Air Traffic Control: Observations on FAA's Air Traffic Control
Modernization Program (Statement/Record, 03/25/99,
GAO/T-RCED/AIMD-99-137).

Pursuant to a congressional request, GAO discussed the Federal Aviation
Administration's (FAA) Air Traffic Control Modernization Program,
focusing on: (1) the causes of the problems that have plagued FAA's
modernization program for nearly two decades; (2) recent agency efforts
to overcome these problems; and (3) the readiness of FAA and others to
meet year 2000 requirements.

GAO noted that: (1) from the inception of the air traffic control
modernization program to today, FAA has not consistently followed a
disciplined management approach for acquiring new systems; (2) in the
1980s and early 1990s, FAA did not follow the phased approach of federal
acquisition guidance designed to help mitigate the cost, schedule, and
performance risk associated with the development of major systems; (3)
FAA believed it could develop and install new systems more quickly by
combining several of the five phases outlined in this guidance; (4)
however, as a result of not following this disciplined, phased approach,
FAA often encountered major difficulties such as those associated with
developing the Advanced Automation System; (5) in 1995, Congress
exempted FAA from many federal procurement rules and regulations; (6) in
April 1996, FAA implemented an acquisition management system, which
emphasized the need for a disciplined approach to acquisition
management; (7) however, GAO found continuing weaknesses in key areas
such as how FAA monitors the status of projects throughout their life
cycles; (8) FAA has taken a number of steps to overcome problems with
past modernization efforts; (9) FAA has moved away from its practice of
taking on large, complex projects all at once and is now acquiring new
systems by using a more incremental approach; (10) in addition, FAA is
no longer making unilateral decisions about air traffic control
modernization; (11) instead, it has been working actively with the
aviation community to make decisions more collaboratively; (12)
furthermore, FAA has begun to address some of the root causes of its
modernization problems by implementing processes to help: (a) improve
its ability to estimate and account for project costs; (b) develop a
complete architecture for modernizing the National Airspace System; (c)
reduce the risks associated with software development; and (d) reform
the organization's culture, including providing incentives to make
managers more accountable; (13) while FAA has delivered some of its
major systems, it must be recognized that many of these projects
encountered difficulties in meeting their original cost and schedule
goals, and the baselines were subsequently revised; and (14) FAA has
taken critical steps over the past year to address problems associated
with the date change to the year 2000, but much work remains to be done
to help ensure that FAA and other key players such as airports have made
needed fixes and have contingency plans in place so that operations can
continue should problems arise.

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

 REPORTNUM:  T-RCED/AIMD-99-137
     TITLE:  Air Traffic Control: Observations on FAA's Air Traffic 
             Control Modernization Program
      DATE:  03/25/99
   SUBJECT:  Air traffic control systems
             ADP procurement
             Systems development life cycle
             Systems conversions
             Information resources management
             Procurement planning
             Federal procurement
             Strategic planning
             Accountability
IDENTIFIER:  Y2K
             FAA Advanced Automation System
             FAA National Airspace System Plan
             FAA Voice Switching and Control System
             FAA Acquisition Management System
             FAA Air Traffic Control Modernization Program
             FAA National Airspace System Year 2000 Business Continuity 
             and Contingency Plan
             
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Cover
================================================================ COVER


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

To Be Released
at 10 a.m.  EST
Thursday
March 25, 1999

AIR TRAFFIC CONTROL - OBSERVATIONS
ON FAA'S AIR TRAFFIC CONTROL
MODERNIZATION PROGRAM

Statement for the Record by
Gerald L.  Dillingham
Associate Director, Transportation Issues
Resources, Community and Economic
Development Division

GAO/T-RCED/AIMD-99-137

GAO/RCED-96-000T


(348165)


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

  FAA -
  TRACON -
  DOD -

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

Mr.  Chairman and Members of the Subcommittee: 

