oversight

Air Traffic Control: FAA's Modernization Efforts--Past, Present, and Future

Published by the Government Accountability Office on 2003-10-30.

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

                             United States General Accounting Office

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

For Release on Delivery
Expected at 10:00 a.m. EST
Thursday, October 30, 2003   AIR TRAFFIC CONTROL
                             FAA’s Modernization
                             Efforts—Past, Present, and
                             Future
                             Statement of Gerald L. Dillingham, Director,
                             Physical Infrastructure Issues




GAO-04-227T 

                                                October 30, 2003


                                                AIR TRAFFIC CONTROL

                                                FAA’s Modernization Efforts—Past,
Highlights of GAO-04-227T, a testimony          Present, and Future
before the Subcommittee on Aviation,
Committee on Transportation and
Infrastructure, House of Representatives




The Federal Aviation                            Over the years, systemic management issues, including inadequate
Administration’s (FAA) air traffic              management controls and human capital issues, have contributed to the cost
control modernization (ATC)                     overruns, schedule delays, and performance shortfalls that FAA’s major ATC
efforts are designed to enhance the             projects have consistently experienced. These problems occurred, in large
safety, capacity, and efficiency of             part, because FAA lacked the information technology and financial
the national airspace system
through the acquisition of a vast
                                                management systems that would have helped it reliably determine the
network of radar, navigation,                   projects’ technical requirements and estimate and control their costs and
communications, and information                 schedules. In addition, organizational culture issues discouraged
processing systems, as well as new              collaboration among technical experts and users, and frequent changes in
air traffic control facilities. Since           FAA’s leadership—seven different Administrators and Acting Administrators
1981, when these efforts began,                 in the first 10 years—hampered the modernization efforts.
FAA’s ATC modernization projects
have consistently experienced cost,             FAA has taken steps to improve the management of its ATC modernization
schedule, and performance                       efforts and has made progress. For example, it implemented a cost-
problems that GAO and others                    effective, incremental development approach that avoided costly late-stage
have attributed to systemic                     changes. In addition, it has fully or partially implemented over 30 GAO
management issues. As a result,
FAA’s cost estimates have grown
                                                recommendations designed to improve its management controls and address
and planned improvements have                   human capital issues. The Congress also extended the term of the FAA
been delayed. Initially FAA                     Administrator to 5 years, providing for greater continuity and stability, and
estimated that its ATC                          enacted legislation designed to bring the benefits of performance
modernization efforts would cost                management to ATC modernization.
$12 billion and could be completed
over 10 years. Now, two decades                 FAA faces a number of challenges in fully implementing recommendations
and $35 billion later, FAA expects              that GAO and others have made to improve its management controls and
to need another $16 billion through             address human capital issues. FAA also faces the challenge of becoming a
2007 to complete key projects, for a            more efficient and accountable performance-based air traffic organization.
total cost of $51 billion.                      Finally, FAA has an opportunity to review its current 10-year plan for
This testimony (1) provides an
                                                modernizing the National Airspace System and to assess the relative
overview of the systemic                        importance and feasibility of the plan’s priorities in light of current federal
management issues that GAO and                  and private sector economic constraints, new aviation security
others have identified in FAA’s                 requirements, and other issues.
ATC modernization efforts over
time, (2) discusses key actions that            Air Traffic Controller at Work
FAA and others have taken to
address these issues, and (3)
identifies the challenges that lie
ahead for FAA.




www.gao.gov/cgi-bin/getrpt?GAO-04-227T.

To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Gerald L.         Source: National Air Traffic Controllers Association.
Dillingham at (202) 512-2834 or
dillinghamg@gao.gov.
Mr. Chairman and Members of the Subcommittee:

We appreciate the opportunity to participate in today’s hearing to discuss
our work on FAA’s air traffic control modernization (ATC) efforts, which
are designed to enhance the safety, capacity, and efficiency of the national
airspace system, primarily through software-intensive technology
improvements. As you know, these efforts involve acquiring a vast
network of radar, navigation, communications, and information
processing systems, as well as new air traffic control facilities. Since 1981,
when these efforts began, FAA’s ATC modernization projects have
consistently experienced cost, schedule, and performance problems that
we and others have attributed to systemic management issues. As a result,
FAA’s cost estimates have grown and planned improvements have been
delayed. Initially FAA estimated that its ATC modernization efforts would
cost $12 billion and could be completed over 10 years. Now, two decades
and $35 billion later, FAA expects to need another $16 billion through 2007
to complete key projects, for a total cost of $51 billion.

By the summer of 2000, the ATC system no longer had the capacity to
manage demand efficiently, and flight delays produced near-gridlock
conditions at many U.S. airports. The events of September 11 and the
subsequent economic downturn severely reduced the demand for air
travel for a time, but the aviation industry is gradually recovering, and FAA
forecasts a return to pre-9/11 demand levels in about 2005 or 2006. This
current period of reduced but growing demand for air travel has created a
narrow window of opportunity to address the management issues
underlying FAA’s ATC modernization problems and to prepare the ATC
system for managing a growing volume of air traffic more safely and
efficiently than in the past.

