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Testimony: 

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

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 2:00 p.m. EDT: 

Wednesday, June 21, 2006: 

Air Traffic Control Modernization: 

Status of the Current Program and Planning for the Next Generation Air 
Transportation System: 

Statement of Gerald L. Dillingham, Ph.D., Director: 
Physical Infrastructure Issues: 

GAO-06-653T: 

GAO Highlights: 

Highlights of GAO-06-653T, testimony before the Subcommittee on 
Aviation, Committee on Transportation and Infrastructure, House of 
Representatives. 

Why GAO Did This Study: 

The Federal Aviation Administration’s (FAA) effort to modernize the 
nation’s air traffic control (ATC) system has been listed by GAO as a 
high risk program for more than a decade now, due to systemic 
management and acquisition problems. Two relatively new organizations 
housed within FAA—the Air Traffic Organization (ATO) and the Joint 
Planning and Development Office (JPDO)—have been given the bulk of the 
responsibility for planning and implementing these modernization 
efforts. Congress created ATO to be a performance-based organization 
that would improve the culture, structure, and processes and bring 
accountability to the ATC modernization program. Congress created JPDO, 
made up of seven partner agencies, to coordinate the federal and 
nonfederal stakeholders necessary to plan a transition from the current 
air transportation system to the “next generation air transportation 
system” (NGATS). This testimony is based on GAO’s recently completed 
and ongoing studies of the ATC modernization program. GAO provides 
information on (1) the status of ATO’s efforts to implement processes 
and other initiatives aimed at efficiently managing and modernizing the 
current ATC system and (2) the status of JPDO’s planning efforts and 
the key challenges that JPDO faces in planning for NGATS. 

What GAO Found: 

ATO has made significant progress toward the efficient management of 
the nation’s ATC system, but faces several challenges. ATO has 
implemented organizational and business process changes, and has taken 
steps to increase scrutiny of its acquisition decisions. ATO has met 
its acquisition performance goal for the second consecutive year—that 
is, 80 percent of its system acquisitions are on schedule and within 10 
percent of budget. ATO has identified cost savings opportunities 
through consolidation of administrative activities and outsourcing. 
However, ATO faces several challenges, including sustaining and 
institutionalizing its progress toward operating effectively as a 
performance-based organization, hiring and training thousands of air 
traffic controllers, ensuring stakeholder involvement in major system 
acquisitions, and keeping acquisitions on schedule and within budget. 
JPDO is making progress in its planning for NGATS, but faces several 
challenges. JPDO is implementing a number of practices that our work 
has shown facilitates the federal interagency collaboration that is 
central to its mission and legislative mandate. However, JPDO is 
fundamentally a planning and coordinating body that lacks authority 
over the key human and technological resources needed to continue 
developing plans and system requirements for NGATS. Thus, a challenge 
may arise in leveraging the resources of the partner agencies. As part 
of its planning, JPDO is working to develop a cost estimate for NGATS 
through a series of workshops with various stakeholders. JPDO has taken 
several important first steps and is following effective practices in 
developing an NGATS enterprise architecture—a blueprint for NGATS and 
one of the most critical planning documents in the NGATS effort. JPDO 
faces several challenges, including maintaining stakeholder support 
over the long term, defining roles and responsibilities and deciding 
how to coordinate the implementation of NGATS, and addressing several 
critical policy issues, such as the extent to which NGATS will 
accommodate visual flights versus instrument-only flights. 

Figure: Air Traffic Management: 

[See PDF for Image] 

[End of Figure] 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-653T]. 

To view the full product, click on the link above. For more 
information, contact Dr. Gerald L. Dillingham, at (202) 512-2834 or 
dillinghamg@gao.gov. 

[End of Section] 

Mr. Chairman and Members of the Subcommittee: 

We appreciate the opportunity to participate in today's hearing to 
discuss the status of efforts by the Air Traffic Organization (ATO) and 
the Joint Planning and Development Office (JPDO) to modernize and 
transform the nation's air traffic control (ATC) system. Both 
organizations are within the Federal Aviation Administration (FAA) and 
represent recent efforts by Congress to, among others things, ensure a 
national airspace system that is safe, efficient, and capable of 
meeting a growing demand for air transportation--a demand that is 
expected to triple by 2025. ATO has responsibility for operating, 
maintaining, and modernizing the current ATC system. ATO was authorized 
as a performance-based organization (PBO)[Footnote 1] in 2000 and 
includes 36,000 of FAA's roughly 46,000 employees. JPDO, authorized in 
2003, is responsible for planning and coordinating the broader and 
longer-term transformation (through 2025) to the "next generation air 
transportation system" (NGATS). JPDO is conducting its work with the 
assistance of seven partner agencies: the Departments of Commerce, 
Defense, Homeland Security, and Transportation; FAA; the National 
Aeronautics and Space Administration (NASA); and the White House Office 
of Science and Technology Policy. 

In 1981, FAA began a program to replace and upgrade ATC facilities and 
equipment, but encountered chronic cost, schedule, and performance 
problems, leading us to classify FAA's ATC modernization program as 
high risk in 1995.[Footnote 2] We have issued a series of reports on 
these problems and made numerous recommendations over the years. Our 
reports focused on many aspects of the national airspace system, 
including the management of modernization projects; the management of 
the information technology that is at the heart of many modern ATC 
systems; the challenges FAA faces in increasing system capacity and 
reducing delays; and an acquisition workforce culture that lacked the 
mission focus, accountability, coordination, and adaptability needed 
for FAA to meet its cost, schedule, and performance targets. FAA has 
implemented many of our recommendations to varying degrees. 

System modernization, as envisioned in NGATS and being planned by JPDO, 
will be costly and will have to compete with other national priorities 
and demands for resources. ATO will be especially challenged to 
maintain the current ATC system while simultaneously developing and 
transitioning to the future system. These tasks will require ATO to 
make the best and most efficient use of increasingly scarce resources. 
Additionally, the transition also involves the recognition that other 
nations are upgrading their aviation systems, creating a need for 
global harmonization to support international travel and commerce. 

My statement today focuses on two key questions. (1) What is the status 
of ATO's efforts to implement processes and other initiatives aimed at 
efficiently managing and modernizing the current ATC system? (2) What 
is the status of JPDO's planning efforts, and what are the key 
challenges that JPDO faces in planning for NGATS? My statement is based 
on our recently completed and ongoing studies of FAA's ATC 
modernization program, together with updated information from ATO and 
JPDO officials and aviation stakeholder[Footnote 3]s. Later this year, 
we expect to issue two detailed reports related to the issues discussed 
in this statement. One report will provide our assessment of the status 
of JPDO's efforts to plan for the development of NGATS. Another report 
will examine financial management issues at FAA, including options for 
cost savings and alternative funding mechanisms. We are performing our 
work in accordance with generally accepted government auditing 
standards. 

The following is a summary of our findings to date: 

* ATO has made significant progress toward the efficient management of 
the nation's ATC system, but faces several challenges. ATO has 
implemented organizational and business process changes to improve 
management of the ATC modernization program. ATO has taken several 
steps to increase its scrutiny of its acquisition decisions, in part by 
ensuring executive-level oversight of key decisions and improving 
understanding of system requirements to avoid delays and cost overruns. 
ATO has met its acquisition performance goal for the second consecutive 
year--that is, 80 percent of its system acquisitions are on schedule 
and within 10 percent of budget. ATO has identified cost savings 
opportunities through consolidation of administrative activities and 
outsourcing. However, ATO faces several challenges, including 
sustaining and institutionalizing ATO's progress toward operating 
effectively as a performance-based organization, hiring and training 
thousands of air traffic controllers, ensuring stakeholder involvement 
in major system acquisitions, and keeping acquisitions on schedule and 
within budget. 

