U.S. Aerospace Industry: Progress in Implementing Aerospace	 
Commission Recommendations, and Remaining Challenges (13-SEP-06, 
GAO-06-920).							 
                                                                 
The U.S. aerospace industry's wide-ranging activities--including 
commercial aviation, national security, and space		 
exploration--make it critical to the economic health and	 
strategic strength of our nation. However, the industry faces	 
challenges, such as a national air traffic management system	 
that, in its present form, cannot handle expected increases in	 
demand; an aging aerospace workforce; and an increasingly	 
competitive global market. In response to these and other	 
challenges, Congress established the Commission on the Future of 
the United States Aerospace Industry in 2001 to recommend	 
potential actions by the federal government and others to support
a robust aerospace industry in the 21st century. In 2002, the	 
Commission made recommendations to address these challenges. This
report discusses (1) the extent to which federal agencies have	 
addressed selected Commission recommendations and (2) the	 
challenges that remain in addressing the recommendations. Based  
on the opinions of former Commissioners and GAO research, GAO	 
selected recommendations dealing with the national airspace	 
system, space policy, government-wide management structure,	 
international issues, the aerospace workforce, and research and  
development. This report is based on reviews of agency documents,
literature, and interviews with aerospace experts and officials  
from relevant federal agencies. 				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-920 					        
    ACCNO:   A60826						        
  TITLE:     U.S. Aerospace Industry: Progress in Implementing	      
Aerospace Commission Recommendations, and Remaining Challenges	 
     DATE:   09/13/2006 
  SUBJECT:   Aerospace industry 				 
	     Aerospace research 				 
	     Air transportation 				 
	     Commercial aviation				 
	     Economic analysis					 
	     Economic growth					 
	     Interagency relations				 
	     National policies					 
	     Program evaluation 				 
	     Research and development				 
	     Space exploration					 
	     Strategic planning 				 
	     Audit recommendations				 
	     Program coordination				 
	     Commission on the Future of the United		 
	     States Aerospace Industry				 
                                                                 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-06-920

     

     * Results in Brief
     * Background
          * Role of Government and Industry in Aerospace Is Significant
          * Government Funding of Aerospace R&D Is Significant, but Tren
          * Aerospace Industry Facing Multiple Challenges
          * Aerospace Commission Made Recommendations to Address Challen
     * Federal Agencies Have Addressed Commission Recommendations t
          * New Federal Programs and Policies Have Addressed Some Commis
               * Creation of JPDO Addresses Recommendation to Transform the U
               * Issuance of a New Space Exploration Policy and Creation of a
               * The President's High Growth Job Training Initiative Addresse
               * Federal Agencies Have Established New Education Programs, bu
          * Changes to Existing Programs Have Addressed Some Commission
               * NASA's Aeronautics Program Focuses on Basic Research as Reco
               * FAA's Modifications of Regulations and Procedures Address Re
               * Agencies are Making Efforts to Address the Commission's Reco
               * Limited Streamlining of U.S. Export Control Licensing Proced
     * Federal Agencies Face Challenges in Addressing the Commissio
          * Agencies Face Challenges in Setting Funding Priorities for E
          * Agencies Face Challenges in Coordinating Efforts to Avoid Du
     * Concluding Observations
     * Agency Comments
     * Appendix I: Objectives, Scope, and Methodology
     * Appendix II: Aerospace Research and Development Funding Tren
          * Aerospace R&D Includes a Wide Range of Activities
          * Federal Support of R&D Remains Critical to the Aerospace Ind
          * Objectives of Federal Funding for Aerospace R&D Differ by Ag
               * Department of Defense
               * National Aeronautics and Space Administration
               * Federal Aviation Administration
     * Appendix III: Federal Actions That Address Selected Aerospac
     * Appendix IV: Joint Planning and Development Office
          * Role of the Joint Planning and Development Office in the Nat
          * JPDO Organization Structure and Partner Agencies
          * JPDO's Integrated Plan
          * JPDO Efforts to Leverage Partner Agency Resources
          * JPDO Is Involving Nonfederal Stakeholders
     * Appendix V: Comments from the Department of Labor
     * Appendix VI: Comments from the NationalAeronautics and Spac
     * Appendix VII: GAO Contact and Staff Acknowledgments
          * GAO Contact
          * Staff Acknowledgments
               * Order by Mail or Phone

Report to the Ranking Democratic Member, Subcommittee on Aviation,
Committee on Transportation and Infrastructure, House of Representatives

United States Government Accountability Office

GAO

September 2006

U.S. AEROSPACE INDUSTRY

Progress in Implementing Aerospace Commission Recommendations, and
Remaining Challenges

GAO-06-920

Contents

Letter 1

Results in Brief 3
Background 5
Federal Agencies Have Addressed Commission Recommendations to Varying
Degrees through Different Types of Actions 10
Federal Agencies Face Challenges in Addressing the Commission's
Recommendations 29
Concluding Observations 33
Agency Comments 34
Appendix I Objectives, Scope, and Methodology 36
Appendix II Aerospace Research and Development Funding Trends 39
Aerospace R&D Includes a Wide Range of Activities 39
Federal Support of R&D Remains Critical to the Aerospace Industry 40
Objectives of Federal Funding for Aerospace R&D Differ by Agency and
Mission 41
Appendix III Federal Actions That Address Selected Aerospace Commission
Recommendations 48
Appendix IV Joint Planning and Development Office 71
Role of the Joint Planning and Development Office in the National Airspace
System Modernization 71
JPDO Organization Structure and Partner Agencies 72
JPDO's Integrated Plan 74
JPDO Efforts to Leverage Partner Agency Resources 74
JPDO Is Involving Nonfederal Stakeholders 75
Appendix V Comments from the Department of Labor 76
Appendix VI Comments from the National Aeronautics and Space
Administration 77
Appendix VII GAO Contact and Staff Acknowledgments 79

Tables

Table 1: Summary of Aerospace Commission Recommendations 9
Table 2: Grants Awarded by Labor for Aerospace Workforce Projects 19
Table 3: Reshaped Strategy of NASA's Aeronautics Research Mission
Directorate 24
Table 4: Experts Providing Input during Our Review 37
Table 5: JPDO's Strategies and Responsible Agencies 74

Figures

Figure 1: Federal Funding for Industrial R&D in the Aerospace Industry 7
Figure 2: Key Federal Entities for Selected Recommendations 11
Figure 3: Extent to Which Selected Recommendations Have Been Addressed 12
Figure 4: JPDO's Seven Partner Agencies 14
Figure 5: Proposed Cargo Launch Vehicle with Lunar Lander Is an Example of
Aerospace R&D 17
Figure 6: Projected Trends in Major Aerospace-Related Missions within
NASA, Fiscal Years 2005-2011 31
Figure 7: Defense Budget for Science and Technology for Air and Space
Platforms, Fiscal Years 2001-2005 42
Figure 8: Defense Budget Authority for Basic and Applied Research, and for
Development, Fiscal Years 1999-2007 43
Figure 9: Actual and Projected Funding Trends in Major Aerospace-Related
Missions within NASA, Fiscal Years 2005-2011 44
Figure 10: NASA's Budget Authority for Basic and Applied Research, and for
Development, Fiscal Years 1999-2007 45
Figure 11: FAA Outlays for R&D, Including R&D for Facilities and
Equipment, Fiscal Years 1999-2007 47
Figure 12: Global Positioning System Display Screen Used in Capstone
Program 51
Figure 13: Information Regarding the Moon and Mars 56
Figure 14: Proposed Advanced Orbital Transfer Propulsion Technology 57
Figure 15: ASTS Membership 59
Figure 16: Engineers at NASA Langley Research Center 68
Figure 17: Computational Fluid Dynamic Image of the Hyper-X Vehicle 69
Figure 18: NASA Glen Research Center's Research on Aircraft Noise 70
Figure 19: JPDO Organization Chart 73

Abbreviations

ADS-B Automatic Dependent Surveillance Broadcast ASTS Aeronautics,
Science, and Technology Subcommittee ATO Air Traffic Organization DOT
Department of Transportation FAA Federal Aviation Administration ICAO
International Civil Aviation Organization IPT integrated product team JPDO
Joint Planning and Development Office NASA National Aeronautics and Space
Administration NGATS next generation air transportation system OSTP Office
Science and Technology Policy R&D research and development RNP required
navigation performance SESAR Single European Air Traffic Management
Research Programme SMART Science and Mathematics Access to Retain Talent
STEM science, technology, engineering and mathematics

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.

United States Government Accountability Office

Washington, DC 20548

September 13, 2006 September 13, 2006

The Honorable Jerry F. Costello Ranking Democratic Member Subcommittee on
Aviation Committee on Transportation and Infrastructure House of
Representatives The Honorable Jerry F. Costello Ranking Democratic Member
Subcommittee on Aviation Committee on Transportation and Infrastructure
House of Representatives

Dear Mr. Costello: Dear Mr. Costello:

The U.S. aerospace industry is critical to the economic health and
strategic strength of the nation. The industry's wide-ranging
activities-including aircraft manufacturing and commercial aviation-make
it a major contributor to U.S. economic growth. The Aerospace Industries
Association estimates that the industry employs approximately 625,000
people with sales of approximately $170 billion in 2005. This economic
benefit is in part due to the United States' global leadership in the
development of a robust commercial aviation industry, the industry's
employment of a highly skilled and trained workforce, and the manufacture
of civil and defense aerospace products. These factors have allowed the
U.S. aerospace industry to produce significant improvements in science,
technology, and national security in and beyond the aerospace field. For
example, the global positioning system uses satellites, ground control
networks, and user equipment to provide navigational information for land,
sea, and airborne navigation; surveying and mapping; farming;
telecommunications; and a wide variety of other applications. The U.S.
aerospace industry is critical to the economic health and strategic
strength of the nation. The industry's wide-ranging activities-including
aircraft manufacturing and commercial aviation-make it a major contributor
to U.S. economic growth. The Aerospace Industries Association estimates
that the industry employs approximately 625,000 people with sales of
approximately $170 billion in 2005. This economic benefit is in part due
to the United States' global leadership in the development of a robust
commercial aviation industry, the industry's employment of a highly
skilled and trained workforce, and the manufacture of civil and defense
aerospace products. These factors have allowed the U.S. aerospace industry
to produce significant improvements in science, technology, and national
security in and beyond the aerospace field. For example, the global
positioning system uses satellites, ground control networks, and user
equipment to provide navigational information for land, sea, and airborne
navigation; surveying and mapping; farming; telecommunications; and a wide
variety of other applications.

However, the aerospace industry faces a host of challenges, such as a
national air traffic management system that, in its present form, lacks
the capacity to handle expected increases in air traffic; an aging
aerospace industry workforce; and an increasingly competitive global
market that may threaten the U.S. industry's traditional leadership in
aerospace manufacturing. According to the Federal Aviation Administration
(FAA), the demand for both passenger and cargo air service will continue
to grow for the foreseeable future, and these increases will place a
greater strain on the current national airspace system-increasing airspace
congestion and delays, and resulting in negative economic effects.
Additionally, the government has reported that an estimated 26 percent of
aerospace workers will be eligible to retire by 2008, and there are
concerns about the availability of sufficiently trained workers to fill
these positions. Furthermore, the industry has reported having difficulty
not only retaining However, the aerospace industry faces a host of
challenges, such as a national air traffic management system that, in its
present form, lacks the capacity to handle expected increases in air
traffic; an aging aerospace industry workforce; and an increasingly
competitive global market that may threaten the U.S. industry's
traditional leadership in aerospace manufacturing. According to the
Federal Aviation Administration (FAA), the demand for both passenger and
cargo air service will continue to grow for the foreseeable future, and
these increases will place a greater strain on the current national
airspace system-increasing airspace congestion and delays, and resulting
in negative economic effects. Additionally, the government has reported
that an estimated 26 percent of aerospace workers will be eligible to
retire by 2008, and there are concerns about the availability of
sufficiently trained workers to fill these positions. Furthermore, the
industry has reported having difficulty not only retaining its existing
workforce, but also attracting young people into the field. Finally,
increased global competition from both foreign companies and governments
will place even more pressure on the industry. For example, the European
Union published two reports-STAR-211 and Vision 20202-that establish
European aerospace policy objectives, including the use of government
resources to pursue global leadership by European aerospace companies.

In response to these and other challenges, Congress established the
Commission on the Future of the United States Aerospace Industry (the
Commission) in 2001 to study the issues associated with the future of this
industry in the global economy, and to recommend potential actions by the
federal government to support the maintenance of a robust aerospace
industry in the 21st century.3 In 2002, the Commission made
recommendations to address these challenges.4 Some of the recommendations
proposed by the Commission included transforming the national air
transportation system, creating a U.S. space exploration imperative,
creating a government-wide management structure to support aerospace,
establishing a level playing field for the United States in global
markets, promoting the growth of the U.S. aerospace workforce, and
increasing government investment in aerospace research and development
(R&D).

You asked us to determine the status of federal actions that address the
Commission's recommendations. Accordingly, this report focuses on the
following questions: (1) To what extent have federal agencies addressed
selected Commission recommendations? (2) What challenges remain in
addressing these recommendations?

To address these two questions, we obtained and analyzed information from
a variety of sources. We reviewed the relevant empirical literature to
understand the circumstances under which the Commission was formed and to
develop the context and perspective of the issues facing the aerospace
industry. We interviewed five of twelve former Commission members and the
former Commission's executive director to obtain their opinions on which
of the specific recommendations are the most important. Since each of the
former Commissioners is an expert in specific aerospace issues the
Commission examined, we selected these former Commissioners to ensure
coverage of all Commission recommendations. Using their opinions and our
research, we selected recommendations that address transforming the
national air transportation system, creating a U.S. space exploration
imperative, creating a government-wide management structure to support a
national aerospace policy, establishing a level playing field for the
United States in global markets, promoting the growth of the U.S.
aerospace workforce, and increasing government investment in aerospace
R&D. To determine the extent to which federal agencies addressed the
selected recommendations and the challenges that remain, we interviewed
officials from FAA; the Departments of Defense (Defense), Labor (Labor),
and Transportation (DOT); the National Aeronautics and Space
Administration (NASA); the White House Office of Science and Technology
Policy (OSTP); private aerospace companies; and industry associations. In
addition, we analyzed agency budget documents, strategic plans, briefings
on federal agency actions, and our past work describing challenges that
agencies face in implementing the selected recommendations. With the
assistance of the National Academy of Sciences, we identified experts in
the fields of national air transportation systems, U.S. space exploration,
government aerospace management structure, U.S. aerospace workforce and
education, and aerospace R&D. We then interviewed these experts to obtain
their views about the extent to which federal actions have addressed the
selected Commission recommendations, and about the challenges that lie
ahead. These experts are listed in appendix I. We did not analyze the
validity of the Commission's recommendations, and our work does not take a
position on, or represent an endorsement of, the recommendations. We
conducted our work from August 2005 through September 2006 in accordance
with generally accepted government auditing standards. Additional
information on our scope and methodology appears in appendix I.

1European Union, Strategic Aerospace Review for the 21st Century (STAR-21)
(Brussels, Belgium: July 2002).

2European Union, European Aeronautics: A Vision for 2020 (Brussels,
Belgium: Jan. 2001).

3Section 1092 of Pub. L. No. 106-398, Floyd D. Spence National Defense
Authorization Act for Fiscal Year 2001.

4Commission on the Future of the United States Aerospace Industry, Final
Report (Arlington, Va.: Nov. 2002).

                                Results in Brief

Federal agencies have taken actions that address selected Commission
recommendations to varying degrees, from establishing new offices,
programs, and policies to changing existing programs or policies; however,
the actions the agencies have taken are still in the early stages of
implementation. For example, the Commission's recommendation to establish
a federal interdepartmental group to plan a new, highly automated air
traffic management system was addressed by the creation of the Joint
Planning and Development Office (JPDO), which consists of seven federal
agencies, including FAA, NASA, and Defense. However, JPDO faces challenges
in leveraging partner agency resources and maintaining commitment from
nonfederal stakeholders as it moves forward in planning the new air
traffic management system. In addition, the President issued a new space
exploration policy and NASA created a directorate to implement the policy,
realigning some programs and funds to do so. Both the new policy and the
directorate address the broad Commission recommendation to create a space
imperative. Other new efforts include a jobs training initiative and
education programs that address the broad Commission recommendation to
promote the growth of the U.S. aerospace workforce. Labor and the
Department of Education have provided grant funding for these efforts,
however, there are questions about the impact of the grants. Changes to
existing programs include NASA's restructuring of its aeronautics research
program, which addresses the specific Commission recommendation to
increase the federal focus on long-term aerospace research; FAA's
revisions to its rule making and airport environmental review procedures,
which address the specific Commission recommendations to streamline the
regulatory and airport review processes; and FAA's attempts to increase
the U.S. presence in international aviation partnerships, which addresses
the specific Commission recommendation to commit to international
partnerships. Federal agencies have taken few, if any, actions to address
other Commission recommendations such as reforming exports control
policies and establishing a national aerospace policy.

