oversight

Major Management Challenges and Program Risks: Department of Transportation

Published by the Government Accountability Office on 2003-01-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               United States General Accounting Office

GAO            Performance and Accountability Series




January 2003
               Major Management
               Challenges and
               Program Risks
               Department of
               Transportation




GAO-03-108
               a
A Glance at the Agency Covered in This Report
The Department of Transportation implements national transportation policy and
administers federal transportation programs. Its responsibilities are considerable
and reflect the extraordinary scale, use, and impacts of the nation’s transportation
system. The department carries out multiple transportation missions, including
●    reducing deaths and injuries on our nation’s roads, in civil aviation, in the
     railroad industry, and on waterways;
●    improving mobility on and the accessibility of our nation’s roads and public
     transportation systems;
●    protecting the nation’s passenger and freight transportation systems;
●    promoting the development of the railroad industry and the development and
     maintenance of an adequate, well-balanced merchant marine; and
●    providing law enforcement, humanitarian assistance, and emergency response
     on our nation’s waterways.


The Department of Transportation’s Budgetary and Staff Resources


Budgetary Resources a, b                                                     Staff Resources b
Dollars in billions                                                          FTEs in thousands

120                                                116                       100
                                        110
                                                                                                                  82

    90                        88                                             75
                   82                                                                       64            63
                                                                                    63             63
          67
    60                                                                       50



    30                                                                       25



    0                                                                          0
         1998     1999       2000       2001       2002                            1998     1999   2000   2001   2002
         Fiscal year                                                               Fiscal year

Source: Budget of the United States Government for fiscal years 2000-2003.

a Budgetary resources include new budget authority (BA) and unobligated balances of previous BA.

b Budget and staff resources are actuals for FY 1998-2001. FY 2002 are estimates from the FY 2003 budget, which
    are the latest publicly available figures on a consistent basis as of January 2003. Actuals for FY 2002 will be
    contained in the President’s FY 2004 budget to be released in February 2003. Does not include the U.S. Coast
    Guard’s uniformed personnel, which was about 36,600 personnel in fiscal year 2002.




This Series
This report is part of a special GAO series, first issued in 1999 and updated in
2001, entitled the Performance and Accountability Series: Major Management
Challenges and Program Risks. The 2003 Performance and Accountability Series
contains separate reports covering each cabinet department, most major
independent agencies, and the U.S. Postal Service. The series also includes a
governmentwide perspective on transforming the way the government does
business in order to meet 21st century challenges and address long-term fiscal
needs. The companion 2003 High-Risk Series: An Update identifies areas at high risk
due to either their greater vulnerabilities to waste, fraud, abuse, and
mismanagement or major challenges associated with their economy, efficiency, or
effectiveness. A list of all of the reports in this series is included at the end of
this report.
                                                        January 2003


                                                        PERFORMANCE AND ACCOUNTABILITY SERIES

                                                        Department of Transportation
    Highlights of GAO-03-108, a report to
    Congress included as part of GAO’s
    Performance and Accountability Series




    In its 2001 performance and                         The Department of Transportation has implemented a number of actions to
    accountability report on the                        improve its mission and management performance. Future improvements
    Department of Transportation (the                   will increasingly demand effective partnerships and consensus-building with
    department), GAO identified                         state, local, and private stakeholders.
    important safety, security,
    acquisition, financial management,
    and other issues facing the                         •   Improving transportation safety. Efforts to further reduce 44,000
    department.                                             annual transportation fatalities have reached a plateau. Since the
                                                            highest pay-off actions have occurred, future improvements will be
    The information GAO presents in                         difficult because they depend on influencing individuals’ behaviors and
    this report is intended to help                         state and local governments’ implementation of safety laws.
    sustain congressional attention and
    a departmental focus on continuing                  •   Transforming transportation security. Security is a crucial and
    to make progress in addressing                          growing responsibility. The department needed to design and implement
    these challenges—and others that                        effective security approaches that did not unduly hinder passenger and
    have arisen since 2001—and                              freight mobility. It created the Transportation Security Administration
    ultimately overcoming them. This
                                                            and staffed a federalized aviation screening workforce of more than
    report is part of a special series of
    reports on governmentwide and                           60,000 people within just a few months. Despite an impressive start,
    agency-specific issues.                                 extraordinary challenges remain. It now must accomplish a smooth
                                                            transfer of security functions to the new Department of Homeland
                                                            Security and work closely with the new agency on transportation
                                                            security.
    GAO believes the department
    should                                              •   Improving mobility and economic growth through intermodal and
    •   work with Congress and other                        modal approaches. As transportation needs change, mobility and
        transportation stakeholders to                      economic growth are affected. More travel crosses transportation
        develop approaches that                             modes and increasing congestion—particularly for freight—affects
        improve transportation safety,                      productivity. New strategies and policy decisions--especially about
        mobility through intermodal
        and modal planning and
                                                            Amtrak's role--are required to meet these challenges.
        investment approaches, and
        human capital strategies;                       •   Enhancing management of aviation and Coast Guard acquisitions.
    •   pursue strategies to address                        The Federal Aviation Administration (FAA) and the Coast Guard face
        long-term security challenges                       major acquisition issues. Both agencies have improved acquisition
        and ensure a smooth transition                      management, but multibillion-dollar modernization projects pose risks of
        to Department of Homeland                           significant delays and cost increases. Specifically, FAA’s Air Traffic
        Security responsibility;                            Control modernization efforts continue to be at high risk.
    •   continue to improve its
        acquisition and financial                       •   Building human capital strategies. The department faces human
        management by addressing
                                                            capital problems that are mirrored in the nation’s transportation sector.
        root causes of problems.
                                                            A shortfall of people and skills could compromise the transportation
.                                                           workforce and affect the economy, safety, and mobility of our nation.

    www.gao.gov/cgi-bin/getrpt?GAO-03-108.              •   Fostering improved financial management. The department and
                                                            FAA have made significant progress in improving the underlying causes
    To view the full report, click on the link above.
    For more information, contact John H.                   of weaknesses in their financial management systems. Until new
    Anderson, Jr. at (202) 512-2834 or                      systems that will soon be deployed are proven in full operation, FAA’s
    andersonj@gao.gov.                                      financial management systems remain at high risk.
Contents



Transmittal Letter                                                                                                1


Major Performance                                                                                                  2

and Accountability
Challenges

GAO Contacts                                                                                                      49


Related GAO Products                                                                                              50


Performance and                                                                                                   57
Accountability and
High-Risk Series




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                       Page i                                                        GAO-03-108 DOT Challenges
A
United States General Accounting Office
Washington, D.C. 20548
                                                                                           Comptroller General
                                                                                           of the United States




           January 2003                                                                                           T
                                                                                                                  ransmL
                                                                                                                       ta
                                                                                                                        ileter




           The President of the Senate
           The Speaker of the House of Representatives

           This report addresses the major management challenges facing the U.S. Department of
           Transportation as it carries out its multiple and highly diverse missions. The report discusses the
           actions that the department has taken and that are under way to address the challenges GAO
           identified in its Performance and Accountability Series 2 years ago, and major events that have
           occurred that significantly influence the environment in which the department carries out its mission.
           Also, GAO summarizes the challenges that remain, new ones that have emerged, and further actions
           that GAO believes are needed.

           This analysis should help the new Congress and the administration carry out their responsibilities and
           improve government for the benefit of the American people. For additional information about this
           report, please contact John H. Anderson, Jr., Managing Director, Physical Infrastructure Issues, at
           (202) 512-2834 or at andersonj@gao.gov.




           David M. Walker
           Comptroller General
           of the United States




                                     Page 1                                               GAO-03-108 DOT Challenges
Major Performance and Accountability
Challenges

              Our 2001 Performance and Accountability Series report described the
              major challenges facing the Department of Transportation (the
              department) as follows:

              • Improving the safety and security of air, highway, and pipeline
                transportation;

              • Strengthening the financial condition of Amtrak;

              • Enhancing competition and consumer protection in the aviation and
                freight rail industries;

              • Enhancing the management of aviation and Coast Guard acquisitions
                and obsolete ship disposal;

              • Increasing the accountability for financial management activities; and

              • Improving the oversight of highway and transit projects.

              We have reported that the department has made measurable progress in
              carrying out its diverse missions and improving management of its
              operations since our 2001 report. For example, the department has made
              concentrated efforts to improve financial management of its accounting
              and property management activities. However, we continue to designate
              both the Federal Aviation Administration’s (FAA) acquisition and financial
              management as high risk areas. Both our reviews and the department’s own
              performance reports indicate that its performance has been uneven. The
              department’s fiscal year 2001 performance report (the most recent data
              available), for example, indicates that it met only slightly more than half
              (59 percent) of the performance goals that it set for itself.

              In addition, the intervening 2 years have resulted in dramatic changes that
              have introduced complex new issues with no easy solutions into the
              department’s responsibilities. Newly critical concerns—transportation
              security and human capital—are affecting the department’s priorities and
              the scope of these concerns is substantial. Security, always a crucial issue,
              became paramount. An impending shortage of skilled personnel may
              compromise transportation missions and services in the department and
              throughout the transportation system. Also of concern is the level of
              congestion, which is an increasingly pervasive problem in the
              transportation system. Furthermore, the department’s other missions and
              management goals require continuing attention.



              Page 2                                               GAO-03-108 DOT Challenges
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Challenges




This 2003 Performance and Accountability Series report differs from our
2001 report in two important ways. First, our 2003 report recognizes the
need to frame some issues more broadly than we have done before.
Second, it provides attention to those issues, such as security, that have
arisen in the intervening 2 years and will challenge the department for
years to come. This report discusses six mission and management
challenges that require the department’s sustained attention and
innovation.




The department’s pressing challenges are to:

• Improve transportation safety to reduce transportation-related
  fatalities, a leading cause of death. We have framed this issue more
  broadly than in the past so as to include highway safety. This broader
  statement of the safety challenge facing the department recognizes that
  it has not made substantial inroads into reducing transportation-related
  fatalities in the last 2 years. We focused on safety on the nation’s
  highways because the overwhelming majority of fatalities occur there.
  We are not focusing on pipeline safety as we did in 2001 because the



Page 3                                              GAO-03-108 DOT Challenges
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Challenges




   department’s Office of Pipeline Safety has responded positively to our
   recommendations aimed at (1) involving state pipeline safety offices in
   the department’s safety inspection of pipelines and (2) using a fuller
   range of enforcement actions, such as monetary penalties, when it finds
   safety violations.

• Transform transportation security to reduce the vulnerability of the
  nation’s surface and air transportation systems to terrorism and other
  disruptions. While our 2001 report recognized that the department faced
  aviation security concerns, these concerns have been greatly amplified
  as a result of the terrorist attacks on the United States in September
  2001 and subsequent events. This 2003 report, therefore, presents
  transportation security as a separate mission challenge. Under the
  Homeland Security Act of 2002, the department's major homeland
  security functions, now housed in the Transportation Security
  Administration (TSA) and the Coast Guard, are to be moved to the
  newly created Department of Homeland Security by January 2004.
  Because there will be a continued need for cooperation and
  communication between the Department of Transportation and TSA to
  effectively protect borders and ensure security of all modes of
  transportation and because the department will be a key stakeholder in
  the future regarding development and implementation of transportation
  security policy, we continue to consider transportation security
  functions as challenges for the department to address.

• Improve mobility and economic growth using intermodal and
  modal approaches to meet changing passenger and freight travel needs,
  such as ameliorating congestion. Our 2001 report recognized some
  aspects of this challenge—addressing the financial condition of Amtrak,
  aviation industry consolidation and its impacts on small communities,
  mass transit funding, and oversight of federal highway and bridge
  investments. However, this 2003 report presents this issue in a broader
  perspective, recognizing that the challenge to fostering mobility is more
  than just surmounting problems in individual modes of transportation.
  Three issues included in our 2001 report are not included in this report.
  First, the department has responded positively to our recommendations
  regarding transit project oversight. Second, we have presented Congress
  with options for determining the amount of highway trust funds for
  distribution that it may wish to consider during the reauthorization of
  the Transportation Equity Act for the 21st Century. Finally, regarding
  freight rail competition, the Surface Transportation Board (the industry




Page 4                                              GAO-03-108 DOT Challenges
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Challenges




   regulator) does not expect additional applications for mergers of major
   railroads in the near future.

• Build human capital strategies that will ensure that the department
  and the transportation sector achieve missions and deliver services
  effectively, efficiently, and economically. We identified the need to
  revamp federal strategic human capital management as a
  governmentwide challenge1 in 2001 and discussed aspects of this issue
  in our 2001 report on the department. The need to address human
  capital challenges has grown over the past 2 years and we have
  identified it as a discrete challenge for the department in 2003.

• Enhance FAA and Coast Guard acquisition management to
  maximize returns from investment of public funds in large, complex,
  high-cost procurements. This is a continuing challenge in which the
  department has made some progress, but still needs concentrated
  attention. This is particularly true for aviation acquisition management,
  which we designated as high risk in 1995. FAA acquisition remains a
  high risk area in 2003 because critical systems are not yet in place and
  proven in operation and because the agency has not completed efforts
  to address root causes of prior modernization problems. As a result, key
  reforms are not completed and could jeopardize major projects’ costs,
  schedule, and performance. Obsolete ship disposal—included in our
  2001 report—is not discussed in this report because the department has
  made progress in this area.