* JPDO is making progress in its planning for NGATS, but faces several 
challenges. JPDO is implementing a number of practices that our work 
has shown facilitates the federal interagency collaboration that is 
central to its mission and legislative mandate. However, JPDO is 
fundamentally a planning and coordinating body that lacks authority 
over the key human and technological resources needed to continue 
developing plans and system requirements for NGATS. Thus, a challenge 
may arise in leveraging the resources of the partner agencies--agencies 
with a variety of missions and priorities other than supporting NGATS. 
For example, NASA has reduced its aeronautics budget, raising questions 
about how the research and development efforts necessary for NGATS will 
be completed. As part of its planning, JPDO is working to develop a 
cost estimate for NGATS through a series of workshops with various 
stakeholders. JPDO has taken several important first steps and is 
following effective practices in developing an NGATS enterprise 
architecture--a blueprint for NGATS and one of the most critical 
planning documents in the NGATS effort. In addition to the challenge of 
leveraging resources noted above, JPDO faces several other challenges, 
including maintaining stakeholder support over the long term, defining 
roles and responsibilities and deciding how to coordinate the 
implementation of NGATS, and addressing several critical policy issues, 
such as the extent to which NGATS will accommodate visual flights 
versus instrument-only flights. 

Background: 

The ATC system is composed of an array of largely ground-based 
subsystems, including radars; automated data-processing, navigation, 
and communications equipment; and ATC facilities. These subsystems work 
together to support all phases of flight for aircraft operating in U.S. 
airspace. The ATC system also includes the FAA employees who manage, 
operate, and maintain ATC equipment and facilities. 

In 1995, based on the premise that FAA would be better able to manage 
the ATC modernization if it were not constrained by federal personnel 
and acquisition laws, Congress passed legislation that exempted FAA 
from most federal personnel and acquisition laws and 
regulations.[Footnote 4] In December 2000, President Clinton signed an 
executive order and a few months later Congress passed supporting 
legislation that, together, provided FAA with the authority to create 
ATO as a PBO to control and improve FAA's management of the 
modernization effort. In February 2004, FAA reorganized, transferring 
36,000 employees (most of who worked in air traffic services and 
research and acquisitions) to ATO. (See fig. 1.) 

Figure 1: Figure 1. Prior and Current Structure of Research and 
Acquisitions and Air Traffic Services, and Free Flight Organizations: 

[See PDF for image] 

[End of figure] 

In late 2003, recognizing that the current approach to managing air 
transportation is becoming increasingly inefficient and operationally 
obsolete, Congress created JPDO[Footnote 5] to plan NGATS, a system 
intended to accommodate what is expected to be three times more air 
traffic by 2025 than there is today. JPDO's scope is broader than 
traditional ATC modernization in that it is "airport curb to airport 
curb," encompassing such issues as security screening and environmental 
concerns. Additionally, JPDO's approach will require unprecedented 
collaboration and consensus among many stakeholders--federal and 
nonfederal--about necessary system capabilities, equipment, procedures, 
and regulations. Each of JPDO's partner agencies will play a role in 
creating NGATS. For example, the Department of Defense has deployed 
"network centric" systems,[Footnote 6] originally developed for the 
battlefield, that are being considered as a framework to provide all 
users of the national airspace system--FAA and the Departments of 
Defense and Homeland Security--with a common view of that system. To 
incorporate the expertise and views of nonfederal stakeholders, the 
NGATS Institute was created by an agreement between the National Center 
for Advanced Technologies and FAA. 

JPDO began its initial operations in early 2004. A Senior Policy 
Committee, chaired by the Secretary of Transportation and including 
senior representatives from each of the participating departments and 
agencies, provides oversight to JPDO. JPDO is located within FAA and 
reports to the FAA Administrator and to the Chief Operating Officer 
within ATO. (See figure 2.) 

Figure 2: Organizational Chart of JPDO: 

[See PDF for image] 

[End of figure] 

ATO Has Made Significant Progress Toward More Efficiently Managing ATC 
Modernization, but Challenges Remain: 

ATO has implemented organizational and business process changes to 
improve management of the ATC modernization program. ATO has taken 
several steps to increase its scrutiny of its acquisition decisions and 
has met its acquisition performance goal for the second consecutive 
year. ATO has identified cost savings opportunities through 
consolidation of administrative activities and outsourcing. However, 
ATO faces several challenges, including sustaining and 
institutionalizing ATO's progress toward operating effectively as a 
performance-based organization, hiring and training thousands of air 
traffic controllers, ensuring stakeholder involvement in major system 
acquisitions, and keeping acquisitions on schedule and within budget. 

ATO Has Implemented Organizational and Business Process Changes to 
Improve Management of the ATC Modernization Program: 

In our past work, we noted that FAA's acquisitions workforce operated 
in an environment where accountability was not well defined or enforced 
and vertical lines of authority impaired productivity, communication, 
and decision-making across the organization. Our recent studies have 
shown that ATO is taking steps to break down those vertical lines of 
authority and organizational "stovepipes." ATO has become a flatter 
organization, with fewer management layers. Additionally, the Chief 
Operating Officer (COO), who heads ATO, is holding ATO's vice 
presidents collectively accountable for the organization's success, in 
addition to their areas of specific responsibility. The COO conducts 
daily meetings with the managers of ATO's departments to review 
operations. According to the COO, these meetings have provided a more 
holistic perspective on the organization since, formally, some managers 
were only focused on and responsible for their own departments. 

ATO is also in the early stages of involving the line staff in the 
efforts aimed at increasing organizational effectiveness and 
efficiency. For example, ATO surveyed the workforce to determine the 
extent to which employees and managers believe the organization 
exhibits managerial accountability, customer focus, and 
transformational leadership. The first survey established a baseline 
against which ATO plans to measure progress through future annual 
surveys. By analyzing the results, ATO expects to determine the 
underlying assumptions that drive employee behavior and decide where to 
target efforts for change. According to an ATO official, such a root- 
cause level of analysis has never been done before in FAA. FAA is also 
undertaking an initiative that includes creating a training framework 
and measures for the effectiveness of that training. These initiatives 
mirror effective human capital practices that we have identified in 
previous reports. 

In addition to organizational efforts, ATO is moving forward with an 
improvement to its business processes with the development of a cost 
accounting system, which will eventually be implemented throughout FAA 
to improve its financial management. Ultimately, ATO plans to routinely 
incorporate the cost information generated by the cost accounting 
system into its investment decision-making. When implemented, this cost 
accounting system will address a long-standing GAO concern that FAA has 
not had the needed cost accounting practices in place to effectively 
manage software-intensive investments, which characterize many of the 
agency's major ATC system acquisitions. This type of information can be 
used to improve future cost estimates for these acquisitions. 

In another change to its business processes, FAA has stated that its 
management will provide additional information to decision makers to 
better illustrate the rationale behind its budget requests. This 
information is helpful to decision makers when budget constraints do 
not allow all system acquisitions to be fully funded at their planned 
and approved levels, leaving FAA to decide which programs to fund and 
which to cut, according to its priorities. Those that are cut may fall 
behind schedule, requiring FAA to continue operating and maintaining 
the older equipment and possibly delaying the realization of benefits 
from the new system. To address this issue, we recommended that FAA 
identify and annually report on programs that have had funding 
deferred, reduced, or eliminated, and the impact of those decisions on 
ATC modernization.[Footnote 7] Such information would make clear how 
constrained budgets will affect modernization of the national airspace 
system and how FAA is working to live within its means. In its formal 
written response to our recommendation, FAA stated its intent to better 
inform Congress in the future by providing information in its capital 
investment plan, submitted to Congress annually with the President's 
Budget, that will identify changes from the preceding year. We have not 
yet verified whether FAA's action fully responds to our recommendation. 

ATO Has Increased Scrutiny of Its Investment Decisions: 

ATO has taken several steps to increase its scrutiny of its acquisition 
decisions, both with initial investment decisions and as part of 
acquisition oversight. Since 2004, the ATO executive council has been 
reviewing the mission need and readiness for decisions for all proposed 
investments. Furthermore, to ensure executive-level oversight of all 
key decisions, FAA plans to incorporate key decision points in a 
knowledge-based product development process by June 2006, as we have 
recommended; however, we have not yet independently assessed the 
sufficiency of this change. FAA has also issued guidance on how to 
develop and use investment pricing, including guidelines for disclosing 
the levels of uncertainty and imprecision that are inherent in cost 
estimates for major ATC systems. 

