Responses to Questions for the Record; Hearing on the Future of  
Air Traffic Control Modernization (30-MAY-07, GAO-07-928R).	 
                                                                 
This letter responds to Congress's May 10, 2007, request that we 
address questions submitted for the record related to the May 9, 
2007, hearing entitled The Future of Air Traffic Control	 
Modernization.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-928R					        
    ACCNO:   A70036						        
  TITLE:     Responses to Questions for the Record; Hearing on the    
Future of Air Traffic Control Modernization			 
     DATE:   05/30/2007 
  SUBJECT:   Air traffic control systems			 
	     Air traffic controllers				 
	     Air transportation 				 
	     Commercial aviation				 
	     Concept of operations				 
	     Enterprise architecture				 
	     Future budget projections				 
	     Program evaluation 				 
	     Program management 				 
	     Strategic planning 				 
	     Systems conversions				 
	     Transportation planning				 
	     Next Generation Air Transportation 		 
	     System						 
                                                                 
	     Federal Aviation Administration			 

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GAO-07-928R

May 30, 2007

The Honorable Jerry F. Costello
Chairman
Zubcommittee on Aviation
Committee on Transportation and Infrastructure
House of Representatives

Subject: Responses to Questions for the Record; Hearing on the Future of
Air Traffic Control Modernization

Dear Chairman Costello:

This letter responds to your May 10, 2007, request that we address
questions submitted for the record related to the May 9, 2007, hearing
entitled The Future of Air Traffic Control Modernization. Our answers to
your questions are attached. Our responses are based on our previous work,
^1 preliminary results of ongoing work, and our knowledge of the areas
addressed by the questions. We prepared our responses during May 2007 in
accordance with generally accepted government auditing standards. Because
our responses are based on our previously issued products for which we
sought and incorporated agency comments, as well as updates that we
obtained through interviewing FAA officials and reviewing their
documentation, we did not seek agency comments on our responses to these
questions.

We are sending copies of this letter to the Administrator, Federal
Aviation Administration, and the Director, Joint Planning and Development
Office. We will make copies available to others on request. This letter is
also available on GAO's Web site at [1]www.gao.gov .

^1 GAO, Next Generation Air Transportation System: Status of the
Transition to the Future Air Traffic Control System, GAO-07-784T
(Washington, D.C.: May 9, 2007); Joint Planning and Development Office:
Progress and Key Issues in Planning the Transition to the Next Generation
Air Transportation System, GAO-07-693T (Washington, D.C.: Mar. 29, 2007);
Federal Aviation Administration: Key Issues in Ensuring the Efficient
Development and Safe Operation of the Next Generation Air Transportation
System,  GAO-07-636T (Washington, D.C.: Mar. 22, 2007); and Next
Generation Air Transportation System: Progress and Challenges Associated
with the Transformation of the National Airspace System,  GAO-07-25
(Washington, D.C.: Nov. 13, 2006).

If you have any questions or would like to discuss the responses, please
contact me at (202) 512-2834 or [email protected].

Sincerely yours,

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

Enclosure

               Responses to Post-Hearing Questions for the Record
               "The Future of Air Traffic Control Modernization"
                            Subcommittee on Aviation
                 Committee on Transportation and Infrastructure
                         U.S. House of Representatives
                          Hearing held on May 9, 2007

                Questions for Dr. Gerald L. Dillingham, Director
                         Physical Infrastructure Issues
                     U.S. Government Accountability Office

 ______________________________________________________________________________

        Questions for the Record Submitted by Chairman Jerry F. Costello

           1. Several stakeholders and other observers have suggested that
           JPDO is at a juncture wherein its current organizational structure
           and operating procedures should be revisited. The suggestions have
           ranged from the idea that JPDO should cease to exist as soon as it
           publishes its primary planning documents to the idea that it
           should become more autonomous, with more authority and budgetary
           control.

                        a. How long should JPDO continue to exist, and if it
                        should continue to exist, in what ways should its
                        role and responsibilities with regard to NextGen
                        change?

JPDO was established to plan and coordinate the development of the next
generation air transportation system (NextGen) and should exist for the
duration of those tasks. The basic planning documents that JPDO is
developing for NextGen are near completion, but further iterations of
these planning documents will be needed as NextGen technologies are
developed and implemented. With NextGen's progression from the initial
planning to the early implementation phase, JPDO's role has evolved to
include coordination and facilitation activities, as well as planning
activities. GAO believes this is a reasonable evolution and a proper role
for JPDO and is consistent with the language of JPDO's authorizing
legislation.