• Continue progress in improving financial management to
  provide accurate, reliable financial information for decisionmakers.
  FAA’s financial management has been a high risk area since 1999 and,
  despite significant progress made by the department, continues to be
  high risk this year because critical systems are not yet in place and
  proven in operation.

Selected GAO reports that address many of the department’s performance
and accountability challenges and offer recommendations for improvement
are listed at the end of this report.




1
 U.S. General Accounting Office, Major Management Challenges and Program Risks: A
Governmentwide Perspective, GAO-01-241 (Washington, D.C.: January 2001).




Page 5                                                   GAO-03-108 DOT Challenges
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                        Challenges




Improving               In the past decade, transportation accidents—particularly motor vehicle
                        accidents—were among the top 10 leading causes of death in the United
Transportation Safety   States and the leading cause of death for people from 6 through 27 years of
                        age. In 2001, over 44,000 people were killed and over 3 million people were
                        injured in highway, aviation, rail, and maritime accidents. (See fig. 1.) To
                        address this problem, improving transportation safety is the department’s
                        highest priority.



                        Figure 1: Fatalities by Transportation Mode, 2001




                        Notes: GAO analysis of the department’s data.
                        Aviation, rail, and maritime numbers are preliminary. Aviation fatalities include the 265 persons killed in
                        the four aircraft hijacked on September 11, 2001, but do not include the 2,801 persons killed or missing
                        at the World Trade Center or 125 persons killed at the Pentagon.


                        Over the past 4 decades, transportation safety has improved considerably.
                        However, in recent years, fatalities have plateaued. Of particular concern is
                        the limited progress in recent years in improving safety on our nation’s
                        roads, where 94 percent of all fatalities occur; in general aviation, where
                        87 percent of all aviation fatalities occur; and in commercial aviation,
                        where accidents have the potential for catastrophic loss of life.




                        Page 6                                                                    GAO-03-108 DOT Challenges
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                           Challenges




Improved Highway Safety    Between 1960 and 1990, motor vehicle transportation fatality rates were
Requires a Renewed Focus   reduced by more than half. (See fig. 2.) However, since the mid-1990s, the
                           fatality rate and the number of fatalities from transportation-related
on Seat Belts and Truck-
                           accidents on our nation’s highways has not declined substantially. Two
related Fatalities         areas for reducing motor vehicle fatalities—seat belt use and large truck
                           safety—continue to experience less progress than other areas in meeting
                           highway safety goals.



                           Figure 2: Motor Vehicle Fatality Rate and Number of Fatalities, 1960 through 2001




                           Page 7                                                   GAO-03-108 DOT Challenges
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Challenges




Seat belts. The department’s National Highway Traffic Safety
Administration (NHTSA), leading highway organizations, and we have
reported that seat belts offer the most effective way to lower highway
fatalities.2 In 2000, NHTSA estimated that seat belts saved almost 12,000
lives and could have saved an additional 9,200 lives that year if all
passenger vehicle occupants aged 4 and older had worn seat belts. As a
result of the passage of state seat belt laws and a national effort of highly
visible seat belt law enforcement and public education, seat belt use
increased considerably in the 1980s and early 1990s from 10 to 15 percent
nationwide to 66 to 70 percent nationwide. However, since the early 1990s,
seat belt use rates have not increased substantially. In 2001, front seat belt
usage increased slightly to 73 percent but remained well below the
department’s target for the year of 86 percent. In 2002, front seat belt usage
increased slightly again to 75 percent, saving an additional 500 lives.
Nevertheless, small annual percentage increases in front seat belt use do
not put the department on track to meet its goal of having 90 percent of
front seat occupants use seat belts by 2005.

One key factor in increasing seat belt use is the enactment of primary
enforcement seat belt laws. Primary enforcement allows police officers to
stop vehicles and write citations whenever they observe violations of safety
belt laws. (In contrast, secondary enforcement permits police officers to
write a citation only after a vehicle is stopped for some other traffic
violation.) As of September 2002, nearly every state has enacted laws
requiring the use of safety belts, but only about 40 percent of all states have
primary enforcement laws. NHTSA estimates that states with secondary
enforcement laws could increase seat belt use an estimated 14 percentage
points from an average of 67 percent if they enacted primary enforcement
laws. This increase translates to preventing around 1,750 fatalities, saving
the federal government around $300 million, saving states nearly $140
million, and saving $3 billion in total costs to society annually (1998
dollars).




2
 U.S. Department of Transportation, Office of the Inspector General, Progress in
Implementing Strategies to Increase the Use of Seat Belts, MH-2002-109 (Washington, D.C.:
Sept. 18, 2002) and U.S. General Accounting Office, Motor Vehicle Safety: Comprehensive
State Programs Offer the Best Opportunity for Increasing Use of Safety Belts, GAO/RCED-
96-24 (Washington, D.C.: Jan. 3, 1996).




Page 8                                                       GAO-03-108 DOT Challenges
Major Performance and Accountability
Challenges




The department’s ability to implement safety-enhancing interventions has
been limited because it must rely heavily on individuals to modify their
behavior and state governments to implement laws that enhance safety. To
increase seat belt use, we have suggested that Congress consider
encouraging states to enact primary enforcement laws. The department’s
recent campaign to encourage states to increase seat belt use, “Click It or
Ticket,” is designed to resonate with hard-core non-seat-belt-users in high-
risk populations that have traditionally lower than average seat belt use
rates and higher fatality rates. The department has received preliminary
evidence that this campaign is having some success. For example, some of
the strongest gains in seat belt use during the Memorial Day holiday in 2002
were in states participating in the “Click It or Ticket” enforcement
campaign.

Large commercial trucks. The department has made significantly less
progress in reducing commercial truck-related fatalities than it has in
improving highway safety overall.3 While commercial trucks represent
only 4 percent of all registered vehicles, they are involved in 12 percent of
all crashes resulting in fatalities. As a result, around 5,000 people died on
our nation’s roads in 2001 from crashes involving large trucks, a figure
largely unchanged from a decade ago. In 2001, 200 fewer people were killed
in large truck-related accidents than in 2000. This reduction was
substantially in line with the department’s goal. (See fig. 3.) However, the
department will have to make significantly greater gains in the coming
years to meet its goal for reducing by half the number of large truck-related
fatalities, from about 5,300 in 1999 to about 2,600 in 2009.




3
Large trucks are those with a gross weight of more than 10,000 pounds.




Page 9                                                       GAO-03-108 DOT Challenges
                                          Major Performance and Accountability
                                          Challenges




Figure 3: Number of Fatalities from Crashes Involving Large Trucks, 1991 through 2001




                                          As we reported in 1999, efforts to determine how its actions will reduce the
                                          number of large truck-related fatalities have been limited because the
                                          department does not have a good understanding of the causes of large
                                          truck crashes. At the direction of Congress, the department is performing a
                                          multiyear large-scale study of the causes of large truck crashes and expects
                                          to report its findings in 2004.



Improved Aviation Safety                  In 2001, more than 1,100 people died in commercial and general aviation
Will Require Improved                     accidents, almost 50 percent more than the nearly 750 people who died in
                                          2000.4 Despite the unusually large increase in aviation fatalities in 2001,
Interventions and Oversight               primarily caused by the September 11, 2001 terrorist events, commercial


                                          4
                                           Aviation fatalities in 2001 include the 265 persons killed in the four aircraft hijacked on
                                          September 11, 2001, but do not include the 2,801 persons killed at the World Trade Center or
                                          125 persons killed at the Pentagon.




                                          Page 10                                                        GAO-03-108 DOT Challenges
Major Performance and Accountability
Challenges




and general aviation safety has improved considerably over the past 4
decades. In general and commercial aviation, the fatality rate decreased
considerably between 1960 and 1975. Between 1975 and 2000 (the most
recent data available), the fatality rate in general aviation has continued to
decline substantially (to about 2 fatalities per 100,000 flight hours). The
fatality rate in commercial aviation has remained relatively low since 1975,
averaging around 2 fatalities per 100,000 aircraft departures. In 2002, there
were no commercial aviation fatalities.

However, aviation experts are concerned that if air travel during the next
decade were to increase 37 percent over 1999 levels, as was forecast before
September 11, 2001, the number of fatalities from aviation accidents would
rise if the department did not make a sustained effort to improve aviation
safety. To address concerns about safety, FAA and the aviation industry
developed the Safer Skies initiative in 1998. The initiative established the
broad safety goal of reducing the fatal aviation accident rate for
commercial aviation by 80 percent by 2007. As we reported in 2000, to
accomplish this, the initiative is designing interventions to respond to key
safety problems that accounted for over three-quarters of the fatal
accidents from 1988 through 1997, including pilots losing control of their
aircraft, pilots flying otherwise controllable aircraft into the ground or
water, and accidents during approach and landing .5

For general aviation, the Safer Skies initiative did not adopt the 80 percent
goal proposed by two aviation safety commissions. Instead, as we reported
in 2001, the Safer Skies initiative chose the goal of reducing the number of
fatal general aviation accidents to 350 by 2007, which represents a 20-
percent reduction (from 440) in the number of fatal accidents that would be
expected in 2007 given the expected growth in the industry.6 Interim goals
for 2000 through 2002 were actually higher than the fatalities seen in 1999
and did not challenge the general aviation industry to continue
improvements. General aviation safety initiatives will focus on major




5
 U.S. General Accounting Office, Aviation Safety: Safer Skies Initiative Has Taken Steps
to Reduce Accident Rates by 2007, GAO/RCED-00-111 (Washington, D.C.: June 28, 2000).
6
 U.S. General Accounting Office, General Aviation: Status of the Industry, Related
Infrastructure, and Safety Issues, GAO-01-916 (Washington, D.C.: Aug. 31, 2001).




Page 11                                                       GAO-03-108 DOT Challenges
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Challenges




causes of fatal accidents that include weather, loss of control, and runway
incursions.7

Compounding our concern about improving aviation safety is the
impending wave of retirements among aviation professionals—and the
FAA’s limited progress in addressing this problem, as we reported in June
2002.8 In a recent survey of air traffic controllers, about 5,000 of the
approximately 20,000 controllers indicated that they might leave in the next
5 years. However, FAA has not yet implemented our recommendations to
develop a comprehensive human capital strategy to meet the impending
need to hire and train new controllers. Instead, it is hiring new controllers
only when current, experienced controllers leave—a strategy that might
not provide enough well-qualified new controllers when they are needed.
Further, FAA has not addressed the resources that may be needed at its
training academy and for on-the-job training at its control facilities in order
to handle the large influx of new controllers and to ensure that FAA's
controller workforce will continue to have the knowledge, skills, and
abilities necessary to perform its critical mission.




7
 Runway incursions are incidents on the runway that create a collision hazard or result in
aircraft being closer than allowed by air traffic control requirements.
8
 U.S. General Accounting Office, Air Traffic Control: FAA Needs to Better Prepare for
Impending Wave of Controller Attrition, GAO-02-591 (Washington, D.C.: June 14, 2002).




Page 12                                                        GAO-03-108 DOT Challenges
                 Major Performance and Accountability
                 Challenges




                 In addition to developing interventions that respond to significant safety
                 problems, a key to improving aviation safety will require that FAA be able
                 to effectively inspect the nation’s airline operations. In 1998, FAA
                 introduced a redesigned safety inspection system called the Air
                 Transportation Oversight System (ATOS), which shifted oversight of airline
                 operations beyond simply ensuring compliance to ensuring that airlines
                 have operating systems to control risks and prevent accidents. However, in
                 1999, we reported that FAA’s overly ambitious implementation schedule
                 has impaired its ability to successfully implement several of the system’s
                 key elements.9 In 2002, the department’s Inspector General reported that
                 FAA introduced the system’s new inspection system without fully
                 developing several key elements and without thoroughly testing the
                 feasibility of ATOS as a stand-alone surveillance system.10 Critical actions,
                 such as analyzing the system’s inspection data and implementing actions to
                 correct identified weaknesses, are still being developed. Moreover, while
                 FAA has made some progress in addressing recommendations we made in
                 1999 to improve inspection guidance, it still has not adequately prepared
                 inspectors with adequate training and inspection tools.11 Lastly, ATOS has
                 been inconsistently implemented nationwide at FAA’s field offices because
                 FAA has not established strong oversight and accountability procedures.



Transforming     Since September 11, 2001, securing our nation’s transportation system from
                 terrorist attacks has assumed great urgency. In response, on November 19,
Transportation   2001, the Aviation and Transportation Security Act was enacted. This act
Security         created TSA within the department and defined its primary responsibility
                 as ensuring security in all modes of transportation. Since then, the
                 department has worked to make security improvements through its modal
                 administrations while simultaneously organizing a new agency to meet the
                 longer-term challenge of implementing security improvements that will not
                 excessively inhibit commerce and travel or interfere with other critical
                 agency missions. With the enactment of the Homeland Security Act on


                 9
                  U.S. General Accounting Office, Aviation Safety: FAA’s New Inspection System Offers
                 Promise, but Problems Need to Be Addressed, GAO/RCED-99-183 (Washington, D.C.:
                 June 28, 1999).
                 10
                  U.S. Department of Transportation, Office of Inspector General, Report on the Air
                 Transportation Oversight System: Federal Aviation Administration, AV-2002-088
                 (Washington, D.C.: Apr. 8, 2002).
                 11
                      GAO/RCED-99-183.




