Federal Aviation Administration: Key Issues in Ensuring the	 
Efficient Development and Safe Operation of the Next Generation  
Air Transportation System (22-MAR-07, GAO-07-636T).		 
                                                                 
The Federal Aviation Administration (FAA) operates one of the	 
safest air transportation systems in the world. It is, however, a
system under strain. The skies are becoming more crowded every	 
day, with an estimated 1 billion passengers per year expected by 
2015. The current aviation system cannot be expanded to meet this
growth. The reauthorization of FAA is an opportunity to examine  
how the agency is managing the operation and safety of the air	 
transportation system as it leads the transition to the Next	 
Generation Air Transportation System (NextGen)--a major redesign 
of the current system. GAO's testimony focuses on key issues	 
related to FAA's reauthorization, including (1) FAA's progress in
implementing initiatives that could provide a solid foundation	 
for NextGen, (2) issues that need to be addressed to help ensure 
a successful transition to NextGen, and (3) safety areas that are
important for the continued safe operation of the current and	 
future system. This statement is based on recent GAO reports and 
ongoing work on some management and safety initiatives. 	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-636T					        
    ACCNO:   A67134						        
  TITLE:     Federal Aviation Administration: Key Issues in Ensuring  
the Efficient Development and Safe Operation of the Next	 
Generation Air Transportation System				 
     DATE:   03/22/2007 
  SUBJECT:   Air traffic control systems			 
	     Air transportation 				 
	     Data collection					 
	     Data integrity					 
	     Financial management				 
	     Internal controls					 
	     Legacy systems					 
	     Safety regulation					 
	     Safety standards					 
	     Strategic planning 				 
	     Transportation safety				 
	     Transportation statistics				 
	     Program implementation				 
	     Next Generation Air Transportation 		 
	     System						 
                                                                 

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GAO-07-636T

   

     * [1]Improved, Businesslike Operations Should Better Position FAA

          * [2]FAA Has Improved Its Financial Management, although the Soun
          * [3]Progress Has Been Made but Further Work Remains to Instituti
          * [4]FAA's Methodology for Tracking and Reporting Performance on
          * [5]Although FAA Is Now Focusing on NextGen, It Must Continue to
          * [6]Institutionalizing Change Within FAA Will Require Continued

     * [7]Key Issues Remain in the Transition From Planning to Impleme

          * [8]FAA Has Improved Coordination with JPDO, but Some Key Stakeh
          * [9]FAA Has Begun Budgeting for NextGen Programs, although Quest
          * [10]FAA Needs to Explore whether It Has the Technical and Contra

     * [11]Aviation Safety Record Remains High, but Some Areas Need to

          * [12]FAA Faces Challenges in Implementing Advanced Technology and
          * [13]FAA and Congress Should Address Regulatory Approaches to Som
          * [14]FAA Needs Improved Data and Analysis for Current Safety Over
          * [15]FAA Faces Human Capital Challenges

     * [16]GAO's Mission
     * [17]Obtaining Copies of GAO Reports and Testimony

          * [18]Order by Mail or Phone

     * [19]To Report Fraud, Waste, and Abuse in Federal Programs
     * [20]Congressional Relations
     * [21]Public Affairs

Testimony

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

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10 a.m. EDT
Thursday, March 22, 2007

FEDERAL AVIATION ADMINISTRATION

Key Issues in Ensuring the Efficient Development and Safe Operation of the
Next Generation Air Transportation System

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

GAO-07-636T

Mr. Chairman and Members of the Subcommittee:

I appreciate the opportunity to testify before you today as you consider
the reauthorization of the Federal Aviation Administration (FAA). FAA
operates one of the safest air transportation systems in the world. It is,
however, a system under strain. The skies over America are becoming more
crowded every day. Demand for air travel has increased in recent years,
with over 740 million passengers flying in fiscal year 2006, climbing
toward an estimated 1 billion passengers per year in 2015, according to
FAA estimates. Already, with the increasing demand for air travel, flight
arrival delays have increased; such delays are nearing the record levels
of 2000, a year in which one in four flights reached its destination
behind schedule. The system is also expected to absorb a variety of
different types of aircraft in the near future, ranging from the jumbo
Airbus A380--which can hold more than 500 passengers--to very light
jets--which may greatly increase the number of aircraft in the sky while
transporting six or fewer passengers on any given flight. The consensus is
that the current aviation system cannot be expanded to meet this projected
growth.

In 2003, recognizing the need for system transformation, Congress
authorized the creation of the Joint Planning and Development Office
(JPDO), housed within FAA but involving several federal partner
agencies,^1 to conceptualize and plan for the Next Generation Air
Transportation System (NextGen). NextGen is envisioned as a major redesign
of the air transportation system that will move from largely ground-based
radars to precision satellite-based navigation and includes digital,
networked communications; an integrated weather system; layered, adaptive
security; and more. The reauthorization of FAA and the Airport and Airway
Trust Fund provides a unique opportunity to examine how the agency is
managing the operation and safety of the current air traffic control
system as it prepares to implement NextGen. My testimony today focuses on
these questions: (1) What progress is FAA making in implementing
initiatives that could provide a solid foundation for NextGen? (2) What
are the key issues that need to be addressed to help ensure a successful
transition to NextGen? and (3) What key safety areas need to be addressed
for the continued safe operation of the current and future air
transportation system? My statement is based on our recent reports as well
as ongoing work for this subcommittee assessing FAA's performance metrics
for its acquisitions, runway safety, and safety issues concerning the
operation of unmanned aircraft systems in the national airspace. We
conducted this work in accordance with generally accepted government
auditing standards.

^1JPDO was authorized by the Vision 100--Century of Aviation
Reauthorization Act (Pub. L. No. 108-176), which requires the office to
operate in conjunction with multiple government agencies, including the
Departments of Transportation, Commerce, Defense, and Homeland Security;
FAA; the National Aeronautics and Space Administration (NASA); and the
White House Office of Science and Technology Policy. JPDO also involves
industry and other stakeholders through the Next Generation Air
Transportation System Institute.