One example of this evolution is the role JPDO has begun to play in
incorporating NextGen goals and activities into the Air Traffic
Organization's (ATO) strategic plans. ATO has expanded and revamped its
Operational Evolution Partnership (OEP) to become the Federal Aviation
Administration's (FAA) implementation plan for NextGen. The Review Board
that oversees the OEP is cochaired by JPDO and ATO. Similar developments
are expected to occur with other partner agencies as JPDO completes a
memorandum of understanding with these agencies. If JPDO ceased to exist
before NextGen was more fully developed, some alternative means of
planning and coordinating NextGen's development would have to be
established, which could delay NextGen's implementation.

JPDO's role could further evolve to include more coordination and
oversight activities. For example, JPDO could establish a program
oversight capacity that would enable it to perform such functions as (1)
harmonizing the enterprise architectures among the partner agencies; (2)
coordinating the research, development, and systems-engineering and
integration activities of the cooperating agencies and industry; (3)
overseeing multi-agency projects; (4) overseeing, with FAA, the selection
of products or outcomes of research and development that would be moved to
the next stage of a demonstration project through the Joint Resources
Council (JRC);1 (5) overseeing the fundamental research activities that
support the long-term strategic investments of NextGen by managing a
research portfolio among NASA, academia, federally funded research and
development centers, and industry; and (6) maintaining a baseline modeling
and simulation environment for testing and evaluating alternative concepts
to satisfy NextGen enterprise architecture requirements.

Another example of the evolution of JPDO's role is the organizational
shift from integrated product teams to working groups. This shift reflects
the extension of JPDO's role beyond planning to the development of work
products or "outcomes" that will contribute to the early development of
NextGen and facilitate its implementation. As  JPDO assumes more
responsibility for facilitating NextGen's implementation, greater
authority and resources would allow it to do more to coordinate the
efforts of the partner agencies and work with the Office of Management and
Budget as the principal NextGen point of contact. With adequate funding
and authority, JPDO could acquire staff with the project management and
systems engineering skills needed for JPDO to be an effective oversight
and coordinating office.

           b. To what extent do you think that moving JPDO out of the Federal
           Aviation Administration's Air Traffic Organization will give it
           greater visibility and authority?

Currently, JPDO is located within FAA and reports to both the FAA
Administrator and the Chief Operating Officer of ATO. In GAO's view, JPDO
should not be moved out of FAA. Since JPDO provides the vision for the
future air traffic control (ATC) system and ATO is to be the principal
implementer of that vision, the two organizations need to continue working
closely together.

However, JPDO's dual reporting status hinders its ability to interact on
an equal footing with ATO and the other partner agencies. On one hand,
JPDO must counter the perception that it is a proxy for the ATO and, as
such, is not able to act as an "honest broker." On the other hand, JPDO
must continue to work with ATO and its partner agencies in a partnership
in which ATO is the lead implementer of NextGen. Therefore, it is
important for JPDO to have some independence from ATO. One change that
could begin to address this issue would be to have the JPDO Director
report directly to the FAA Administrator. This change may also lessen what
some stakeholders now perceive as unnecessary bureaucracy and red tape
associated with decision making and other JPDO and NextGen processes.

As a part of any change in the dual reporting status of JPDO's Director,
consideration could be given to the possibility of creating the position
of Associate Administrator of NextGen and elevating the JPDO Director to
that post.

           c. What are the potential pluses and minuses of such a move?

One plus or advantage of moving JPDO out of ATO is that it could raise
JPDO's authority and visibility in interagency deliberations by putting
JPDO on an equal footing with ATO and other FAA lines of business. For
example, moving JPDO out of ATO might strengthen its linkages to the
Department of Defense (DOD) and the Department of Homeland Security (DHS).
In addition, JPDO may be able to work more effectively with other FAA
lines of business, such as Airports, for which JPDO has planning
responsibilities. For example, JPDO is responsible for developing plans to
increase airport capacity. A minus or disadvantage of moving JPDO out of
ATO is that because much of the work related to implementing NextGen must
occur under ATO, this work could be harder to accomplish.