We appreciate the opportunity to provide our observations on the
Federal Aviation Administration's (FAA) efforts to modernize the
nation's air traffic control system.  In 1981, FAA began a
multibillion-dollar modernization effort to improve the safety,
capacity, and efficiency of this system to meet the increasing demand
for air traffic services and to replace aging equipment.  The
agency's most recent estimate is that it will spend approximately $41
billion on the modernization effort through 2004.  FAA has had some
success in deploying new modernization systems over the past two
decades.  However, the agency has not delivered most of its major
systems within cost, schedule, and performance goals due largely to
its failure to implement established guidelines for acquiring new
systems.  Implementing disciplined acquisition management practices
is key to allowing the agency to consistently deliver new systems
within established goals. 

In light of past problems and continuing concerns about key projects
funded under this program, you asked us to provide current
information on the status of the modernization program based on prior
reports and testimonies as well as ongoing work.\1 Our statement will
focus on (1) the causes of the problems that have plagued FAA's
modernization program for nearly two decades and (2) recent agency
efforts to overcome these problems.  We will also discuss our
concerns about the readiness of FAA and others to meet Year 2000
requirements. 

In summary: 

  -- From the inception of the air traffic control modernization
     program to today, FAA has not consistently followed a
     disciplined management approach for acquiring new systems.  In
     the 1980s and early 1990s, FAA did not follow the phased
     approach of federal acquisition guidance designed to help
     mitigate the cost, schedule, and performance risk associated
     with the development of major systems.  The agency believed that
     it could develop and install new systems more quickly by
     combining several of the five phases outlined in this guidance. 
     However, as a result of not following this disciplined, phased
     approach, FAA often encountered major difficulties such as those
     associated with developing the Advanced Automation System.\2 In
     1995, the Congress exempted FAA from many federal procurement
     rules and regulations.  In April 1996, FAA implemented an
     acquisition management system, which emphasized, once again, the
     need for a disciplined approach to acquisition management. 
     However, we found continuing weaknesses in key areas such as how
     FAA monitors the status of projects throughout their life-cycle.

  -- FAA has taken a number of steps to overcome problems with past
     modernization efforts.  Most notably, the agency has moved away
     from its prior practice of taking on large, complex projects all
     at once and is now acquiring new systems by using a more
     incremental approach.  In addition, the agency is no longer
     making unilateral decisions about air traffic control
     modernization.  Instead, it has been working actively with the
     aviation community to make decisions more collaboratively. 
     Furthermore, FAA has begun to address some of the root causes of
     its modernization problems by implementing processes to help (1)
     improve its ability to estimate and account for project costs,
     (2) develop a complete architecture (blueprint) for modernizing
     the National Airspace System, (3) reduce the risks associated
     with software development, and (4) reform the organization's
     culture, including providing incentives to make managers more
     accountable.  While FAA has delivered some of its major systems,
     it must be recognized that many of these projects encountered
     difficulties in meeting their original cost and schedule goals,
     and the baselines were subsequently revised.

  -- FAA has taken critical steps over the past year to address
     problems associated with the date change to the year 2000, but
     much work remains to be done to help ensure that FAA and other
     key players such as airports have made needed fixes and have
     contingency plans in place so that operations can continue
     should problems arise. 


--------------------
\1 See Air Traffic Control Modernization:  Status of FAA's
Modernization Program (GAO/RCED-99-25, Dec.  3, 1998) for our most
recent work on air traffic control modernization. 

\2 AASï¿½the centerpiece of the modernization program-was designed to
replace the computer hardware and software, including workstations,
used by controllers in air traffic control facilities.  Numerous
development problems led the agency to restructure the project in
1994. 


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

As the principal component of the National Airspace System, FAA's air
traffic control system must operate continuously--24 hours a day, 365
days a year.  Under federal law, FAA has the primary responsibility
for operating a common air traffic control systemï¿½a vast network of
radars; automated data processing, navigation, and communications
equipment; and air 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.\3 The
users of FAA's services include the military, other government users,
private pilots, and commercial aircraft operators.\4 Projects in
FAA's modernization program are primarily organized around seven
functional areasï¿½automation, communications, facilities, navigation
and landing, surveillance, weather, and mission support. 

