Air Traffic Control: Observations on FAA's Modernization Program
(Testimony, 02/26/98, GAO/T-RCED/AIMD-98-93).

To cope with increases in traffic volume, enhance safety margins, and
boost the efficiency of the air traffic control system, the Federal
Aviation Administration (FAA) in late 1981 began a multibillion dollar
effort to replace and upgrade the national airspace system's equipment
and facilities. This modernization effort, however, has experienced many
problems in meeting cost, schedule, and performance goals. As a result,
the promised benefits of the new equipment have been delayed and the
aviation community's confidence in FAA's ability to manage the
modernization program has been undermined. GAO has included FAA's
modernization program on its list of government programs at high-risk
for waste, fraud, abuse, and mismanagement. FAA is now developing a new
modernization approach. This testimony discusses (1) the status of key
modernization projects, (2) FAA's actions to implement recommendations
to correct modernization problems, and (3) the opportunities and
challenges facing FAA as it embarks upon its new modernization approach.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-RCED/AIMD-98-93
     TITLE:  Air Traffic Control: Observations on FAA's Modernization 
             Program
      DATE:  02/26/98
   SUBJECT:  Air traffic control systems
             Federal procurement
             Systems conversions
             Life cycle costs
             ADP procurement
             Computer software
             Systems design
IDENTIFIER:  Y2K
             
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Cover
================================================================ COVER


Before the Subcommittee on Aviation, Committee on Commerce, Science,
and Transportation, U.S.  Senate

For Release
on Delivery
Expected at
2 p.m.  EST
Thursday
February 26, 1998

AIR TRAFFIC CONTROL - OBSERVATIONS
ON FAA'S MODERNIZATION PROGRAM

Statement of Gerald L.  Dillingham,
Associate Director, Transportation Issues,
Resources, Community, and Economic
Development Division

GAO/T-RCED/AIMD-98-93

GAO/RCED/AIMD-98-93T


(348074)


Abbreviations
=============================================================== ABBREV

  FAA -
  NAS -
  ATC -
  TRACON -
  AAS -
  DOD -
  WAAS -
  STARS -
  GPS -
  CIO -
  ARA -
  RTCA -
  AMS -

============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

We appreciate the opportunity to testify on the Federal Aviation
Administration's (FAA) program to modernize its National Airspace
System (NAS), a multibillion dollar investment comprising over 200
separate projects.  In late 1981, FAA began this program to replace
and upgrade the system's equipment and facilities to meet the
expected increase in traffic volume, enhance the margin of air
safety, and increase the efficiency of the air traffic control (ATC)
system--the principal component of the NAS.  However, the
modernization program has experienced many problems in meeting cost,
schedule, and performance goals.  As a result, many of the promised
benefits from using the new equipment have been delayed and the
aviation community's confidence in FAA's ability to manage the
modernization program has been weakened.  Because of the complexity,
the cost, and the problem-plagued past of FAA's modernization
program, GAO designated it a high-risk information technology
initiative in 1995 and again in 1997.\1 FAA is currently developing a
new modernization approach. 

Our testimony today, which is based on completed and ongoing work,
discusses (1) the status of key modernization projects, (2) FAA's
actions to implement recommendations to correct modernization
problems, and (3) the opportunities and challenges facing FAA as it
embarks upon its new modernization approach.  In summary, we found
the following: 

  -- Since 1982, the Congress has appropriated over $25 billion to
     the modernization program.  While FAA has fielded some
     equipment, historically, the agency has experienced considerable
     difficulty in delivering systems within promised cost and
     schedule parameters.  As a result, FAA has been forced to
     implement costly interim projects.  Meanwhile, two key
     systems--the Wide Area Augmentation System and the Standard
     Terminal Automation Replacement System--have encountered cost
     increases and schedule delays. 

  -- Our work has pinpointed the root causes of FAA's modernization
     problems and has recommended actions to overcome them.  Most
     recently, we found shortcomings in the areas of systems
     architecture or the overall modernization blueprint, cost
     estimating and accounting, software acquisition, and
     organizational culture.  Although FAA has begun to implement
     many of our recommendations, sustained management attention is
     required to improve the management of the modernization program. 

  -- FAA is collaborating with and seeking commitment from users in
     developing a new approach to make the modernization less costly
     and to provide earlier user benefits.  The challenge for FAA is
     to have disciplined processes in place in order to deliver
     projects as promised.  The agency will also need to quickly
     address the looming year 2000 computer crisis to ensure that
     critical ATC systems do not malfunction or produce inaccurate
     information simply because the century has changed. 


--------------------
\1 FAA's modernization program is one of four information management
and technology high-risk areas.  See High-Risk Series:  An Overview
(GAO/HR-95-1, Feb.  1995) and High-Risk Series:  Information
Management and Technology (GAO/HR-97-9, Feb.  1997). 


   BACKGROUND
---------------------------------------------------------- Chapter 0:1

As the principal component of the NAS, FAA's ATC system must operate
continuously--24 hours a day, 365 days a year.  Under federal law,
FAA has primary responsibility for operating a common ATC system--a
vast network of radars; automated data processing, navigation, and
communications equipment; and traffic control facilities.  FAA meets
this responsibility by providing such services as controlling
takeoffs and landings and managing the flow of air traffic between
airports.\2 Users of FAA's services include the military, other
government users, private pilots, and commercial aircraft
operators.\3

Projects in FAA's modernization program are primarily organized
around seven functional areas--automation, communications,
facilities, navigation and landing, surveillance, weather, and
mission support. 