In summary

           o Over the past few years, FAA has made significant progress in
           moving to more businesslike and cost effective operations and
           modernizing the air traffic control system, which should better
           position the agency for the complex implementation of NextGen.
           However, further work remains to fully address past problems in
           the modernization program. FAA has improved its financial
           management, including implementing a new cost accounting system
           and developing a cost allocation methodology; however, it is not
           yet clear if the cost allocation methodology is sufficiently valid
           and reliable to derive the administration's proposed new
           cost-based funding for FAA. FAA has also sought to improve its
           financial management with efforts to control and reduce costs. For
           example, FAA plans to produce cost savings through outsourcing
           such as with its planned contracting out of new surveillance
           technology, and through facility consolidations. In addition to
           improvements in financial management, FAA has improved its
           acquisition management, which will be critical to a successful
           transition to NextGen. For example, FAA has begun reviewing its
           major systems acquisitions and has established guidance for using
           a project management technique known as Earned Value Management^2
           in its acquisition management system, although institutionalizing
           these improvements will continue to be a challenge for FAA. FAA
           has also established performance measures and targets for its
           critical acquisitions. While the acquisition and deployment of
           NextGen technology are key issues facing the agency, it will be
           critical that FAA continue to maintain existing systems and phase
           out existing systems using a risk-based approach. And, although
           FAA has initiated numerous financial, management, and acquisition
           process improvements, the agency must work to institutionalize
           these changes while at the same time finding new leadership--due
           to losses of key leaders at FAA and its Air Traffic Organization
           (ATO)--that can continue to enforce an agencywide commitment to
           change and continuous improvement.
           o As FAA begins implementing NextGen, key issues remain that will
           need to be addressed, such as coordinating with JPDO, funding for
           NextGen-related programs, and ensuring that FAA has both the
           technical and contract management expertise that will be required
           to oversee this complex undertaking. FAA has become steadily more
           focused on NextGen over the past few years and is expanding and
           revamping its Operational Evolution Plan--renamed the Operational
           Evolution Partnership--to integrate with JPDO activities and
           become its implementation plan for NextGen, including details of
           required technologies, procedures, and resources. This is a step
           in the right direction. JPDO recently reported that the total cost
           for NextGen infrastructure may range between $15 billion and $22
           billion. The agency also noted that it expects a corresponding
           cost to system users, who will have to equip themselves with the
           advanced avionics necessary to realize the full benefits of some
           NextGen technologies, in the range of $14 billion to $20 billion.
           Another transition challenge for FAA and JPDO is to address
           questions about which entities will fund and conduct some of the
           necessary research, development, and demonstration projects that
           will be key to achieving certain NextGen capabilities and keeping
           the development of new systems on schedule. We have also
           recommended that FAA examine its strengths and weaknesses with
           regard to the technical and contract management expertise that
           will be needed for NextGen implementation. In response to our
           recommendation, FAA is considering convening a blue ribbon panel
           to study the issue and make recommendations to the agency. We
           believe that such a panel could help FAA begin to address this
           challenge.
           o To deal with current and future safety issues, it will be
           important for FAA to also address several issues as it works to
           ensure that its safety programs are aligned to meet future demand.
           First, ground safety is an area of increasing concern because air
           traffic is forecast to grow substantially during the coming
           decades, which will result in more aircraft and increased
           congestion and safety hazards in the complex airport environment.
           FAA needs to keep on schedule to deploy NextGen technology that
           warns controllers of imminent ground collisions and implement
           recommendations by the National Transportation Safety Board (NTSB)
           (which continues to place runway incursions on its Most Wanted
           Transportation Safety Improvements list). Second, FAA needs to
           establish an appropriate regulatory approach for some current
           airspace users, such as air ambulances, and new users such as the
           emerging space tourism industry. For example, we suggested that
           Congress should consider revisiting FAA's dual role for ensuring
           safety and promoting the emerging space tourism industry and
           decide whether the elimination of FAA's promotional role is
           necessary to alleviate a potential conflict of interest. Third, to
           maintain and expand the margin of safety--especially if
           substantial growth in air traffic materializes--FAA cannot rely on
           its current oversight approach, which focuses on labor-intensive
           inspections. Accurate, complete safety data would provide FAA with
           an early warning of hazards that can lead to accidents. We have
           recommended that FAA improve the accuracy and completeness of its
           safety data and its analysis of that data. FAA is in the early
           planning stages of addressing our recommendations, but more work
           remains. Fourth, FAA's ability to ensure safety in NextGen will be
           affected by its ability to manage its human capital, including
           safety inspectors, engineers, technicians, and air traffic
           controllers. FAA faces challenges in improving its staffing
           processes, addressing human factors issues associated with
           significant increases in the automation of air traffic management,
           replacing the large percentage of staff expected to retire, and
           addressing the contentious relations with its employee unions,
           which have the potential to hinder the agency's ability to retain
           and recruit skilled staff.
			  
			  Improved, Businesslike Operations Should Better Position FAA to
			  Implement and Manage NextGen, but Further Work Remains

           Although the NextGen effort involves multiple government agencies
           and the private sector, FAA will be the entity largely responsible
           for implementing the policies and systems necessary for NextGen
           while safely operating the current air traffic control system 24
           hours a day, 7 days a week. This means that FAA will be
           responsible for keeping a number of large NextGen systems
           acquisitions on budget and on schedule as it manages and sustains
           the current system. Historically, FAA has had serious weaknesses
           in its financial management as well as chronic cost and schedule
           difficulties with air traffic control system acquisitions. During
           the past few years, FAA has made significant progress in
           implementing businesslike processes and procedures for financial
           management, acquisitions, and organization structures. The
           implementation of these types of initiatives has improved FAA's
           management of the current system and should better position the
           agency to manage the enormously complex transition to NextGen.
           However, further work remains to fully address past problems and
           institutionalize these changes throughout the agency, especially
           given the changing leadership within both FAA and its ATO.
			  
			  FAA Has Improved Its Financial Management, although the Soundness
			  of Its Cost Allocation Methodology is Uncertain

           Sound financial management, including sound cost accounting and
           cost allocation systems, is important for the current operation of
           FAA and lays the foundation for the transformation to NextGen and
           proposed changes to the agency's funding system laid out in the
           administration's reauthorization proposal. In 1999, we placed FAA
           on our high-risk list for its financial management practices,
           noting weaknesses that rendered the agency vulnerable to fraud,
           waste, and abuse by undermining its ability to manage operations
           and limiting the reliability of financial information provided to
           Congress. In 2005, we removed FAA's financial management from our
           high-risk list because the agency had made significant progress,
           including implementing a new financial management system called
           Delphi^3 and receiving unqualified opinions from auditors on its
           annual financial statements for fiscal years 2001 through 2005.
           Nonetheless, external auditors issued a qualified opinion on FAA's
           fiscal year 2006 financial statement and repeated a material
           internal control weakness that was reported in 2005. The concerns
           that led to the qualified opinion stemmed from FAA's inability to
           support the accuracy and completeness of its
           construction-in-progress account, reported in the financial
           statement as $4.7 billion. FAA is working to address the problem.

           As part of its improved financial management, FAA has developed a
           cost accounting system and a cost allocation methodology, which
           are critical to the successful implementation of the new
           cost-based funding system included in the administration's
           reauthorization proposal.^4 The proposal would change FAA's
           financing system from one based mainly on excise taxes to one that
           provides a better link between revenues and the costs that users
           of the national airspace system impose on the system, according to
           the agency. FAA also says the proposal would improve revenue
           adequacy, equity, and efficiency.^5 While the reauthorization
           proposal may address some of the equity and efficiency concerns
           that FAA has raised with the current funding structure, we have
           reported that it is not yet clear if FAA has developed a sound
           cost allocation methodology from which to derive the new
           cost-based funding.^6 We are reviewing FAA's cost allocation
           methodology and expect to issue a report later this year.

           FAA has also improved its financial management through increased
           efforts to achieve cost savings and cost avoidance throughout the
           agency. For example, FAA is outsourcing flight service stations
           and estimates a $2.2 billion savings over 12 years. Similarly, FAA
           is seeking savings through outsourcing its planned nationwide
           deployment of Automatic Dependent Surveillance-Broadcast (ADS-B),
           a critical element of NextGen. FAA is planning to implement ADS-B
           through a performance-based contract in which FAA will pay
           "subscription" charges for the ADS-B services and the vendor will
           be responsible for building and maintaining the infrastructure.
           (FAA also reports that the ADS-B rollout will allow the agency to
           remove 50 percent of its current secondary radars, saving money in
           the program's baseline. The remaining radars will serve as a
           back-up system to ADS-B.) As for consolidating facilities, FAA is
           currently restructuring ATO's administrative service areas from
           nine offices to three offices, which FAA estimates will save up to
           $460 million over 10 years.

           We previously reported that FAA should pursue further cost control
           options, such as exploring additional opportunities for
           contracting out services and consolidating facilities. However, we
           recognize that FAA faces challenges with consolidating facilities,
           an action that can be politically sensitive. In recognition of
           this sensitivity, the administration's reauthorization proposal
           presents a "BRAC-like" initiative in which the Secretary of
           Transportation would be authorized to establish an independent,
           five-member commission, known as the Realignment and Consolidation
           of Aviation Facilities and Services Commission, to independently
           analyze FAA's recommendations to realign facilities or services.
           The commission would then send its own recommendations to the
           President and Congress. In the past, we noted the importance of
           potential cost savings through facility consolidations; however,
           it must also be noted that any such consolidations must be handled
           through a process that solicits and considers stakeholder input
           throughout and fully considers the safety implications of both
           proposed facility closures and consolidations.
			  
			  Progress Has Been Made but Further Work Remains to Institutionalize
			  Recent Improvements in Management and Acquisition Processes

           A successful transition to NextGen will depend, to a great extent,
           on FAA's ability to manage the acquisition and integration of
           multiple NextGen systems. Since 1995, we have designated FAA's air
           traffic control modernization program as high risk because of
           systemic management and acquisition problems. However, in recent
           years, FAA has made significant progress toward improving its
           acquisition management. Realization of NextGen goals could be
           severely compromised if FAA's improved processes are not
           institutionalized and carried over into the implementation of
           NextGen, which is an even more complex and ambitious undertaking
           than past modernization efforts.

