of its
    designated program milestones. It also set and met its annual cost
    performance goals for each of these 41 system acquisitions. In our
    opinion, having and meeting such performance goals is commendable, but it
    is important to note that these goals are updated program milestones and
    cost targets, not those set at the program's inception.41 Consequently,
    they do not provide a consistent benchmark for assessing progress over
    time. Moreover, as indicators of annual progress, they cannot be used in
    isolation to measure progress in meeting cost and schedule targets over
    the life of an acquisition. Finally, given the problems FAA has had in
    acquiring major ATC systems for over two decades, it is too soon to tell
    whether meeting these annual performance goals will ultimately improve the
    agency's ability to deliver system acquisitions as promised.

    40According to FAA, 43 capital projects were included in the fiscal year
    2004 acquisition performance goal--41 of these projects fall under the ATC
    modernization program.

    41Our statements about meeting cost, schedule, and/or performance targaets
    in this report and in our past reports are based on the original targets
    that FAA established and approved at the start of its acquisition
    programs.

    FAA Has Taken Some Positive Steps to Address Key Legacy Challenges, but
    Additional Steps Are Warranted to Reduce Risk and Strengthen Oversight

    FAA has taken a number of positive steps, primarily through the ATO, to
    address key legacy challenges in acquiring major systems under its ATC
    modernization program; however, we have identified additional steps that
    are warranted to reduce risk and strengthen oversight. Some of the steps
    FAA has taken directly address the four factors we identified as
    contributing to cost, schedule, and/or performance problems, while others
    support more general efforts to improve the modernization program's
    management. The steps taken and additional steps needed are discussed
    below by key areas.

    Steps Taken to Address the Four Factors We Identified As Contributing to
    Performance Shortfalls and Additional Steps Needed

    To address the concern that some system acquisitions have had difficulty
    meeting performance targets because they have not received annual funding
    at the levels called for in key planning documents, the ATO has taken
    several steps. For example, the ATO has demonstrated a willingness to cut
    major programs that were not meeting their performance targets even after
    a significant investment of agency resources. The ATO is currently
    reviewing all of its capital projects to reassess priorities. Both of
    these actions should help improve the chances that sufficient funding will
    be available for priority system acquisitions to conduct the annual
    activities necessary to keep them on track to meet cost, schedule, and
    performance targets.

    Specifically, for fiscal year 2005, the appropriation for FAA's facilities
    and equipment budget, which funds the ATC modernization program, was $393
    million less than the agency had planned to spend. FAA absorbed the $393
    million reduction largely by cutting funding for three of the major system
    acquisitions we reviewed in detail: a digital e-mail-type capability
    between controllers and pilots was suspended (CPDLC); the next generation
    air-to
    ground communication system had the funding cut for a major component
    (NEXCOM); and a precision-landing system augmented by satellites for use
    primarily by commercial airlines (LAAS) was returned to research and
    development to focus the remaining funding for the system on resolving a
    key performance shortfall. FAA also plans to defer funding for CPDLC and
    LAAS for fiscal year 2006.

    FAA decisions to cut or eliminate funding for system acquisitions in its
    current ATC modernization system may prove to be positive in the long run.
    For example, although FAA and National Air Traffic Controllers

    Association officials say that the cuts the agency made to 3 of its 16
    major ATC system acquisitions will delay system benefits until the
    acquisitions are fully developed and deployed, the cuts demonstrate FAA's
    willingness to suspend major ATC system acquisitions, despite large
    resource investments. In addition, by delaying a system acquisition, FAA
    may later be able to save time and money by leveraging the experiences
    that others have had with developing and deploying systems that provide
    similar capabilities (e.g., the controller-pilot e-mail-type capability
    for which FAA cut funding is now in use in both Canada and Europe).
    Furthermore, as FAA continues to reassesses its funding priorities, it
    could explore cost
    saving options including taking steps to systematically (1) evaluate the
    costs and benefits of continuing to fund system acquisitions across the
    ATC modernization program at current and planned levels to identify
    potential areas for savings and (2) identify potentially lower-cost
    alternatives to current system acquisitions, such as lower-cost controller
    workstations.

    FAA has also taken a number of steps to address two other factors-reduce
    the risk of requirements growth and/or the need to undertake unplanned
    work-and to improve its ability to better assess and manage the risks
    associated with acquiring major ATC systems that require complex software
    development. However, additional steps are needed in these areas.

    o 	Processes for acquiring software and systems: FAA has made progress in
    improving its process for acquiring software-intensive systems-
    including establishing a framework for improving its system management
    processes, and performing many of the desired practices for selected FAA
    projects.42 The quality of these systems and software, which are essential
    to FAA's ATC modernization program, depends on the value and maturity of
    the processes used to acquire, develop, manage, and maintain them. In
    response to our previous recommendations, FAA developed an FAA-integrated
    capability maturity model (iCMM). Since FAA implemented the model, a
    growing number of system acquisitions have adopted the model, and its use
    has paid off in enhanced productivity, higher quality, greater ability to
    predict schedules and resources, better morale, and improved communication
    and teamwork. However, ATO did not mandate the use of the process
    improvement model for all software-intensive acquisition

    42GAO, Air Traffic Control: System Management Capabilities Improved, but
    More Can Be Done to Institutionalize Improvements, GAO-04-901 (Washington,
    D.C.: Aug. 20, 2004).

    projects. In response to our recommendation, the ATO informed us of its
    plans to establish, by June 30, 2005, an overall policy defining the ATO's
    expectations for process improvement, and by September 30, 2005, a process
    improvement plan to address and coordinate improvement activities
    throughout the organization.

    o 	Management of information technology investments: In 2004, we reported
    that FAA has made considerable progress in managing its information
    technology investments.43 However, we also found that FAA's lack of
    regular review of investments that are more than 2 years into their
    operations is a weakness in the agency's ability to oversee more than $1
    billion of its information technology investments as a total package of
    competing investment options and pursue those that best meet the agency's
    goals. FAA recently informed us that it has taken a number of steps aimed
    at achieving a higher maturity level, including establishing service-level
    mission need statements and service-level reviews, which address
    operational systems to ensure that they are achieving the expected level
    of performance. While these steps could resolve some of the deficiencies
    that we previously reported, we have not yet performed our own evaluation
    of these steps. FAA could potentially realize considerable savings or
    performance improvements if these reviews result in the discontinuation of
    some investments, since operating systems beyond their second year of
    service accounted for 37 percent of FAA's total investment in information
    technology in fiscal year 2004.

    o 	Enterprise architecture: FAA has established a project office to
    develop a NAS enterprise architecture-a blueprint for modernization-and
    designated a chief architect, and has committed resources to this effort,
    and issued its latest version of its architecture.44 However, FAA has not
    yet taken key steps to improve its architecture development, such as
    designating a committee or group representing the enterprise to direct,
    oversee, or approve the architecture; establishing a policy for
    developing, maintaining, and implementing the architecture; or fully
    developing architecture products that meet contemporary guidance and

    43GAO-04-822.

    44GAO, Federal Aviation Administration: Stronger Architecture Program
    Needed to Guide Systems Modernization Efforts, GAO-05-266 (Washington,
    D.C.: Apr. 29, 2005).

    describe both the "As Is" and "To Be" environments and developing a
    sequencing plan for transitioning between the two.

    To help address concerns that stakeholders have not been sufficiently
    involved throughout the development of major systems acquisitions, FAA has
    taken a number of steps. For example, when the ATO was created, it brought
    together the FAA entities that develop systems and those who will
    ultimately use them. Specifically, it reorganized FAA's air traffic
    services and research and acquisition organizations along functional lines
    of business to bring stakeholders together and integrate goals. The ATO is
    also continuing with a phased approach to system acquisitions that it
    began using under Free Flight Phase 1,45 through which it has begun to
    involve stakeholders more actively throughout a system acquisition's
    development and deployment. However, as we reported in November 2004, FAA
    needs to take additional steps to ensure the continued and active
    involvement of stakeholders in certifying new ATC system acquisitions.46
    In addition, the union that represents the specialists who install,
    maintain, troubleshoot, and certify NAS systems, recently testified that
    over the past 2 years, FAA has systematically eliminated the participation
    of these specialists in all but a few modernization programs.47 Given the
    importance of stakeholder involvement in the development and deployment of
    new ATC systems, their continued involvement in ATC modernization efforts
    will be important to help avoid the types of problems that led to cost
    growth and delays for STARS.

    Other Steps FAA Has Taken Reassessment of capital investment to decrease
    operating costs: Both the to Improve the FAA Administrator and the ATO's
    chief operating officer have committed to Modernization Program's basing
    future funding decisions for system acquisitions on their

    contribution to reducing the agency's operating costs while
    maintainingManagement and Additional safety. This is consistent with our
    2004 recommendation that FAA consider Steps That Are Needed its total
    portfolio of investments as a package of competing options.

    45Under Free Flight Phase 1, FAA developed a suite of tools to assist
    controllers with managing air traffic.

    46GAO-05-11.

    47On Transforming the Federal Aviation Administration: A Review of the Air
    Traffic Organization (ATO) and the Joint Program Development Office
    (JPDO), Statement of Thomas Brantley, President, Professional Airways
    Systems Specialists (PASS) AFL-CIO, before the House Committee on
    Transportation and Infrastructure, Subcommittee on Aviation, April 7,
    2005.

    Currently, only 1 of the 55 system acquisitions in FAA's ATC modernization
    program-FAA Telecommunications Infrastructure-helps to reduce the agency's
    operating costs. Most of FAA's major system acquisitions are aimed at
    increasing the capacity of the NAS and delivering benefits to system
    users. The ATO is in the process of reviewing all of its capital
    investments, including system acquisitions under the ATC modernization
    program, to identify areas of cost savings and to focus limited funding on
    investments that will reduce operating costs. However, because FAA has
    only recently begun to incorporate this type of analysis of the costs and
    operational efficiency of system acquisitions into the decision-making and
    management processes, it is too early to assess the results.

