Air Traffic Control Modernization: Status of the Current Program 
and Planning for the Next Generation Air Transportation System	 
(21-JUN-06, GAO-06-653T).					 
                                                                 
The Federal Aviation Administration's (FAA) effort to modernize  
the nation's air traffic control (ATC) system has been listed by 
GAO as a high risk program for more than a decade now, due to	 
systemic management and acquisition problems. Two relatively new 
organizations housed within FAA--the Air Traffic Organization	 
(ATO) and the Joint Planning and Development Office (JPDO)--have 
been given the bulk of the responsibility for planning and	 
implementing these modernization efforts. Congress created ATO to
be a performance-based organization that would improve the	 
culture, structure, and processes and improve accountability in  
the ATC modernization program. Congress created JPDO, made up of 
seven partner agencies, to coordinate the federal and nonfederal 
stakeholders necessary to plan a transition from the current air 
transportation system to the "next generation air transportation 
system" (NGATS). This testimony is based on GAO's recently	 
completed and ongoing studies of the ATC modernization program.  
GAO provides information on (1) the status of ATO's efforts to	 
implement processes and other initiatives aimed at efficiently	 
managing and modernizing the current ATC system and (2) the	 
status of JPDO's planning efforts and the key challenges that	 
JPDO faces in planning for NGATS.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-653T					        
    ACCNO:   A55799						        
  TITLE:     Air Traffic Control Modernization: Status of the Current 
Program and Planning for the Next Generation Air Transportation  
System								 
     DATE:   06/21/2006 
  SUBJECT:   Air traffic control systems			 
	     Air transportation 				 
	     Enterprise architecture				 
	     Interagency relations				 
	     Performance measures				 
	     Procurement planning				 
	     Strategic planning 				 
	     Technology modernization programs			 
	     Cost estimates					 
	     Next Generation Air Transportation 		 
	     System						 
                                                                 

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GAO-06-653T

     

     * Background
     * ATO Has Made Significant Progress Toward More Efficiently Ma
          * ATO Has Implemented Organizational and Business Process Chan
          * ATO Has Increased Scrutiny of Its Investment Decisions
          * FAA Met Its Acquisition Performance Goal for the Second Cons
          * ATO Is Reviewing Its Infrastructure and Operations for Cost
          * ATO Faces Human Capital Challenges in Institutionalizing Its
          * FAA Faces Challenges in Ensuring Stakeholder Involvement in
          * FAA Faces Challenges in Keeping Acquisitions on Schedule and
     * JPDO Has Made Progress in Planning for NGATS, but Faces Chal
          * JPDO Is Working to Facilitate Collaboration among Federal Ag
          * JPDO Is Working to Develop a Cost Estimate for NGATS
          * JPDO Is Taking a Reasonable Approach to Technical Planning,
          * Maintaining Stakeholder Support Will Be a Long-Term Challeng
          * As NGATS Moves Toward Implementation, Defining Roles and Res
          * JPDO Must Address a Variety of Policy Issues
     * Concluding Observations
     * Contact and Staff Acknowledgments
          * Order by Mail or Phone

Testimony

Before the Subcommittee on Aviation, Committee on Transportation and
Infrastructure, House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 2:00 p.m. EDT

Wednesday, June 21, 2006

AIR TRAFFIC CONTROL MODERNIZATION

Status of the Current Program and Planning for the Next Generation Air
Transportation System

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

GAO-06-653T

Mr. Chairman and Members of the Subcommittee:

We appreciate the opportunity to participate in today's hearing to discuss
the status of efforts by the Air Traffic Organization (ATO) and the Joint
Planning and Development Office (JPDO) to modernize and transform the
nation's air traffic control (ATC) system. Both organizations are within
the Federal Aviation Administration (FAA) and represent recent efforts by
Congress to, among others things, ensure a national airspace system that
is safe, efficient, and capable of meeting a growing demand for air
transportation-a demand that is expected to triple by 2025. ATO has
responsibility for operating, maintaining, and modernizing the current ATC
system. ATO was authorized as a performance-based organization (PBO)1 in
2000 and includes 36,000 of FAA's roughly 46,000 employees. JPDO,
authorized in 2003, is responsible for planning and coordinating the
broader and longer-term transformation (through 2025) to the "next
generation air transportation system" (NGATS). JPDO is conducting its work
with the assistance of seven partner agencies: the Departments of
Commerce, Defense, Homeland Security, and Transportation; FAA; the
National Aeronautics and Space Administration (NASA); and the White House
Office of Science and Technology Policy.

In 1981, FAA began a program to replace and upgrade ATC facilities and
equipment, but encountered chronic cost, schedule, and performance
problems, leading us to classify FAA's ATC modernization program as high
risk in 1995.2 We have issued a series of reports on these problems and
made numerous recommendations over the years. Our reports focused on many
aspects of the national airspace system, including the management of
modernization projects; the management of the information technology that
is at the heart of many modern ATC systems; the challenges FAA faces in
increasing system capacity and reducing delays; and an acquisition
workforce culture that lacked the mission focus, accountability,
coordination, and adaptability needed for FAA to meet its cost, schedule,
and performance targets. FAA has implemented many of our recommendations
to varying degrees.

1PBOs are discrete units, led by a Chief Operating Officer, that commit to
clear objectives, specific measurable goals, customer service standards,
and targets for improved performance.

2ATC Modernization has remained on our high-risk list since 1995. See GAO,
High Risk Series: An Update, GAO-05-207  (Washington, D.C.: January 2005).

System modernization, as envisioned in NGATS and being planned by JPDO,
will be costly and will have to compete with other national priorities and
demands for resources. ATO will be especially challenged to maintain the
current ATC system while simultaneously developing and transitioning to
the future system. These tasks will require ATO to make the best and most
efficient use of increasingly scarce resources. Additionally, the
transition also involves the recognition that other nations are upgrading
their aviation systems, creating a need for global harmonization to
support international travel and commerce.

My statement today focuses on two key questions. (1) What is the status of
ATO's efforts to implement processes and other initiatives aimed at
efficiently managing and modernizing the current ATC system? (2) What is
the status of JPDO's planning efforts, and what are the key challenges
that JPDO faces in planning for NGATS? My statement is based on our
recently completed and ongoing studies of FAA's ATC modernization program,
together with updated information from ATO and JPDO officials and aviation
stakeholders.3 Later this year, we expect to issue two detailed reports
related to the issues discussed in this statement. One report will provide
our assessment of the status of JPDO's efforts to plan for the development
of NGATS. Another report will examine financial management issues at FAA,
including options for cost savings and alternative funding mechanisms. We
are performing our work in accordance with generally accepted government
auditing standards.

The following is a summary of our findings to date:

           o  ATO has made significant progress toward the efficient
           management of the nation's ATC system, but faces several
           challenges. ATO has implemented organizational and business
           process changes to improve management of the ATC modernization
           program. ATO has taken several steps to increase its scrutiny of
           its acquisition decisions, in part by ensuring executive-level
           oversight of key decisions and improving understanding of system
           requirements to avoid delays and cost overruns. ATO has met its
           acquisition performance goal for the second consecutive year-that
           is, 80 percent of its system acquisitions are on schedule and
           within 10 percent of budget. ATO has identified cost savings
           opportunities through consolidation of administrative activities
           and outsourcing. However, ATO faces several challenges, including
           sustaining and institutionalizing ATO's progress toward operating
           effectively as a performance-based organization, hiring and
           training thousands of air traffic controllers, ensuring
           stakeholder involvement in major system acquisitions, and keeping
           acquisitions on schedule and within budget.
           o  JPDO is making progress in its planning for NGATS, but faces
           several challenges. JPDO is implementing a number of practices
           that our work has shown facilitates the federal interagency
           collaboration that is central to its mission and legislative
           mandate. However, JPDO is fundamentally a planning and
           coordinating body that lacks authority over the key human and
           technological resources needed to continue developing plans and
           system requirements for NGATS. Thus, a challenge may arise in
           leveraging the resources of the partner agencies-agencies with a
           variety of missions and priorities other than supporting NGATS.
           For example, NASA has reduced its aeronautics budget, raising
           questions about how the research and development efforts necessary
           for NGATS will be completed. As part of its planning, JPDO is
           working to develop a cost estimate for NGATS through a series of
           workshops with various stakeholders. JPDO has taken several
           important first steps and is following effective practices in
           developing an NGATS enterprise architecture-a blueprint for NGATS
           and one of the most critical planning documents in the NGATS
           effort. In addition to the challenge of leveraging resources noted
           above, JPDO faces several other challenges, including maintaining
           stakeholder support over the long term, defining roles and
           responsibilities and deciding how to coordinate the implementation
           of NGATS, and addressing several critical policy issues, such as
           the extent to which NGATS will accommodate visual flights versus
           instrument-only flights.