My statement today (1) provides an overview of the systemic management
issues that we and others have identified in FAA’s ATC modernization
efforts over time, (2) discusses key actions that FAA and others have
taken to address these issues, and (3) identifies the challenges that lie
ahead for FAA. The statement is based on our past reports on ATC
modernization (see Related GAO Products)—updated to reflect important
milestones—and recent interviews with key stakeholders in the aviation
community, including the Air Transport Association, National Air Traffic
Controllers Association, and Professional Airways Systems Specialists. We
performed our work in accordance with generally accepted government
auditing standards.




Page 1                                                            GAO-04-227T
     In summary:

•	   Over the years, systemic management issues, including inadequate
     management controls and human capital issues, have contributed to the
     cost overruns, schedule delays, and performance shortfalls that FAA’s
     major ATC projects have consistently experienced. These systemic
     management issues have kept FAA’s ATC modernization efforts on our
     watch list of high-risk federal programs since 1995. Both the Wide Area
     Augmentation System (WAAS)—designed to provide satellite-based
     navigation for airspace users—and the Standard Terminal Automation
     Replacement System (STARS)—designed to replace aging displays and
     processing systems used by air traffic controllers—have missed cost,
     schedule, and performance targets because of such issues. For both
     projects, FAA initially underestimated the costs and time needed to meet
     complex technical requirements and for STARS, it failed to involve
     stakeholders sufficiently in determining the project’s requirements.
     Consequently, when the projects failed to meet requirements, FAA had to
     contract for costly, time-consuming modifications and revise its cost and
     schedule estimates. These problems occurred, in large part, because FAA
     lacked the information technology and financial management controls that
     would have helped it reliably determine the projects’ technical
     requirements and estimate and control their costs and schedules. In
     addition, organizational culture issues discouraged collaboration among
     technical experts and users, and frequent changes in FAA’s leadership—
     seven different Administrators and Acting Administrators in the first 10
     years—hampered the modernization effort. In numerous reports and
     testimonies, we, the Department of Transportation’s Inspector General,
     and others have made recommendations to address these issues.

•	   FAA has taken steps to improve the management of its ATC modernization
     efforts and has made progress in a number of areas. For example, it
     implemented an incremental, “build a little, test a little” approach that
     improved its management by providing for mid-course corrections and
     thus helping FAA to avoid costly late-stage changes. Furthermore, since
     1995, FAA has fully or partially implemented over 30 of our
     recommendations, including recommendations to improve its
     management controls and address human capital issues. In the area of
     management controls, it has (1) developed a blueprint for modernization
     (systems architecture) to manage the development of ATC systems; (2)
     established processes for selecting and controlling information technology
     investments, (3) introduced an integrated framework for improving
     software and system acquisition processes, and (4) improved its cost-
     estimating and cost-accounting practices. In addition, it has taken steps to
     identify and address its information systems security needs. In the human


     Page 2                                                          GAO-04-227T
                    capital area, FAA has attempted to improve collaboration among technical
                    experts and system users by establishing integrated teams to serve as
                    vehicles for identifying needs, pooling expertise, and reconciling priorities.
                    Additionally, in 1994, the Congress extended the term of the FAA
                    Administrator to 5 years, providing for greater continuity and stability; in
                    1995, the Congress exempted FAA, at its request, from certain federal
                    human capital requirements; and in 2000, the Congress and the
                    administration together provided for a new oversight and management
                    structure and a new air traffic organization to bring the benefits of
                    performance management to ATC modernization. To date, one FAA
                    Administrator has completed a 5-year term; FAA has fully or partially
                    implemented the personnel reforms that the Congress authorized; and the
                    Air Traffic Services Subcommittee, which provides oversight, has recently
                    appointed a chief operating officer to manage the new air traffic
                    organization, which has yet to be formed. It is still too early to assess the
                    results of some of these initiatives, and some challenges remain.

               •	   While FAA has taken steps to improve its management controls and
                    resolve human capital issues, it still faces challenges in fully implementing
                    recommendations that we and others have made. For example, it still
                    needs to (1) complete and make better use of its information technology
                    blueprint to manage change; (2) put processes in place for evaluating
                    projects after implementation to strengthen the investment management
                    process, (3) ensure that systems achieve a minimum level of software
                    capability before being funded; and (4) incorporate actual costs from
                    related system development efforts in its processes for estimating the
                    costs of new projects. Efforts to secure FAA’s air traffic control systems
                    from cyber threats also remain a critical challenge. In the human capital
                    area, FAA needs to do more to foster collaboration among technical
                    experts and users, as well as fully implement the personnel reforms that
                    the Congress authorized. FAA also faces the challenge of becoming a more
                    efficient and accountable performance-based air traffic organization under
                    the leadership of the Air Traffic Services Subcommittee and the recently
                    hired chief operating officer. Finally, during the remaining lull in the
                    demand for air travel, FAA has an opportunity to review its 10-year plan
                    for modernizing the National Airspace System and to assess the relative
                    importance and feasibility of the plan’s priorities in light of current federal
                    and private sector economic constraints, new security requirements, and
                    other issues.