^1 FAA's Joint Resources Council establishes and manages acquisition
program baselines, which define cost, schedule, performance, and benefit
parameters for programs over their full life cycle.

           d. What are some potential alternative organizational structures
           or arrangements and operating procedures for JPDO? 

We think that besides moving JPDO out of ATO and changing JPDO's reporting
status, a potential organizational alternative for JPDO could be elevating
the JPDO Director's position by having the Director and the ATO Chief
Operating Officer cochair the Joint Resources Council, the body within FAA
that provides executive review and oversight of acquisitions. (Currently,
the JRC is chaired by the Federal Acquisition Executive, a responsibility
delegated by the Administrator to the Vice President of
ATO-Administration.) Consideration could also be given to creating the
position of Associate Administrator of NextGen for the JPDO Director. This
would give greater authority, credibility, and visibility to this
important position.

           e. What are your thoughts on the following suggestions?

                        1) JPDO should be established as a program office
                        with program management capabilities and tools to
                        interact with other program offices such as the FAA
                        program office, the program office that DOD has
                        committed to create, and the joint weather office
                        involving DOD, DOC, and FAA.

Currently, we do not think JPDO has the technical resources, tools, or
operational knowledge to function as a program office. Moreover, the
partner agencies, led by ATO, have the operational knowledge to best
implement NextGen systems. JPDO, however, could function purely as a
coordinating body or executive council. For example, JPDO could be
provided with the resources and authority to establish a program oversight
capacity that would enable it to perform such functions as (1) harmonizing
the enterprise architectures among the partner agencies; (2) coordinating
the research, development, and systems-engineering and integration
activities of the cooperating agencies and industry; (3) overseeing
multi-agency projects; (4) overseeing, with FAA, the selection of products
or outcomes of research and development that would be moved to the next
stage of a demonstration project through the Joint Resources Council
(JRC); 2 (5) overseeing the fundamental research activities that support
the long-term strategic investments of NextGen by managing a research
portfolio among NASA, academia, federally funded research and development
centers, and industry; and (6) maintaining a baseline modeling and
simulation environment for testing and evaluating alternative concepts to
satisfy NextGen enterprise architecture requirements.

           2) JPDO lacks the technical capacity to evaluate the R&D efforts
           of its government partners and private sector clients and should
           be provided with an increased capacity and technical resources to
           carry out this function.

To oversee multi-agency programs and have the capacity to evaluate NextGen
R&D efforts, JPDO must have the requisite human and technical resources,
such as a sufficient number of personnel with expertise in areas related
to NextGen technologies. JPDO does not currently have these resources, but
it could obtain them with funding over and above the level in the FAA
reauthorization proposal. Such resources are needed for JPDO to monitor
the implementation of NextGen.

^2 FAA's Joint Resources Council establishes and manages acquisition
program baselines which define cost, schedule, performance, and benefit
parameters for programs over the full lifecycle of the program.

^4 Congressional Budget Office, Financing Investment in the Air Traffic
Control System (Washington, D.C.: Sept. 27, 2006)

           3) JPDO lacks a clear process to identify inconsistencies in
           partner agency budgeting. JPDO should become a partner in the
           budgeting process and there should be a budget resolution council
           to provide a forum for negotiation of budget priorities.

JPDO is already a partner in the budgeting process. JPDO has been working
with OMB to develop a process that would allow OMB to identify
NextGen-related projects across the partner agencies and consider NextGen
as a unified, cross-agency program. Under this process, JPDO and its
partner agencies can jointly present OMB with business cases for the
partner agencies' NextGen-related efforts, and these business cases can be
used as inputs to funding decisions for NextGen research and acquisitions
across the agencies.

We do not believe JPDO needs a forum to negotiate budget priorities. The
Senior Policy Committee (SPC), headed by the Secretary of Transportation,
includes senior-level officials from JPDO's partner agencies and was
established, in part, to address NextGen budget issues. In JPDO's enabling
legislation, SPC was explicitly made responsible for identifying NextGen
resource needs and making recommendations to the members' respective
agencies for the necessary funding.

           2. Much has been written and spoken about the role of and
           contributions of the various partner agencies to JPDO. Some
           observers have commented that the degree of participation by the
           partner agencies seemed to be on a continuum from a significant
           amount of participation to seemingly not very much at all. FAA and
           NASA are consistently indicated as the most involved participants.

                        a. In your opinion, to what extent are the partner
                        agencies participating in the vision and work of
                        JPDO?