           The ATC system is composed of an array of largely ground-based
           subsystems, including radars; automated data-processing,
           navigation, and communications equipment; and ATC facilities.
           These subsystems work together to support all phases of flight for
           aircraft operating in U.S. airspace. The ATC system also includes
           the FAA employees who manage, operate, and maintain ATC equipment
           and facilities.

           In 1995, based on the premise that FAA would be better able to
           manage the ATC modernization if it were not constrained by federal
           personnel and acquisition laws, Congress passed legislation that
           exempted FAA from most federal personnel and acquisition laws and
           regulations.4 In December 2000, President Clinton signed an
           executive order and a few months later Congress passed supporting
           legislation that, together, provided FAA with the authority to
           create ATO as a PBO to control and improve FAA's management of the
           modernization effort. In February 2004, FAA reorganized,
           transferring 36,000 employees (most of who worked in air traffic
           services and research and acquisitions) to ATO. (See fig. 1.)

3Because ATO includes the majority of FAA employees, this statement will
refer to ATO initiatives, even though some may apply FAA-wide.

                                   Background

4Pub. L. No. 104-50, Fiscal Year 1996 Department of Transportation
Appropriations Act.

Figure 1. Prior and Current Structure of Research and Acquistions and Air
Traffic Services, and Free Flight Organizations

In late 2003, recognizing that the current approach to managing air
transportation is becoming increasingly inefficient and operationally
obsolete, Congress created JPDO5 to plan NGATS, a system intended to
accommodate what is expected to be three times more air traffic by 2025
than there is today. JPDO's scope is broader than traditional ATC
modernization in that it is "airport curb to airport curb," encompassing
such issues as security screening and environmental concerns.
Additionally, JPDO's approach will require unprecedented collaboration and
consensus among many stakeholders-federal and nonfederal-about necessary
system capabilities, equipment, procedures, and regulations. Each of
JPDO's partner agencies will play a role in creating NGATS. For example,
the Department of Defense has deployed "network centric" systems,6
originally developed for the battlefield, that are being considered as a
framework to provide all users of the national airspace system-FAA and the
Departments of Defense and Homeland Security-with a common view of that
system. To incorporate the expertise and views of nonfederal stakeholders,
the NGATS Institute was created by an agreement between the National
Center for Advanced Technologies and FAA.

JPDO began its initial operations in early 2004. A Senior Policy
Committee, chaired by the Secretary of Transportation and including senior
representatives from each of the participating departments and agencies,
provides oversight to JPDO. JPDO is located within FAA and reports to the
FAA Administrator and to the Chief Operating Officer within ATO. (See
figure 2.)

5Pub. L. No. 108-176, Vision 100-Century of Aviation Reauthorization Act,
December 12, 2003.

6Network centric operations aim to exploit technical advances in
information technology and telecommunications to improve situational
awareness and the speed of decision making.

Figure 2: Organizational Chart of JPDO

     ATO Has Made Significant Progress Toward More Efficiently Managing ATC
                      Modernization, but Challenges Remain

ATO has implemented organizational and business process changes to improve
management of the ATC modernization program. ATO has taken several steps
to increase its scrutiny of its acquisition decisions and has met its
acquisition performance goal for the second consecutive year. ATO has
identified cost savings opportunities through consolidation of
administrative activities and outsourcing. However, ATO faces several
challenges, including sustaining and institutionalizing ATO's progress
toward operating effectively as a performance-based organization, hiring
and training thousands of air traffic controllers, ensuring stakeholder
involvement in major system acquisitions, and keeping acquisitions on
schedule and within budget.

ATO Has Implemented Organizational and Business Process Changes to Improve
Management of the ATC Modernization Program

In our past work, we noted that FAA's acquisitions workforce operated in
an environment where accountability was not well defined or enforced and
vertical lines of authority impaired productivity, communication, and
decision-making across the organization. Our recent studies have shown
that ATO is taking steps to break down those vertical lines of authority
and organizational "stovepipes." ATO has become a flatter organization,
with fewer management layers. Additionally, the Chief Operating Officer
(COO), who heads ATO, is holding ATO's vice presidents collectively
accountable for the organization's success, in addition to their areas of
specific responsibility. The COO conducts daily meetings with the managers
of ATO's departments to review operations. According to the COO, these
meetings have provided a more holistic perspective on the organization
since, formally, some managers were only focused on and responsible for
their own departments.

ATO is also in the early stages of involving the line staff in the efforts
aimed at increasing organizational effectiveness and efficiency. For
example, ATO surveyed the workforce to determine the extent to which
employees and managers believe the organization exhibits managerial
accountability, customer focus, and transformational leadership. The first
survey established a baseline against which ATO plans to measure progress
through future annual surveys. By analyzing the results, ATO expects to
determine the underlying assumptions that drive employee behavior and
decide where to target efforts for change. According to an ATO official,
such a root-cause level of analysis has never been done before in FAA. FAA
is also undertaking an initiative that includes creating a training
framework and measures for the effectiveness of that training. These
initiatives mirror effective human capital practices that we have
identified in previous reports.

In addition to organizational efforts, ATO is moving forward with an
improvement to its business processes with the development of a cost
accounting system, which will eventually be implemented throughout FAA to
improve its financial management. Ultimately, ATO plans to routinely
incorporate the cost information generated by the cost accounting system
into its investment 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 the
agency's major ATC system acquisitions. This type of information can be
used to improve future cost estimates for these acquisitions.

In another change to its business processes, FAA has stated that its
management will provide additional information to decision makers to
better illustrate the rationale behind its budget requests. This
information is helpful to decision makers when budget constraints do not
allow all system acquisitions to be fully funded at their planned and
approved levels, leaving FAA to decide which programs to fund and which to
cut, according to its priorities. Those that are cut may fall behind
schedule, requiring FAA to continue operating and maintaining the older
equipment and possibly delaying the realization of benefits from the new
system. To address this issue, we recommended that FAA identify and
annually report on programs that have had funding deferred, reduced, or
eliminated, and the impact of those decisions on ATC modernization.7 Such
information would make clear how constrained budgets will affect
modernization of the national airspace system and how FAA is working to
live within its means. In its formal written response to our
recommendation, FAA stated its intent to better inform Congress in the
future by providing information in its capital investment plan, submitted
to Congress annually with the President's Budget, that will identify
changes from the preceding year. We have not yet verified whether FAA's
action fully responds to our recommendation.

ATO Has Increased Scrutiny of Its Investment Decisions

ATO has taken several steps to increase its scrutiny of its acquisition
decisions, both with initial investment decisions and as part of
acquisition oversight. Since 2004, the ATO executive council has been
reviewing the mission need and readiness for decisions for all proposed
investments. Furthermore, to ensure executive-level oversight of all key
decisions, FAA plans to incorporate key decision points in a
knowledge-based product development process by June 2006, as we have
recommended; however, we have not yet independently assessed the
sufficiency of this change. FAA has also issued guidance on how to develop
and use investment pricing, including guidelines for disclosing the levels
of uncertainty and imprecision that are inherent in cost estimates for
major ATC systems.

