Monday, January 25, 2016
DOT IG: FAA Failing to Cost-Effectively Implement NextGen Tech
[Avionics Today 01-25-2016] The Department of Transportation Inspector General (DOT IG) released a report last week that found that, while funding for the FAA has doubled, productivity has dropped sharply in the last two decades. The report outlined numerous shortcomings of the FAA’s efforts to implement reforms intended to help the agency operate more effectively and efficiently, improve the delivery of air traffic services, and modernize the U.S. Air Traffic Control (ATC) system.
|ATC at work. Photo: Rohde & Schwarz|
The report, “FAA Reforms Have Not Achieved Expected Cost, Efficiency, and Modernization Outcomes,” set out to assess whether FAA reforms implemented in 1995 have resulted in improved air traffic operations and reduced agency costs, as well as expedited the delivery of new technologies, as intended. The DOT IG found that, while FAA has implemented the provisions of past reform legislation, these efforts “have not achieved anticipated cost savings and operational efficiencies.” Instead, costs are continuing to rise while operational productivity has declined.
Between fiscal years 1996 and 2012, FAA’s total budget grew by 95 percent — from $8.1 billion to $15.9 billion — and its total personnel, compensation, and benefits costs increased by 98 percent, from $3.7 billion to $7.3 billion while productivity has fallen. The failure to see a successful correlation between costs and efficiencies mainly falls on the agency itself and its failure to use business-like practices to improve operations and maximize funding, according to analysis featured in the report.
These failures include those in the internal workings of the FAA itself, but reforms have also fallen short in the way of responding to legislation calling for improved delivery of new technologies and capabilities, such as the reforms of the upgrades to the U.S. under NextGen.
“While FAA reports improvements in its management of acquisitions, major projects continue to experience problems that delay the introduction of new technologies, such as performance-based navigation; postpone benefits to users; and defer the retirement of costly legacy systems,” the report states.
This includes long-delayed projects such as the multi-billion dollar implementation of the En-Route Automation system (ERAM), which successfully took over as the primary ATC architecture from the previous En Route Host computer system in April 2015 after four years of delays and $400 million over-budget expenses. Current projects are also under threat as recent audits of Automatic Dependent Surveillance Broadcast (ADS-B) have revealed that the FAA was unable to use the ADS-B signal at some air traffic control facilities after the ADS-B ground infrastructure and acceptance testing was completed because the facilities did not have the equipment required to use the signal.
Furthermore, the FAA has adopted a staged approach to implementing programs under NextGen in order to employ lessons learned and therefore help reduce costs and schedule risks, but that could be masking additional costs for programs. While the agency says this improves management based on identification of initial issues, the DOT IG finds that the agencies implementation of this approach has led to “unclear and inconsistent” reporting on overall program costs, schedules and benefits.
Further failures to report all costs include the FAA’s policy to report of past segments in major projects. The FAA only reports on the progress of acquisition segments with active baselines; in other words, FAA does not report performance on past segments, the report finds. As a result, FAA’s reporting masks many past cost, schedule, and other performance problems and, ultimately, total acquisition cost, schedule, and technical capabilities.
This was an issue with implementing the Standard Terminal Automation Replacement System (STARS) program, jump started in 1996 with the goal of replacing all 172 of the agency’s terminal automation systems for $940 million by 2005. The FAA split the program early on and continued on to implement a separate system before deciding to continue under just the Terminal Automation Modernization and Replacement (TAMR) system it is currently pursuing. Because the agency does not have to report past segments under a singular program, it is difficult to compare how much the agency overshot its original $940 million mark under the current TAMR $3.7 billion program.
Outside of technology reforms, the report goes on to identify further systematic issues within the FAA structure that impact its ability to introduce new technologies crucial to transitioning to NextGen, including overambitious plans, shifting requirements, software development problems, ineffective contract and program management, and unreliable cost and schedule estimates.
“This report shows that the FAA simply isn’t suited to successfully modernize our nation’s antiquated air traffic control system,” said Transportation and Infrastructure Committee Chairman Bill Shuster in a statement released after the report. “Over two decades of FAA personnel, organizational, and acquisition reforms have failed to slow the agency’s cost growth, improve its productivity, or improve its performance in modernizing the system.”
Schuster has previously called for the privatization of the ATC system through separating the Air Traffic Organization (ATO) — which is responsible for providing air navigation services in the National Airspace System (NAS) — from complete government control and running it under a private organization. According to Shuster, while the FAA has spent more than $6 billion to implement NextGen, ATC delays are up at 13 of the 20 largest U.S. airports. In the same amount of time the FAA has been working on NextGen, "Verizon has upgraded its wireless network four times," he said during a House Subcommittee on Aviation hearing last March.
To remedy the issues the FAA is experiencing, the DOT IG provided a list of recommendations that include identifying and implementing agency-wide cost-saving initiatives and develop appropriate timelines and metrics to measure whether the initiatives are successful; identifying current and accurate costs for each acquisition system; and reviewing and identifying federal industry best practices into the agency’s Acquisition Management System (AMS).
However, Shuster, alongside airlines affiliated with the Airlines for America (A4A) industry group, believes the only way to effectively move NextGen forward is to privatize the ATC system. Shuster is expected to introduce legislation in coming months to spin off the ATO segment to a nonprofit controlled by a series of aviation stakeholders.
“The FAA remains a vast government bureaucracy, not a high-tech service provider,” said Shuster. “It’s clear from the DOT IG’s findings that we need transformational FAA reform if we are going to have a safe, efficient, 21st century aviation system.”