                    Commercial aviation is a critical component of our nation’s transportation
Background 	        infrastructure and a significant contributor to our nation’s economy. For
                    example, in 2000, there were over half a billion passenger boardings of


                    Page 3                                                            GAO-04-227T
commercial airline flights and the airline industry contributed $800 billion
to Gross Domestic Product (8 percent) and employed nearly 10 million
people (7 percent).1

Automated information processing and display, communication,
navigation, surveillance, and weather resources permit air traffic
controllers to view key information, such as aircraft location, aircraft flight
plans, and prevailing weather conditions and to communicate with pilots.
These resources reside at, or are associated with, several ATC facilities—
flight service stations, air traffic control towers, terminal radar approach
control (TRACON) facilities, and air route traffic control centers (en route
centers). These facilities are depicted in figure 1.




1
 These 10 million people include those with jobs both directly and indirectly related to
aviation activities.



Page 4                                                                        GAO-04-227T
Figure 1: Overview of U.S. Air Traffic Control System




Source: GAO

                                          Notes:




                                          Page 5        GAO-04-227T
                       a
                       The Standard Terminal Automation Replacement System (STARS) is designed to allow controllers at
                       TRACONs to separate and sequence aircraft.
                       b
                        The Wide Area Augmentation System (WAAS), when fully developed, will comprise a network of up
                       to 76 ground stations (not depicted in graphic) and three to four geostationary communications
                       satellites.
                       c
                        The Next-Generation Air/Ground Communications System (NEXCOM), is an integrated voice and
                       data system that will be in aircraft avionics, with the ground network infrastructure to support data link
                       services to be deployed, as appropriate, for operation in en route centers.




                       Over the years, systemic management issues, including inadequate
Systemic Issues Have   management controls and human capital issues, have contributed to the
Contributed to ATC     cost overruns, schedule delays, and performance shortfalls that FAA’s
                       major ATC projects have consistently experienced.
Modernization
Projects’ Cost,        These problems were of such magnitude that we designated ATC
                       modernization as high risk in 1995. Table 1 summarizes the types of
Schedule, and          problems experienced by five major air traffic control projects.
Performance
Problems




                       Page 6                                                                                   GAO-04-227T
                              Table 1: Cost, Schedule, and Performance Information for Selected ATC
                              Modernization Efforts

                                                                                                  Cost        Schedule   Performance
                                  Project                        Purpose                          overruns    slips      issues
                                  Standard Terminal              To replace aging                 Yes         Yes        Yes
                                  Automation                     displays and
                                  Replacement System             processing systems
                                  (STARS)                        used by air traffic
                                                                 controllers
                                  Next-Generation                To replace existing No                       Yes        Test pending
                                  Air/Ground                     communications
                                  Communications                 systems and provide
                                  (NEXCOM)                       additional voice
                                                                 channels
                                                                                                                 a
                                  Wide Area                      To provide satellite-            Yes         Yes        Yes
                                  Augmentation                   based navigation for
                                  System (WAAS)                  airspace users
                                  Integrated Terminal            To provide air traffic Yes                   Yes        Yes
                                  Weather System                 managers with
                                  (ITWSb)                        enhanced weather
                                                                 information that does
                                                                 not require
                                                                 meteorological
                                                                 interpretation
                                  Weather and Radar              To provide            Yes                    Yes        Yes
                                                 b
                                  Processor (WARP )              controllers, traffic
                                                                 managers, and
                                                                 meteorologists with
                                                                 accurate and reliable
                                                                 weather information
                              Sources: GAO and Department of Transportation, Office of Inspector General. 

                              a
                              While WAAS was deployed in July 2003, historically, the project has had schedule slips.

                              b
                              Information for WARP reported by the Department of Transportation, Office of Inspector General. 



Two Projects Illustrate the   Two projects, WAAS and STARS, illustrate the effects of inadequate
Effects of Systemic           management controls and human capital issues on the costs, schedules,
Management Issues on          and performance of major ATC modernization projects. More specifically,
                              FAA lacked adequate information technology and financial management
Costs, Schedules, and         controls to comprehensively identify these projects’ requirements, reliably
Performance                   estimate their costs and schedules, and hold contractors accountable for
                              meeting cost, schedule, and performance targets. In addition, FAA lacked
                              effective processes for fostering collaboration among technical experts
                              and users, as well as sustained leadership to provide direction and follow-
                              through. As a result, these projects cost more, took longer, and met fewer
                              requirements than planned.