To improve its understanding of system requirements, FAA has developed 
a software acquisition process improvement model.[Footnote 8] When a 
system's requirements are not fully understood at the start of an 
acquisition, requirements must often be redefined or unplanned work 
performed, which takes time and can be costly. In addition, unplanned 
work may occur when the agency misjudges the extent to which a 
commercial-off-the-shelf or nondevelopmental item, such as one procured 
by another agency, will meet the agency's needs. To address these 
issues, FAA has developed and applied a process improvement model that 
assesses the maturity of FAA's software and systems capabilities. As we 
reported, this approach has resulted in enhanced productivity, higher 
quality, greater ability to predict schedules and resources, better 
morale, and improved communication and teamwork.[Footnote 9] However, 
FAA did not mandate the use of the model throughout the organization. 
In response to our recommendation that FAA institutionalize the model's 
use throughout the organization, FAA has begun developing a requirement 
that acquisition projects have process improvement activities in place 
before seeking approval from FAA's investment review board. 

With regard to acquisition investment oversight, ATO has increased the 
use of an earned value approach to program oversight.[Footnote 10] In 
fiscal year 2000, only 4 programs used an earned value approach, 
compared to 19 major active programs in fiscal year 2006. Going 
forward, all new acquisitions will use an earned value approach. ATO 
has also conducted business case reviews for facilities and equipment- 
and operations-funded programs. Based on these reviews, ATO terminated 
funding for three projects. One was cancelled because the prototype 
lacked demonstrable benefits, another due to a poor business case, and 
the third due to weaknesses in its business case as well as schedule 
and performance issues.[Footnote 11] 

Additionally, FAA has implemented, or is in the process of 
implementing, a number of recommendations that we have made to improve 
acquisition investment management. For example, FAA is now considering 
all information technology investments as a complete portfolio. In 
2004, we pointed out that FAA was not evaluating projects beyond the 
first 2 years of service to ensure alignment with organizational 
goals.[Footnote 12] Consequently, the agency could not ensure that 
projects with a longer service history (which at the time totaled about 
$1.3 billion per year) were still aligned with FAA's strategic plans 
and business goals and objectives. We recommended that FAA include 
these projects in its investment portfolio management for review. In 
response to this and other recommendations we have made, FAA is making 
revisions to its Acquisition Management System. FAA has modified its 
Acquisition Management Policy to require periodic monitoring of in- 
service systems to collect and analyze performance data to use as the 
basis for sustained deployment. In a similar vein, ATO has committed to 
basing future funding decisions for system acquisitions on their 
contribution to reducing the agency's operating costs while maintaining 
safety. ATO is also requiring that acquisition planning documents be 
prepared in a format consistent with that prescribed by the Office of 
Management and Budget for use in justifying all major capital 
investments. 

FAA Met Its Acquisition Performance Goal for the Second Consecutive 
Year, but Use of Revised Milestones Does Not Provide Consistent 
Benchmarks: 

FAA has met its acquisitions performance goal 2 years in a row. The 
goal for fiscal years 2004 and 2005 was to have 80 percent of its 
system acquisitions on schedule and within 10 percent of budget. The 
goal gradually increases to 90 percent by fiscal year 2008. The 
increase will make FAA's acquisition performance goal consistent with 
targets set in the Department of Transportation's strategic plan and 
will comply with the Federal Acquisition Streamlining Act of 
1994.[Footnote 13] 

Having such a goal is also consistent with the President's Management 
Agenda, which calls for a commitment to achieve immediate, concrete, 
and measurable results in the near term, and meeting this goal shows 
progress toward better acquisition management. However, because the 
milestones for certain acquisitions have changed over the years to 
reflect changes in cost and schedule, using those revised milestones 
may not provide a complete picture of the acquisition's progress over 
time. For example, the milestones for 3 of the 16 major system 
acquisitions that we reviewed in detail during 2004 and 2005 were being 
revised to reflect cost or schedule changes during 2005. These revised 
milestones, together with revised targets for meeting them, will become 
the new milestones for fiscal year 2006. While revising milestones and 
targets that are no longer valid is an appropriate management action, 
using revised targets for measuring performance does not provide a 
consistent benchmark over time. The extent to which an acquisition 
meets its annual performance targets is one measure of its performance 
and should be viewed together with other measures, such as its progress 
against original and revised baselines. The variance reports provided 
to the FAA Administrator and to Congress may also be useful in 
evaluating an acquisition's performance.[Footnote 14] 

Since fiscal year 2003, the number of acquisition programs measured by 
FAA has varied from 31 to 42. According to FAA, the number varies from 
year to year, in part, because some programs reach completion and 
others are initiated. The programs that are selected each fiscal year 
represent a cross section of ATO programs, including investments in new 
capabilities and others that are ready for use without modification. 
FAA's Portfolio of Goals, which provides supplementary information on 
the agency's performance goals, asserts that no bias exists in the 
selection of milestones for performance review, but does not state the 
basis for this conclusion. The portfolio also states that the 
milestones selected represent the program office's determination of the 
efforts that are "critical" or important enough to warrant inclusion in 
the acquisition performance goal for the year. However, we have not 
conducted a detailed examination of the reliability and validity of 
FAA's metrics for its acquisition program performance. 

ATO Is Reviewing Its Infrastructure and Operations for Cost Savings, 
but Lacks Consistent Processes for Determining Savings: 

ATO is seeking cost savings by reviewing its operations and 
infrastructure. It has begun to decommission ground-based navigational 
aids, such as compass locators, outer markers and nondirectional radio 
beacons, as it begins to transition to a satellite-based navigation 
system. In fiscal year 2005, ATO decommissioned 177 navigational aids, 
claiming a savings of $2.9 million. In addition to the savings 
generated from decommissioning, one expert with whom we spoke noted 
that these sites could be converted to revenue-generating uses, such as 
leasing the sites for warehouses or cell phone towers. ATO also expects 
to reduce costs through streamlining its operations. For example, it is 
consolidating its administrative activities, currently decentralized 
across its nine regions, into three regions, and anticipates an annual 
savings of up to $460 million over the next 10 years. Our work 
analyzing international air navigation service providers has shown that 
additional cost savings may be possible by further consolidating ATC 
facilities such as terminal radar approach control (TRACON) facilities 
and air traffic control centers. According to one estimate, 
consolidating the existing 21 air route traffic control centers into 6 
centers could save approximately $600 million per year. 

ATO also expects to reduce costs through outsourcing. For example, it 
reduced costs by outsourcing its automated flight service stations to a 
private contractor and expects to achieve savings of $1.7 billion over 
ten years. Additionally, $0.5 billion in savings are expected to be 
realized by staffing reductions of 400 that occurred between the time 
the outsourcing began and the new contract was actually implemented. 
The agency expects to receive $66 million--the first installment of 
these cost savings--in fiscal year 2007. 

However, we have found that ATO lacks a consistent process for 
identifying the costs and benefits associated with some of its cost 
control efforts. For example, ATO did not offset its reported savings 
from decommissioning navigational aids with the costs likely to 
accompany such activities, such as real property disposition (including 
buildings or real property leases, standby power systems, and fuel 
storage tanks), site cleanup, and restoration. Without a transparent 
and verifiable process for determining the savings, as well as the 
offsetting costs, the true savings remain unclear. As ATO proceeds with 
these efforts, stakeholders also caution that decommissioning 
navigational aids should entail comprehensive risk mitigation to ensure 
that ATO retains adequate safety levels. 