The partner agencies' participation in the vision and work of JPDO has
varied to date and will continue to evolve over time. Interagency
partnerships are difficult because it takes time to forge working
relationships and establish accountability. While FAA and NASA have been
the most involved in the planning and coordination of NextGen, the other
agencies are also participating. The Department of Defense, for example,
is transferring to NextGen the technology it has developed for sharing
information across networks, is establishing a program office to
coordinate all of its NextGen activities, and is collaborating with FAA
and the Department of Commerce to develop and implement NextGen's weather
forecasting capability. The Department of Homeland Security is
participating by contributing "in-kind" services in the form of personnel
and research.

           b. How could the roles of the partner agencies be changed to
           enhance their participation or positively affect the development
           of NextGen?

We believe that the partner agencies' participation in NextGen could be
enhanced by incorporating NextGen goals and activities in the agencies'
key planning documents and research agendas. For example, JPDO is working
with FAA to refocus one of FAA's key planning documents--its Operational
Evolution Partnership (OEP)--on the implementation of NextGen. Formerly a
plan for airport capacity, OEP has been expanded and revamped to become a
comprehensive description of how FAA will implement NextGen. We believe
that similar efforts by the other partner agencies could increase both
their accountability to JPDO and JPDO's authority over them. In addition,
JPDO has been working with OMB to develop a process for identifying
NextGen-related research in the partner agencies' budgets (see 1e. (3)).

           c. What do you think about the idea of having each partner agency
           designate a senior-level official as the responsible individual
           for all NextGen-related programs in the agency?

Designating a senior-level official within each partner agency as
responsible for all of that agency's NextGen-related programs could be an
effective way of helping to ensure that all the partner agencies are
interacting on an equal footing and providing the needed leadership and
commitment.

           d. Some observers have noted that there seems to be a lack of
           accountability and authority in the current JPDO structure,
           especially with regard to partner agencies. Would you agree or
           disagree with this assertion? If you agree with the assertion, how
           could this problem be addressed?

We would agree that, as a planning and coordinating organization, JPDO
lacks authority over the key human and technological resources of its
partner agencies. Consequently, institutionalizing its process for
collaborating with its partner agencies will be critical to JPDO's ability
to leverage its partner agencies' resources and facilitate the
implementation of NextGen. Institutionalizing the collaborative process
means that, as administrations and staffing within JPDO change over the
years, those coming into JPDO will clearly understand what is expected of
them and what time and resource commitments are entailed. JPDO, however,
has not yet established some practices that are important to
institutionalizing its collaborative process. For example, JPDO does not
yet have formal long-term agreements among its partner agencies on their
roles and responsibilities in creating NextGen. According to JPDO
officials, a memorandum of understanding (MOU), signed by the Secretary or
another high-ranking official from each partner agency, will define the
partner agencies' roles and responsibilities. To date, this MOU has been
signed by the Departments of Transportation and Commerce and NASA, but
remains unsigned by the Departments of Defense and Homeland Security. (See
2e.)

           e. What kind of changes to the authority and resources now
           provided to JPDO would you suggest to enhance its effectiveness in
           coordinating the partner agencies?

Besides institutionalizing the collaborative process between JPDO and its
partner agencies, elevating the position of JPDO within the NextGen
implementation process could enhance its effectiveness in coordinating the
partner agencies. In addition, JPDO could be provided with the resources
and authority to establish a program oversight capacity that would enable
it to perform such functions as (1) harmonizing the enterprise
architectures among the partner agencies; (2) coordinating the research,
development, and systems-engineering and integration activities of the
cooperating agencies and industry; (3) overseeing multi-agency projects;
(4) overseeing, with FAA, the selection of products or outcomes of
research and development that would be moved to the next stage of a
demonstration project through the Joint Resources Council (JRC); (5)
overseeing the fundamental research activities that support the long-term
strategic investments of NextGen by managing a research portfolio among
NASA, academia, federally funded research and development centers, and
industry; and (6) maintaining a baseline modeling and simulation
environment for testing and evaluating alternative concepts to satisfy
NextGen enterprise architecture requirements.