                              Page 7                                                                                       GAO-04-227T
WAAS is designed to provide satellite-based navigation for airspace users.
As we reported in June 2000,2 FAA underestimated the complexity of
developing WAAS. FAA originally planned to start deploying WAAS in 1998
and finish in 2001; however, the agency could not deliver on this promise
because an aggressive schedule contributed to software development
problems, and the project was unable to meet a key integrity
requirement—that WAAS would virtually never fail to warn pilots of
potential navigation hazards. In January 2003, we reported in our high-risk
series that the cost for WAAS had grown from an original estimate of $892
                         ,
million to $2.9 billion.3 4 In July 2003, FAA commissioned WAAS for
instrument flight use.

STARS is designed to replace the outdated computer equipment that air
traffic controllers currently use at some facilities to control air traffic
within 5 to 50 nautical miles of an airport. In 1996, FAA anticipated very
little software development, planned to install STARS in 172 facilities at a
cost of $940 million, and expected implementation to begin in 1998 and
end in 2005. In 1999, FAA modified its acquisition approach (from off-the-
shelf software to a combination of customized and off-the-shelf software)
and then concluded that it did not have adequate funding to deploy STARS
as widely as planned. In March 2002, FAA estimated that the project’s
development costs would total $1.33 billion, and it received approval to
deploy STARS at 74 facilities. FAA does not yet know to what extent its
development cost estimate is reliable because, as we reported in January
2003,5 it lacks accurate, valid, current data on the STARS project’s
remaining costs and progress. FAA commissioned STARS at Philadelphia
International Airport in June 2003. Figure 2 shows a STARS display.




2
 U.S. General Accounting Office, National Airspace System: Problems Plaguing the Wide
Area Augmentation System and FAA’s Actions to Address Them, GAO/T-RCED-00-229
(Washington, D.C.: June 29, 2000).
3
These dollars are nominal.
4
 U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington,
D.C.: January 2003).
5
 U.S. General Accounting Office, National Airspace System: Better Cost Data Could
Improve FAA’s Management of the Standard Terminal Automation Replacement System,
GAO-03-343 (Washington, D.C.: Jan. 31, 2003).



Page 8                                                                  GAO-04-227T
Figure 2: STARS Display with Air Traffic




Source: FAA.



Inadequate Management                      Our work has shown that several types of information technology and
Controls Have Hampered                     financial management controls are important to manage large ATC
ATC Modernization Efforts                  projects efficiently and effectively. These include a blueprint for planning,
                                           a system for managing information technology investments, and an
                                           integrated framework for improving system and software processes, as
                                           well as systems for estimating and accounting for costs. Efforts to ensure
                                           the security of ATC systems are also critical. As we have reported over the
                                           years, inadequate information technology and financial management

                                           Page 9                                                           GAO-04-227T
     controls made it difficult for FAA to ensure, among other things, the
     integrity, efficiency, and security of ATC modernization projects.

•	   Incomplete blueprint for modernization (system architecture): This
     blueprint would define and constrain the development and maintenance of
     the many interrelated systems comprising the ATC infrastructure. In 1997,
     we reported that FAA lacked a complete blueprint. The agency’s lack of a
     complete and enforced systems architecture had permitted
     incompatibilities among existing ATC systems.6

•	   Ineffective information technology investment management: FAA lacked
     a complete framework for selecting, controlling, and evaluating a portfolio
     of investments. Investments in information technology can have a
     dramatic impact on an organization’s performance. If managed effectively,
     these investments can vastly improve government performance and
     accountability.7 If not, however, they can result in wasteful spending and
     lost opportunities for improving delivery of services to the public.

•	   Immature software acquisition processes: FAA lacked a structured
     process for improving its capabilities in acquiring and developing
     software-intensive systems. As a result, we found that its processes for
     acquiring software were ad hoc.

•	   Inadequate cost estimating and cost accounting systems: In our 1997
     high risk series,8 we reported that FAA’s cost estimating processes and
     cost accounting practices were not adequate to effectively manage its
     billion dollar information technology investments for ATC modernization.9
     Among other things, we recommended that FAA institutionalize defined
     processes for estimating projects’ costs.

•	   Poor information security: Since September 1996, we have reported that
     poor information security is a high-risk area across the federal government


     6
      U.S. General Accounting Office, Complete and Enforced Architecture Needed for FAA
     Systems Modernization GAO/AIMD-97-30 (Washington, D.C.: Feb. 3, 1997).
     7
      U.S. General Accounting Office, Information Technology Investment Management: A
     Framework for Assessing and Improving Process Maturity, Exposure Draft, GAO/AIMD-
     10.1.23 (Washington, D.C.: May 2000).
     8
     U.S. General Accounting Office, High Risk Program: Information on Selected High-Risk
     Areas, GAO/HR-97-30 (Washington, D.C.: May 16, 1997).
     9
     U.S. General Accounting Office, Information Needed to Make Billion-Dollar
     Modernization Investment Decisions, GAO/AIMD-97-20 (Washington, D.C.: Jan. 22, 1997).