However, while facility consolidations could offer additional savings, 
an FAA official noted that there are practical limits to these efforts. 
For example, consolidated facilities would need to handle higher 
volumes of communication, but as the volume of communication increases, 
so does "latency"--the delay in transmission that occurs between 
sending and receiving messages. According to FAA, studies of 
telecommunications centers in the private sector suggest that 15 
facilities that combine the approximately 180 existing en route and 
oceanic air traffic control centers and terminal radar approach control 
facilities might be appropriate. Security concerns, such as the need 
for redundancy, also come into play in consolidation decisions. 
Consequently, if FAA decides to procede with facility closures, it is 
important that it do so within the context of a logical, well- 
documented, and risk-based process in consultation with congressional 
oversight committees. 

ATO Faces Human Capital Challenges in Institutionalizing Its 
Performance-based Organization and Hiring and Training Thousands of Air 
Traffic Controllers: 

ATO faces a challenge in sustaining and institutionalizing its efforts 
to operate as a PBO. Our work has shown that successful transformations 
and the institutionalization of change in large public and private 
organizations can take 5 to 7 years or more to fully 
implement.[Footnote 15] Long-term, high-level management attention will 
be needed to assess ATO's transformation on a continuing basis. 

FAA also faces the challenge of hiring and training thousands of air 
traffic controllers during the coming decade. According to its 
controller staffing plan, FAA expects to lose about 11,000 air traffic 
controllers due to voluntary retirements or mandatory retirements at 
age 56, as well as other reasons.[Footnote 16] These retirements stem 
from the 1981 controller strike, when President Ronald Reagan fired 
over 10,000 air traffic controllers, and FAA then had to quickly 
rebuild the controller workforce. From 1982 through 1991, FAA hired an 
average of 2,655 controllers per year. These controllers will become 
eligible for retirement during the next decade. 

To replace these controllers, as well as those who will leave for other 
reasons, and to accommodate forecasted changes in air traffic, FAA 
plans to issue annual air traffic controller staffing plans based on 
the agency's air traffic forecast. FAA's December 2004 Air Traffic 
Controller Work Force Plan called for hiring 12,500 new controllers 
over 10 years, based on the agency's 2004 air traffic 
forecast.[Footnote 17] FAA informed us that its 2006 staffing plan 
update, which it expects to issue shortly, will reflect the need to 
hire fewer controllers over the next few years, compared to the 2004 
plan, because FAA's 2006 air traffic forecast predicts less air traffic 
during this time frame. In fiscal year 2005, FAA hired 438 controllers-
-three more than its target, which was constrained that year due to 
budget considerations. According to an FAA official, FAA plans to hire 
930 controllers in fiscal year 2006 (FAA had hired 637 controllers 
through May 2006). 

FAA Faces Challenges in Ensuring Stakeholder Involvement in Major 
System Acquisitions: 

Adequately involving stakeholders in a system's development is 
important to ensure that the system meets users' needs. In the past, 
air traffic controllers were permanently assigned to FAA's major system 
acquisition program offices and provided input into air traffic control 
modernization projects. In June 2005, FAA terminated this arrangement 
because of budget constraints and other reasons. According to FAA, it 
now plans to obtain the subject-matter expertise of air traffic 
controllers or other stakeholders as needed in major system 
acquisitions. It remains to be seen whether this approach will suffice 
for stakeholder involvement. Our past work has indicated that a lack of 
stakeholder involvement both early on and throughout a system's 
development was a systemic factor contributing to acquisitions missing 
their cost, schedule, and performance targets. 

FAA Faces Challenges in Keeping Acquisitions on Schedule and within 
Budget: 

Three systems--all communications-related--missed their fiscal year 
2005 acquisition performance goals for schedule. According to FAA, the 
$310 million FAA Telecommunications Infrastructure (FTI) acquisition, 
which is replacing costly existing networks of separately managed 
systems and services by integrating advanced telecommunications 
services, was behind schedule because the program was unable to ramp up 
its activities to the level specified in its plan. To complete the 
installations in the first quarter of fiscal year 2008 as originally 
scheduled, FAA initiated a plan to put the program back on schedule and 
has met the plan's milestones since August 2005. 

To the extent that delays in FTI persist, FAA will not accrue the full 
extent of the $672 million in cost savings that the program was 
expected to produce. The Department of Transportation's Office of the 
Inspector General has reported that FAA did not realize $32.6 million 
in anticipated operating cost savings in fiscal year 2005 because of 
the limited progress made in disconnecting legacy circuits. The office 
also reported that without a nearly tenfold increase in its rate of 
transferring service to FTI and disconnecting legacy circuits, FAA 
stands to miss out on an additional $102 million in cost savings in 
fiscal year 2006. FAA has informed us that since the Inspector General 
made this assessment, the program has achieved a significant increase 
in the rates of transferring over services and disconnecting legacy 
circuits. As an alternative to continuing the current FTI program, some 
experts have suggested that FAA consider outsourcing this activity, as 
it did for its flight service stations.[Footnote 18] 

Two other communications acquisition programs also missed their 
acquisition performance goals for schedule in 2005--the $325 million 
Next Generation Air-to-Ground Communication system, segment 1A, which 
replaces analog communication systems with digital systems, and the $85 
million Ultra High Frequency Radio Replacement, which replaces aging 
equipment used to communicate with Department of Defense aircraft. 
According to an FAA official, as the agency assessed its priorities for 
fiscal year 2005, a decision was made that these programs would receive 
fewer resources. The resources that were then available were not 
sufficient to allow the programs to meet established milestones. 

In summary, ATO has made a number of promising moves toward operating 
effectively as a PBO, and we view ATO's efforts to improve its 
management and acquisitions processes as positive steps. However, ATO 
has been established for only slightly more than 2 years. Work remains 
to ensure that these processes become institutionalized and that 
continuing challenges are addressed. Although it is still too early to 
evaluate the effectiveness of many of these steps, we are monitoring 
ATO's progress. Moving forward, ATO will play a key role in 
implementing NGATS, as planned by JPDO. I will now discuss the status 
of JPDO's planning efforts. 

JPDO Has Made Progress in Planning for NGATS, but Faces Challenges in 
Several Areas: 

JPDO has implemented several effective practices to facilitate 
collaboration among its partner agencies, but faces challenges in 
continuing to leverage resources. JPDO is working to develop a cost 
estimate for NGATS through a series of workshops with various 
stakeholders. JPDO is taking a reasonable approach to technical 
planning, but some key tasks are yet to be completed. However, JPDO 
faces several challenges, including maintaining stakeholder support 
over the long term, defining roles and responsibilities as well as 
deciding how to coordinate the implementation of NGATS, and addressing 
several critical policy issues. 

JPDO Is Working to Facilitate Collaboration among Federal Agencies, but 
Faces Challenges in Continuing to Leverage Resources: 

Our work to date shows that JPDO is implementing a number of practices 
that our work has shown facilitates the federal interagency 
collaboration that is central to its mission and legislative mandate. 
According to our research, agencies must have a clear and compelling 
rationale for working together to overcome significant differences in 
their missions, cultures, and established ways of doing business. In 
developing JPDO's integrated plan,[Footnote 19] the partner agencies 
agreed to a vision statement and eight strategies that broadly address 
the goals and objectives for NGATS. These strategies formed the basis 
for JPDO's eight integrated product teams (IPT), and various partner 
agencies have taken the lead on specific strategies. Our research has 
also shown that it is important for collaborating agencies to leverage 
the human, technological, and physical resources needed to initiate or 
sustain their collaborative effort. To leverage human resources, JPDO 
has staffed the various levels of its organization with partner-agency 
employees, many of whom work part time for JPDO. To leverage 
technological resources, JPDO conducted an interagency program review 
of its partner agencies' research and development programs to identify 
work that could support NGATS. Through this process, JPDO identified 
early opportunities that could be pursued during fiscal year 2007 to 
produce tangible results for NGATS, such as the Automatic Dependent 
Surveillance-Broadcast (ADS-B)[Footnote 20] program at FAA. 