JPDO's efforts to reorganize itself internally may also increase its
authority and enhance the participation of its partner agencies. We see
this as a positive development that extends JPDO's role beyond planning to
focus more on the development of work products or "outcomes" that will
contribute to the early development of NextGen and facilitate its
implementation. As  JPDO assumes more responsibility for facilitating
NextGen's implementation, greater authority and resources would allow it
to do more to coordinate the efforts of the partner agencies and work with
the Office of Management and Budget as the principal NextGen point of
contact. We believe that with adequate authority and funding, JPDO could
acquire staff with the project management and systems engineering skills
needed for JPDO to be an effective oversight and coordinating office for
NextGen.

           3. JPDO has been described as having a government staff of fewer
           than a dozen full-time government employees to coordinate a
           long-term initiative involving tens of billions of dollars
           investment. Some observers say that JPDO will only be credible in
           its joint role when funded by all principal partners. Only FAA and
           NASA currently fund JPDO and its funding has not grown since
           inception despite its maturing requirements.

                        a. What are your thoughts on the following
                        suggestions related to funding JPDO?

                                     1) JPDO operations should be funded
                                     equally with money from FAA, NASA, DOD,
                                     DHS, and DOC until such time as a
                                     memorandum of understanding can be
                                     established to determine an alternative
                                     proportional scheme.

We believe the partner agencies' funding of JPDO operations could be based
on the roles and resources of the the partner agencies or the partner
agencies could continue to contribute cash, expertise, and other resources
as needed and available. For example, DOD plans to provide $5 million for
a demonstration of information sharing across networks this year (FAA and
DHS are also providing $5 million each for this demonstration). The other
partner agencies provide a variety of "in-kind" services through personnel
assigned to JPDO and research. Nonetheless, it is most important to ensure
that JPDO's funding needs are fully met.

           2) FY09 funding from DOD, DHS, and DOC should match the ongoing
           commitment from FAA and NASA of at least $18M per entity for a
           total of $90M in FY09.

Contributions of some amount by the partner agencies could encourage those
agencies to have JPDO undertake work that is valuable to them as well as
to JPDO. While some stakeholders have said that requiring $18 million per
agency, the amount currently contributed by FAA and NASA, would not be
likely to have a significant impact on the R&D budgets of DOD, DHS, and
DOC, we believe it is most important that the agencies contribute some
amount to JPDO relative to their roles and responsibilities for making
NextGen a reality.

           b. Some stakeholders and other observers have opined that it is
           essential that JPDO be independent of ATO to be successful in
           objectively facilitating the implementation of NextGen with its
           other governmental partners.

In GAO's view, making JPDO independent of ATO could help to reduce or
eliminate any perceptions on the part of JPDO's other governmental
partners that JPDO might be too closely aligned with FAA to serve as an
objective, independent facilitator of a multiagency partnership.
Independence could also raise JPDO's authority and visibility in
interagency deliberations by putting it on an equal footing with ATO and
other FAA divisions. Furthermore, we believe loosening JPDO's ties to ATO
could strengthen its linkages to DOD and DHS and enable it to work more
effectively with other FAA divisions, such as Airports, for which JPDO has
planning responsibilities. For example, JPDO is responsible for developing
plans to increase airport capacity. Moving JPDO out of ATO could, however,
make it harder for JPDO to obtain ATO's collaboration on efforts related
to the implementation of NextGen.

           c. What are some alternative governance structures that could be
           used by JPDO?

Besides moving JPDO out of ATO and thereby eliminating its dual reporting
status (to both the FAA Administrator and the ATO Chief Operating
Officer), the operation of the Joint Resources Council, the body within
FAA that provides executive review and oversight of acquisitions, could be
changed so that is the council would be chaired jointly by the Chief
Operating Officer and the JPDO Director. (Currently, the JRC is chaired by
the Federal Acquisition Executive, a responsibility delegated by the
Administrator to the Vice President of ATO-Acquisition & Business
Services.) Additionally, consideration could be given to creating the
position of Associate Administrator of NextGen to put the JPDO Director on
a more equal organizational footing with the ATO Chief Operating Officer.

           d. What are the advantages and disadvantages of any such
           governance structures, including potential unintended
           consequences?

As discussed, moving JPDO out of ATO and elevating the position of the
JPDO Director could increase JPDO's independence, raise its authority and
visibility in interagency deliberations, strengthen its linkages to DHS
and DOD, and enable it to work more effectively with other FAA divisions.
Such changes could, however, make it harder for JPDO to collaborate with
ATO.

           e. You testified that the Senior Policy Committee (SPC) meets only
           sporadically and has not been actively engaged in providing
           cross-agency leadership. What do you think would be the effect of
           a mandated schedule for SPC meetings, i.e., quarterly or
           semi-annually?