Over the past 16 years, FAA's modernization projects have experienced
substantial cost overruns, lengthy schedule delays, and significant
performance shortfalls.  To illustrate, the centerpiece of that
modernization program--the Advanced Automation System (AAS)--was
restructured in 1994 after estimated costs to develop the system
tripled from $2.5 billion to $7.6 billion and delays in putting
significantly less-than-promised system capabilities into operation
were expected to run 8 years or more over original estimates.\4


--------------------
\2 FAA uses three types of facilities to control traffic.  Airport
towers direct traffic on the ground, before landing, and after
takeoff within about 5 nautical miles from the airport and about
3,000 feet above the airport.  Terminal radar approach control
(TRACON) facilities sequence and separate aircraft as they approach
and leave airports, beginning about 5 nautical miles and ending about
50 nautical miles from the airport and generally up to 10,000 feet
above the ground.  Air route traffic control centers called en route
centers, control planes in transit and during approaches to some
airports.  The airspace that most en route centers control extends
above 18,000 feet for commercial aircraft.  En route centers also
handle aircraft at lower altitudes when dealing directly with a
control tower, or when agreed upon with a terminal facility. 

\3 The Department of Defense (DOD), with FAA's authority and
oversight, also provides air traffic services, primarily in support
of its military mission, but also to civil users.  The DOD operates
tower and terminal facilities; therefore, FAA and DOD have formally
agreed to cooperate in modernizing air traffic control facilities. 

\4 AAS was designed to replace computer hardware and software,
including workstations, used by controllers in ATC facilities. 


   FAA HAS FIELDED SOME EQUIPMENT
   BUT KEY PROJECTS CONTINUE TO
   EXPERIENCE COST AND SCHEDULE
   PROBLEMS
---------------------------------------------------------- Chapter 0:2

The Congress has appropriated over $25 billion for ATC modernization
between fiscal years 1982 and 1998.\5 FAA estimates that it plans to
spend an additional $11 billion through fiscal year 2003 on projects
in the modernization program. 

Of the over $25 billion appropriated to date, FAA has reported
spending about $5.3 billion on 81 completed projects and $15.7
billion on about 130 ongoing projects.  Of the remaining funds, FAA
has reported spending about $2.8 billion on projects that have been
cancelled or restructured and $1.6 billion for personnel-related
expenses associated with systems acquisition.  (See app.  I for a
list of completed projects.) FAA has fielded some equipment, most
recently a new voice communications system.  However, delays in other
projects have caused the agency to implement costly interim projects. 
Furthermore, the agency is still having difficulties in acquiring new
systems within agreed-to schedule and cost parameters. 


--------------------
\5 These funds were appropriated to FAA's facilities and equipment
account, which finances systems acquisition. 


      NEW EQUIPMENT IS BEING
      FIELDED
-------------------------------------------------------- Chapter 0:2.1

FAA has been fielding new ATC systems.  For example, in February
1997, FAA commissioned the last of 21 Voice Switching and Control
System (VSCS) units.\6,7 As one of the original projects in the 1983
modernization plan, the VSCS project encountered many difficulties
during its early years.  Since the project was restructured in 1992,
FAA has been successful in completing the first phase of the
project--installing the equipment into existing en route controller
workstations.  The second phase is now underway--making VSCS
interface with the new display replacement equipment that is being
installed in the en route centers. 

During the past year, FAA has commissioned 183 additional systems or
units of systems.  For example, FAA commissioned an additional 97
units for its Automated Surface Observing System, which brings the
total of commissioned units to 230 out of 597 that are planned.\8
(See app.  II for details on the implementation status of 17 major
ongoing modernization projects and app.  III for data on changes in
their cost and schedules.)


--------------------
\6 The term "commissioned" is defined as the formal approval of the
equipment for operational use.

\7 The Voice Switching and Control System replaces and improves
ground-to-ground and air-to-ground communications equipment at FAA's
Air Route Traffic Control Centers. 

\8 The Automated Surface Observing System, a joint program with the
National Weather Service, FAA, and DOD, automates and enhances
methods for collecting, processing, and displaying surface weather
conditions, such as temperature and precipitation. 


      DELAYS HAVE LED TO COSTLY
      INTERIM PROJECTS
-------------------------------------------------------- Chapter 0:2.2

Problems with modernization projects have caused delays in replacing
FAA's aging equipment, especially the automation equipment in the en
route and terminal facilities.  We found that FAA has added four
interim projects--three for the TRACONs and one for the en route
centers--reported to cost about $655 million--to sustain and enhance
current automated air traffic control equipment.  FAA began its first
program for the TRACONs in 1987 and expects to complete its third
program in 2000.  In general, these programs provide new displays and
software and upgrade hardware and data-processing equipment to allow
TRACONs to handle increased traffic.  One program for the en route
centers--the Display Complex Channel Rehost--was completed in 1997. 
Under this program, FAA transferred existing software from obsolete
display channel computers to new more reliable and maintainable
computers at five en route centers. 

The cost for interim projects could go even higher if FAA decides to
implement an interim solution to overcome hardware problems and
resolve year 2000 date requirements with the Host computer system.\9
FAA is assessing the Host computer's microcode--low-level machine
instructions used to service the main computer--with a plan to
resolve any identified year 2000 date issues, while at the same time
preparing to purchase and implement new hardware--Interim Host--for
each of its 20 en route centers before January 1, 2000.  FAA expects
to incur costs of about $160 million during fiscal years 1998 and
1999 for the Interim Host. 


--------------------
\9 The Host computer is the centerpiece information-processing system
in FAA's en route centers.  It processes flight, radar, and display
data for use by the controllers.  When FAA restructured the AAS
program in 1994, it cancelled the segment that included the Host
replacement.  It now plans to replace the Host by 2005. 


      MAJOR ACQUISITIONS CONTINUE
      TO FACE DELAYS AND COST
      INCREASES
-------------------------------------------------------- Chapter 0:2.3

Two key components of the modernization effort--the Wide Area
Augmentation System (WAAS) and the Standard Terminal Automation
Replacement System (STARS)--have encountered delays and cost
increases. 

In September 1997, FAA estimated total life cycle costs for WAAS at
$2.4 billion ($900 million for facilities and equipment and $1.5
billion for operations).  In January 1998, the estimate had increased
by $600 million to $3 billion ($1 billion for facilities and
equipment and $2 billion for operations).\10

The increased costs for facilities and equipment are attributable to
FAA's including previously overlooked costs for periodically updating
WAAS' equipment.  The revised cost estimate for operations and
maintenance is largely attributable to higher than expected costs to
lease geostationary satellites. 