     Page 10                                                                 GAO-04-227T
                             with potentially devastating consequences.10 One serious issue is
                             protecting the information systems that support the nation’s critical
                             infrastructure, including segments of the air traffic control system.
                             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. Between May 1998 and December 2000, we made 39
                             recommendations to FAA 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,
                             and personnel security.


Human Capital Issues Also    Our work has also shown that, to avoid costly changes to ATC system
Impeded ATC                  contracts, it is important to bring technical experts and users together to
Modernization                design and test the systems to ensure that they will meet users’ needs and
                             work as intended. We found that FAA’s organizational culture discouraged
                             such collaboration. In addition, a lack of sustained leadership slowed the
                             progress of ATC modernization.

                        •	   FAA’s “stovepiped” organizational culture, as we reported in 1996,11
                             created barriers to collaboration and encouraged a focus on the goals of
                             individual program offices, rather than on the goals of projects as a whole.
                             As a result, employees sometimes acted in ways that did not reflect a
                             strong enough commitment to mission focus, accountability, coordination,
                             and adaptability, and the conflicting priorities led to project delays.

                        •	   The lack of sustained leadership at FAA was problematic throughout the
                             first decade of ATC modernization and beyond. During the first 10 years,
                             the agency had seven different Administrators and Acting Administrators,
                             whose average tenure was less than 2 years. In addition, five people held
                             the position of senior acquisition executive between 1990 and 1995. As we




                             10
                              U.S. General Accounting Office, Information Security: Opportunities for Improved OMB
                             Oversight of Agency Practices, GAO/AIMD-96-110 (Washington, D.C.: Sept. 24,1996).
                             11
                              U.S. General Accounting Office, Aviation Acquisition: A Comprehensive Strategy Is
                             Needed for Cultural Change at FAA (Washington, D.C.: Aug. 22, 1996).



                             Page 11                                                                  GAO-04-227T
                               reported in 1995,12 such frequent turnover at the top contributed to an
                               agency culture that focused on short-term initiatives, avoided
                               accountability, and resisted fundamental improvements in the acquisition
                               process.

                               In addition, according to FAA, burdensome governmentwide human
                               capital rules impeded its ability to hire, train, and deploy personnel,
                               thereby hampering its ability to manage ATC modernization projects
                               efficiently.


                               FAA has taken a number of steps to improve the management of its ATC
FAA Has Taken Steps            modernization efforts and has made progress. First, it has implemented an
to Address Systemic            incremental approach to project development, under which it “builds a
                               little, tests a little” to better estimate the time and costs needed to
Management Issues              complete modernization projects. In addition, it has fully or partially
                               implemented over 30 recommendations that we have made, as well as
                               recommendations made by the Department of Transportation’s Inspector
                               General and others. Our recommendations focused on two key areas—(1)
                               strengthening management controls for major ATC modernization systems
                               (e.g., improving estimates of the time and cost to develop and implement
                               projects) and (2) better managing FAA’s human capital resources (e.g.,
                               improving FAA’s organizational culture to better leverage its human
                               capital resources to effectively support ATC modernization). The Congress
                               has also taken actions designed to address some of FAA’s human capital
                               issues.


A New Development         •	   “Build a little, test a little” approach to system development: During its
Approach and Better            implementation of Free Flight Phase 1, FAA adopted a more incremental
                               approach to acquiring its ATC modernization systems than it had for
Management Controls            previous systems. FAA refers to this as the “build a little, test a little” or
Have Given FAA Stronger        spiral development approach. Some aviation stakeholders applaud this
Tools for Managing ATC         approach because, although they have found that its use can increase
Projects                       costs initially, money can be saved in the long run by avoiding mistakes
                               that are very costly to fix once a system has been developed. This
                               approach helps to ensure that the necessary building blocks of a system
                               are tested along the way through the early and ongoing involvement of key
                               stakeholders, such as those who will use and maintain the system. These


                               12
                                U.S. General Accounting Office, Exempting FAA From Procurement and Personnel
                               Rules, GAO/RCED-96-27R (Washington, D.C.: Oct. 27, 1995).



                               Page 12                                                              GAO-04-227T
     stakeholders are key to identifying critical omissions and “no go” items
     that could prevent a system from operating as intended.

•	   Blueprint for modernization (system architecture): FAA has developed a
     systems architecture, or overall blueprint, that clarifies interdependencies
     and interrelationships among national airspace systems and the technical
     standards to which systems must comply for information technology. In
     November 2002, 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 April 2003,
     GAO issued guidance on developing enterprise architectures.13

•	   Improved information technology investments management: In response
     to our recommendations, FAA has improved its process for managing
     information technology investments (e.g., the software-intensive systems
     under ATC modernization) by overseeing investment risks and capturing
     key information from the investment selection process in a management
     information system. Also, FAA has developed and implemented guidance
     for validating costs, benefits, and risks.