To date, the SPC has not met regularly. During the time JPDO has been
functioning--just over 3 years--the SPC has met four times and has not
convened as a formal body since November 2005. Although JPDO's enabling
legislation calls for the SPC to advise the Secretary of Transportation,
provide policy guidance for NextGen, and provide ongoing policy review for
the transformation of the air transportation system, the legislation does
not require a meeting schedule for the SPC. To the extent that the SPC
cannot voluntarily meet on a regular schedule, then we think requiring
regular meetings could be beneficial.

           f. The JPDO Board has no legislative basis, as it was not created
           by Vision 100. A junior and senior level board (i.e., SPC) for
           governance is unprecedented in industry. Why not dissolve the JPDO
           Board?

The JPDO Board acts as an action arm of the SPC members whose wide-ranging
responsibilities limit their continuing and comprehensive involvement in
NextGen. We believe a designated senior person from each agency who has
access to and can act with the authority of the SPC member from that
agency is needed to carry out necessary actions.

           g. What are your thoughts on the following governance related
           ideas?

           1) JPDO should report directly to the Office of the Secretary of
           Transportation.

In GAO's view, JPDO should not report to the Secretary of Transportation
because placing JPDO in the Secretary's office would remove it too far
from the implementation and operations of NextGen.

           2) The JPDO Director should report to the FAA Administrator
           exclusively, rather than also to the ATO Chief Operating Officer
           (COO), as is currently the case and proposed in FAA's
           reauthorization.

As discussed, this change could increase JPDO's independence and authority
and strengthen JPDO's linkages to some other agencies and divisions, but
it could also hamper interactions with ATO.

           3) FAA funding of JPDO should be direct from FAA Financial
           Services, as is the case for other independent internal FAA
           entities, e.g., Airports and Commercial Space Transportation,
           rather than through ATO.

Yes, this change would be consistent with moving JPDO out of ATO and could
help to raise the visibility and legitimacy of JPDO. If JPDO becomes
organizationally independent of ATO, then its FAA funding should come
directly from FAA Financial Services, as does the funding for FAA's
Airports and Commercial Space Transportation divisions.

           4) FAA should create the position of "Associate Administrator for
           Next Generation Systems" that is co-equal internally with
           positions of the same title for Commercial Space Transportation,
           Airports, and Aviation Safety.

FAA should consider creating the position of Associate Administrator of
NextGen and elevating the JPDO Director to that post. We think that this
would give greater credibility, authority, and visibility to this
important position.

           5) If such a position were created what do you think would be the
           effect of the JPDO Director filling that position or reporting to
           it?

The JPDO Director could fill that position. Another reporting level could
increase red tape and bureaucracy.

           6) The Director of JPDO or Associate Administrator for Next
           Generation Systems should be a voting member of the FAA Joint
           Resources Council and participate in making capital investment
           decisions.

In GAO's view, the JPDO Director should be a member of the Joint Resources
Council (JRC), the body within FAA that makes capital investment decisions
and provides executive review and oversight of acquisitions. The FAA
reauthorization proposal calls for the JPDO Director to be a voting member
of the JRC, as is the Chief Operating Officer of ATO. This change would
help ensure that NextGen plans are consistent with current operations.

           4. You have testified that FAA's funding system based on the
           current ticket and fuel taxes is sufficient to fund the NextGen.
           However, the Administrator suggests that if the current funding
           structure were able to support NextGen, it would be a much longer
           process and has argued for a user fee based system.

                        a. What would be the effect, if any on the NextGen
                        budget if Congress does not enact the
                        Administration's proposed aviation financing reform
                        package (ticket taxes; aviation fuel taxes) as part
                        of a new authorization, but instead leaves the
                        current ticket and fuel taxes in place?

