FAA Encountering Problems in Acquiring Major Automated Systems

Published by the Government Accountability Office on 1990-04-18.

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

                       United   States General    Accounting        Office

For Release            FAA Encountering           Problems          in
on Delivery
                       Acquiring      Major      Automated          Systems
Expected      at
IO:00    a.m.    EDT
April    18, 1990

                       Statement      of JayEtta    Hecker,   Director,
                       Resources,       Community,   and Economic       Development
                       Information       Systems,
                       Information       Management    and Technology       Division

                       Before     the Subcommittee             on    Transportation
                       and Related      Agencies,
                       Committee      on Appropriations,
                       House    of Representatives

                                                                                      GAO Form 160 (12/87)
Mr. Chairman and Members of the Subcommittee:

We are pleased                to be here to discuss                 the Federal      Aviation
Administration's                   (FAA) efforts           to modernize      and upgrade              its
automated         systems.              During        the past year our reviews                of a major
planned         general-purpose                procurement         and two air      traffic           control
modernization                projects        have uncovered          consistent      fundamental
weaknesses             in FAA's acquisition                 of major automated           systems.             These
weaknesses             could     result        in unjustified          and costly      procurements,
further         delays         in delivering            important      components      for       the air
traffic         control         modernization            effort,     and increased            risk     that
existing         air     traffic           control      systems will       be stressed           beyond their

FAA's Computer Resources                         Nucleus      (CORN) project        is one example of
an inadequately                 justified            general-purpose       procurement.               With CORN,
FAA intends             to have a contractor                 provide      and operate          computer
facilities             for     the agency's            general-purpose       data-processing
functions         such as payroll,                    personnel,     and aviation        safety
information             systems for            the next       10 years.      The total           estimated
cost      for    the 10 years               is about $1.5 billion,             a tenfold             increase
since      the project              was first          proposed     in 1986.      FAA anticipates               that
the CORN contract                   will     be awarded within            the next     few months.
While     FAA's concept            to contract          out its       general-purpose               functions
may be acceptable,                the CORNprocurement                  is not adequately                 justified
and therefore,             we are recommending               in a draft          report      that        it        not be

FAA has identified                a number of reasons                to justify       procuring                CORN.
One is insufficient                computer        capacity       causing        poor response                 times
in the current             system.         However,        project      officials         could         not
support     this     assertion,            primarily        because FAA does not perform
needed capacity             management and planning                    that     would provide                 data on
computer      capacity        and explain           why users are apparently                      experiencing
slow response          times.        Our own analysis                 of the limited          data
available      does not show evidence                      of insufficient           computer            capacity
causing     poor response            times.         Other problems              may be the source                    of
the perceived          poor response              times,      such as inefficient                 software             or
communications,             which are not subject                    to change under CORN. This
means that         after     investing         hundreds        of millions          of dollars                in
procuring      more computer               capacity        through      CORN, FAA may still                        end up
with     poor response            times.

A second reason             for    procuring        CORN is FAA's claim               that        its         general-
purpose      data-processing               needs will         increase         by 30 percent             each year
for     10 years,      ultimately           requiring         a system about          1300 percent
larger      than the current               one.     This      is equivalent          to saying                that     in
10 years      a system will            be needed that                can produce      about         15 million
printed      pages per day,            365 days per year.                     This projection                 is based

on sparse data with                 little           identification            of what dramatic                changes
will     occur      in FAA's missions                  to warrant           this     steep growth             in later

Other major          unresolved            problems         and uncertainties                  could     increase
the cost       of CORN. In particular,                           FAA's method for               validating
bidders'       proposed          solutions            is deficient            because information                that
FAA provided             to vendors           to aid them in developing                        their     proposals
was incomplete.                 Further,           the extremely             small     sample work load that
FAA developed             for validating                proposals           is unrepresentative                of the
agency's         total     work load.                This   flawed      methodology             will     not provide
adequate         data     for    accurately             evaluating           vendors'      proposals           and
their      proposed         charges          for     data-processing               services.           This
deficiency          could       have cost            ramifications            throughout          the life       of the

FAA's cost          estimate        of $74.5 million                  for     converting          current
applications             to CORN is unreliable.                       FAA estimates             the cost to
convert      the 15 million                  lines      of existing           software         at about        $5 to $6
per line         of code, while               industry          estimates          are usually          $15 to $20
per line         of code or higher.                     Also,     since       generating          the cost
estimate,         FAA has increased                   the amount of conversion                     work to be
performed         by the contractor                   and has doubled                the amount of time
needed to do this                without           correspondingly             increasing          the cost
estimate.           The estimate              is based on unvalidated                    assumptions            about

the availability              of FAA staff             to assist            the contractor              in the

In addition,         CORNwill           not improve the quality                        of information.
Under CORN, the contractor                      will       be required          only         to move current
applications         and data bases to the new system.                                      The contractor         will
not be required            to enhance the applications,                             improve        their
performance,         or eliminate              existing          deficiencies.                Therefore,
existing        problems       with     FAA's applications                    and data bases would
simply     be transferred              to CORN, at considerable                        expense.