7GAO, The National Airspace System: FAA Has Made Progress but Continues to
Face Challenges in Acquiring Major Air Traffic Control Systems, GAO-05-331
(Washington, D.C.: June 10, 2005).

To improve its understanding of system requirements, FAA has developed a
software acquisition process improvement model.8 When a system's
requirements are not fully understood at the start of an acquisition,
requirements must often be redefined or unplanned work performed, which
takes time and can be costly. In addition, unplanned work may occur when
the agency misjudges the extent to which a commercial-off-the-shelf or
nondevelopmental item, such as one procured by another agency, will meet
the agency's needs. To address these issues, FAA has developed and applied
a process improvement model that assesses the maturity of FAA's software
and systems capabilities. As we reported, this approach has resulted in
enhanced productivity, higher quality, greater ability to predict
schedules and resources, better morale, and improved communication and
teamwork.9 However, FAA did not mandate the use of the model throughout
the organization. In response to our recommendation that FAA
institutionalize the model's use throughout the organization, FAA has
begun developing a requirement that acquisition projects have process
improvement activities in place before seeking approval from FAA's
investment review board.

With regard to acquisition investment oversight, ATO has increased the use
of an earned value approach to program oversight.10 In fiscal year 2000,
only 4 programs used an earned value approach, compared to 19 major active
programs in fiscal year 2006. Going forward, all new acquisitions will use
an earned value approach. ATO has also conducted business case reviews for
facilities and equipment- and operations-funded programs. Based on these
reviews, ATO terminated funding for three projects. One was cancelled
because the prototype lacked demonstrable benefits, another due to a poor
business case, and the third due to weaknesses in its business case as
well as schedule and performance issues.11

8FAA's process improvement model, titled "Integrated Capability Maturity
Model," is a tool to assess the maturity of the agency's software
acquisition capabilities.

9GAO, Air Traffic Control: System Management Capabilities Improved, but
More Can Be Done to Institutionalize Improvements, GAO-04-901 
(Washington, D.C.: Aug. 20, 2004).

10An earned valued management system measures performance by comparing the
value of work accomplished with work scheduled and thereby provides early
warning of schedule delays and cost overruns.

Additionally, FAA has implemented, or is in the process of implementing, a
number of recommendations that we have made to improve acquisition
investment management. For example, FAA is now considering all information
technology investments as a complete portfolio. In 2004, we pointed out
that FAA was not evaluating projects beyond the first 2 years of service
to ensure alignment with organizational goals.12 Consequently, the agency
could not ensure that projects with a longer service history (which at the
time totaled about $1.3 billion per year) were still aligned with FAA's
strategic plans and business goals and objectives. We recommended that FAA
include these projects in its investment portfolio management for review.
In response to this and other recommendations we have made, FAA is making
revisions to its Acquisition Management System. FAA has modified its
Acquisition Management Policy to require periodic monitoring of in-service
systems to collect and analyze performance data to use as the basis for
sustained deployment. In a similar vein, ATO has committed to basing
future funding decisions for system acquisitions on their contribution to
reducing the agency's operating costs while maintaining safety. ATO is
also requiring that acquisition planning documents be prepared in a format
consistent with that prescribed by the Office of Management and Budget for
use in justifying all major capital investments.

11The Medium Intensity Airport Weather System (MIAWS), intended to provide
a real time display of storm positions and estimated storm tracks, was
terminated for lack of demonstrable benefit. The Mode Select (Mode S)
program, intended to provide enhanced radar surveillance information, was
terminated due to a poor business case. The Asset and Supply Chain
Management Program, intended to assist in asset and logistics management,
was terminated due to business case weaknesses and schedule and
performance issues.

12GAO, 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).

FAA Met Its Acquisition Performance Goal for the Second Consecutive Year, but
Use of Revised Milestones Does Not Provide Consistent Benchmarks

FAA has met its acquisitions performance goal 2 years in a row. The goal
for fiscal years 2004 and 2005 was to have 80 percent of its system
acquisitions on schedule and within 10 percent of budget. The goal
gradually increases to 90 percent by fiscal year 2008. The increase will
make FAA's acquisition performance goal consistent with targets set in the
Department of Transportation's strategic plan and will comply with the
Federal Acquisition Streamlining Act of 1994.13

Having such a goal is also consistent with the President's Management
Agenda, which calls for a commitment to achieve immediate, concrete, and
measurable results in the near term, and meeting this goal shows progress
toward better acquisition management. However, because the milestones for
certain acquisitions have changed over the years to reflect changes in
cost and schedule, using those revised milestones may not provide a
complete picture of the acquisition's progress over time. For example, the
milestones for 3 of the 16 major system acquisitions that we reviewed in
detail during 2004 and 2005 were being revised to reflect cost or schedule
changes during 2005. These revised milestones, together with revised
targets for meeting them, will become the new milestones for fiscal year
2006. While revising milestones and targets that are no longer valid is an
appropriate management action, using revised targets for measuring
performance does not provide a consistent benchmark over time. The extent
to which an acquisition meets its annual performance targets is one
measure of its performance and should be viewed together with other
measures, such as its progress against original and revised baselines. The
variance reports provided to the FAA Administrator and to Congress may
also be useful in evaluating an acquisition's performance.14

Since fiscal year 2003, the number of acquisition programs measured by FAA
has varied from 31 to 42. According to FAA, the number varies from year to
year, in part, because some programs reach completion and others are
initiated. The programs that are selected each fiscal year represent a
cross section of ATO programs, including investments in new capabilities
and others that are ready for use without modification. FAA's Portfolio of
Goals, which provides supplementary information on the agency's
performance goals, asserts that no bias exists in the selection of
milestones for performance review, but does not state the basis for this
conclusion. The portfolio also states that the milestones selected
represent the program office's determination of the efforts that are
"critical" or important enough to warrant inclusion in the acquisition
performance goal for the year. However, we have not conducted a detailed
examination of the reliability and validity of FAA's metrics for its
acquisition program performance.

13Pub. L. No. 103-355.

14According to FAA, the agency tracks acquisition program performance from
its original baseline or any subsequently approved baselines approved by
the Joint Resource Council and reports variances to the Administrator and
to Congress as required.

ATO Is Reviewing Its Infrastructure and Operations for Cost Savings, but Lacks
Consistent Processes for Determining Savings

ATO is seeking cost savings by reviewing its operations and
infrastructure. It has begun to decommission ground-based navigational
aids, such as compass locators, outer markers and nondirectional radio
beacons, as it begins to transition to a satellite-based navigation
system. In fiscal year 2005, ATO decommissioned 177 navigational aids,
claiming a savings of $2.9 million. In addition to the savings generated
from decommissioning, one expert with whom we spoke noted that these sites
could be converted to revenue-generating uses, such as leasing the sites
for warehouses or cell phone towers. ATO also expects to reduce costs
through streamlining its operations. For example, it is consolidating its
administrative activities, currently decentralized across its nine
regions, into three regions, and anticipates an annual savings of up to
$460 million over the next 10 years. Our work analyzing international air
navigation service providers has shown that additional cost savings may be
possible by further consolidating ATC facilities such as terminal radar
approach control (TRACON) facilities and air traffic control centers.
According to one estimate, consolidating the existing 21 air route traffic
control centers into 6 centers could save approximately $600 million per
year.

ATO also expects to reduce costs through outsourcing. For example, it
reduced costs by outsourcing its automated flight service stations to a
private contractor and expects to achieve savings of $1.7 billion over ten
years. Additionally, $0.5 billion in savings are expected to be realized
by staffing reductions of 400 that occurred between the time the
outsourcing began and the new contract was actually implemented. The
agency expects to receive $66 million-the first installment of these cost
savings-in fiscal year 2007.