However, while JPDO's legislation, integrated plan, and governance 
structure[Footnote 21] provide the framework for collaboration among 
multiple federal agencies, JPDO is fundamentally a planning and 
coordinating body that lacks authority over the key human and 
technological resources needed to continue developing plans and system 
requirements for NGATS. Consequently, the ability to continue 
leveraging resources of the partner agencies will be critical to JPDO's 
success. Beginning around 2008, JPDO expects a significant increase in 
its IPTs' workloads. JPDO officials told us that although the partner 
agencies have not yet expressed concerns over the time that their 
employees spend on JPDO work, it remains to be seen whether agencies 
will be willing to allow their staff to devote more of their time to 
JPDO. In addition, JPDO anticipates needing more agency resources to 
plan and coordinate demonstrations of potential technologies to 
illustrate some of the early benefits that could be achieved from the 
transformation to NGATS. 

This challenge of leveraging resources arises, in part, because the 
partner agencies have a variety of missions and priorities other than 
supporting NGATS. NASA, for example, while conducting key aeronautical 
and safety research and development relevant to NGATS, nonetheless has 
other competing missions. NASA has recently reduced its aeronautics 
budget and plans to focus its efforts on foundational 
research.[Footnote 22] This decision raises two important questions. 
First, what research needed for NGATS will NASA perform or not perform? 
Second, for the foundational research that will be performed, who will 
perform the development steps--the validation and demonstration of new 
technology--that must take place before a new technology can be 
transferred to industry and incorporated into a product? JPDO and FAA 
officials told us that not enough is understood about what NASA plans 
to do and not do and, therefore, the impact of NASA's action on NGATS 
remains unclear at present. 

However, many experts with whom we spoke believe that NASA's new focus 
on foundational research creates a gap in the technology development 
continuum. Some believe that FAA has neither the research and 
development infrastructure nor the funding to do this work. FAA's 
Research, Engineering and Development Advisory Committee 
(REDAC),[Footnote 23] in a draft report, estimates that FAA would need 
at least $100 million annually in increased funding to perform this 
research and development work, and that reestablishing the 
infrastructure within FAA to accomplish this work could delay NGATS 
implementation by 5 years. An official of the working group that 
produced the draft report stated that a significant amount of research 
and development is needed to create NGATS. For example, the official 
stated that more research is needed to understand wake vortex, which 
could be a limiting factor in airspace capacity and would impact 
aircraft sequencing for landing or departure.[Footnote 24] The official 
also stated that intermediate-level technology development is important 
in establishing "product proof," meaning that technology needs to be 
validated, demonstrated, and certified before beginning the systems 
acquisition process. 

JPDO officials view leveraging partner agency resources as one of their 
most significant near-term challenges. JPDO officials stated that they 
feel the process has worked sufficiently well so far. For example, JPDO 
successfully requested that FAA pursue funding in its fiscal year 2007 
budget request to accelerate development of ADS-B and System Wide 
Information Management (SWIM),[Footnote 25] which are two key systems 
identified for NGATS. However, as noted, our past work on FAA's 
national airspace modernization program has shown that receiving fewer 
resources than planned was one factor that contributed to delays in 
implementing technologies and significant cost increases. Thus, 
continuing success in leveraging partner agencies' resources will help 
avoid program delays and reduction in the benefits-to-cost ratio. 

To further leverage resources for NGATS, JPDO has issued guidance to 
its partner agencies identifying areas that JPDO would like to see 
emphasized in the agencies' fiscal year 2008 budget requests and 
expects to follow this process annually in the years to come. JPDO 
officials have informed us that they have held face-to-face discussions 
with partner agency managers about the guidance and are currently in 
the process of reviewing partner agency responses to the guidance and 
identifying whether gaps exist. Such gaps will be presented to the 
Senior Policy Committee for discussion at its July meeting, according 
to these officials. 

JPDO is currently working with the Office of Management and Budget to 
develop a systematic means of reviewing partner agency budget requests 
so that the NGATS-related funding in each request is easily identified. 
This includes a review of budgets submitted by the Department of 
Homeland Security for efforts by the Transportation Security 
Administration and the Department of Commerce for efforts by the 
National Oceanic and Atmospheric Administration. Such a process would 
help the Office of Management and Budget consider NGATS as a unified 
federal investment, rather than as disparate line items distributed 
across several agencies' budget requests. 

JPDO Is Working to Develop a Cost Estimate for NGATS: 

Important to the planning of NGATS is the development of realistic cost 
estimates for the entire NGATS. To assist in developing such estimates, 
JPDO is holding a series of investment analysis workshops with 
stakeholders to obtain their input. The first workshop, held in April 
2006, was for commercial and business aviation, equipment 
manufacturers, and systems developers. The second workshop is planned 
for early July for operators of lower performance aircraft used in both 
commercial and non-commercial operations, including general aviation 
personal and business flying, flight training, piston and turbine 
rotorcraft as well as public users of the system including civil and 
military aircraft operated by local, state, and federal governments. 
The third workshop, planned for late July or early August, will focus 
on airports and other local, state, and regional planning bodies. JPDO 
plans to use the combined information from these three workshops to 
begin to develop a range of the potential costs of NGATS. 

Preliminary estimates of NGATS' cost, developed by REDAC and ATO, could 
also provide input into JPDO's cost estimate. REDAC and ATO officials 
emphasized that their estimates are preliminary and not yet endorsed by 
any agency. A draft study by REDAC's Financing the NGATS Working Group 
estimated that to implement NGATS and continue operating the national 
airspace system through 2025, the combined costs of FAA's four 
appropriation accounts--operations, facilities and equipment, research, 
engineering and development--and grants-in-aid for airports (commonly 
known as the Airport Improvement Program)--would average about $15 
billion per year, or about $900 million more than FAA's fiscal year 
2006 appropriation. The estimate assumes that (1) the general fund 
contribution will be 20 percent, using the current trust fund revenue 
model and (2) between 2011 and 2025, productivity increases will offset 
the increased operating costs of additional demand.[Footnote 26] 

ATO has developed a preliminary estimate of the increased facilities 
and equipment cost that NGATS would require. ATO estimates that the 
cumulative additional facilities and equipment cost between fiscal 
years 2006 and 2025 would be about $15.3 billion, or about $800 million 
per year, on average, from fiscal year 2007 through 2025. According to 
an ATO official, the ATO facilities and equipment cost estimate is the 
same as the facilities and equipment component of REDAC's cost 
estimate. The only difference is that ATO's estimate accounts for 
inflation, while REDAC expresses its estimate in constant 2005 dollars. 

In addition to being preliminary, it is important to note the 
limitations of these estimates. First, ATO's estimate does not include 
any costs other than those for facilities and equipment. However, an 
ATO official acknowledged that there would likely be additional costs 
within FAA, such as for safety certification or making operational 
changes to respond to NGATS' new technologies. Additionally, ATO's 
facilities and equipment cost estimate assumes that the intermediate 
technology development work, which NASA has historically performed, has 
been completed. As I previously stated, REDAC believes that the cost of 
intermediate technology development could be substantial. Furthermore, 
neither estimate includes other partner agencies' costs to implement 
NGATS, such as those that the Department of Homeland Security might 
incur to develop and implement new security procedures. Also, these 
estimates treat NGATS' development and implementation period as an 
isolated event. Consequently, the costs drop dramatically toward 2025. 
In reality, officials who developed these estimates acknowledge that 
planning for the subsequent "next generation" system will likely be 
underway as 2025 approaches and that actual operations and 
modernization costs could be higher in this time frame than these 
estimates indicate. 

In addition, several unknown factors will drive the cost of NGATS. 
According to JPDO, one of these drivers is the technologies expected to 
be included in NGATS. Some of these are more complex and thus more 
expensive to implement than others. A second driver is the sequence in 
which NGATS technologies will replace the technologies now in use. A 
third driver is the length of time required to transition to NGATS, 
since a longer transition period would impose higher costs. Later this 
year, JPDO expects to issue a first draft of its enterprise 
architecture, or blueprint for the NGATS, which could reduce these 
variables, thereby allowing improved, albeit still preliminary, 
estimates of NGATS' cost. 