                 Page 13                                                       GAO-03-108 DOT Challenges
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Challenges




November 25, 2002, the new Department of Homeland Security will assume
overall responsibility for transportation security and incorporate TSA and
the Coast Guard into its organization. The Department of Transportation
will need to forge a close working relationship with the new agency to
effectively protect borders and ensure security of all modes of
transportation because the department will be a key stakeholder in the
future regarding development and implementation of transportation
security policy.

Aviation security received most of the department’s attention immediately
after September 11. More recently, officials have begun to turn their
attention to surface transportation security as well. Balancing surface
transportation security needs without unduly inhibiting the movement of
goods and people is complicated by the nature and the vast scope of
surface transportation in the United States. For example, the volume of
imported containers that pass through more than 300 public and private
U.S. seaports—in 2001, the equivalent of six million containers were
imported into the United States—ensures that no one single shipment can
be scrutinized too carefully without significantly delaying delivery. (See fig.
4.) About 6,000 agencies provide transit services such as bus, subway,
ferry, and light rail to about 14 million Americans each weekday, and the
open and accessible nature of these services make it difficult to apply the
kinds of security measures that can be applied at airports. Despite an
impressive start in which the department simultaneously began to build the
infrastructure of a large organization as it focused on meeting the nation’s
security needs, formidable short- and long-term challenges remain.12




12
 U.S. General Accounting Office, Transportation Security Administration: Actions and
Plans to Build a Results-Oriented Culture, GAO-03-190 (Washington, D.C.: Jan. 17, 2003).




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Figure 4: Inspecting Millions of Containers that Arrive at U.S. Ports Remains a
Challenge




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Short-Term Challenges in   In response to the September 11 terrorist attacks, the department faced
Aviation Security Remain   several urgent aviation security challenges, including meeting screening
                           deadlines and addressing security gaps that we and others, including the
                           department’s Inspector General, had identified. Prior to September 11,
                           2001, airlines were responsible for screening passengers and property. In
                           November 2001, the Aviation and Transportation Security Act shifted this
                           responsibility to TSA and established a series of monumental requirements
                           for the new agency, including deadlines for hiring and deploying federal
                           passenger screeners by November 19, 2002, and screening all checked
                           baggage using explosive detection systems by December 31, 2002.13 In
                           addition to these screening deadlines, FAA established an April 2003
                           deadline for designing, approving, and installing reinforced cockpit doors
                           in over 6,000 passenger and cargo aircraft.

                           The department has made considerable progress in addressing aviation
                           security challenges. According to TSA, it met the November 2002 deadline
                           by hiring and deploying over 40,000 passenger screeners to screen
                           passengers at 429 commercial airports. In addition, TSA reports that it met
                           the December 31, 2002, deadline to screen all checked baggage. TSA
                           reports that it hired and deployed more than 20,000 of an estimated 22,000
                           baggage screeners as of mid December 2002 to screen all checked baggage
                           and that as of December 31, 2002, about 90 percent of all checked baggage
                           will be screened using explosive detection systems or explosive trace
                           detection equipment.14 The remaining checked baggage will be screened
                           using alternative means such as canine teams, hand searches, and
                           passenger-bag matching. Nevertheless, significant challenges remain. TSA
                           reports that as of mid December 2002, it has installed only 239 of the

                           13
                             The Homeland Security Act of 2002 amends this requirement. According to the legislation,
                           if, in his discretion or at the request of an airport, the Under Secretary of Transportation for
                           Security determines that TSA is not able to deploy explosive detection systems required in
                           the Aviation and Transportation Security Act by December 31, 2002, then for each airport for
                           which the Under Secretary makes this determination, the Under Secretary shall submit to
                           specific congressional committees a detailed plan for the deployment of the number of
                           explosive detection systems at that airport necessary to meet the requirements as soon as
                           practicable at that airport but no later than December 31, 2003; the Under Secretary shall
                           take all necessary action to ensure that alternative means of screening all checked baggage
                           are implemented until the requirements have been met.
                           14
                            Explosive detection machines are used to screen baggage for explosives and work by
                           using CAT scan X-ray to take fundamental measurements of materials in bags to recognize
                           characteristic signatures of threat explosives. Explosive trace detection systems (trace
                           detection machines) are used to screen baggage for explosives and work by detecting
                           vapors and residues of explosives.




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estimated 1,100 explosive detection machines and 1,951 of the estimated
6,000 trace detection machines they say they need to screen baggage to
meet baggage screening requirements contained in the Aviation and
Transportation Security Act. Finally, FAA has approved reinforced
flightdeck doors for 5,150 of 6,000 commercial and cargo aircraft requiring
newly reinforced doors. However, these doors have been installed in only
19 percent of these planes.

In addition to securing passenger carry-on luggage and checked luggage,
TSA faces other immediate challenges in securing cargo aboard
commercial passenger and all-cargo aircraft. The Aviation and
Transportation Security Act, enacted in November 2001, requires screening
all cargo carried aboard commercial passenger aircraft and requires TSA to
have a system in place as soon as practicable to screen, inspect, or
otherwise ensure the security of cargo on all cargo aircraft. The “known
shipper” program–which allows shippers that have established business
histories with air carriers or freight forwarders to ship cargo on planes–is
TSA’s primary approach to ensuring air cargo security and safety and
complying with the cargo screening requirement of the act.15 However, we
and the department’s Inspector General have identified weaknesses in the
known shipper program and TSA’s procedures for approving freight
forwarders. In December 2002, we reported that TSA lacks a
comprehensive plan with long-term goals and performance targets for
cargo security, time frames for completing security improvements, and
risk-based criteria for prioritizing actions to achieve those goals.16 We
recommended that TSA develop a comprehensive plan for air cargo
security that incorporates a risk management approach, includes a list of
security priorities, and sets deadlines for completing actions; TSA agreed
with this recommendation. With regard to dangerous goods shipped by air,
in January 2003, we reported that undeclared air shipments of dangerous
goods can have serious consequences, but TSA lacks statistically valid,
generalizable data to reliably estimate the nature and frequency of such




15
  Freight forwarders consolidate shipments and deliver them to air carriers and cargo
facilities of passenger and all-cargo air carriers.
16
 U.S. General Accounting Office, Aviation Security: Vulnerabilities and Potential
Improvements for the Air Cargo System, GAO-03-344 (Washington, D.C.: Dec. 20, 2002).




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                         shipments and assess their risks.17 We recommended that the Department
                         of Transportation evaluate the need for additional inspection authority to
                         obtain statistically valid data on undeclared air shipments of dangerous
                         goods and document its penalty assessments so that it can demonstrate
                         that it is handling similar cases consistently.



Long-Term Aviation and   The department and the Department of Homeland Security face long-term
Surface Transportation   transportation security challenges that include: (1) ensuring that
                         transportation security funding needs are identified and prioritized and
Security Challenges      costs are controlled, (2) establishing effective coordination among the
                         many public and private entities responsible for transportation security, (3)
                         ensuring adequate workforce competence and staffing levels, (4) ensuring
                         information systems security, and (5) implementing national security
                         standards.

                         Funding. Two key funding and accountability challenges will be (1) paying
                         for increased transportation security and (2) ensuring that these costs are
                         controlled. The costs associated with acquiring equipment and personnel
                         for improving aviation security alone are huge. Although TSA estimates
                         that it will need about $4.8 billion for aviation security in fiscal year 2003, it
                         estimates that revenues from the new passenger security fee will pay for
                         only around one-third ($1.7 billion) of that amount. As a result, TSA will
                         need a major cash infusion at a time when federal budget deficits are
                         growing. Similarly, many of the planned security improvements for surface
                         transportation facilities, such as seaports and mass transit, require costly
                         outlays for infrastructure, technology, and personnel at a time when
                         weakening local economies have reduced local transportation agencies’
                         abilities to fund security improvements. For example, even before
                         September 11, the Interagency Commission on Crime and Security in U.S.
                         Seaports estimated that the costs to upgrade the security infrastructure at
                         the nation’s 361 ports ranged from $10 million to $50 million per port. As we
                         reported in August 2002, although the federal government has already
                         stepped in with additional funding, demand has far outstripped the



                         17
                          U.S. General Accounting Office, Aviation Safety: Undeclared Air Shipments of
                         Dangerous Goods and DOT’s Enforcement Approach, GAO-03-22 (Washington, D.C.: Jan.
                         10, 2003).




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additional amounts made available.18 While Congress appropriated $93
million to fund port security improvements in fiscal year 2002, TSA has
received applications for as much as $697 million for these improvements.
This puts pressure on the federal government to make the best decisions
about how to use the funds that it makes available. As we also reported in
August 2002, the Coast Guard’s efforts to develop port security standards
that define what safeguards a port should have in place will help identify
and prioritize needs so that limited funds can be better targeted to the
highest risks at each port.

The Maritime Transportation Security Act, enacted in November 2002,
requires the Secretary of the department in which the Coast Guard is
operating to, among other things, promulgate regulations setting forth
standards for newly required vessel and facility security plans, conduct
vulnerability assessments for vessels and U.S. port facilities and
promulgate regulations to prevent individuals from entering secured areas
of vessels and port facilities through the use of a biometric transportation
security card. The act does not provide for a dedicated source of funding
for these new requirements, but does require that the Secretary of
Transportation report to Congress on proposals to fund these new
programs within 6 months after passage of the act.




18
 U.S. General Accounting Office, Port Security: Nation Faces Formidable Challenges in
Making New Initiatives Successful, GAO-02-993T (Washington, D.C.: Aug. 5, 2002).




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In July 2002, we reported that long-term attention to cost and
accountability controls for acquisition and related business processes will
be critical both to ensuring TSA’s success and maintaining its integrity and
accountability.19 According to the department’s Inspector General,
although TSA has made progress in addressing certain cost-related issues,
it has not established an infrastructure that provides effective controls to
monitor contractors’ costs and performance. To ensure control over TSA
contracts, the department’s Inspector General has recommended that
Congress set aside a specific amount of TSA’s contracting budget for
overseeing contractor performance with respect to cost, schedule, and
quality.20

Furthermore, funding challenges have implications for the department’s
other vital missions, requiring modal administrations to re-prioritize
functions. For example, as a result of new mission requirements, the Coast
Guard redirected its fiscal year 2002 resources from traditional,
nonsecurity missions to security-oriented functions. This doubled
projected spending for marine safety and security and reduced spending in
areas such as marine environmental protection. While some resources have
been redeployed to restore capabilities in key mission areas, other
resources, including district patrol boats and small boats, are still being
used primarily for security-related functions.




19
 U.S. General Accounting Office, Aviation Security: Transportation Security
Administration Faces Immediate and Long-Term Challenges, GAO-02-971T (Washington,
D.C.: July 25, 2002).
20
 U.S. Department of Transportation, Office of Inspector General, Key Challenges Facing
the Transportation Security Administration, CC-2002-180 (Washington, D.C.: June 20,
2002).




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In considering the federal government’s role in meeting long-term funding
challenges, several issues will need to be addressed beyond determining
who should pay for the security enhancements and how much agency
functions should be funded. An important consideration is establishing
appropriate criteria for distributing federal funds—the most common of
which have included ridership level, population, identified vulnerabilities,
and criticality of assets. Another important consideration, as we reported
in September 2002, is selecting the appropriate federal policy instrument
such as grants, loan guarantees, tax incentives, and partnerships to
motivate or mandate other levels of government or the private sector to
help address security concerns.21 Finally, it will be important to consider
how to allocate funds between competing needs and measure whether we
are achieving increased security benefits envisioned.

Coordination. Since September 11, 2001, federal, state, and local surface
transportation agencies and the private sector have begun rethinking roles
and responsibilities for security. One challenge to achieving national
preparedness hinges on the federal government’s ability to form effective
partnerships among entities that implement security measures at the local
level. Effective, well-coordinated partnerships require identifying roles and
responsibilities; developing effective collaborative relationships with local
and regional transportation, emergency management, and law enforcement
agencies; agreeing on performance-based standards that describe desired
outcomes; testing procedures that implement roles and responsibilities;
and sharing intelligence information. Since its creation in November 2001,
TSA has focused primarily on aviation security challenges and is working
toward defining the roles and responsibilities for surface transportation
security. Specifically, TSA is developing memorandums of agreement with
other modal administrations within the department that are expected to
delineate the lines of authority between the parties and establish their
specific responsibilities for transportation security. TSA plans to complete
the agreements by March 1, 2003.

Coordination challenges will continue for the department after TSA is
transferred to the new Department of Homeland Security. The department
and the new Department of Homeland Security will have to work closely to
ensure the development of sound security policies and procedures and
effective implementation of those procedures by the many public and


21
 U.S. General Accounting Office, Mass Transit: Challenges in Securing Transit Systems,
GAO-02-1075T (Washington, D.C.: Sept. 18, 2002).