In developing WAAS, FAA has also encountered delays.  When signing
the original development contract with Wilcox Electric in August
1995, FAA planned for the initial system to be operational by
December 1997.  Because of concerns about the contractor's
performance, however, FAA terminated the original contract and signed
a development contract with Raytheon (formerly Hughes Aircraft) in
October 1996 that called for the initial system to be operational by
April 1999.  The 16-month schedule slippage was caused by problems
with the original contractor's performance, design changes, and
increased software development. 

Last year, we reported that the implementation of STARS--particularly
at the three facilities targeted for operating the system before
fiscal year 2000--will likely be delayed if FAA and its contractor
experience any difficulties in developing the software.\11 These
difficulties have materialized.\12 In January 1998, FAA reported that
more delays are likely because software requirements could increase
to resolve air traffic controllers' dissatisfaction with the system's
computer-human interface. 

FAA also reported an unexpected cost increase of $35 million for
STARS during fiscal year 1998.  It attributed the increase to such
factors as adding resources to maintain the program's schedule and
the effects of any design changes to address new computer-human
interface concerns.  Also, the estimated size of software
development--measured in source lines of code--is now 50 percent
larger than the original November 1996 estimate.  FAA has requested a
reprogramming of fiscal year 1998 funds to address this cost
increase. 


--------------------
\10 FAA is acquiring WAAS--a network of equipment on the ground and
in space--to enhance DOD's Global Positioning System (GPS) so that it
can meet civil air navigation needs.  WAAS was originally intended to
be a sole means navigation system--users would not need another
navigation system aboard the aircraft.  By providing sole means of
navigation, FAA could replace the current ground-based civil air
navigation system.  Over the past year, FAA has focused on a
technical issue--WAAS/GPS signal vulnerability to radio frequency
interference--that, if not resolved, could require FAA to cancel its
plans to phase out all of its ground-based navigation aids, thereby
reducing the cost savings expected from implementing WAAS. 

\11 Through STARS, FAA will replace, from December 1998 through
February 2005, old computers, controller workstations, and related
equipment at about 170 FAA terminal air traffic control facilities. 
See Air Traffic Control:  Status of FAA's Standard Terminal
Automation Replacement System Project (GAO/RCED-97-51, Mar.  5,
1997). 

\12 See Air Traffic Control:  Timely Completion of FAA's Standard
Terminal Automation Replacement System Is At Risk (GAO/AIMD-98-41R,
Jan.  23, 1998). 


   FAA HAS BEGUN TO IMPLEMENT
   RECOMMENDATIONS TO CORRECT ROOT
   CAUSES OF MODERNIZATION
   PROBLEMS
---------------------------------------------------------- Chapter 0:3

Our reviews have identified some of the root causes of long-standing
problems with FAA's modernization and have recommended solutions to
them.  Among the causes of these problems were the lack of a complete
and enforced systems architecture,\13

unreliable cost information, lack of mature software acquisition
processes, and an organizational culture that did not always act in
the agency's long-term best interest.  While FAA has begun to
implement many of our recommendations, it will need to stay focused
on continued improvement. 


--------------------
\13 An enforcement mechanism is necessary to ensure that projects
being developed comply with the architecture and that any
architectural deviations are justified. 


      A COMPLETE SYSTEMS
      ARCHITECTURE IS KEY TO
      GUIDING AND CONSTRAINING ATC
      MODERNIZATION INVESTMENTS
-------------------------------------------------------- Chapter 0:3.1

FAA has proceeded to modernize its many ATC systems without the
benefits of a complete systems architecture, or overall blueprint, to
guide their development and evolution.\14 In February 1997, we
reported that FAA has been doing a good job of defining one piece of
its architecture--the logical architecture.  That architecture
describes FAA's concept of operations, business functions, high-level
descriptions of information systems and their interrelationships, and
information flows among systems.  This high-level architecture will
guide the modernization of FAA's ATC systems over the next 20 years. 
We identified shortcomings in two main areas.  FAA's system
modernization lacked a technical architecture and an effective
enforcement mechanism.\15

FAA generally agreed with the recommendation in our February 1997
report to develop a technical architecture and has begun the task. 
We will continue to monitor FAA's efforts.  Also, to be effective,
the architecture must be enforced consistently.  FAA has no
organizational entity responsible for enforcing architectural
consistency.  Until FAA defines and enforces a complete ATC systems
architecture, the agency cannot ensure compatibility among its
existing and future programs. 

We also recommended in the February 1997 report that FAA develop a
management structure for enforcing the architecture that is similar
to the provisions of the Clinger-Cohen Act of 1996 for
department-level Chief Information Officers (CIO).  FAA disagrees
with this recommendation because it believes that the current
location of its CIO, within the research and acquisition line of
business, is effective.  We continue to believe that such a structure
is necessary.  FAA's CIO does not report directly to the
Administrator and does not have organizational or budgetary authority
over those who develop ATC systems or the units that operate and
maintain them.  Furthermore, the agency's long history of problems in
managing information technology projects reflects weaknesses in its
current structure. 


--------------------
\14 Air Traffic Control:  Complete and Enforced Architecture Needed
for FAA Systems Modernization (GAO/AIMD-97-30, Feb.  3, 1997). 

\15 A complete systems architecture consists of two principal
components--a "logical" architecture and a "technical" architecture. 
The technical architecture details the specific information
technology and communications standards and approaches that will be
used to build the systems, including those that address critical
hardware, software, communications, data management, security, and
performance characteristics.  It ensures that the systems
interoperate effectively and efficiently. 