           To its credit, FAA has taken a number of actions to improve its
           acquisition management. By creating ATO in 2003 and appointing a
           chief operating officer (COO) to head ATO, FAA established a new
           management structure and adopted more leading practices of private
           sector businesses to address the cost, schedule, and performance
           shortfalls that have plagued air traffic control acquisitions. ATO
           has worked to create a flatter organization, with fewer management
           layers, and has reported reducing executive staffing by 20 percent
           and total management by 16 percent. In addition, FAA uses a
           performance management system to hold managers responsible for the
           success of ATO. More specifically, to better manage its
           acquisitions and address problems we have identified,^7 FAA has

           o undertaken human capital initiatives to improve its acquisition
           workforce culture and build towards a results-oriented,
           high-performing organization;
           o developed and applied a process improvement model to assess the
           maturity of its software and systems acquisitions capabilities
           resulting in, among other things, enhanced productivity and
           greater ability to predict schedules and resources; and
           o reported that it has established a policy and guidance on using
           Earned Value Management (EVM) in its acquisition management system
           and that 19 of its major programs are currently using EVM.^8

           Institutionalizing these improvements throughout the agency will
           continue to be a challenge for FAA. For example, the agency has
           yet to implement its cost-estimating methodology, although,
           according to the agency, it has provided training on the
           methodology to employees. Furthermore, FAA has not established a
           policy to require use of its process improvement model on all
           major acquisitions for the national airspace system. Until the
           agency fully addresses these residual issues, it will continue to
           risk program management problems affecting cost, schedule, and
           performance. With a multibillion dollar acquisition budget,
           addressing these issues is as important as ever.
			  
			  FAAï¿½s Methodology for Tracking and Reporting Performance on
			  Critical Acquisitions is Subject of Ongoing Work for this
			  Subcommittee

           In another effort to improve agency processes, FAA expanded its
           use of performance measures to track its performance. In its
           fiscal year 2007 portfolio of goals, FAA lists 30 performance
           measures. As part of our ongoing work,^9 we are currently
           reviewing how FAA selects and measures two of these goals in
           particular: critical acquisitions on budget and critical
           acquisitions on schedule.^10 FAA has reported exceeding targets
           for both of these measures for the past 3 fiscal years. FAA's
           targets for fiscal year 2006 were to have 85 percent of critical
           acquisition programs within 10 percent of budget, as reflected in
           its capital investment plan, and to have 85 percent of critical
           acquisition programs on schedule. For fiscal year 2006, FAA
           reported that its critical acquisitions were 100 percent on budget
           and over 97 percent on schedule. This represents a major
           turnaround in a program that remains on our high-risk list.

           It will be important, as FAA begins to implement NextGen systems,
           to maintain critical acquisitions on schedule and on budget in
           order to meet the goal of transitioning to NextGen by 2025 and to
           prevent escalation of the costs of NextGen. Our ongoing work is
           examining FAA's performance and reporting on its critical
           acquisitions, including applicable performance measures. We are
           also exploring FAA's use of the most recently approved cost and
           schedule baselines, which may have changed significantly since the
           start of an acquisition, to measure program performance.
           Rebaselining acquisitions is an accepted practice and there are
           valid reasons for doing so, such as when changes in a program's
           requirements fundamentally alter the acquisition and make the
           originally approved schedule unrealistic. Because rebaselining
           resets the cost and schedule variances to zero, we want to verify
           that FAA's practice is not masking acquisition performance
           problems. We expect to issue a report on these issues later this
           year.
			  
			  Although FAA Is Now Focusing on NextGen, It Must Continue to
			  Manage and Sustain the Current System

           While the acquisition and deployment of NextGen technology are key
           issues facing the agency, it will be critical for FAA to continue
           to maintain existing systems and phase out existing systems using
           a risk-based approach. The adequacy of FAA's maintenance of
           existing systems was raised following a power outage and equipment
           failures in Southern California that caused hundreds of flight
           delays during the summer of 2006. Investigations by FAA and the
           Department of Transportation Inspector General into these
           incidents identified a number of underlying issues, including the
           age and condition of equipment. Nationwide, the number of
           scheduled^11 and unscheduled outages of air traffic control
           equipment and ancillary support systems has been increasing (see
           fig. 1). Increases in the number of unscheduled outages indicate
           that systems are failing more frequently.

           Figure 1: Number of Scheduled and Unscheduled Equipment Outages,
           Calendar Years 2001-2006

           In addition, the duration of unscheduled equipment outages has
           also been increasing in recent years from an average of about 21
           hours in 2001 to about 40 hours in 2006 (see fig. 2), which may
           indicate, in part, that maintenance and troubleshooting activities
           are requiring more effort and longer periods of time. However,
           according to FAA, it considers user impact and resource efficiency
           when planning and responding to equipment outages. As a result,
           according to the agency, although some outages will have longer
           restoration times, the agency believes they do not adversely
           affect air traffic control operations. It will be critical for FAA
           to monitor and address equipment outages to ensure the safety and
           efficiency of the legacy systems, since they will be the core of
           the national airspace system for a number of years and, in some
           cases, will become part of NextGen.

           Figure 2: Average Duration of Scheduled and Unscheduled Equipment
           Outages, Calendar Years 2001-2006
			  
			  Institutionalizing Change Within FAA Will Require Continued Strong
			  Leadership

           While FAA has implemented many positive changes to its management
           and business processes in recent years, it currently faces the
           loss of key leaders. We reported that the experiences of
           successful transformations and change management initiatives in
           large public and private organizations suggest that it can take 5
           to 7 years or more until such initiatives are fully implemented
           and cultures are transformed in a sustainable manner. Such changes
           require focused, full-time attention from senior leadership and a
           dedicated team.^12 However, the agency will have lost two of its
           significant agents for change--the FAA administrator and the COO,
           who heads ATO--by the end of September 2007. The administrator's
           term ends in September 2007; the COO left in February 2007, after
           serving 3 years. This situation is exacerbated by the fact that
           the current director of JPDO is new, having assumed that position
           in August 2006. For the financial, management, and acquisition
           improvements to further permeate the agency, and thus provide a
           firm foundation upon which to implement NextGen, FAA's new leaders
           will need to demonstrate the same commitment to improvement as the
           outgoing leaders. This continued commitment to change is critical
           over the next few years, as foundational NextGen systems begin to
           be implemented. Because this is a critical time for FAA, the
           agency needs to move expeditiously to find a new COO for ATO. It
           could be useful to have a COO whose tenure lasted the length of
           the current statutory 5-year term. This would allow for stable
           leadership at ATO during this critical transition from planning to
           early implementation of NextGen.
			  
			  Key Issues Remain in the Transition From Planning to Implementing
			  NextGen

           Several key issues will need to be addressed to help ensure a
           successful transition to NextGen as FAA moves from the
           conceptualization and planning of NextGen, handled largely through
           the interagency collaborative efforts of FAA's JPDO, to the
           implementation of NextGen technologies and systems. Those issues
           include (1) continuing to focus on the coordination between ATO
           and JPDO and stakeholder involvement; (2) determining which
           entities will fund the necessary research, development, and
           demonstration projects for NextGen; and (3) determining whether
           FAA has the technical and contract management expertise necessary
           to oversee the complex implementation of NextGen.
			  
			  FAA Has Improved Coordination with JPDO, but Some Key Stakeholder
			  Involvement is Absent

           FAA has become steadily more focused on NextGen implementation,
           but some key stakeholders, such as FAA technicians who will
           maintain NextGen systems, are not currently involved. One of the
           most important changes FAA has made with regard to NextGen is the
           expansion and revamping of its Operational Evolution Plan
           (OEP)--renamed the Operational Evolution Partnership--to become
           FAA's implementation plan for NextGen. This is a step in the right
           direction. The OEP is being expanded to apply to all of FAA and is
           intended to become a comprehensive description of how the agency
           will implement NextGen, including the required technologies,
           procedures, and resources.^13 (Figure 3 shows the OEP framework.)
           An ATO official told us that the new OEP is expected to be
           consistent with JPDO's key planning documents and partner agency
           budget guidance.^14 According to FAA, the OEP will allow it to
           demonstrate appropriate budget control and linkage to NextGen
           plans and will force FAA's research and development to be relevant
           to NextGen's requirements. According to FAA documents, the agency
           plans to publish the new OEP in June 2007.

           Figure 3: New OEP Framework

           Source: JPDO.

           Note: The concentric rings indicate the nature of initiative
           development from the outer ring (NextGen strategic initiatives),
           in which new programs and concepts are analyzed and demonstrated;
           to the second ring, where decisions are made regarding safety,
           operating policy, performance standards, and certification
           requirements; to the third ring (technical development), where
           concepts are prototyped and investment analysis decisions are
           made. The progression through the rings is not necessarily linear,
           and a program may be in more than one ring at a time. Data
           communications, for example, is in the technical development ring
           and also in the middle ring as policy and rulemaking is
           considered. The core is divided into three sections, which
           indicate the FAA offices that implement the final NextGen program.