In summary, while              the CORN approach                   may have merit,               FAA's
justification          and planning             for      this      effort      has been inadequate.
Before     it    spends hundreds               of millions            of dollars             to move to a new
system that         neither      guarantees              a remedy for           existing           deficiencies
nor improves         current          information,              FAA should          first       identify     the
causes of perceived              problems           with        current       system performance.

Mode Select,         or Mode S, is another                       project       where lack           of adequate
management oversight                  and action           has resulted             in the delayed
delivery        of important           air     traffic          control       system components.                  Mode
S is an air         traffic      control          surveillance               and communication              system
that     is being      developed             to provide          more accurate               aircraft      location
information        by replacing               some existing               radars,      and to allow
controllers         and pilots          to exchange data,                    such as weather
information.           Fifteen         years      after         initiating          the Mode S concept,

FAA awarded a production                       contract           in 1984 to a Westinghouse                        and
UNISYS joint          venture         to buy 137 Mode S systems at an original
estimated         cost     of $221 million.                   In 1988, before                   any of the 137
systems had been successfully                           produced,           FAA decided            to purchase           259
more Mode S systems,                  with         contract        award scheduled                for     late     1992.
FAA estimates             that     the total           cost       of deploying            all     396 systems
will      be $1.7 billion.

Over 5 years             after     FAA awarded the contract                         for    the initial             137
systems,         the agency has spent about                         $145 million                of the $271-
million         contract         ceiling       price      without          receiving            the first        system.
Delivery          of the first             fully      capable       Mode S system is now scheduled
for     April      1993, 5 years              later     than originally                planned.             This
occurred          because FAA used a high-risk                         acquisition               strategy        and did
not remedy contract                  problems          when they arose.                   In acquiring             Mode S,
FAA did not adequately                      develop       or test          the system before                 awarding
the production              contract,              which contributed               to later         technical
problems.           Further,         although          officials           knew of these problems                      as
early      as February            1987, FAA did not act to correct                                them until           June
1989, when it              warned the contractor                    that      if    contract            deficiencies
were not resolved,                  the contract              might    be terminated.

Since June 1989, FAA and the contractor                                     have been unable                 to agree
on an approach              to overcome the contract                        problems.             Recently,
additional          delays         occurred          and the contracting                  officer         stopped
paying          the contractor             until      progress        is made.            These continuing

problems       make it       uncertain           whether       FAA's approach--to                negotiate
additional        contract          changes-- is the most effective                         way to deal with
this     situation.          Therefore,              we believe        the Secretary           of
Transportation            should      conduct           an independent            evaluation         of the
economic,        operational,              and technical             risks      involved      in completing
the Mode S contract                 that      considers        all     alternatives           available             to
the government--           including            terminating           the contract           in whole or in

Even though           Mode S still            does not work,             FAA has decided             to spend
over a billion            dollars          to buy 259 more of the systems.                           This
decision        is unjustified.                 In making this               decision,      FAA did not
properly        analyze      requirements,               did not adequately                consider
alternatives,           and did not evaluate                   benefits          and costs.          We
therefore        are recommending                    in a draft       report      that     the Secretary                 of
Transportation            direct      the FAA Administrator                      to cancel       plans        for
buying       the additional           259 Mode S systems and to perform                              a thorough
analysis       of requirements,                 alternatives,            benefits,         and costs.

The Advanced Automation                     System,       or AAS, is yet another                    project
where FAA is encountering                       delays      in the delivery               of critical
components        for     the air          traffic       control       modernization           effort.          These
delays       have the potential                 for     affecting        FAA's ability           to handle
safely       the predicted           increases           in air       traffic      into     the next
AA.5 is scheduled           to replace          aging       air     traffic       control         COIQUter

systems with        new hardware,            software,             and controller            workstations.
Improvements        are expected          to result               primarily       from (1) the use of
modern equipment            and (2) the development                      of new software                functions
intended      to automate        some controller                   functions       and allow           more
aircraft      to fly       user-preferred,              fuel-efficient             routes.            FAA awarded

competitive        contracts         to design        AAS to International                       Business
Machines       (IBM) Corporation               and Hughes Aircraft                 Company in 1984.
During      this   design      competition           phase,          new requirements               were added,
contract       costs      doubled,      and the schedule                 was delayed             a year.           In
1988, FAA awarded a contract                     to IBM to complete                  the design              and
production         of AAS.      The cost of AAS is estimated                          at over $5
billion,       making it       the most expensive                    program      in the National
Airspace       System Plan.