    Acquisition Management System: The ATO has taken a number of steps to
    improve its Acquisition Management System (AMS). For example, it has
    revised AMS to require that acquisition planning documents be prepared in
    a format consistent with that prescribed by OMB for use in justifying all
    major capital investments. In addition, the ATO revised AMS in December
    2004, in part to respond to recommendations we made about needed changes
    in its investment management practices for information technology.48
    However, we have not yet independently assessed the sufficiency of these
    changes. Moreover, additional changes to AMS are warranted. For example,
    while AMS provides some discipline for acquiring major ATC systems, it
    does not use a knowledge-based approach to acquisitions, characteristic of
    best commercial and DOD practices. A knowledge-based approach includes
    using established criteria to attain specific knowledge at three critical
    junctures in the acquisition cycle, which we call knowledge points, and
    requiring oversight at the corporate executive level for each of these
    knowledge points. Experience has shown that not attaining the level of
    knowledge called for at each knowledge point increases the risk of cost
    growth and schedule delays.49 We recommended, among other things, that FAA
    take several actions to more closely align its acquisition management
    system with commercial best practices. FAA said that our recommendations
    would be helpful to them as they continue to refine this system.

    48GAO-04-822.

    49For more information on using a knowledge-based approach, see GAO, Air
    Traffic Control: FAA's Acquisition Management Has Improved, but Policies
    and Oversight Need Strengthening to Help Ensure Results, GAO-05-23
    (Washington, D.C.: Nov. 12, 2004).

    Cost accounting and cost estimating practices: FAA has improved its
    financial management by moving forward with the development of a cost
    accounting system, which it plans to fully deploy by 2006. Ultimately, FAA
    plans to use this cost information routinely in its decision-making. When
    implemented, this cost accounting system will address a long-standing GAO
    concern that FAA has not had the needed cost accounting practices in place
    to effectively manage software-intensive investments, which characterize
    many of agency's major ATC system acquisitions. This type of information
    can be used to improve future estimates of cost for these acquisitions.50

    Organizational culture: FAA has also sought to establish an organizational
    culture that supports sound acquisitions. We have ongoing work to assess
    FAA's efforts concerning cultural change.

    ATO business practices: To improve its investment management decision
    making and oversight of major ATC acquisitions, the ATO has informed us
    that it has initiated the following steps, which we have reported are
    important to effective oversight:51

    o 	integrated AMS and OMB's Capital Planning and Investment Control
    Process to develop a process for analyzing, tracking, and evaluating the
    risks and results of all major capital investments made by FAA;

    o 	conducted Executive Council52 reviews of project breaches of 5 percent
    in cost, schedule, and/or performance to better manage cost growth;

    o 	issued monthly variance reports to upper management to keep them
    apprised of cost and schedule trends; and

    50GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January
    2005).

    51GAO-05-23; GAO-04-822.

    52The ATO's Executive Council is responsible for further implementing
    acquisition reform for major ATC system acquisitions.

    o 	increased the use of cost monitoring or earned value management53
    systems to improve oversight of programs.

    However, much work remains before the ATO will have key business practices
    in place.

    Specifically, according to the ATO's chief operating officer, it will be
    at least 2 years before the ATO has completed the basic management
    processes needed to use the new financial management systems it has been
    putting in place.

    Despite progress to date, until the agency addresses the residual issues
    cited above, it will continue to risk the project management problems
    affecting cost, schedule, and/or performance that have hampered its
    ability to acquire systems for improving air traffic control.

    A Constrained Budgetary Environment Could Further Challenge the ATO's
    Efforts to Modernize the ATC System

    The ATO will be further challenged to modernize the ATC system in the
    current constrained budget environment and remain within the
    administration's future budget targets, which are lower than those of
    recent years. Specifically, for fiscal year 2005, FAA requested $393
    million less than it had planned to spend for activities under the
    facilities and equipment budget account, which funds the ATC modernization
    program and related modernization activities. In addition, the President's
    fiscal year 2006 budget submission calls for an additional cut to this
    budget account of $77 million from FAA's planned level, which would bring
    the fiscal year 2006 funding level to about $470 million below the fiscal
    year 2004 appropriation. Moreover, FAA officials told us that funding for
    the facilities and equipment account is likely to hold near fiscal year
    2004 levels, or at about $2.5 billion annually, for the next 5 years. In
    total, FAA plans to spend $4.4 billion during fiscal years 2005 through
    2009 on key modernization efforts, despite FAA receiving about $2 billion
    less than it had planned in appropriations over this 5-year period for its
    facilities and equipment

    53Earned value management compares the actual work performed at certain
    stages of a job to its actual costs-rather than comparing budgeted and
    actual costs, the traditional management approach to assessing progress.
    By measuring the value of the work that has been completed at certain
    stages in a job, earned value management can alert program managers,
    contractors, and administrators to potential cost growth and schedule
    delays before they occur and to problems that need correcting before they
    worsen.

    budget, which funds the ATC modernization program and related
    modernization activities.

    To fund its major system acquisitions while remaining within the
    administration's budget targets, the ATO has eliminated planned funding to
    start new projects and substantially reduced planned funding for other
    areas. These funding decisions are reflected in FAA's updated Capital
    Investment Plan. This plan shows substantially reduced funding for two
    major system acquisitions in fiscal year 2005-CPDLC and LAAS--and defers
    funding for them in fiscal year 2006. For the remaining 14 major ATC
    system acquisitions we reviewed in detail, FAA plans to increase funding
    by $533 million between fiscal year 2005 and fiscal year 2009. In
    contrast, for the remaining 39 system acquisitions, FAA has reduced
    funding by $420 million for this period.

    The planned increases in funding for these 14 major system acquisitions
    also come at the expense of other modernization activities outside the ATC
    modernization program, such as capital expenditures to replace aging ATC
    facilities that will house the system acquisitions. For example, FAA
    reports that it needs $2.5 billion (2005 dollars) annually to renew its
    aging physical infrastructure-assuming a $30 billion value of its assets
    and a 7-to 12-year useful life. According to the ATO, much of its physical
    infrastructure, including the buildings and towers that house costly ATC
    systems, is over 30 years old and needs to be refurbished or replaced.54
    However, FAA plans to reduce funding for facilities by nearly $790 million
    between fiscal year 2005 and fiscal year 2009-a plan that runs counter to
    its reported need to refurbish or replace its physical infrastructure.
    Furthermore, FAA also plans to cut $1.4 billion from its spending plans
    for fiscal years 2005 through 2009 for, among other things, new system
    acquisitions in the ATC modernization pipeline that do not yet have
    agency-approved cost, schedule, and performance targets or baselines
    (e.g., a new technology that would allow pilots to "see" the location of
    other aircraft on cockpit display).55

    Our work has shown that FAA has taken some important steps to prioritize
    the 55 system acquisitions under its ATC modernization program. These

    54We have not verified FAA's reported needs to refurbish or replace these
    structures/ facilities.

    55Automatic Dependent Surveillance-Broadcast (ADS-B).

    revised priorities are reflected in its most recent plans, which detail
    the areas where FAA plans to make cuts within its facilities and equipment
    budget to live within its expected means during fiscal years 2005 through
    2009. However, our work has also shown that these plans do not provide
    detailed information about the trade-offs that are underlie decisions to
    fully fund some systems and to defer, reduce, or eliminate funding for
    others and how these cuts will affect FAA's modernization efforts,
    including what impact they will have on interdependent system
    acquisitions. To convey information to decision-makers on the impact of
    reduced funding on modernization, the ATO should detail its rationale and
    explicitly identify the trade-offs it is making to reach the
    administration's budget targets, highlighting those programs slated for
    increased funding and those slated for reduced funding. Key information
    includes delayed benefits, the impact of cutting one ATC system
    acquisition on related or interdependent systems, and increased costs for
    maintaining legacy systems until new systems are deployed. Overall, the
    ATO needs to explicitly identify the implications of deferring, reducing,
    or cutting funding for a particular system or activity on the agency's
    ability to modernize both the ATC system and related components of the NAS
    in the near, mid, and longer term. While funding deferrals, reductions,
    and cuts to ATC system acquisitions and related activities in FAA's
    facilities and equipment budget may be beneficial and necessary in the
    long run, it is important for senior agency, department, OMB, and
    congressional decision-makers to have complete information to make
    informed decisions about the trade-offs that are being made when they
    consider annual budget submissions.

    As part of our research, we sought the perspective of an international
    group of experts, who also suggested that the ATO should provide the
    administration and Congress with detailed information in its budget
    submissions about the impact of reduced budgets on both ATC and NAS
    modernization.56 These experts were a part of an international panel of
    aviation experts we convened to address, among other issues, how federal

    56The panel consisted of foreign and domestic aviation experts from
    industry, government, private think tanks, and academia. Their fields of
    expertise included aviation safety, economics, and engineering;
    transportation research and policy; and government and private-sector
    management. Former FAA officials and current executives of the air traffic
    organizations in Canada and the United Kingdom were among the experts, as
    was the chairman of EUROCONTROL's Performance Review Commission. GAO,
    Experts' Views on Improving the U.S. Air Traffic Control Modernization
    Program, GAO-05-333SP (Washington, D.C.: April 2005).

    budget constraints have affected ATC modernization and what steps the ATO
    could take in the short term to address these constraints.