A number of challenges remain for federal agencies in further addressing
the Commission's recommendations, including dealing with difficult
budgetary trade-offs and collaborating on actions involving multiple
agencies. Federal agencies may not give priority to programs that address
Commission recommendations because of budget limitations. Such budgetary
trade-offs are all the more likely if implementing a recommendation
requires launching or expanding large, expensive programs. NASA has
already realigned some programs that address the Commission's
recommendations-such as the recommendation to create a U.S. space
imperative-and, in so doing, has had to make some difficult budgetary
prioritization decisions. Since multiple federal agencies are involved in
the U.S. aerospace industry, a lack of coordination among federal
agencies, aerospace companies, and universities could result in
duplicating efforts and not leveraging resources efficiently. For example,
our prior work has shown that coordination of federal science, technology,
engineering, and mathematics education programs has been limited, and that
better coordination between federal agencies could help the agencies to
better encourage students to pursue careers in science, technology,
engineering, and mathematics. We provided a draft of this report to the
Departments of Defense, Labor, and Transportation, NASA, and the Office of
Science Technology Policy for their review and comment. The Department of
Defense had no comments, and the other agencies generally concurred with
the report, but provided clarifications and technical comments, which we
incorporated as appropriate.

                                   Background

The impact of the aerospace industry on the U.S. economy is significant,
with the industry estimating $170 billion in sales and approximately
625,000 people employed in 2005.5 The importance of this industry to the
U.S. economy will continue to grow in the future. According to FAA, the
U.S. commercial aircraft fleet is estimated to grow from 7,836 in 2005 to
10,677 in 2017. Both passenger capacity and cargo operations are expected
to continue to grow, with passenger capacity in 2007 increasing by 4.6
percent and then increasing by an average of 4.2 percent per year until
2017. FAA estimates that over 1 billion passengers will use U.S. airports
by 2015. Domestic cargo revenue-ton miles are projected to increase at an
average annual rate of 3.2 percent until 2017, exceeding 23 billion.
Furthermore, the U.S. aerospace industry consistently shows a foreign
trade surplus-reaching $31 billion in 2004. Aerospace exports constituted
6.9 percent of the total value of U.S.-exported merchandise in 2004.

Role of Government and Industry in Aerospace Is Significant

The federal government is involved in many aspects of aerospace, such as
civil aviation transportation management, national security, space
exploration, and related R&D. FAA, NASA, and Defense are major federal
agencies significantly involved in aerospace activities.6

           o  FAA is responsible for maintaining a safe and efficient
           national airspace system by managing the nation's air traffic
           control system, which comprises a vast network of radars;
           automated data processing, navigation, and communications
           equipment; and facilities. As manager of the air traffic control
           system, FAA provides services such as controlling takeoffs and
           landings and managing the flow of traffic between airports. In
           addition, FAA serves as the national aviation regulatory authority
           and implements and enforces safety regulations that include
           certifications of aircraft, aircraft operations, and aviation
           pilots and mechanics.

           o  NASA is responsible for the nation's civil space and
           aeronautics efforts. In this role, NASA conducts human exploration
           of space, conducts R&D in aeronautics and space technologies, and
           conducts R&D to advance and communicate scientific knowledge.
           NASA's programs encompass a broad range of complex and technical
           activities-from investigating the composition and resources of
           Mars to providing satellite and aircraft observations of Earth for
           scientific purposes and weather forecasting.

           o  Defense is responsible for national security and purchases a
           variety of aerospace products from the private sector such as
           aircraft, satellites, missiles, space launch systems, and
           supporting products. Defense also manages a broad array of space
           activities, including the development of space launch vehicles and
           satellites used for communication; navigation; intelligence,
           surveillance, and reconnaissance; and weather monitoring.

           The private sector provides aerospace products and services. For
           example, U.S. companies manufacture aerospace products that
           include commercial and military aircraft, satellites, and air
           traffic infrastructure systems. Commercial airlines provide
           domestic and international aviation passenger service. Software
           and electronics companies produce avionics and other electronic
           systems that are used in all types of aerospace products. To
           provide these products and services, companies rely on a highly
           skilled workforce of approximately 625,000 employees, including
           manufacturing technicians, aerospace engineers, and scientists.

           Government Funding of Aerospace R&D Is Significant, but Trends in
			  Funding Differ among Agencies
			  
			  R&D enables the advancement of aerospace technologies, and funding
           for it will continue to be necessary if the industry is to
           maintain its global competitiveness and meet future needs.
           Traditionally, the federal government has provided significant
           funding for aerospace R&D (see fig. 1). However, federal R&D
           investments in some areas of aerospace, like aeronautics, are in
           decline. For example, NASA estimates that its 2006 direct
           aeronautics R&D budget will decline by approximately 43 percent
           from 2002, the time of publication of the Commission report.
           Conversely, R&D funding is increasing in space exploration areas
           as well as defense-related areas such as ballistic missile defense
           and defense-related aeronautics.7 Additional information on
           federal government R&D funding trends appears in appendix II.

           Figure 1: Federal Funding for Industrial R&D in the Aerospace
           Industry

           Aerospace Industry Facing Multiple Challenges
			  
			  Despite the economic importance of the aerospace industry, many
           challenges face both government and private industry in
           maintaining the industry's health. First, the current approach to
           managing air transportation is becoming increasingly inefficient
           and operationally obsolete. The government will be faced with
           transforming the U.S. air traffic management system to accommodate
           expected increases in demand while ensuring the continued safety
           and security of the flying public. Second, given the terrorist
           attacks of September 11, 2001, the U.S. government has had to
           reevaluate whether existing arms export-control policies support
           national security and foreign policy goals. Finally, the U.S.
           aerospace workforce is aging and a significant percentage of the
           aerospace workforce will be eligible to retire by 2008. Therefore,
           the industry must attract, train, and retain new workers with the
           engineering, science, and technical capabilities it needs. But
           recent trends show declines in the future supply of such workers.
           For example, the Commission highlighted that the number of
           doctorate degrees awarded annually in engineering had declined by
           15 percent from the mid 1990s.

           Aerospace Commission Made Recommendations to Address Challenges
			  
			  To confront these challenges, the U.S. Congress established the
           Commission and gave it a broad mandate to study the health of the
           aerospace industry and recommend actions that the U.S. government
           should take to ensure the industry's future health. Congress
           directed the Commission to take an integrated, long-term view of
           the entire aerospace industry from the perspective of government,
           industry, labor, and academia. Therefore, its 12 members came from
           manufacturing firms, industry groups, aerospace consultancies,
           financial institutions, and labor groups with expertise in space
           and aeronautics in both civil and defense areas. In 2002, the
           Commission issued its final report on the major challenges facing
           the U.S. aerospace industry and recommended actions to address
           these challenges. The Commission's recommendations covered a wide
           variety of aerospace issues and included both broad government
           policy recommendations and specific actions for individual federal
           agencies.8 For example, one recommendation called for the United
           States to pioneer new frontiers in aerospace while another
           recommendation specifically called for FAA to reform its
           certification process. Table 1 provides a summary of some of the
           major issue areas identified by the Commission report, as well as
           some challenges and nine broad recommendations made by the
           Commission to address the issues.

5Aerospace Industries Association, Aerospace: Facts and Figures 2005-2006
(Arlington, Va.: 2005).

6Other federal agencies involved in the aerospace industry to some extent
are the Departments of Commerce, Homeland Security, and State.


Aerospace Industry Facing Multiple Challenges

7The Department of Homeland Security also funds a variety of R&D
activities, including some related to aviation security. These activities
are overseen by the Department of Homeland Security's Science and
Technology Directorate. This directorate requested approximately $1
billion for fiscal year 2007, but these funds are primarily for homeland
security-capabilities R&D.

8Federal agencies were not required to implement any of the Commission's
recommendations.

Table 1: Summary of Aerospace Commission Recommendations

                        Sample of challenges        Summary of broad          
                        identified by the           recommendation made by    
Area addressed       Commission                  the Commission            
Aerospace vision     U.S. leadership in the      The United States should  
                        global aerospace industry   pioneer new frontiers in  
                        is in jeopardy, in part     aerospace technology,     
                        because the U.S. aerospace  commerce, and             
                        sector lacks capital        exploration.              
                        investment, innovation, and 
                        capacity for growth; and    
                        foreign competitors are     
                        increasingly implementing   
                        policies to gain global     
                        market share in commercial  
                        aviation.                   
National air         America's air               Transformation of the     
transportation       transportation system faces U.S. air transportation   
system               serious challenges; the     system should be a        
                        commercial air transport    national priority.        
                        system is becoming          
                        unpredictable because the   
                        current air traffic system  
                        is approaching gridlock,    
                        regulatory processes have   
                        failed to keep pace with    
                        rapidly evolving            
                        technologies, and           
                        environmental limits on     
                        noise and emissions         
                        restrict airport runway     
                        development.                
U.S. space policy    The nation faces            The United States should  
                        limitations to space        create a space            
                        progress, such as the       imperative, through       
                        significant expense to get  government and private    
                        to orbit, a hostile and     sector partnerships, to   
                        highly limited environment  enhance national          
                        once in orbit, and lack of  security, stimulate the   
                        a strong public advocacy    economy, explore the      
                        for moving ahead.           universe, and open up     
                                                    space for new commercial  
                                                    opportunities.            
National security    Today's military            The United States should  
                        capabilities are robust,    adopt a policy that       
                        but at significant risk.    invigorates and sustains  
                        They rely on platforms and  the aerospace industrial  
                        an industrial base-measured base and includes         
                        in both human capital and   removing barriers to      
                        physical facilities-that    international sales of    
                        are aging and increasingly  defense products,         
                        inadequate.                 removing barriers to      
                                                    defense procurement of    
                                                    commercial products and   
                                                    services, and             
                                                    transferring defense      
                                                    technology to the civil   
                                                    sector.                   
Government-wide      The health and future of    The federal government    
management structure the aerospace industry will should establish a        
                        depend on the federal       national aerospace policy 
                        government being able to    and promote aerospace by  
                        efficiently and effectively creating a                
                        serve as leader, customer   government-wide           
                        and operator, facilitator,  management structure.     
                        and investor.               
Open and fair global Foreign governments or      Federal regulations and   
markets              coalitions of countries are policies should be        
                        distorting the aerospace    reformed to enable the    
                        market through policies,    movement of products and  
                        regulations, or subsidies   capital across            
                        that provide foreign        international borders on  
                        competitors with a          a fully competitive basis 
                        competitive advantage.      and to establish a level  
                                                    playing field for U.S.    
                                                    industry in the global    
                                                    marketplace.              
A new business model The aerospace industry has  A new business model,     
for the aerospace    been characterized as a     with increased and        
sector               low-growth sector,          sustained government      
                        chronically hampered by     investment and the        
                        high cyclicality, low       adoption of policies that 
                        margins, revenue            stimulate the flow of     
                        instability, and inadequate capital into the          
                        returns on investment,      industry, should be       
                        amplified by the            designed to promote a     
                        uncertainty in the          healthy and growing U.S.  
                        government budgeting and    aerospace industry.       
                        acquisition process.        
U.S. aerospace       There is a major workforce  The nation should         
workforce            crisis in the aerospace     immediately reverse the   
                        industry. Over 600,000      decline in, and promote   
                        scientific and technical    the growth of, a          
                        aerospace jobs have been    scientifically and        
                        lost since 1998, and these  technologically trained   
                        losses, coupled with        U.S. aerospace workforce. 
                        pending retirements,        
                        represent a loss of skill,  
                        experience, and             
                        intellectual capital to the 
                        industry.                   
U.S. aerospace R&D   The lack of sufficient and  The federal government    
                        sustained public funding    should significantly      
                        for research and associated increase its investment   
                        infrastructure for          in basic aerospace        
                        research, development,      research, which enhances  
                        testing, and evaluation     U.S. national security;   
                        limits the nation's ability enables breakthrough      
                        to address critical         capabilities; and fosters 
                        national challenges and to  an efficient, secure, and 
                        enable breakthrough         safe aerospace            
                        aerospace capabilities.     transportation system.    

Source: Commission report.

Additionally, since the publication of the Commission report, other
studies by such organizations as the National Academy of Sciences and the
National Institute of Aerospace also provided information on the
importance of the aerospace industry, along with challenges and
recommendations for addressing the issues.9

 Federal Agencies Have Addressed Commission Recommendations to Varying Degrees
                       through Different Types of Actions

The federal government has addressed a number of the Commission's
recommendations; however, the extent to which it has done so varies
significantly across the individual recommendations. Figure 2 identifies
the key federal entities that have taken steps to address the
recommendations or, because of their missions, were identified by the
Commission as the entities that would be responsible for addressing the
recommendations.

9National Research Council of the National Academy of Sciences, Decadal
Survey of Civil Aeronautics: Foundation for the Future (Washington, D.C.:
2006) and the National Institute of Aerospace, Responding to the Call:
Aviation Plan for American Leadership (Washington, D.C.: Apr. 2005).

Figure 2: Key Federal Entities for Selected Recommendations

Former Commissioners and experts with whom we spoke generally agreed that
the federal government's efforts to transform the national airspace system
was the most significant action that addresses a Commission
recommendation-in particular, the establishment of JPDO as an interagency
office. These former Commissioners and experts also cited the President's
Vision for Space Exploration,10 which addresses the Commission's
recommendation that the United States create a space imperative to explore
and exploit space to ensure national and planetary security, economic
benefit, and scientific discovery. In addition, federal agencies have
started addressing the workforce issue through a new jobs training
initiative. According to our research11 and the opinions of former
Commissioners and aerospace industry officials, the federal government has
not taken any significant action to address the recommendations to change
the current export control policy. In addition, there has been no action
taken by the federal government to establish a national aerospace
policy.12 While many of these federal actions address the Commission's
recommendations, some agency officials indicated that some federal actions
predate the Commission report and therefore do not represent a direct
response to the Commission's recommendations. Figure 3 summarizes the
extent to which federal agencies have taken actions-such as publishing new
policies or establishing new offices-that address some of the Commission's
recommendations. While this information summarizes federal actions, it
does not evaluate how well these actions have been implemented. See
appendix III for additional federal actions that address selected
aerospace Commission recommendations.

10NASA, The Vision for Space Exploration (Washington, D.C.: Feb. 2004).

11GAO, Defense Trade: Arms Export Control System in the Post-9/11
Environment, GAO-05-234 (Washington, D.C.: Feb. 16, 2005).

12While separate space and aeronautic policies have been developed, or are
in the process of being developed, there is no single national aerospace
policy.

Figure 3: Extent to Which Selected Recommendations Have Been Addressed

aRefers to the JPDO demonstration goals identified in its next generation
air transportation system integrated plan.

New Federal Programs and Policies Have Addressed Some Commission Recommendations

Congress and federal agencies have established new offices, programs, and
policies that address a number of the Commission's recommendations in the
areas of transforming the U.S. air transportation system, creating a U.S.
space imperative, and promoting the U.S. aerospace workforce. However, the
actions the agencies have taken are still in the early stages of
implementation.

  Creation of JPDO Addresses Recommendation to Transform the U.S. Air
  Transportation System, but Funding Concerns Remain

In 2003, Congress passed the Vision 100-Century of Aviation
Reauthorization Act (Vision 100),13 which created JPDO within FAA to plan
work related to the creation of the next generation air transportation
system (NGATS). The Commission identified the current air traffic
management system as severely limited in its ability to accommodate
America's growing need for mobility, and that the design, development, and
implementation of a next generation air traffic management system will be
an exceedingly complex challenge. The Commission called for a federal
inter-departmental group-working collaboratively with industry, labor, and
other stakeholders-to be formed to plan this new system, and former
Commissioners and experts agree that the creation of JPDO addresses this
recommendation. JPDO consists of seven partner agencies: the Departments
of Commerce (Commerce) and Homeland Security; Defense; DOT; FAA; NASA; and
OSTP. (See fig. 4.) Additionally, JPDO has responsibility to consult with
the public; to coordinate federal goals, priorities, and research
activities with those of aviation and aeronautical firms; and to ensure
the participation of nonfederal stakeholders from the private sector,
including commercial and general aviation, labor, aviation R&D entities,
and manufacturers. To date, JPDO has been funded by FAA and NASA.14

13Pub.L. No. 108-176 (Dec. 12, 2003).

14FAA's fiscal year 2007 budget request for R&D includes about $18 million
for JPDO, which is supplemented by matching funds from NASA. NASA has
committed to continuing this match in the future, according to a JPDO
official. JPDO uses these funds to conduct planning and studies. Vision
100 authorized $50 million annually for 7 years for JPDO.

