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GAO discussed the need for reforms at the Federal Aviation Administration (FAA), focusing on air traffic control (ATC) modernization, funding, and organizational structure. GAO noted that: (1) FAA attributes schedule delays and cost overruns in the ATC modernization program to burdensome procurement rules; (2) exempting FAA from the rules could result in a more expeditious acquisition process; (3) FAA schedule and cost problems are caused by such factors as inadequate contractor oversight, underestimating the complexity of the systems being developed, and frequent turnover of FAA management; (4) a predictable and sufficient flow of funds will be needed to meet FAA needs, which will require some exemptions from the Budget Enforcement Act; (5) in creating a new organizational structure for federal aviation functions, it is important to consider the Department of Transportation's future role in linking aviation with other modes of transportation and balancing aviation interests with competing interests; and (6) the proposal to establish a private ATC corporation raises such issues as how to keep the corporation from charging monopolistic fees or restricting services, to what extent would the Department of Defense pay for the corporation's services, and how the corporation would treat small airports and general aviation.

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