Less than a year after                the contractor                 began work on the contract,
FAA and IBM jointly             identified           a 13-month delay                in the scheduled
delivery       of the first          major      segment of three                 project         increments,
called      the Initial        Sector     Suite         System.          The primary             causes of this
delay      were an overly         ambitious          software           development          schedule          and
FAA's and the contractor's                     inability           to resolve        key requirements
issues.        Although       FAA's required                schedule          appeared      unrealistic,                IBM
agreed to it.             In addition,          FAA did not adequately                      define           some
requirements,          and IBM did not thoroughly                        analyze         other
requirements.             At present,          some requirements                 issues      are still
unresolved,         which will        likely       lead to even further                     delays.

As a consequence              of the delay             in the first                segment,       the potential
exists     that     later        phases of AAS to upgrade                          terminal        automation
systems will          also       be delayed.            This           increases       the likelihood              that
FAA will       be forced          to operate           its        current         aging     systems       through         the
1990s and further                delay      benefits.              As we reported              last      year,     many
of these       current        systems have experienced                            capacity       shortfal1s.l
Indeed,     almost         70 percent         of the large,                   busy terminal             radar
approach       control        facilities,             known as TRACONs, reported                          to us that
they had experienced                aircraft           information                disappearing           from
controllers'          screens,           flickering              displays,         or delayed           computer
responses         to controllers'              attempts            to update          or request          data.
These overload             problems         threaten             the    ability       of controllers              to
maintain       safe separation               of aircraft.

To address         this      dilemma,        last      year we recommended that                          the
Secretary         of Transportation                 direct         FAA to institute                a computer
capacity       and performance               management program to monitor                               work loads
and system utilization                    in all       facilities,                and investigate
alternatives          for meeting            the larger                TRACONs' air           traffic       control
requirements          for     at least         the next             10 years.             Since our report,               FAA
has initiated             some    steps      to remedy immediate                      capacity          deficiencies.

lAir Traffic          Control:            COIIIWter          CaDacitv          Shortfalls  May
Imoair Flisht          Safetv        (GAO/IMTEC-89-63,                      July 6, 1989).
However,         regarding              the need to explore                     alternatives,            the
Department            of Transportation                    believed            that    FAA    had already
developed         an appropriate                      interim      solution           in 1987 to meet TRACON
requirements                for      the next          10 years.           This       interim      solution         is not
encouraging.                 It      calls      for     increasing             the capacity         of the present
systems         in larger             TRACONs by pursuing                      sole-source         contracts        to
expand current                    system configurations                    to their          maximum design
limits.          This        expansion           will      require         FAA to buy 1960s-vintage
computers         similar             to existing           processors.                These antiquated
processors            have less              processing           capability           than a desktop           computer
that      can    be     purchased             in a local              store.

Given the potential                         further       delay        in AAS and the clear                inadequacies
of the existing                    computer           systems in large                TRACONs, FAA is assuming
the risk         that        its       systems will             not be able to handle                    the
increasing            air         traffic       of the 1990s.                  To prevent         this    potential
threat      to air           traffic          safety       and reduce the possible                       need to take
drastic         actions            in the future,               such as limiting                 the number of
aircraft,         we reiterate                  our recommendation                    that      FAA immediately
identify         other            alternatives            for meeting             the larger         TRACONs' air
traffic         control            requirements            through         the 1990s.

In summary, Mr. Chairman,                              FAA's acquisition                management Suffers               from
fundamental             weaknesses that                   have resulted               in expensive,
inadequately                justified           procurements,              continued          delays      in the
development             and delivery                  of important             elements         of air    traffic

control          modernization,              and increased            risk     that     some existing                air
traffic          control      systems will             be stressed           beyond their          capacities.
Implementation               of the National             Airspace            System Plan is a formidable
task.        To develop            and acquire          so many large,                complex systems would
challenge           the abilities              of any organization.

To do the best               job possible,             FAA must elevate                the importance                of
acquisition           management within                 the agency.             It     must improve            its
acquisition           management and ensure that                         acquisition         has the
visibility           and involvement                of top management within                  the
organization.                We understand             that        FAA has recently          instituted                a
reorganization               to give          acquisition           increased         emphasis.       This           is a
positive           beginning.               However,    reorganization                must be accompanied                    by
adequate           program management policies                        and practices.              Until        FAA
gets       its     acquisition              house in order           and breaks         the trend         of
unjustified,               costly,          and delayed        procurements,            the American            public
cannot           be assured          that     its   money is being             well     spent and that                 its
air       safety      is ensured.

Mr. Chairman,               this      concludes        my prepared            remarks.       I will        be
pleased           to answer any questions                     you or other            members of the
Subcommittee               may have at this             time.