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The Federal Aviation Administration's (FAA) multibillion-dollar effort to modernize the nation's air traffic control (ATC) system has suffered from cost, schedule, and/or performance shortfalls in its system acquisitions for more than two decades and has been on our list of high risk programs since 1995. FAA's performance-based Air Traffic Organization (ATO) was created in February 2004, in part, to address these legacy challenges. In this report, GAO examined (1) FAA's experience in meeting cost, schedule, and performance targets for major ATC system acquisitions; (2) steps taken to address legacy problems with the program and additional steps needed; and (3) the potential impact of the constrained federal budget on this program.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Transportation 1. To help ensure that key administration and congressional decision-makers have more complete information to assess the potential impact of annual budget submissions on individual ATC system acquisitions, the overall ATC modernization program, and related larger-scale National Airspace System (NAS) modernization activities funded through the facilities and equipment budget, the Secretary of Transportation should direct FAA to identify which activities under the ATC modernization program have had funding deferred, reduced, or eliminated and to provide detailed information about the impact of those decisions on FAA's ability to modernize the ATC system and related components of the NAS in the near, mid, and longer term. This information should be reported to Congress annually.
Closed - Implemented
In our December 2007 report we stressed the importance of ensuring that key administration and congressional decision makers and stakeholders have complete information on the budget and schedule performance of FAA's critical Air Traffic Control acquisition programs. We recommended in that FAA improve the objectivity, reliability, and inclusion of core programs in ATO's acquisition performance measures by establishing written, objective criteria and guidance for managers to use in determining which programs are major and thus selected for performance reporting and in selecting schedule milestones. Since 2009, FAA has defined "major programs" as new investments with acquisition category levels of 1, 2, or 3 (there are 5 levels in total). Each of the three category levels contains programs that require special management attention because of their importance to the agency's mission as defined in Office of Management and Budget Circular A-11, Part 7. Programs in the three categories include those with high development, operating or maintenance costs; high risk; high return; or a significant role in the administration of FAA programs, finances, property, or other resources. FAA reports on the performance of the major programs contained in acquisition categories' 1 through 3 in Appendix D of its Capital Investment Plan which it submits to Congress. With this action, FAA can provide assurance that programs important to the transition to NextGen are on time and within budget.

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