•	   Improved software acquisition processes: In response to shortcomings
     that we identified in FAA’s process for acquiring software, FAA developed
     an integrated framework for improving its software acquisition, software
     development, and systems engineering processes. FAA has also continued
     to expand the number of system development projects that use this
     integrated framework.

•	   Cost-estimating and cost-accounting systems: To improve cost estimates,
     FAA developed a standard work breakdown structure and established an
     historical database for tracking ATC systems’ estimated costs and other
     information. As we reported in January 2003,14 FAA has made significant
     progress in implementing its cost accounting system since our last high-
     risk series.




     13
       U.S. General Accounting Office, Information Technology: A Framework for Assessing
     and Improving Enterprise Architecture Management (Version 1.1), GAO-03-
     584G (Washington, D.C.: April 2003).
     14
      U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington,
     D.C.: January 2003).



     Page 13                                                                 GAO-04-227T
                            •	   Information security: FAA has initiated numerous activities in response
                                 to our recommendations about pervasive weakness in its facilities’
                                 physical and information security system. For example, 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. The security office also implemented a
                                 certification and accreditation process to ensure that vulnerabilities in
                                 current and future ATC systems are identified and weaknesses are
                                 addressed.


FAA Is Implementing         •	   Organizational culture framework: In response to recommendations we
Human Capital Initiatives        made about the need for FAA to address the organizational barriers that
                                 had impaired its ATC acquisition process, the agency issued an
                                 organizational culture framework in 1997 and is working to implement it.
                                 For example, it has used integrated project teams to improve collaboration
                                 among technical experts and users.

                            •	   Personnel reform: In response to FAA’s request, the Congress exempted
                                 FAA from many federal laws governing human capital, and the agency
                                 began implementing sweeping human capital reforms in 1996. These
                                 reforms addressed (1) compensation and performance management, (2)
                                 workforce management, and (3) labor and employee relations. In our
                                 February 2003 report on FAA’s implementation of personnel reform,15 we
                                 found that the agency had fully or partially implemented initiatives in each
                                 of these areas.

                            •	   Actions to sustain leadership: To provide FAA’s ATC modernization
                                 efforts with needed direction and stability, the Congress established a 5-
                                 year term for the FAA Administrator in 1994. Former Administrator
                                 Garvey was the first to complete a term of this length in 2002. In addition,
                                 the three individuals who served as FAA’s senior acquisition executive—
                                 the Associate Administrator for Research and Acquisitions—between 1996
                                 and 2003 held this position longer than their predecessors.

                            •	   Chief operating officer and Air Traffic Organization: To accelerate ATC
                                 modernization and improve the performance of the air traffic control
                                 system, the Congress enacted legislation in 2000 that established a five-
                                 member board (the Air Traffic Services Subcommittee) to oversee, and a


                                 15
                                  U.S. General Accounting Office, Human Capital Management: FAA’s Reform Effort
                                 Requires a More Strategic Approach, GAO-03-156 (Washington, D.C.: February 3, 2003).



                                 Page 14                                                                  GAO-04-227T
                               chief operating officer to manage, a new performance-based organization,
                               the Air Traffic Organization, which was created through an executive
                               order to operate the ATC system. Under the act, the Subcommittee
                               provides oversight by, among other things, reviewing and approving
                               strategic plans, large contracts, and budget requests for the air traffic
                               control system. The Subcommittee has been meeting since January 2001,
                               and a chief operating officer was appointed in June 2003. While awaiting
                               the appointment of a chief operating officer, the Subcommittee focused on
                               bringing performance management, accountability, and a more
                               businesslike structure to the ATC system, and it took some specific
                               actions, including reviewing and approving performance metrics, a budget,
                               and three large procurements that FAA initiated.


                               FAA faces a number of challenges in fully implementing management
Key Challenges Lie 	           controls for major ATC projects and marshalling the human capital
Ahead 	                        resources to deliver on these controls. Additionally, during this lull in the
                               demand for air travel, it has an opportunity to review its long-term ATC
                               modernization priorities to assess their relative importance and feasibility
                               in light of current economic constraints, security requirements, and other
                               issues.


Continuing to Improve          Despite the progress FAA has made in improving its management controls
Management Controls and        and human capital management for ATC modernization, systemic
Use Human Capital              management issues persist and warrant sustained attention. In our 2003
                               review of federal high-risk areas,16 we considered these issues of sufficient
Resources More                 magnitude to continue placing ATC modernization on our high-risk list.
Effectively Poses Ongoing
Challenges                •	   Need for complete and enforced enterprise 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. However, in
                               February 2002, we reported that while 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— it has not yet
                               completed the architecture products or leveraged the architecture for




                               16
                                U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington,
                               D.C.: January 2003).