      RELIABLE COST INFORMATION IS
      NEEDED TO EFFECTIVELY MANAGE
      MODERNIZATION PROJECTS
-------------------------------------------------------- Chapter 0:3.2

In January 1997, we reported that FAA lacks reliable cost-estimating
processes and cost-accounting practices needed to effectively manage
investments in information technology, which leaves it at risk of
making ill-informed decisions on critical multimillion, even billion,
dollar air traffic control systems.\16 Without reliable cost
information, the likelihood of poor investment decisions is
increased, not only when a project is initiated, but also throughout
its life cycle.  We recommended that FAA improve its cost-estimating
processes and fully implement a cost-accounting system. 

Our recent review of the reliability of FAA's reported financial
information and the possible program and budgetary effects of
reported financial statement deficiencies again highlights the need
for reliable cost information.  The audit of FAA's 1996 financial
statement disclosed many problems in reporting of operating materials
and supplies and property and equipment.\17 Many of these problems
resulted from the lack of a reliable system for accumulating project
cost accounting information.  Although FAA has begun to
institutionalize defined cost-estimating processes and to acquire a
cost-accounting system, it will be awhile before FAA and other
decisionmakers have accurate information to determine and control
costs. 


--------------------
\16 Air Traffic Control:  Improved Cost Information Needed to Make
Billion Dollar Modernization Investment Decisions (GAO/AIMD-97-20,
Jan.  22, 1997). 

\17 The Department of Transportation Inspector General audited FAA's
fiscal year 1996 Statement of Financial Position.  For our analysis
of that audit see Financial Management:  Federal Aviation
Administration Lacked Accountability for Major Assets
(GAO/AIMD-98-62, Feb.  18, 1998). 


      A MATURE SOFTWARE
      ACQUISITION CAPABILITY IS
      IMPORTANT TO THE SUCCESS OF
      FAA'S ATC MODERNIZATION
      PROGRAM
-------------------------------------------------------- Chapter 0:3.3

In March 1997, we reported that FAA's processes for acquiring
software--the most costly and complex component of ATC systems--are
ad hoc, sometimes chaotic, and not repeatable across projects.\18 As
a result, FAA is at great risk of acquiring software that does not
perform as intended and is not delivered on time and within budget. 
Furthermore, FAA lacks an effective approach for improving its
processes for acquiring software. 

In the March 1997 report, we recommended that FAA improve its
software acquisition capabilities by institutionalizing mature
acquisition processes and reiterated our prior recommendation that
FAA establish a management structure similar to the department-level
CIOs to instill process discipline.  FAA concurred with part of our
recommendation and has initiated efforts to improve its software
acquisition processes.  These efforts, however, are not
comprehensive, are not complete, and have not yet been implemented
agencywide.  Furthermore, FAA disagrees with our recommendation
related to its management structure.  Without establishing strong
software acquisition processes and an effective management structure,
FAA risks making the same mistakes it did on failed systems
acquisition projects. 


--------------------
\18 Air Traffic Control:  Immature Software Acquisition Processes
Increase FAA System Acquisition Risks (GAO/AIMD-97-47, Mar.  21,
1997). 


      CONTINUED MANAGEMENT
      ATTENTION IS CRITICAL TO
      COMPREHENSIVE CULTURAL
      CHANGE
-------------------------------------------------------- Chapter 0:3.4

In August 1996, we reported that an underlying cause of FAA's ATC
acquisition problems is its organizational culture--the beliefs, the
values, and the attitudes and expectations shared by an
organization's members that affect their behavior and the behavior of
the organization as a whole.\19 We found that FAA's acquisitions were
impaired when employees acted in ways that did not reflect a strong
commitment to mission focus, accountability, coordination, and
adaptability.  We recommended that FAA develop a comprehensive
strategy for cultural change that (1) addresses specific
responsibilities and performance measures for all stakeholders
throughout FAA and (2) provides the incentives needed to promote the
desired behaviors and achieve agencywide cultural change. 

In response to our recommendations, FAA issued a report outlining its
overall strategy for changing its acquisition culture and describing
its ongoing actions to influence organizational culture and improve
its life cycle acquisition management processes.\20 For example, the
Acquisition and Research (ARA) organization has proposed
restructuring its personnel system to tie pay to performance based on
15 measurable goals, each with its own performance plan.  ARA's
proposed personnel system is under consideration by the
Administrator. 

In our August 1996 report, we also noted that the Integrated Product
Development System, based on integrated teams, was a major FAA
initiative to address the shortcomings with its organizational
culture.  According to an ARA program official, FAA has 15 integrated
product teams, the majority of which have approved plans.  The
official indicated that all team members have received training to
prepare them for their roles and that ARA is developing a set of
standards to measure the performance of the integrated teams. 
However, the official also acknowledged that FAA has had difficulty
in gaining commitment to the integrated team concept throughout the
agency because offices outside of ARA have been resistant to
integrated teams. 

To help overcome institutional cultural barriers, FAA and external
stakeholders have been discussing the establishment of a special
program office responsible for the acquisition of free flight
systems.\21 Although, the details of how such an office would operate
have not been put forward, one option would be for this office to
have its own budget and the authority to make certifications and
regulations and to determine system requirements.  Such an office
could be viewed as the evolutionary successor to the integrated
product team system.  Another approach being considered by FAA is the
establishment of a single NAS manager at the level of associate
administrator to eliminate traditional "stovepipes" between the
acquisition and air traffic organizations. 

As FAA considers recommendations to create a new structure, we
believe that it would be advantageous for FAA to implement our
recommendation to create a management structure similar to the
department-level CIO as called for in the Clinger-Cohen Act.  Having
an effective CIO, with the organizational and budgetary authority to
implement and enforce a complete, agencywide systems architecture
would go a long way towards eliminating traditional "stovepipes"
between integrated product teams, as well as between the acquisition
and air traffic organizations.  Furthermore, the agency could gain
valuable insight from the experiences of other organizations that
have implemented similar structures.  Regardless of future direction,
FAA recognizes that considerable work is needed to modify behaviors
and create comprehensive cultural change.  A continued focus on
cultural change initiatives will be critical in the years ahead. 


--------------------
\19 Aviation Acquisition:  A Comprehensive Strategy Is Needed for
Cultural Change at FAA (GAO/RCED-96-159, Aug.  22, 1996). 