Figure 4: JPDO's Seven Partner Agencies

Vision 100 directed JPDO to develop an integrated plan for NGATS and to
include in the plan, among other things, a description of the demand and
required performance characteristics of the future system, as well as a
high-level, multi-agency roadmap and concept of operations for the future
system.15 NGATS is needed to avoid congestion and costly delays, provide
adequate security and environmental safeguards, and accommodate a
projected tripling of demand for air traffic services by 2025. This is a
significant challenge given that these new capabilities must be deployed
seamlessly while the current system continues to operate. (See app. IV for
more information on JPDO.)

We found that JPDO has made progress in organizing itself and
incorporating federal and nonfederal stakeholders; it has also set forth a
vision for NGATS and strategies for attaining that vision.16 Furthermore,
JPDO has engaged in practices to facilitate the federal interagency
collaboration that is central to its mission. The partner agencies have
agreed to a vision statement and eight strategies that broadly address the
goals and objectives for NGATS. JPDO has also begun leveraging the
resources of its partner agencies. To leverage human resources, JPDO has
staffed its organization with partner-agency employees, although many of
them work for JPDO on a part-time basis. To further leverage resources,
JPDO conducted an interagency program review of its partner agencies' R&D
programs to identify the work that could support NGATS, as well as
identify areas for more effective interagency collaboration.

15As directed by Vision 100, the FAA Administrator provided this
integrated plan to Congress in December 2004. JPDO, Integrated National
Plan for the Next Generation Air Transportation System (Dec. 2004). In
March 2006, JPDO issued a progress report on the integrated plan, which
provides information on JPDO's organization and activities, such as
staffing integrated product teams that are discussed in appendix IV.

16GAO, Next Generation Air Transportation System: Preliminary Analysis of
the Joint Planning and Development Office's Planning, Progress, and
Challenges, GAO-06-574T (Washington, D.C.: Mar. 29, 2006); GAO, Air
Traffic Control: Status of the Current Modernization Program and Planning
for the Next Generation System, GAO-06-738T (Washington, D.C.: May 4,
2006); GAO, Air Traffic Control Modernization: Status of the Current
Program and Planning for the Next Generation Air Transportation System,
GAO-06-653T (Washington, D.C.: June 21, 2006); GAO, Next Generation Air
Transportation System: Preliminary Analysis of Progress and Challenges
Associated with the Transformation of the National Airspace System,
GAO-06-915T (Washington, D.C.: July 25, 2006).

However, as it moves forward in planning the new air traffic management
system, JPDO faces a challenge in continuing to leverage partner agencies'
resources because JPDO is fundamentally a planning and coordinating body
that lacks authority over the key human and financial resources needed to
continue developing plans and system requirements for NGATS. Despite early
successes in leveraging its partner agencies' resources and expertise for
NGATS initiatives, JPDO may have difficulty continuing to do so because
its partner agencies have a variety of missions and priorities in addition
to NGATS. As a result, some experts questioned the ability of partner
agencies to fully support the research needs of NGATS at planned levels.
For example, the President's fiscal year 2007 budget request for NASA did
not seek significant funding increases for aeronautics research to support
NGATS.17 JPDO's ability to leverage technical assistance and funding
resources from its partner agencies will be further tested in 2008, when
JPDO is planning technology demonstration projects related to NGATS. In
addition, JPDO may have difficulty leveraging its partner agencies'
resources and expertise because it does not yet have formal, long-term
agreements with the agencies on their roles and responsibilities in
creating NGATS. According to JPDO officials, they are working to establish
memorandums of understanding signed by the heads of the partner agencies
that will broadly define the partner agencies' roles and responsibilities
at a high level. JPDO is also developing more specific memorandums of
understanding with individual partner agencies that lay out expectations
for support on NGATS components, such as information sharing through
network-centric operations. Additionally, JPDO faces the challenge of
convincing nonfederal stakeholders that the government is fully committed
to NGATS because, in the past, the government has discontinued work on new
technologies for the national airspace system, including one technology in
which a nonfederal stakeholder had already invested.

17NASA's fiscal year 2006 budget provides $174 million for the Airspace
Systems program, which, according to NASA, is aligned with NGATS-related
airspace research needs. The President's proposed budget for fiscal year
2007 shows future funding for this program decreasing by more than 50
percent through fiscal year 2011. NASA officials noted that research in
the Aviation Safety Program and Subsonic Fixed Wing project also support
NGATS-related research in addition to contributing to broader national
needs in military and civil aviation.

  Issuance of a New Space Exploration Policy and Creation of a New NASA Office
  Addressed the Recommendation to Create a U.S. Space Imperative, but May
  Negatively Affect Other NASA Programs

The President's issuance of a national space exploration policy in January
2004, which calls for the human exploration of the Moon and Mars, and
NASA's formation of a new mission directorate for space exploration
programs, address the Commission's recommendation to create a U.S. space
imperative. According to the Commission, the United States is in danger of
losing its global leadership in space exploration, in large part because
it lacks strong public advocacy for the nation's space program, whereas
foreign countries are aggressively pursuing space exploration as a
significant strategic and economic asset. Experts believe that the
President's space exploration policy and NASA's new directorate address
the Commission's concern. To achieve the policy's objective, NASA formed
the Exploration Systems Mission Directorate to consolidate separate
exploration-related capabilities within one organizational unit18 and
thereby enhance their cooperation. The new directorate conducted a study19
to devise a plan for supporting the technologies and infrastructure needed
to meet the new space exploration policy. Released in November 2005, the
study recommended that NASA focus on the near-term activities needed to
complete the International Space Station and then focus on the longer-term
activities needed to implement its moon missions. The centerpiece of the
longer-term activities is a program to accelerate the development of a new
Crew Exploration Vehicle and Crew Launch Vehicle, to replace the shuttle.
The exploration directorate restructured its programs and, as of fiscal
year 2007, the three programs under the exploration directorate will be
the Constellation Systems program,20 the Exploration Systems Research and
Technology program,21 and the Human Systems Research and Technology
program.22 NASA officials stated that research and technology projects
have been aligned to support the new space exploration policy.

18Former programs of the Biological and Physical Research Enterprise
merged with Exploration Systems on August 1, 2004.

19NASA, NASA's Exploration Systems Architecture Study (Washington, D.C.:
Nov. 2005).

20The Constellation Systems program will develop, demonstrate, and deploy
the collection of systems that will enable sustained human exploration of
the Moon and Mars. These include the Crew Exploration Vehicle for the
transport and support of human crews traveling to low Earth orbit and
beyond, as well as launch vehicles for transport of the Crew Exploration
Vehicle and cargo to low Earth orbit, and any ground or in-space support
infrastructure for communications and operations.

Figure 5: Proposed Cargo Launch Vehicle with Lunar Lander Is an Example of
Aerospace R&D

Aerospace experts reported that they believe NASA's focus on implementing
the space exploration policy's goal of returning to the Moon and sending
human missions to Mars negatively affects other space exploration projects
that have significant scientific benefits. For example, in the fiscal year
2007 budget request, NASA announced cuts and delays in a number of
projects in areas such as space crew health research, electric propulsion
systems, and weather-monitoring systems. While experts and industry
officials generally thought that NASA's space exploration policy addresses
the Commission recommendation, they were concerned about the negative
impact of this new policy on other programs. For example, one expert noted
that NASA's cancellation of research projects that are not directly
supporting the space exploration programs has already negatively affected
research efforts at universities throughout the nation. With the loss of
funding in certain areas, this expert noted, many graduate students have
lost their grants and could potentially leave the aerospace field. Their
departure could have a long-term impact on the nation's future ability to
develop new technologies. In addition, a recent report by the National
Academy of Sciences that reviewed NASA's plans for science programs over
the next 5 years, concluded that NASA does not have the necessary
resources to carry out the tasks of completing the International Space
Station, returning humans to the Moon, sustaining capabilities in
aeronautical research, and maintaining space and Earth science programs.23

21The Exploration Systems Research and Technology program's primary focus
is solar system exploration. This program will include areas such as
exploratory R&D of new high-leverage technologies and the development of
nuclear technologies for power and propulsion.

22The Human Systems Research and Technology program focuses on ensuring
the health, safety, and security of humans through the course of
solar-system exploration.

  The President's High Growth Job Training Initiative Addresses Recommendation
  on Promoting the Aerospace Workforce, but Questions Remain about Its Impact

Labor addressed the Commission's workforce recommendation to reverse the
decline and support the training of the aerospace workforce by including
the aerospace industry in the President's High Growth Job Training
Initiative.24 The initiative focuses on 14 high-growth industries.25 Given
estimates that 26 percent of the aerospace industry workforce will be
eligible for retirement by 2008, the Commission was concerned about a loss
of intellectual capital. While the Commission was unable to agree on any
immediate solution, it maintained that U.S. policy must reaffirm the goal
of stabilizing and increasing the number of jobs in the industry. The
training initiative is a national grant program, started in 2003, that
attempts to tailor local workforce investment activities to reflect the
workforce needs of local employers. According to Labor officials, the
aerospace industry was selected in large part because of its significant
impact on the economy overall, as well as its impact on the growth of
other industries. A primary focus of the initiative is to address the
aerospace industry's aging workforce-with the subsequent loss of
institutional knowledge, experience, and technical talent-by attracting
young people into the field and building their skills. The grants are
provided to projects designed to address the industry's aerospace
workforce needs while also helping workers find employment with good wages
and career opportunities. For example, a number of projects are geared
toward expanding the number of youth interested in aerospace and provide
training for aerospace employment. As of June 2006, Labor had provided
eight grants, totaling over $10 million, for aerospace projects. (See
table 2.)

23National Academy of Sciences, An Assessment of Balance in NASA's Science
Programs (Washington, D.C.: 2006).

24The high growth initiatives provide federal funding to local workforce
training programs in 14 high-growth business sectors that have been
identified as potentially adding a substantial numbers of new jobs, or
have emerging technologies that require new skill sets for workers.

25The targeted industries are: advanced manufacturing, aerospace,
automotive, biotechnology, construction, energy, financial services,
geospatial technology, health care, homeland security, hospitality,
information technology, retail, and transportation.

Table 2: Grants Awarded by Labor for Aerospace Workforce Projects

                                                        Date                  
Recipient              Purpose                       awarded        Amount
Community Learning     To train aerospace workers    June 2001 $4,028,000a 
Center, Inc., Texas    for new high-technology                 
                          manufacturing processes                 
Brevard Community      To provide hands-on learning  December       99,000 
College, Florida       opportunities for students to 2004      
                          develop technical aerospace             
                          skills and improve awareness            
                          of the skills required for              
                          aerospace careers                       
Edmonds Community      To develop an advanced        December    1,475,000 
College, Washington    aerospace technician          2004      
                          curriculum, career ladders,             
                          and distance learning                   
                          approaches associated with              
                          the Boeing 787 supply chain             
Florida Space Research To provide two aerospace      December      356,000 
Institute, Florida     mentors for 25 teachers in    2004      
                          seven Florida counties to               
                          improve hands-on knowledge              
                          and awareness of the skills             
                          required for aerospace                  
                          careers in Florida                      
Houston-Galveston Area To reduce foreign visa worker December    1,000,000 
Council for the Gulf   dependency in several high    2004      
Coast Workforce Board, technology, high skill                  
Texas                  aerospace job occupations on            
                          the Texas Gulf Coast                    
Enterprise-Ozark       To develop skilled aviation   October     1,637,000 
Community College,     technicians in Alabama's      2005      
Alabamab               aviation industry corridor              
Aerospace Development  To establish an aerospace     July 2005   1,899,000 
Corporation            workforce infrastructure that           
                          identifies and develops                 
                          strategic solutions to                  
                          state-level challenges in the           
                          five key aerospace states of            
                          Alabama, California,                    
                          Colorado, Florida, and Texas            

Source: GAO analysis of Labor information.

aThe Community Learning Center, Inc. received two grants, which we
combined.

bThis grant was awarded under the Community-Based Job Training grant
program, which is a competitive grant program that increases the capacity
of community colleges to train workers in key industries such as the
aerospace industry.

While the initiative addresses the Commission's recommendation to promote
the growth of the aerospace workforce, the experts with whom we spoke
questioned whether this program will have a significant impact. One expert
stated that, because the aerospace industry rapidly changes, these types
of job training programs are replacing skills that may run the risk of
becoming quickly outdated. Another expert said that, even with these types
of government training programs, the business cycle is the major influence
on the status of the aerospace workforce. As with any other major
industry, if there is not a strong demand for aerospace products,
companies will be hard pressed to provide enough jobs to maintain a strong
workforce. In commenting on a draft of this report, Labor officials noted
that this initiative is designed to model innovative solutions and to
leverage larger federal investment programs and partnerships with
industry, education providers, and other stakeholders. Therefore, Labor
officials believe that this initiative will be able to respond to the
aerospace industry's changing competency and skill requirements. However,
the initiative has not been evaluated, so its impact is unknown.

  Federal Agencies Have Established New Education Programs, but Concerns Remain
  About Programs' Effectiveness

Congress and federal agencies have addressed the Commission's
recommendation to invest in science, technology, engineering, and
mathematics (STEM) education by establishing a number of programs designed
to increase students' interest in STEM careers. The Commission believes
that STEM education at all levels, from kindergarten through graduate
school, needs government action and investment to ensure that the
aerospace industry has access to a scientifically and technologically
trained workforce. In 2005, we reported26 that 13 federal civilian
agencies27 spent about $2.8 billion in fiscal year 2004 for 207 education
programs designed to increase the number of students and graduates, or to
improve the educational programs in STEM fields.28 Since 2004, a number of
new STEM education programs have been created. For example, the national
Science and Mathematics Access to Retain Talent (SMART) grant program was
created in 2006 to encourage students to enroll in STEM fields. This
program provides up to $4,000 for each of 2 academic years for students in
their third or fourth academic year of an undergraduate program at a
4-year degree-granting institution, who have maintained a cumulative grade
point average of 3.0 or above and meet the eligibility requirements of the
federal government's need-based Pell Grant program.29 The Department of
Education expects to provide $790 million in SMART grants to over 500,000
students in academic year 2006-2007. In addition, under the Deficit
Reduction Act of 2005, Congress established an Academic Competitiveness
Council, chaired by the Secretary of Education, to identify, evaluate,
coordinate, and improve federal STEM programs.30 This council is composed
of officials from federal agencies with responsibilities for managing
existing federal programs that promote STEM education. As mandated, the
council plans to identify all federal programs with a STEM focus, identify
the target populations, determine the effectiveness of these programs,
identify areas of overlap or duplication, and recommend ways to
efficiently integrate and coordinate the programs. Congress directed the
council to report its findings and recommendations by early 2007. Finally,
in 2006, the President announced the American Competitiveness Initiative,
which, over the next 10 years, would commit $50 billion to increase
funding for research and $86 billion for R&D tax incentives to encourage
innovation in science and technology, and to support math and science
education. While it does not specifically refer to aerospace, the
initiative calls for investing in key federal agency programs with
objectives that include encouraging up to 30,000 math and science
professionals to become adjunct high school teachers, creating a research
base to improve instructional methods and materials for teaching math and
science, and evaluating the impact of government-wide investments in math
and science education. 31

26GAO, Higher Education: Federal Science, Technology, Engineering, and
Mathematics Programs and Related Trends, GAO-06-114 (Washington, D.C.:
Oct. 12, 2005).

27The 13 federal agencies are the Departments of Agriculture, Education,
Energy, Homeland Security, and the Interior; Commerce; DOT; the
Environmental Protection Agency; the Health Resources and Services
Administration; the Indian Health Service; NASA; the National Institutes
of Health; and the National Science Foundation.

28STEM fields cover degrees in many disciplines (including aerospace,
aeronautical, and astronautical engineering) and occupations (including
aerospace, electrical, and electronics engineers).

29The Federal Pell Grant Program promotes access to postsecondary
education by providing need-based grants to low-income students.

Although the federal government has spent billions of dollars on education
programs in STEM fields, concerns remain about the effectiveness of the
federal investment. For example, the reduction in NASA's education budget
will result in the elimination of long-standing programs designed to reach
education communities, both formal (e.g., students, teachers, education
administrators, and institutions) and informal (e.g., museums,
planetariums, and community organizations). Experts told us that, although
the federal government is directing significant amounts of funds to
educational programs, the goals and potential outcomes for the programs
are unclear and decentralized, thereby raising questions about whether the
funding is providing the most effective results. For example, we have
reported32 that fewer STEM education programs are targeted to elementary
and secondary school teachers and students than to other targeted
groups-such as graduate program students-even though a number of experts
stated that STEM programs for these teachers and students can have the
greatest benefits. The experts we interviewed believe that the focus
should start at the primary school level to have a better chance of
influencing students to seek careers in the aerospace industry.