FAA expects to spend approximately $41 billion for its modernization
program through 2004.\5 Of this amount, Congress appropriated over
$27 billion for fiscal years 1982 through 1999.  The agency expects
that approximately $13 billion will be provided for fiscal years 2000
through 2004.  See figure 1 for an illustration of how FAA's
appropriation was divided among the seven functional areas. 

   Figure 1:  Air Traffic Control
   Modernization:  Funding by
   Functional Areas, FY 1982-99
   (Dollars in billions)

   (See figure in printed
   edition.)

Source:  FAA. 

Figure 2 illustrates how FAA's appropriation was divided by project
status--completed projects, ongoing projects, canceled/restructured
projects, and personnel-related expenses. 

   Figure 2:  Air Traffic Control
   Modernization:  Funding by
   Project Status, FY 1982-1999
   (Dollars in billions)

   (See figure in printed
   edition.)

Source:  FAA. 

Over the past 17 years, FAA's modernization projects have experienced
substantial cost overruns, lengthy schedule delays, and significant
performance shortfalls.  Because of the size, complexity, cost, and
problem-plagued past of FAA's modernization program, we have
designated it a high-risk information technology investment since
1995.\6


--------------------
\3 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. 

\4 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. 

\5 Total spending on modernization includes all actual and projected
facilities and equipment appropriations from fiscal year 1982 through
fiscal 2004 for projects in FAA's financial plan.  Projected
appropriations for future years fluctuate so the total estimated
spending will vary.  FAA's financial plan contains funding primarily
for projects, including prime contract costs; costs for personnel
compensation, benefits, and travel; and contract costs for technical
support service activities.  The plan also includes estimated future
costs for some projects that have not yet been funded but are part of
the National Airspace System architecture. 

\6 FAA's modernization program is one of four high-risk system
development and modernization efforts.  See High-Risk Series:  An
Overview (GAO/HR-95-1, Feb.  1995), High-Risk Series:  Information
Management and Technology (GAO/HR-97-9, Feb.  1997), and High-Risk
Series:  An Update (GAO/HR-99-1, Jan.  1999). 


   FAA HAS HISTORICALLY NOT
   FOLLOWED A DISCIPLINED
   ACQUISITION MANAGEMENT APPROACH
---------------------------------------------------------- Chapter 0:2

FAA has encountered difficulty in acquiring new systems to help
achieve its goals of replacing the air traffic control system's aging
infrastructure and of meeting the projected increase in air traffic. 
In the 1980s and early 1990s, the agency did not follow the
structured approach outlined in federal acquisition guidance.  Even
after the agency revised its approach in 1991--to address past
shortcomings in the design and implementation of the
approach--problems persisted with FAA's air traffic control
modernization program.  In 1996, FAA began a new approach that
emphasized, once again, the need for discipline in selecting,
monitoring, and evaluating modernization projects.  Despite this new
approach, problems persist with FAA's ability to effectively
implement and manage its modernization program.  We have identified a
number of root causes that have contributed to modernization
problems.  These causes are related to the lack of a disciplined
acquisition management approach. 


      DURING THE FIRST DECADE OF
      MODERNIZATION, FAA DID NOT
      FOLLOW A DISCIPLINED
      APPROACH
-------------------------------------------------------- Chapter 0:2.1

In the 1980s and early 1990s, we reported that problems with
modernization projects occurred largely because FAA did not follow
the guidance outlined in Office of Management and Budget Circular
A-109, which is the principal guidance for acquiring major systems in
the federal government.\7 Circular A-109 calls for following a
disciplined, five-phased approach to acquisition in order to minimize
problems, such as cost increases and schedule delays.  The five
phases include (1) determining mission needs; (2) identifying and
exploring alternative design concepts; (3) demonstrating alternative
design concepts, including prototype testing, and evaluation; (4)
initiating full-scale development and limited production, including
independent testing; and (5) full production.  Before moving from one
phase to the next, the guidance calls for a key decision point, at
which time agency heads are to evaluate the cost, schedule, and
performance parameters of major projects.  During these reviews, any
management concerns about these parameters must be resolved before
the acquisition is allowed to proceed. 