           In an effort to further align FAA's efforts with JPDO's plans for
           NextGen, FAA has created a NextGen Review Board to oversee the
           OEP. This review board will be co-chaired by JPDO's director and
           ATO's vice president of operations planning services. Initiatives,
           such as concept demonstrations or research proposed for inclusion
           in the OEP will now need to go through the review board for
           approval. Initiatives are to be assessed for their relation to
           NextGen requirements, concept maturity, and risk. An ATO official
           told us that the new OEP process should also help identify some
           smaller programs that might be inconsistent with NextGen and could
           be discontinued and will assist in project integration.
           Additionally, as a further step towards integrating ATO and JPDO,
           the administration's reauthorization proposal calls for the JPDO
           director to be a voting member of FAA's Joint Resources Council
           and ATO's Executive Council.

           Some stakeholders, such as current air traffic controllers and
           technicians, will play critical roles in NextGen, and their
           involvement in planning for and deploying the new technology will
           be important to the success of NextGen. In November 2006, we
           reported that air traffic controllers were not involved in the
           NextGen planning effort.^15 Controllers are beginning to become
           involved as they are now represented on a key planning body.
           However, the technicians do not participate in NextGen efforts.
           Input from current air traffic controllers who have recent
           experience controlling aircraft and current technicians who will
           maintain the new equipment is important in considering human
           factors and safety issues. Our work on past air traffic control
           modernization projects has shown that a lack of stakeholder
           involvement early and throughout a project can lead to cost
           increases and delays.
			  
			  FAA Has Begun Budgeting for NextGen Programs, although Questions
			  Remain About the Funding of NextGen Research and Development

           JPDO recently reported some estimated costs for NextGen, including
           specifics on some early NextGen programs.^16 JPDO believes the
           total federal cost for NextGen infrastructure through 2025 will
           range between $15 billion and $22 billion. JPDO also reported a
           preliminary estimate of the corresponding cost to system users to
           equip themselves with the advanced avionics that are necessary to
           realize the full benefits of some NextGen technologies may range
           from $14 billion to $20 billion. JPDO, in its recently released
           2006 Progress Report, noted that this range for avionics costs
           reflects uncertainty about equipage costs for individual aircraft,
           the number of very light jets that will operate in
           high-performance airspace, and the amount of out-of-service time
           required for installation.

           In its capital investment plan for fiscal years 2008-2012, FAA
           includes estimated expenditures for 11 line items that are
           considered NextGen capital programs.^17 The total 5-year estimated
           expenditures for these programs is $4.3 billion. In fiscal year
           2008, only 6 of the line items are funded for a total of roughly
           $174 million; funding for the remaining 5 programs would begin
           with the fiscal year 2009 budget. According to FAA, in addition to
           capital spending for NextGen, the agency will spend an estimated
           $300 million on NextGen-related research and development from
           fiscal years 2008 through 2012. The administration's budget for
           fiscal year 2008 for FAA includes a total of $17.8 million to
           support the activities of JPDO.

           The administration's reauthorization proposal would allow for $5
           billion in Treasury debt financing authority for NextGen-related
           capital needs for fiscal years 2013-2017. Projects that might be
           appropriate for such financing include safety-critical and
           mission-essential software and systems that controllers and
           traffic flow managers will use to support certain aircraft
           operations in the NextGen system, according to the proposal.
           However, the proposed borrowing authority seems unlikely to have a
           major impact on FAA's ability to pay for capital investment
           associated with moving to NextGen because the payback period is
           relatively short. With a maximum payback period of 5 years, the
           advantage of matching the time period for paying for a capital
           investment with the time period in which the benefits of that
           investment are realized is unlikely to be achieved. Therefore, the
           advantage of borrowing versus receiving appropriations for a
           period of up to 5 years is unclear.

           While FAA and JPDO have begun to release estimates for FAA's
           NextGen investment portfolio, questions remain over which entities
           will fund and conduct some of the necessary research, development,
           and demonstration projects that will be key to achieving certain
           NextGen capabilities and keeping the development of new systems on
           schedule. In the past, a significant portion of aeronautics
           research and development, including intermediate technology
           development, has been performed by NASA. However, NASA's
           aeronautics research budget and proposed funding shows a
           30-percent decline, in constant 2005 dollars, from fiscal year
           2005 to fiscal year 2011. To its credit, NASA plans to focus its
           research on the needs of NextGen. However, NASA is also moving
           toward a focus on fundamental research and away from developmental
           work and demonstration projects. FAA and JPDO face the challenge
           of determining the nature and scope of the research and technology
           development necessary to begin the transition to NextGen. They
           also have to identify the entities that can conduct that research
           and development and the source of funding to support it.
			  
			  FAA Needs to Explore whether It Has the Technical and Contract
			  Management Expertise Necessary to Implement NextGen

           In the past, a lack of expertise contributed to weaknesses in
           FAA's management of air traffic control modernization efforts, and
           industry experts with whom we spoke questioned whether FAA will
           have the technical expertise needed to implement NextGen. In
           addition to technical expertise, FAA will need contract management
           expertise to oversee the systems acquisitions and integration
           involved in NextGen. In November 2006, we recommended that FAA
           examine its strengths and weaknesses with regard to the technical
           expertise and contract management expertise that will be required
           to define, implement, and integrate the numerous complex programs
           inherent in the transition to NextGen.^18 In response to our
           recommendation, FAA is considering convening a blue ribbon panel
           to study the issue and make recommendations to the agency about
           how best to proceed with its management and oversight of the
           implementation of NextGen. We believe that such a panel could help
           FAA begin to address this challenge.
			  
			  Aviation Safety Record Remains High, but Some Areas Need to be
			  Addressed for Current and Future Safety as FAA Transitions to
			  NextGen

           As FAA works to develop the policies and systems to transition to
           NextGen, it will be important for the agency to also ensure that
           its safety programs are aligned with these changes. While recent
           safety trends are generally positive, improving upon those trends
           will be necessary simply to maintain the same level of safety if
           air traffic doubles or triples during the coming decades.
           Moreover, certain recent trends--such as the commercial air
           carrier fatal accident rate--may warrant immediate attention.
           Although this accident rate has steadily declined in recent years,
           FAA did not meet its performance target in this area for fiscal
           year 2006 due to four accidents, including two accidents on runway
           and ramp areas and one runway overrun. FAA's ability to deal with
           current safety issues and the transition to NextGen would be
           enhanced by (1) acquiring and deploying new safety enhancing
           technologies; (2) establishing appropriate regulatory approaches
           for current airspace users and emerging sectors; (3) improving the
           accuracy and completeness of its safety data; and (4) addressing
           human capital issues associated with hiring, training, and
           deploying its skilled workforce of air traffic controllers, safety
           inspectors, engineers, and technicians.
			  
			  FAA Faces Challenges in Implementing Advanced Technology and Other
			  Measures to Improve Safety in the Airport Environment

           Safety in the airport environment is an area of increasing concern
           because air traffic is forecast to grow substantially during the
           coming decades. More aircraft and congestion at the airport will
           make maintaining safety even more critical, as the airport
           environment involves enormously complex interactions between air
           traffic controllers and the people who operate on the airport
           surface, including pilots, mechanics, maintenance technicians, and
           airport employees. FAA's efforts to improve safety in the airport
           environment include deploying NextGen technology, such as the
           Airport Surface Detection Equipment Model X (ASDE-X),^19
           evaluating runway status lights, and testing a low-cost surface
           surveillance system. FAA pursues new technologies to improve
           runway safety because the incursion rate at U.S. airports was
           higher in fiscal year 2006 than it was in fiscal year 2002.^20
           (Incursions are potential collisions on the ground.) However, the
           deployment of new technology has faced schedule delays. FAA
           originally planned to deploy ASDE-X at 35 major airports by 2007,
           but the technology is operational at only 8 airports to date, and
           deployment at the remaining 27 airports is not scheduled to be
           complete until 2011 (see fig. 4). At the same time, FAA is
           evaluating the performance of runway status lights, another
           technology aimed at preventing runway incursions by warning pilots
           when a runway is unsafe for crossing or departure. FAA expects to
           decide this year whether to deploy the system at 35 large airports
           at an estimated cost of $300 million. Although the 35 airports
           that are to receive ASDE-X--and may receive runway status
           lights--handle about 70 percent of enplanements in the United
           States, they represent only about 6 percent of the country's 573
           commercial service airports. Therefore, FAA is also evaluating a
           low-cost surface surveillance system that could meet the needs of
           small- to medium-sized airports. The system is designed to alert
           controllers of potential conflicts and hazards and provide direct
           warnings to pilots entering or approaching active runways.