30Pub. L. No. 109-171 (2006).

31The American Competitiveness Initiative identified the National Science
Foundation, the Department of Energy's Office of Science, and Commerce's
National Institute of Standards and Technology as the federal agencies
that will have investments in their core research activities doubled over
the next 10 years.

Changes to Existing Programs Have Addressed Some Commission Recommendations

Agencies' efforts to revise strategies and procedures and to restructure
existing organizations have addressed some Commission recommendations in
the areas of aeronautics R&D, streamlining FAA procedures, and increasing
U.S. presence in international aviation; however, experts and industry
officials have emphasized that these changes can negatively affect other
programs or be limited by external factors.

  NASA's Aeronautics Program Focuses on Basic Research as Recommended by the
  Commission, but Has Not Adopted Recommended Technology Demonstration Goals

NASA addressed the Commission's recommendations to focus on basic research
by restructuring the Aeronautics Research Mission Directorate to give
greater priority to fundamental research.33 However, the Commission also
recommended specific technology demonstration goals, and the agency is
moving away from demonstration projects that showcase such goals. The
Commission reported that U.S. industry might fall behind foreign
competitors in pioneering new aerospace technology if U.S. R&D investments
continued to downplay basic research and were not focused on specific,
breakthrough technology goals. To address this challenge, the Commission
recommended that the United States pursue long-term basic research and
specific technology demonstration goals. NASA's restructured Aeronautics
Research Mission Directorate includes three research programs-Fundamental
Aeronautics, Aviation Safety, and Airspace Systems-that replace previous
programs in Vehicle Systems, Aviation Safety and Security, and Airspace
Systems, respectively.34 (See table 3.) Within the three research
programs, the most significant change occurred within what is now the
Fundamental Aeronautics program, which focuses on fundamental aeronautics
research rather than on development projects. Airspace Systems' name
remains unchanged, but it will now focus on NGATS and JPDO's research
needs. According to NASA, these programs give priority to fundamental
research that is applicable to a broad range of air vehicles, whereas in
the recent past NASA emphasized bringing specific projects to higher
technological maturity, often focusing on these narrowly defined
demonstration projects and not on developing technology that would be
transferable to other types of systems or projects.35 NASA also has taken
several actions to better solicit input from academia and industry, with
the goal of facilitating the transfer of R&D to industry as a whole.36 For
example, NASA told us that as of August 2006, at least 110 universities
had submitted proposals in response to research announcements that it
issued in January 2006. In addition, the Commission recommended technology
demonstration goals, such as reducing aviation transit time by 50 percent
and engine emissions and noise by 90 percent, but NASA does not plan to
adopt these goals or alternative narrowly defined technology demonstration
goals, because its leadership believes that pursuing them can lead to
scientifically unjustified research projects. For example, while the
design for a vehicle could showcase one particular goal, such as reducing
emissions, this design could perform poorly in another area, such as
reducing engine noise. NASA leadership believes that to overcome these
types of conflicting design requirements, NASA must use a more integrated
approach, grounded in fundamental research that cuts across its core
disciplines such as aerodynamics, acoustics, and combustion.

32 GAO-06-114 .

33NASA uses the term "fundamental" to refer to research that includes
continued long-term, scientific study in core areas such as physics,
chemistry, materials, experimental techniques, and computational
techniques to enable new capabilities and technologies for individual and
multiple disciplines.

34In addition, NASA's aeronautics directorate plans to preserve key
aeronautics test facilities, such as wind tunnels.

35Technology maturity is attained when a technology can be shown to work
in an operational environment.

36The Commission report stated the Commission's belief that the U.S.
aerospace industry must take a leadership role in transitioning government
and university research into products and services. In reviewing a draft
of this report, NASA officials stated that their restructured aeronautics
program is directly aligned with the Commission's intent.

Table 3: Reshaped Strategy of NASA's Aeronautics Research Mission
Directorate

                                                          Major changes       
Previous                                               between previous    
program    New program New program's focus             and new programs    
Vehicle    Fundamental Conduct long-term research in   Program no longer   
Systems    Aeronautics the core competencies of        focuses on the      
                          aeronautics-such as propulsion, development of      
                          aerothermodynamics, and         narrowly defined    
                          materials-that are applicable   technology          
                          to a broad range of subsonic    demonstration       
                          (both fixed- and rotary-wing),  projects and        
                          supersonic, and hypersonic air  directs attention   
                          vehicles.                       to more fundamental 
                                                          research areas.     
Aviation   Aviation    Provide the capabilities and    Aviation security   
Safety and Safety      technologies needed to increase is dropped from the 
Security               aviation safety given the       research portfolio. 
                          revolutionary changes expected  If it continued     
                          in air vehicles of the future.  this work, NASA     
                          Work is "vehicle-centric" and   believes it would   
                          focused on the safety needs of  duplicate efforts   
                          NGATS.                          now under way by    
                                                          the Department of   
                                                          Homeland Security.  
Airspace   Airspace    Develop future concepts,        Reshaped program    
Systems    Systems     capabilities, and technologies  integrates formerly 
                          that enable major increases in  independent         
                          air traffic effectiveness,      programs and is     
                          flexibility, and efficiency, as directly aligned    
                          articulated for NGATS by JPDO.  with supporting     
                                                          NGATS and JPDO.     

Source: GAO analysis of NASA data.

NASA's restructuring of the Aeronautics Research Mission Directorate
matches the Commission's recommendation to emphasize basic research, but
reduced funding of demonstration projects might leave technologies too
underdeveloped for easy adoption by industry. While NASA's reshaped
strategy focuses more on basic research, as recommended by the Commission,
NASA has less funding for demonstration projects and partnership projects
with industry and academia. Experts commented that these demonstration
projects are an important mechanism for technology transfer and in
focusing on fundamental research, NASA will not be able to develop new
technologies to the same level of maturity as in the past. NASA noted that
it will continue to conduct flight test demonstrations with other federal
agencies, such as Defense. Our prior work has found that technologies that
have demonstrated a high level of maturity are more likely to meet cost,
schedule, and performance requirements during product development.
Similarly, our prior work and several experts with whom we spoke indicated
that, as a result, industry would be less likely to further develop these
new technologies for commercial and government use and, therefore, for
example, implementation of NGATS could be delayed. While experts agreed
that the budget decline will negatively affect aeronautics R&D, they
disagreed about the importance of adopting the Commission's specific
demonstration goals. One expert stated that the Commission's recommended
demonstration goals are best interpreted as ideals for the future, whereas
another expert endorsed pursuing them. Still another expert stated that
focusing on basic research instead of demonstration projects makes sense
in the face of the directorate's declining budget, since demonstration
projects are expensive (see app. II for further information on R&D
funding). Finally, a recent study by the National Academy of Sciences
notes that declining budgets for aeronautic research pose a challenge to
civil aeronautics research, but recommends that research should focus on
strategic objectives, themes, and high-priority research and technical
challenges, regardless of funding levels.37

  FAA's Modifications of Regulations and Procedures Address Recommendations;
  however, External Factors Might Limit Further Streamlining

A variety of FAA actions have addressed the Commission's recommendations
to revise rule-making procedures and streamline airport and runway
development processes. These recommendations reflect the Commission's
concerns that lengthy rule-making procedures have delayed the issuance of
new rules and that delays in airport environmental reviews for new runways
have hindered efforts to enhance airport capacity. FAA actions include
conducting monthly briefings for senior policymakers on significant rules,
creating compensation incentives for senior executives that are tied to
the timely completion of rules, and developing a performance standard that
requires 80 percent of all initiated rules to be cleared by the FAA
Administrator within 90 days of their originally scheduled completion
date. Furthermore, DOT's Chief of Staff and Deputy Secretary conduct
quarterly meetings with the FAA Administrator to review the status of each
proposed rule. In addition, to help expedite the process for airport
development projects and reduce the average of 10 years it takes to plan
and build a new runway, FAA is taking steps to streamline airport
environmental reviews.38 For example, FAA issued an order in April 2006 to
expedite reviews of airport projects that includes the ability to
prioritize the review of certain airport projects; promote public review
and comment; manage time lines during the review; and expedite
coordination between those federal, state, and local agencies involved in
airport environmental reviews in order to reduce undue delays during the
review process. In addition, to reduce delays in environmental review work
caused by insufficient staff, FAA is reallocating FAA staff resources and
increasing the use of consultants.

While some FAA actions have addressed the Commission's recommendations to
revise rule-making procedures and streamline environmental airport
reviews, we have reported that factors such as legal and policy
requirements and local politics might limit FAA's ability to further
streamline these procedures. In a 2003 analysis of 32 runway projects, we
noted significant challenges to reducing runway project delays, including
the difficulty of reaching consensus among stakeholders on the need for
runways; complying with numerous overlapping federal, state, and local
environmental laws; mitigating the impact of aircraft noise on the
surrounding community; and challenges faced during the runway design and
construction phase.39 Former commissioners and experts supported our prior
research. For example, one aerospace expert said that legal requirements
that apply to the rule-making process, such as the requirement for periods
of public comment, create unavoidable delays. Another expert said that FAA
is limited in its ability to reduce the time it takes to issue rules
because rules are designed to ensure the safe operation of aircraft and
public safety considerations have to take priority over reducing the time
it takes to issue the rule. Some experts also said that FAA is limited in
its ability to further streamline new airport runway reviews. For example,
one expert noted that unavoidable delays often occur when local public and
political opposition to runway development leads to court proceedings.

37National Research Council of the National Academy of Sciences, Decadal
Survey of Civil Aeronautics: Foundation for the Future (Washington, D.C.:
2006).

38GAO, Aviation Infrastructure: Challenges Related to Building Runways and
Actions to Address Them, GAO-03-164 (Washington, D.C.: Jan. 30, 2003).

  Agencies are Making Efforts to Address the Commission's Recommendation to
  Increase U.S. Presence in International Aviation

FAA and JPDO have made efforts to address the Commission's recommendation
to increase the U.S. commitment to the development of global aviation
standards and the establishment of international partnerships for global
air traffic management systems. The Commission found that some foreign
countries have established domestic standards that provide a competitive
advantage for those countries' national companies, and although other
governments have actively sought global leadership in international
standard-setting bodies, such as the International Civil Aviation
Organization (ICAO),40 the United States has not devoted enough resources
and is, therefore, losing its position as the de facto standard setter.
FAA has supported several efforts to increase the U.S. commitment to, and
involvement in, the development of global aviation standards by increasing
its presence at ICAO. ICAO allocates positions within its organization to
national citizens from all its member organizations and currently has
allocated 31 positions to the United States. To ensure that qualified U.S.
candidates apply for these positions, FAA has supported a number of
activities, including outreach efforts, incentive pay programs, and a
fellowship program. For example, FAA has conducted outreach efforts at the
staff level to increase awareness of international opportunities at ICAO.
Senior FAA officials have given speeches and presentations at major agency
functions, such as the Hispanic Coalition and the Professional Women's Air
Traffic Control Organization. In 2003, FAA established the FAA/ICAO
Fellowship Program, which sends FAA employees to work at ICAO for up to 12
months. Since the FAA/ICAO Fellowship Program started, six FAA employees
have served as fellows and one of these fellows was subsequently hired by
ICAO as a full-time employee for a 2-year position. JPDO has also worked
to develop international partnerships-including partnerships with China,
East Asia, and Europe-to promote the global harmonization of air traffic
management systems.41 The goal is to harmonize equipment and operations
globally and advocate for the adoption of U.S.-preferred transformation
concepts, technologies, procedures, and standards. For example, JPDO
officials have noted the need to work toward harmonization with the Single
European Air Traffic Management Research Program (SESAR), a major
initiative to modernize the airspace system of the European Union. In July
2006, FAA announced that it had signed a memorandum of understanding with
the European Union that identifies specific areas of cooperation.42

39 GAO-03-164 .

40ICAO is a United Nations agency that sets international standards on
civil aviation for 188 member states. The organization addresses
fundamental issues ranging from air navigation and capacity to emerging
environmental concerns such as engine noise and emissions.

While FAA has made efforts to increase the U.S. presence at ICAO and
develop partnerships, the majority of U.S. positions at ICAO are still
unfilled, and in some areas, cooperation does not appear to be fully
developed. FAA faces difficulty in filling the allocated positions for
reasons beyond its control. For example, while FAA can recruit applicants,
it does not make the final hiring decision. Despite FAA's efforts to fill
the positions allocated to the United States at ICAO, as of December 2005,
only 13 of the 31 allocated positions were filled. While FAA and JPDO are
planning cooperative activities, our research has identified several areas
where coordination does not appear to be fully developed. For example, we
have reported that 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.43 It is possible
that greater cooperation and exchange between NGATS and SESAR might
develop once planning has progressed to the development and validation
stage.

41JPDO has a global harmonization integrated product team, led by managers
from the Air Traffic Organization's Operations Planning Services
International and FAA's Office of International Aviation.

42The areas of cooperation include regulations, standards, and procedures;
coordination with international organizations; R&D and civil and military
air traffic management issues.

  Limited Streamlining of U.S. Export Control Licensing Procedures Address the
  Commission's Recommendation; however, the Export Control Policy Has Not
  Fundamentally Changed

Some limited federal initiatives, primarily designed to streamline export
licensing procedures, address aspects of the Commission's recommendation
to reform regulations and policies to enable the movement of goods across
borders on a fully competitive basis. According to the Commission, the
current approach to U.S. export control is counterproductive to national
security interests and the vitality of the U.S. aerospace industry. The
Commission recommended streamlining U.S. export licensing systems and
reforming export control policy. Commerce regulates exports of dual-use
items-that is, items with military and civilian uses-and the Department of
State regulates arms exports.44 There are many aerospace products, such as
commercial aircraft frames and components, which are designed for both
civilian and military uses and are therefore licensed as dual-use items,
while other aerospace products, such as precision-guided air-to-surface
missiles, are designed for military use and would be licensed by State.
State has implemented, through regulation and guidance, initiatives
primarily designed to streamline and expedite the processing of export
license applications. For example, in January 2004, State officially
implemented a Web-based license application submission and review system
that allows companies to electronically submit export authorization
requests and supporting documentation for review. In February 2005, we
reported that, although State initially received few applications through
this system, officials noted greater use of the system after 1 year as
well as reduced median processing times for electronically submitted
export license applications.45

Although State has implemented initiatives to streamline the arms export
control licensing process, overall, the export control policy has not
undergone fundamental changes since the Commission published its report.
In 2005, we reported46 that, although the system itself remains basically
unchanged, new trends have emerged in the processing of arms export
cases.47 Median processing times48 for all arms export cases declined
between fiscal year 1999 and fiscal year 2002, but began increasing in
fiscal year 2003; this upward trend continued into the first 7 months of
fiscal year 2004. Furthermore, Commerce has not made fundamental changes
to the dual-use export control system.49 Attempts have been made to change
the legislation governing the U.S. export control system since the
Commission published its report, but none have resulted in new export
control legislation.50

43 GAO-06-738T .

44Commerce licenses dual-use items under Executive Order 13222 (66 Fed.
Reg. 44025), and State licenses arms exports under the Arms Export Control
Act (P.L. 90-629).

45GAO, Defense Trade: Arms Export Control System in the Post-9/11
Environment, GAO-05-234 (Washington D.C.: Feb. 16, 2005).

Federal Agencies Face Challenges in Addressing the Commission's Recommendations

Federal agencies will face a number of challenges in continuing to address
the Commission's recommendations. These challenges include confronting
difficult budgetary trade-offs and coordinating actions between multiple
agencies and industry. Specifically, our work, federal officials, and
industry experts indicated that budget constraints will require agencies
to prioritize some programs that address certain recommendations at the
expense of other programs. Furthermore, according to experts, a lack of
coordination between federal agencies, private industry, and universities
could impede the efficient advancement of the aerospace industry.

46 GAO-05-234 .

47Cases include applications for the permanent export of arms, the
temporary export and import of arms, and agreements between U.S. industry
and foreign entities to provide technical assistance or manufacturing
capability, as well as requests for amendments to existing licenses and
jurisdiction determinations.

48The median processing time is the point at which 50 percent of the cases
took more time and 50 percent took less time. We are reporting the median
processing time because average (or mean) processing times can be
significantly affected by a small number of cases that had much longer
review times than the majority of cases.

49 GAO, Export Controls: Improvements to Commerce's Dual-Use System Needed
to Ensure Protection of U.S. Interests in the Post-9/11 Environment,
GAO-06-638 (Washington, D.C.: June 26, 2006).

50See H.R. 4572, 109th Congress and H.R. 4200, 109th Congress.