                               Page 15                                                                 GAO-04-227T
     managing change.17

•	   Need to strengthen information technology investment management
     processes: Although FAA has developed guidance for validating costs,
     benefits, and risks, the agency has not yet implemented processes for
     evaluating projects after implementation in order to identify lessons
     learned and improve the investment management process. Our work has
     also identified the need for sustained attention to managing ATC systems
     over their entire lifecycles—from the cradle to the grave.

•	   Need to improve software acquisition processes: Since our last high-risk
     update, FAA has continued to expand the number of system development
     projects that use an integrated framework. However, FAA still does not
     require all systems to achieve a minimum level of progress within the
     framework before being funded.

•	   Need to improve cost-estimating practices: FAA has not yet fully
     instituted rigorous cost-estimating practices. That is, it is not yet
     incorporating actual costs from related system development efforts in its
     processes for estimating the costs of new projects. Cost estimation was
     problematic for both STARS and WAAS. As we reported in January 2003,18
     FAA lacks accurate, valid, and current data on the remaining costs and
     progress of STARS. Without such data, FAA is limited in its ability to
     effectively oversee the contractor’s performance and reliably estimate
     future costs. Given FAA’s chronic difficulty in meeting cost, schedule, and
     performance targets, some members of the aviation community have
     suggested that more rigor needs to be built into these estimates when
     projects are started and that this could best be done by having an
     independent group of experts review FAA’s initial estimates for ATC
     projects. The accuracy of these estimates is particularly important as FAA
     embarks on two relatively new and costly ATC modernization projects—
     NEXCOM, which is expected to cost nearly $1 billion, and the En Route
     Automation Replacement Modernization (ERAM), which will provide new
     hardware and software to facilities responsible for directing high-altitude
     air traffic and is expected to cost over $2 billion.




     17
       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).
     18
      U.S. General Accounting Office, High-Risk Series: An Update, GAO-03-119 (Washington,
     D.C.: January 2003).



     Page 16                                                                  GAO-04-227T
•	   Need to improve cost-accounting system: In January 2003, we reported
     that FAA had made significant progress in implementing its cost-
     accounting system since we issued our last high-risk report. However, in
     June 2003, the Department of Transportation’s Inspector General issued an
     assessment of FAA’s cost-accounting system and found that the system
     was still not effective.19 According to the Inspector General, FAA could not
     credibly claim to be a performance-based organization, or function as one,
     without a cost-accounting system that is compliant with federal cost-
     accounting standards.

•	   Need to improve information security: Despite improvements by FAA,
     the agency faces continued challenges in improving its intrusion detection
     capabilities, obtaining accreditation for systems that are already
     operational, and managing information systems security throughout the
     agency.

•	   Need to change organizational culture: Although FAA issued an
     organizational culture framework in 1997 and established integrated teams
     to implement it, the Department of Transportation’s Inspector General
     reported in 2000 that FAA’s culture remains a barrier to successful
     acquisition projects and that integrated teams are not working well
     because FAA’s culture continues to operate in vertical “stovepipes” that
     conflict with the horizontal structure of team operations. Our 2000 report
     on WAAS confirmed that the integrated teams were not working as
     intended.20 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.

•	   Need to fully implement personnel reforms: In our February 2003 report
     on FAA’s implementation of personnel reforms, we found that the agency
     had not fully incorporated elements that are important to effective human
     capital management into its overall reform effort, including data collection
     and analysis, performance goals and measures, and links between reform
     goals and program goals. In turn, we recommended that FAA develop a
     more strategic approach to its reform effort, to better position itself to


     19
      U.S. Department of Transportation, Inspector General, 2002 Status Assessment of Cost
     Accounting System and Practices, Federal Aviation Administration, Report Number FI-
     2003-043 (Washington, D.C., June 3, 2003).
     20
      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).



     Page 17                                                                  GAO-04-227T
                            evaluate the effects of its reform initiatives, use the evaluations as a basis
                            for any strategic improvements to its human capital management
                            approach, and hold its leaders accountable for the results of its human
                            capital management efforts. FAA generally agreed with our
                            recommendations.

                       •	   Implement the new Air Traffic Organization: The new Air Traffic
                            Organization remains to be formed by joining FAA’s Air Traffic Services
                            and Research and Acquisition offices. In addition, some issues that we
                            identified in our May 2003 report pose potential challenges to this
                            restructuring effort. For example, certain lines of authority between the
                            Subcommittee and the FAA Administrator remain to be clarified.