    For example, aviation experts emphasized the need for the ATO-which is now
    the organizational entity responsible for acquiring ATC systems-to
    prioritize its capital investments, as well as its investment in operating
    systems, with affordability in mind. These experts believe that the ATO
    needs to review all of its spending plans for modernization, determine
    which programs can realistically be funded, and select programs to cut.
    Moreover, they indicated that the ATO should have a mechanism to explain
    to Congress the implications that cutting one system has on other systems.
    For example, according to one of these experts, the current budget process
    tears apart a highly layered, interdependent system and does not reveal
    synergies between projects. Then, when the budget request goes to
    Congress, he said, "you have no opportunity to try to explain to anybody
    the interconnections of these programs." As a result, when the
    appropriators decide not to fund a project, they may not understand how
    their decision will affect other projects.

    Conclusions	The constrained budgetary environment makes it more important
    than ever for FAA to meet cost, schedule, and performance targets for each
    of the major ATC systems it continues to fund and to ensure that related
    activities, such as those to refurbish or replace the buildings that house
    ATC modernization systems, receive sufficient funding. The need for FAA to
    accommodate a 25 percent increase in demand for air travel over the next
    decade underscores the importance of these efforts. FAA has demonstrated a
    commitment to live within its expected means during fiscal years 2005
    through 2009 by setting priorities among its ATC system acquisitions and
    identifying areas where it plans to cut funding. However, without detailed
    information about the trade-offs that underlie decisions to fully fund
    some systems and to defer, reduce, or eliminate funding for others, FAA's
    plans do not allow senior agency, department, OMB, and congressional
    decision-makers to assess the implications of approving annual budget
    submissions for the ATC modernization program and related modernization
    activities that support more comprehensive efforts to modernize the NAS.

    Recommendation for Executive Action

    To help ensure that key administration and congressional decision-makers
    have more complete information to assess the potential impact of annual
    budget submissions on individual ATC system acquisitions, the overall ATC
    modernization program, and related larger-scale NAS modernization
    activities funded through the facilities and equipment budget, we
    recommend that the Secretary of Transportation direct FAA to identify
    which activities under the ATC modernization program have had funding
    deferred, reduced, or eliminated and to provide detailed information about
    the impact of those decisions on FAA's ability to modernize the ATC system
    and related components of the NAS in the near, mid, and longer term. This
    information should be reported to Congress annually.

    Agency Comments	We provided a copy of our draft report to DOT for review
    and comment. The draft was reviewed by officials throughout DOT and FAA,
    including the Vice President for Acquisition and Business Service. These
    officials provided comments through email. They generally agreed with the
    report and provided technical comments on specific aspects of the report,
    which we incorporated as appropriate. The FAA officials said they are
    continuing to consider our recommendation and indicated they would provide
    a response to it as required by 31 U.S.C. S:720.

    As agreed with your offices, unless you publicly announce the contents of
    this report earlier, we plan no further distribution until 30 days from
    the report date. At that time, we will send copies of this report to
    interested congressional committees, the Secretary of Transportation, and
    the Administrator, FAA. We will also make copies available to others upon
    request. In addition, the report will be available at no charge on the GAO
    Web site at http://www.gao.gov.

    Please call me at (202) 512-2834 if you or your staff have any questions
    about this report. Contact points for our Offices of Congressional
    Relations and Public Affairs may be found on the last page of this report.
    Key contributors to this report are listed in appendix IV.

    Gerald L. Dillingham, Ph.D. Director, Physical Infrastructure Issues

    List of Congressional Requesters

    The Honorable Tom DavisChairmanThe Honorable Henry A. WaxmanRanking
    Minority MemberCommittee on Government ReformHouse of Representatives

    The Honorable Don YoungChairmanThe Honorable James L. OberstarRanking
    Democratic MemberCommittee on Transportation and InfrastructureHouse of
    Representatives

    The Honorable John L. MicaChairmanThe Honorable Jerry CostelloRanking
    Democratic MemberSubcommittee on AviationCommittee on Transportation and
    InfrastructureHouse of Representatives

    Appendix I

    Background and Status of FAA's 16 Major System Acquisitions We Reviewed in
    Detail

    Airport Surface Detection Equipment- Model X (ASDE-X)

    Figure 2: ASDE-X Screen Depicting an Airport Layout with Active Aircraft
    Targets

                             Source: Photo courtesy of FAA.

                Note: Contractor for this system is Sensis Corporation.

    Purpose and Status	ASDE-X enables air traffic controllers to track the
    surface movement of aircraft and vehicles. It was developed to reduce
    runway incursions, reported as increasing from 186 in 1993 to 383 in
    2001.1 ASDE-X improves the ability of controllers to maintain awareness of
    the operational environment and to anticipate contingencies. The detection
    system automatically predicts potential conflicts and seamlessly covers
    airport runways, taxiways, and other areas.

    1FAA defines runway incursion as any occurrence at an airport involving an
    aircraft, vehicle, person, or object on the ground that creates a
    collision hazard or results in a loss of separation between aircraft
    taking off, intending to take off, landing, or intending to land.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

                 Figure 3: Changes to ASDE-X Schedule and Cost Targets

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    aAccording to FAA officials, the change in cost target for ASDE-X was due
    to an increase in the scope of the project.

    bFAA plans to extend ASDE-X's current deployment target from 2007 to 2009
    because the project's budgets were cut in fiscal years 2004 and 2005.

    In June 2002, FAA decided to upgrade seven additional airports increasing
    the project's total cost by $80.9 million. As of September 2004, FAA had
    placed three systems in operation and installed six others. FAA officials
    said they propose to extend the deployment baseline from 2007 to 2009
    because budgets were cut in fiscal years 2004 and 2005; in addition,
    internal and external funding was reprogrammed for other high-priority
    activities. The ASDE-X program office is working on alternative cost
    estimates and plans to present them to the Joint Resources Council by June
    2005.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Airport Surveillance Radar Model-11 (ASR

    11) Figure 4: ASR-11 Equipment

                             Source: Photo courtesy of FAA.

                     Note: Contractor for this system is Raytheon.

    Purpose and Status	ASR-11 replaces aging analog radars, such as ASR-7 and
    ASR-8, with a single, integrated digital radar system. ASR-11 reduces
    operational costs, improves safety, and accommodates future capacity
    increases. ASR-11 also provides surveillance information to existing
    systems, such as the Standard Terminal Automation Replacement System
    (STARS) in terminal facilities and other systems in en route ATC
    facilities. As of March 2005, five sites have been commissioned into the
    NAS and five additional sites are in full operational capability.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

                 Figure 5: Changes to ASR-11 Schedule and Cost Targets

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    ASR-11 has experienced unplanned work, and the funding level received was
    less than the agency-approved funding level for the system acquisition;
    both factors contributed to schedule extensions and cost increases. FAA
    misjudged the extent to which the high-level requirements that were used
    to support the Department of Defense's procurement of the commercial
    off-the-shelf/nondevelopmental item (COTS/NDI) could result in a product
    capable of meeting FAA's mission or user needs. As a result, unplanned
    software changes were required. The program requested $98.8 million for
    fiscal year 2004, based on the system's acquisition program baseline, but
    received $74.3 million. In May 2004, FAA reprogrammed $2.35 million from
    ASR-11's appropriated funds to the Essential Air Service.2 Due to funding
    reductions, FAA decreased the number of ASR-11 systems to be purchased
    from 112 to 111. The 2005 request of $107.6 million was not approved; the
    reduction to $87.5 million may result in additional cost growth or the
    elimination of planned replacement sites. The ASR-11 program is scheduled
    to go to the Joint Resources Council in fiscal year 2005 to extend the
    program's schedule to 2013 and to revise the baseline funding, primarily
    because of deferrals and budget reductions. As of March 2005, five sites
    have been commissioned into the NAS and five additional sites are fully
    operational.

    2The objective of the Essential Air Service program is to ensure that
    small communities that had received scheduled passenger air service before
    deregulation will continue to have access to the nation's air
    transportation system.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Air Traffic Control Radar Beacon Interrogator-Replacement (ATCBI-6)

    Figure 6: ATCBI-6 Screen Display Depicting All Transponder-Equipped
    Aircraft

    Source: Photo courtesy of FAA.

    Note: Contractor for this system is Raytheon.

    Purpose and Status	ATCBI-6 is part of the agency's continuing effort to
    upgrade equipment to provide greater system capability and reliability
    that will, in turn, reduce operating costs. The ATCBI-6 replacement
    program will replace existing en route air traffic control beacon
    interrogator (ATCBI-4/5) equipment. The new ATCBI-6 radars will be able to
    determine both range and direction to and from aircraft, in addition to
    forwarding this information to the appropriate Air Route Traffic Control
    Centers' automation systems.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

                 Figure 7: Changes to ATCBI-6 Cost and Schedule Targets

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    Funding reductions of $31.0 million for fiscal years 2002 and 2003
    contributed to the extension of ATCBI-6's schedule. According to FAA, if
    funding reductions continue, further delays could occur with the system's
    deployment, installation, and commissioning activities. As of September
    2004, the contractor has been meeting the new contract delivery schedule.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Advanced Technologies and Oceanic Procedures

    (ATOP) Figure 8: ATOP Equipment Reporting Aircraft Position Information

                             Source: Photo courtesy of FAA.

                  Note: Contractor for this system is Lockheed Martin.