From the inception of the air traffic control modernization program
until 1991, FAA did not follow Circular A-109 guidance.  The agency
believed that it could deliver and install new systems more quickly
by combining Circular A-109 phases.  For example, FAA merged the
first three phases into one, under which the agency performed some
prototype testing but ignored mission need and alternative analyses. 
However, FAA's failure to follow Circular A-109 resulted in delays in
many of the major systems in the modernization effort, most notably
FAA's centerpiece project, known as the Advanced Automation System
(AAS).  For example, FAA contracted for the production of a key
component of this project before it had fully defined requirements
for this component.  Between 1983 and 1991, the lack of clarity and
decisiveness in resolving requirements contributed to costs for the
project increasing from $2.6 billion to $4.5 billion and the schedule
slipping by 7 years. 


--------------------
\7 On April 5, 1976, the Executive Office of the President, Office of
Management and Budget, issued Circular A-109.  The circular was
designed to improve the effectiveness of the management of major
system acquisitions. 


      FAA INCORPORATED CIRCULAR
      A-109 GUIDANCE INTO ITS
      APPROACH IN 1991
-------------------------------------------------------- Chapter 0:2.2

In February 1991, FAA issued revised guidance on major acquisitions,
which put FAA policy in compliance with Circular A-109.  Among the
changes incorporated in this guidance was a requirement that new
projects have a mission needs statement approved before being
included in FAA's budget.  The guidance also required that
alternatives be identified and evaluated and that operational testing
be conducted and reviewed by an independent test group within FAA
before production decisions were made.  Moreover, FAA required that
program managers submit a risk management plan, including measures to
reduce risk, that FAA senior managers must approve before an
acquisition could proceed to the next phase.  Program managers were
also required to develop acquisition program baselines (boundaries)
for the most costly major acquisitions--usually those exceeding $150
million.  These baseline documents were intended to promote stability
and control costs by establishing quantified targets for key
performance, cost, and schedule parameters that are critical to the
success of the acquisition. 

Although FAA revised its acquisition policies in 1991 to instill more
discipline into the acquisition management process, shortcomings in
both design and implementation limited the process's effectiveness. 
For example, the agency's acquisition orders and guidance still did
not require an analysis of current system performance as the starting
point in the acquisition process.  Instead, under the order, the
starting point for the acquisition process was the mission needs
statement.  The order did not include any procedures or guidance for
conducting a mission analysis before generating mission needs
statements and made little mention of what types of data analyses
were expected.  As a result, the agency did not document that its
current assets could no longer fulfil its needs and did not have any
assurance that it was not wasting scarce resources in developing
systems that were not the most appropriate and cost-effective. 
Similarly, senior acquisition officials did not thoroughly review
project justifications to ensure that they were adequately supported. 
Other conditions that contributed to this lack of discipline in FAA's
acquisition process during this period included the frequent turnover
of FAA senior managers.  For example, between 1982 and 1995, the
average tenure of the FAA Administrator was less than 2 years.  This
lack of continuity in personnel allowed the agency's bureaucracy to
focus on short-term improvements, avoid accountability, and resist
fundamental changes. 