Other Challenges Lie        FAA faces a variety of other challenges as it attempts to balance its
Ahead                       modernization investments. These include working effectively in the post-
                            9/11 environment to determine how best to move forward with ATC
                            modernization. In addition, FAA must contend with a number of economic
                            constraints, including the current economic downturn, poor financial
                            condition of the airline industry, competing demands for agency resources
                            (e.g. safety, security, infrastructure, and operations), and the need for
                            airlines to voluntarily equip their fleets with technologies needed to
                            participate in a modernized National Airspace System. As we, the
                            Department of Transportation’s Inspector General, and others have noted,
                            to work effectively within these constraints, it is important for FAA to
                            determine how it can best maximize the ATC system’s current capabilities
                            by (1) identifying the initiatives that hold the most promise for increasing
                            capacity and efficiency in the near-term and (2) determining the extent to
                            which the airline industry will be financially able to equip with new
                            technologies in the near and mid-term. A review of FAA’s 10-year plan to
                            increase the capacity and efficiency of the National Airspace System called
                            the called the Operational Evolution Plan, could ultimately result in a
                            reordering of some ATC modernization priorities because the plan, though
                            issued in 2002, is based on analyses that precede the important changes in
                            aviation security and the nation’s economy that have taken place during
                            the past 2 years. A fresh view of this plan could put FAA in a better
                            position to target its resources toward projects that will maximize the
                            system’s capacity and efficiency and identify those ATC projects that
                            should be kept in the pipeline to meet critical future needs.

                            In summary, we are at a critical juncture for reassessing FAA’s ATC
                            modernization efforts. Given over two decades of experience with ATC
                            modernization, it is time to take advantage of the lessons learned to date


                            Page 18                                                            GAO-04-227T
                      and the relative lull in air traffic demand resulting from the events of 9/11
                      to make inroads in improving the capacity and efficiency of the National
                      Airspace System. The systemic issues that have plagued FAA’s ATC
                      modernization efforts for over two decades also provide us with critical
                      lessons learned as we navigate our way around past mistakes and into this
                      new century of aviation.


                      This concludes my statement. I would be pleased to respond to any
                      questions that you or other Members of the Subcommittee may have at
                      this time.


                      For further information on this testimony, please contact Gerald
Contact Information   Dillingham at (202) 512-2834 or by e-mail at dillinghamg@gao.gov, or David
                      Powner at (202) 512-9286 or by e-mail at pownerd@gao.gov. Individuals
                      making key contributions to this testimony include Elizabeth Eisenstadt,
                      Samantha Goodman, Maren McAvoy, Beverly Norwood, Colleen Phillips,
                      and Richard Scott.




                      Page 19                                                          GAO-04-227T
Related GAO Products 



              Aviation Safety: Information on FAA’s Data on Operational Errors at
              Air Traffic Control Towers. GAO-03-1175R. Washington, D.C.: September
              23, 2003.

              National Airspace System: Current Efforts and Proposed Changes to
              Improve Performance of FAA’s Air Traffic Control System. GAO-03-542.
              Washington, D.C.: May 30, 2003.

              National Airspace System: Reauthorizing FAA Provides Opportunities
              and Options to Address Challenges. GAO-03-473T. Washington, D.C.:
              February 12, 2003.

              Human Capital Management: FAA’s Reform Effort Requires a More
              Strategic Approach. GAO-03-156. Washington, D.C.: February 3, 2003.

              National Airspace System: Better Cost Data Could Improve FAA’s
              Management of the Standard Terminal Automation Replacement System.
              GAO-03-343. Washington, D.C.: January 31, 2003.

              High-Risk Series: An Update. GAO-03-119. Washington, D.C.: January 2003.

              Air Traffic Control: Impact of Revised Personnel Relocation Policies Is
              Uncertain. GAO-03-141. Washington, D.C.: October 31, 2002.

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

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

              National Airspace System: Long-Term Capacity Planning Needed Despite
              Recent Reduction in Flight Delays. GAO-02-185. Washington, D.C.:
              December 14, 2001.

              National Airspace System: Free Flight Tools Show Promise, but
              Implementation Challenges Remain. GAO-01-932. Washington, D.C.:
              August 31, 2001.

              Air Traffic Control: Role of FAA’s Modernization Program in Reducing
              Delays and Congestion. GAO-01-725T. Washington, D.C.: May 10, 2001.




              Page 20                                                        GAO-04-227T
           National Airspace System: Problems Plaguing the Wide Area
           Augmentation System and FAA’s Actions to Address Them. GAO/T-RCED-
           00-229. Washington, D.C.: June 29, 2000.

           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.

           Air Traffic Control: Status of FAA’s Implementation of the Display System
           Replacement Project. GAO/T-RCED-00-19. Washington, D.C.: October 11,
           1999.

           Air Traffic Control: FAA’s Modernization Investment Management
           Approach Could Be Strengthened. GAO/RCED/AIMD-99-88. Washington,
           D.C.: April 30, 1999.

           Air Traffic Control: Observations on FAA’s Air Traffic Control
           Modernization Program. GAO/T-RCED/AIMD-99-137. Washington, D.C.:
           March 25, 1999.




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           Page 21                                                       GAO-04-227T
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