However, we have found that ATO lacks a consistent process for identifying
the costs and benefits associated with some of its cost control efforts.
For example, ATO did not offset its reported savings from decommissioning
navigational aids with the costs likely to accompany such activities, such
as real property disposition (including buildings or real property leases,
standby power systems, and fuel storage tanks), site cleanup, and
restoration. Without a transparent and verifiable process for determining
the savings, as well as the offsetting costs, the true savings remain
unclear. As ATO proceeds with these efforts, stakeholders also caution
that decommissioning navigational aids should entail comprehensive risk
mitigation to ensure that ATO retains adequate safety levels.

However, while facility consolidations could offer additional savings, an
FAA official noted that there are practical limits to these efforts. For
example, consolidated facilities would need to handle higher volumes of
communication, but as the volume of communication increases, so does
"latency"-the delay in transmission that occurs between sending and
receiving messages. According to FAA, studies of telecommunications
centers in the private sector suggest that 15 facilities that combine the
approximately 180 existing en route and oceanic air traffic control
centers and terminal radar approach control facilities might be
appropriate. Security concerns, such as the need for redundancy, also come
into play in consolidation decisions. Consequently, if FAA decides to
procede with facility closures, it is important that it do so within the
context of a logical, well-documented, and risk-based process in
consultation with congressional oversight committees.

ATO Faces Human Capital Challenges in Institutionalizing Its Performance-based
Organization and Hiring and Training Thousands of Air Traffic Controllers

ATO faces a challenge in sustaining and institutionalizing its efforts to
operate as a PBO. Our work has shown that successful transformations and
the institutionalization of change in large public and private
organizations can take 5 to 7 years or more to fully implement.15
Long-term, high-level management attention will be needed to assess ATO's
transformation on a continuing basis.

FAA also faces the challenge of hiring and training thousands of air
traffic controllers during the coming decade. According to its controller
staffing plan, FAA expects to lose about 11,000 air traffic controllers
due to voluntary retirements or mandatory retirements at age 56, as well
as other reasons.16 These retirements stem from the 1981 controller
strike, when President Ronald Reagan fired over 10,000 air traffic
controllers, and FAA then had to quickly rebuild the controller workforce.
From 1982 through 1991, FAA hired an average of 2,655 controllers per
year. These controllers will become eligible for retirement during the
next decade.

15 GAO-03-669 .

16Federal Aviation Administration, A Plan for the Future: The Federal
Aviation Administration's 10-Year Strategy for the Air Traffic Control
Workforce (Dec. 21, 2004).

To replace these controllers, as well as those who will leave for other
reasons, and to accommodate forecasted changes in air traffic, FAA plans
to issue annual air traffic controller staffing plans based on the
agency's air traffic forecast. FAA's December 2004 Air Traffic Controller
Work Force Plan called for hiring 12,500 new controllers over 10 years,
based on the agency's 2004 air traffic forecast.17 FAA informed us that
its 2006 staffing plan update, which it expects to issue shortly, will
reflect the need to hire fewer controllers over the next few years,
compared to the 2004 plan, because FAA's 2006 air traffic forecast
predicts less air traffic during this time frame. In fiscal year 2005, FAA
hired 438 controllers-three more than its target, which was constrained
that year due to budget considerations. According to an FAA official, FAA
plans to hire 930 controllers in fiscal year 2006 (FAA had hired 637
controllers through May 2006).

FAA Faces Challenges in Ensuring Stakeholder Involvement in Major System
Acquisitions

Adequately involving stakeholders in a system's development is important
to ensure that the system meets users' needs. In the past, air traffic
controllers were permanently assigned to FAA's major system acquisition
program offices and provided input into air traffic control modernization
projects. In June 2005, FAA terminated this arrangement because of budget
constraints and other reasons. According to FAA, it now plans to obtain
the subject-matter expertise of air traffic controllers or other
stakeholders as needed in major system acquisitions. It remains to be seen
whether this approach will suffice for stakeholder involvement. Our past
work has indicated that a lack of stakeholder involvement both early on
and throughout a system's development was a systemic factor contributing
to acquisitions missing their cost, schedule, and performance targets.

FAA Faces Challenges in Keeping Acquisitions on Schedule and within Budget

Three systems-all communications-related-missed their fiscal year 2005
acquisition performance goals for schedule. According to FAA, the $310
million FAA Telecommunications Infrastructure (FTI) acquisition, which is
replacing costly existing networks of separately managed systems and
services by integrating advanced telecommunications services, was behind
schedule because the program was unable to ramp up its activities to the
level specified in its plan. To complete the installations in the first
quarter of fiscal year 2008 as originally scheduled, FAA initiated a plan
to put the program back on schedule and has met the plan's milestones
since August 2005.

17According to FAA, since issuing its controller staffing plan, it has
achieved productivity gains that have reduced the need to hire about 460
air traffic controllers.

To the extent that delays in FTI persist, FAA will not accrue the full
extent of the $672 million in cost savings that the program was expected
to produce. The Department of Transportation's Office of the Inspector
General has reported that FAA did not realize $32.6 million in anticipated
operating cost savings in fiscal year 2005 because of the limited progress
made in disconnecting legacy circuits. The office also reported that
without a nearly tenfold increase in its rate of transferring service to
FTI and disconnecting legacy circuits, FAA stands to miss out on an
additional $102 million in cost savings in fiscal year 2006. FAA has
informed us that since the Inspector General made this assessment, the
program has achieved a significant increase in the rates of transferring
over services and disconnecting legacy circuits. As an alternative to
continuing the current FTI program, some experts have suggested that FAA
consider outsourcing this activity, as it did for its flight service
stations.18

Two other communications acquisition programs also missed their
acquisition performance goals for schedule in 2005-the $325 million Next
Generation Air-to-Ground Communication system, segment 1A, which replaces
analog communication systems with digital systems, and the $85 million
Ultra High Frequency Radio Replacement, which replaces aging equipment
used to communicate with Department of Defense aircraft. According to an
FAA official, as the agency assessed its priorities for fiscal year 2005,
a decision was made that these programs would receive fewer resources. The
resources that were then available were not sufficient to allow the
programs to meet established milestones.

In summary, ATO has made a number of promising moves toward operating
effectively as a PBO, and we view ATO's efforts to improve its management
and acquisitions processes as positive steps. However, ATO has been
established for only slightly more than 2 years. Work remains to ensure
that these processes become institutionalized and that continuing
challenges are addressed. Although it is still too early to evaluate the
effectiveness of many of these steps, we are monitoring ATO's progress.
Moving forward, ATO will play a key role in implementing NGATS, as planned
by JPDO. I will now discuss the status of JPDO's planning efforts.

18In February 2005, FAA awarded a contract for the operation of its flight
service stations.

 JPDO Has Made Progress in Planning for NGATS, but Faces Challenges in Several
                                     Areas

JPDO has implemented several effective practices to facilitate
collaboration among its partner agencies, but faces challenges in
continuing to leverage resources. JPDO is working to develop a cost
estimate for NGATS through a series of workshops with various
stakeholders. JPDO is taking a reasonable approach to technical planning,
but some key tasks are yet to be completed. However, JPDO faces several
challenges, including maintaining stakeholder support over the long term,
defining roles and responsibilities as well as deciding how to coordinate
the implementation of NGATS, and addressing several critical policy
issues.