Agencies Face Challenges in Setting Funding Priorities for Efforts That Address
Recommendations

Budget constraints, in all likelihood, will challenge agencies' efforts to
address the Commission's recommendations, and require that some programs
that address certain recommendations be given priority over other programs
that address other recommendations.51 Such budgetary trade-offs are all
the more likely if implementing a recommendation requires launching or
expanding large, expensive programs, such as the mission to Mars. Given
the long-term fiscal challenges facing the United States and other current
spending priorities that are unrelated to aerospace, it is unlikely that
significant new sources of funding will be available for these programs,
and overall departmental budgets may not expand. Consequently, agency
officials are likely to face tough decisions prioritizing programs within
their jurisdictions, and some programs that address recommendations will
likely be scaled back, delayed, or cancelled. For example, the NASA
Administrator testified in February 2006 that NASA cannot afford to fully
fund all its programs. As a result, NASA's proposed fiscal year 2007
budget shows lower funding levels for a variety of areas such as
aeronautics research and space shuttle operations.

Within NASA, some programmatic realignment has already occurred in the
course of implementing programs that address the Commission's
recommendations, and, as a result, NASA has made some difficult budgetary
prioritization decisions. For example, as discussed earlier, when NASA
formed the Exploration Systems Mission Directorate to pursue the
President's space policy, NASA aligned resources to complete the
International Space Station and accelerate the development of new space
vehicles to replace the space shuttle. In congressional testimony, the
NASA Administrator stated that this reallocation of resources requires
NASA to delay several NASA space science projects, and budget plans for
upcoming years reflect an increasing priority for space exploration (see
fig. 6).52 Former commissioners and experts told us that, although NASA's
space exploration activities are largely in line with the Commission's
recommendation to create a space imperative, the resultant pull-back of
NASA funds from other activities-like aeronautics research, which is
projected to decrease almost 30 percent from $906 million in 2005 to $647
million (in 2005 dollars) in 2011, or support for basic scientific
research in aerospace at universities-was having negative effects.
Likewise, the recent study of civil aeronautics research by the National
Academy of Sciences notes that the continued decline of aeronautics
research funding will challenge NASA's ability to conduct basic research
needed for the future.53

51For additional information on federal budget constraints see GAO, 21st
Century Challenges: Reexamining the Base of the Federal Government,
GAO-05-325SP (Washington, D.C.: Feb. 2005).

52Statement of Michael Griffin, Administrator, NASA, before the Committee
on Science, House of Representatives, February 16, 2006.

Figure 6: Projected Trends in Major Aerospace-Related Missions within
NASA, Fiscal Years 2005-2011

Note: This figure excludes NASA's budget for cross-agency support
programs, such as education programs, and the Inspector General's Office.
Space operations includes funding for the space shuttle and International
Space Station. Exploration systems includes the budgets for developing new
space vehicles such as the Crew Launch Vehicle and Crew Exploration
Vehicle. Science includes funding for earth-sun, solar system, and
universe programs. Aeronautics research is the total budget for the
Aeronautics Research Mission Directorate.

53National Research Council of the National Academy of Sciences, Decadal
Survey of Civil Aeronautics: Foundation for the Future (Washington, D.C.:
2006).

FAA and JPDO also face difficult budget prioritization questions that are
likely to challenge their ability to address the Commission's
recommendation to establish a new automated air traffic management system.
For example, JPDO faces challenges in providing Congress with realistic
cost estimates for the entire NGATS effort. While JPDO is responsible for
the planning of NGATS, the implementation of NGATS will fall in large part
to FAA. We reported54 that FAA faces challenges in institutionalizing
recent improvements in its management and acquisition processes, as well
as in obtaining the expertise and resources needed to implement NGATS. We
noted that transforming the national airspace system while the current
system continues to operate will be an enormously complex undertaking,
made more challenging by a difficult budgetary environment. Going forward,
efforts by both FAA and JPDO to control costs and leverage resources will
become ever more critical. Success depends on the ability of FAA and JPDO
to define their roles and form a collaborative environment for planning
and implementing the next generation system.

Agencies Face Challenges in Coordinating Efforts to Avoid Duplication and
Inefficiency

According to experts and our work, better coordination among federal
agencies, private industry, and universities could help advance the
aerospace industry by reducing duplicative efforts and leveraging
resources more efficiently. Such coordination is particularly important
for STEM funding and JPDO, both of which involve multiple agencies. As
previously discussed and as we reported in 2005, 13 federal civilian
agencies reported funding 207 education programs in fiscal year 2004 to
expand and improve STEM training.55 Additionally, experts stated that,
since these STEM programs are operated by the government and are designed
to meet the needs of the federal government, industry, and research
facilities, it is important that these key groups coordinate to develop an
overall strategy. However, as we reported, there has been limited
coordination between these programs. According to our prior report and
experts with whom we spoke, the current lack of coordination is hindering
improvements to STEM education.

54 GAO-06-915T .

55GAO, Higher Education: Federal Science, Technology, Engineering, and
Mathematics Programs and Related Trends, GAO-06-114 (Washington D.C.: Oct.
12, 2005). Among the agencies involved in these programs are NASA and FAA,
which support degrees in aerospace and aeronautical engineering.

JPDO also faces the challenge of coordinating with its partner agencies in
creating NGATS. 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. JPDO's integrated plan, among other things, provides a framework
for institutionalizing collaboration among multiple federal agencies. JPDO
is fundamentally a planning and coordinating body; therefore, it will be
challenged to coordinate with its partner agencies, in part, because those
agencies have differing missions and priorities. In addition, our work has
shown that collaborating agencies should work together to define and agree
on their respective roles and responsibilities, including how the
collaborative effort will be led.56 In JPDO's case, there is no
formalized, long-term agreement on the partner agencies' roles and
responsibilities in creating NGATS. According to JPDO officials, a
memorandum of understanding that would define partner agencies'
relationships was being developed, but has not been completed. It is
particularly important for JPDO and FAA's Air Traffic Organization to
define their respective roles and responsibilities, since both
organizations are involved in planning the national airspace system's
modernization and in coordinating the challenging transition from the
current air traffic control system to NGATS.

                            Concluding Observations

Sustaining the nation's long-term commitment to science and
technology-including aerospace science and technology-presents great
opportunities to improve the quality of life, the performance of the
economy, and the relationship of government to its citizens. Advances in
aerospace technology in the United States have historically been fueled by
combined public and private sector R&D, which have ensured the United
States a global leadership position in the aerospace industry. However, a
growing fiscal imbalance will require the nation to decide what level of
federal spending it wants-including funding of aerospace R&D.
Additionally, as other governments, such as the European Union, increase
the use of government resources to pursue global leadership in the
aerospace industry, the United States' preeminent position is being
challenged.

56GAO, Next Generation Air Transportation System: Preliminary Analysis of
the Joint Planning and Development Office's Planning, Progress, and
Challenges, GAO-06-574T (Washington D.C.: Mar. 29, 2006).

While Congress did not establish any requirements to implement the
Commission's recommendations, Congress and several federal agencies have
taken significant actions that begin to address many of them. If Congress
and federal agencies want to continue to address the Commission's
recommendations, it will require leadership from all levels of government
and the private sector. The establishment of JPDO and the President's
space exploration policy are two major actions taken by the federal
government, both of which will require the federal government to maintain
long-term funding commitments. Our prior work has shown that one way to
accomplish this is for federal agencies to continue to form collaborative
environments for planning and implementing large cross-cutting programs
such as NGATS. For example, JPDO has already moved to leverage other
federal agency resources by conducting a review of its partner agencies'
R&D programs to identify ongoing work that could support NGATS. Our prior
work has also shown that the government's use of public-private
partnerships can help to focus limited resources in programs that could
provide the greatest benefit-both for the government and the private
sector-and spread the risk across multiple stakeholders. The Commission
emphasized the goal of developing stronger public-private partnerships,
and some of the most significant actions that address the Commission's
recommendations brought cross-government efforts together with industry to
make advances with positive results.

                                Agency Comments

We provided a draft of this report to Defense, DOT, Labor, NASA, and OSTP
for their review and comment. Labor and NASA provided written comments
(see apps. V and VI). DOT and OSTP provided technical clarifications,
which we incorporated into this report as appropriate. Defense had no
comments on the draft report.

In response to the report's description of comments by experts concerning
the President's High Growth Job Training Initiative, Labor emphasized that
this initiative is designed to demonstrate innovative model solutions to
these challenges, which may be leveraged and replicated by the larger
publicly funded workforce investment system. The agency therefore believes
that this approach will develop the ability to respond to the industry's
changing competency and skill requirements. We revised the report to
reflect Labor's viewpoint, but point out that since the initiative has not
been evaluated, its impact is unknown.

NASA generally agreed with the report's contents, but provided several
clarifying comments. For example, NASA identified additional actions it
has taken that are aligned with Commission recommendations, such as
providing research grants to universities and NASA explained that it will
continue to conduct flight test demonstrations with other federal
agencies, such as Defense. We revised the report to include NASA's other
actions. In addition, NASA noted that its aeronautics research budget is
not projected to decline by 50 percent from fiscal year 2006 to fiscal
year 2011, as stated in our report draft. We agree that 50 percent was an
incorrect calculation and further agree with the budget numbers stated in
NASA's letter. However, to evaluate budget trends over a number of years
in real terms, we present budget numbers in the report in
inflation-adjusted dollars. Therefore, when converted into 2005 dollars,
the proposed aeronautics research budget will decrease by nearly 30
percent from $906 million in 2005 to $647 million (in 2005 dollars) in
2011. We corrected and clarified the report language.

As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 15 days after
the report date. At that time, we will send copies of this report to
interested congressional committees, the Secretaries of Defense, Labor,
and Transportation; the Administrators of FAA and NASA; and the Director
of OSTP. 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.

If you have any questions about this report, please contact me at (202)
512-2834 or [email protected]. 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
VII.

Sincerely yours,

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

Appendix I: Objectives, Scope, and Methodology

In considering the recommendations made by the Commission on the Future of
the United States Aerospace Industry (the Commission), this report
addresses the following research questions: (1) To what extent have
federal agencies addressed selected Commission recommendations? (2) What
challenges remain in addressing these recommendations?

The 2002 report by the Commission contains nine broad recommendations,
each of which call for multiple actions by the federal government.1 We
selected six of these recommendations for review. To assist us in our
selection, we interviewed five of the twelve former
Commissioners-including the Commission's former Chair-and the Commission's
former executive director, to obtain their views on the relative
importance and potential impact of the recommendations. Since each of the
former Commissioners is an expert in specific aerospace issues the
Commission examined, we selected these former Commissioners to ensure
coverage of all Commission recommendations. The six recommendations call
for: (1) transforming the national air transportation system, (2) creating
a U.S. space exploration imperative, (3) creating a government-wide
management structure to support a national aerospace policy, (4)
establishing a level playing field for the United States in global
markets, (5) promoting the growth of the U.S. aerospace workforce, and (6)
increasing government investment in aerospace research and development
(R&D). We selected these recommendations according to the degree to which
they were viewed as important by former Commission members and by us, and
called for measurable agency actions.

To address our two research questions, we obtained and analyzed
information from a variety of sources, including agency budget documents,
reports, policies, legislation, regulations, strategic plans, briefings,
and our own reports. We interviewed officials from the Federal Aviation
Administration (FAA); the Departments of Defense (Defense), Labor (Labor),
and Transportation (DOT); the Office of Science and Technology Policy
(OSTP); and the National Aeronautics and Space Administration (NASA). We
also visited NASA's Dryden Flight Research Center and Ames Research
Center. In addition, we interviewed officials from the Aerospace
Industries Association, Boeing, and Northrup Grumman to obtain their views
on agency actions and challenges. Finally, with the assistance of the
National Academy of Sciences, we identified 15 experts in the fields of
air transportation, space, aerospace policy and government structure,
aerospace workforce and education, and aerospace R&D. We interviewed these
experts to obtain their views on the extent to which the federal actions
have addressed the selected Commission recommendations, and on the
challenges that lie ahead. (Table 4 identifies the list of participating
experts.)

1Commission on the Future of the United States Aerospace Industry, Final
Report (Arlington, Va.: Nov. 2002).

Table 4: Experts Providing Input during Our Review

Expert                                       Area of expertise             
Dwight Abbott, General Manager (retired),       o  Space                   
Systems Engineering Division, The Aerospace  
Corporation                                  
Bill Ballhaus, President and Chief Executive    o  Space                   
Officer, The Aerospace Corporation           
Jack Fearnsides, Senior Strategic Consultant    o  Air transportation      
to the President, Lockheed-Martin Air           o  Aerospace policy and    
Traffic Management Company                      government structure       
Mike Freeman, Vice President and Program        o  Air transportation      
Manager, Northrop Grumman                    
Rich Golaszewski, Executive Vice President,     o  Air transportation      
GRA Incorporated                                o  Aerospace R&D           
Bernard Grossman, Vice President for            o  Aerospace workforce and 
Education and Outreach, The National            education                  
Institute of Aerospace                       
Hollis Harris, President and Chief Executive    o  Air transportation      
Officer (retired), World Airways             
Preston Henne, Senior Vice President for        o  Aerospace R&D           
Programs, Engineering, and Test, Gulfstream  
John LaGraff, Professor, Department of          o  Aerospace workforce and 
Mechanical and Aerospace Engineering,           education                  
Syracuse University                          
John McMasters, Technical Fellow, The Boeing    o  Aerospace workforce and 
Company                                         education                  
George Muellner, Vice President and General     o  Space                   
Manager of Air Force Systems for Integrated  
Defense Systems, The Boeing Company          
Bob Ravera, Consultant, RJR Aviation, LLC       o  Air transportation      
                                                   o  Aerospace policy and    
                                                   government structure       
Dorothy Robyn, Senior Consultant, The           o  Aerospace policy and    
Brattle Group                                   government structure       
Annalisa Weigel, Professor, Aeronautics and     o  Aerospace policy and    
Astronautics, Massachusetts Institute of        government structure       
Technology                                      o  Aerospace R&D           
Dave Wisler, Manager of University Programs     o  Aerospace workforce and 
and Aero Technology Labs, GE Aircraft           education                  
Engines                                      

Source: GAO.

We did not analyze the validity of the Commission's recommendations, and
our work does not take a position on, or represent an endorsement of, the
recommendations, or the actions that address them. We conducted our work
from August 2005 through September 2006 in accordance with generally
accepted government auditing standards.

Appendix II: Aerospace Research and Development Funding
Trends

Aerospace R&D includes a wide range of activities, from basic scientific
research to the development of new technologies in increasingly diverse
fields of study. Federal dollars continue to be a significant contributor
to U.S. aerospace R&D, but in recent years, the federal role has declined
relative to industry funding. The three major federal agencies that
support aerospace R&D- Defense, NASA, and FAA-have different priorities
and missions that are reflected in their respective R&D portfolios.
Defense's R&D budget is greater than any other agency-with a large
majority of its R&D funds supporting development projects-and its R&D
budgets for air and space R&D has increased in recent years. NASA's
current prioritization of space exploration has driven R&D funding
priorities, and under current plans NASA will provide more funding for
development activities than for basic and applied research. Likewise,
NASA's projected funding for aeronautics research and science is in slight
decline. FAA, with the smallest R&D budget of the three agencies, focuses
funding on the development of the next generation air transportation
system (NGATS), but its R&D funding has also declined.

               Aerospace R&D Includes a Wide Range of Activities

Aerospace R&D includes a wide range of activities such as basic research,
applied research, and development. Basic research works to expand
fundamental knowledge in areas such as physics, chemistry, and mathematics
without specific applications in mind; however, it may include activities
with broad applications. Applied research aims to gain knowledge
applicable to solving specific and identified needs, building on the
general work of the basic sciences. Applied aerospace research includes
activities to develop better propulsion and power technology, advanced
spacecraft technology, and crew and personnel protection technology.
Development projects use the knowledge and understanding developed by
researchers to build new, or improve existing, systems. New military
weapons systems, a replacement for the space shuttle, and new commercial
aircraft are all examples of major development projects.

Increasingly, R&D in areas not traditionally associated with aerospace,
such as computer software, has applicability to the sector. At the same
time, long-established areas for aerospace research may bring benefits to
other economic sectors. For example, advances in software might benefit
new flight control systems and have applications to banking, or new
ceramic materials developed for airplanes might be used in automobiles.
Researchers do not always know beforehand where the results of their work
will find useful applications. This uncertainty is particularly
characteristic of basic research that, by definition, is not motivated by
possible applications. Consequently, it is difficult to estimate the range
of R&D activities that have an impact on the aerospace industry.