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private transportation system’s stakeholders. A key coordination challenge
for TSA involves ensuring that terrorist and threat information gathered
and maintained by numerous law enforcement and other agencies,
including the Federal Bureau of Investigation, the Immigration and
Naturalization Service, the Central Intelligence Agency, and the
Department of State, is quickly and efficiently communicated among
federal agencies and to state and local authorities, as needed. In aviation
security, timely information sharing among agencies has been hampered by
organizational cultures that make them reluctant to share sensitive
information and by outdated computer systems that lack interoperability.
In surface transportation, timely information sharing has been hampered
by the lack of standard protocols to exchange information among federal,
state, and local government agencies and private entities. The department
should have a critical role in ensuring that information on best practices is
shared with local transportation agencies. Finally, as we reported in
September 2002, intelligence sharing can be hampered if personnel in
surface transportation agencies have difficulty in obtaining the security
clearances necessary to obtain the critical intelligence information that
might be exchanged.22

Human capital. A key challenge to ensuring the success of the
Department of Transportation and the Department of Homeland Security in
protecting the nation’s transportation system is recruiting, training, and
retaining a large workforce (currently TSA has more than 60,000 people).
TSA is currently addressing some critical success factors in managing
human capital by hiring personnel, using a wide range of tools available for
hiring, and beginning to link individual performance to organizational
goals. However, concerns remain in areas of hiring, training, and retention;
developing an approach to compensation; and setting up a performance
management system.




22
     GAO-02-1075T.




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TSA has encountered unexpected difficulty in hiring and training a federal
screener workforce. For example, at Baltimore-Washington International
Airport—the first of 429 airports to be staffed with federal passenger
screeners—TSA’s hiring of screeners was delayed because only about one-
third of qualified applicants who were contacted to schedule an assessment
reported for the assessment. Of those that reported, only about one-third
passed the skills assessment. In addition, while TSA is using a wide range
of tools and flexibilities available to meet its workforce needs, the
department’s Inspector General has expressed concern about its approach
to compensation. TSA is basing its compensation system on FAA’s pay
banding approach, which allows the agency to hire employees anywhere
within broad pay bands for their positions. In a report issued last summer,
the department’s Inspector General has expressed concern about TSA’s
salary levels for law enforcement and general and administrative positions,
stating that they are higher than for comparable positions in other
agencies.23 Finally, while TSA has made progress in setting up the
performance management system, the agency has not approved an interim
employee performance management system for 2002. Finalizing a
performance management system linked to organizational goals will be
critical to motivating and managing staff, ensuring the quality of screeners’
performance, and ultimately, restoring public confidence in air travel.24

Information systems security. Security at our nation’s airports alone
does not ensure safe air travel. It is also critical to secure FAA’s air traffic
control computer systems, which provide information to air traffic
controllers and aircraft flight crews to help ensure the safe and expeditious
movement of aircraft. Failure to adequately protect these systems, as well
as the facilities that house them, could cause a nationwide disruption of air
traffic or even a loss of life due to collisions. In the area of information
systems security, we made 39 recommendations to FAA between May 1998
and December 2000 to address pervasive weaknesses in the agency’s
facilities’ physical and information systems security—both for currently
operational and future air traffic control systems, security management,

23
 U.S. Department of Transportation, Office of Inspector General, Progress in
Implementing Provisions of the Aviation and Transportation Security Act, CC-2002-203
(Washington, D.C.: Aug. 7, 2002).
24
 To assist agencies in managing their human capital more strategically, we have developed a
model of strategic human capital management that identifies cornerstones and related
critical success factors that agencies should apply and steps they can take. See U.S. General
Accounting Office, A Model of Human Capital Management, GAO-02-373SP (Washington,
D.C.: March 2002).




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and personnel security. FAA has initiated numerous activities in response
to our recommendations. However, in several areas, including ensuring
that operational systems and facilities are secure, more must be done.

FAA has established an information systems security management
structure under its Chief Information Officer. In recent years, the Chief
Information Officer’s information systems security office has developed an
information systems security strategy, security architecture (i.e., overall
blueprint), security policies and directives, and a security awareness
training campaign; managed FAA’s incident response center; and
implemented a certification and accreditation process to ensure that
vulnerabilities in current and future air traffic control systems are
identified and weaknesses addressed. Despite these improvements, the
office faces continued challenges in increasing its intrusion detection
capabilities, obtaining accreditation for systems that are already
operational, and managing information systems security throughout the
agency. In addition, according to senior security officials, FAA has
completed assessments of the physical security of its staffed facilities, but
has not yet accredited all of these air traffic control facilities as secure in
compliance with agency policy. Finally, in the area of personnel security,
FAA has worked aggressively over the past 2 years to complete background
investigations on numerous contractor employees. However, ensuring that
all new contractors are assessed to determine which employees require
background checks and that those checks are completed in a timely
manner will be a continuing challenge for the agency. While FAA has made
progress in each of these areas, more remains to be done to better ensure
that critical information systems are not at risk of intrusion and attack.




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National security standards for surface transportation. Standards
define the level of security that is needed and the safeguards that should be
in place to meet identified needs. Adequate standards, consistently applied,
are important to ensure that operators improve their security practices in
modes where lax security could make surface transportation facilities
attractive targets for terrorists. New security standards are being
developed in some modes and are being considered in other modes. New
port security standards are being developed in areas such as preventing
unauthorized persons from accessing sensitive areas, detecting and
intercepting intrusions, checking backgrounds of those whose jobs require
access to port facilities, and screening travelers and other visitors to port
facilities. The Maritime Transportation Security Act of 2002, enacted
November 25, 2002, in fact, requires that port security standards for access
controls, background checks, and vessel and facility security plans be
developed by the Secretary of the department where the Coast Guard is
operating. The act also directs the Secretary of the department where the
Coast Guard is operating to develop performance standards for seals and
locks on shipping containers. In addition, in the last session of Congress,
legislation was proposed that would require the department to prescribe
standards for pipeline security programs and approve or disapprove each
pipeline operator’s program on the basis of their adherence to these
standards.25 However, industry representatives have told us that they prefer
a nonregulatory approach, citing concerns about the need for flexibility in
designing security programs suitable for each pipeline facility.

While progress has been made in developing security standards, challenges
remain in implementing them. There is little precedent for how to enforce
standards because the size, complexity, and diversity of surface
transportation facilities do not lend themselves to an enforcement
approach similar to the one adopted for airports after September 11.
Perhaps most importantly, implementing standards is difficult because it
requires consensus and compromises on the part of stakeholders. To the
degree that some stakeholders believe that security actions are
unnecessary or conflict with other goals and interests, achieving consensus
about what to do will be difficult.




25
 Pipeline Infrastructure Protection to Enhance Security and Safety Act, H.R. 3609, 107th
Congress (2001).




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Improving Mobility and   Ensuring that the nation’s transportation system improves mobility and
                         supports economic growth are vital departmental goals that influence our
Economic Growth          quality of life.26 Today, changing passenger and freight travel needs and
through Intermodal       expectations are redefining what is needed to meet these goals. Pervasive
                         problems, such as congestion and inadequate capacity in both the air and
and Modal Approaches     surface transportation systems, also are making it increasingly difficult to
                         improve mobility and economic growth, as we reported in May 1999,
                         October 2001, and August 2002. (See table 1.) Moreover, budget constraints
                         at all levels of government are expected to reduce the resources that are
                         available for transportation solutions.



                         Table 1: Changing Transportation Needs

                         Key change          Elements of change
                         Increasing travel All modes face surging travel demand by passengers, freight shippers,
                         demand            and the military. Time lost to congestion delays is estimated from
                                           $75 billion to $100 billion annually. Demand will continue to grow. By
                                           calendar year 2020, the U.S. population is projected to grow by
                                           50 million to 60 million people and 60 million to 70 million more
                                           vehicles will be using the nation’s transportation network.
                         Increasing          For the $8 trillion freight industry, efficient connections between modes
                         expectations        and efficient travel in each mode are essential to the competitive
                                             position of U.S. products in global markets. For the public, better and
                                             more reliable transportation services are expected.
                         Increasing        Passengers and freight have more diverse mobility needs that
                         intermodal travel increasingly involve moving across modes—highways to airports, ports
                                           to railroads, transit to highways—and through connections between
                                           modes. Trip timeliness, cost, quality, and safety are becoming more
                                           relevant than which mode is used.
                         Source: Congressional Research Service, Transportation Board, and others.
                         Note: GAO’s analysis of its reports on mobility and growth topics and reports from the Congressional
                         Research Service, Transportation Research Board, and others.




                         26
                           The department’s performance plan for fiscal year 2003 and performance report for fiscal
                         year 2001 defines mobility as shaping an accessible, affordable, reliable transportation
                         system for all people, goods, and regions and economic growth as supporting a
                         transportation system that sustains America’s economic growth.




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Congestion has emerged as a prime yardstick of the immense pressure on
the nation’s transportation system, as we reported in August 2002 and in
December 2001.27 Congestion has led to longer, less predictable trips that
translate into lost productivity, higher fuel costs, and frustration. (See fig.
5.) Moreover, congestion and capacity problems are expected to worsen in
the future. We recommended that the department develop a blueprint for
effectively addressing capacity issues in its strategic planning for airspace
capacity—a recommendation that remains open.

• The difficulty in moving freight efficiently and safely between the
  highway system and ports, rail, airports, and truck terminals has long
  been a major freight problem. Over the next 20 years, freight volumes
  are expected to increase by about 70 percent. This suggests that freight
  infrastructure—already straining to accommodate today’s volumes—
  will be pushed to the breaking point and generate more gridlock.
  However, funds for connectors have been limited and might not be a
  priority for local governments or for highway capital improvements that
  tend to be passenger-oriented.

• For passengers, travel on roads is expected to increase by about
  25 percent from 2000 through 2010. Furthermore, poor connections also
  are a significant barrier to moving between cars, buses, trains, and other
  means of transit. In many areas, infrastructure that could serve as
  multimodal transfer points—passenger rail terminals, for example—
  have been abandoned or demolished.




27
 U.S. General Accounting Office, Surface and Maritime Transportation: Developing
Strategies for Enhancing Mobility—A National Challenge, GAO-02-775 (Washington, D.C.:
Aug. 30, 2002) and National Airspace System: Long-Term Capacity Planning Needed
Despite Recent Reduction in Flight Delays, GAO-02-185 (Washington, D.C.: Dec. 14, 2001).




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Figure 5: Congestion on Our Nation’s Highways Reduces Mobility and Results in
Lost Productivity and Growth Opportunities




In this increasingly complex environment, it is much less likely that
mobility and economic growth can be enhanced if major modes—air,
highway, transit, rail, and water—are not connected, no matter how well
each mode functions. Yet, intermodal connections, such as multimodal
passenger terminals and roads that link freight terminals and major
highways, are among the transportation system’s weakest links. The
department’s challenge is to leverage all of its transportation resources—
both intermodal and modal—to deal with these problems and their
increasingly ominous impacts on mobility and economic growth.




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Intermodal Planning and    Whether and how efficiently people and products move between modes
Investments Are Vital to   has become crucial to mobility and economic growth. (See fig. 6.)
                           Connections between modes now can mean success or failure for a region’s
Promoting Mobility and     transportation network and economy. As we reported in May 1999 and
Economic Growth            October 2001, aligning transportation with changing needs is vital.28 An
                           intermodal approach can give passengers and freight shippers more
                           choices, greater convenience, and reduced costs by making it possible for
                           them to use whatever mode is best suited to each portion of their trip. To
                           deliver these potential benefits, an intermodal planning and investment
                           approach emphasizes coordinating transportation policy and
                           decisionmaking, connecting transportation modes, and allowing
                           passengers and freight to reach their destinations efficiently through the
                           use of multiple modes of transportation, if necessary. An intermodal
                           approach connotes a transportation system that is more than the sum of its
                           modal parts.




                           28
                            U.S. General Accounting Office, Surface Transportation: Moving Into the 21st Century,
                           GAO/RCED-99-176 (Washington, D.C.: May 1999) and Physical Infrastructure:
                           Crosscutting Issues Planning Conference Report, GAO-02-139 (Washington, D.C.: October
                           2001).




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Figure 6: Intermodal Connections Are Crucial for Continued Growth and
Competitiveness in a Global Economy




As early as March 1978, and again in July 1987, November 1988, December
1989, and August 2002, we reported that an intermodal approach was vital
to match the nation’s modal infrastructure with its diverse transportation
needs. The Intermodal Surface Transportation Efficiency Act of 1991 made
developing an intermodal transportation system that connects all
transportation modes a national policy. This policy goal was reaffirmed in
1998 with the enactment of the Transportation Equity Act for the 21st
Century.

The department is in a unique position to advocate an intermodal approach
to meet mobility and economic growth needs by encouraging consensus
and action by stakeholders inside and outside the department. Yet, the
reality is that the department’s modally based funding and organization
limits its ability to promote intermodalism. Adopting an intermodal
approach will require addressing a number of fundamental issues. (See
table 2.) A key issue is ensuring that federal policies support intermodal
needs. Other issues include dealing with institutional barriers—a critical
transportation issue in 2002, according to the Transportation Research



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Board—and matching funding to intermodal needs. An intermodal
approach also focuses on supporting federal research that improves
transportation stakeholders’ ability to plan and make cross-modal
investment decisions.