    Purpose and Status	ATOP replaces aging oceanic ATC systems and procedures
    with an integrated system of new controller workstations, data-processing
    equipment, and software that will enhance the control and flow of oceanic
    air traffic to and from the United States. The system automatically
    updates information on an aircraft's location and supersedes the current
    manual process. FAA controls oceanic air traffic at three sites:
    Anchorage, Alaska; New York, New York; and Oakland, California.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

                  Figure 9: Changes to ATOP Schedule and Cost Targets

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    The ATOP program is operating within its cost, schedule, and performance
    targets. ATOP achieved its initial operational capability milestone in
    June 2004. The contractor had originally agreed to a more aggressive
    development schedule in order to achieve this milestone by April 2003, or
    14 months earlier. FAA determined, however, that the contractor could not
    meet this accelerated date because of poor requirements development,
    unrealistic schedule targets, and inadequate estimation of software
    complexity. This exacerbated the scheduled transition from the current
    oceanic system to ATOP. Consequently, FAA spent an additional $4 million a
    year to operate and maintain the old system until ATOP is fully
    operational. According to FAA, the ATOP program office did not overspecify
    the operational and performance requirements; it wrote the technical
    document at a level that allowed the contractor to select the appropriate
    solutions and did not restrict design innovations. Yet, FAA's internal
    documents revealed that the requirements were not adequately defined. For
    example, the ATOP Investment Analysis Study reported to the Joint
    Resources Council prior to the contract award that the lack of more
    detailed ATOP requirements at this stage of acquisition added risk and was
    of concern to the investment analysis team.

    According to FAA, the agency has taken steps to recognize the concerns
    identified by the ATOP Investment Analysis Study by maintaining
    requirements, encouraging controller participation, and robustly
    testingthe system. FAA officials stated that the agency has developed a
    transition plan for the three sites. To accelerate the transition schedule
    and offset facility attrition, the ATOP program filled eight new
    controller positions at the New

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
    Reviewed in Detail

    York site and six at the Oakland site. In addition, ATOP training
    schedules are in place, and classes for FAA's Air Traffic and Airway
    Facilities personnel are under way. Although the contractor's costs to
    develop ATOP have grown by approximately $20 million, FAA is not
    responsible for payment because it has a fixed-price contract arrangement
    with the contractor. Yet, according to the Department of Transportation's
    Inspector General, FAA would have to pay for all software problems after
    February 28, 2005. After February 2005, Lockheed Martin will continue to
    work on software changes under the time and materials portion of the ATOP
    contract. FAA plans to maintain the acquisition program baseline
    milestones by relying on current contractor staffing and resources. FAA
    expects to conduct full transition exercises in June 2005 at the New York
    and Oakland sites.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Controller-Pilot Data Link Communications (CPDLC)

    Source: Photo courtesy of FAA.

                 Note: Contractor for this system is to be determined.

    Purpose and Status	CPDLC will allow pilots and controllers to transmit
    digital data messages directly between FAA automated ground computers and
    aircraft. By digitally transmitting routine air traffic control (ATC)
    messages between pilots and controllers, CPDLC will alleviate voice
    congestion, enhance ATC efficiency, and increase capacity by allowing
    controllers to handle more aircraft. FAA originally planned to implement
    CPDLC in several phases. Build 1, the initial development phase, was
    deployed in Miami for 2 years and consisted of four information services:
    initial contact, transfer of communications, altimeter setting, and
    predefined menu text. Build 1A would have added five additional services,
    including speed, altitude, and route clearance, but it was deferred by a
    Joint Resources Council decision in April 2003. Presently, FAA is
    conducting a preliminary investment analysis of National Build, which is
    intended to deploy the CPDLC system

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    to all 20 Air Route Traffic Control Centers after they have implemented
    the En Route Automation Modernization (ERAM) program.

    Initial deployment

    Final deployment

    Undetermined

    Source: GAO presentation of FAA data.

    CPDLC Build 1, implemented at Miami Air Route Traffic Control Center in
    October 2002, operated for 2 years. FAA's acquisitions office had awarded
    the CPDLC Build 1A development contract before fully understanding the
    system's requirements, including those of FAA's aircraft certification
    office. Additionally, detailed interoperability requirements of air and
    ground equipment were not complete before the contract was awarded.
    According to FAA, additional CPDLC hardware, software, and other
    requirements increased costs by $69.8 million over the original baseline
    of $166.7 million. The revised cost target presented to the Joint
    Resources Council in April 2003 was $236.5 million, about a 42 percent
    increase from its original cost target, for only 8 of the 20 proposed
    Build 1A locations. FAA decided to suspend acquisition of Build 1A because
    of concerns about the high costs of communications service provider
    messages, the uncertainty of integrating CPDLC with ERAM, and the ability
    of airlines to install, and benefit from, the CPDLC avionics equipment.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    En Route Communications Gateway (ECG)

                             Source: Photo courtesy of FAA.

                  Note: Contractor for this system is Lockheed Martin.

    Purpose and Status	ECG replaces the interim Peripheral Adapter Module
    Replacement Item (PAMRI). Providing an interface from radar sites to en
    route centers, PAMRI has been operating for 10 years and has exceeded its
    life expectancy. The open and expandable platform of the ECG will allow
    for new connectivity and functionality as the NAS evolves.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    FAA is on schedule to complete ECG deployment in calendar year 2005. Tests
    revealed a weakness in security: limitations in designing the monitoring
    capability prevented appropriate monitoring unless a system technician
    remained logged on. To ensure that only authorized personnel had access to
    the system and that the monitoring could be done without a technician
    on-site, the ECG program office implemented a "guest" logon that enabled
    monitoring and prevented unauthorized access. According to FAA officials,
    correcting the weakness cost about $25,000, which falls within the
    program's budget and schedule. An additional challenge concerns monitoring
    the ECG system from the System Operations Control (SOC)3 positions. This
    issue may require SOC personnel to leave their posts if ECG requires some
    intervention to, among other things, discover why an event occurred. FAA
    is evaluating an improvement in the monitoring capability at the SOC
    positions. The estimated cost is $480,000, which falls within the
    program's budget and schedule.

    3The System Operations Center (SOC) is the workspace on the operations
    control room floor where managers monitor the state of the equipment
    providing air traffic services.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    En Route Automation Modernization (ERAM)

    Purpose and Status	Modular and expandable, ERAM will replace software and
    hardware in the host computers at FAA's 20 en route air traffic control
    centers, which provide separation, routing, and advisory information.
    ERAM's flight data processing capabilities will provide flexible routing
    around restrictions, such as congestion and weather. It will improve
    surveillance by increasing the number and types of surveillance sources,
    such as radars. ERAM will provide safety alerts to prevent aircraft
    collisions and congestion.

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    ERAM has not breached schedule or cost parameters, but it remains a high
    risk program because of its size and its amount of software code (more
    than 1 million lines). The contractor has reported that engineering costs
    are rising because of lower productivity than originally planned and an
    increase in the number of lines of software code. According to FAA
    officials, the contractor's management reserve can absorb additional
    software development costs.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Free Flight Phase 2 (FFP2)

                             Source: Photo courtesy of FAA.

    Note: Contractors for this system are Computer Sciences Corporation, ITT,
    Lockheed Martin, and Metron.

    Purpose and Status	FFP2 builds on Free Flight Phase 1, which established
    the concept of managing air traffic in a way that enhances the safety,
    capacity, and efficiency of the NAS. Under FFP2, FAA expects air traffic
    control to move gradually from a highly structured system, based on
    elaborate rules and procedures, to a more flexible system that allows
    pilots, within limits, to change their route, speed, and altitude while
    keeping air traffic controllers informed of such changes. FFP2 will allow
    controllers to manage pilot requests for flight information in en route
    airspace, identify and resolve possible mid-air conflicts up to 20 minutes
    in advance, and develop arrival sequence plans.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    According to FAA officials, the schedule delay in FFP2's deployment from
    2006 to 2007 because, among other things, the funding level received was
    less than the agency-approved funding level for the system acquisition.
    Since the transition from Free Flight Phase 1 to Phase 2, the program has
    received less than the expected level of funding. For example, in fiscal
    year 2003, FAA requested $107 million; however, due to external and
    internal budget cuts, the funding was reduced to $70 million.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    FAA Telecommunications Infrastructure (FTI)

                             Source: Photo courtesy of FAA.

                Note: Contractor for this system is Harris Corporation.

    Purpose and Status	FTI will replace costly networks of separately managed
    systems and services-both leased and owned-by integrating advanced
    telecommunications services within the NAS and non-NAS infrastructures.
    FTI will provide FAA with commercial telecommunications services that can
    meet present and future telecommunications needs between facilities. Its
    modern and reliable consolidated network will furnish multi-service
    capabilities.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    FTI's two-phase transition will take about 5 years to complete. Phase I
    was implemented at 21 Air Route Traffic Control Centers and 2 National
    Network Operations Control Centers. Deployment of Phase II, which is under
    way, will extend service to the remaining 4,477 NAS facilities.

    In June 2003, the FTI program returned to the Joint Resources Council with
    a proposed revision to the baseline that was based on actual contract
    prices for NAS operational services and estimated prices for mission
    support services. The council deferred revising the baseline until the
    program negotiated prices for mission support services. A consolidated
    Acquisition Program Baseline package for the full scope of NAS operational
    and mission support services was then completed in December 2004. The
    Joint Resources Council approved the revised baseline on December 8, 2004.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Integrated Terminal Weather System (ITWS)

                             Source: Photo courtesy of FAA.

                     Note: Contractor for this system is Raytheon.

    Purpose and Status	ITWS furnishes air traffic controllers and supervisors
    with full-color graphic displays of weather information concerning airport
    terminal airspace within a 60-mile radius. It provides a comprehensive
    current weather situation and precise forecasts of expected weather
    conditions for the next 60 minutes. ITWS requires no meteorological
    interpretation by air traffic controllers or pilots.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    aFAA initially projected that its first ITWS deployment would occur
    between September 2001 and August 2002 and that final system deployment
    would occur between January 2003 and July 2003.

    ITWS experienced delays because its software development was complex and
    the funding level received was less than the agency-approved funding level
    for the system acquisition. The program appeared to be progressing
    according to its baseline; however, immediately after the critical design
    review in September 1998, the contractor revealed that the program had
    exceeded the target cost by $4 million. Consequently, ITWS experienced
    schedule delays and cost increases, along with performance shortfalls.