      FAA IMPLEMENTED ITS
      ACQUISITION MANAGEMENT
      SYSTEM IN 1996
-------------------------------------------------------- Chapter 0:2.3

FAA continued to experience problems in the mid-1990s with its major
acquisitions.  For example, in 1994, FAA restructured AAS after the
estimated cost to deploy the system had tripled, capabilities were
significantly less than promised, and delays were expected to run
nearly a decade.  Additionally, the costs of the Voice Switching and
Control
System\8 increased by 400 percent, from about $260 million to $1.4
billion, and the project's planned date for implementation slipped by
6 years.  Concerned about the continuing slow pace of the air traffic
control modernization program--which led at times to FAA's having to
implement costly interim projects to sustain the ATC system--FAA
sought from the Congress exemptions from many federal procurement
rules.  The agency asserted that these rules contributed to its
acquisition problems and that exemptions would allow it to reduce the
time and cost to deliver new products and services.  In response,
Congress exempted FAA in 1995\9 from many federal procurement rules,
and the agency implemented its Acquisition Management System (AMS) on
April 1, 1996.  AMS is intended to provide high-level acquisition
policy and guidance and to establish rigorous management practices
for selecting and monitoring investments. 

To date, FAA has established a structure that is generally sound and
could provide the discipline needed to help ensure that ATC
modernization projects are implemented in a cost-effective manner. 
However, our past and recent work have shown that FAA has fallen
short when it comes to implementing practices to build discipline
into acquisition management.  Specifically, our preliminary findings
on FAA's present approach indicate that the agency has not fully
implemented an effective process for monitoring the cost, schedule,
benefits, performance, and risk of its key projects throughout their
life-cycle.  Additionally, FAA lacks an evaluation process for
assessing outcomes after projects have been developed to help improve
the selection and monitoring of future projects. 


--------------------
\8 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. 

\9 Department of Transportation and Related Agencies Appropriations
Act of 1996 (P.L.  104-50). 


      ROOT CAUSES OF MODERNIZATION
      PROBLEMS ARE VARIED
-------------------------------------------------------- Chapter 0:2.4

As we reported in 1995, exempting FAA from procurement rules could
result in a somewhat more expeditious acquisition process, but those
looking for dramatic, immediate changes in the modernization program
would likely be disappointed.\10 Our work showed then, and continues
to show today, that the schedule, cost, and performance problems are
caused by factors other than procurement rules.  We have reported on
several root causes of FAA's past modernization problems.  First, FAA
lacks reliable cost estimating practices and cost accounting data,
which leaves it at risk of making ill-informed decisions on critical
and costly air traffic control systems and limits the ability of
congressional decisionmakers to make trade-offs among FAA
programs.\11 Second, FAA attempted to modernize the National Airspace
System without a complete systems architecture, or blueprint, to
guide development and evolution and did not have the management
structure needed to enforce its architecture once completed.\12 The
result has been unnecessarily higher spending to buy, integrate, and
maintain hardware and software.  Third, FAA processes for acquiring
software for air traffic control systems are ad hoc, sometimes
chaotic, and not repeatable across projects.\13 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.  Finally, FAA's
organizational cultureï¿½the values, beliefs, attitudes, and
expectations shared by an organization's members that affect their
behavior and the behavior of the whole organizationï¿½is an underlying
cause of acquisition problems.\14 When employees act in ways that do
not reflect a strong commitment to mission focus, accountability,
coordination, and adaptability, acquisitions can be impaired.  We
made recommendations in these reports to correct these root causes. 


--------------------
\10 See Federal Aviation Administration:  Issues Related to FAA
Reform (GAO-T-RCED-95-247, Aug.  2, 1995). 

\11 See Air Traffic Control:  Improved Cost Information Needed to
Make Billion-Dollar Modernization Investment Decisions
(GAO/AIMD-97-20, Jan.  22, 1997). 

\12 See Air Traffic Control:  Complete and Enforced Architecture
Needed for FAA Systems Modernization (GAO/AIMD-97-30, Feb.  3, 1997). 

\13 See Air Traffic Control:  Immature Software Acquisition Processes
Increase FAA Systems Acquisition Risks (GAO/AIMD-97-47, Mar.  21,
1997). 