JPDO Is Working to Facilitate Collaboration among Federal Agencies, but Faces
Challenges in Continuing to Leverage Resources

Our work to date shows that JPDO is implementing a number of practices
that our work has shown facilitates the federal interagency collaboration
that is central to its mission and legislative mandate. According to our
research, agencies must have a clear and compelling rationale for working
together to overcome significant differences in their missions, cultures,
and established ways of doing business. In developing JPDO's integrated
plan,19 the partner agencies agreed to a vision statement and eight
strategies that broadly address the goals and objectives for NGATS. These
strategies formed the basis for JPDO's eight integrated product teams
(IPT), and various partner agencies have taken the lead on specific
strategies. Our research has also shown that it is important for
collaborating agencies to leverage the human, technological, and physical
resources needed to initiate or sustain their collaborative effort. To
leverage human resources, JPDO has staffed the various levels of its
organization with partner-agency employees, many of whom work part time
for JPDO. To leverage technological resources, JPDO conducted an
interagency program review of its partner agencies' research and
development programs to identify work that could support NGATS. Through
this process, JPDO identified early opportunities that could be pursued
during fiscal year 2007 to produce tangible results for NGATS, such as the
Automatic Dependent Surveillance-Broadcast (ADS-B)20 program at FAA.

19The Vision 100 Act called for JPDO to create and carry out an integrated
plan for NGATS. This integrated plan was developed by the partner agencies
and submitted to Congress on December 12, 2004.

However, while JPDO's legislation, integrated plan, and governance
structure21 provide the framework for collaboration among multiple federal
agencies, JPDO is fundamentally a planning and coordinating body that
lacks authority over the key human and technological resources needed to
continue developing plans and system requirements for NGATS. Consequently,
the ability to continue leveraging resources of the partner agencies will
be critical to JPDO's success. Beginning around 2008, JPDO expects a
significant increase in its IPTs' workloads. JPDO officials told us that
although the partner agencies have not yet expressed concerns over the
time that their employees spend on JPDO work, it remains to be seen
whether agencies will be willing to allow their staff to devote more of
their time to JPDO. In addition, JPDO anticipates needing more agency
resources to plan and coordinate demonstrations of potential technologies
to illustrate some of the early benefits that could be achieved from the
transformation to NGATS.

This challenge of leveraging resources arises, in part, because the
partner agencies have a variety of missions and priorities other than
supporting NGATS. NASA, for example, while conducting key aeronautical and
safety research and development relevant to NGATS, nonetheless has other
competing missions. NASA has recently reduced its aeronautics budget and
plans to focus its efforts on foundational research.22 This decision
raises two important questions. First, what research needed for NGATS will
NASA perform or not perform? Second, for the foundational research that
will be performed, who will perform the development steps-the validation
and demonstration of new technology-that must take place before a new
technology can be transferred to industry and incorporated into a product?
JPDO and FAA officials told us that not enough is understood about what
NASA plans to do and not do and, therefore, the impact of NASA's action on
NGATS remains unclear at present.

20ADS-B is a surveillance technology that transmits an aircraft's
identity, position, velocity, and intent to other aircraft and to ATC
systems on the ground, thereby enabling pilots and controllers to have a
common picture of airspace and traffic. By providing pilots with a display
that shows the location of nearby aircraft, the system enables pilots to
collaborate in decision making with controllers, safely allowing reduced
aircraft separation and thereby increasing capacity within the national
airspace system.

21Some of JPDO's governance structure was determined by Vision 100, which
directed the Secretary of Transportation to establish a Senior Policy
Committee and set forth the membership of this committee. In addition,
JPDO has established a Board of Directors, a Master IPT, and several
divisions.

22NASA uses the term foundational to refer to research that explores core
science, but does so with a view toward how the research will be applied.

However, many experts with whom we spoke believe that NASA's new focus on
foundational research creates a gap in the technology development
continuum. Some believe that FAA has neither the research and development
infrastructure nor the funding to do this work. FAA's Research,
Engineering and Development Advisory Committee (REDAC),23 in a draft
report, estimates that FAA would need at least $100 million annually in
increased funding to perform this research and development work, and that
reestablishing the infrastructure within FAA to accomplish this work could
delay NGATS implementation by 5 years. An official of the working group
that produced the draft report stated that a significant amount of
research and development is needed to create NGATS. For example, the
official stated that more research is needed to understand wake vortex,
which could be a limiting factor in airspace capacity and would impact
aircraft sequencing for landing or departure.24 The official also stated
that intermediate-level technology development is important in
establishing "product proof," meaning that technology needs to be
validated, demonstrated, and certified before beginning the systems
acquisition process.

JPDO officials view leveraging partner agency resources as one of their
most significant near-term challenges. JPDO officials stated that they
feel the process has worked sufficiently well so far. For example, JPDO
successfully requested that FAA pursue funding in its fiscal year 2007
budget request to accelerate development of ADS-B and System Wide
Information Management (SWIM),25 which are two key systems identified for
NGATS. However, as noted, our past work on FAA's national airspace
modernization program has shown that receiving fewer resources than
planned was one factor that contributed to delays in implementing
technologies and significant cost increases. Thus, continuing success in
leveraging partner agencies' resources will help avoid program delays and
reduction in the benefits-to-cost ratio.

23FAA's Research, Engineering and Development Advisory Committee,
established in 1989, advises the FAA Administrator on research and
development issues and coordinates FAA's research, engineering, and
development activities with industry and other government agencies. The
committee considers aviation research needs in air traffic services,
airport technology, aircraft safety, aviation security, human factors, and
environment and energy.

24Wake vortex is air turbulence that occurs behind an aircraft and was a
cause in the 2001 American Airlines accident in which 265 people died.

25SWIM is expected to help in the transition to network-centric operations
by providing the infrastructure and associated policies and standards to
enable information sharing among all authorized system users, such as the
airlines, other government agencies, and the military.

To further leverage resources for NGATS, JPDO has issued guidance to its
partner agencies identifying areas that JPDO would like to see emphasized
in the agencies' fiscal year 2008 budget requests and expects to follow
this process annually in the years to come. JPDO officials have informed
us that they have held face-to-face discussions with partner agency
managers about the guidance and are currently in the process of reviewing
partner agency responses to the guidance and identifying whether gaps
exist. Such gaps will be presented to the Senior Policy Committee for
discussion at its July meeting, according to these officials.

JPDO is currently working with the Office of Management and Budget to
develop a systematic means of reviewing partner agency budget requests so
that the NGATS-related funding in each request is easily identified. This
includes a review of budgets submitted by the Department of Homeland
Security for efforts by the Transportation Security Administration and the
Department of Commerce for efforts by the National Oceanic and Atmospheric
Administration. Such a process would help the Office of Management and
Budget consider NGATS as a unified federal investment, rather than as
disparate line items distributed across several agencies' budget requests.

JPDO Is Working to Develop a Cost Estimate for NGATS

Important to the planning of NGATS is the development of realistic cost
estimates for the entire NGATS. To assist in developing such estimates,
JPDO is holding a series of investment analysis workshops with
stakeholders to obtain their input. The first workshop, held in April
2006, was for commercial and business aviation, equipment manufacturers,
and systems developers. The second workshop is planned for early July for
operators of lower performance aircraft used in both commercial and
non-commercial operations, including general aviation personal and
business flying, flight training, piston and turbine rotorcraft as well as
public users of the system including civil and military aircraft operated
by local, state, and federal governments. The third workshop, planned for
late July or early August, will focus on airports and other local, state,
and regional planning bodies. JPDO plans to use the combined information
from these three workshops to begin to develop a range of the potential
costs of NGATS.

Preliminary estimates of NGATS' cost, developed by REDAC and ATO, could
also provide input into JPDO's cost estimate. REDAC and ATO officials
emphasized that their estimates are preliminary and not yet endorsed by
any agency. A draft study by REDAC's Financing the NGATS Working Group
estimated that to implement NGATS and continue operating the national
airspace system through 2025, the combined costs of FAA's four
appropriation accounts-operations, facilities and equipment, research,
engineering and development-and grants-in-aid for airports (commonly known
as the Airport Improvement Program)-would average about $15 billion per
year, or about $900 million more than FAA's fiscal year 2006
appropriation. The estimate assumes that (1) the general fund contribution
will be 20 percent, using the current trust fund revenue model and (2)
between 2011 and 2025, productivity increases will offset the increased
operating costs of additional demand.26

ATO has developed a preliminary estimate of the increased facilities and
equipment cost that NGATS would require. ATO estimates that the cumulative
additional facilities and equipment cost between fiscal years 2006 and
2025 would be about $15.3 billion, or about $800 million per year, on
average, from fiscal year 2007 through 2025. According to an ATO official,
the ATO facilities and equipment cost estimate is the same as the
facilities and equipment component of REDAC's cost estimate. The only
difference is that ATO's estimate accounts for inflation, while REDAC
expresses its estimate in constant 2005 dollars.