JPDO Is Taking a Reasonable Approach to Technical Planning, but Some 
Key Tasks are Yet to Be Completed: 

To conduct the technical planning for NGATS, JPDO has formed separate 
divisions to perform system modeling and create the NGATS enterprise 
architecture, but has not yet completed key activities. JPDO has formed 
an Evaluation and Analysis Division (EAD), composed of FAA and NASA 
employees and contractors, to assemble a suite of models that will help 
JPDO refine its plans for NGATS and iteratively narrow the range of 
potential solutions. For example, EAD has used modeling to begin 
studying how possible changes in the duties of key individuals, such as 
air traffic controllers, could affect the workload and performance of 
others, such as airport ground personnel. 

As I previously noted, NGATS could shift some tasks now done by air 
traffic controllers to pilots. According to JPDO officials, the change 
in roles of pilots and controllers is the most important human factors 
issue involved in creating the NGATS. JPDO officials noted that the 
Agile Airspace and Safety IPTs contain human factors specialists and 
that JPDO's chief architect has a background in human factors. However, 
EAD has not yet begun to model the effect of the shift in roles on 
pilots' performance because, according to an EAD official, a suitable 
model has not yet been incorporated into the modeling tool suite. 
According to EAD, addressing this issue is necessary, but will be 
difficult because data on pilot behavior are not readily available to 
use in creating such models. Furthermore, EAD has not yet studied the 
training implications of various NGATS-proposed solutions because 
further definition of the concept of operations for these solutions has 
not been completed. As the concept of operations matures, it will be 
important for air traffic controllers and other affected stakeholders 
to provide their perspectives on these modeling efforts. In addition, 
as the concept of operations and plans for sequencing equipment 
matures, EAD will be able to study the extent to which new air traffic 
controllers will have to be trained to operate both the old and the new 
equipment. 

To develop an enterprise architecture--a blueprint for NGATS and one of 
the most critical planning documents in the NGATS effort--JPDO has 
taken several important first steps and is following several effective 
practices that we have identified for enterprise architecture 
development. However, JPDO's enterprise architecture is currently a 
work in progress and many of JPDO's future activities will depend on 
the robustness and timeliness of its architecture development. The 
enterprise architecture will describe FAA's operation of the current 
national airspace system, JPDO's plans for the NGATS, and the sequence 
of steps needed to transition between them. The enterprise architecture 
will provide the means for coordinating among the partner agencies and 
private sector manufacturers, aligning relevant research and 
development activities, and integrating equipment. And as I noted 
earlier, the enterprise architecture will also be a key tool in 
developing cost estimates for NGATS. 

To date, JPDO has formed an Enterprise Architecture Division and has 
established and filled a chief architect position. JPDO has also 
established an NGATS Architecture Council composed of representatives 
from each partner agency's chief architect office to provide the 
organizational structure and oversight needed to develop the enterprise 
architecture. JPDO is using a phased "build a little, test a little" 
approach for developing and refining its enterprise architecture that 
is similar to a process that we have advocated for FAA's major system 
acquisition programs. In addition, this phased development process will 
allow JPDO to incorporate evolving market forces and technologies in 
its architecture and thus better manage change. JPDO plans to have an 
early version of the architecture by the end of fiscal year 2006. 

Maintaining Stakeholder Support Will Be a Long-Term Challenge for JPDO: 

JPDO has structured itself to involve federal and nonfederal 
stakeholders throughout its organization, but maintaining their long- 
term support will be a challenge. Our work has shown that involving 
stakeholders can, among other things, increase their support for a 
collaborative effort. Federal stakeholders from the partner agencies 
serve on JPDO's Senior Policy Committee, board, and IPTs. Nonfederal 
stakeholders may participate through the NGATS Institute (the 
Institute). Through the Institute, JPDO obtained the participation of 
over 180 stakeholders from over 70 organizations for the IPTs. The 
NGATS Institute Management Council, composed of top officials and 
representatives from the aviation community, oversees the policy and 
recommendations of the Institute and provides a means for advancing 
consensus positions on critical NGATS issues. 

Although JPDO has developed the mechanisms for involving stakeholders 
and brought stakeholders into the process, it faces challenges in 
sustaining nonfederal stakeholders' participation over the long term. 
Much as with the federal partner agencies, JPDO has no direct authority 
over the human, technical, or financial resources of its nonfederal 
stakeholders. To date, these stakeholders' investment in NGATS has been 
through their part-time, pro bono participation on the IPTs and the 
NGATS Institute Management Council.[Footnote 27] The challenge for JPDO 
is to maintain the interest and enthusiasm of these nonfederal 
stakeholders, which will have to juggle their own multiple priorities 
and resource demands, even though some of the tangible benefits of 
NGATS may not be realized for several years. For example, stakeholders' 
support will be important for programs such as SWIM, which is a 
prerequisite to future benefits, but may not produce tangible benefits 
in the near term. 

In the wake of past national airspace modernization efforts, JPDO also 
faces the challenge of convincing nonfederal stakeholders that the 
government is financially committed to NGATS. While most of FAA's major 
ATC acquisition programs are currently on track, earlier attempts at 
modernizing the national airspace system encountered many difficulties. 
In one instance, for example, FAA developed a datalink communications 
system that transmitted scripted e-mail-like messages between 
controllers and pilots. One airline equipped some of its aircraft with 
this new technology, but because of funding cuts, among other things, 
FAA ended up canceling the program. In a similar vein, we have reported 
that some aviation stakeholders expressed concern that FAA may not 
follow through with its airspace redesign efforts and are hesitant to 
invest in equipment unless they are sure that FAA's efforts will 
continue. One expert suggested to us that the government might mitigate 
this issue by making an initial investment in a specific technology 
before requesting that airlines or other industry stakeholders purchase 
equipment. 

In addition to maintaining stakeholder involvement, JPDO faces 
challenges in obtaining the participation of all stakeholders. In 
particular, JPDO does not involve current air traffic controllers, who 
will play a key role in NGATS. The current air traffic control system 
is based primarily on the premise that air traffic controllers direct 
pilots to maintain safe separation between aircraft. In NGATS, this 
premise could change and, accordingly, JPDO has recognized the need to 
conduct human factors research on such issues, including how tasks 
should be allocated between humans and automated systems and how the 
existing allocation of responsibilities between pilots and air traffic 
controllers might change. The input of current air traffic controllers 
who have recent experience controlling aircraft is important in 
considering human factors and safety issues. 

However, as mentioned, no current air traffic controllers are involved 
in NGATS. In June 2005, FAA terminated its labor liaison program based 
on its determination that program was not providing sufficient benefit 
compared to the program's cost. The liaison program assigned air 
traffic controllers to major system acquisition program offices, as 
well as to JPDO. Since that time, the National Air Traffic Controllers 
Association (NATCA), the labor union that represents air traffic 
controllers, has not been a participant in planning NGATS. Although the 
NGATS Institute Management Council includes a seat for the union, a 
NATCA official told us that the union's head had been unable to attend 
the council's meetings. According to JPDO officials, the council has 
left a seat open in hopes that the controllers will participate in 
NGATS as the new labor-management agreement between NATCA and FAA is 
implemented. 

Finally, some of the benefits of NGATS' are contingent on users of the 
system--airlines and general aviation--equipping their aircraft with 
NGATS-compatible technologies. This is particularly important 
concerning ADS-B, a new air traffic surveillance system that JPDO has 
determined will be one of the early core technologies for NGATS. The 
first phase of ADS-B implementation, known as "ADS-B out," will allow 
FAA to replace many ground radars that currently provide aircraft 
surveillance with less costly ground-based transceivers. Aircraft would 
be equipped with ADS-B out, which broadcasts a signal to these 
transceivers. FAA anticipates significant cost savings from this phase 
and, according to trade association officials, regional and large 
commercial airlines are largely supportive of this initial phase. But 
implementing ADS-B out is just the first step to achieving the larger 
benefits of ADS-B, which would be provided by "ADS-B in." ADS-B in 
would allow aircraft to receive signals from ground-based transceivers 
or directly from other ADS-B equipped aircraft--this could allow pilots 
to "see" nearby traffic and, consequently, take on some responsibility 
for maintaining safe separation from those aircraft. 