The current FAA funding structure can provide sufficient funding for
NextGen--with some caveats. Congress has used the current funding
structure--excise taxes plus a General Fund contribution--to fund FAA for
many years. As the number of air travelers has grown, so have excise tax
revenues. Even though revenues fell during the early years of this decade
as the demand for air travel fell, they began to rise again in fiscal year
2004, and FAA estimates that if the current taxes remain in effect at
their current rates, revenues will continue to increase. According to
projections prepared by the Congressional Budget Office (CBO),4  revenues
obtained from the existing funding structure are projected to increase
substantially. Assuming the General Fund provides about 19 percent of
FAA's budget, CBO estimates that through 2016 the Trust Fund can support
about $19 billion in additional spending over the baseline FAA spending
levels CBO has calculated for FAA (the 2006 funding level, growing with
inflation) provided that most of the spending occurs after 2010. How far
this money will go to fund modernization is subject to a number of
uncertainties--including the future cost of NextGen investments, the
volume of air traffic, the future cost of operating the national airspace
system (NAS), and the levels of future appropriations for the Airport
Improvement program, all of which influence funding for FAA.

However, if the desired level of funding exceeded what was likely to be
available from the Trust Fund at current tax rates, Congress could make
further changes within the current structure that would provide FAA with
additional revenue. Congress could raise more revenue from airspace system
users for NextGen or for other purposes by raising the rates on one or
more of the current excise taxes. Congress could also provide more General
Fund revenues for FAA, although the nation's fiscal imbalance may make a
larger contribution from this source difficult.

           b. If additional financial resources, in the range of $200 million
           annually for the next five years over the President's current
           budget request, were made available to JPDO, what would or should
           be its priorities aimed at expediting NextGen capabilities into
           the NAS?

In GAO's view, JPDO could expedite the development of NextGen capabilities
with accelerated funding over and above the President's current budget
request. There are several areas in which additional research and
development and deployment could be undertaken or accelerated with funding
over and above the President's current budget request. Two closely related
areas that could be candidates for increased funding are avionics
development and aircraft equipage. Additional support in these areas could
accelerate the transition to satellite-based navigation, which requires
the commercial fleet to be equipped with advanced avionics. This
transition would allow FAA to pursue the elimination of costly
ground-based navigation aids; the transition to data link; and the
standardization of future aircraft capabilities such as flight management
systems, traffic collision avoidance systems, and modular avionics. The
successful development and deployment of NextGen will require a series of
incremental changes that must be tested to help ensure that they do not
degrade the safety of the current system. Developing the evidence for
regulatory bodies and for the public that these incremental changes are
safe will be time consuming, costly, and difficult. For example,
additional development funding could help with the testing of a system in
which both pilots and air traffic controllers share in decisions about
flight paths. Such testing would increase the level of safety assurance
for en route and terminal automation and support the acquisition of
air-to-ground data communications used in trajectory negotiation.

Research and development for advanced concepts and applications could also
accelerate and strengthen the area of airborne applications. This research
area could include spacing and merging for approaches including:
optimizing the spacing of aircraft that are in fight, allowing for closely
spaced parallel approaches and reduced separation standards, and
addressing the issue of wake turbulence. Additional funding could also
allow for limited field trials to refine operational and system
requirements, and work could be done to integrate unmanned aerial systems
into the NAS. Establishing supporting processes for rulemaking and
software certification could also accelerate the removal of potential
bottlenecks to implementing NextGen.

Another area that could benefit from additional funding is human factors
research.  As you know, one of the principal changes under NextGen will be
a transformation from air traffic control to air traffic management. This
will mean new roles for all participants in the system, including air
traffic controllers and pilots. Additional funding could accelerate human
factors research and training initiatives that are central to the success
of NextGen, such as initiatives defining the relative responsibilities of
aircraft personnel and ground controllers, and modernizing controller
training through the use of advanced simulation and intelligent tutoring
tools.

           5. Traditionally, NASA has developed promising technologies to a
           high maturity level enabling FAA to incorporate them into its air
           traffic control system without too much additional development.
           Now that NASA is confining its development work to a basic level
           of technical maturity, JPDO/FAA must find ways to have the
           necessary R&D work conducted by other organizations. This R&D
           includes work needed for planning as well that needed for
           validation and demonstrations.

                        a. To what extent do FAA and the other federal
                        partners have the resources and capability to meet
                        the R&D needs in these two areas?

