Air Traffic Control:

FAA's Acquisition Management Has Improved, but Policies and Oversight Need Strengthening to Help Ensure Results

GAO-05-23: Published: Nov 12, 2004. Publicly Released: Dec 13, 2004.

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The Federal Aviation Administration's (FAA) multibillion-dollar effort to modernize the nation's air traffic control (ATC) system has resulted in cost, schedule, and performance shortfalls for over two decades and has been on GAO's list of high-risk federal programs since 1995. According to FAA, performance shortfalls were due, in part, to restrictions imposed by federal acquisition and personnel regulations. In response, Congress granted FAA exemptions in 1995 and directed it to develop a new acquisition management system. In this report, GAO compared FAA's AMS with (1) the FAR and (2) commercial best practices for major acquisitions, and (3) examined FAA's implementation of AMS and its progress in resolving problems with major acquisitions.

FAA's Acquisition Management System (AMS) is broader and less prescriptive than the Federal Acquisition Regulation (FAR), but both afford managers flexibility. AMS establishes an acquisition life-cycle management system, including both a contracting and program management system, whereas the FAR is primarily a contracting system. In addition, AMS takes the form of guidance--it is not regulatory, while the FAR is a set of published regulations--a legal foundation that has the force and effect of law that most federal agencies are required to follow. AMS provides some discipline for acquiring major ATC systems; however, it does not ensure a knowledge-based approach to acquisition found in the best commercial practices for managing commercial and DOD product developments that we have identified in numerous past reports. Best practices call for (1) use of explicit written criteria to attain specific knowledge at key decision points and (2) use of this knowledge by executives at the corporate level to determine whether a product is ready to move forward. Attainment and use of such knowledge by executives helps to avoid cost, schedule, and performance shortfalls that can occur if they commit to a system design prematurely. While AMS has some good features, including calling for key decision points, it falls short of best practices. GAO's review of seven major ATC systems and analysis of FAA's performance in acquiring major systems found that AMS has not resolved longstanding problems it experienced prior to its implementation of AMS--including developing requirements and managing software--and is just beginning to focus on how these acquisitions will improve the efficiency of ATC operations. While FAA has made progress by providing guidance for avoiding past weaknesses, it has not applied these improvements consistently. According to FAA officials, reorganization under and improved oversight by FAA's new performance-based Air Traffic Organization should help ensure greater consistency and an increased focus on results. Past GAO reports have demonstrated that the success of an acquisition process depends on good management, whether it be under AMS or the FAR.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: First set of service level reviews for most of Air Traffic Organization (ATO) Service Units' National Airspace System (NAS) acquisitions and operation systems has been completed, and the agency has planned reviews for the remaining systems. FAA plans to complete an assessment of the entire review process by mid-June 2006, and update the service level review process after that date.

    Recommendation: To reduce the risk of persistent cost and schedule shortfalls in major ATC system acquisition programs, to improve the quality of the ATC systems that are deployed, and to deliver new capability to the National Airspace System faster, the Secretary of Transportation should advise the FAA Administrator to require corporate executive-level decisions at these key decision points (before an acquisition moves from integration to demonstration and, again, before it moves to production).

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: FAA modified the AMS guidance for the FAA Acquisition System Tool (FAST) by instituting on-site integration testing at FAA facilities, operational capability tests and demonstrations, etc., so that any modification to hardware and software can be determined before source selection.

    Recommendation: To reduce the risk of persistent cost and schedule shortfalls in major ATC system acquisition programs, to improve the quality of the ATC systems that are deployed, and to deliver new capability to the National Airspace System faster, the Secretary of Transportation should advise the FAA Administrator to develop explicit written criteria for the key decision points called for under best practices, including the capture of specific design and manufacturing knowledge.

    Agency Affected: Department of Transportation

  3. Status: Closed - Implemented

    Comments: AMS was modified in December 2004 to require, among other things, the development of the preliminary program document for the investment analysis readiness decision and the initial investment decision, etc. Templates have also been developed and inserted in the guidance portion of the FAA Acquisition System Tool.

    Recommendation: To reduce the risk of persistent cost and schedule shortfalls in major ATC system acquisition programs, to improve the quality of the ATC systems that are deployed, and to deliver new capability to the National Airspace System faster, the Secretary of Transportation should advise the FAA Administrator to establish a strategy for identifying and measuring all additional development needed for complex software (e.g., commercial-off-the-shelf or nondevelopmental items) used for major ATC systems.

    Agency Affected: Department of Transportation

  4. Status: Closed - Implemented

    Comments: The AMS was modified in December 2004 to require the development of documents that staff must use prior to making investment decisions. In addition, templates that stipulate that top level functional and performance requirements that reflect the needs of the customer were added to the program's guidance and are required to be used by staff before a final investment decision is made.

    Recommendation: To reduce the risk of persistent cost and schedule shortfalls in major ATC system acquisition programs, to improve the quality of the ATC systems that are deployed, and to deliver new capability to the National Airspace System faster, the Secretary of Transportation should advise the FAA Administrator to modify AMS to specify that requirements be more clearly defined for major ATC systems, including providing more detailed guidance on setting clear, objective, and measurable requirements that reflect customers' needs, before making large investments of agency resources.

    Agency Affected: Department of Transportation

  5. Status: Closed - Implemented

    Comments: In response to GAO's recommendations, FAA (1) has established a senior-level, acquisition workforce council in ATO to oversee acquisition-related activities; (2) will monitor OMB's efforts to develop core, standardized acquisition workforce competencies and training programs for the executive branch, and use OMB Policy Letter of April 15, 2005 for guidance on managing acquisition workforce; (3) will continue to use industry-standard competency certification for managers of major acquisition programs and related disciplines; (4) will use subject matter experts to assess training and develop career path guidance; and (5) will implement an agency-wide training program on earned value management in alignment with OMB requirements.

    Recommendation: In addition, to assure FAA that the training framework it has adopted for the ATO's acquisition workforce is improving the knowledge base of this workforce as intended, the Secretary of Transportation should advise the FAA Administrator to develop performance criteria to comprehensively evaluate the framework's effectiveness.

    Agency Affected: Department of Transportation

 

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