Table 2: Intermodal Issues and Key Considerations

Issues             Key considerations
Policies           Ensuring that federal policies support intermodalism
Strategies         Capturing the strengths of each mode in a national intermodal system
Priorities         Identifying critical actions to promote intermodal passenger and freight
                   transportation, relevant performance measures, and methods for
                   achieving measurable progress
Institutional      Agreeing on roles and responsibilities for public and private
support            stakeholders at all levels; identifying institutional barriers to intermodal
                   action—including the department’s modal structure—and tactics to
                   minimize their impacts; supporting entities that can promote intermodal
                   planning and investment
Funding            Increasing federal and state funding/flexibility for intermodal
                   connectors—seen as the weakest links in the transportation system—
                   and supporting innovative public and private partnerships and financing
Research           Supporting research that can be applied in making decisions about
                   intermodal passenger and freight policies, planning, investing, and
                   technologies. Research also is needed to explore interactions between
                   passenger and freight travel
Regulations        Streamlining federal requirements for state and local planning and
                   decisionmaking
Safety             Identifying safety standards needed for intermodal transportation
standards
Source: Congressional Research Service, Transportation Board, and others.
Note: GAO’s analysis of its reports on mobility and growth topics and reports from the Congressional
Research Service, Transportation Research Board, and other sources.


Currently, the department is taking actions to promote intermodalism. It
expects to support intermodal financing, connectors, systems
management, and new technologies as Congress reauthorizes surface
transportation legislation. It also is developing a dialogue with the freight
industry, since there is considerable need for better public sector
understanding of freight and its needs. The Intelligent Transportation
System program is helping to improve intermodal operations by using
information and communication technology to expedite shipments and
improve safety and security. In addition, modal agencies—such as the
Federal Highway Administration (FHWA) and the Federal Transit



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                           Administration (FTA)—have assumed responsibility for advocating
                           intermodal passenger and freight programs with state, regional, and local
                           transportation agencies and with other agencies in the department.



Intercity Passenger Rail   Amtrak’s financial condition and ability to provide quality intercity
Poses Critical Policy      passenger rail service has been tenuous since it began operations in 1971. It
                           was on the brink of having to shut down in 2002. While Amtrak meets
Decisions
                           several of the criteria for designation as one of our high risk areas, we have
                           not done so because it is a private corporation, albeit with significant
                           federal funding.29 Amtrak’s intractable financial condition makes a
                           congressional decision on intercity passenger rail’s future paramount, as
                           we reported in April 2002.30 This decision poses significant mobility issues--
                           if and how intercity passenger rail fits into the nation's transportation
                           system and the appropriate balance between needed federal investments
                           and other competing national priorities.

                           As we also reported in April 2002, there is considerable agreement that
                           passenger rail’s mission, funding, and approach of providing service
                           through Amtrak needs to be changed. Intercity passenger rail has the
                           potential to produce transportation benefits—more in some markets than
                           others—as projected increases in intercity passenger travel occur.
                           Currently, over half of Amtrak’s 23 million passengers are in the
                           Washington, D.C., to Boston corridor. Where intercity passenger rail is time
                           and price competitive, it could potentially help reduce highway and air
                           travel congestion, pollution, energy dependence, and improve safety.
                           Nevertheless, federal development and operating support will be needed.

                           The department has the opportunity to support a congressional decision by
                           providing a framework for determining the appropriate role and level of
                           investment for intercity passenger rail. This framework would help
                           establish clear, nonconflicting goals for federal support, government-

                           29
                             From fiscal years 1998 through 2002, the federal government has provided $1 billion per
                           year on average to Amtrak to help meet the railroad’s capital and operating needs. The
                           federal government also has an ownership interest of over $17 billion in preferred stock and
                           cumulative unpaid dividends. See U.S. General Accounting Office, Intercity Passenger Rail:
                           Potential Financial Issues in the Event That Amtrak Undergoes Liquidation, GAO-02-871
                           (Washington, D.C.: Sept. 20, 2002).
                           30
                            U.S. General Accounting Office, Intercity Passenger Rail: Congress Faces Critical
                           Decisions in Developing a National Policy, GAO-02-522T (Washington, D.C.: Apr. 11,
                           2002).




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                            private sector roles, funding approaches that reward results and
                            accountability, and strategies that address stakeholders’ interests and limit
                            unintended consequences. Although the department has developed five
                            general reform principles as its vision for the future, a more detailed
                            framework will be essential.



Addressing the Effects of   Airline industry competition and service have mobility and economic
Aviation Industry           consequences for consumers, as we reported in October 2002.31 Airlines’
                            restructuring and consolidation—whether through marketing alliances
Consolidation and Reduced   among or mergers between carriers in the wake of financial pressures—
Service to Small            will significantly affect the industry’s competitive landscape. Consumers
Communities                 have fewer travel options and generally face higher fares when carriers
                            reduce the number of flights, reduce aircraft size, or drop markets
                            altogether. As we reported in February and March 2001, industry
                            consolidation also raises critical public policy issues, such as greater
                            potential barriers to carriers that want to enter markets, less competition in
                            key markets, and greater risk of travel disruptions as a result of labor
                            disputes.32

                            Small communities face higher fares and reduced service as airlines
                            continue to reduce their market presence. These actions will increase
                            pressure on the primary federal program that assists the smallest
                            communities, the Essential Air Service program. The number of
                            communities that qualify for subsidized service under this program has
                            grown over the last year, and there are clear indications that this number
                            and the program’s costs will continue to grow. Federal awards under the
                            program have increased from just over $40 million in 1999 to an estimated
                            $97 million in fiscal year 2002. As carriers continue to drop service in some
                            markets, more communities will become eligible for Essential Air Service
                            funding, an issue that Congress and the department will have to confront.




                            31
                             U.S. General Accounting Office, Commercial Aviation: Financial Condition and
                            Industry Responses Affect Competition, GAO-03-171T (Washington, D.C.: Oct. 2, 2002).
                            32
                             U.S. General Accounting Office, Aviation Competition: Regional Jet Service Yet to Reach
                            Many Small Communities, GAO-01-344 (Washington, D.C.: Feb. 14, 2001) and Aviation
                            Competition: Challenges in Enhancing Competition in Dominated Markets, GAO-01-
                            518T (Washington, D.C.: Mar. 13, 2001).




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Current and Planned         FTA’s New Starts program provides a large share of capital investment in
Commitments Could           urban mass transportation systems, and demand for these funds is
                            extremely high. However, as we reported in June 2002, FTA is likely to end
Constrain Future Spending   the current authorization period with significantly limited ability to fund
for New Mass Transit        future transit projects. This situation could occur if the program is
Projects                    reauthorized at the currently authorized level of $6.1 billion because FTA
                            (1) needs over $3 billion after 2003 for projects that it has already approved
                            and (2) will likely need $2.8 billion in the next 2 years for five projects that
                            it is close to approving for a grant agreement.33 Limited funding for this
                            program could mean an even more competitive environment for future
                            projects seeking approval and funding. Although the administration has
                            proposed to fund more future projects by limiting federal funds to less than
                            80 percent of a single project, the effect of such a reduction is unclear. A
                            federal funding limit would, in part, reflect a pattern that has emerged in
                            the program—few projects are asking for the maximum 80 percent federal
                            share and many have already significantly increased the local share to be
                            competitive under the New Starts program. Local transit officials also may
                            modify or even terminate projects, be more aggressive in containing
                            project costs, or search for lower cost transit options. To facilitate a clearer
                            prioritization of projects seeking limited funding, we recommended in
                            March 2000 that the department further prioritize the projects as “highly
                            recommended” and “recommended” for funding purposes. However, this
                            recommendation has not been implemented.



Oversight of Federal        Federal grants to states and local governments for transportation
Highway and Bridge          infrastructure promote mobility and economic growth. FHWA oversees
                            major highway and bridge projects to help ensure that federal funds are
Investments Could Reduce
                            spent appropriately and costs are contained to maximize transportation
Cost Growth                 services that are provided by the federal investment. Federal funds often
                            are used to pay for 80 percent of a project’s costs that can range from
                            several million to several billion dollars.




                            33
                                 According to FTA, as of early January 2003, none of these projects have been approved.




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                     FHWA’s performance continues to be a concern, although it has taken
                     initiatives to improve its oversight of major projects. FHWA now requires
                     that projects costing over $1 billion submit annual financial plans and has
                     introduced greater risk-based oversight into its work. Despite these
                     initiatives, the department’s Inspector General, state agencies, and we have
                     reported cost growth on large projects. As we reported in May 2002, cost
                     growth on large highway and bridge projects intensifies the problem of
                     limited federal and state funds that are available for transportation.34 While
                     the question of whether more federal or state level oversight is needed to
                     minimize project cost growth ultimately is a policy decision, both federal
                     and state levels need to identify and share strategies to control costs and
                     improve oversight.



Building Human       The department and other federal agencies face a growing human capital
                     challenge that we have designated as a governmentwide high risk concern.
Capital Strategies   In addition, this challenge ripples throughout the state and local
                     transportation agencies that build, maintain, and operate the vast
                     preponderance of the nation’s transportation system. The problem is
                     similar—finding enough people with the appropriate skills.

                     Both the department and transportation stakeholders face an impending
                     shortage of skilled people that threatens to have serious short- and long-
                     term consequences, according to the department and the Transportation
                     Research Board. As we have reported, the department’s air traffic control
                     modernization and airport and coastal security programs face human
                     capital issues that are likely to impair mission performance. All 50 state
                     departments of transportation have singled out recruiting and retaining
                     staff as their greatest human resource issues. The repercussions from these
                     issues are considerable—a compromised departmental and transportation
                     sector workforce could seriously impair the U.S. economy, public safety,
                     and mobility. The Transportation Research Board calls attracting, hiring,
                     and retaining personnel a critical transportation issue.

                     Public and private transportation entities are finding it difficult to hire
                     enough people with the right skills, according to the department and
                     independent experts. The gap between the skilled workforce and need is


                     34
                      U.S. General Accounting Office, Transportation Infrastructure: Cost and Oversight
                     Issues on Major Highway and Bridge Projects, GAO-02-702T (Washington, D.C.: May 1,
                     2002).




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                                               expected to surge, as about 50 percent of the people who plan, develop,
                                               and manage the nation’s transportation system will become eligible to
                                               retire in the next 5 years. As these retirements occur, they will deplete the
                                               collective experience, knowledge, and skills of organizations throughout
                                               the transportation sector. The growing demand for human capital will
                                               collide with the reality of fewer people entering transportation-related
                                               fields. Enrollments in such fields as engineering are declining, creating
                                               fierce competition for these and other technical graduates needed in
                                               transportation.

                                               Other factors further complicate the transportation sector’s human capital
                                               challenge. Changes in intergovernmental responsibilities for delivering
                                               transportation services, new travel patterns, different business practices,
                                               advances in technology, and changed public expectations are redefining the
                                               competencies and skills that are needed. Increasingly, transportation will
                                               require more diverse, sophisticated management and technical
                                               competencies than ever before. (See table 3.)



Table 3: Changing Transportation Workforce Competencies

Competency               Change                                                              New skills needed
Building and sustaining Public agencies, private companies, and nonprofit                    Managing these extensive networks and
partnerships            organizations are partnering to deliver transportation               collaborating with diverse stakeholders
                        services.
Developing intermodal    Transportation agencies at all levels increasingly will be asked    Broad transportation knowledge, financing
approaches               to develop intermodal connections and solutions to passenger        expertise, and technical competence in
                         and freight transportation problems as envisioned by the            applying complex analytic tools--especially in
                         Intermodal Surface Transportation Efficiency Act of 1991 and        freight planning
                         the Transportation Equity Act for the 21st Century (1998) to
                         connect travel modes to promote transportation system
                         integration.
Managing contractors     Public agencies are using the private sector to meet their          Contract management
                         growing workloads. For example, state agencies’ full-time
                         employment has decreased about 5 percent as their budgets
                         increased over 50 percent in the past decade.
Incorporating            Information and communications technologies are                     Strategic technology investing and
technologies             revolutionizing transportation.                                     incorporating technology into operations
Responding to public     The public increasingly expects transportation decisions to         Public participation and communication
concerns                 consider concerns about land use, air and water quality, and
                         historic preservation.
                                               Source: DOT and State transportation agencies.
                                               Note: GAO’s analysis of information from the department and state transportation agencies.




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The Department’s            A consistent strategic approach to marshaling, managing, and maintaining
Challenge: A Strategic      human capital is essential to deal with the human capital shortfalls that are
                            eroding many federal agencies’ ability to perform their missions, as we
Approach to Human Capital   have reported.35 However, the department faces persistent human capital
Issues                      problems that put its ability to accomplish its own missions and
                            performance at risk throughout the department and key agencies such as
                            FAA, TSA, and the Coast Guard. Its human capital plan, published in
                            September 2002, acknowledges that accomplishing the department’s
                            missions depends on a strategic approach to human capital and highlights
                            workforce planning to meet its most formidable organizational and
                            management challenges. Although a number of milestones have been met
                            since workforce planning began in fiscal year 1999, the plan provides
                            limited information about how future milestones will be accomplished.
                            Other human capital initiatives also are under way. For example, FHWA has
                            taken the first steps in creating a senior executive performance
                            management system that holds managers accountable for contributing to
                            organizational results.