The National Aeronautics and Space Administration (NASA) formerly
conducted the type of intermediate research and development (R&D) and
demonstration projects that will be needed for the NextGen program, but
the funding for these efforts was discontinued when NASA's aeronautical
research portfolio was restructured to focus more on fundamental research.
Although FAA has not fully determined the impact of the NASA restructuring
on the R&D needs for NextGen, We agree with some key stakeholders that
additional R&D funds will be needed and are critical for the timely
development of NextGen. FAA recognizes that this is a critical issue and
has already taken some action to address it. For example, in the
President's fiscal year 2008 budget request for FAA, funds have been
included for developmental and transition research, in the Facilities and
Equipment (F&E) Activity 1 account. In light of the NASA restructuring,
FAA has also undertaken a study to assess the nature and scope of its
NextGen R&D  needs. According to JPDO officials, this study will be
completed in August 2007. FAA officials say the results of this study will
be used as a basis for determining how any "gap" identified can be
addressed with government or private sector resources.

           b. What actions should JPDO take to help ensure that the
           demonstrations, certifications, and transition R&D needed to
           validate new technologies be conducted in a timely manner so that
           NextGen will not be delayed?

The time required to prototype, validate, and certify a technology can
present a significant risk to the timely and cost-effective implementation
of NextGen. We have studied the lead times required to prototype,
validate, and certify new technologies. Neither JPDO nor FAA currently has
sufficient resources to prototype, validate, and certify new technologies,
and neither agency can currently develop the technologies internally
without causing significant delays in the implementation of NextGen. In
addition, stakeholders have expressed concern over the time it takes to
develop rules for new equipment and the problems caused when equipment is
fielded before rules are finalized. Any activities that will be required
to implement new policies, demonstrate new capabilities, set parameters
for the certification of new systems, and develop technologies will take
time. Just as important, the time required to prototype, validate, and
certify a new technology must be balanced against the need to ensure the
reliability of the technology and the safety of the flying public.

If JPDO had sufficient resources, it could prototype, validate, and
certify new technologies in a timely manner. We believe another option
would be for JPDO to identify other organizations with the capacity to
accomplish these tasks and provide them with the resources to take on
these tasks. In addition, JPDO could work with FAA's Aviation Safety
organization to establish the metrics needed to assess compliance with the
standards to which these systems must conform.

           c. It takes considerable time to prototype, validate, and certify
           new technologies required for NextGen, in addition to time
           required for rulemakings. How much of a risk do these processes
           pose to timely development of NextGen?

We cannot quantify how much of risk exists, but we think that a
significant risk does exist for the timely development of NextGen because
demonstrations and transition R&D are necessary to develop certification
standards for new technologies.

JPDO does not currently have the resources to prototype, validate, and
certify new technologies. Moreover, several of the stakeholders with whom
we spoke believed that even if JPDO were to obtain the needed resources,
it could require as much as 5 years to establish the infrastructure needed
to prototype, validate, and certify new technologies. Any activities that
will be required to implement new policies, demonstrate new capabilities,
set parameters for certifying new systems, and develop technologies will
take time. Just as important, the time required to prototype, validate,
and certify new technologies must be balanced against the need to ensure
the reliability and safety of the technology.

           d. What do you think of the following suggestions related to
           research and development?

                        1) Establish JPDO as the modeler for the NextGen
                        business case, with a formal charter and supporting
                        resources made available to allow the creation of a
                        National Virtual Test Bed to link government,
                        academic, and industry simulation models in a
                        nonpartisan and transparent fashion to assess
                        technical options and quantify cost and benefits of
                        the evolving implementation approach for NextGen.

Yes, this role seems to be consistent with JPDO's authorizing legislation.
As JPDO becomes more involved in facilitation, it must test, validate, and
assess technical options and quantify their costs and benefits so that
decision makers can evaluate the options for inclusion in the NAS.

           2) In order for FAA/JPDO to be able to conduct all but the most
           long-term, fundamental research supporting NextGen development,
           some or all of NASA's aeronautics research capabilities should be
           transferred to FAA/JPDO, specifically Langley Research Center and
           portions of Ames Research Center.

In GAO's view, some or all of NASA's aeronautical research capabilities
that are located at Langley Research Center and portions of Ames Research
Center could be transferred to FAA or JPDO. However, another alternative
to consider might be to make more use of the resources available at the
FAA Technical Center in Atlantic City, New Jersey, and the FAA
Aeronautical Center in Oklahoma City, Oklahoma. This decision will be
informed by the results of a JPDO study that is currently underway to
assess the nature and scope of NextGen's R&D needs. According to JPDO
officials, this study will be completed in August 2007.

(540156)

References

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