       Federal Support of R&D Remains Critical to the Aerospace Industry

The federal government's support of R&D has been critical to maintaining
the nation's global leadership in the aerospace industry. For example,
government-supported research enabled the development of jet engine
technologies that helped U.S. commercial and military aircraft
manufacturers achieve global prominence. According to industry statistics,
aerospace companies are funding an increasing portion of industrial R&D
than they did in the past.1 In fiscal year 2003, the most recent year for
which data are available, federal funds supported 48 percent of industry
R&D in the aerospace industry, whereas in 1999 the federal share was 63
percent. Nevertheless, the federal role remains significant.

Industrial R&D tends to focus on technology development that is specific
to individual company products. As a result, company funding is
significantly lower for basic and applied research than for development.
According to aerospace industry statistics, federal dollars fund the
majority of the basic and applied research performed by the aerospace
industry, whereas most development is funded by companies themselves. In
dollar terms, development expenditures, by both companies and the federal
government, are much higher than research expenditures. Nonetheless,
federal funds provide the dominant share of applied research support, in
particular. Aerospace industry experts told us that, if industry is to
benefit from federally funded basic and applied research, new technologies
must be developed to a relatively high level to be easily applied to
product development. Likewise, our prior work has found that technologies
with a high level of maturity are more likely to be applied successfully
to product development projects. An individual company is unlikely to
invest its own money in basic and applied research that offers uncertain
payoffs and might benefit competitors.

1For the purpose of this report, we define industry-funded R&D to exclude
R&D funded by the government (and federally funded R&D centers) and
academia.

  Objectives of Federal Funding for Aerospace R&D Differ by Agency and Mission

R&D funding levels differ by agency and mission. The primary federal
agencies engaged in aerospace R&D are Defense, NASA, and, to a lesser
extent, FAA. Defense accounts for the majority of aerospace R&D funding.

Department of Defense

Like Defense's budget in general, Defense's overall R&D budget has
increased in recent years and is the largest federal supporter of R&D.2
Its current modernization effort is driving increases in R&D expenditures
for developing major weapons systems, including aviation, missile, and
space systems. In 2005, with a budget of $8.1 billion, the ballistic
missile defense program was the largest R&D program in Defense-nearly more
than twice the budget of the Joint Strike Fighter, the second largest
program. The Aeronautics and Space Report of the President estimates
Defense's budget for space activities in fiscal year 2006 at $22.7
billion-over $7 billion more than NASA's. Within Defense's R&D budget are
funds for science and technology activities. These fund R&D that is
typically not associated with specific weapons systems and potentially can
benefit a wide range of military and civilian applications.3 Since 2001,
Defense's science and technology budget has increased for both air and
space activities (see fig. 7).

2For the purposes of this report, Defense's Research, Development, Testing
and Evaluation budget is referred to as Defense's R&D budget.

3Defense's R&D budget is divided into seven categories in the Defense
budget: basic research, applied research, advanced technology development,
demonstration and validation, engineering and manufacturing development,
management support, and operational systems development. The first three
categories are referred to as science and technology.

Figure 7: Defense Budget for Science and Technology for Air and Space
Platforms, Fiscal Years 2001-2005

Note: Fiscal year 2005 is the latest year for which these data are
available.

Like industry-funded R&D, defense R&D tends to focus on advanced stages of
development rather on than basic or applied research. As a result,
Defense's outlays for basic and applied research account for less than 10
percent, or $6.3 billion, of its total outlays for R&D in fiscal year
2005. Conversely, $63 billion went to development activities. For example,
$8.2 billion of the Missile Defense Agency's $8.8 billion R&D budget for
fiscal year 2005 went to development activities, not to basic or applied
research. Nevertheless, Defense remains a significant supporter of basic
and applied research, with Defense support climbing between fiscal years
2001 and 2006. (See fig. 8.) However, current plans call for a decline in
fiscal year 2007.

Figure 8: Defense Budget Authority for Basic and Applied Research, and for
Development, Fiscal Years 1999-2007

Note: Defense funding data are not specific to aerospace activities.
Fiscal year 2007 data come from the President's proposed budget; 2006 data
are estimated outlays.

National Aeronautics and Space Administration

NASA's R&D includes a broad range of complex and technical activities-from
space exploration to scientific observations of the solar system to the
development of new aviation technologies, including those needed for
NGATS. According to the President's proposed fiscal year 2007 budget and
NASA's current plans, space exploration activities, including R&D, will
continue to be the largest part of NASA's budget in the future. This trend
will be driven by the development of a replacement vehicle for the space
shuttle, manned lunar exploration, and robotic and manned Mars exploration
missions. In contrast, funding for aeronautics research and some space and
earth science research within NASA will decline until fiscal year 2011
(see fig. 9).

Figure 9: Actual and Projected Funding Trends in Major Aerospace-Related
Missions within NASA, Fiscal Years 2005-2011

Notes: Space operations includes the space shuttle, International Space
Station, and flight support. Exploration systems includes the budgets for
developing new space vehicles, such as the Crew Launch Vehicle and Crew
Exploration Vehicle. Science includes earth-sun, solar system, and
universe programs. Aeronautics research is the total budget for the
Aeronautics Research Mission Directorate.

Fiscal year 2005 and fiscal year 2006 are actual funding amounts.

Like NASA's budget overall, the agency's R&D funding is relatively stable,
but current space exploration plans call for a shift toward more
development and less research. Consequently, NASA's funding for basic and
applied research has been declining while its funding for development has
increased (see fig. 10).

Figure 10: NASA's Budget Authority for Basic and Applied Research, and for
Development, Fiscal Years 1999-2007

Federal Aviation Administration

The major focus of FAA's R&D is the realization of NGATS. The new system
requires work in multiple areas, and several R&D programs are currently
under way. However, FAA's R&D budget has generally declined since the
publication of the Commission's report in 2002, because some programs have
been completed and new NGATS projects have not taken their place (see fig.
11).4 For example, R&D on Automatic Dependent Surveillance Broadcast
(ADS-B)5 was completed in 2006, and no additional funding was sought for
this program for fiscal year 2007. In addition, FAA's R&D budget includes
projects that are not related to NGATS, such as aviation safety projects
pertaining to weather and aircraft aging. FAA classifies a large
proportion of its R&D as part of facilities and equipment activities.6
This R&D includes a program to reduce runway incursions, the Capstone
program7 in Alaska, and several airspace programs, to name a few. Compared
with Defense's and NASA's R&D activities, FAA's are small.

4FAA's R&D budget increased in fiscal year 2002 partly because of new
post-September 11, 2001, aviation security funding. This security research
is now funded through Homeland Security.

5ADS-B is a surveillance technology that transmits an aircraft's identity,
position, velocity, and intent to other aircraft and to air traffic
control systems on the ground, thereby enabling pilots and controllers to
have a common picture of airspace and traffic.

6FAA's budget includes funds for `Facilities and Equipment' activities.
These activities aim to improve and modernize the equipment central to the
national airspace system. Some of its facilities and equipment activities
involve R&D.

7Capstone is an FAA program intended to improve aviation system safety in
Alaska through the introduction of new navigation technologies.

Figure 11: FAA Outlays for R&D, Including R&D for Facilities and
Equipment, Fiscal Years 1999-2007

Note: Facilities and equipment data include outlays for the airport
improvement program and space commercialization R&D.

Appendix III: Federal Actions That Address Selected
Aerospace Commission Recommendations

This appendix provides additional details on selected Commission
recommendations and federal agency actions that address them. Included
below are descriptions of the Commission's main recommendations and
subrecommendations that we selected for review, as noted in appendix I.
Also provided are descriptions of key federal agency actions, with time
frames, that address both the main recommendations and the
subrecommendations of the Commission report.

Recommendation: The Commission recommends the transformation of the U.S.
air transportation system as a national priority. The transformation
requires the:

           o  rapid deployment of a new, highly automated air traffic
           management system, beyond FAA's Operational Evolution Plan, robust
           enough to efficiently, safely, and securely accommodate an
           evolving variety and growing number of aerospace vehicles, and
           civil and military operations;

           o  accelerated introduction of new aerospace systems by shifting
           from product to process certification, and providing
           implementation support; and

           o  streamlined new airport and runway development.

           Subrecommendation: The federal government should develop a federal
           interdepartmental group to work collaboratively with industry,
           labor, and other stakeholders, to plan a new, highly automated air
           traffic management system.

           Federal Action:

           o  In December 2003 legislation, Congress directed DOT to create
           the Joint Planning and Development Office (JPDO) as an office
           within the FAA. The purpose of JPDO is to plan for the transition
           to NGATS and to coordinate aviation and aeronautics research
           programs across federal agencies. By January 2004, JPDO was
           established in FAA. Agencies participating in JPDO include the
           Departments of Commerce (Commerce) and Homeland Security (Homeland
           Security), DOT, FAA, NASA, Defense, and OSTP. The legislation also
           called for JPDO to consult with the public and ensure the
           participation of experts from the private sector.

           o  In December 2004, JPDO delivered to Congress the Integrated
           National Plan, which established a vision for the national air
           transportation system and a framework within JPDO for
           accomplishing that vision. The plan also established multi-agency
           integrated product teams responsible for each of eight
           strategies-airport infrastructure, security, an agile air traffic
           system, shared situational awareness, safety management,
           environment, weather, and global harmonization. In addition, a
           JPDO Senior Policy Committee made up of executive-level
           individuals from all partner agencies was established to provide
           high-level guidance, resolve major policy issues, and identify
           resource needs.

           o  Resources provided to JPDO by FAA and NASA:

           FAA

                        o  FAA provided $18 million in fiscal year 2006 to
                        support JPDO and will provide a similar amount of
                        funds in fiscal year 2007.

                        o  FAA leads four of JPDO's integrated product teams
                        and provides approximately 90 employees to support
                        JPDO and the product teams.

                        o  In the President's 2007 budget submission, DOT
                        requested $80 million for Automated Dependent
                        Surveillance Broadcast (ADS-B), which is a
                        surveillance technology that transmits an aircraft's
                        identity, position, velocity, and intent to other
                        aircraft and to air traffic control systems on the
                        ground, thereby enabling pilots and controllers to
                        have a common picture of airspace and traffic. DOT
                        also requested $24 million for the System Wide
                        Information Network, which would support the
                        transition to network-centric operations by providing
                        the infrastructure and associated policies and
                        standards to enable information sharing among all
                        authorized users, such as the airlines, other
                        government agencies, and the military.

           NASA

                        o  NASA provided $18 million in fiscal year 2006 to
                        support JPDO and will provide a similar amount of
                        funds in fiscal year 2007.

                        o  NASA's fiscal year 2006 NGATS contributions total
                        $174 million (for Airspace Systems research). NASA
                        requests for future NGATS air traffic management
                        research funding are:

                                     o  Fiscal year 2007: $120 million
                                     o  Fiscal year 2008: $124 million
                                     o  Fiscal year 2009: $105 million
                                     o  Fiscal year 2010: $91 million

                        o  NASA's Aviation Safety Program and Subsonic Fixed
                        Wing project also contribute to NGATS research. This
                        program and this project also provide benefits to
                        other federal agencies and private industry beyond
                        specific NGATS research needs.

           Subrecommendation: The federal government should develop initial
           implementation efforts that should focus on changing those federal
           policies and procedures, such as navigation and surveillance
           systems, that will provide early and significant operational
           benefits with little or no added "out-of-pocket" investments.

           Federal Action:

           o  In 2002, FAA committed to develop and implement a plan for
           performance-based navigation, which uses two concepts-"Area
           Navigation," commonly known as RNAV, and required navigation
           performance (RNP) operations. RNAV allows operators of properly
           equipped aircraft to use onboard navigation capabilities to fly
           desired flight paths without requiring direct flight over
           ground-based navigation aids. RNP adds to RNAV by taking advantage
           of the aircraft's avionics navigation performance-monitoring and
           alerting capability. By potentially allowing users to fly shorter
           routes, RNAV and RNP hold promise to reduce flight times and fuel
           consumption; this would, in turn, save system users time and
           money. In addition, RNP could potentially increase the capacity of
           the air traffic control system to handle air traffic by reducing
           the required distance (i.e., separation) between aircraft equipped
           with advanced navigation capabilities.

           o  FAA published a plan in 2003 (updated in July 2006) that lays
           out milestones for RNAV and RNP implementation over three planning
           horizons: near-term (2006-2010), mid-term (2011-2015), and
           far-term (2016-2025). For example, a near-term milestone is to
           develop 25 RNP approaches per year over the next 5 years.

           o  In June 2005, FAA published criteria for use in designing
           public RNP instrument approach procedures and, as of August 2006,
           FAA runs RNP procedures in Washington, D.C. (Reagan National
           Airport); San Francisco, California; Portland, Oregon; Palm
           Springs, California; and Juneau, and six smaller city airports, in
           Alaska. FAA has also published standard RNP procedures for Hailey
           (Sun Valley), Idaho; Newark, New Jersey; Chicago (Midway),
           Illinois; Long Beach, California; Tucson, Arizona; and Gary,
           Indiana, and expects to be using the new published RNP procedures
           at these six additional airports later this year, as more aircraft
           operators become approved for RNP approaches.
           o  FAA has installed and tested ADS-B technology on a limited
           basis in aircraft since 2000 in a demonstration program in Alaska
           called Capstone, which is a program intended to improve aviation
           system safety in Alaska through the introduction of new navigation
           technologies. In addition, FAA has been running ADS-B procedures
           in the Gulf of Mexico, and at airports in Louisville, Kentucky,
           and Memphis, Tennessee.

           o  In September 2005, FAA executives reviewed information on
           investment and alternatives for the ADS-B program and approved the
           technology for a more thorough analysis for possible future
           deployment on a national basis. In the first half of 2006, FAA
           will analyze specific costs and benefits for implementing the
           technology and submit a final proposal for FAA executive-level
           review in June 2006. With a positive investment decision, the
           first ADS-B implementation segment envisions the potential
           deployment of approximately 400 ground-based transmitters and the
           implementation of terminal, en route, and broadcast ADS-B services
           from fiscal years 2007-2012.

           Figure 12: Global Positioning System Display Screen Used in
           Capstone Program

           Sub-recommendation: FAA should support and motivate efforts for
           the installation of system-critical airborne equipment by
           providing either full or partial federal funding, or by auctioning
           investment credits, for such equipment.

           Federal Action:

           o  In 1999, the Capstone program received initial funding. This
           first phase focused on providing advanced navigation capability
           and equipment for aircraft operating air taxi services in
           southwest Alaska. By 2004, FAA had installed 11 ground-based
           navigation transmitters and equipped 208 aircraft with Capstone
           avionics capabilities, such as ADS-B. The Capstone program
           includes full funding for operator equipage.

           o  In 2003, Capstone phase II expanded the program to air taxi
           aircraft in southeast Alaska and included similar navigation
           capabilities and full funding for operator equipage. As of June
           2006, the FAA has a total of 366 aircraft in the Capstone program.

           o  A September 2004 plan for phase III of Capstone calls for
           expanding Capstone throughout Alaska. The plan proposed $25
           million per year through fiscal year 2007 for reimbursements to
           pilots who paid for Capstone equipment and installation. A final
           decision on Capstone phase III is expected by the end of summer
           2006.

           Sub-recommendation: The federal government should streamline the
           regulatory process to enable timely development of regulations
           needed to address new technologies.

           Federal Action:

           o  FAA uses several approaches to streamline the regulatory
           process for new technologies:

                        o  FAA sometimes uses a "special condition" to
                        approve new technology under an existing rule. For
                        example, FAA issued a new standard on the existing
                        type of certificate for a general aviation aircraft
                        to allow a parachute to be deployed as a last resort
                        in an emergency. The parachute recovery system is
                        intended to prevent serious passenger injuries by
                        parachuting the aircraft to the ground.

                        o  FAA sometimes uses existing regulations without a
                        special condition and publishes new methods of
                        compliance for the new technology. The methods are
                        neither mandatory nor regulatory but describe
                        acceptable means for showing compliance with
                        regulations. For example, in December 2005, FAA
                        published an advisory circular on the acceptable
                        means for showing compliance for the use of
                        "synthetic vision" developed by the military.

           o  FAA has also developed new procedures that apply to all rule
           making, including rules for new technologies. Highlights include
           the following:

                        o  In 2003, FAA supplemented its weekly management
                        review of ongoing rule making with a standing meeting
                        of senior policy makers to review significant rules
                        in order to expedite their review. It also gave a
                        higher priority to nonsignificant rules that had gone
                        through the public comment stage.

                        o  In 2004, to link rule-making performance with pay,
                        FAA created shared executive compensation incentives
                        for senior executives that are tied to timely
                        completion of rules.

                        o  In 2005, FAA adopted a performance standard that
                        requires 80 percent of all initiated rules to be
                        issued within 90 days of their originally scheduled
                        issuance date.

           Subrecommendation: FAA should focus on certifying a manufacturing
           organization's internal design, simulation, testing, and quality
           assurance processes to ensure that organizations' products comply
           with all applicable regulations, and are delivered in a condition
           for safe operation.