The National Challenge: A   A nationwide shortfall in human capital with the requisite skills to meet
Collaborative Approach to   transportation’s changing needs calls for a national response. The
                            department’s leadership and active involvement are essential to coordinate
Workforce Development
                            a strategic response by promoting

                            • agreement among high-level stakeholders on successful performance by
                              transportation agencies and the competencies these agencies will need
                              to achieve this performance and

                            • information sharing on best practices, lessons learned, human capital
                              research, and benchmarking against other industries and countries that
                              face issues related to an aging workforce.

                            To its credit, the department has taken several steps to address this
                            challenge confronting the transportation sector. For example, FHWA’s




                            35
                               U.S. General Accounting Office, A Model of Strategic Human Capital Management:
                            Exposure Draft, GAO-02-373SP (Washington, D.C.: March 15, 2002) and High-Risk Series:
                            An Update, GAO-01-263 (Washington, D.C.: January 2001).




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                            Office of Professional Development recently organized the first National
                            Transportation Workforce Summit in Washington, D.C., for representatives
                            of state and local transportation agencies, the transportation industry, and
                            academic experts. The department’s Deputy Secretary and administrators
                            of FTA, FHWA, the Research and Special Projects Administration, and the
                            Federal Motor Carrier Safety Administration participated. The summit
                            focused on three critical concerns: making a sustained commitment to
                            attract people to transportation careers, investing in employee skills
                            development, and institutionalizing workforce development initiatives. A
                            committee of attendees is expected to continue addressing these issues.
                            FHWA also is working with major national and state transportation
                            organizations and independent experts to identify human capital needs and
                            innovative ways to meet them.



Enhancing the               Aging and obsolete equipment has limited FAA’s and the Coast Guard’s
                            abilities to achieve their safety and security missions. In response, FAA and
Management of FAA           the Coast Guard are undertaking costly, complex, and long-term programs
and Coast Guard             to modernize and replace aging equipment, putting them at greater risk for
                            significant schedule delays and cost increases. Because of the size,
Acquisitions                complexity, cost, and problem-plagued past of FAA’s program designed to
                            acquire systems needed to modernize air traffic control, we designated it as
                            high risk in 1995. FAA’s air traffic control modernization program remains
                            at high risk in 2003. Because of the September 11 terrorist attacks and the
                            subsequent need for a variety of security improvements that were neither
                            planned nor budgeted for, FAA and the Coast Guard have had to re-
                            evaluate their acquisition plans. As greater emphasis is placed on security,
                            important questions exist about how to move forward with acquisition
                            projects and at what pace.



FAA’s Air Traffic Control   Faced with rapidly growing air traffic and aging equipment, FAA initiated
Modernization               an ambitious effort in 1981 to modernize air traffic control. This
                            modernization involved the acquisition of new air traffic control facilities,
                            as well as a vast network of radar, navigation, automated data processing,
                            and communications equipment. However, this modernization effort has
                            experienced cost overruns, schedule delays, and performance shortfalls.
                            Originally, FAA had planned to complete its modernization in 10 years at a
                            cost of $12 billion. Now, two decades and $35 billion later, FAA estimates
                            that modernization efforts are still far from complete and that it will need
                            nearly $16 billion more through fiscal year 2007 to complete key projects,



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                                              including the Standard Terminal Automation Replacement System
                                              (STARS), the Wide Area Augmentation System (WAAS), and the Next-
                                              Generation Air/Ground Communications System (NEXCOM). (All amounts
                                              are in nominal dollars.) These projects continue to face challenges that
                                              might affect FAA’s ability to meet cost, schedule, and/or performance
                                              expectations. (See table 4.)



Table 4: Selected Air Traffic Control Modernization Acquisition Projects

                                 Estimated                   Projected deployment
                                    cost                           schedule
Project                   Original      Current          Original           Current           Status
Standard Terminal         $940 million $1.33 billion     Start: 1998;       Start: 2002;      FAA’s latest cost and schedule for STARS is
Automation                                               Finish: 2005       Finish: 2005      based on deployment to 74 facilities as
Replacement System                                                                            opposed to the original 172 facilities. In
(STARS), designed to                                                                          September 2002, we found that FAA's
replace aging displays                                                                        schedule for deploying STARS to a large
and processing                                                                                facility presents challenges in terms of
systems used by air                                                                           completing efforts to test the system,
traffic controllers                                                                           resolve problems, and train all employees
                                                                                              on the new system.a
Wide Area                 $892 million $2.9 billion      Start: 1998;       Start: 2003;      Integrity concerns have plagued WAAS’
Augmentation System                                      Finish: 2001       Finish: to be     development. While the agency has made
(WAAS), designed to                                                         determined        progress in resolving these concerns, FAA
provide satellite-based                                                                       must decide whether to stop WAAS
navigation for airspace                                                                       development in 2003 or continue to refine
users                                                                                         the technology to provide an approach
                                                                                              capability with greater precision.
Next-Generation           $986 million $986 million      Finish: 2009       Finish: 2013      FAA is only in the early stages of making a
Air/Ground                (1st segment (1st                                                   final decision to select the technology for
Communications            only)        segment                                                NEXCOM and still needs to address three
(NEXCOM), designed                     only)                                                  major issues: (1) whether the preferred
to replace existing                                                                           technology is technically sound and will
communications                                                                                operate as intended, (2) if the preferred
systems and provide                                                                           technology and equipment it requires can be
additional voice                                                                              certified as safe for use in the National
channels                                                                                      Airspace System, and (3) whether it is cost
                                                                                              effective for users and the agency.
                                              Source: FAA.
                                              Notes: Dollars are nominal.
                                              GAO analysis of the department’s data.
                                              a
                                               U.S. General Accounting Office, National Airspace System: Status of FAA’s Standard Terminal
                                              Automation Replacement System, GAO-02-1071 (Washington, D.C.: Sept. 17, 2002).




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Since 1995, we have made over 30 recommendations to address the root
causes of FAA’s modernization problems. Although FAA has made progress
in addressing these root causes, more remains to be done. For example:

Improve immature software capabilities. FAA developed an integrated
framework for improving its software acquisition, software development,
and systems engineering processes. Since our last high-risk update, FAA
has continued to expand the number of system development projects that
use this integrated framework. However, FAA still does not require all
systems to achieve a minimum level of progress within the framework
before being funded.

Need for a complete and enforced systems architecture. FAA has
developed a systems architecture, or overall blueprint, which clarifies
interdependencies and interrelationships among national airspace systems
and the technical standards to which systems must comply. In November
2000, the Office of Management and Budget instructed agencies to base
investments in information technology on enterprise architectures, which
define (in both business and technology terms) how an entity operates
today and how it wants to operate in the future, including a roadmap for
transitioning to this future operational state. In February 2002, we reported
that FAA’s enterprise architecture is at a moderate level of maturity—that
is, the agency has begun developing architecture products such as policies
and concepts, but has not yet completed the architecture products or
leveraged the architecture for managing change.36

Improve cost estimating and cost accounting practices. To improve
cost estimates, FAA developed a standard work breakdown structure and
established an historical database for tracking systems’ estimated costs
and other information. Further, since our last high-risk update, FAA has
made significant progress in implementing its cost accounting system.
However, the agency has not yet fully instituted rigorous cost estimating
practices. That is, FAA is not yet incorporating actual costs from related
system development efforts in its processes for estimating the costs of new
projects.




36
 U.S. General Accounting Office, Information Technology: Enterprise Architecture Use
Across the Federal Government Can Be Improved, GAO-02-6 (Washington, D.C.: Feb. 19,
2002).




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                    Strengthen investment management processes. To improve its
                    investment management processes, FAA is now overseeing investment
                    risks and capturing key information from the investment selection process
                    in a management information system. Also, since our last high-risk update,
                    FAA has developed guidance for validating costs, benefits, and risks and
                    expects to finalize this guidance by early 2003. However, FAA has not yet
                    implemented processes for evaluating projects after implementation in
                    order to identify lessons learned and improve the investment management
                    process.

                    Change organizational culture. FAA issued an organizational culture
                    framework in 1997 and is working to implement it. However, in 2000, the
                    department’s Inspector General reported that FAA’s culture remains a
                    barrier to successful acquisition projects and that integrated teams, a key
                    mechanism to deliver more cost-effective and timely products, are not
                    working well because FAA’s culture continues to operate in vertical
                    “stovepipes,” which conflict with the horizontal structure of team
                    operations. In fact, our 2000 report on WAAS confirmed that the integrated
                    teams were not working as intended.37 We found that competing priorities
                    between two key organizations that are part of WAAS’ integrated team
                    negated the effectiveness of the team’s approach for meeting the agency’s
                    goals for the system.

                    Clearly, FAA has undertaken numerous improvements to enhance its ability
                    to manage the air traffic control modernization, but its reform efforts are
                    not yet complete and thus remain at high risk. In the meantime, major
                    projects continue to face challenges that could affect their cost, schedule,
                    and performance. We will continue to evaluate FAA’s progress on selected
                    system acquisition efforts.



The Coast Guard’s   The Deepwater Capability Replacement Project involves replacing or
Deepwater Project   modernizing over 90 ships and 200 aircraft that are approaching the end of
                    their useful lives and are critical to missions that occur 50 miles or more
                    offshore (“deepwater”). These missions include search and rescue
                    activities and interdiction of illegal aliens and drugs. The Coast Guard is
                    addressing many of the concerns we reported in our 2001 Performance and


                    37
                     U.S. General Accounting Office, National Airspace System: Persistent Problems in FAA’s
                    New Navigation System Highlight Need for Periodic Reevaluation, GAO/RCED/AIMD-00-
                    130 (Washington, D.C.: June 12, 2000).




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Accountability Series report, but uncertainties still exist in key areas such
as (1) attaining stable, sustained funding; (2) controlling costs, especially in
the contract’s later years; (3) ensuring that procedures and personnel are in
place for managing and overseeing the contractor; and (4) minimizing
potential problems using unproven technology.

Stable, sustained funding. In 2002, the Coast Guard awarded a
$17 billion contract to a Lockheed-Northrop Grumman team, using
projections of sustained funding of $500 million a year (in 1998 dollars)
over the next 2 to 3 decades to develop the Integrated Deepwater System.
However, the Office of Management and Budget estimates a possible
cumulative funding shortfall of about half a billion dollars for the project’s
first 5 years. In response to our concerns38 about the Coast Guard’s ability
to obtain sustained funding of $500 million a year, the fiscal year 2002
appropriations act for the department prohibited the obligation and
expenditure of appropriated funds until the department and the Office of
Management and Budget jointly (1) certified that the Coast Guard’s
deepwater funding was within the Office of Management and Budget’s
projections and (2) approved a contingency procurement strategy for
assets and capabilities envisioned in the deepwater system. The 2002 fiscal
year appropriation of $320 million for the deepwater system was about $18
million below the planned level. The fiscal year 2003 transportation
appropriations have not yet been signed into law; however, the Senate
appropriations committee has proposed $480 million for Deepwater, about
$20 million below the budget request and the House appropriations
committee proposed full funding for the $500 million budget request. The
Coast Guard is updating its baseline funding projections for the deepwater
project according to these lower funding levels. Reductions in funding from
amounts planned could result in reduced operations, increased costs,
and/or schedule delays.

Controlling costs. While the Coast Guard’s management during the
planning phase of the deepwater project was among the best of the federal
agencies we have evaluated and provides a solid foundation for the project,
the next phase presents considerably tougher management challenges. The
next phase concentrates the responsibility for the project’s success with
one systems integrator and its subcontractors for a period of 20 or more
years and starts the Coast Guard on a course that is likely to be difficult and


38
 U.S. General Accounting Office, Coast Guard: Progress Being Made on Deepwater
Project, but Risks Remain, GAO-01-564 (Washington, D.C.: May 21, 2001).




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potentially expensive to alter once funding has been committed and
contracts have been executed. Moreover, this approach has never been
used on a procurement of this size or complexity, and, as a result, there are
no models in the federal government to guide the Coast Guard in
developing its acquisition strategy. We and others have raised concerns
about whether the Coast Guard’s planned contracting approach of relying
on a single contracting team will be able to control costs and still meet
performance requirements in later years in the absence of competition,
particularly since it was adopted without documentation of risks involved
or the degree to which this approach provided better value than other ones.
In response, the Coast Guard developed processes and policies to address
concerns about costs, including establishing prices for deliverables,
negotiating change order terms, and developing incentives. We will
continue to assess the department’s actions in this area.

