In 1995, GAO designated the ATC modernization program as a  high-risk information technology initiative because of its size, complexity,  cost, and problem-plagued past. FAA, in response to over 45 recommendations we have made, has taken  steps to improve its acquisition management. NextGen also includes  the acquisition of ATC systems. Most Acquisition Programs Are Meeting Cost and Schedule Estimates since the Creation of ATO

Since the creation of ATO in 2004, FAA has shown significant  improvement in its management of ATC modernization through better  acquisitions management and the introduction of more efficient business  practices. FAA has demonstrated executive-level commitment to  addressing the systemic factors that we have identified as contributing to  FAA’s historic cost overruns and schedule delays. Since 2004, many more  acquisition programs are being completed within the original cost and  time estimates than prior to ATO’s existence. While FAA has made progress in improving acquisition management  practices in the 4 years since ATO was created, areas remain that need  further improvement. In December 2007, we recommended that FAA identify or establish a  vehicle for regularly reporting to Congress and the public on the agency’s  overall, long-term performance in acquiring ATC systems by providing  original budget and schedule baselines for each rebaselined program and  the reasons for the rebaselining. FAA plans to  address our recommendation by reporting such information in its Capital  Improvement Plan, which it sends annually to Congress. FAA will need to continue to manage the acquisition of billions of dollars  worth of new ATC systems as NextGen progresses. Basic Planning for NextGen Is Completed and ATO Has Reorganized as It Transitions to NextGen, but Stakeholders Have Concerns

Congress authorized JPDO to plan and coordinate the development of  NextGen and placed JPDO organizationally within FAA. In addition, a number of stakeholders as well as members of Congress  have expressed concerns with the key NextGen planning documents being  developed by JPDO and FAA—JPDO’s Concept of Operations, Enterprise  Architecture, and Integrated Work Plan and FAA’s implementation plan  for NextGen (a document previously known as the Operational Evolution  Partnership (OEP) and now called the NextGen Implementation Plan). However, it is too early to tell if this  reorganization sufficiently addresses concerns raised by stakeholders about  the fragmented management structure for NextGen since other executives  continue to have responsibility for parts of NextGen mentioned earlier in this  report, and the division of responsibility for NextGen efforts among the senior  vice presidents and associate administrators is not clear. FAA’s Ability to Implement and Obtain Expected Benefits from NextGen Will Be Affected by Research and Development, Human Capital, and Infrastructure Challenges

A number of areas are central to FAA’s ability to implement NextGen and  thus realize the safety and efficiency gains that are expected for the nation’s  air transportation system. Ten industry stakeholders told us  that the “research gap” left by NASA’s declining aeronautics research  budget needs to be addressed. 5) reflect the expected increases in NextGen  research funding. To help bridge the gap between NASA’s research and FAA’s need to  develop and implement new technology, the two agencies have developed  a strategy to identify, conduct, and transfer to FAA the research and  development needed for NextGen. NextGen Will Require New Skills and Abilities of FAA Personnel

FAA will need technical skills such as systems engineers and contract  management expertise to implement NextGen. We believe that this is a reasonable approach that should  help FAA begin to address this issue, recognizing that once the right skill  set is identified, it may take considerable time to select, hire, and integrate  what FAA estimates could be 150 to 200 more staff. In addition, building new runways at some of these airports will  present considerable obstacles. Without significant reductions in emissions and  noise around the nation’s airports and continuing efforts at all levels of  government, efforts to expand airport capacity could be stalled and the  implementation of NextGen delayed. GAO staff who made major contributions to this report  are listed in appendix V.

Appendix I: Scope and Methodology

In this report, we assessed the Federal Aviation Administration’s (FAA)  ability to acquire and integrate new air traffic control (ATC) systems and  transition to the next generation air transportation system (NextGen). (3) What key challenges does FAA face in implementing NextGen? To determine the status of the key NextGen planning and transition issues  and key challenges facing FAA in implementing NextGen, we interviewed  senior ATO and Joint Planning and Development Office (JPDO) officials.
Why GAO Did This Study

The Joint Planning and Development Office (JPDO), an interagency organization within the Federal Aviation Administration (FAA), was created to plan and coordinate research and development for the next generation air transportation system (NextGen). Transitioning to NextGen will require FAA to continue to acquire new air traffic control (ATC) systems on schedule and on budget. GAO's concerns about the size, complexity, and cost of FAA's acquisition of ATC systems led GAO to designate this issue as high-risk in 1995. NextGen includes system acquisitions but is a significantly larger initiative involving multiple federal agencies, such as the National Aeronautics and Space Administration (NASA), which conducts aeronautics research and development for NextGen, and nonfederal aviation stakeholders, such as aviation equipment manufacturers, airports, and aircraft operators. GAO addressed (1) FAA's ATC systems acquisition activities, (2) key NextGen planning and transition issues, and (3) key challenges that FAA faces in implementing NextGen. GAO reviewed FAA's management processes and cost and schedule data for acquiring ATC systems, interviewed senior FAA, JPDO, and NASA officials, and 24 aviation stakeholders involved in NextGen. This report is also based on recent GAO products. The Department of Transportation (DOT) and NASA provided technical corrections, which GAO included.

What GAO Found

The majority of FAA's key ATC acquisition programs are currently being managed within the established cost and time estimates since FAA created the performance-based Air Traffic Organization (ATO) in 2004 and improved its management of acquisitions. The agency has demonstrated executive-level commitment to addressing systemic factors that have contributed to historic cost overruns and schedule delays. FAA's response to over 45 recommendations by GAO contributed to significantly improved acquisition management. While FAA has implemented numerous acquisition management practices, areas remain that need further improvement, such as ensuring transparency on rebaselined programs. FAA plans to address this issue by reporting annually to Congress the original budget and schedule baselines and the reasons for the rebaselining. FAA needs to continue its progress in managing acquisitions, since it will be acquiring billions of dollars of new systems as part of the NextGen transformation. JPDO has completed the initial versions of three basic planning documents for NextGen, but many aviation stakeholders felt the documents, which focus on a 2025 time frame, lack the information that industry needs to make near-term business decisions to support NextGen. The next version of the NextGen work plan, scheduled to be issued in September 2008, will address some of these concerns. ATO recently reorganized to facilitate the transition to NextGen, but it is too early to tell if the reorganization addresses concerns about the fragmented management structure for NextGen, since multiple offices in ATO and FAA continue to have responsibility for NextGen. FAA's ability to implement NextGen will be affected by how it addresses research and development, human capital, and infrastructure challenges. Although research and development are critical for NextGen, research gaps exist because of a recent decline in NASA's aeronautical research funding and the expanded requirements of NextGen. FAA faces a human capital challenge of having the necessary knowledge and skills, such as contract management and system engineering expertise, to implement NextGen. In response to GAO's prior recommendation, in September 2008, FAA expects to complete an analysis comparing the skills needed for NextGen with its current staff resources. However, it may take considerable time to hire what FAA estimates could be up to 200 more staff with the needed skills. FAA also faces the challenge of maintaining and repairing existing ATC infrastructure, such as radar stations, while consolidating or realigning its facilities to accommodate NextGen technologies and operations. An additional infrastructure challenge is increasing airport runway capacity to handle the expected increases in traffic. While FAA's plans call for building or expanding runways at the nation's 35 busiest airports, its analyses indicate that 14 more airports will still need additional runway capacity. These efforts to expand capacity by means of runway development could be delayed without significant reductions in emissions and noise around some airports.