\20 Strategy for Acquisition Culture Change, Federal Aviation
Administration, June 1997. 

\21 Free flight is a new operational concept that would provide
airspace users with more flexibility in choosing preferred routes
with less air traffic restrictions. 


   FAA IS REVISING THE
   MODERNIZATION PROGRAM AND
   IMPLEMENTING ACQUISITION REFORM
   BUT FACES NEW CHALLENGES
---------------------------------------------------------- Chapter 0:4

While FAA is involving external and internal stakeholders in revising
its approach to the modernization program, it will need to stay
focused on implementing solutions to the root causes of past
problems, ensure that all aspects of its acquisition management
system are effectively implemented, and quickly address the looming
crisis with the year 2000 date requirements. 


      FAA IS SEEKING CONSENSUS
      FROM STAKEHOLDERS ON AN
      ACHIEVABLE MODERNIZATION
      PROGRAM
-------------------------------------------------------- Chapter 0:4.1

The FAA Administrator has begun an outreach effort with the aviation
community to build consensus on and seek commitment to the future
direction of the agency's modernization program.  Similar to our
findings on the logical architecture, a review of this program by the
NAS Modernization Task Force concluded that the architecture under
development builds on the concept of operations for the NAS and
identifies the programs needed to meet the needs of the user
community.\22 However, the task force found that the architecture is
not realistic because of (1) an insufficient budget; (2) the
preponderance of risks associated primarily with certifying and
deploying new equipment and with users' cost to acquire equipment;
and (3) unresolved institutional issues and a lack of user
commitment. 

The task force recommended a revised approach that would be less
costly and would be focused more on providing near-term user
benefits.\23 Under this revised approach, FAA would (1) implement a
set of core technologies to provide immediate user benefits;\24

(2) modify the Flight 2000 initiative to address critical risk areas
associated with key communications, navigation, and surveillance
programs;\25 and (3) proceed with implementing critical time-driven
activities related to the Host computer and the year 2000 problems
and with implementing such systems as STARS, surveillance radars, and
en route displays to replace aging infrastructure. 

The details on how FAA intends to implement the task force's
recommendations are not yet known.  However, from our discussions
with task force officials, their practical effect would be that the
development and the deployment of some current programs would be
accelerated while others would be slowed down.  Meanwhile, FAA would
continue developing programs like STARS and the Display System
Replacement and work to ensure that its computers recognize the year
2000.  For example, under the revised approach, the WAAS program
would be slowed down after Phase I, which is scheduled to provide
initial satellite navigation capabilities by 1999, to enable FAA to
resolve technical issues and explore how costs could be reduced. 
Further development would be subject to review and risk mitigation
under the expanded Flight 2000 initiative. 

FAA faces both opportunities and challenges as it revises the
modernization program.  On the one hand, FAA has an opportunity to
regain user confidence by delivering systems that benefit them.  On
the other hand, FAA is challenged to follow through with its
investment management process improvements.  We urge FAA to proceed
cautiously as it attempts to expedite the deployment of key
technologies to avoid repeating past practices, such as undue concern
for schedules at the expense of disciplined systems development and
careful, thorough testing.  FAA will need to resist this temptation,
as the results are typically systems that cost more than expected,
are of low quality, and are late as well. 


--------------------
\22 The NAS Modernization Task Force includes FAA and DOD officials
and representatives of external stakeholders. 

\23 These recommendations are now being considered by the RTCA Free
Flight Select Committee, which expects to make formal recommendations
to the Administrator by the end of February 1998.  RTCA functions as
a federal advisory committee and develops consensus-based
recommendations on contemporary aviation issues. 

\24 These technologies include initial conflict probe, center-TRACON
automation system tools, collaborative decisionmaking tools, and
controller-pilot data link. 

\25 Through the Flight 2000 initiative, FAA plans to demonstrate and
test key technologies needed to implement free flight. 


      FAA WILL NEED TO CONTINUE
      IMPROVING ITS ACQUISITION
      MANAGEMENT PROCESS
-------------------------------------------------------- Chapter 0:4.2

Concerned that burdensome procurement rules were a primary
contributor to FAA's acquisition problems, the Congress exempted FAA
from many procurement rules.  In response, the agency implemented its
Acquisition Management System (AMS) on April 1, 1996, to improve its
acquisition of new technology. 

AMS is intended to provide high-level acquisition policy and guidance
and to establish rigorous investment management practices.  We are
currently reviewing FAA's investment management approach, including
its practices and processes for selecting, controlling, and
evaluating projects, and expect to report later this year.  As FAA
continues to implement AMS and embarks on a revised modernization
approach, it will need to establish baselines for individual projects
and performance measurements to track key goals. 

Under AMS, an acquisition project should have a baseline, which
establishes the performance, life-cycle cost, schedule, and benefit
boundaries within which the program is authorized to operate.  Having
an effective investment analysis capability is important in
developing these baselines.  In its May 1997 report on AMS, FAA noted
that it has focused more attention on investment management
analyses.\26 The agency reported that it has established several
investment analysis teams of individuals with expertise in such areas
as cost estimating, market analysis, and risk assessment to help
prepare program baselines to use in determining the best way to
satisfy mission needs. 

Although FAA has begun efforts to establish new baselines for
projects that were underway prior to AMS, program evaluation
officials question the availability and the quality of operations and
maintenance data that are being used to estimate life-cycle project
costs.  FAA's history of unplanned cost increases, most recently seen
with its STARS and WAAS programs, coupled with past deficiencies in
cost estimating processes and practices point to the need to use
reliable and complete data to establish realistic baselines. 

As for performance measurements, FAA does not have a unified effort
underway to effectively measure progress toward achieving acquisition
goals.  FAA has established a goal to reduce the time to field
systems by 50 percent and to reduce the cost of acquisitions by 20
percent during the first 3 years under AMS.  FAA also plans to
measure performance in such other critical areas as customer
satisfaction and the quality of products and services.  According to
FAA's evaluation, while individual organizations are attempting to
measure progress in meeting the two goals, a coordinated agencywide
measurement effort is lacking. 