In addition to being preliminary, it is important to note the limitations
of these estimates. First, ATO's estimate does not include any costs other
than those for facilities and equipment. However, an ATO official
acknowledged that there would likely be additional costs within FAA, such
as for safety certification or making operational changes to respond to
NGATS' new technologies. Additionally, ATO's facilities and equipment cost
estimate assumes that the intermediate technology development work, which
NASA has historically performed, has been completed. As I previously
stated, REDAC believes that the cost of intermediate technology
development could be substantial. Furthermore, neither estimate includes
other partner agencies' costs to implement NGATS, such as those that the
Department of Homeland Security might incur to develop and implement new
security procedures. Also, these estimates treat NGATS' development and
implementation period as an isolated event. Consequently, the costs drop
dramatically toward 2025. In reality, officials who developed these
estimates acknowledge that planning for the subsequent "next generation"
system will likely be underway as 2025 approaches and that actual
operations and modernization costs could be higher in this time frame than
these estimates indicate.

26The $15 billion estimate is based on the working group's "base case"
scenario. The working group also calculated a lower cost "best case"
scenario, in which FAA achieves an annual 2 percent productivity increase
beyond the cost of increased demand; and a higher cost "worst case"
scenario, in which costs grow with the increase in operations with no
productivity increases.

In addition, several unknown factors will drive the cost of NGATS.
According to JPDO, one of these drivers is the technologies expected to be
included in NGATS. Some of these are more complex and thus more expensive
to implement than others. A second driver is the sequence in which NGATS
technologies will replace the technologies now in use. A third driver is
the length of time required to transition to NGATS, since a longer
transition period would impose higher costs. Later this year, JPDO expects
to issue a first draft of its enterprise architecture, or blueprint for
the NGATS, which could reduce these variables, thereby allowing improved,
albeit still preliminary, estimates of NGATS' cost.

JPDO Is Taking a Reasonable Approach to Technical Planning, but Some Key Tasks
are Yet to Be Completed

To conduct the technical planning for NGATS, JPDO has formed separate
divisions to perform system modeling and create the NGATS enterprise
architecture, but has not yet completed key activities. JPDO has formed an
Evaluation and Analysis Division (EAD), composed of FAA and NASA employees
and contractors, to assemble a suite of models that will help JPDO refine
its plans for NGATS and iteratively narrow the range of potential
solutions. For example, EAD has used modeling to begin studying how
possible changes in the duties of key individuals, such as air traffic
controllers, could affect the workload and performance of others, such as
airport ground personnel.

As I previously noted, NGATS could shift some tasks now done by air
traffic controllers to pilots. According to JPDO officials, the change in
roles of pilots and controllers is the most important human factors issue
involved in creating the NGATS. JPDO officials noted that the Agile
Airspace and Safety IPTs contain human factors specialists and that JPDO's
chief architect has a background in human factors. However, EAD has not
yet begun to model the effect of the shift in roles on pilots' performance
because, according to an EAD official, a suitable model has not yet been
incorporated into the modeling tool suite. According to EAD, addressing
this issue is necessary, but will be difficult because data on pilot
behavior are not readily available to use in creating such models.
Furthermore, EAD has not yet studied the training implications of various
NGATS-proposed solutions because further definition of the concept of
operations for these solutions has not been completed. As the concept of
operations matures, it will be important for air traffic controllers and
other affected stakeholders to provide their perspectives on these
modeling efforts. In addition, as the concept of operations and plans for
sequencing equipment matures, EAD will be able to study the extent to
which new air traffic controllers will have to be trained to operate both
the old and the new equipment.

To develop an enterprise architecture-a blueprint for NGATS and one of the
most critical planning documents in the NGATS effort-JPDO has taken
several important first steps and is following several effective practices
that we have identified for enterprise architecture development. However,
JPDO's enterprise architecture is currently a work in progress and many of
JPDO's future activities will depend on the robustness and timeliness of
its architecture development. The enterprise architecture will describe
FAA's operation of the current national airspace system, JPDO's plans for
the NGATS, and the sequence of steps needed to transition between them.
The enterprise architecture will provide the means for coordinating among
the partner agencies and private sector manufacturers, aligning relevant
research and development activities, and integrating equipment. And as I
noted earlier, the enterprise architecture will also be a key tool in
developing cost estimates for NGATS.

To date, JPDO has formed an Enterprise Architecture Division and has
established and filled a chief architect position. JPDO has also
established an NGATS Architecture Council composed of representatives from
each partner agency's chief architect office to provide the organizational
structure and oversight needed to develop the enterprise architecture.
JPDO is using a phased "build a little, test a little" approach for
developing and refining its enterprise architecture that is similar to a
process that we have advocated for FAA's major system acquisition
programs. In addition, this phased development process will allow JPDO to
incorporate evolving market forces and technologies in its architecture
and thus better manage change. JPDO plans to have an early version of the
architecture by the end of fiscal year 2006.

Maintaining Stakeholder Support Will Be a Long-Term Challenge for JPDO

JPDO has structured itself to involve federal and nonfederal stakeholders
throughout its organization, but maintaining their long-term support will
be a challenge. Our work has shown that involving stakeholders can, among
other things, increase their support for a collaborative effort. Federal
stakeholders from the partner agencies serve on JPDO's Senior Policy
Committee, board, and IPTs. Nonfederal stakeholders may participate
through the NGATS Institute (the Institute). Through the Institute, JPDO
obtained the participation of over 180 stakeholders from over 70
organizations for the IPTs. The NGATS Institute Management Council,
composed of top officials and representatives from the aviation community,
oversees the policy and recommendations of the Institute and provides a
means for advancing consensus positions on critical NGATS issues.

Although JPDO has developed the mechanisms for involving stakeholders and
brought stakeholders into the process, it faces challenges in sustaining
nonfederal stakeholders' participation over the long term. Much as with
the federal partner agencies, JPDO has no direct authority over the human,
technical, or financial resources of its nonfederal stakeholders. To date,
these stakeholders' investment in NGATS has been through their part-time,
pro bono participation on the IPTs and the NGATS Institute Management
Council.27 The challenge for JPDO is to maintain the interest and
enthusiasm of these nonfederal stakeholders, which will have to juggle
their own multiple priorities and resource demands, even though some of
the tangible benefits of NGATS may not be realized for several years. For
example, stakeholders' support will be important for programs such as
SWIM, which is a prerequisite to future benefits, but may not produce
tangible benefits in the near term.

In the wake of past national airspace modernization efforts, JPDO also
faces the challenge of convincing nonfederal stakeholders that the
government is financially committed to NGATS. While most of FAA's major
ATC acquisition programs are currently on track, earlier attempts at
modernizing the national airspace system encountered many difficulties. In
one instance, for example, FAA developed a datalink communications system
that transmitted scripted e-mail-like messages between controllers and
pilots. One airline equipped some of its aircraft with this new
technology, but because of funding cuts, among other things, FAA ended up
canceling the program. In a similar vein, we have reported that some
aviation stakeholders expressed concern that FAA may not follow through
with its airspace redesign efforts and are hesitant to invest in equipment
unless they are sure that FAA's efforts will continue. One expert
suggested to us that the government might mitigate this issue by making an
initial investment in a specific technology before requesting that
airlines or other industry stakeholders purchase equipment.