    In May 2004, FAA's Joint Resources Council revised the baseline for the
    ITWS program to include, in production, the capability to predict weather
    conditions 60 minutes into the future. Because of constrained funding, the
    ATO Executive Council froze funding for fiscal years 2005, 2006, and 2007.
    In addition, FAA postponed deploying 12 of the 34 systems until an
    undefined future date. In January 2005, FAA management decided that the
    ITWS program would use already-procured equipment to install the next six
    sites and transition to Airport Improvement Program grants for the
    remaining scheduled sites. The ITWS program office is currently studying
    the impact of the decision on the system's baseline. According to the
    contractor and the original acquisition plan, all systems were scheduled
    for delivery by December 2001, but that date has now been extended to
    after 2009.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Local Area Augmentation System (LAAS)

                             Source: Photo courtesy of FAA.

                     Note: Contractor for this system is Honeywell.

    Purpose and Status	LAAS will allow aircraft to execute precision
    instrument approaches and landings in all weather conditions. Its global
    positioning system will broadcast highly accurate information to aircraft
    in a flight's final phases, providing more precise approach paths than the
    current instrument landing system, reducing the required separation
    between incoming aircraft, and increasing airspace capacity. LAAS will
    also provide airports with precision approach capability for all runways,
    eliminating the need for multiple
    instrument landing system installations.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    For LAAS, three of the four factors we discussed have contributed to the
    system's cost increases, schedule extensions, and performance problems.
    Specifically, poorly established requirements resulted in the addition of
    113 new requirements to the initial specification, entailing unplanned
    work including significant software and hardware changes. In addition, FAA
    underestimated LAAS' software complexity because it inadequately assessed
    the system's technology maturity. In particular, the agency misunderstood
    the potential for radio interference through the atmosphere, which could
    limit LAAS' operations. FAA also did not fully engage technical experts
    early in the approval process of LAAS. According to the Department of
    Transportation Inspector General, although FAA has had a LAAS Integrity
    Panel in place since 1996 to assist with its research and development
    activities, the panel was not formally tasked with resolving the integrity
    requirement4 early in the approval process, which might have enabled FAA
    to develop a quicker solution.5 In 2003, FAA focused the LAAS Integrity
    Panel on developing a solution to meet the integrity requirement.

    4The system's integrity requirement alerts pilots of erroneous information
    not more often than once every 47 years, or 10-7.

    5Department of Transportation's Inspector General, FAA Needs to Reset
    Expectations for LAAS Because Considerable Work Is Required before It Can
    Be Deployed for Operational Use, AV-2003-006 (Dec. 16, 2002).

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
    Reviewed in Detail

    The contractor has experienced difficulties ensuring that the system will
    alert pilots when it produces erroneous information. FAA and the
    contractor agree that these difficulties have resulted from a lack of
    communication. When the contract was awarded, FAA assumed that LAAS was
    80-percent developed but later discovered that only about 20 percent was
    complete. FAA therefore suspended funding in fiscal year 2005 and used the
    remaining $18 million to resolve the integrity requirement problem, among
    other things, in fiscal year 2004. Although FAA had not requested funding,
    Congress did approve an additional $10 million for LAAS in fiscal year
    2005. The FAA will continue to work on resolving LAAS integrity and safety
    assurance issues during fiscal year 2005. During fiscal year 2006, the
    program office will develop a business case justification on whether to
    continue the LAAS program.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Next Generation Air-to-Ground Communication

    (NEXCOM) Figure 23: Multimode Digital Radio

                             Source: Photo courtesy of FAA.

                 Note: Contracter for this system is ITT (segiment 1A).

    Purpose and Status	NEXCOM will improve air traffic control communications
    by replacing controller-pilot analog communication with a state-of-the-art
    digital system. Consisting of multimode digital radios, avionics, and
    ground stations, NEXCOM will enhance security by requiring digital
    authentication and preventing "phantom controllers" from gaining access to
    the communications system. NEXCOM Segment 1A will replace 30-to 40-year
    old radios, deploying 12,000 new radio sets that use analog and digital
    communications with aircraft. Segment 1B will create ground stations to
    communicate with aircraft equipped with digital capability.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Initial deployment

    Final deployment

    Undetermined

    Source: GAO presentation of FAA data.

    NEXCOM experienced schedule slippages in developing Segment 1A-the
    multimode radio sets-because the vendor failed to meet interference
    requirements and to perform additional tests to avoid risks associated
    with future upgrades. FAA's initial plans did require meeting interference
    requirements. The initial schedule assumed FAA could procure a
    nondevelopmental item (NDI) product that met the interference
    requirements. The vendor's product did not meet the established
    interference requirements. A solution had to be developed and tested. The
    project schedule had to be adjusted to accommodate additional development
    and testing. As a result, the system's approval was delayed by about 20
    months. In September 2003, NEXCOM Segment 1A was initially deployed at
    Jacksonville, Florida. Segment 1A cost and schedule baseline is scheduled
    for a Joint Resources Council review in August 2005.

    NEXCOM's cost growth has resulted from additional software and hardware
    requirements. Because the funding level received was less than the
    agency-approved funding level for the system acquisition, FAA postponed
    funding Segment 1B-the ground stations-until at least fiscal year 2008.
    FAA has no current estimate for the last deployment date.

    FAA plans to develop and deploy NEXCOM Segment 2 between 2008 and 2013.
    This segment will provide a digital data link to aircraft at high and
    super-high altitudes. Segment 3, scheduled between 2011 and 2013, will
    provide digital voice and data link capabilities throughout the ATC
    system. FAA has not developed funding estimates for these two segments.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    NAS Infrastructure Management System- Phase 2 (NIMS-2)

                             Source: Photo courtesy of FAA.

                      Note: Contractor for this system is Digicon.

    Purpose and Status	NIMS, a centralized maintenance management system, will
    operate and maintain the NAS infrastructure, including its facilities,
    systems, and equipment (e.g., communications, radars, and navigational
    aids). NIMS will decrease the number of en route delays by reducing the
    time required to restore systems to full operation following maintenance.
    NIMS-Phase 1

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    currently provides initial Operational Control Center capability,6 along
    with remote monitoring and control functionality, to 3,700 NAS facilities
    and 5,800 deployed maintenance data terminals. By fully implementing
    resource management and enterprise management software, NIMS-Phase 2 will
    focus on increasing workforce productivity in such priority activities as
    receiving orders and managing resources. Future NIMS phases will allow for
    information sharing that is in sync with NAS' technological improvements.

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    According to FAA, the funding for NIMS-Phase 2 was $96.4 million below the
    approved amount in agency planning documents. Subsequently, FAA had to
    defer additional system requirements, extend the schedule by 5 years, and
    increase the system's cost estimate by $84.0 million. FAA is revising the
    baseline for Phase 2, as shown in figure 26; a Joint Resources Council
    decision is planned for August 2005.

    6Operational Control Center capability, established in 2001, is a standard
    set of tools and procedures needed to open the control centers. The tools
    provide the initial enterprise management and resource management
    technical capabilities needed at Operational Control Centers.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Operational and Supportability Implementation

    System (OASIS) Figure 27: OASIS Dual Screen Display

                             Source: Photo courtesy of FAA.

    Note: Contractors for this system are Harris Corporation (OASIS
    workstations) and Evans Corporation (consoles), respectively.

    Purpose and Status
    OASIS, a modified commercial-off-the-shelf system, replaces workstation
    consoles, among other things, at automated flight service stations. It
    also replaces the Flight Services Automation system for which spare parts
    and hardware support have been difficult for FAA to maintain. OASIS
    furnishes up-to-the-minute weather graphics by integrating real-time
    weather and flight planning data with overlays of flight routes. It also
    provides operational support, retrieves reports, and supplies lightning
    data and icing images, among other things.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    OASIS has experienced schedule extensions and cost increases because of
    unplanned work, insufficient stakeholder involvement, and funding that is
    less than the agency had approved as needed for meeting the system's
    schedule, cost, and performance targets. For example, the system
    acquisition schedule slipped because of a larger-than-planned development
    effort. FAA's 1998 review of the contractor system's architecture for
    OASIS revealed that the commercial-off-the-shelf solution was not as
    mature as FAA had envisioned when the contract was awarded and revealed
    that the contractor's commercial products did not fully satisfy its
    requirements. According to the Department of Transportation's Inspector
    General, FAA had identified a number of significant human factors
    concerns, such as inadequate weather graphics. This indicated that
    stakeholders were not sufficiently involved throughout the system's design
    and development. As a result, FAA eliminated the option of
    commercial-off-the-shelf procurement. In addition, the OASIS program was
    rebaselined in March 2000 due to fiscal year 2000 appropriations being
    reduced to $10 million from the $21.5 million baseline. The reduction in
    funding resulted in a reduced rate of software development, delayed and
    reduced the rate of planned hardware and console deployments, and resulted
    in the incremental deployment of operational software. This contributed to
    FAA's delay of its first-site implementation from July 1998 to 2002.

    According to FAA officials, receiving less funding than the agency had
    approved for fiscal years 2004 and 2005 also resulted in a delay in OASIS'
    deployment to automated flight service stations. As of February 2005, FAA
    had deployed 19 systems: 16 at Automated Flight Service Stations (AFSS)

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
    Reviewed in Detail

    and 3 at other sites. Software upgrades that are under way will be
    completed by June 2005. FAA had no plans for installations or software
    upgrades beyond those at the AFSS sites, pending an evaluation of
    private	sector bids to operate flight service stations. Until then, FAA
    had directed the program to remain within the funding levels of its
    Capital Investment Plan for fiscal years 2004 to 2006.7 According to FAA,
    since completion of the evaluation of bids in February 2005, OASIS'
    implementation remains unchanged. FAA does not plan on additional OASIS
    funding for software enhancements or more installations. FAA plans to
    phase out OASIS between March 2006 and March 2007 in accordance with the
    new service provider's transition plan.