^2Earned Value Management combines measurements of technical, schedule,
and cost performance with the intent of providing an early warning of
problems while there is time for corrective action.

^3Delphi is a commercial off-the-shelf financial management system that
was acquired by the Department of Transportation and fully implemented in
FAA in 2003.

^4The reauthorization proposal includes, among other things, introducing
direct user charges for commercial aircraft based on the cost of the air
traffic services they receive, eliminating many current taxes,
substantially increasing the fuel taxes general aviation operators pay,
charging both commercial and general aviation a fuel tax to pay for
airport capital improvements, and linking the contribution to FAA's budget
from the General Fund of the U.S. Treasury to the public benefits FAA
provides. Under the administration's proposal, these changes would begin
in fiscal year 2009.

^5Revenue adequacy refers to the ability of FAA's funding system to
produce revenues commensurate with workload changes over time. Equity
refers to the equitable distribution of costs to aviation users.
Efficiency refers to incentives that encourage the efficient use of the
national airspace system.

^6GAO, Federal Aviation Administration: Observations on Selected Changes
to FAA's Funding and Budget Structure in the Administration's
Reauthorization Proposal, [22]GAO-07-625T (Washington, D.C.: Mar. 21,
2007).

^7GAO, Federal Aviation Administration: Stronger Architecture Program
Needed to Guide Systems Modernization Efforts, [23]GAO-05-266 (Washington,
D.C.: Apr. 29, 2005); Air Traffic Control: System Management Capabilities
Improved, but More can be Done to Institutionalize Improvements,
[24]GAO-04-901 (Washington, D.C.: Aug. 20, 2004); and Information
Technology: FAA Has Many Investment Management Capabilities in Place, but
More Oversight of Operational Systems is Needed, [25]GAO-04-822
(Washington, D.C.: Aug. 20, 2004).

^8EVM is a project management technique that combines measurements of
technical performance, schedule performance, and cost performance with the
intent of providing an early warning of problems while there is time for
corrective action.

^9This work is in response to a joint request from this subcommittee and
the Subcommittee on Aviation of the Senate Commerce, Science, and
Transportation Committee.

^10ATO has the lead responsibility for both of these goals.

^11Scheduled outages occur for scheduled maintenance.

^12GAO, National Airspace System: Transformation will Require Cultural
Change, Balanced Funding Priorities, and Use of All Available Management
Tools, [26]GAO-06-154 (Washington, D.C.: Oct. 14, 2005).

^13Prior to expansion of the OEP, the document centered on plans for
increasing capacity and efficiency at 35 major airports.

^14The planning documents include the Concept of Operations, Enterprise
Architecture, and Integrated Work Plan. The Concept of Operations
describes how the transformational elements of NextGen will operate in
2025. It is intended to establish general stakeholder buy-in to the
NextGen end state, transition path, and business case. The Enterprise
Architecture follows from the Concept of Operations and describes the
system in more detail. It will be used to integrate planning efforts and
drive partner agency guidance. The Integrated Work Plan lays out a
timeline for deploying and integrating NextGen systems.

^15GAO, Next Generation Air Transportation System: Progress and Challenges
Associated with the Transformation of the National Airspace System,
[27]GAO-07-25 (Washington, D.C.: Nov. 13, 2006).

^16JPDO, Making the NextGen Vision a Reality: 2006 Progress Report to the
Next Generation Air Transportation System Integrated Plan (Washington,
D.C.: March 2007).

^17FAA has six capital investment programs that it considers
transformational NextGen programs slated to receive funding in fiscal year
2008: ADS-B nationwide implementation, System Wide Information Management
(SWIM), NextGen Data Communications, NextGen Network Enabled Weather,
National Airspace System Voice Switch, and NextGen Technology
Demonstration. In addition, five other programs are slated to begin
funding in 2009: NextGen System Development, NextGen High Altitude
Trajectory Based Operations, NextGen High Density Airports, NextGen
Networked Facilities, and NextGen Cross-Cutting Infrastructure.

^18 [28]GAO-07-25 .

^19ASDE-X is the upgraded digitally-based technology that enables air
traffic controllers to detect potential runway conflicts by providing
detailed coverage of movement on runways and taxiways. ASDE-X warns
controllers of potential runway incursions.

^20The rate was 5.4 incursions per 1 million tower operations in fiscal
year 2006 and 5.2 incursions per 1 million tower operations in fiscal year
2002.

Figure 4: Airport Surface Detection Equipment Model X (ASDE-X) Deployment
Sites

The number of serious incursions--incidents where a collision was narrowly
avoided--rose from 28 in fiscal year 2004 to 31 in fiscal year 2006. As a
result, NTSB continues to place runway incursions on its Most Wanted
Transportation Safety Improvements list. FAA has not yet implemented any
of the six runway incursion prevention recommendations that NTSB made in
2000. The recommendations include such things as implementing at
commercial airports ground movement safety systems that provide a direct
warning to flight crews of possible incursions and changing air traffic
control procedures.^21 According to NTSB, FAA has not completed its
evaluation and implementation of technology to address the recommendation
on safety systems, and the two agencies have not reached agreement on the
recommendations to change air traffic control procedures.

FAA is also making efforts to prevent runway overruns, which occur when
aircraft pass the ends of runways during aborted takeoffs or while
landing, by the construction of runway safety areas or the installation of
arresting material at the end of runways. In 2000, FAA established its
Runway Safety Area program to accelerate the construction of runway safety
areas--areas surrounding the runways designed to reduce the risk of damage
to aircraft from overruns. Since 2005, commercial service airports have
been required^22 to bring their runway safety areas into compliance with
FAA standards by 2015. According to FAA, as of January 2007, 70 percent of
the 1,020 runways at 573 commercial airports in the United States
substantially comply with runway safety area standards, up from 55 percent
in 2000. In fiscal year 2006, the Airport Improvement Program (AIP)
awarded more than $240 million in grants for runway safety area
improvement projects. FAA indicates that about $1.1 billion in AIP funds
will be needed to complete the remainder. The administration's budget
request for FAA calls for $2.75 billion in AIP funds in fiscal year 2008,
a substantial reduction from the $3.5 billion funding levels for fiscal
years 2006 and 2007. It will be important for FAA to consider these runway
safety areas as it prioritizes AIP funds. FAA considers the installation
of an Engineered Materials Arresting System (EMAS), a bed of crushable
concrete designed to safely decelerate and stop overrunning aircraft, to
be an acceptable alternative for meeting runway safety area standards. As
of December 2006, EMAS was installed on 21 runways at 16 U.S. airports and
had successfully stopped three aircraft from overrunning runways. We are
conducting ongoing work for this subcommittee on runway and ramp safety
and expect to issue our final report later this year.

^21Recommended changes to air traffic control procedures include
clarifying authorized runway crossings, increasing the situational
awareness of the flight crews for arriving aircraft at night or in poor
visibility conditions without relying on the controllers, and the use of
international landing clearance procedures and standard phraseology for
airport surface operations.

^22Public Law 109-115.

FAA and Congress Should Address Regulatory Approaches to Some Current Airspace
Users and Emerging Sectors

Future air traffic is expected to include not only increases in the number
of traditional airspace users, but new users as well. It will be important
for FAA to establish the appropriate regulatory approach for current users
and new users such as the emerging space tourism industry and unmanned
aircraft systems. For example, we recently found that FAA's current
oversight approach for air ambulances was not geared to the unique
operating characteristics and risks associated with that sector.^23
Further, in 2006, NTSB recommended, among other things, that FAA require
that all air ambulance operators comply with Part 135 of Title 14 of the
Code of Federal Regulations during all flights with medical personnel on
board.^24 Under FAA regulation, most air ambulances operate under rules
specified in Part 135. However, pilots may operate under different
standards, depending on whether they are carrying patients. Without
patients or passengers on board, pilots may operate under rules specified
in Part 91 of Title 14 of the Code of Federal Regulations. With patients
on board, pilots are required to operate under Part 135 rules. Parts 91
and 135 flight rules differ significantly in two key areas--(1) weather
and visibility minimums and (2) rest requirements--with Part 135
requirements being more stringent.