FAA's failure to field systems on time and within cost indicates the
need for a comprehensive system of performance measurements that can
help provide systematic feedback about accomplishments and progress
in meeting mission objectives.  The need for such measurements will
become even more critical as FAA expedites the deployment of some
projects.  Clearly identified performance measurements will help FAA,
the Congress, and system users assess how well the agency achieves
its goals. 


--------------------
\26 Evaluation of FAA Acquisition Reform--The First Year:  April
1996-March 1997, FAA Program Evaluation Staff, Office of Systems
Architecture and Investment Analysis, May 1997. 


      URGENT ACTION NEEDED TO
      ENSURE COMPUTERS RECOGNIZE
      THE YEAR 2000
-------------------------------------------------------- Chapter 0:4.3

On January 1, 2000, computer systems worldwide could malfunction or
produce inaccurate information simply because the century has
changed.  Unless corrected, such failures could have a costly,
widespread impact.  The problem is rooted in how dates are recorded
and computed.  For the past several decades, systems have typically
used two digits to represent the year, such as "97" for 1997, to save
electronic storage space and reduce operating costs.  This practice,
however, makes 2000 indistinguishable from 1900, and the ambiguity
could cause systems to malfunction in unforeseen ways or to fail
completely. 

FAA's challenge is great.  Correcting this problem will be difficult
and expensive, and must be done while such systems continue to
operate.  In less than 2 years, hundreds of computer systems that are
critical to FAA's operations, such as monitoring and controlling air
traffic, could fail to perform as needed unless proper date-related
calculations can be made. 

FAA's progress in making its systems ready for the year 2000 has been
too slow.  We have reported that, at its current pace, it will not
make it in time.\27 The agency has been severely behind schedule in
completing basic awareness and assessment activities--critical first
and second phases in an effective year 2000 program.  For example,
just this month FAA appointed a program manager who reports to the
Administrator. 

Delays in completing the first two phases have left FAA little time
for critical renovation, validation, and implementation
activities--the final three phases in an effective year 2000 program. 
With less than 2 years left, FAA is quickly running out of time,
making contingency planning for continuity of operations even more
critical. 

If critical FAA systems are not year 2000 compliant and ready for
reliable operation on January 1 of that year, the agency's capability
in several areas--including the monitoring and controlling of air
traffic--could be severely compromised.  The potential serious
consequences could include degraded safety, grounded or delayed
flights, increased airline costs, and customer inconvenience.  We
have made a number of recommendations aimed at expediting the
completion of overdue awareness and assessment activities. 


--------------------
\27 FAA Computer Systems:  Limited Progress on Year 2000 Issue
Increases Risk Dramatically (GAO/AIMD-98-45, Jan.  30, 1998). 


-------------------------------------------------------- Chapter 0:4.4

Mr.  Chairman, this concludes my statement.  We will be happy to
answer any questions from you or any Member of the Subcommittee. 


MODERNIZATION PROJECTS COMPLETED
THROUGH AUGUST 1998
========================================================== Appendix II

                                  (Dollars in millions)