27Nonfederal stakeholders' participation varies from approximately 10
percent to 25 percent of their time per week on the IPTs and involves
approximately one meeting per month for members of the council.

In addition to maintaining stakeholder involvement, JPDO faces challenges
in obtaining the participation of all stakeholders. In particular, JPDO
does not involve current air traffic controllers, who will play a key role
in NGATS. The current air traffic control system is based primarily on the
premise that air traffic controllers direct pilots to maintain safe
separation between aircraft. In NGATS, this premise could change and,
accordingly, JPDO has recognized the need to conduct human factors
research on such issues, including how tasks should be allocated between
humans and automated systems and how the existing allocation of
responsibilities between pilots and air traffic controllers might change.
The input of current air traffic controllers who have recent experience
controlling aircraft is important in considering human factors and safety
issues.

However, as mentioned, no current air traffic controllers are involved in
NGATS. In June 2005, FAA terminated its labor liaison program based on its
determination that program was not providing sufficient benefit compared
to the program's cost. The liaison program assigned air traffic
controllers to major system acquisition program offices, as well as to
JPDO. Since that time, the National Air Traffic Controllers Association
(NATCA), the labor union that represents air traffic controllers, has not
been a participant in planning NGATS. Although the NGATS Institute
Management Council includes a seat for the union, a NATCA official told us
that the union's head had been unable to attend the council's meetings.
According to JPDO officials, the council has left a seat open in hopes
that the controllers will participate in NGATS as the new labor-management
agreement between NATCA and FAA is implemented.

Finally, some of the benefits of NGATS' are contingent on users of the
system-airlines and general aviation-equipping their aircraft with
NGATS-compatible technologies. This is particularly important concerning
ADS-B, a new air traffic surveillance system that JPDO has determined will
be one of the early core technologies for NGATS. The first phase of ADS-B
implementation, known as "ADS-B out," will allow FAA to replace many
ground radars that currently provide aircraft surveillance with less
costly ground-based transceivers. Aircraft would be equipped with ADS-B
out, which broadcasts a signal to these transceivers. FAA anticipates
significant cost savings from this phase and, according to trade
association officials, regional and large commercial airlines are largely
supportive of this initial phase. But implementing ADS-B out is just the
first step to achieving the larger benefits of ADS-B, which would be
provided by "ADS-B in." ADS-B in would allow aircraft to receive signals
from ground-based transceivers or directly from other ADS-B equipped
aircraft-this could allow pilots to "see" nearby traffic and,
consequently, take on some responsibility for maintaining safe separation
from those aircraft.

However, before airlines can establish a business case that supports an
investment, several unknowns concerning ADS-B in must be resolved. For
example, the cost of installing ADS-B in must be determined. Also, human
factors considerations need further exploration to determine whether
pilots can safely use ADS-B in to maintain separation of aircraft.
Finally, it is unclear whether air carriers will be willing to equip with
the second frequency that ADS-B would require.28 How these issues are
resolved will be an important factor in airlines' decisions on whether to
equip with ADS-B in. Given the breadth and complexity of NGATS, issues
involving equipage decisions by nonfederal stakeholders are likely to
arise again and can impact the extent and speed to which the benefits
envisioned by NGATS will be realized.

As NGATS Moves Toward Implementation, Defining Roles and Responsibilities and
Deciding How to Coordinate Implementation Are Challenges

JPDO also faces the challenge of clearly defining its partner agencies'
roles and responsibilities. Our work has shown that collaborating agencies
should work together to define and agree on their respective roles and
responsibilities, including how the collaboration will be led. JPDO has
operated thus far with no formal, long-term agreement on partner agencies'
roles and responsibilities in creating NGATS. JPDO officials informed us
that they are working to establish a memorandum of understanding (MOU)
signed by the heads of the partner agencies that will broadly define
partner agency roles and responsibilities at a high level. JPDO officials
said they hope to have the MOU signed and released next month. JPDO is
also developing more specific MOUs with partner agencies that lay out
expectations for support on NGATS components, such as information sharing
through network-enabled operations.

28In 2002, FAA established a policy whereby commercial air transport,
regional, and military fleets operating in the nation's higher airspace
would use the 1090 MHz frequency. The policy also prescribed the use of
978 MHz, known as the "universal access transceiver" or UAT, for general
aviation operating in lower airspace. Uplinking weather and national
airspace status information is only possible on the 978 MHz frequency.

Defining roles and responsibilities is particularly important between JPDO
and ATO, because both organizations have responsibilities related to
planning the national airspace system's modernization. ATO has primary
responsibility for the ATC system's current and near-term modernization,
while JPDO has responsibility for planning and coordinating a
transformation to NGATS over the next 20 years. The roles and
responsibilities of each office are currently being worked out. ATO now
plans to expand its Operational Evolution Plan so that it applies FAA-wide
and represents FAA's piece of JPDO's overall NGATS plan.29 ATO is also
prioritizing its facilities and equipment investments to support the
NGATS. As the roles and responsibilities of the two offices become more
clearly defined, there is also a need to better communicate these
decisions to stakeholders.

As NGATS moves forward, JPDO and FAA must address how to define roles and
responsibilities for managing its implementation. JPDO, FAA, and other
aviation experts consider NGATS to be a task of unprecedented complexity,
with each partner agency having responsibility for developing and
implementing portions of NGATS, while JPDO maintains a coordinating role.
Recognizing the complexity involved in implementing NGATS, FAA and JPDO
officials are considering several different approaches, one of which is to
contract with a lead systems integrator (LSI). Generally, an LSI is a
prime contractor that would help to ensure that the discrete systems used
in NGATS will operate together and whose responsibilities may include
designing system solutions, developing requirements, and selecting major
system and subsystem contractors.

The government has used LSIs before for complex programs that require
system-of-systems integration. Our research indicates that, while LSIs
provide certain advantages, such as the ability to know, understand, and
integrate functions across various systems, they also entail certain
risks. For example, because the degree of responsibility held by the LSI
may be significantly greater than that usually held by a prime contractor,
careful oversight may be necessary to ensure that the government's
interests are protected and that conflicts of interest are avoided.
Consequently, selecting, assigning responsibilities, and managing an LSI
could pose significant challenges for JPDO and FAA.

29Currently, FAA's Operational Evolution Plan monitors how NAS capacity
will change over a rolling 10-year planning horizon depending on numerous
variables, such as the demand for air travel, the completion of new
runways, and the availability of new ATC systems.

JPDO Must Address a Variety of Policy Issues

JPDO also faces critical policy issues as NGATS moves toward
implementation. Some stakeholders have noted that addressing the policy
issues needed to implement NGATS technologies will be even more of a
challenge for JPDO than determining the technologies for NGATS. JPDO's
Concept of Operations-a document that provides a textual operational
description of the transformations needed to achieve NGATS' overall
goals-has been used to identify key research and policy issues for NGATS.
For example, the Concept of Operations identifies several issues
surrounding the automation of the air traffic control system, including
the need for a backup plan in the event that automation fails, the
responsibilities and liabilities of different stakeholders in the event of
automation failure, and the level of monitoring needed by pilots when
automation is ensuring safe separation from surrounding aircraft.

JPDO officials said that most policy decisions, when they occur, will be
tied to the requirements of the enterprise architecture. However, some
decisions will involve input from several entities and stakeholders. For
example, it is likely that decisions on concepts and policies relating to
general aviation would be made in concert among FAA, JPDO, and the Senior
Policy Committee, with significant input from the general aviation
community, to address concerns such as visual flight rules versus
instrument flight rules. Flowing from broad policy decisions, FAA or other
partner agencies would have to start developing regulations to implement
the new technologies so that they would be ready at the appropriate time.