However, before airlines can establish a business case that supports an 
investment, several unknowns concerning ADS-B in must be resolved. For 
example, the cost of installing ADS-B in must be determined. Also, 
human factors considerations need further exploration to determine 
whether pilots can safely use ADS-B in to maintain separation of 
aircraft. Finally, it is unclear whether air carriers will be willing 
to equip with the second frequency that ADS-B would require.[Footnote 
28] How these issues are resolved will be an important factor in 
airlines' decisions on whether to equip with ADS-B in. Given the 
breadth and complexity of NGATS, issues involving equipage decisions by 
nonfederal stakeholders are likely to arise again and can impact the 
extent and speed to which the benefits envisioned by NGATS will be 
realized. 

As NGATS Moves Toward Implementation, Defining Roles and 
Responsibilities and Deciding How to Coordinate Implementation Are 
Challenges: 

JPDO also faces the challenge of clearly defining its partner agencies' 
roles and responsibilities. Our work has shown that collaborating 
agencies should work together to define and agree on their respective 
roles and responsibilities, including how the collaboration will be 
led. JPDO has operated thus far with no formal, long-term agreement on 
partner agencies' roles and responsibilities in creating NGATS. JPDO 
officials informed us that they are working to establish a memorandum 
of understanding (MOU) signed by the heads of the partner agencies that 
will broadly define partner agency roles and responsibilities at a high 
level. JPDO officials said they hope to have the MOU signed and 
released next month. JPDO is also developing more specific MOUs with 
partner agencies that lay out expectations for support on NGATS 
components, such as information sharing through network-enabled 
operations. 

Defining roles and responsibilities is particularly important between 
JPDO and ATO, because both organizations have responsibilities related 
to planning the national airspace system's modernization. ATO has 
primary responsibility for the ATC system's current and near-term 
modernization, while JPDO has responsibility for planning and 
coordinating a transformation to NGATS over the next 20 years. The 
roles and responsibilities of each office are currently being worked 
out. ATO now plans to expand its Operational Evolution Plan so that it 
applies FAA-wide and represents FAA's piece of JPDO's overall NGATS 
plan.[Footnote 29] ATO is also prioritizing its facilities and 
equipment investments to support the NGATS. As the roles and 
responsibilities of the two offices become more clearly defined, there 
is also a need to better communicate these decisions to stakeholders. 

As NGATS moves forward, JPDO and FAA must address how to define roles 
and responsibilities for managing its implementation. JPDO, FAA, and 
other aviation experts consider NGATS to be a task of unprecedented 
complexity, with each partner agency having responsibility for 
developing and implementing portions of NGATS, while JPDO maintains a 
coordinating role. Recognizing the complexity involved in implementing 
NGATS, FAA and JPDO officials are considering several different 
approaches, one of which is to contract with a lead systems integrator 
(LSI). Generally, an LSI is a prime contractor that would help to 
ensure that the discrete systems used in NGATS will operate together 
and whose responsibilities may include designing system solutions, 
developing requirements, and selecting major system and subsystem 
contractors. 

The government has used LSIs before for complex programs that require 
system-of-systems integration. Our research indicates that, while LSIs 
provide certain advantages, such as the ability to know, understand, 
and integrate functions across various systems, they also entail 
certain risks. For example, because the degree of responsibility held 
by the LSI may be significantly greater than that usually held by a 
prime contractor, careful oversight may be necessary to ensure that the 
government's interests are protected and that conflicts of interest are 
avoided. Consequently, selecting, assigning responsibilities, and 
managing an LSI could pose significant challenges for JPDO and FAA. 

JPDO Must Address a Variety of Policy Issues: 

JPDO also faces critical policy issues as NGATS moves toward 
implementation. Some stakeholders have noted that addressing the policy 
issues needed to implement NGATS technologies will be even more of a 
challenge for JPDO than determining the technologies for NGATS. JPDO's 
Concept of Operations--a document that provides a textual operational 
description of the transformations needed to achieve NGATS' overall 
goals--has been used to identify key research and policy issues for 
NGATS. For example, the Concept of Operations identifies several issues 
surrounding the automation of the air traffic control system, including 
the need for a backup plan in the event that automation fails, the 
responsibilities and liabilities of different stakeholders in the event 
of automation failure, and the level of monitoring needed by pilots 
when automation is ensuring safe separation from surrounding aircraft. 

JPDO officials said that most policy decisions, when they occur, will 
be tied to the requirements of the enterprise architecture. However, 
some decisions will involve input from several entities and 
stakeholders. For example, it is likely that decisions on concepts and 
policies relating to general aviation would be made in concert among 
FAA, JPDO, and the Senior Policy Committee, with significant input from 
the general aviation community, to address concerns such as visual 
flight rules versus instrument flight rules. Flowing from broad policy 
decisions, FAA or other partner agencies would have to start developing 
regulations to implement the new technologies so that they would be 
ready at the appropriate time. 

In addition, JPDO has limited control over some of the factors 
affecting NGATS-related policy issues. For example, the consolidation 
of ATC facilities could provide cost savings that could in turn be used 
for NGATS technologies. However, facility consolidations can often run 
into political hurdles that are outside of JPDO's control. Similarly, 
while JPDO's Airport IPT is considering how airport capacity can be 
expanded, a JPDO official told us that the ability of JPDO to enhance 
airport capacity is still limited because enhancement decisions are 
made at the state and local level. The official also noted that JPDO 
cannot channel federal funds from the Airport Improvement Program to 
airports where capacity expansion is most needed to achieve the goals 
of NGATS. 

Another key policy area is how JPDO will work toward global 
harmonization. For example, concurrent with JPDO's efforts, the 
European Commission[Footnote 30] is conducting a project to harmonize 
and modernize the European air traffic management systems. Known as the 
Single European Sky Air Traffic Management Research Programme (SESAR), 
the project is overseen by the European Organization for the Safety of 
Air Navigation (Eurocontrol).[Footnote 31] Eurocontrol has contracted 
out the work of SESAR to a 30-member consortium of airlines, air 
navigation service providers, airports, manufacturers, and others. The 
consortium is receiving 60 million euros ($73 million)[Footnote 32] to 
conduct a 2-year definition phase and produce a master plan for SESAR. 

JPDO officials said they recognize the need for global harmonization of 
systems and have met with officials from various parts of the world-- 
including Europe, China, and East Asia--to assess the potential for 
cooperative NGATS demonstrations. JPDO has a Global Harmonization IPT, 
led by managers from ATO's International Operations Planning Services 
International and FAA's Office of International Aviation. The IPT's 
mission is to harmonize equipment and operations globally and advocate 
the adoption of U.S.-preferred transformation concepts, technologies, 
procedures, and standards. The Harmonization IPT finalized its charter 
in March 2006 and is working to develop an international strategy and 
outreach plan. In addition to external efforts, the Harmonization IPT 
plans to work as a crosscutting IPT that will raise awareness of global 
interoperability and standards issues within the other IPTs as they 
consider system performance requirements. 

According to several European officials with whom we spoke, global 
harmonization (and harmonization with the U.S. system specifically) is 
considered to be a key ingredient for the success of SESAR. Several of 
these officials said that although the European organization invited 
JPDO to participate as a full member in SESAR and the organization has 
indicated its willingness to have reciprocal participation with the 
United States, personnel exchanges are just beginning to occur. JPDO 
officials recognize the importance of cooperative efforts and noted 
that if Europe and the United States were to implement different and 
incompatible standards and technologies, there could be a major adverse 
impact on airlines that serve international markets. Nonetheless, these 
officials point out that JPDO, as a U.S. government entity, could not 
participate as a member in a private industry effort like the SESAR 
consortium. FAA is, however, a member of the European Commission's 
Industry Consultation Body, which provides advice to SESAR. 