    7The Capital Investment Plan, a 5-year financial plan, allocates funds to
    NAS projects on the basis of a detailed analysis of project funding by FAA
    functional working groups. The plan includes estimates for the current
    fiscal year budget and for 4 future year expenditures for each line item
    in the facilities and equipment budget.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

      Standard Terminal Automation Replacement System

    (STARS) Figure 29: STARS Controller Workstation

                             Source: Photo courtesy of FAA.

                     Note: Contractor for this system is Raytheon.

    Purpose and Status
    STARS-a joint program of FAA, the Department of Defense (DOD), and the
    Department of Transportation (DOT)-replaces aging FAA and DOD terminal
    systems with state-of-the-art terminal air traffic control systems. The
    system is designed to prevent duplication of development and logistic
    costs. Civil and military air traffic controllers use STARS to direct
    aircraft near major U.S. airports. Its open and expandable terminal
    automation platform can accommodate air traffic growth, as well as new
    hardware and software that promote safety, maximize operational
    efficiency, and improve controllers' productivity.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Initial deployment

    Final deployment

    Source: GAO presentation of FAA data.

    aThis estimate includes development costs only and does not include
    technology refresh and terminal automation enhancement.

    bBased on the May 2004 FAA approved Acquisition Program Baseline for
    development and procurement estimates.

    cThe February 1996 baseline included limited human factor evaluations and
    a basic commercial-off	the-shelf configuration.

    FAA revised its baseline for the STARS program in May 2004, changing the
    acquisition to a phased approach that divides large programs into smaller
    phases to allow the agency to evaluate other alternatives of system
    implementation. For Phase 1, STARS was approved for deployment to 51
    Terminal Radar Approach Control (TRACON) facilities. Following the
    system's release and FAA's concurrence with the November 23, 2004, report
    from the DOT Inspector General, FAA reduced STARS' deployment to 47 TRACON
    facilities. STARS is fully operational at 29 FAA terminal radar control
    facilities and 21 DOD radar control facilities. If approved in 2005, DOD
    plans to deploy STARS to 106 Radar Approach and Control (RAPCON)
    facilities and 75 towers nationally and worldwide. With completion of
    DOD's transition in 2004 to FAA's new STARS' configuration, both DOD and
    FAA are operating together on a single national software and hardware
    configuration baseline.

    During STARS' development, schedule slippages and cost increases occurred
    because the original commercial-off-the-shelf (COTS) acquisition strategy
    focused on early adoption of commercial technology by FAA and DOD could
    avoid the increasing cost of supporting legacy systems by quickly
    deploying STARS to the highest-priority air traffic control facilities,
    and then making further improvements. FAA had compressed STARS'

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
    Reviewed in Detail

    original development and testing schedule from 32 to 25 months, leaving
    only limited time for human factors evaluations. Allowing insufficient
    time to involve stakeholders, FAA and the contractor had to restructure
    the contract to address technicians' and controllers' concerns, including
    an inconsistency in visual warning alarms and color codes between the old
    and the new systems. However, the STARS initial system configuration was
    satisfactory for use by DOD as deployed. The FAA modified the COTS
    strategy and suspended STARS deployments until FAA controller and
    technician requirements were developed. FAA estimates the COTS acquisition
    strategy, which limited involvement of controllers and maintenance
    technicians in the system's development added 3 years and $500 million to
    the development of more than 160 system requirements. The first phase of
    the three-phase deployment plan comprises 47 systems. FAA and the DOT are
    currently determining a safe, economical, and affordable site mix for
    follow-up phases.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Wide Area Augmentation System (WAAS)

                             Source: Photo courtesy of FAA.

                     Note: Contractor for this system is Raytheon.

    Purpose and Status
    WAAS uses global positioning system satellites to provide precise
    navigation and landing guidance to aircraft at all airports, including
    thousands that have no ground-based instrument landing capability. WAAS
    also provides safer and more efficient arrival, en route, and departure
    operations by allowing user equipment to augment the global positioning
    system while increasing its position accuracy and reliability, among other
    things.

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
                                   Reviewed in Detail

    Initial operating capability

    Full operating capability

    Source: GAO presentation of FAA data.

    aSeptember 1999 and May 2004 estimates for WAAS development exclude $1.3
    billion in satellite communications leases.

    When WAAS has full operating capability, it will provide en route
    navigation guidance from the surface up to 100,000 feet and instrument
    landing guidance down to 200 feet. It currently provides full en route
    navigation up to 100,000 feet and instrument landing guidance down to 250
    feet at all qualified airports in the continental United States. FAA has
    begun to publish WAAS instrument flight procedures for some runways;
    however, pilots cannot use WAAS for landing guidance on those runways for
    which FAA has not written guidance. To achieve full operating capability,
    a second civil aviation frequency must be added to new global positioning
    system satellites to allow aircraft to conduct precision runway approach
    operations during ionospheric interruptions, such as "solar storms." The
    Department of Defense, which is responsible for providing this frequency,
    plans to add it between 2013 and 2019.

    FAA encountered cost, schedule, and performance problems because its
    scheduling was accelerated, coordination among its offices proved
    insufficient, and technical challenges delayed its meeting the integrity
    requirement-a requirement that pilots be alerted in a timely manner when
    the system should not be used. At the urging of government and aviation
    industry groups in the early 1990s, FAA accelerated WAAS' schedule by
    attempting to develop, test, and deploy the system within 28 months, even
    though software development alone was expected to take 24 to 28 months.
    Rather than shortening the total development time, these steps contributed
    to schedule delays. FAA also set development milestones before

    Appendix I Background and Status of FAA's 16 Major System Acquisitions We
    Reviewed in Detail

    completing the research and development required to prove WAAS'
    capability. Since officials on WAAS' integrated product development team
    within the aircraft certification office did not participate regularly
    during design and development, FAA did not recognize its difficulty in
    meeting the integrity requirement or its lack of scientific and technical
    expertise. FAA eventually acquired the expertise, and a team of satellite
    navigation experts solved the problem. These actions resulted in unplanned
    work and contributed to the rise in WAAS's cost from the original estimate
    of $509 million in 1994 to $2.036 billion in 2005, and to a 6-year
    extension in its commissioning date. According to FAA, adding 6 years to
    the program's life cycle also contributed to increased costs.8

    8FAA also transferred $1.3 billion--the cost of satellite leases--from the
    operations account to the facilities and equipment account, bringing the
    total estimate at completion cost to $3.3 billion.

    Appendix II

    Information on the 39 Additional Systems under the ATC Modernization Program

     Table 4: Cost and Schedule Information for Nine Additional Major Systems under
                             the ATC Modernization Program

    Dollars in millions

                                        Original    Current   Original    Current
                                        schedule   schedule   schedule   schedule
    Original     Current Last year    initial    initial       last       last
           cost    cost 1st
                       year  funding  deployment deployment deployment deployment

    Program/system description target target funded planned target target
    target target

    HOST/Oceanic Computer $424.10 $368.50 FY 97 FY 05 December December June
    2004 April 2004
    System Replacement 1998 1998
    (HOCSR): Replaces the main
    ATC computer processor and
    some peripherals and ensures
    supportability of other
    peripherals until replaced by
    ERAM.

            En Route System      $201.90 $201.90 FY 00 FY 09 N/A N/A May 2009 N/A
          Modification: Will
                replace
         obsolete components,
                upgrade
    controllers' displays and
              supporting
          infrastructure, and
         configure consoles to
        accommodate additional
              processors.

         Initial                  FY  FY
         Academy    $23.35 $23.35 03  08  September September September September
         Training
          System
         (IATS):                            2005      2005      2005      2005
    Enables the
    training of
            an
        increasing
        number of
         new air
         traffic
    controllers
        at the FAA
         Academy.

        Ultra High Frequency   $85.15 $85.15 FY 01 Beyond FY 03 FY 10 FY 10 FY 10
                (UHF)
         Radio Replacement:                        FY 09
           Replaces aging
              equipment
         used to communicate
                with
        Department of Defense
              aircraft
    in support of military
             operations.

    Command Center Conference Control System (CCS) - Replace Operational
    Telephone Voice Switch (OTS): Replaces the existing telephone system at
    the FAA Air Route Control System Command Center in Herndon, Va. The
    existing telephone system is becoming unsupportable and can no longer
    perform required functions.

    $12.70 $12.70 FY 02 FY 05 FY 05 FY 05 FY 05 FY 05

    Appendix II Information on the 39 Additional Systems under the ATC Modernization
                                        Program

                             (Continued From Previous Page)

    Dollars in millions

    Original Current Original Current schedule schedule schedule schedule
    Original Current Last year initial initial last last cost cost 1st year
    funding deployment deployment deployment deployment Program/system
    description target target funded planned target target target target

         Capstone Phase I (a part of    $18.55 $18.55 N/A N/A FY 00 N/A FY 03 N/A
         the Safe Flight 21 program):
           A demonstration program,
         intended to improve aviation
           system safety in Alaska
    through the introduction of new
         communications, navigation,
        and surveillance technologies,
        as well as improving aviation
    system capacity and efficiency.

    Automated Surveillance Radar-Model 9 (ASR-9)/Mode Service Life Extension
    (SLEP): Extends the service life of the radar by replacing obsolete
    components to sustain existing system capabilities, such as providing
    aircraft detection and separation services to reduce aircraft delays and
    improve safety at congested airports.