Contractor oversight. While the Coast Guard’s overall management and
day-to-day administration of the deepwater contract during the planning
phase has generally been excellent, as the project moves into a
procurement phase that has a smaller scope of work and uses a contracting
approach that is unique and untried, the challenges in managing and
overseeing the contractor will become more difficult. To address these
challenges, the Coast Guard plans to require the systems integrator to
implement many management processes and procedures according to best
practices. Since our May 2001 report, the Coast Guard has identified
management processes and procedures based on best practices for
governance, peer review inside the federal government, advisory boards
outside the federal government, program self-assessment, risk
management, and technology readiness. According to the Coast Guard,
these best practices are assisting it to build out the 21st century Coast
Guard using lessons learned, which it is incorporating in its program
management to build partnerships with industry. While these practices are
not yet in place, in May 2002, the Coast Guard released its Phase 2 Program
Management Plan, which establishes processes to successfully manage,
administer, monitor, evaluate, and report contract performance.

Unproven technology. Our reviews of other acquisitions have shown that
reliance on unproven technology is a frequent contributor to escalated
costs, schedule delays, and compromised performance standards. While
the Coast Guard has successfully identified technologies that are
sufficiently mature, commercially available, and proven in similar
applications for use in the first 7 years of the project, it has had no
structured process to assess and monitor the potential risk of technologies



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                            proposed for use in later years. Specifically, the Coast Guard has lacked
                            uniform and systematic criteria, such as those used by the National
                            Aeronautics and Space Administration to judge the level of a technology’s
                            readiness, maturity, and risk. Such criteria are important for monitoring
                            continued development of the technologies that will be used later in the
                            project. However, in response to our 2001 recommendation, the Coast
                            Guard is incorporating the technology readiness level assessment in the
                            deepwater program’s risk management process. Technology readiness level
                            assessments are to be performed for technologies identified in the design
                            and proposal preparation and procurement stages of the deepwater
                            program.



Continuing Progress in      Since our 2001 Performance and Accountability Series report, the
                            department has made significant progress in addressing financial
Financial Management        accountability weaknesses. In 2001, as in 1999, we designated FAA’s
                            financial management as high risk because of wide-ranging concerns
                            reported by the department’s Inspector General and us, about the
                            department’s ability to prepare accurate, reliable financial information that
                            its managers could use to make decisions. While the department has begun
                            installing a new departmentwide general accounting system and FAA has
                            installed a new interim property system and expects to complete
                            implementation of its cost accounting system in 2003, it is too early to
                            predict whether the new systems will completely remedy the department’s
                            and FAA’s financial management weaknesses. As a result, we continue to
                            designate FAA financial management as high risk in 2003.



Eliminating Financial       The department has continued to expand implementation of its new
Management Deficiencies     general accounting system—Delphi—throughout the department.39 This
                            new system is expected to correct many of the financial management
Will Require Successfully
                            deficiencies that have plagued the department.
Implementing a New
General Accounting System   Problems with the department’s current general accounting system have
                            been substantial. In its fiscal year 2001 financial statement audit report, the
                            Inspector General described the current general accounting system as
                            unable to produce auditable financial statements based on the information


                            39
                             Delphi consists of a number of integrated components, including modules for general
                            accounting and property.




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in the system. This meant that the department needed to make about 850
adjustments outside of its general accounting system totaling about
$41 billion in order to prepare its financial statements. The need for
extensive adjustments, along with other general financial management
weaknesses, also has led to misstatements in the department’s financial
reporting. For example, its fiscal year 2001 financial statements included
net prior period adjustments totaling approximately $2.1 billion. Prior
period adjustments are required when financial statement balances have
been materially misstated in previously issued financial statements. They
confirm the existence of severe financial management accountability
problems. Prior period adjustments totaling $5.6 billion and $330 million,
respectively, also were reported in the department’s 1999 and 2000 financial
statements. Large numbers of adjustments also mean that the department
lacked reliable day-to-day data to make management decisions and
maintain ongoing accountability to the taxpayers.

The new Delphi accounting system will allow the department and its modal
administrations to accumulate information at the detailed account level
necessary to prepare financial statements and other reports without the
extensive manual intervention presently required. It also will accumulate
costs by program. This presently is not possible, which prevents the
department from linking its costs with performance information. The
system was implemented in seven of the department’s smaller modal
administrations by the end of fiscal year 2001. Full departmentwide and
FAA implementation is expected by the end of 2003.

The department also introduced a system module that facilitated the
preparation of its financial statements and related reports starting with
fiscal year 2001. This module automated many financial statement
preparation operations that had been done manually and is designed to
utilize the information provided by the Delphi general accounting
component. The department will realize additional efficiencies when this
component is fully implemented, including the consolidation of modal
administrations’ financial information at the department level. The system
also is designed to receive and exchange financial data with many other
systems such as those for FAA’s property and cost accounting.

However, the reliability of the data produced and maintained by the new
systems will be unproven until they are operated in a fully integrated
manner and a subsequent audit of the department’s financial statements
occurs. As such, it is too early to predict whether or not these new systems
will meet the department’s financial management information needs.



Page 45                                             GAO-03-108 DOT Challenges
                          Major Performance and Accountability
                          Challenges




FAA Property              FAA implemented its new property system module as a stand-alone interim
Accountability Requires   system in 2001. This module will be a component of the new Delphi system
                          when it is implemented by FAA. The property system module is designed to
New Systems to Be Fully   account for FAA property from acquisition through disposal. Along with
Implemented and           related procedural and control changes, it is expected to remedy FAA’s
Successfully Operated     long-standing inability to properly account for the cost of its property.

                          FAA property accountability has been an issue since the Inspector
                          General’s first audit of FAA financial statements in 1994. The Inspector
                          General and we have reported consistently that FAA lacked the systems
                          and related procedures to accurately and routinely account for property
                          that totaled $11.7 billion as of September 30, 2001. FAA property
                          accountability also has been cited as a material internal control weakness
                          for many years.

                          Although the Inspector General issued an unqualified audit opinion on
                          FAA’s financial statements for fiscal year 1999, special FAA and Inspector
                          General efforts were required to produce this result, since FAA’s systems
                          did not provide reliable data. For fiscal year 2000, when these significant
                          extra efforts were not made, the Inspector General qualified its opinion
                          because it was unable to determine the accuracy of FAA’s reported
                          property amounts. In fiscal year 2001, FAA centralized its accounting for
                          property and implemented an interim property system. After the Inspector
                          General initially found prior year property errors totaling $184 million
                          during its audit, FAA hired an independent certified public accounting firm
                          to perform a complete property financial audit. The auditors recommended
                          additional adjustments totaling $138 million. After those adjustments were
                          made, the Inspector General gave the 2001 FAA financial statements an
                          unqualified opinion, but continued to cite property accountability as a
                          material internal control weakness.

                          FAA expects to convert to its new Delphi system including the property
                          system and general accounting system modules by the end of 2003. These
                          systems components, which exchange data, will need to be proven in full
                          operation. Subsequently, FAA’s financial statement audit will provide a
                          comprehensive test of the ability of these systems to function in the
                          complex FAA environment. That audit will include an assessment about the
                          reliability of reported property amounts and the related internal controls.




                          Page 46                                             GAO-03-108 DOT Challenges
                         Major Performance and Accountability
                         Challenges




More Complete FAA Cost   FAA continues to make substantial progress in developing its cost
Accounting Information   accounting information capabilities. It is completing the implementation of
                         its cost accounting system that it expects to have fully operational by the
Requires Additional      end of 2003. This system is intended to provide reliable information that
Systems Implementation   has been lacking in the past about the full cost of FAA’s projects and
                         services.

                         FAA’s progress in this area is important because a cost accounting system’s
                         objective is to accurately assign basic financial costs—such as an agency’s
                         labor, overhead, and other costs—to program activities and projects.
                         Accurate cost information is essential for managing FAA's programs in
                         areas that include budgeting and cost control, determining cost
                         reimbursements and setting fees and prices, performance measurement,
                         program evaluations, and choosing among alternative actions.40 The nature
                         of its activities means that FAA has many cost information needs. For
                         example, labor and other costs are incurred in the design, acquisition, and
                         installation of air traffic control and other systems. Such costs need to be
                         identified and accounted for as a part of systems acquired instead of being
                         charged to current operating costs. FAA also needs information about the
                         cost of services that it provides to the public.

                         We and others have reported that FAA lacked the systems necessary to
                         provide cost accounting information. This deficiency limits FAA's and
                         others' ability to make effective decisions about resource needs and to
                         adequately control major projects, such as its multibillion-dollar air traffic
                         control modernization program.

                         FAA began to implement portions of its cost accounting system in fiscal
                         year 1997. By the end of fiscal year 2001, FAA had completed the
                         implementation of its cost accounting system for its Air Traffic Services,
                         began to track labor cost by project in two FAA organizations, and started
                         to develop cost/performance models for its enroute and flight services.41
                         During 2002, FAA focused on implementing cost accounting systems in its
                         remaining organizations such as the Aeronautical Center and Civil Aviation


                         40
                           The Statement of Federal Financial Accounting Standards No. 4, Managerial Cost
                         Accounting Standards, July 31, 1995, describes these five areas for which cost information
                         is essential in managing government programs.
                         41
                          Air Traffic Services is the FAA office responsible for operating and maintaining the
                         national airspace system.




                         Page 47                                                         GAO-03-108 DOT Challenges
Major Performance and Accountability
Challenges




Security and began to use cost data to support fee and pricing activities. It
also made progress in developing financial measures that focus on cost
trends by service area, analyzing cost anomalies, and using cost per flight
as a financial indicator in relation to operational measures. FAA continues
to add to and enhance the comprehensiveness of its cost systems. For
example, it is integrating additional labor cost data into the system from
various FAA activities. Complete implementation of this system is expected
by the end of 2003.

As is the case with FAA’s property system, the reliability of the data
produced and maintained by FAA’s new cost accounting system will be
unproven until it is fully implemented and is subsequently subjected to a
financial statement audit.




Page 48                                              GAO-03-108 DOT Challenges
GAO Contacts




               Subject covered in this report            Contact person
               Improving transportation safety           John H. Anderson, Jr., Managing Director
                                                         Physical Infrastructure Issues
               Transforming transportation security      (202) 512-2834
                                                         andersonj@gao.gov
               Improving mobility and economic growth
               through intermodal and modal approaches
               Building human capital strategies         J.C. Mihm, Director
                                                         Strategic Issues
                                                         (202) 512-3236
                                                         mihmj@gao.gov

                                                         Gerald L. Dillingham, Ph.D., Director
                                                         Physical Infrastructure Issues
                                                         (202) 512-2834
                                                         dillinghamg@gao.gov
               Enhancing the management of FAA           Gerald L. Dillingham, Ph.D., Director
               acquisitions                              Physical Infrastructure Issues
                                                         (202) 512-2834
                                                         dillinghamg@gao.gov

                                                         David A. Powner, Acting Director
                                                         Information Technology Issues
                                                         (202) 512-9286
                                                         pownerd@gao.gov

               Enhancing the management of Coast         JayEtta Z. Hecker, Director
               Guard acquisitions                        Physical Infrastructure Issues
                                                         (202) 512-2834
                                                         heckerj@gao.gov
               Continuing progress in financial          Linda M. Calbom, Director
               management                                Financial Management and Assurance
                                                         Issues
                                                         (202) 512-9508
                                                         calboml@gao.gov




               Page 49                                                    GAO-03-108 DOT Challenges
Related GAO Products



Performance,               Performance and Accountability: Reported Agency Actions and Plans to
Accountability, and High   Address 2001 Management Challenges and Program Risks. GAO-03-225.
                           Washington, D.C.: October 31, 2002.
Risk
                           Performance Reporting: Few Agencies Reported on the Correctness and
                           Reliability of Performance Data. GAO-02-372. Washington, D.C.: April 26,
                           2002.

                           Department of Transportation: Status of Achieving Key Outcomes and
                           Addressing Major Management Challenges. GAO-01-834. Washington,
                           D.C.: June 22, 2001.

                           Major Management Challenges and Program Risks: Department of
                           Transportation. GAO-01-253. Washington, D.C.: January 2001.

                           Major Management Challenges and Program Risks: A Governmentwide
                           Perspective. GAO-01-241. Washington, D.C.: January 2001.

                           High-Risk Series: An Update. GAO-01-263. Washington, D.C.: January
                           2001.



Transportation Safety      Aviation Safety: Undeclared Air Shipments of Dangerous Goods and
                           DOT’s Enforcement Approach. GAO-03-22. Washington, D.C.: January 10,
                           2003.

                           Pipeline Safety and Security: Improved Workforce Planning and
                           Communication. GAO-02-785. Washington, D.C.: August 26, 2002.

                           General Aviation: Status of the Industry, Related Infrastructure, and
                           Safety Issues. GAO-01-916. Washington, D.C.: August 31, 2001.

                           Vehicle Safety: Technologies, Challenges, and Research and Development
                           Expenditures for Advanced Air Bags. GAO-01-596. Washington, D.C.: June
                           12, 2001.

                           Motor Vehicle Safety: NHTSA’s Ability to Detect and Recall Defective
                           Replacement Crash Parts Is Limited. GAO-01-225. Washington, D.C.:
                           January 31, 2001.




                           Page 50                                           GAO-03-108 DOT Challenges
                          Related GAO Products




                          Commercial Motor Vehicles: Effectiveness of Actions Being Taken to
                          Improve Motor Carrier Safety Is Unknown. GAO/RCED-00-189.
                          Washington, D.C.: July 17, 2000.