In many air ambulance trips, part of the trip may involve Part 135 rules,
while another part may involve Part 91 rules. For example, scene response
missions for air ambulance helicopters frequently have three legs--the
flight en route to the accident scene, the transport of the patient to the
hospital, and the reposition of the helicopter back to its base (see fig.
5). Only the leg during which patients or other passengers (medical crew
members are not considered passengers) are on board must be flown under
Part 135 flight rules. Of the 89 air ambulance accidents that we examined
from 1998 through 2005, 64 took place during Part 91 flight and the
remaining 25 took place during Part 135 flight. However, because air
ambulance flights without patients or passengers could be flown under Part
91 requirements, there may be more than twice as many flights taking place
under Part 91 compared with Part 135. A better understanding of the trends
in the air ambulance industry, including accident data, will be important
in deciding if the current regulatory approach is appropriate or if more
fundamental changes, such as revising FAA regulations, need to be made.

^23GAO, Aviation Safety: Improved Data Collection Needed for Effective
Oversight of Air Ambulance Industry, [29]GAO-07-353 (Washington, D.C.:
Feb. 21, 2007).

^24NTSB, Special Investigative Report on Emergency Medical Services
Operations (Washington, D.C.: 2006). According to NTSB, as of December 21,
2006, this recommendation and others made in this report were still open.

Figure 5: Air Ambulance Scene Flight Response Legs

As another example, the need for a different regulatory approach for
all-cargo operations has been raised. According to FAA, from 1998 through
2005, the accident rate for scheduled air cargo operators declined
significantly but was still about 2.5 times higher than the accident rate
for scheduled passenger operators. The Congressional Research Service
pointed out that the size of aircraft, the range of operations flown by
all-cargo operators, and the large growth in the all-cargo sector
introduce unique risks to operators, airports, and the public that may
call for revisiting the safety standards that apply to all-cargo
operations.^25

25Congressional Research Service, Reauthorization of the Federal Aviation
Administration: Background and Issues for Congress (Washington, D.C.: Jan.
29, 2007).

In recent work, we also raised issues concerning FAA's regulation of the
emerging space tourism industry.^26 Specifically, we suggested that
Congress should consider revisiting the granting of FAA's dual mandate for
ensuring safety and promoting space tourism and decide whether the
elimination of FAA's promotional role is necessary to alleviate a
potential conflict. FAA licenses the operation of commercial space
launches and launch sites. Historically, these launches carried commercial
payloads and were unmanned. The prospect for commercial space tourism
materialized in 2004, after the successful launches of SpaceShipOne raised
the possibility of an emerging U.S. commercial space tourism industry that
would make human space travel available to the public. Several companies
are planning to start taking paying passengers on suborbital flights
within the next few years and a number of commercial spaceports are being
planned. For example, Virgin Galactic intends to provide suborbital space
flight from a planned spaceport in New Mexico starting in 2009. It plans
to carry 3,000 passengers over 5 years, with 100 individuals having
already paid the full fare of $200,000. Figure 6 shows current and planned
spaceports. In 1984, the Commercial Space Launch Act gave DOT the
authority to license and monitor the safety of commercial space launches
and to promote the industry. It is important that FAA's statutory
responsibility to promote the commercial space launch industry does not
interfere with its safety oversight of the industry as the space tourism
sector develops. We have no evidence that FAA's promotional activities,
such as sponsoring an annual industry conference and publishing economic
impact studies, have conflicted thus far with its safety regulatory role,
but conflicts could occur as the industry matures.

^26GAO, Commercial Space Launches: FAA Needs Continued Planning and
Monitoring to Oversee the Safety of the Emerging Space Tourism Industry,
[30]GAO-07-16 (Washington, D.C.: Oct. 20, 2006).

Figure 6: Federal Commercial Launch Sites and Existing and Proposed
Spaceports in the United States, October 2006

In addition, FAA faces the challenge of determining the circumstances
under which it would regulate the safety of crew and space flight
participants. In 2004, the Commercial Space Launch Amendments Act
prohibited FAA from regulating crew and passenger safety before 2012,
except in response to high-risk incidents, serious injuries, or
fatalities. FAA has interpreted this limited authority as allowing it to
regulate crew safety in certain circumstances and has been proactive in
proposing regulations concerning emergency training for crews and
passengers. However, FAA has not developed safety indicators by which it
would monitor the developing space tourism sector and determine when to
step in and regulate human space flight. We have recommended that the
agency be proactive about safety rather than respond only after a fatality
or serious incident occurs by identifying and monitoring safety indicators
that might trigger the need for regulation before 2012. Actions have not
been taken on our recommendations.

Another emerging sector that poses regulatory issues is unmanned aircraft
systems (UAS)^27 (see fig. 7), which are expected to be part of the mix of
aircraft that will operate in NextGen. A small number of UASs are
currently used by government agencies for a variety of purposes, such as
border security, search and rescue, firefighting, military training
exercises, and other law enforcement and homeland security initiatives.
Recent projections indicate that over 10,000 UASs could be in operation in
the United States by 2015, but FAA believes that the number may be less.
We have work ongoing for this subcommittee to assess issues such as the
technological and regulatory issues that remain in order for UASs to be
safely integrated in the national airspace system, the timeframes for
completing such work, and the identification of entities that should take
the lead in such work. We expect to issue a report later this year.

Figure 7: U.S. Air Force's Global Hawk UAS

^27Unmanned aircraft systems do not carry a human operator; they are
either programmed for autonomous flight (called a "drone") or are flown
remotely by a ground operator.

Our preliminary work, indicates that UASs pose unique safety challenges
and questions. For example, what standards should UASs meet to ensure that
they detect, sense, and avoid other aircraft? What standards should be set
for UAS safety and reliability? How should FAA classify UASs, which can
range in size from very small, hand launched systems to those similar in
size to a large passenger aircraft? What pilot qualifications are needed
for UAS operators? FAA has begun to answer such questions by reviewing its
existing safety regulations developed for manned aircraft to determine how
or whether they need to be modified to enable UASs to be safely integrated
into the national airspace system. FAA expects this to be a 5- to 10-year
effort. In the meantime, FAA will continue its existing oversight approach
and review each request to operate on a case-by-case basis. If FAA
determines that a UAS can operate safely under specified conditions, the
agency issues a certificate of authorization and the airspace is
restricted during the period of operation.^28 In fiscal year 2006, FAA
processed 96 applications for certificates of authorization and issued 62
certificates. FAA projects that it will receive over 400 applications in
2010. The agency may have difficulty handling such an increase under its
existing case-by-case process, which could serve as a de facto limit on
the number of UASs operating in the next few years.

FAA Needs Improved Data and Analysis for Current Safety Oversight and for the
Transition to NextGen

FAA cannot rely on its current oversight approach, which focuses on
labor-intensive inspections to maintain and expand the margin of safety,
especially if substantial growth in air traffic materializes. FAA
acknowledges this situation and sees the need to establish a safety
information system that can provide an early warning of hazards that may
lead to accidents and help the agency manage risk. However, our past work
has found problems with the accuracy and completeness of FAA's safety
data. For example, FAA does not collect actual flight activity data for
general aviation operators, air taxis, or air ambulances. As a result, FAA
lacks information to monitor the rate of accidents and determine the
effectiveness of its oversight. We have recommended that FAA improve the
accuracy and completeness of its safety data and evaluate this information
to identify nationwide trends. FAA is in the early planning stages of
addressing our recommendations, but more work remains.

^28A certificate of authorization allows an operator to use defined
airspace for a specified time (up to one year, in some cases) and includes
special provisions unique to each operation. For instance, a certificate
may include a requirement to operate only under visual flight rules.

An important aspect of FAA's safety oversight is the use of over 13,000
private individuals and organizations, known as designees, to leverage
inspector resources. Designees 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, and
approving designs for aircraft parts. In reviewing FAA's designee
programs, we found that the agency's oversight of designees was hampered,
in part, by limited data on designees' performance.^29 FAA is in the early
stages of addressing our recommendation to improve the consistency and
completeness of designee information. FAA is also changing and expanding
the designee programs by replacing certain designee programs with an
organization designation authorization. By expanding the number and types
of organizational designees, FAA's role is being further transformed to
monitoring the performance of organizations rather than overseeing the
individuals who perform the certification activities. It will be important
for FAA to have the data, evaluative processes, and a well-trained
inspector staff to effectively monitor the new program to make sure that
safety is not adversely affected.