    $186.50 $186.50 FY 01	Beyond TBD TBD TBD TBD FY 09

        Aviation Surface   $350.90 $403.80 FY  Beyond September N/A September N/A
             Weather                       98
    Observation Network                     FY 09    2002          2010
    (ASWON): A suite of
              five
         weather systems
          that provides
        automated surface
             weather
    observation to meet
            the needs
           of pilots,
    operators, and air
             traffic
          controllers.

    Precision Runway Monitor (PRM): An electronic scan radar that tracks and
    processes aircraft targets at a 1-second update rate and allows
    simultaneous approaches on runways spaced less than 4,300 feet apart,
    thereby increasing capacity and reducing delays during adverse weather
    conditions.

    $145.80 $145.80 FY 88 FY 07	October October January January 1997 1997 2007
    2007

    Source: GAO presentation of FAA data.

    Appendix II Information on the 39 Additional Systems under the ATC
    Modernization Program

     Table 5: Cost and Schedule Information for the 30 Buy-It-by-the-Pound Systems
                          under the ATC Modernization Program

    Dollars in millions

                                                            1st initial
                                                                           Last
                                                             operating    initial
                                                            capability/  operating
                   Appropriated Appropriated        Last    operational capability/
                                                    year
                    funding for      funding 1st    funding  readiness  operational
                            1st              year
    Program/system              through FY   funded            date       readiness
     description           year 04                  planned                    date

          En Route Enhancements: Maintains    $5.30   $36.50 FY 01 Beyond N/A N/A
    current software systems and supports                       FY 09
           development, integration, and
        implementation of upgrades to, among
          other things, the Host software.

         Terminal Sustainment: Will maintain    $6.30 $73.60 FY 00 Beyond N/A N/A
         the existing FAA terminal automation                      FY 09
          systems, such as Common Automated
            Radar Terminal System (CARTS)
    ARTS IIEs and IIIEs, until the Terminal
             Automation Modernization and
           Replacement program replaces or
                upgrades the systems.a

              Current Enhanced Traffic         $13.40 $116.50 FY 98 FY 05 N/A N/A
            Management System (ETMS) OPS:
    Maintains and supports mission-critical
            traffic flow management (TFM)
         operations in 85 ATC facilities and
         makes necessary upgrades to support
        enhanced traffic management services.

             Traffic Flow Management       $8.50 $30.40 FY 02 Beyond February N/A
             Infrastructure (TFM-I)                           FY 09    2008
        Modernization: Modernizes the TFM
    decision support systems and tools
                      that
    help balance growing flight demands
           with NAS capacity within an
                  environment.

    Departure Spacing Program $7.50 $48.50 FY 01 FY 06 Prior to FY Prior to FY
                (DSP):                                        03               03
        Assists controllers in
          the more efficient
    management of departures
                 from
    multiple airports within
             the New York
           and Philadelphia
          metropolitan areas.

           NAS Resources/Notice to Airmen      $1.70  $10.90 FY 04 Beyond N/A N/A
           (NOTAM): Provides an automated,                         FY 09
        centralized, standardized, and timely
    distribution system for NOTAMS using a
        dedicated telecommunications network.

    Appendix II Information on the 39 Additional Systems under the ATC Modernization
                                        Program

                             (Continued From Previous Page)

    Dollars in millions

    Appropriated Appropriated Last year funding for 1st funding 1st year
    funding

    1st initial 	operating Last initial 	capability/ operating	operational
    capability/ 	readiness operational

    Program/ system description year through FY 04 funded planned date
    readiness date

    Voice Switching and Control System $13.60 $60.00 FY 01 Beyond October 2006
    N/A
    (VSCS)b: Upgrade and tech refresh to FY 09
    ensure that the air-to-ground and
    ground-to-ground communications
    capabilities are reliable and available
    for separating aircraft, coordinating
    flight plans, and transferring information
    between en route ATC facilities.

           Weather Message Switching Center     $2.50   $8.50 FY 01 FY 05 N/A N/A
           Replacement (WMSCR) Transition:
          Will upgrade obsolete processors,
    output devices, display screens, backup
        systems and software. This will allow
         pilots quick and accurate access to
               weather data and NOTAMS.

          Enhanced Terminal Voice Switch    $2.00 $95.40 FY 95 FY 09 May 1998 N/A
         (ETVS): Replaces obsolete voice
          switches in the ATC Towers and
         Terminal Radar Approach Control
        facilities. Voice switches enable
                       air
        traffic controllers to communicate
                       with
          aircraft as well as other ATC
                   facilities.

              Communications Facilities         $6.00 $53.00 FY 91 Beyond N/A N/A
         Expansion (CFE): Provides a vehicle                       FY 09
    for facilities to improve communications
        coverage to meet specific operational
         requirements based upon, among other
             things, air traffic demand.

    Air/Ground Communications  $1.20 $26.40 FY 89 Beyond 1st delivery  Ongoing
                 Radio                                           on
         Frequency Interference                      FY 09     current
                 (RFI)
         Elimination: Provides                              contract June
              equipment to
    improve air and/or ground                                1996
           communications and
            provides support
        for remote communication
              facilities.
    The equipment will reduce
              the need for
    inter-modulation products,
                  thus
         eliminating the major
            source of radio
    frequency interference at
               congested
                 sites.

    Appendix II Information on the 39 Additional Systems under the ATC Modernization
                                        Program

                             (Continued From Previous Page)

    Dollars in millions

                                               Appropriated funding through FY 04

                                    1st year funded

    Last year funding planned 1st initial operating capability/ operational
    readiness date Last initial operating capability/ operational readiness
    date

                              Program/ system description

                                                Appropriated funding for 1st year

    Critical Telecommunications Support (CTS): Enables FAA to nationally
    manage programmed, unprogrammed, and emergency telecommunications network
    requirements for the NAS.

                            $9.90 $63.00 FY 89 FY 05 N/A N/A

    Recovery Communications (RCOM ) - Command and Control Communications (C3):
    Provides FAA with the minimum command-andcontrol communications capability
    necessary to direct the management, operation, and reconstruction of the
    NAS during regional or local emergencies when normal common carrier
    communicationsare interrupted. C3 also provides minimum capabilities for
    continuity of operations for FAA.

    $6.30 $51.10 FY 92	Beyond June 2003 N/A FY 09

    Aeronautical Data Link (ADL) -Flight $3.30 $8.50 FY 99 FY 08 June 2000 N/A
    Information Service (FIS): Provides
    data link broadcasts of graphic and
                       text
        flight information service data to
                       the
         cockpit that are consistent with
    information available to air traffic
          controllers and flight service
                   specialists
                   in the NAS.

    Tower Data Link Services (TDLS):

    Displays the clearances received from Air Route Traffic Control Centers
    (ARTCC) to the tower, distributes flight plan data, weather information,
    and general information messages from the ARTCC National Airspace Center
    computer to ARTCC printers and Air Traffic Control Towers (ATCT) remote
    sites. In addition, the system displays weather information received via
    ATCT weather interface.

    $2.30 $10.80 FY 00 FY 05	Tech refresh N/A start May 2002

    Appendix II Information on the 39 Additional Systems under the ATC Modernization
                                        Program

                             (Continued From Previous Page)

    Dollars in millions 1st initial operating capability/ operational
    readiness date Last initial operating capability/ operational readiness
    date

             Appropriated funding for 1st year Appropriated funding through FY 04

                                    1st year funded

    Last year funding planned

    Program/ system description

    Voice Recorder Replacement Program (VRRP): Replaces a total of 530 aging
    analog systems with modern digital systems that will reduce both lifecycle
    maintenance costs and maintenance staffing requirements.

    $3.60 $24.80 FY 97	Beyond FY 09

                                    January 1996 N/A

          Houston Area Air Traffic System     $12.00   $52.10 FY 01 FY 08 N/A N/A
    (HAATS): Provides the focal point and
        support for infrastructure, national
             airspace improvements, and
        implementation of the new procedures
        and airspace design for the Houston
                       area.

        Instrument Landing Systems   $5.70 $455.30 FY 89 Beyond  April 1995,  N/A
                  (ILS):c
        Provides precision guidance                      FY 09  February 2007
        (horizontal, vertical, and
                 distance)
    information to allow category
                I, II, and
         III landing approaches at
                 large and
             medium airports.

    Visual Navaids for New Qualifiers: $9.80 $40.90 FY 93 Beyond June 2006 N/A
          Procures and installs visual                       FY 09
           navigational aids approach
                    lighting
           systems to enhance landing
           capabilities at designated
                    airports
         throughout the United States.

           Approach Lighting System      $5.80 $183.20 FY 93 Beyond September N/A
    Improvement (ALSIP) Continuation:                     FY 09    1996
    Retrofits rigid lighting systems
                     with
          lightweight and low-impact
                   resistant
    structures that collapse or break
                     apart
          at impact, thereby reducing
                   damage to
        aircraft that may strike these
                  structures
         during departure or landing.

          Visual Navaids-Sustain, Replace,     $3.00   $6.00 FY 02 Beyond N/A N/A
         Relocate: Replaces aging, obsolete                        FY 09
         visual navigational aids and other
         ground-based navigation and landing
         aids to maintain current en route,
        approach, and landing capabilities at
    various airports throughout the United
                       States.

    Appendix II Information on the 39 Additional Systems under the ATC Modernization
                                        Program

                             (Continued From Previous Page)

    Dollars in millions

    1st initial	operating Last initial 	capability/ operating

    Appropriated Appropriated Last year operational capability/ funding for
    1st funding 1st year funding readiness operational

    Program/ system description year through FY 04 funded planned date
    readiness date

    Very High Frequency Omni-$1.60 $27.00 FY 93 Beyond NA N/A
    directional Range (VOR) Collocated FY 09
    with Tactical Air Navigation	(VORTAC): Replaces, relocates, or
    converts VORTAC facilities used for
    aerial navigation. General aviation,
    commercial carriers, and other groups
    use this navigation capability for en
    route navigation and approach
    operations into airports.