           Federal Action:

           o  In October 2005, FAA issued a final rule for a new Organization
           Designation Authorization. This program expands the number of
           organizational designees and should ultimately reduce the number
           of individual designees. FAA's designee programs authorize about
           13,400 private individuals and about 180 organizations nationwide,
           known as "designees," to act as representatives of the agency to
           conduct many safety certification activities, such as
           administering flight tests to pilots, inspecting repair work by
           maintenance facilities, conducting medical examinations of pilots,
           and approving designs for aircraft parts. The program allows FAA
           to expand and standardize the approval functions of organizational
           designees and also expand eligibility for organizational
           designees. FAA issued a final order for the rule in 2006.

           o  In addition, Congress has mandated that FAA develop and
           implement a certified design organization program. Under this
           program, certain designees that design and produce aircraft parts
           and equipment would no longer be designees; rather, they would
           conduct their approval functions under a newly created FAA
           certificate. FAA expects to provide a report to Congress, by the
           mandated December 2007 deadline, for the development and oversight
           of a system to certify design organizations.

           Subrecommendation: FAA and other agencies should adopt regulations
           or procedures that would expedite new runway and airport
           development.

           Federal Action:

           o  FAA is reallocating staff resources and increasing the use of
           consultants to assist it with the coordination and administration
           of environmental impact statements.

           o  To increase coordination and reduce delays, FAA has created a
           process for establishing multidisciplinary environmental review
           teams for new reviews at large hub airports.

           o  In April 2006, FAA completed a revised order for streamlining
           airport development projects that includes the ability to give
           priority review to certain projects; promotes public review and
           comment; manages timelines during the review; and expedites
           coordination between those federal, state, and local agencies
           involved in environmental reviews in order to reduce undue delays
           during the review process.

           o  To increase coordination and assign accountability for new
           runway construction tasks, FAA is using detailed plans called
           Runway Template Action Plans to provide a standard set of tasks
           that must be considered when developing new runways (FAA developed
           the tool in August 2001).

           Recommendation: The Commission recommends that the United States
           create a space imperative. Defense, NASA, and industry must
           partner in innovative aerospace technologies, especially in areas
           of propulsion and power. These innovations will enhance national
           security, provide major spin-offs to the economy, accelerate the
           exploration of the near and distant universe with both human and
           robotic missions, and open up new opportunities for public space
           travel and commercial space endeavors in the twenty-first century.

           Subrecommendation: Explore and exploit space to ensure national
           and planetary security, economic benefit, and scientific
           discovery.

           Federal Action:

           o  In January 2004, Executive Order 13326 established the
           President's Commission on Implementation of United States Space
           Exploration Policy. This commission was chartered to provide
           recommendations to the President on implementing the vision
           outlined in the President's policy statement entitled "A Renewed
           Spirit of Discovery," and the President's budget submission for
           fiscal year 2005. The commission published its report in June
           2004.

           o  In 2004, NASA formed the Exploration Systems Mission
           Directorate to implement the President's vision. Throughout 2005,
           the directorate restructured its organization by reducing
           headquarters staff, designating program and project offices at
           NASA centers, and realigning activities to other mission
           directorates.

           o  Defense published its space science and technology strategy in
           2004. This strategy, which provides guidance for Defense space
           science and technology activities, is derived jointly from the
           Defense Science and Technology Strategy and the National Security
           Space Strategy. The strategy addresses space science and
           technology development, outlines strategy implementation,
           describes the process by which space science and technology
           progress is assessed, and identifies the means by which these
           goals can be achieved.

           o  In August 2005, Defense and NASA signed an agreement on how
           they could coordinate their efforts to implement NASA's space
           transportation strategy. The agreement focused on the use and
           development of national launch systems.

           o  In November 2005, to assist in implementing the President's
           space exploration policy, NASA published its Exploration Systems
           Architecture Study. The purpose of the study was to

                        o  assess the top-level crew exploration vehicle
                        requirements,
                        o  define the top-level requirements and
                        configurations for crew and cargo launch systems to
                        support the lunar and Mars exploration programs,
                        o  develop a reference exploration architecture
                        concept to support sustained human and robotic lunar
                        exploration operations, and
                        o  identify key technologies required to enable and
                        significantly enhance these reference exploration
                        systems, and reprioritize near-term and far-term
                        technology investments.

           o  On the basis of analysis and recommendations, NASA realigned
           research and technology projects. As a result, some programs were
           curtailed, modified, deferred, or added.

           o  NASA and DOD established the Partnership Council to provide a
           forum for senior Defense and civil space leaders to meet on a
           regular basis to discuss cross-cutting issues relevant to the
           national space community. The purpose of the Partnership Council
           is to facilitate communication between the organizations and to
           identify areas for collaboration and cooperation.

           Figure 13: Information Regarding the Moon and Mars

           Subrecommendation: The federal government should support the
           development of commercial space operations, such as space tourism.

           Federal Action:

           o  FAA's Office of Commercial Space Transportation regulates the
           U.S. commercial space transportation industry by licensing
           commercial space launches and nonfederal spaceports. Commercial
           space operations have historically launched commercial or
           government payloads (generally satellites) into orbit from Air
           Force launch sites. The industry is changing with the development
           of commercial vehicles that enable human space flight from
           nonfederal spaceports. FAA is developing regulations for launch
           vehicles and spaceports. The proposed regulations, based on common
           safety standards developed jointly by FAA and the Air Force, have
           the goal of promoting consistent, streamlined safety reviews of
           launch and reentry operations at all launch sites.

           o  The Commercial Space Launch Amendments Act of 2004 prohibits
           FAA from regulating crew and passenger safety before 2012 in order
           to encourage growth in the emerging space tourism industry.

           Figure 14: Proposed Advanced Orbital Transfer Propulsion
           Technology

           Recommendation: The Commission recommends that the federal
           government establish a national aerospace policy and promote
           aerospace by creating a government-wide management structure. This
           would include a White House policy coordinating council, an
           aerospace management office in the Office of Management and
           Budget, and a joint committee in Congress. The Commission further
           recommends the use of an annual aerospace sector budget to
           establish presidential aerospace initiatives, ensure coordinated
           funding for such initiatives, and replace vertical decision making
           with horizontally determined decisions in both authorizations and
           appropriations.

           Subrecommendation: Develop a process to bring the appropriate
           departments and agencies together to reach a consensus on a
           national aerospace policy.

           Federal Action:

           o  In January 2004, the President announced the Vision for Space
           Exploration, which serves as the nation's space exploration
           policy. This policy directs NASA to advance U.S. scientific,
           security, and economic interests through a space exploration
           program.

           o  In December 2004, the administration approved the U.S. Space
           Transportation Policy. This policy's goal was to ensure the
           capability to access and use space. It sets out implementation
           guidelines and actions for federal departments and agencies,
           including NASA, Defense, and DOT.

           o  In September 2005, the National Science and Technology Council
           established the Aeronautics, Science, and Technology Subcommittee
           (ASTS). (See fig. 15.) The objective of ASTS is to develop a
           national aeronautics R&D policy. This policy is expected to
           establish a set of specific U.S. aeronautics research objectives;
           define the appropriate role of the federal government in
           aeronautics R&D define the roles and responsibilities of the
           various departments and agencies in aeronautics R&D address the
           research, development, test, and evaluation infrastructure; and
           address the coordination of aeronautics research across the
           federal government.

                        o  In April 2006, ASTS convened three stakeholder
                        meetings to discuss aeronautics R&D priorities, the
                        appropriate role of the federal government, near- and
                        far-term research objectives and a plan to achieve
                        them, and the roles and responsibilities of the
                        multiple federal agencies involved in aeronautics
                        research. Representatives from government, industry,
                        the aviation user community, and academia
                        participated.

                        o  ASTS is co-chaired by OSTP and NASA, and includes
                        the Department of Energy, Commerce, Defense, Homeland
                        Security, DOT, FAA, JPDO, the National Science
                        Foundation, the Council of Economic Advisors, the
                        Domestic Policy Council, the U.S. Trade
                        Representative, U.S. International Trade Commission,
                        the Office of the Vice President, the National
                        Security Council, and the Office of Management and
                        Budget. ASTS is working on renewing its charter,
                        which will expire on December 31, 2006. The renewed
                        charter would expire on March 31, 2009.

           o  In December 2005, Congress directed OSTP to commission an
           independent review of the nation's long-term strategic needs for
           aeronautics test facilities. Congress also required OSTP to
           conduct a study to determine (1) if any NASA R&D programs are
           unnecessarily duplicating aspects of programs of other federal
           agencies; and (2) if any such programs are neglecting any topics
           of national interest that are related to NASA's mission.

Figure 15: ASTS Membership

Subrecommendation: Establish an office of aerospace development in each
federal department and agency, and have a full-time senior executive lead
the office and report directly to the office of the secretary, or the
agency head.

Federal Action:

           o  No action taken.

           Subrecommendation: Congress should establish a Congressional Joint
           Committee on Aerospace that would have the obligation to
           legislatively coordinate the multifaceted jurisdiction issues.

           Federal Action:

           o  No action taken.

           Subrecommendation: Establish an Aerospace Policy Coordinating
           Council to develop and implement an integrated means of
           formulating a national aerospace policy.

           Federal Action:

           o  As of January 2006, no single national aerospace policy
           existed. There are two policy efforts in place to address space
           and aeronautics issues separately.

           o  The National Security Council has drafted space policies that
           address the major space sectors such as position, navigation, and
           timing; commercial remote sensing; and space transportation.

           o  OSTP and NASA are co-chairing the Aeronautics Subcommittee of
           the National Science and Technology Council to coordinate U.S.
           aeronautics research and development activities.

           Subrecommendation: Have the Office of Management and Budget assume
           a new and proactive role as coordinator of federal agencies'
           aerospace-sector plans, programs, and budgets.

           Federal Action:

           o  No action taken.

           Recommendation: The Commission recommends that U.S. and
           multilateral regulations and policies be reformed to enable the
           movement of products and capital across international borders on a
           fully competitive basis, establishing a level playing field for
           U.S. industry in the global marketplace. This includes
           substantially overhauling U.S. export control regulations. The
           Commission also recommends that the U.S. government neutralize
           foreign-government market intervention in areas such as subsidies,
           tax policy, export financing, and standards-either through
           strengthening multilateral disciplines or providing similar
           support for U.S. industry as necessary.

           Subrecommendation: The U.S. government should reform the nation's
           arms transfer policy and regulatory process.

           Federal Action:

           o  In February 2002, Congress had two bills before it -H.R. 2581
           and S. 149-that proposed a new legal basis for controls over
           exports of dual-use goods and services. Neither bill was passed.

           o  H.R. 4572 was introduced on December 16, 2005. This bill, which
           sought to extend the Export Administration Act, among other items,
           would have revised this act, especially in the areas of penalties,
           enforcement, and U.S. policy towards multilateral export control
           regimes. No action has been taken on this bill as of September
           2006.

           Subrecommendation: The U.S. government should overhaul current
           export-control restrictions on the sale or transfer of technology
           to foreign customers by implementing a fundamental shift-from the
           existing transaction-based licensing system to process licensing.

           Federal Action:

           o  In 2001, the Department of State (State) and Defense
           established an "expedited" process for reviewing license
           applications in support of Operation Enduring Freedom and
           Operation Iraqi Freedom.

           o  In 2000, State announced the Defense Trade Security Initiative,
           which was characterized as the first major post-Cold War
           adjustment to the arms export control system and an effort to
           facilitate defense trade with allies. As part of this effort,
           State established special processes for the expedited review of
           license applications determined to be in support of the North
           Atlantic Treaty Organization's Defense Capabilities Initiative. In
           addition, State developed the D-Trade system, which came on line
           in January 2004. This is a Web-based license application
           submission and review system that allows companies to
           electronically submit export authorization requests and supporting
           documentation for review.

           Subrecommendation: The U.S. government should ensure commitment to
           global partnerships in air transportation systems and space
           activities by supporting the recruitment of FAA employees for the
           International Civil Aviation Organization (ICAO).

           Federal Action:

           o  FAA established a Web site to increase employees' awareness of
           ICAO positions.

           o  FAA tracks ICAO vacancies and solicits qualified candidates to
           fill the U.S. positions.

           o  In 2003, FAA established the FAA/ICAO fellowship program, which
           sends FAA employees to work at ICAO for up to 12 months.

           o  Senior FAA officials give speeches and presentations at FAA
           organizations such as the Hispanic Coalition and the Professional
           Women's Air Traffic Control Organization.

           Subrecommendation: The U.S. government should ensure commitment to
           global partnerships in air transportation systems and space
           activities by working for continued liberalization of the air
           transport market.

           Federal Action:

           o  As of July 2006, the United States had 76 "open skies"
           agreements with foreign governments. "Open skies" agreements are
           bilateral agreements between two nations that reduce or eliminate
           operating restrictions on the airlines of either nation.

           Recommendation: The Commission recommends that the nation
           immediately reverse the decline in, and promote the growth of, a
           scientifically and technologically trained U.S. aerospace
           workforce. In addition, the nation must address the failure of the
           math, science, and technology education of Americans. The
           breakdown of America's intellectual and industrial capacity is a
           threat to national security and its capability to continue as a
           world leader. Congress and the administration must therefore do
           the following:

           o  Create an interagency task force that develops a national
           strategy on the aerospace workforce to attract public attention to
           the importance of, and opportunities within, the aerospace
           industry.

           o  Establish lifelong learning and individualized instruction as
           key elements of educational reform.

           o  Make long-term investments in education and training with a
           major emphasis in math and science so that the aerospace industry
           has access to a scientifically and technologically trained
           workforce.

           Subrecommendation: Establish an interagency task force on
           workforce issues in the aerospace industry.

           Federal Action:

           o  In 2004, Labor established an interagency taskforce that
           included the Department of Education, Commerce, Defense, DOT,
           NASA, OSTP, the National Science Foundation, and the Office of
           Management and Budget.

           o  Labor hosted the Aerospace Workforce Forum in June 2004. This
           forum included stakeholders representing industry, education, and
           government agencies with the objective of involving the public in
           developing solutions that address the decline in the U.S.
           technical workforce. The forum developed multiple recommendations
           to address the overall workforce issues. These recommendations
           focused on the aging workforce and the loss of technical talent.

           o  In 2005, the House passed H.R. 758, a bill that will require
           federal agencies to establish an interagency aerospace
           revitalization task force to develop a national strategy for
           aerospace workforce recruitment, training, and cultivation. The
           bill proposes that the task force meet at least twice a year and
           produce an annual report no later than 1 year after the date of
           the act's enactment, and annually thereafter for 4 years. As of
           September 2006, no action has been taken on this bill in the
           Senate.

           Subrecommendation: Develop a national strategy to attract public
           attention to the importance of, and opportunities within, the
           aerospace industry.

           Federal Action:

           o  In collaboration with the private sector, educational
           institutions, and local employment agencies, Labor issued a 2005
           report on workforce challenges facing the aerospace industry and
           possible solutions to these challenges.

           o  The President's High Growth Job Training Initiative targets 14
           industries, including aerospace, that have been identified as
           important to the U.S. workforce.

           o  H.R. 758, described previously in this appendix, would also
           require federal agencies to develop a national strategy for
           aerospace workforce development.

           Subrecommendation: Develop workforce skills needed by the industry
           and promote registered apprenticeship programs for technical and
           skilled occupations.

           Federal Action:

           o  Since 1991, FAA has sponsored the Aviation and Space Education
           Outreach Program, which teaches students between kindergarten and
           the 12th grade about aerospace technology and career
           opportunities.

           o  Since 2001, under the President's High Growth Job Training
           Initiative, Labor has issued eight aerospace industry
           demonstration grants, totaling over $10 million. These grants
           funded demonstration projects to help train and improve the U.S.
           aerospace workforce.

           o  In December 2003, Congress enacted Vision 100-Century of
           Aviation Reauthorization Act (Vision 100),1 which included
           language to promote the aerospace workforce and to fund a
           scholarship program for careers in aerospace-related fields.

           o  In the NASA Authorization Act of 2005, Congress directed NASA
           to develop a human capital strategy to ensure that NASA has a
           workforce of the appropriate size and with the appropriate skills
           to carry out its programs. NASA has assigned a team of
           representatives from each of its centers and directorate locations
           to coordinate and identify the skills available at these
           locations. The results of this process are scheduled for
           completion by the end of fiscal year 2006.

           o  In February 2006, Labor announced a series of grant awards
           under the Workforce Innovation in Regional Economic Development
           Initiative. Over three years, this initiative will provide $195
           million to thirteen regions to address the skill challenges of one
           or more industries, including aerospace, which has been identified
           as critical for economic growth.

           o  In April 2006, the Subcommittee on Technology, Innovation, and
           Competitiveness of the Senate Committee on Commerce, Science, and
           Transportation held a hearing to examine approaches for fostering
           innovation in math and science.