FAA is in the early stages of addressing some of these data issues as it
begins planning a new system-- Aviation Safety Information Analysis and
Sharing System--that would provide access to large volumes of industry
safety data. FAA began planning for the new system in 2006. Because this
activity is in the early planning stages, our concerns about FAA's data
remain relevant. The successful completion of this planning effort will be
critical to FAA's ability to improve safety. In fiscal year 2008, FAA
proposes budgeting $32 million for safety databases and computer systems.
As FAA prioritizes the activities that it undertakes with these funds, it
will be important to continue addressing these critical data limitations.

In addition, FAA is shifting to a data-driven, risk-based approach to
maintaining the agency's approximately 40,000 pieces of air traffic
control equipment, but it has not yet determined its new data needs. FAA
is in the very early planning stages of a 10-year or longer effort to
switch to this new approach, termed reliability centered maintenance
(RCM), which private industry and other federal agencies, such as the
Department of Defense (DOD) and NASA, use to maintain equipment. FAA
expects the new approach to improve equipment performance. However, we
reported in November 2006 that FAA had not developed a plan to implement
RCM, has not determined the data needs for RCM, and has not decided what
training will be provided to staff.^30 As the agency moves forward with
this approach, it will be important for FAA to address the issues we
identified as well as work with stakeholders, including FAA maintenance
technicians, to ensure that decisions are not driven entirely by cost
savings and that the safety and efficiency of national airspace operations
are not adversely affected.

^29GAO, Aviation Safety: FAA Needs to Strengthen the Management of Its
Designees Programs, [31]GAO-05-40 (Washington, D.C.: Oct. 8, 2004).

FAA Faces Human Capital Challenges

FAA's ability to ensure safety in NextGen will also be affected by its
ability to manage its human capital, including air traffic controllers,
safety inspectors, engineers, and technicians. FAA faces a challenge in
managing human capital due to contentious relations with its labor unions.
Fourteen unions represent more than 34,000 of FAA's 43,200 full time
permanent employees. With the exception of two unions--the National Air
Traffic Controllers Association (NATCA) and the Professional Airway System
Specialists (PASS), which represent about 23,000 FAA employees--12 unions
have negotiated a contract or memorandum of agreement with FAA, according
to agency officials. In April 2006, after reaching an impasse in
negotiations with NATCA, FAA used its authority^31 to settle the impasse
by imposing a contract on its air traffic controllers. After 4 years of
contract negotiations with PASS, FAA reached an agreement in April 2006.
The PASS membership, however, according to an FAA official, rejected this
proposed contract. Subsequently, FAA filed a complaint with the Federal
Labor Relations Authority claiming an unfair labor practice, according to
the same FAA official. Until this complaint is adjudicated, the previous
PASS contract remains in effect, according to the FAA official. Improving
the contentious relationship between FAA and these unions could have
positive effects on both the safety of FAA operations and the
implementation of new air traffic management systems under NextGen. For
example, delays in union approvals that may be needed to implement new
systems could lead to delays in their implementation if labor management
relations are acrimonious. In addition, the current contract situations
have the potential to hinder FAA's ability to retain and recruit skilled
technical staff.

^30GAO, FAA's Proposed Plan for Implementing a Reliability Centered
Maintenance Process for Air Traffic Control Equipment, [32]GAO-07-81R
(Washington, D.C.: Nov. 9, 2006).

^3149 U.S.C. S40122(a)(2).

FAA estimates it will lose about 72 percent of its air traffic controller
workforce over the next 10 years. (See fig. 8.) To replace these
controllers, FAA plans to hire 15,004 new controllers from fiscal years
2006 through 2016, according to the agency's March 2007 controller
workforce plan. This recent hiring target is higher than FAA's June 2006
hiring target^32 to reflect recent data indicating that controllers are
retiring at a faster rate than FAA anticipated. To meet these higher
targets, FAA has expanded its hiring sources, which had focused on
individuals with prior FAA or DOD air traffic control experience and
graduates from FAA's collegiate training initiative program to include the
general public. This strategy is needed, according to FAA officials,
because DOD has recently become less of a hiring source for controllers
due to military incentives for retaining controllers and DOD's higher
salaries than FAA's entry-level salary.^33 However, those new hires that
lack prior air traffic control experience will require more training to
become certified controllers.^34 Additionally, since it can take up to 3
to 5 years for a controller to become certified, within a few years, a
large portion of the controller workforce may be trainees and not fully
certified. Based on FAA's hiring and retirement projections, by 2010,
about 40 percent of the air traffic controller workforce will have 5 or
fewer years of experience. This high percentage of newly hired controllers
will continue for a number of years, making it important for FAA to
carefully balance the ratio of trainees to certified controllers at each
air traffic control facility.

^32In June 2006, FAA planned to hire 11,851 new air traffic controllers
from 2006 through 2015. FAA's revised plan calls for hiring 13,641 new
controllers for the same time period.

^33Under FAA's recently implemented contract with air traffic controllers,
most current controllers continue to receive their existing base salaries
and benefits, while new controllers are hired at lower wages.

^34Only newly hired controllers without any previous experience or
specialized education are required to complete 5 weeks of initial
qualification training.

Figure 8: Estimated Controller Losses and Planned Hires, Fiscal Years
2006-2016

Note: Numbers for fiscal year 2006 represent actual losses and hires.

In addition to the challenge of hiring and training new air traffic
controllers, it will be important to deploy them in an optimal manner to
reflect changing air traffic demands. FAA's recent controller workforce
plan includes facility-by-facility staffing standards for fiscal year 2007
expressed as ranges.^35 The staffing standards are intended to take into
consideration facility-specific information, such as air traffic
operations, productivity trends, expected retirements, and the number of
controllers in training. These new standards are an improvement over FAA's
historical approach, which was to compute the number of controllers needed
systemwide and negotiate the distribution of these totals to the facility
level. However, FAA's current staffing does not align with the new
standards at about one-third of FAA's 314 facilities--93 of which are
currently overstaffed and 11 understaffed. This situation adds further
complexity to the controller hiring, training, and staffing issues that
FAA must carefully manage in the upcoming years. Furthermore, FAA has not
factored into its staffing standards or its projected hiring targets the
effect of new NextGen technologies on controller workload. The new
technologies will result in a more automated system that, over time, is
expected to change the role of controllers as well as productivity. In
future updates of the controller workforce plan, it will be important to
begin to factor in this impact.

^35For example, the staffing range at the Seattle-Tacoma International
Airport is from 23 to 29 controllers.

Furthermore, having the right skill mix of safety inspectors and
technicians and deploying them to make best use of their skills is
especially important as new and developing sectors emerge. By 2010, 44
percent of FAA's inspector workforce of about 3,865 will be eligible to
retire. To begin addressing this situation, FAA has requested funding to
hire an additional 87 inspectors in fiscal year 2008. In addition to
maintaining a sufficient number of safety inspectors, it will be important
to deploy them where they are most needed. However, FAA lacks a staffing
model to accomplish this. The National Academy of Sciences recently
completed a study that analyzed FAA's staffing processes for safety
inspectors and identified a number of issues that the agency needed to
address. For instance, the study indicated that the current staffing
process does not focus resources in the areas of greatest need and the
match between individual inspectors' technical knowledge and the
facilities and operations they oversee is not always optimal. In response
to academy recommendations, FAA expects to develop a staffing model, but
the agency does not have a specific time frame for initiating this effort.
In addition, FAA lacks staffing standards for its approximately 6,100
technicians, who are responsible for maintaining the agency's air traffic
control equipment. The development of staffing models for safety
inspectors and technicians is important in the changing aviation
environment and is critical to FAA's ability to ensure that its safety
programs and workload are aligned to meet the future demands for which
NextGen is preparing.

For further information about this testimony, please contact Dr. Gerald L.
Dillingham at (202) 512-2834 or [email protected]. Individuals making
key contributions to this testimony include Faye Morrison, Teresa Spisak,
Nancy Boardman, Anne Dilger, Sharon Dyer, Kevin Egan, Colin Fallon, Jim
Geibel, Bob Homan, Rosa Leung, Ed Menoche, Taylor Reeves, Richard Scott,
Jeremy Sebest, Larry Thomas, Pam Vines, and Carrie Wilkes.