                          Aviation Safety: Safer Skies Initiative Has Taken Steps to Reduce
                          Accident Rates by 2007. GAO/RCED-00-111. Washington, D.C.: June 28,
                          2000.

                          Air Traffic Control: FAA Needs to Better Prepare for Impending Wave of
                          Controller Attrition. GAO-02-591. Washington, D.C.: June 14, 2002.

                          Pipeline Safety: The Office of Pipeline Safety Is Changing How It
                          Oversees the Pipeline Industry. GAO/RCED-00-128. Washington, D.C.:
                          May 15, 2000.

                          Commercial Motor Vehicles: Significant Actions Remain to Improve
                          Truck Safety. GAO/T-RCED-00-102. Washington, D.C.: March 2, 2000.

                          Truck Safety: Motor Carrier Office Hampered by Limited Information
                          on Causes of Crashes and Other Data Problems. GAO/RCED-99-182.
                          Washington, D.C.: June 29, 1999.

                          Aviation Safety: FAA’s New Inspection System Offers Promise, but
                          Problems Need to Be Addressed. GAO/RCED-99-183. Washington, D.C.:
                          June 28, 1999.

                          Motor Vehicle Safety: Comprehensive State Programs Offer Best
                          Opportunity for Increasing Use of Safety Belts. GAO/RCED-96-24.
                          Washington, D.C.: January 3, 1996.



Transportation Security   Transportation Security Administration: Actions and Plans to Build a
                          Results-Oriented Culture. GAO-03-190. Washington, D.C.: January 17, 2003.

                          Aviation Security: Vulnerabilities and Potential Improvements for the
                          Air Cargo System. GAO-03-344. Washington, D.C: December 20, 2002.

                          Mass Transit: Federal Action Could Help Transit Agencies Address
                          Security Challenges. GAO-03-263. Washington, D.C.: December 13, 2002.




                          Page 51                                           GAO-03-108 DOT Challenges
                        Related GAO Products




                        Mass Transit: Challenges in Securing Transit Systems. GAO-02-1075T.
                        Washington, D.C.: September 18, 2002.

                        Port Security: Nation Faces Formidable Challenges in Making New
                        Initiatives Successful. GAO-02-993T. Washington, D.C.: August 5, 2002.

                        Aviation Security: Transportation Security Administration Faces
                        Immediate and Long-Term Challenges. GAO-02-971T. Washington, D.C.:
                        July 25, 2002.

                        Homeland Security: Progress Made, More Direction and Partnership
                        Sought. GAO-02-490T. Washington, D.C.: March 12, 2002.

                        Aviation Security: Terrorist Acts Demonstrate Urgent Need to Improve
                        Security at the Nation’s Airports. GAO-01-1162T. Washington, D.C.:
                        September 20, 2001.

                        FAA Computer Security: Recommendations to Improve Continuing
                        Weaknesses. GAO-01-171. Washington, D.C.: December 6, 2000.

                        Aviation Security: Long-Standing Problems Impair Airport Screeners’
                        Performance. GAO/RCED-00-74. Washington, D.C.: June 28, 2000.



Mobility and Economic   Commercial Aviation: Financial Condition and Industry Responses
Growth                  Affect Competition. GAO-03-171T. Washington, D.C.: October 2, 2002.

                        Intercity Passenger Rail: Potential Financial Issues in the Event that
                        Amtrak Undergoes Liquidation. GAO-02-871. Washington, D.C.:
                        September 20, 2002.

                        Highway Infrastructure: Timely Delivery of Highway Construction
                        Projects. GAO-02-1067T. Washington, D.C.: September 19, 2002.

                        Marine Transportation: Federal Financing and a Framework for
                        Infrastructure Investments. GAO-02-1033. Washington, D.C.: September 9,
                        2002.

                        Surface and Maritime Transportation: Developing Strategies for
                        Enhancing Mobility: A National Challenge. GAO-02-775. Washington,
                        D.C.: August 30, 2002.




                        Page 52                                            GAO-03-108 DOT Challenges
Related GAO Products




Mass Transit: Status of New Starts Program and Potential for Bus Rapid
Transit Projects. GAO-02-840T. Washington, D.C.: June 20, 2002.

Railroad Regulation: Changes in Freight Railroad Rates from 1997
through 2000. GAO-02-721. Washington, D.C.: June 5, 2002.

Highway Infrastructure: Interstate Physical Conditions Have Improved,
but Congestion and Other Pressures Continue. GAO-02-571. Washington,
D.C.: May 31, 2002.

Mass Transit: FTA’s New Starts Commitments for Fiscal Year 2003.
GAO-02-603. Washington, D.C.: April 30, 2002.

Intercity Passenger Rail: Congress Faces Critical Decisions in
Developing a National Policy. GAO-02-522T. Washington, D.C.: April 11,
2002.

Physical Infrastructure: Crosscutting Issues Planning Conference
Report. GAO-02-139. Washington, D.C.: October, 2001.

Mass Transit: FTA Could Relieve New Starts Funding Program
Constraints. GAO-01-987. Washington, D.C.: July 31, 2001.

Aviation Competition: Restricting Airline Ticketing Rules Unlikely to
Help Consumers. GAO-01-831. Washington, D.C.: July 31, 2001.

Freight Railroad Regulation: Surface Transportation Board’s Oversight
Could Benefit from Evidence Better Identifying How Mergers Affect
Rates. GAO-01-689. Washington, D.C.: July 5, 2001.

Mass Transit: Many Management Successes at WMATA, but Capital
Planning Could Be Enhanced. GAO-01-744. Washington, D.C.: July 3, 2001.

Aviation Competition: Challenges in Enhancing Competition in
Dominated Markets. GAO-01-518T. Washington, D.C.: March 13, 2001.

Highway Infrastructure: FHWA’s Model for Estimating Highway Needs
Has Been Modified for State-Level Planning. GAO-01-299. Washington,
D.C.: February 14, 2001.




Page 53                                           GAO-03-108 DOT Challenges
Related GAO Products




Aviation Competition: Issues Raised by Consolidation Proposals. GAO-
01-370T. Washington, D.C.: February 1, 2001.

Mass Transit: Project Management Oversight Benefits and Future
Funding Requirements. GAO-00-221. Washington, D.C.: September 15,
2000.

Transit Grants: Need for Improved Predictability, Data, and Monitoring
in Application Processing. GAO/RCED-00-260. Washington, D.C.: August
30, 2000.

Highway Funding: Problems with Highway Trust Fund Information
Can Affect State Highway Funds. GAO/RCED/AIMD-00-148. Washington,
D.C.: June 29, 2000.

Highway Infrastructure: FHWA’s Model for Estimating Highway Needs
Is Generally Reasonable, Despite Limitations. GAO/RCED-00-133.
Washington, D.C.: June 5, 2000.

Intercity Passenger Rail: Amtrak Will Continue to Have Difficulty
Controlling Its Costs and Meeting Capital Needs. GAO/RCED-00-138.
Washington, D.C.: May 31, 2000.

Mass Transit: Challenges in Evaluating, Overseeing, and Funding Major
Transit Projects. GAO/T-RCED-00-104. Washington, D.C.: March 8, 2000.

Transportation Infrastructure: Better Data Needed to Rate the Nation’s
Highway Conditions. GAO/RCED-99-263. Washington, D.C.: September 24,
1999.

Mass Transit: Status of New Starts Transit Projects with Full Funding
Grant Agreements. GAO/RCED-99-240. Washington, D.C.: August 19, 1999.

Aviation Competition: Information on the Department of
Transportation’s Proposed Policy. GAO/RCED-99-225. Washington, D.C.:
July 29, 1999.

Surface Transportation: Moving Into the 21st Century. GAO/RCED-99-
176. Washington, D.C.: May 1999.




Page 54                                         GAO-03-108 DOT Challenges
                         Related GAO Products




Human Capital            A Model of Strategic Human Capital Management. GAO-02-373SP.
                         Washington, D.C.: March 2002.

                         Coast Guard Workforce Mix: Phased-In Conversion of Some Support
                         Officer Positions Would Produce Savings. GAO/RCED-00-60. Washington,
                         D.C.: March 1, 2000.

                         Federal Aviation Administration: Challenges in Modernizing the
                         Agency. GAO/T-RCED/AIMD-00-87. Washington, D.C.: February 3, 2000.



Acquisition Management   National Airspace System: Status of FAA’s Standard Terminal
                         Automation Replacement System. GAO-02-1071. Washington, D.C.:
                         September 17, 2002.

                         National Airspace System: FAA’s Approach to Its New Communications
                         System Appears Prudent, but Challenges Remain. GAO-02-710.
                         Washington, D.C.: July 15, 2002.

                         FAA Alaska: Weak Controls Resulted in Improper and Wasteful
                         Purchases. GAO-00-606. Washington, D.C.: May 30, 2002.

                         Coast Guard: Budget and Management Challenges for 2003 and Beyond.
                         GAO-02-538T. Washington, D.C.: March 19, 2002.

                         Coast Guard: Progress Being Made on Deepwater Project, but Risks
                         Remain. GAO-01-564. Washington, D.C.: May 21, 2001.

                         National Airspace System: Persistent Problems in FAA’s New Navigation
                         System Highlight Need for Periodic Re-evaluation. GAO/RCED/AIMD-00-
                         130. Washington, D.C.: June 12, 2000.



Financial Management     Transportation Infrastructure: Cost and Oversight Issues on Major
                         Highway and Bridge Projects. GAO-02-702T. Washington, D.C.: May 1,
                         2002.

                         Metropolitan Washington Airports Authority: Contracting Practices Do
                         Not Always Comply with Airport Lease Requirements. GAO-02-36.
                         Washington, D.C.: March 1, 2002.




                         Page 55                                         GAO-03-108 DOT Challenges
Related GAO Products




Airport Infrastructure: Unresolved Issues Make It Difficult to Determine
the Cost to Serve New Large Aircraft. GAO-02-251. Washington, D.C.:
February 4, 2002.

Department of Transportation: Status of Achieving Key Outcomes and
Addressing Major Management Challenges. GAO-01-824. Washington,
D.C.: June 22, 2001.

Port Infrastructure: Financing of Navigation Projects at Small and
Medium-Sized Ports. GAO/RCED-00-58. Washington, D.C.: March 2, 2000.

Results Act: Information on Performance Goals and Measures Contained
in the Department of Transportation’s Fiscal Year 2000 Performance
Plan. GAO/RCED-00-36, Washington, D.C.: November 15, 1999.

Commercial Maritime Industry: Updated Information on Federal
Assessments. GAO/T-RCED-00-36. Washington, D.C.: November 3, 1999.




Page 56                                           GAO-03-108 DOT Challenges
Performance and Accountability and High-
Risk Series

              Major Management Challenges and Program Risks: A Governmentwide
              Perspective. GAO-03-95.

              Major Management Challenges and Program Risks: Department of
              Agriculture. GAO-03-96.

              Major Management Challenges and Program Risks: Department of
              Commerce. GAO-03-97.

              Major Management Challenges and Program Risks: Department of
              Defense. GAO-03-98.

              Major Management Challenges and Program Risks: Department of
              Education. GAO-03-99.

              Major Management Challenges and Program Risks: Department of
              Energy. GAO-03-100.

              Major Management Challenges and Program Risks: Department of
              Health and Human Services. GAO-03-101.

              Major Management Challenges and Program Risks: Department of
              Homeland Security. GAO-03-102.

              Major Management Challenges and Program Risks: Department of
              Housing and Urban Development. GAO-03-103.

              Major Management Challenges and Program Risks: Department of the
              Interior. GAO-03-104.

              Major Management Challenges and Program Risks: Department of
              Justice. GAO-03-105.

              Major Management Challenges and Program Risks: Department of
              Labor. GAO-03-106.

              Major Management Challenges and Program Risks: Department of State.
              GAO-03-107.

              Major Management Challenges and Program Risks: Department of
              Transportation. GAO-03-108.




              Page 57                                       GAO-03-108 DOT Challenges
Performance and Accountability and High-
Risk Series




Major Management Challenges and Program Risks: Department of the
Treasury. GAO-03-109.

Major Management Challenges and Program Risks: Department of
Veterans Affairs. GAO-03-110.

Major Management Challenges and Program Risks: U.S. Agency for
International Development. GAO-03-111.

Major Management Challenges and Program Risks: Environmental
Protection Agency. GAO-03-112.

Major Management Challenges and Program Risks: Federal Emergency
Management Agency. GAO-03-113.

Major Management Challenges and Program Risks: National
Aeronautics and Space Administration. GAO-03-114.

Major Management Challenges and Program Risks: Office of Personnel
Management. GAO-03-115.

Major Management Challenges and Program Risks: Small Business
Administration. GAO-03-116.

Major Management Challenges and Program Risks: Social Security
Administration. GAO-03-117.

Major Management Challenges and Program Risks: U.S. Postal Service.
GAO-03-118.

High-Risk Series: An Update. GAO-03-119.

High-Risk Series: Strategic Human Capital Management. GAO-03-120.

High-Risk Series: Protecting Information Systems Supporting the
Federal Government and the Nation’s Critical Infrastructures. GAO-03-
121.

High-Risk Series: Federal Real Property. GAO-03-122.




Page 58                                         GAO-03-108 DOT Challenges
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