             Runway Visual Range (RVR) -        $2.80 $42.50 FY 98 Beyond N/A N/A
              Replacement/Establishment:                           FY 09
             Replaces aging, maintenance-
    intensive, and difficult-to-support RVR
    legacy systems. Pilots receive critical
    meteorological visibility data that are
         used to decide whether it is safe to
                         take
    off or land when visibility is limited.

          Sustain Distance Measuring    $1.20 $13.90 FY 99 Beyond August 2003 N/A
    Equipment (DME): Replaces older                     FY 09
         DME, which is difficult and
                 expensive to
         maintain because replacement
                    parts
         are largely unavailable, and
                   provides
        current technology electronics
                      to
            improve operations and
                  facilities
                 performance.

              Long Range Radars (LRR)         $1.00   $20.20 FY 00  FY 09 N/A N/A
            Improvements -Infrastructure
          Upgrades: Sustains and improves
    LRRs, many of which are over 50 years
        old, and require upgrades to prevent
           outages and reduce maintenance
                       costs.

             Runway Incursion Reduction        $1.40  $35.40 FY 99 Beyond N/A N/A
           Program (RIRP) -ATDP: Provides                          FY 09
             research, development, and
    operational evaluation of technologies
              to improve runway safety.

    Appendix II Information on the 39 Additional Systems under the ATC Modernization
                                        Program

                             (Continued From Previous Page)

    Dollars in millions

                                                     1st initial
                                                      operating  Last initial
                                                     capability/  operating
           Appropriated    Appropriated      Last    operational  capability/
                                             year
                                        1st           readiness
           funding for 1st      funding year funding              operational

    Program/ system description year through FY 04 funded planned date
    readiness date

    Automatic Dependent Surveillance-$3.50 $14.30 FY 99 FY 09 N/A N/A
    Broadcast (ADS-B): Broadcasts
    derived aircraft position data from an
    onboard navigation system such as
    global navigation satellite system
    thereby allowing pilots and air traffic
    controllers to "see" location of nearby
    aircraft and engage in collaborative
    decisionmaking.

        Next Generation Weather Radar  $2.00 $32.90 FY 98 FY 06 February 2000 N/A
    (NEXRAD) Open Systems Upgrades:
             Detects, processes,
              distributes, and
    displays hazardous and routine
         weather information on air
                   traffic
            controller consoles.

    Terminal Doppler Weather Radar (TDWR) - Service Life Extension Program
    (SLEP): Maintains the current level of service until 2020 and improves
    deteriorating system reliability. The service provides air traffic
    controllers with reports of hazardous windshear and other severe weather
    in and near an airport's terminal approach and departure zone at
    higher-density airports with high occurrences of thunderstorms.

    $3.30 $3.30 FY 03 FY 09	September N/A 2004

         Corridor Integrated Weather System    $5.00   $9.10 FY 02 Beyond N/A N/A
    (CIWS): Will improve airspace capacity                      FY 09
         during adverse weather in congested
          airspace. The key approach is to
    provide accurate and timely prediction
           of hazardous weather activity.

    Source: GAO presentation of FAA data.

    aTerminal Automation Modernization and Replacement program is intended to
    replace aging automation and display systems at the Nation's terminal air
    traffic control facilities.

    bThe VSCS tech refresh does not have a baseline; an investment analysis is
    pending.

    cThe April 1995 operational readiness data (ORD) is under the original
    contract, while the new contract will be in effect in fiscal year 2006.
    Additional systems added in appropriations may affect the last ORD.

    Appendix III

                           Objectives, Scope, and Methodology

    We examined (1) FAA's experience in meeting cost, schedule, and/or
    performance targets for major system acquisitions under its ATC
    modernization program, (2) the steps FAA has taken to address longstanding
    challenges with the ATC modernization program and additional steps that
    are needed, and (3) the potential effects of the constrained budget
    environment on FAA's ability to modernize the ATC system.

    To address the first objective, we selected 16 of the 55 system
    acquisitions in the ATC modernization program to review in detail.1 We
    selected these 16 systems in July 2004, when this review was still a part
    of our broader work on FAA's efforts to modernize the National Airspace
    System (NAS).2 Specifically, we selected the 16 ATC system acquisitions
    with the largest life-cycle costs that met the following criteria: each
    system had cost, schedule, and/or performance targets, was discussed in
    our prior and Department of Transportation Inspector General reports, had
    not been fully implemented or deployed by 2004, and received funding in
    2004. We reviewed this list with FAA officials to ensure that we did not
    exclude any significant system.3 (See app. I for additional information on
    these 16 systems.) FAA does not have a formal definition of major systems
    under its Acquisition Management System; however, agency officials told us
    that if a system acquisition has a formally approved baseline, we could
    consider it "major." Using this definition, we determined that 25 of the
    55 system acquisitions under the ATC modernization program are major. The
    remaining 30 system acquisitions are generally what FAA refers to as
    buy-itby-the-pound systems that are commercially available and ready to
    use without modification, such as those to replace a system that has
    reached the end of its useful life.

    For fiscal year 2005, the 55 systems accounted for about 55 percent of
    FAA's facilities and equipment (F&E) budget, or $1.38 billion of the $2.52
    billion appropriated for the F&E budget. The 16 major systems accounted
    for 36 percent ($917.3 million), and the other 39 system acquisitions
    accounted for about 19 percent ($460 million). The remaining 45 percent of

    1According to FAA officials, the number of system acquisitions in the ATC
    modernization program can vary annually, when Congress earmarks funds for
    a specific system acquisition. As of March 2005, the number of system
    acquisitions under the program was 55.

    2Our review of FAA's NAS modernization efforts will be issued later this
    year.

    3To make the report as current as possible, we have used fiscal year 2005
    funding levels where appropriate, including the status sheets for each of
    the 16 systems in appendix I.

    Appendix IIIObjectives, Scope, and Methodology

    the F&E budget will be spent on facilities, mission support, and
    personnelrelated activities ($1.14 billion).

    To assess the 16 major system acquisitions, we relied largely on data
    collected from FAA and contracting officials for two engagements we issued
    in November 2004 on FAA's acquisition and certification processes.4 In
    turn, we updated this information and collected data on the remaining 39
    systems under the modernization program, primarily through interviews with
    FAA officials and analyses of the data they provided, including key
    acquisition documents. (See app. II for additional information on these 39
    system acquisitions.) In addition, we reviewed our past reports and those
    of the Department of Transportation's Inspector General. Furthermore, we
    interviewed FAA officials within the recently created ATO and collected
    and analyzed the documents they provided. We also interviewed officials
    with the Aircraft Owners and Pilots Association, Air Transport
    Association, Department of Defense, National Air Traffic Controllers
    Association, and RTCA.5 Furthermore, we convened a panel of international
    aviation experts6 to obtain their views on, among other things, the
    factors that have affected the cost, schedule, and/or performance of FAA's
    ATC modernization program.

    In addition, we assessed the reliability of FAA's cost and schedule
    estimates. Through interviews with FAA officials about their data system
    and quality controls, we determined that the cost and schedule estimates
    were appropriate for use in our report. Specifically, the estimates are
    sufficiently authoritative, appropriate, and reliable to allow us to use
    them without conducting any further assessment. The estimates appear to be
    based on reasonable assumptions. Our review did not focus on FAA's efforts
    to modernize its facilities.

    4GAO, Air Traffic Control: FAA Needs to Ensure Better Coordination When
    Approving Air Traffic Control Systems, GAO-05-11 (Washington, D.C.: Nov.
    17, 2004); GAO, Air Traffic Control: FAA's Acquisition Management Has
    Improved, but Policies and Oversight Need Strengthening to Help Ensure
    Results, GAO-05-23 (Washington, D.C.: Nov. 12, 2004).

    5Organized in 1935 and once called the Radio Technical Commission for
    Aeronautics, RTCA is today known just by its acronym. RTCA is a private,
    not-for-profit corporation that develops consensus-based performance
    standards for ATC systems. RTCA serves as a federal advisory committee,
    and its recommendations are the basis for a number of FAA's policy,
    program, and regulatory decisions.

    6GAO, Experts' Views on Improving the U.S. Air Traffic Control
    Modernization Program, GAO-05-333SP (Washington, D.C.: April 2005).

    Appendix IIIObjectives, Scope, and Methodology

    To address the second objective, we interviewed FAA officials, primarily
    within the recently created ATO, and collected and analyzed the documents
    they provided. We also interviewed officials with the Aircraft Owners and
    Pilots Association, Air Transport Association, Department of Defense,
    National Air Traffic Controllers Association, and RTCA.

    We also reviewed past GAO reports and those of the Department of
    Transportation's Inspector General. In addition, we obtained the views of
    the international aviation experts who participated in our panel on what
    steps the ATO could take in the short term to address the factors that
    have affected the cost, schedule, and/or performance of FAA's ATC
    modernization program.

    To address the third objective, we interviewed officials within FAA's ATO
    and obtained and analyzed data on FAA's capital investments and annual
    budgets. We also interviewed officials with other organizations cited
    above. In addition, we obtained the views of the international aviation
    panelists on how federal budget constraints have affected ATC
    modernization and what steps the ATO could take in the short term to
    address these constraints. We conducted our review from November 2004
    through May 2005 in accordance with generally accepted government auditing
    standards.

    Appendix IV

                         GAO Contact and Staff Acknowledgments

    GAO Contact Gerald L. Dillingham, Ph.D. (202) 512-2834

    Staff 	In addition to the person named above, Beverly L. Norwood, Tamera
    Dorland, Seth Dykes, Elizabeth Eisenstadt, Brandon Haller, Bert Japikse,

    Acknowledgments Maren McAvoy, and Ed Menoche made key contributions to
    this report.

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