According to an FAA official, negotiations are currently underway to 
complete an MOU between FAA and the European Commission that will 
commit both parties to cooperation in information sharing and the 
development of a seamless air traffic management system. JPDO officials 
noted that personnel exchanges and other cooperative activities, such 
as information exchanges and a joint working group on technical 
standards, are already occurring under a memorandum of cooperation 
between FAA and Eurocontrol. 

While FAA and JPDO's Harmonization IPT are planning cooperative 
activities, our research has identified several other areas where 
cooperation does not appear to be fully developed. For example, the 
SESAR and NGATS initiatives, despite their similarities, do not have 
coordination activities such as peer reviews of relevant research, 
cooperation on safety analysis (such as through the pooling of accident 
data), or validation of technologies. It is possible that greater 
cooperation and exchange between NGATS and SESAR might develop once 
planning has progressed to the development and validation stage. 

Concluding Observations: 

Transforming the national airspace system to accommodate what is 
expected to be three times the current amount of traffic by 2025, 
providing adequate security and environmental safeguards--and doing 
these things seamlessly while the current system continues to operate-
-will be an enormously complex undertaking. Both ATO and JPDO have been 
given difficult tasks in a difficult budgetary environment. Going 
forward, efforts to control costs and leverage resources will become 
ever more critical. Success also depends on the ability of ATO and JPDO 
to define their roles and form a collaborative environment for planning 
and implementing the next generation system. 

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. 

Contact and Staff Acknowledgments: 

For further information on this statement for the record, please 
contact Gerald Dillingham at (202) 512-2834 or dillinghamg@gao.gov. 
Individuals making key contributions to this statement include 
Nabajyoti Barkakati, Christine Bonham, Colin Fallon, Carol Henn, David 
Hooper, Heather Krause, Elizabeth Marchak, Edmond Menoche, Faye 
Morrison, Richard Scott, Sarah Veale, and Matthew Zisman. 

FOOTNOTES 

[1] PBOs are discrete units, led by a Chief Operating Officer, that 
commit to clear objectives, specific measurable goals, customer service 
standards, and targets for improved performance. 

[2] ATC Modernization has remained on our high-risk list since 1995. 
See GAO, High Risk Series: An Update, GAO-05-207 (Washington, D.C.: 
January 2005). 

[3] Because ATO includes the majority of FAA employees, this statement 
will refer to ATO initiatives, even though some may apply FAA-wide. 

[4] Pub. L. No. 104-50, Fiscal Year 1996 Department of Transportation 
Appropriations Act. 

[5] Pub. L. No. 108-176, Vision 100--Century of Aviation 
Reauthorization Act, December 12, 2003. 

[6] Network centric operations aim to exploit technical advances in 
information technology and telecommunications to improve situational 
awareness and the speed of decision making. 

[7] GAO, The National Airspace System: FAA Has Made Progress but 
Continues to Face Challenges in Acquiring Major Air Traffic Control 
Systems, GAO-05-331 (Washington, D.C.: June 10, 2005). 

[8] FAA's process improvement model, titled "Integrated Capability 
Maturity Model," is a tool to assess the maturity of the agency's 
software acquisition capabilities. 

[9] GAO, Air Traffic Control: System Management Capabilities Improved, 
but More Can Be Done to Institutionalize Improvements, GAO-04-901 
(Washington, D.C.: Aug. 20, 2004). 

[10] An earned valued management system measures performance by 
comparing the value of work accomplished with work scheduled and 
thereby provides early warning of schedule delays and cost overruns. 

[11] The Medium Intensity Airport Weather System (MIAWS), intended to 
provide a real time display of storm positions and estimated storm 
tracks, was terminated for lack of demonstrable benefit. The Mode 
Select (Mode S) program, intended to provide enhanced radar 
surveillance information, was terminated due to a poor business case. 
The Asset and Supply Chain Management Program, intended to assist in 
asset and logistics management, was terminated due to business case 
weaknesses and schedule and performance issues. 

[12] GAO, Information Technology: FAA Has Many Investment Management 
Capabilities in Place, but More Oversight of Operational Systems Is 
Needed, GAO-04-822 (Washington, D.C.: Aug. 20, 2004). 

[13] Pub. L. No. 103-355. 

[14] According to FAA, the agency tracks acquisition program 
performance from its original baseline or any subsequently approved 
baselines approved by the Joint Resource Council and reports variances 
to the Administrator and to Congress as required. 

[15] GAO-03-669. 

[16] Federal Aviation Administration, A Plan for the Future: The 
Federal Aviation Administration's 10-Year Strategy for the Air Traffic 
Control Workforce (Dec. 21, 2004). 

[17] According to FAA, since issuing its controller staffing plan, it 
has achieved productivity gains that have reduced the need to hire 
about 460 air traffic controllers. 

[18] In February 2005, FAA awarded a contract for the operation of its 
flight service stations. 

[19] The Vision 100 Act called for JPDO to create and carry out an 
integrated plan for NGATS. This integrated plan was developed by the 
partner agencies and submitted to Congress on December 12, 2004. 

[20] ADS-B is a surveillance technology that transmits an aircraft's 
identity, position, velocity, and intent to other aircraft and to ATC 
systems on the ground, thereby enabling pilots and controllers to have 
a common picture of airspace and traffic. By providing pilots with a 
display that shows the location of nearby aircraft, the system enables 
pilots to collaborate in decision making with controllers, safely 
allowing reduced aircraft separation and thereby increasing capacity 
within the national airspace system. 

[21] Some of JPDO's governance structure was determined by Vision 100, 
which directed the Secretary of Transportation to establish a Senior 
Policy Committee and set forth the membership of this committee. In 
addition, JPDO has established a Board of Directors, a Master IPT, and 
several divisions. 

[22] NASA uses the term foundational to refer to research that explores 
core science, but does so with a view toward how the research will be 
applied. 

[23] FAA's Research, Engineering and Development Advisory Committee, 
established in 1989, advises the FAA Administrator on research and 
development issues and coordinates FAA's research, engineering, and 
development activities with industry and other government agencies. The 
committee considers aviation research needs in air traffic services, 
airport technology, aircraft safety, aviation security, human factors, 
and environment and energy. 

[24] Wake vortex is air turbulence that occurs behind an aircraft and 
was a cause in the 2001 American Airlines accident in which 265 people 
died. 

[25] SWIM is expected to help in the transition to network-centric 
operations by providing the infrastructure and associated policies and 
standards to enable information sharing among all authorized system 
users, such as the airlines, other government agencies, and the 
military. 

[26] The $15 billion estimate is based on the working group's "base 
case" scenario. The working group also calculated a lower cost "best 
case" scenario, in which FAA achieves an annual 2 percent productivity 
increase beyond the cost of increased demand; and a higher cost "worst 
case" scenario, in which costs grow with the increase in operations 
with no productivity increases. 

[27] Nonfederal stakeholders' participation varies from approximately 
10 percent to 25 percent of their time per week on the IPTs and 
involves approximately one meeting per month for members of the 
council. 

[28] In 2002, FAA established a policy whereby commercial air 
transport, regional, and military fleets operating in the nation's 
higher airspace would use the 1090 MHz frequency. The policy also 
prescribed the use of 978 MHz, known as the "universal access 
transceiver" or UAT, for general aviation operating in lower airspace. 
Uplinking weather and national airspace status information is only 
possible on the 978 MHz frequency. 

[29] Currently, FAA's Operational Evolution Plan monitors how NAS 
capacity will change over a rolling 10-year planning horizon depending 
on numerous variables, such as the demand for air travel, the 
completion of new runways, and the availability of new ATC systems. 

[30] The European Commission is a politically independent institution 
that prepares and implements legislative instruments. 

[31] Eurocontrol is an autonomous organization established in 1963 with 
the intention of creating a single upper airspace in Europe. 

[32] A portion of this funding is in-kind services from Eurocontrol. To 
convert euros to U.S. dollars, we used 1.2098, the foreign exchange 
rate for March 21, 2006, as published in The Washington Post. 

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