           Subrecommendation: Make tax credits available to employers who
           invest in the skills and training programs needed by the industry.

           Federal Action:

           o  No specific tax credit is available to the aerospace industry.

           o  In 2006, the President proposed making an R&D tax credit
           permanent to encourage private-sector investment in technology.
           For fiscal year 2007, the administration budgeted $4.6 billion for
           the R&D incentives.

           Subrecommendation: Make long-term investments in education and
           training with a major emphasis in math and science, so that the
           aerospace industry has access to a scientifically and
           technologically trained workforce.

           Federal Action:

           o  In 2002, NASA unified all of its educational programs
           (previously managed by individual mission offices and field
           centers) under one organization and vision.

           o  NASA's five programs target elementary and secondary education,
           higher education, NASA exhibits and community-based events, and
           the Minority University Research and Education Program. Funding
           for NASA's education programs has decreased from $217 million in
           fiscal year 2005 to about $153 million in the fiscal year 2007
           budget. This budget decrease, for example, will result in NASA
           deferring the implementation of the Science and Technology
           Scholarship Program.

           o  In 2005, Congress directed NASA to review its educational
           programs. This review will be conducted by the National Research
           Council of the National Academy of Sciences and will evaluate
           NASA's precollege science, technology, and mathematics education
           programs.

           o  Congress established Defense's scholarship program ("SMART")
           for students in science and math under the National Defense
           Authorization Act for fiscal year 2005. These scholarships and
           fellowships are awarded to applicants who are pursuing a degree
           in, or closely related to, science, mathematics, or engineering.

           o  In 2006, the President announced the American Competitiveness
           Initiative to encourage innovation in science and technology, and
           to support math and science education. In the fiscal year 2007
           budget, the administration has committed $5.9 billion for R&D,
           education, and entrepreneurship. Over the next 10 years, the
           administration plans to commit $50 billion to increase funding for
           research and $86 billion for R&D tax incentives.

           o  In 2006, the President proposed a plan to train an additional
           70,000 high school math and science teachers with the objective of
           increasing advanced-placement courses in math and science. In
           addition, up to 30,000 math and science professionals will be
           recruited to teach in classrooms nationwide.

           Recommendation: The Commission recommends that the federal
           government significantly increase its investment in basic
           aerospace research, which enhances U.S. national security; enables
           breakthrough capabilities; and fosters an efficient, secure, and
           safe aerospace transportation system. The U.S. aerospace industry
           should take a leading role in applying research to product
           development.

           Subrecommendation: Increase and provide stable funding in order to
           achieve national technology goals, especially in long-term
           research in areas such as propulsion and power, emissions and
           noise, and human factors; as well as associated research,
           development, testing, and equipment infrastructure.

           Federal Actions:

           o  FAA's R&D funding declined from $349 million in fiscal year
           2001 to $279 million in fiscal year 2005 (in constant fiscal year
           2005 dollars). FAA plans indicated that these funds support the
           R&D needs of NGATS.

           o  Defense's R&D funding has increased overall since the
           publication of the Commission report. The majority of the
           department's R&D funding goes to development activities, but
           Defense's science and technology budgets for air and space
           research have increased between fiscal years 2001 to 2005 from
           $613 million and $220 million to $907 million and $462 million,
           respectively (in fiscal year 2005 dollars).
           o  NASA's overall R&D budget has decreased slightly, shifting from
           $10.6 billion in fiscal year 2001 to $10.2 billion in fiscal year
           2005 (in constant fiscal year 2005 dollars). Looking forward,
           NASA's budget is expected to vary between missions. Space
           activities are expected to increase overall, though some programs
           will decline, whereas aeronautics research is expected to decline.
           For example, NASA's fiscal year 2007 budget request for the
           Exploration Systems Mission Directorate increased by $1.3 billion
           over 2006 levels to nearly $3.1 billion (a 76 percent increase),
           but the Aeronautics Research Mission Directorate request is about
           $724 million for 2007-down 18 percent from the fiscal year 2006
           budget in non-inflation-adjusted dollars.

           o  NASA's reshaped aeronautics research strategy will focus on
           four programs, including one that targets air traffic management
           research for NGATS.

           o  In June 2006, the National Academy of Sciences issued a study
           on NASA's long-term strategy for aeronautics research and
           technology development. It identifies four high-priority strategic
           objectives for civil aeronautics research and, among its
           recommendations, suggests that NASA establish a stable aeronautics
           research plan, balance in-house research with involvement from
           academia and industry, and ensure technologies are developed to a
           level of maturity that is appropriate for that technology.

           Figure 16: Engineers at NASA Langley Research Center

           Subrecommendation: Adopt national technology demonstration goals
           for 2010 on air transportation and space.

           Federal Action:

           o  JPDO identified technology goals in its NGATS plan. These goals
           are not consistent with the goals outlined in the Commission's
           report. For example, the NGATS plan calls for a 30 percent
           reduction in transit time for domestic aviation travel, whereas
           the Commission calls for a 50 percent reduction in travel time
           between any two points on earth, as well as between any two points
           in space. In general, the Commission's goals are more specific and
           aggressive than the NGATS goals.

           o  In 2006, NASA's Aeronautics Research Mission Directorate
           announced plans for R&D. These plans do not include demonstration
           goals. In addition, NASA cancelled funding in fiscal year 2004 for
           the Hyper-X hypersonic vehicle program, which demonstrated
           air-breathing flight of mach 9.6 in 2004.

           Figure 17: Computational Fluid Dynamic Image of the Hyper-X
           Vehicle

           Subrecommendation: Find new and faster ways to transfer research
           and technology developed in federal laboratories, and in academia,
           to applications in the private sector, by establishing
           partnerships between government, industry, and academia.

           Federal Action:

           o  NASA's research strategy includes a new approach for
           establishing partnerships with universities and the private
           sector. Some key milestones in this approach include the
           following:

                        o  In January 2006, NASA issued three requests for
                        information that will be used to solicit information
                        on key areas of interest for private industry and
                        determine opportunities for collaboration with NASA's
                        planning and research efforts.

                        o  In May 2006, NASA released research announcements
                        to solicit proposals for foundational research in
                        areas where NASA needs to enhance its core
                        capabilities. The announcements were influenced by
                        the response to the requests for information,
                        solicited in January 2006, and were open to all
                        stakeholders.

           o  NASA's realigned aeronautics research mission plans to focus on
           foundational research and will develop new technologies to a
           lower-and therefore less readily adopted-maturity level than in
           the past.

           o  In 2004, NASA's Centennial Challenges Program initiated
           competitions, with prizes under $250,000, for advances in a
           variety of technical areas such as astronaut gloves, high
           strength-to-weight materials, and telerobotic construction. The
           2005 NASA Authorization Act provided NASA with the legislative
           authority to conduct competitions with prizes up to $1,000,000.

           Figure 18: NASA Glen Research Center's Research on Aircraft Noise

           Role of the Joint Planning and Development Office in the National
			  Airspace System Modernization
			  
			  FAA, with research assistance from NASA, has had the primary
           responsibility for planning and implementing national airspace
           system modernization since these efforts began more than 20 years
           ago. Recently, FAA placed the modernization program under a new
           Air Traffic Organization (ATO), headed by a Chief Operating
           Officer. The JPDO Director reports to the FAA Administrator and to
           ATO's Chief Operating Officer.1 JPDO's scope is broader than
           traditional air traffic control 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 consensus and
           cooperation among many stakeholders-federal and nonfederal-about
           necessary system capabilities, equipment, procedures, and
           regulations.

           JPDO Organization Structure and Partner Agencies
			  
			  JPDO was mandated by the Vision 100 and is comprised of seven
           partner agencies: Commerce, Homeland Security, DOT, Defense, FAA,
           NASA, and OSTP. Each of these agencies has expertise and
           technology that will play a part in creating NGATS and
           responsibilities for coordinating their activities. Figure 19
           lists JPDO's organization and how its partner agencies fit into
           that organization. JPDO has staffed its organization with
           partner-agency employees, many of whom work for JPDO on a
           part-time basis. The JPDO board, which provides coordination
           between partner agencies and JPDO, is composed of key executives
           of the partner agencies who can facilitate bringing agency
           resources to bear on NGATS development. Additionally, Vision 100
           created the Next Generation Air Transportation Senior Policy
           Committee, composed of partner agency senior executives, to
           provide ongoing policy review and identify resource needs from the
           partner agencies.

1Pub.L. No. 108-176 (Dec. 12, 2003).

Appendix IV: Joint Planning and Development Office

Role of the Joint Planning and Development Office in the National Airspace
                              System Modernization

1ATO is FAA's business unit that is responsible for operating,
maintaining, and modernizing the nation's current air traffic control
system.

                JPDO Organization Structure and Partner Agencies

Figure 19: JPDO Organization Chart

                             JPDO's Integrated Plan

In December 2004, JPDO and its partner agencies developed and submitted to
Congress its integrated plan that broadly addresses the goals and
objectives for NGATS. This plan provided a vision statement that
elaborates on the broadly stated common outcome set forth by the Vision
100 legislation-an air transportation system that meets potential air
traffic demand by 2025. In addition, the plan provides eight strategies
that formed the basis for JPDO's eight integrated product teams, and
various partner agencies have taken the lead on specific strategies. (See
table 5.) In March 2006, JPDO published its first report to Congress on
the progress made in carrying out the integrated plan.

Table 5: JPDO's Strategies and Responsible Agencies

Strategy                                                 Lead agency       
Develop airport infrastructure to meet future demand     FAA               
Establish an effective security system without limiting  Homeland Security 
mobility or civil liberties                              
Conduct research to enable an agile air traffic system   NASA              
that quickly responds to shifts in demand                
Establish shared situational awareness-where all users   Defense           
share the same information                               
Establish a comprehensive and proactive approach to      FAA               
safety                                                   
Develop environmental protection that allows sustained   FAA               
aviation growth                                          
Develop a systemwide capability to reduce weather        Commerce          
impacts                                                  
Harmonize equipage and operations globally               FAA               

Source: GAO presentation of JPDO data.

               JPDO Efforts to Leverage Partner Agency Resources

Vision 100 requires JPDO to coordinate NGATS-related programs across the
partner agencies. To address this requirement, JPDO conducted an initial
interagency review of its partner agencies' R&D programs during July 2005
to identify work that could support NGATS. Through this process, JPDO
identified early opportunities that could be pursued during fiscal year
2007 to coordinate and minimize the duplication of research programs
across the partner agencies and produce tangible results for NGATS. In
addition, JPDO is currently working with the Office of Management and
Budget to develop a systematic means of reviewing the partner agencies'
budget requests, so that the NGATS-related funding in each request can
easily be identified. Such a process would help the Office of Management
and Budget consider NGATS as a unified federal investment, rather then as
disparate line items distributed across several agencies' budget requests.

The challenge of leveraging resources will likely intensify beginning in
2008, when JPDO expects a significant increase in the workload of its
integrated product teams. JPDO anticipates needing more resources for the
teams to, among other things, plan demonstrations of potential
technologies to illustrate some of the early benefits that could be
achieved from the transformation to NGATS.

                   JPDO Is Involving Nonfederal Stakeholders

JPDO has structured itself in a way that involves federal and nonfederal
stakeholders throughout its organization. Vision 100 directed JPDO to
involve nonfederal stakeholders as it fulfills its mission. Nonfederal
stakeholders may participate through the NGATS Institute. Through this
institute, JPDO obtained the participation of over 180 stakeholders from
over 70 organizations for the integrated product teams. 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.

As with its federal partner agencies, JPDO has no direct authority over
the human, technical, or financial resources of its nonfederal
stakeholders. To date, nonfederal stakeholders spend approximately 10-25
percent of their time, per week, on the integrated project teams; members
of the NGATS Institute Management Council attend approximately one meeting
per month. The challenge for JPDO is to maintain the interest and
enthusiasm of nonfederal stakeholders, who will have to juggle their own
multiple priorities and resource demands in order to maintain this level
of participation when some tangible benefits may not be realized for
several years.

Appendix V: Comments from the Department of Labor

Appendix VI: Comments from the National Aeronautics and Space
Administration

Appendix VII: GAO Contact and Staff Acknowledgments

                                  GAO Contact

Gerald L. Dillingham, Ph.D. (202) 512-2834 or [email protected]

                             Staff Acknowledgments

In addition to the above individual, Teresa Spisak, Assistant Director;
Brad Dubbs; Elizabeth Eisenstadt; David Hooper; Heather Krause; Elizabeth
Marchak; Edmond Menoche; Sara Ann Moessbauer; Faye Morrison; Josh Ormond;
Tim Schindler; Richard Scott; John W. Stambaugh; Larry Thomas; and Dale
Yuge made key contributions to this report.

(540107)

GAO's Mission

The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of GAO Reports and Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO's Web site ( www.gao.gov ). Each weekday, GAO posts newly
released reports, testimony, and correspondence on its Web site. To have
GAO e-mail you a list of newly posted products every afternoon, go to
www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone

The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

To Report Fraud, Waste, and Abuse in Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: [email protected]
Automated answering system: (800) 424-5454 or (202) 512-7470

Congressional Relations

Gloria Jarmon, Managing Director, [email protected] (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125 Washington,
D.C. 20548

Public Affairs

Paul Anderson, Managing Director, [email protected] (202) 512-4800 U.S.
Government Accountability Office, 441 G Street NW, Room 7149 Washington,
D.C. 20548

www.gao.gov/cgi-bin/getrpt? GAO-06-920 .

To view the full product, including the scope

and methodology, click on the link above.

For more information, contact Gerald L. Dillingham at (202) 512-2834 or
[email protected].

Highlights of GAO-06-920 , a report to the Ranking Democratic Member,
Subcommittee on Aviation, Committee on Transportation and Infrastructure,
House of Representatives

September 2006

U.S. AEROSPACE INDUSTRY

Progress in Implementing Aerospace Commission Recommendations, and
Remaining Challenges

The U.S. aerospace industry's wide-ranging activities-including commercial
aviation, national security, and space exploration-make it critical to the
economic health and strategic strength of our nation. However, the
industry faces challenges, such as a national air traffic management
system that, in its present form, cannot handle expected increases in
demand; an aging aerospace workforce; and an increasingly competitive
global market. In response to these and other challenges, Congress
established the Commission on the Future of the United States Aerospace
Industry in 2001 to recommend potential actions by the federal government
and others to support a robust aerospace industry in the 21st century. In
2002, the Commission made recommendations to address these challenges.

This report discusses (1) the extent to which federal agencies have
addressed selected Commission recommendations and (2) the challenges that
remain in addressing the recommendations. Based on the opinions of former
Commissioners and GAO research, GAO selected recommendations dealing with
the national airspace system, space policy, government-wide management
structure, international issues, the aerospace workforce, and research and
development. This report is based on reviews of agency documents,
literature, and interviews with aerospace experts and officials from
relevant federal agencies.

Federal agencies have taken actions that address selected Commission
recommendations to varying degrees, from establishing new offices,
programs, and policies to changing existing programs or policies; however,
the actions the agencies have taken are still in the early stages of
implementation. For instance, the creation of the Joint Planning and
Development Office (JPDO) addresses the recommendation to establish an
interagency office to plan a new, highly automated air traffic management
system; however, JPDO faces challenges in leveraging resources and
maintaining the commitment of nonfederal stakeholders. Additionally, the
National Aeronautics and Space Administration (NASA) created a directorate
to implement the President's new space exploration policy, which addresses
the Commission's space exploration recommendation. Aerospace experts told
us that they believe this may negatively affect other space exploration
programs that have significant benefits. Changes to existing programs
include NASA's restructuring of its aeronautics research program and FAA's
attempts to increase the U.S. presence in international aviation
partnerships. Federal agencies have taken few, if any, actions to address
other Commission's recommendations, such as creating a government-wide
management structure for aerospace.

Challenges remain for federal agencies in further addressing the
Commission's recommendations, including dealing with difficult budgetary
trade-offs and collaborating on actions involving multiple agencies. For
example, federal agencies may have to give priority to some programs that
address Commission recommendations at the expense of other programs
because of budget limitations. In addition, with multiple agencies
involved in the U.S. aerospace industry, a lack of coordination among
them, aerospace companies, and universities could result in duplication
and inefficient resource leveraging. GAO provided a draft of this report
to the relevant federal agencies. The Department of Defense had no
comments; the other agencies generally concurred with the report, but
provided clarifications and technical comments, which GAO incorporated as
appropriate.

Proposed Cargo Launch Vehicle with Lunar Lander Is an Example of Aerospace
Research and Development
*** End of document. ***