\14 See Aviation Acquisition:  A Comprehensive Strategy Is Needed for
Cultural Change at FAA, GAO/RCED-96-159. 


   FAA HAS TAKEN STEPS TO OVERCOME
   MODERNIZATION PROBLEMS AND HAS
   DELIVERED SOME SYSTEMS
---------------------------------------------------------- Chapter 0:3

FAA has taken a number of steps, in addition to implementing its
Acquisition Management System, to overcome past problems with
modernization efforts.  However, most of these initiatives are just
getting under way, and it is too soon to tell how successful they
will be.  Additionally, the agency has now completed work on about 90
modernization projects.  In some cases, the costs were higher and the
development longer than expected. 


      RECENT INITIATIVES TO
      ADDRESS MODERNIZATION
      PROBLEMS
-------------------------------------------------------- Chapter 0:3.1

The FAA Administrator took a notable step in November 1997 when she
began an outreach effort to the aviation community to build consensus
on and seek commitment to the future direction of the agency's
modernization program.  As a result of this outreach effort, FAA and
the aviation community agreed to (1) use an incremental approach to
modernizing the National Airspace System, referred to as the ï¿½build a
little, test a littleï¿½ approach; (2) revise its blueprint for
modernizing this system; and (3) deploy certain technologies earlier
than FAA had planned because the aviation industry believed that
these technologies could provide immediate benefits.  These practices
differ from those of the past in which FAA made unilateral decisions
about air traffic control modernization and tried to deploy large,
complex projects all at once, known as the ï¿½big bangï¿½ approach. 

Furthermore, FAA has actions under way to address the root causes we
have identified in the past with its acquisitions.  First, FAA has
begun to develop a cost estimating process for its projects that will
satisfy recognized estimating standards; draft guidance on reporting
project cost estimates as ranges rather than precise point estimates;
and develop a cost accounting system.  Specifically, FAA plans to
complete a cost estimating handbook, which should help improve the
agency's approach to estimating project costs.  However, FAA has not
established a firm date for issuing the handbook or for completing
other tasks related to cost estimating.  As for cost accounting, FAA
had hoped to have a system operating by October 1998, but officials
underestimated the complexity of developing the system and found that
their implementation milestones were unrealistic.  The agency now
projects that the system will be fully operational by April 2001. 
Second, FAA has begun to develop a complete systems architecture for
its modernization program and estimated in May 1998 that it would
take 18 to 24 months to complete the development.  Third, FAA has
initiated efforts to improve its software acquisition processes. 
However, these efforts have not been implemented agencywide.  In this
connection, the agency hired a Chief Information Officer in February
1999.  It is expected that FAA will establish a management structure
similar to the department-level Chief Information Officers provision
of the Clinger-Cohen Act of 1996, as we recommended.\14 If so, the
Chief Information Officer organization would be responsible for
activities related to information technology, including software
acquisition and systems architecture.  Finally, FAA has outlined its
overall structure for changing its organizational culture and
described its ongoing actions to influence organizational culture.\15
In this area, FAA has a pilot program under way for a new
compensation program that it plans to implement agencywide. 


--------------------
\14 The Clinger-Cohen Act requires that major federal departments and
agencies establish Chief Information Officers that report to the
department/agency head and are responsible for developing,
maintaining, and facilitating the acquisition of information
technology systems. 

\15 See Strategy for Acquisition Culture Change, FAA (June 1997). 