Related GAO Products

Federal Aviation Administration: Observations on Selected Changes to FAA's
Funding and Budget Structure in the Administration's Reauthorization
Proposal. [33]GAO-07-625T . Washington, D.C.: March 21, 2007.

Aviation Safety: Improved Data Collection Needed for Effective Oversight
of Air Ambulance Industry. [34]GAO-07-353 . Washington, D.C.: February 21,
2007.

Federal Aviation Administration: Challenges Facing the Agency in Fiscal
Year 2008 and Beyond. [35]GAO-07-490T . February 14, 2007.

Next Generation Air Transportation System: Progress and Challenges
Associated with the Transformation of the National Airspace System.
[36]GAO-07-25 . Washington, D.C.: November 13, 2006.

FAA's Proposed Plan for Implementing a Reliability Centered Maintenance
Process for Air Traffic Control Equipment. [37]GAO-07-81R . Washington,
D.C.: November 9, 2006.

Aviation Safety: FAA's Safety Efforts Generally Strong but Face
Challenges. [38]GAO-06-1091T . Washington, D.C.: September 20, 2006.

Commercial Space Launches: FAA Needs Continued Planning and Monitoring to
Oversee the Safety of the Emerging Space Tourism Industry. [39]GAO-07-16 .
Washington, D.C.: September 20, 2006.

Aviation Safety: FAA's Safety Oversight System Is Effective but Could
Benefit from Better Evaluation of Its Programs' Performance.
[40]GAO-06-266T . Washington, D.C.: November 17, 2005.

National Airspace System: Transformation will Require Cultural Change,
Balanced Funding Priorities, and Use of All Available Management Tools.
[41]GAO-06-154 . Washington, D.C.: October 14, 2005.

Aviation Safety: System Safety Approach Needs Further Integration into
FAA's Oversight of Airlines. [42]GAO-05-726 . Washington, D.C.: September
28, 2005.

Federal Aviation Administration: Stronger Architecture Program Needed to
Guide Systems Modernization Efforts. [43]GAO-05-266 . Washington, D.C.:
April 29, 2005.

Aviation Safety: FAA Needs to Strengthen the Management of Its Designees
Programs. [44]GAO-05-40 . Washington, D.C.: October 8, 2004.

Air Traffic Control: System Management Capabilities Improved, but More can
be Done to Institutionalize Improvements. [45]GAO-04-901 . Washington,
D.C.: August 20, 2004.

Information Technology: FAA Has Many Investment Management Capabilities in
Place, but More Oversight of Operational Systems is Needed. [46]GAO-04-822
. Washington, D.C.: August 20, 2004.

(540146)

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Highlights of [54]GAO-07-636T , a testimony before the Subcommittee on
Aviation, Committee on Transportation and Infrastructure, House of
Representatives

March 22, 2007

FEDERAL AVIATION ADMINISTRATION

Key Issues in Ensuring the Efficient Development and Safe Operation of the
Next Generation Air Transportation System

The Federal Aviation Administration (FAA) operates one of the safest air
transportation systems in the world. It is, however, a system under
strain. The skies are becoming more crowded every day, with an estimated 1
billion passengers per year expected by 2015. The current aviation system
cannot be expanded to meet this growth. The reauthorization of FAA is an
opportunity to examine how the agency is managing the operation and safety
of the air transportation system as it leads the transition to the Next
Generation Air Transportation System (NextGen)--a major redesign of the
current system. GAO's testimony focuses on key issues related to FAA's
reauthorization, including (1) FAA's progress in implementing initiatives
that could provide a solid foundation for NextGen, (2) issues that need to
be addressed to help ensure a successful transition to NextGen, and (3)
safety areas that are important for the continued safe operation of the
current and future system. This statement is based on recent GAO reports
and ongoing work on some management and safety initiatives.

[55]What GAO Recommends

This testimony does not contain recommendations. However, GAO reports
containing relevant recommendations are listed among the Related GAO
Products, some of which FAA is in the process of responding to.

FAA has made significant progress in moving to more businesslike and
cost-effective operations and modernizing the air traffic control system.
This progress should better position the agency for the complex
implementation of NextGen. However, further work remains to fully address
past problems in the modernization effort while at the same time finding
new leadership--due to losses of key leaders at FAA and its Air Traffic
Organization--that can continue an agencywide commitment to
transformation. While FAA has improved its financial management
capability, including implementing a new cost accounting system and
developing a cost allocation methodology, it is not yet clear if that
methodology provides a sound basis from which to derive the
administration's proposed new cost-based funding structure for FAA. In
addition, improved acquisition processes, such as establishing guidance on
using Earned Value Management, are positive steps, but they need to be
fully implemented across all critical acquisitions. As FAA works toward
acquiring and deploying NextGen technology, it will also be important to
phase out existing air traffic control equipment using a risk-based
approach and continue to maintain existing systems.

Key issues that FAA needs to address as it begins implementing NextGen
include continued focus on coordination with the Joint Planning and
Development Office (JPDO). FAA, in coordination with JPDO, is developing
an implementation plan for NextGen that is expected to include details of
the required technologies, procedures, and resources. This is a step in
the right direction. While FAA estimates that its cost for NextGen
programs may range between $15 billion and $22 billion, it will be
important to determine which entities will fund and conduct the necessary
developmental research. Also, GAO has recommended that FAA assess its
capacity to handle the technical and contract management expertise to
determine if it has the capabilities required to oversee the
implementation of NextGen. FAA is considering action that would respond to
this recommendation.

To deal with current safety issues and the transition to NextGen, it will
be important for FAA to address safety in the airport environment, where
forecasted traffic growth could lead to increased ground congestion and
safety hazards. FAA also needs to establish the appropriate regulatory
approach for certain current airspace users, such as air ambulances, and
new users, such as the emerging space tourism industry. In addition, to
maintain and expand the margin of safety, especially if substantial growth
in air traffic materializes, FAA will need to rely more on data than on
labor-intensive inspections. GAO has recommended that FAA improve its
safety data. FAA has taken some action to improve its data, but more work
remains. FAA's ability to ensure a safe system will also be affected by
its ability to hire, train, and deploy its workforce of air traffic
controllers, inspectors, and technicians.

References

Visible links
  22. http://www.gao.gov/cgi-bin/getrpt?GAO-07-625T
  23. http://www.gao.gov/cgi-bin/getrpt?GAO-05-266
  24. http://www.gao.gov/cgi-bin/getrpt?GAO-04-901
  25. http://www.gao.gov/cgi-bin/getrpt?GAO-04-822
  26. http://www.gao.gov/cgi-bin/getrpt?GAO-06-154
  27. http://www.gao.gov/cgi-bin/getrpt?GAO-07-25
  28. http://www.gao.gov/cgi-bin/getrpt?GAO-07-25
  29. http://www.gao.gov/cgi-bin/getrpt?GAO-07-353
  30. http://www.gao.gov/cgi-bin/getrpt?GAO-07-16
  31. http://www.gao.gov/cgi-bin/getrpt?GAO-05-40
  32. http://www.gao.gov/cgi-bin/getrpt?GAO-07-81R
  33. http://www.gao.gov/cgi-bin/getrpt?GAO-07-625T
  34. http://www.gao.gov/cgi-bin/getrpt?GAO-07-353
  35. http://www.gao.gov/cgi-bin/getrpt?GAO-07-490T
  36. http://www.gao.gov/cgi-bin/getrpt?GAO-07-25
  37. http://www.gao.gov/cgi-bin/getrpt?GAO-07-81R
  38. http://www.gao.gov/cgi-bin/getrpt?GAO-06-1091T
  39. http://www.gao.gov/cgi-bin/getrpt?GAO-07-16
  40. http://www.gao.gov/cgi-bin/getrpt?GAO-06-266T
  41. http://www.gao.gov/cgi-bin/getrpt?GAO-06-154
  42. http://www.gao.gov/cgi-bin/getrpt?GAO-05-726
  43. http://www.gao.gov/cgi-bin/getrpt?GAO-05-266
  44. http://www.gao.gov/cgi-bin/getrpt?GAO-05-40
  45. http://www.gao.gov/cgi-bin/getrpt?GAO-04-901
  46. http://www.gao.gov/cgi-bin/getrpt?GAO-04-822
  54. http://www.gao.gov/cgi-bin/getrpt?GAO-07-636T
*** End of document. ***