                                                                Total reported facilities
Project (project number)                    Completion date            and equipment cost
-----------------------------  ----------------------------  ----------------------------
Automated Radar Terminal                               1983                           0\a
 System (ARTS) IIIA Assembler
 (22-02)
ARTS II Displays (22-07)                               1984                         $ 3.6
Radar Remote Weather Display                           1984                           0\a
 System (23-10)
Interim Voice Response System                          1985                           0\a
 (23-06)
Geostationary Operational                              1985                           1.9
 Environmental Satellite
 Recorders (23-11)
En Route Automation (21-01)                            1986                           2.3
ARTS IIIA Memory (22-04)                               1986                           8.6
Additional ARTS IIIA at FAA                            1986                           4.7
 Technical Center (22-05)
ARTS II Interfacility                                  1986                           0\a
 Interface (22-08)
Consolidated Notice to Airmen                          1986                           0\a
 System (23-03)
Radar Microwave Link Trunking                          1986                           8.2
 (25-01)
Teletypewriter Replacement                             1986                           5.1
 (25-09)
Nonradar Approach (21-14)                              1987                           1.6
Visual Flight Rules Air                                1987                           1.5
 Traffic Control Tower
 Closures (22-14)
Air/Ground Communications                              1987                          60.6
 Equipment Modernization (24-
 01)
Airport Telecommunications                             1987                           4.2
 (25-05)
Data System Specialist                                 1987                          32.0
 Support (51-20)
Host Computer (21-07)\b                                1988                         290.7
Altitude Reporting Mode of                             1988                           0\a
 Secondary Radar (Mode-C)
 (21-10)
Enhanced Target Generator                              1988                           0\a
 Displays (ARTS III) (22-03)
Nondirectional Beacon (24-                             1988                          23.8
 04)
National Airspace Data                                 1988                          17.0
 Interchange Network IA (25-
 06)
Aircraft Fleet Conversion                              1988                          68.6
 (26-11)
Enhanced Terminal Conflict                             1989                           0.4
 Alert (22-01)
Automatic Terminal                                     1989                          11.2
 Information Service
 Recorders (22-10)
High-Altitude En Route Flight                          1989                           6.3
 Advisory Service (23-07)
Hazardous In Flight Weather                            1989                           7.3
 Advisory Service (23-08)
Instrument Landing System                              1989                          69.6
 (24-06)
Power Conditioning Systems                             1989                          21.5
 for ARTS III (26-06)
TPX-42 Replacement (22-17)                             1990                          40.0
Flight Data Entry and Print-                           1991                          18.8
 Out Devices (21-02)
En Route Automated Radar                               1991                           2.8
 Tracking System Enhancements
 (21-04)
Offshore Flight Data                                   1991                           1.0
 Processing System (21-16)
Sustain New York Terminal                              1991                          95.4
 Radar Approach Control
 (TRACON) (22-18)
Computer-Based Instruction                             1991                          10.4
 (26-02)
National Radio Communication                           1991                          82.7
 System (26-14)
Direct Access Radar Channel                            1992                          45.0
 System (21-03)
Air Traffic Control Tower/                             1992                         391.4
 TRACON Modernization (22-
 13)\c
Communications Facilities                              1992                          16.8
 Consolidation/Network (24-
 02)
National Airspace Data                                 1992                          42.4
 Interchange Network II (25-
 07)
Power System (26-07)                                   1992                          71.5
Modernization of Unmanned FAA                          1992                          85.7
 Buildings and Equipment (26-
 08)
Aircraft and Related                                   1992                          68.9
 Equipment (26-12)
National Airspace System                               1992                           9.4
 Spectrum Engineering (26-
 15)
System Support Lab (26-17)                             1992                          31.5
General Support Lab (26-18)                            1992                          25.6
ARTS IIA Enhancements (22-                             1993                          12.9
 06)
Area Control Facilities (21-                           1993                           9.6
 15)
Data Multiplexing Network                              1993                          34.0
 (25-02)
Radar Microwave Link                                   1993                         268.4
 Replacement and Expansion
 (25-03)\d
Large Airport Cable Loop                               1993                          20.3
 Systems (26-05)
Interfacility Data Transfer                            1994                           1.8
 System for Edwards Air Force
 Base Radar Approach Control
 (35-20)
Visual Navaids (24-09)                                 1994                         137.7
Acquisition of Flight Service                          1994                          79.7
 Facilities (26-10)
Interim Support Plan\e (46-                            1994                         362.9
 30)
Tower Integration Program                              1994                          11.2
 (42-20)
Radar Pedestal Vibration                               1994                           5.0
 Analysis (44-43)
Low-Level Wind Shear Alert                             1994                          47.2
 System (23-12)
Human Resource Management                              1994                           7.3
 (56-22)
Brite Radar Indicator Tower                            1994                          64.5
 Equipment (22-16)
Approach Lighting System                               1994                         121.9
 Improvement Program (24-10)
Central Weather Processor                              1994                          81.1
 (23-02)
General Support (26-16)\f                              1994                         824.0
National Implementation of                             1994                           4.6
 the "Imaging" Aid for
 Dependent Converging Runway
 Approaches (62-24)
Integrated Communications                              1995                          98.3
 Switching System (23-13)
System Engineering and                                 1995                         759.3
 Integration Contract (26-
 13)
National Airspace Data                                 1995                          23.7
 Interchange Network II
 Continuation (35-07)
ARTS IIIA Peripheral Adapter                           1995                           5.9
 Module Modernization (52-
 21)
Instrument Landing System and                          1995                          13.1
 Visual Navaids Engineering
 and Sparing (44-24)
Air Traffic Control Tower/                             1995                          13.1
 TRACON Establishment (32-
 13)
Flight Service Automation                              1995                         313.7
 System (23-01)
Multichannel Voice Recorders                           1996                          40.2
 (22-11)
Weather Message Switching                              1996                          32.5
 Center Replacement (23-04)
Computer Aided Engineering                             1996                           3.7
 Graphics Enhancements (56-
 25)
Oceanic Display and Planning                           1996                          36.8
 System (21-05)
Integrated Communications                              1996                          10.6
 Switching System Logistics
 Support (43-14)
Maintenance Control Center                             1996                          47.9
 (26-04)
Long-Range Navigation-C                                1996                          51.9
 (LORAN-C) Systems (24-17)
ARTS IIA Interface with Mode-                          1996                           0\a
 S/Airport Surveillance
 Radar-9 (22-09)
Replacement of Controllers                             1996                           5.1
 Chairs (42-24)
ARTS IIIA-Expand 1 Capacity                           997 1                          09.8
 and Provide Mode C Intruder
 Capability (32-20)
Display Channel Complex                                1997                          61.3
 Rehost (A-01)
Digital Bright Radar                                   1998                          24.2
 Indicator Tower Equipment
 (32-16)
Civil Aviation Registry                                1998                          34.4
 Modernization (56-24)
FAA Telecommunications (45-                            1998                          16.1
 21)
Precision Automated Tracking                           1998                           3.3
 System (56-16)
National Airspace Integrated                           1998                          27.6
 Logistic Support (56-58)
Long Range Radar Radome                                1998                          39.5
 Replacement (44-42)
Computer Resources Nucleus                             1998                         158.1
 (56-28)
=========================================================================================
Total                                                                            $5,714.2
-----------------------------------------------------------------------------------------
\a The cost of this project was covered under another facilities and
equipment project. 

\b Installed at en route centers to allow processing of existing air
traffic control software on new equipment. 

\c Project comprised a variety of tower and terminal replacement and
modernization projects.  Project was continued in the Capital
Investment Plan under projects 42-13 and 42-14. 

\d Also known as the Radio Communications Link project, it was
designed to convert aging "special purpose" Radar Microwave Link
System into a "general purpose" system for data, voice, and radar
communications among en route centers and other major FAA facilities. 

\e Project was activated to sustain and upgrade air traffic control
operations and acquire eight terminal radars awaiting the full
implementation of the Advanced Automation System. 

\f Project comprised a variety of diverse support projects and has
been continued in the Capital Investment Plan under Continued General
Support (46-16). 

Source:  FAA.  We did not independently verify the schedule and cost
information. 


STATUS OF FAA'S MAJOR
MODERNIZATION PROJECTS
========================================================== Appendix II

Over the past decade, we have reported on FAA's progress in meeting
schedule commitments for last-site implementation, which signals
completion of the project.  Prior to this year, we have used the
dates from the 1983 NAS modernization plan.  This year, after
discussions with FAA officials, we are measuring FAA's progress
against an interim date--which in most cases represents the date of
contract award or investment decision.  We will continue to show the
original date, but will only measure progress against the interim
date. 