      FAA HAS DELIVERED SOME
      MODERNIZATION SYSTEMS
-------------------------------------------------------- Chapter 0:3.2

In recent years, FAA has claimed some success with delivering systems
under its modernization program.  While the agency has completed some
modernization projects since 1982, many of the major projects,
especially in the automation area, are years behind schedule.  The
agency has spent $6.3 billion of the over $27 billion appropriated
between 1982 and 1999 on 93 completed projects.  We note that
although FAA completed several of its major projects, they generally
cost more than anticipated and were delivered behind schedule.  For
example, FAA has declared the Display System Replacement a success
because it deployed operational equipment to the first of 20 sites in
December 1998.\16 However, FAA's 1983 modernization plan called for a
similar system under the Advanced Automation System to be deployed in
1990.  Likewise, FAA is now completing the deployment of other key
systems first identified in its 1983 modernization plan.  For
example, FAA expects to complete the deployment later this year of
two projects--Airport Surface Detection Equipment and Air Route
Surveillance Radarï¿½which were originally scheduled to be completed in
1990 and 1995, respectively.\17 Of FAA's key modernization projects,
the agency has successfully deployed two large-scale projects over
the past 17 years--both involving the HOST computer system.\18 FAA
completed the implementation of the HOST computer in 1988 and is
currently replacing portions of this system.  Both of these projects
involve replacing hardware while utilizing existing system software. 


--------------------
\16 The Display System Replacement will modernize en route center
equipment by replacing 20-to-30-year-old display channels,
controllers' workstations, and network infrastructure. 

\17 Airport Surface Detection Equipment detects traffic on airport
runways.  Air Route Surveillance Radar detects air traffic and
weather in the en route environment. 

\18 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. 


   PROGRESS MADE ON ADDRESSING
   YEAR 2000 PROBLEMS
---------------------------------------------------------- Chapter 0:4

On a related issue, our work on the Year 2000 problem has shown that
FAA has made tremendous progress over the past year, but much remains
to be done to complete the validation and implementation of FAA's
mission-critical systems.\19 In addition to these systems, the agency
is concerned that system failures by external organizations, such as
airports and foreign air traffic control systems could seriously
affect FAA's ability to provide aviation services.  For example, we
recently reported that 26 of the largest 50 airports in the United
States are not planning to be Year 2000 compliant by June 30,
1999.\20 Because of the risk of anticipated and unanticipated
failuresï¿½whether from internal systems or from reliance on external
partners and suppliersï¿½a comprehensive business continuity and
contingency plan is crucial to continuing core operations.  FAA
drafted its Year 2000 Business Continuity and Contingency Plan in
December 1998 and is currently reviewing it.  The agency plans to
release four more iterations of this plan by the end of the year,
with the next version due out in April 1999.  We and others have
expressed some concerns with FAA's draft plans, which the agency is
working to address. 


--------------------
\19 See Year 2000 Computing Crisis:  FAA is Making Progress But
Important Challenges Remain (GAO/T-AIMD/RCED-99-118, Mar.  15, 1999). 

\20 See Year 2000 Computing Crisis:  Status of Airports' Efforts to
Deal with Date Change Problem (GAO/RCED/AIMD-99-57, Jan.  29, 1999). 


-------------------------------------------------------- Chapter 0:4.1

In conclusion Mr.  Chairman, FAA has fallen short over the past two
decades in implementing a disciplined management acquisition
approach.  While the agency has many of the elements in place to
improve its management of the modernization program, implementation
is key to the agency's future success in this area.  Among the
positive steps that FAA has taken include actions to bring stability
to the agency's senior management ranks, as evidenced by the
Administrator's commitment to serve a full 5-year term.  Moreover,
she has filled many key management positions that had been vacant and
has also begun to provide senior managers with incentives to work
together toward agency goals.  For the most part, FAA will need to
sustain its commitment to fully implementing the various initiatives
underway.  As a first priority, it will be important for the agency
to continue all of its efforts to help ensure that it can fulfill its
mission when the year 2000 arrives.  As for the longer-term, FAA's
continued collaboration with the aviation community will allow the
agency to develop future plans for air traffic control modernization,
including establishing realistic and clear goals and measures for
tracking progress.  Similarly, fully implementing solutions to the
root causes of modernization problems and strengthening FAA's control
over modernization investments will better position the agency to
consistently deliver modernization projects within established cost,
schedule, and performance goals. 


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