In addition, JPDO has limited control over some of the factors affecting
NGATS-related policy issues. For example, the consolidation of ATC
facilities could provide cost savings that could in turn be used for NGATS
technologies. However, facility consolidations can often run into
political hurdles that are outside of JPDO's control. Similarly, while
JPDO's Airport IPT is considering how airport capacity can be expanded, a
JPDO official told us that the ability of JPDO to enhance airport capacity
is still limited because enhancement decisions are made at the state and
local level. The official also noted that JPDO cannot channel federal
funds from the Airport Improvement Program to airports where capacity
expansion is most needed to achieve the goals of NGATS.

Another key policy area is how JPDO will work toward global harmonization.
For example, concurrent with JPDO's efforts, the European Commission30 is
conducting a project to harmonize and modernize the European air traffic
management systems. Known as the Single European Sky Air Traffic
Management Research Programme (SESAR), the project is overseen by the
European Organization for the Safety of Air Navigation (Eurocontrol).31
Eurocontrol has contracted out the work of SESAR to a 30-member consortium
of airlines, air navigation service providers, airports, manufacturers,
and others. The consortium is receiving 60 million euros ($73 million)32
to conduct a 2-year definition phase and produce a master plan for SESAR.

JPDO officials said they recognize the need for global harmonization of
systems and have met with officials from various parts of the
world-including Europe, China, and East Asia-to assess the potential for
cooperative NGATS demonstrations. JPDO has a Global Harmonization IPT, led
by managers from ATO's International Operations Planning Services
International and FAA's Office of International Aviation. The IPT's
mission is to harmonize equipment and operations globally and advocate the
adoption of U.S.-preferred transformation concepts, technologies,
procedures, and standards. The Harmonization IPT finalized its charter in
March 2006 and is working to develop an international strategy and
outreach plan. In addition to external efforts, the Harmonization IPT
plans to work as a crosscutting IPT that will raise awareness of global
interoperability and standards issues within the other IPTs as they
consider system performance requirements.

According to several European officials with whom we spoke, global
harmonization (and harmonization with the U.S. system specifically) is
considered to be a key ingredient for the success of SESAR. Several of
these officials said that although the European organization invited JPDO
to participate as a full member in SESAR and the organization has
indicated its willingness to have reciprocal participation with the United
States, personnel exchanges are just beginning to occur. JPDO officials
recognize the importance of cooperative efforts and noted that if Europe
and the United States were to implement different and incompatible
standards and technologies, there could be a major adverse impact on
airlines that serve international markets. Nonetheless, these officials
point out that JPDO, as a U.S. government entity, could not participate as
a member in a private industry effort like the SESAR consortium. FAA is,
however, a member of the European Commission's Industry Consultation Body,
which provides advice to SESAR.

30The European Commission is a politically independent institution that
prepares and implements legislative instruments.

31Eurocontrol is an autonomous organization established in 1963 with the
intention of creating a single upper airspace in Europe.

32A portion of this funding is in-kind services from Eurocontrol. To
convert euros to U.S. dollars, we used 1.2098, the foreign exchange rate
for March 21, 2006, as published in The Washington Post.

According to an FAA official, negotiations are currently underway to
complete an MOU between FAA and the European Commission that will commit
both parties to cooperation in information sharing and the development of
a seamless air traffic management system. JPDO officials noted that
personnel exchanges and other cooperative activities, such as information
exchanges and a joint working group on technical standards, are already
occurring under a memorandum of cooperation between FAA and Eurocontrol.

While FAA and JPDO's Harmonization IPT are planning cooperative
activities, our research has identified several other areas where
cooperation does not appear to be fully developed. For example, the SESAR
and NGATS initiatives, despite their similarities, do not have
coordination activities such as peer reviews of relevant research,
cooperation on safety analysis (such as through the pooling of accident
data), or validation of technologies. It is possible that greater
cooperation and exchange between NGATS and SESAR might develop once
planning has progressed to the development and validation stage.

                            Concluding Observations

Transforming the national airspace system to accommodate what is expected
to be three times the current amount of traffic by 2025, providing
adequate security and environmental safeguards-and doing these things
seamlessly while the current system continues to operate-will be an
enormously complex undertaking. Both ATO and JPDO have been given
difficult tasks in a difficult budgetary environment. Going forward,
efforts to control costs and leverage resources will become ever more
critical. Success also depends on the ability of ATO and JPDO to define
their roles and form a collaborative environment for planning and
implementing the next generation system.

This concludes my statement. I would be pleased to respond to any
questions that you or other Members of the Subcommittee may have at this
time.

                       Contact and Staff Acknowledgments

For further information on this statement for the record, please contact
Gerald Dillingham at (202) 512-2834 or [email protected]. Individuals
making key contributions to this statement include Nabajyoti Barkakati,
Christine Bonham, Colin Fallon, Carol Henn, David Hooper, Heather Krause,
Elizabeth Marchak, Edmond Menoche, Faye Morrison, Richard Scott, Sarah
Veale, and Matthew Zisman.

(540120)

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Highlights of GAO-06-653T , testimony before the Subcommittee on Aviation,
Committee on Transportation and Infrastructure, House of Representatives

June 21, 2006

AIR TRAFFIC CONTROL MODERNIZATION

Status of the Current Program and Planning for the Next Generation Air
Transportation System

The Federal Aviation Administration's (FAA) effort to modernize the
nation's air traffic control (ATC) system has been listed by GAO as a high
risk program for more than a decade now, due to systemic management and
acquisition problems. Two relatively new organizations housed within
FAA-the Air Traffic Organization (ATO) and the Joint Planning and
Development Office (JPDO)-have been given the bulk of the responsibility
for planning and implementing these modernization efforts. Congress
created ATO to be a performance-based organization that would improve the
culture, structure, and processes and improve accountability in the ATC
modernization program. Congress created JPDO, made up of seven partner
agencies, to coordinate the federal and nonfederal stakeholders necessary
to plan a transition from the current air transportation system to the
"next generation air transportation system" (NGATS). This testimony is
based on GAO's recently completed and ongoing studies of the ATC
modernization program. GAO provides information on (1) the status of ATO's
efforts to implement processes and other initiatives aimed at efficiently
managing and modernizing the current ATC system and (2) the status of
JPDO's planning efforts and the key challenges that JPDO faces in planning
for NGATS.

ATO has made significant progress toward the efficient management of the
nation's ATC system, but faces several challenges. ATO has implemented
organizational and business process changes, and has taken steps to
increase scrutiny of its acquisition decisions. ATO has met its
acquisition performance goal for the second consecutive year-that is, 80
percent of its system acquisitions are on schedule and within 10 percent
of budget. ATO has identified cost savings opportunities through
consolidation of administrative activities and outsourcing. However, ATO
faces several challenges, including sustaining and institutionalizing its
progress toward operating effectively as a performance-based organization,
hiring and training thousands of air traffic controllers, ensuring
stakeholder involvement in major system acquisitions, and keeping
acquisitions on schedule and within budget.

JPDO is making progress in its planning for NGATS, but faces several
challenges. JPDO is implementing a number of practices that our work has
shown facilitates the federal interagency collaboration that is central to
its mission and legislative mandate. However, JPDO is fundamentally a
planning and coordinating body that lacks authority over the key human and
technological resources needed to continue developing plans and system
requirements for NGATS. Thus, a challenge may arise in leveraging the
resources of the partner agencies. As part of its planning, JPDO is
working to develop a cost estimate for NGATS through a series of workshops
with various stakeholders. JPDO has taken several important first steps
and is following effective practices in developing an NGATS enterprise
architecture-a blueprint for NGATS and one of the most critical planning
documents in the NGATS effort. JPDO faces several challenges, including
maintaining stakeholder support over the long term, defining roles and
responsibilities and deciding how to coordinate the implementation of
NGATS, and addressing several critical policy issues, such as the extent
to which NGATS will accommodate visual flights versus instrument-only
flights.

Air Traffic Management
*** End of document. ***