                                                                Number of operational
                            Last-site implementation                   systems
                     --------------------------------------  ----------------------------
                                      Year                   Planned      Commissioned
                     --------------------------------------  --------  ------------------
Major                1983      Interim   1998      Years               Since     Current
projects             NAS Plan  estimate  estimate  delayed             Feb-97    total
-------------------  --------  --------  --------  --------  --------  --------  --------
Aeronautical Data    N/A       TBD\a     TBD       N/A       57 TDLS   0         57
Link (ADL)                                                   I\a       20        48
                                                             57 TDLS
                                                             II\a

Air Route            1991      1996\b    1999      3         41        19        32
Surveillance Radar                                           radars
(ARSR-4)

Airport Surface      1990      1996\c    1999      3         38        3         29
Detection Equipment                                          radars
(ASDE-3)

Airport              1992      1996\d    1998      2         120       2         113
Surveillance Radar                                           radars
(ASR-9)

Air Traffic Control  N/A       2004\e    2004      0         125       0         0
Beacon Interrogator                                          systems
(ATCBI) Replacement

Automated Surface    1997      2002\f    2002      0         597       97        230
Observing System                                             units
(ASOS)

En Route             N/A       2000\g    2000      0         21        0         0
Automation--                                                 systems
Display System
Replacement (DSR)

Integrated Terminal  N/A       2003\h    2003      0         34        0         0
Weather System                                               systems
(ITWS)

Mode S               1993      1996\i    1999      3         144       9         80
                                                             systems

Oceanic Automation   N/A       2000\j    2001      1         2         0         0
Program (OAP) Build                                          systems
1.0

Operational and      N/A       2001\k    2001      0         61        0         0
Supportability                                               stations
Implementation
System (OASIS)

Terminal             N/A       2005\l    2005      0         173       0         0
Automation--                                                 systems
Standard Terminal
Automation
Replacement System
(STARS)

Terminal Doppler     N/A       1998\m    2001      3         45        11        33
Weather Radar                                                radars
(TDWR)

Terminal Radar       N/A       2005\n    2005      0         108       0         0
Digitize, Replace,                                           radars
and Establish
(TRDRE)

Voice Switching and  1992      1997\o    1997      0         21 units  1         21
Control System
(VSCS)

Weather and Radar    N/A       2000\p    2000      0         Stage 0:  21        21
Processor (WARP)                                             21        0         0
                                                             Stage 1
                                                             and 2:
                                                             21

Wide Area            N/A       1999\q    1999      0         1 system  0         0
Augmentation System
(WAAS)
-----------------------------------------------------------------------------------------
\a The JRC investment decision on Aeronautical Data Link is scheduled
for later this year. 

TDLS is the Tower Data Link Services.  TDLS I (Predeparture
Clearance/Flight Data Input/Output CRT/Rank Emulation) has been
commissioned at all 57 sites; TDLS II (Digital-Automatic Terminal
Information Service) has been installed at all 57 sites and
commissioned at 48 sites. 

\b Date reflects last-site implementation (source 1989 NAS Plan) when
the contract was awarded in 1988. 

\c Date reflects last-site implementation (source 1993 CIP) when the
program was rescoped in 1993 to acquire seven additional systems per
congressional direction.  When the original contract was awarded in
1985, last-site implementation was scheduled for 1990 (source 1986
NAS Plan). 

\d Date reflects last-site implementation (source 1993 CIP) when the
program was rescoped to acquire six additional systems (two were
mandated by Congress).  The original contract was awarded in 1983. 

\e Reflects APB from July 1997JRC-approved investment decision. 

\f The Congress added $10 million in both the fiscal year 1997 and
fiscal year 1998 appropriations to acquire additional ASOS systems. 
The date reflects these additional systems.  When the original
contract was awarded in 1991, last-site implementation was scheduled
for 1997 (Source 1991 CIP). 

\g Date reflects the Display System Replacement (DSR) project,
initiated as part of the June 1994 restructuring of the Advanced
Automation System into three distinct areas:  en route, terminal, and
tower automation. 

\h Date reflects January 1997 program rebaselining associated with
contract award. 

\i Date reflects last-site implementation (source 1993 CIP) when the
program was rescoped to acquire 11 additional systems.  The systems
commissioned are those that have been upgraded to full Mode-S
capability. 

\j In 1996, the program was rescoped.  The date reflects the
projected last-site implementation for Build 1.0. 

\k Date reflects APB from December 1996 JRC investment decision. 

\l Date reflects APB approved January 1996.  The production contract
was awarded in September 1996. 

\m Date is from the 1987 NAS Plan, when TDWR project was added.  The
1998 estimate includes the last five systems (Fort Lauderdale, San
Juan, Las Vegas, Midway, and New York), which have been delayed due
to land acquisition problems and environmental issues.  Excluding
these last five systems, last-site implementation is scheduled for
8/98. 

\n Date reflects APB approved at November 1997 JRC investment
decision.  The program was expanded in scope to replace ASR-8s (in
addition to ASR-7s) as well as provide for new establishments. 

\o Date reflects last-site implementation when the production
contract was awarded in 1991 (source 1991 CIP).  The date reflects
the first phase of the project, when systems were installed in
existing en route controller workstations.  Last-site implementation
date for the second phase of the project, when the system will
interface with the DSR, is estimated for 2000. 

\p Date reflects last-site implementation when the contract was
awarded in June 1996.  The date is for Stages 1-2. 

\q Reflects January 1998 JRC approval of rebaselined program.  Date
reflects Initial Operational Capability when WAAS will provide
supplemental CAT I precision approach capability. 

Note:  Two projects that GAO reviewed in February 1997 are not
included.  The Terminal ATC Automation (TATCA) project has been
integrated into the Air Traffic Management (ATM) program, which
contains multi-segmented projects.  TATCA functionality is contained
within the Traffic Manager Advisor (TMA), Final Approach Spacing Tool
(FAST), and Descent Advisor (DA).  The Tower Automation Program has
been terminated. 

Source:  FAA.  We did not independently verify the schedule
information. 


*** End of document. ***