	FAA Is Taking Steps to Address Challenges in Delivering and Demonstrating NextGen’s Benefits

		Delivering NextGen Benefits

FAA must deliver systems, procedures, and capabilities that provide  operators with a return on their investments in NextGen avionics in order  to convince operators to continue making such equipment investments. However, aircraft operators have expressed  concerns that FAA has not produced the most useful or beneficial PBN  routes and procedures to date. In response, FAA has  worked to include stakeholders, such as air traffic controllers and airlines,  in the study and design of new PBN procedures. To address these challenges,  FAA has undertaken a Navigation Lean (NAV Lean) project to streamline  the implementation process for flight procedures. For example, public  information about FAA’s near-term plans for implementing additional  capabilities lacks specifics about the timing and locations of  implementation. FAA Is Working to Identify and Develop a Cost-effective Mechanism to Encourage Operators to Equip with NextGen Technologies

While some operational improvements can be made with existing aircraft  equipment, realizing more significant NextGen benefits requires a critical  mass of properly equipped aircraft. Reaching that critical mass is a  significant challenge because the first aircraft operators to purchase and  install NextGen-capable technologies will not obtain a return on the  investment until many other operators are similarly equipped. FAA is soliciting industry input about how to  design and implement such a program but has yet to decide on how to  incentivize this transition. Although authorized, no funding has been  appropriated to establish a public-private financing program. FAA Faces Challenges in Maintaining Timely Delivery of Key Acquisitions

NextGen has significantly increased the number, cost, and complexity of  FAA’s acquisition programs, and it is imperative that these programs  remain on time and within budget, particularly given current budget  constraints and the interdependencies of many NextGen-acquisitions. In  February 2012, we reported that most of the key NextGen-related  acquisition programs were generally proceeding on time and on budget.See appendix I for the current cost and schedule performance of select  baselined NextGen and related acquisition programs. However, delays  with the En Route Automation Modernization (ERAM) program—a critical  program for NextGen—illustrate how delays can affect overall acquisition  and maintenance costs as well as time frames for other programs. According to FAA, this change increased  NextGen’s visibility within and outside the agency and created a direct  line of authority and responsibility for NextGen. However, in February  2012, the FAA Modernization and Reform Act designated that the  Director of the Joint Planning and Development Office (JPDO)—who is  responsible for NextGen planning and coordination—report directly to the  FAA Administrator and created a new leadership position—the Chief  NextGen Officer—who will also report directly to the Administrator. FAA has not yet  made the organizational changes called for by the act or clearly defined  the relationships among the Deputy Administrator, Chief NextGen Officer,  and JPDO director. According to FAA, no organizational changes will be  made until the agency has a permanent FAA Administrator in place. FAA Faces Challenges in Balancing the Needs of the Current and NextGen Systems and Addressing Infrastructure and Operational Issues That Transcend NextGen

Particularly in light of constrained budget resources, FAA will have to  balance its priorities to help ensure that NextGen implementation stays on  course. Sustaining the current legacy infrastructure remains critical, as it  will continue to be the core of the national airspace system for a number  of years, and some of its components will be part of NextGen. We have ongoing work for this  committee that is further exploring how FAA is preparing for the transition  to NextGen and balancing the demands of the legacy and NextGen  systems, including potential implications for the legacy systems and FAA  budgets if NextGen implementation is delayed. These decisions could affect  future consolidation plans. FAA has  acknowledged the need to keep long-term plans in mind so that it does  not invest unnecessarily in facilities that will not be used for NextGen.
Why GAO Did This Study

To prepare for forecasted air traffic growth, FAA is planning for and implementing NextGen in partnership with other federal agencies and the aviation industry. NextGen is a complex undertaking that requires acquiring new integrated air traffic control systems; developing new flight procedures, standards, and regulations; and creating and maintaining supporting infrastructure to create a more automated aircraft-centered, satellite-based air transportation system. GAO has made recommendations to address delays in NextGen's acquisitions, improve FAA's processes, and focus on accountability and performance, which FAA is implementing.
This statement discusses five key challenges that GAO and others have previously identified that affect NextGen implementation, as well as steps FAA has taken to address these challenges. These challenges are (1) delivering and demonstrating NextGens near-term benefits; (2) developing a cost-effective mechanism to encourage operators to equip with NextGen technologies; (3) maintaining timely delivery of acquisitions; (4) clearly defining NextGen leadership roles and responsibilities; and (5) balancing the needs of the current radar-based systems and NextGen systems through the transition. This statement is based on GAOs previous reports and testimonies, ongoing work for the committee, and updates on FAAs responses to these challenges through a review of FAA documents and interviews with FAA officials.

What GAO Found

Delivering and demonstrating the Next Generation Air Transportation System's (NextGen) benefits : The Federal Aviation Administration (FAA) must deliver capabilities that provide aircraft operators with a return on their investments in NextGen avionics to convince operators to continue making equipment investments. However, operators have expressed concerns that FAA has not produced the navigational procedures needed to achieve benefits from existing avionics, such as reduced fuel burn and flight time. To help produce more beneficial procedures, FAA is, among other things, involving air traffic controllers and other stakeholders in the design of new procedures.
Encouraging acquisition of NextGen equipage : For some technologies, realizing NextGen benefits requires a critical mass of properly equipped aircraft. Reaching that critical mass is a significant challenge because the first aircraft operators to purchase and install NextGen avionics will not obtain a return on their investment until many other operators are similarly equipped. FAA has begun to solicit industry input about how to design and implement a public-private financing program for equipment but has yet to make decisions about how to incentivize the airline operators' transition to NextGen.
Maintaining timely delivery of key systems : NextGen has significantly increased the number, cost, and complexity of FAA's acquisition programs, which must remain on time and within budget, particularly given current budget constraints and the interdependencies of many NextGen-related acquisitions. While these acquisitions are generally proceeding on time and within budget, previous challenges with the En Route Automation Modernization (ERAM) program--a critical program for NextGen--illustrate how delays can increase the costs and schedules of other acquisitions as well as the maintenance costs of the system that is meant to be replaced. Overall, NextGen implementation will be affected by how well FAA manages program interdependencies.
Clearly defining NextGen leadership roles and responsibilities : Although FAA has made organizational changes to increase visibility and accountability for NextGen, it has not made management changes called for by the FAA Modernization and Reform Act of 2012. According to FAA, those changes will not occur until a permanent FAA Administrator is in place. Further, FAA has not clearly defined the relationships among the Deputy Administrator (responsible for NextGen implementation and also the current Acting Administrator); the new Chief NextGen Officer position; and the Director of the Joint Planning and Development Office (responsible for NextGen planning and coordination).
Managing the transition to the NextGen system : Particularly in light of constrained budget resources, FAA will have to balance its priorities to help ensure that NextGen implementation stays on course while sustaining the current legacy infrastructure that will continue to be the core of the national airspace system for a number of years. For example, while FAA has an initial plan to consolidate facilities, the agency will need to keep long-term plans in mind so that it does not invest unnecessarily in facilities that may not be needed for NextGen.