Unplanned cost increases have characterized many other FAA acquisitions. Employees in these organizations demonstrate a stronger commitment in the following four areas: mission focus, accountability, coordination, and adaptability. Objectives, Scope, and Methodology

In light of FAA’s persistent acquisition problems and our work at other federal agencies that highlighted a need to change organizational culture, the Chairman, Subcommittee on Transportation and Related Agencies, House Committee on Appropriations, asked us to examine FAA’s management of its ATC modernization program to (1) determine whether FAA’s organizational culture has contributed to the agency’s continuing cost, schedule, and technical problems and (2) identify steps that FAA could take to improve its acquisition management through changing its organizational culture if that is a contributing factor. Over the years, program officials did not perform mission needs analyses; set unrealistic program cost and schedule estimates; suppressed bad news; and began system production before completing development, testing, and evaluation. It is easy to understand why participants in the federal acquisition process, including FAA officials, are driven by these incentives. FAA concluded that because accountability for contract administration was not well-defined or enforced, program officials were not encouraged to exercise strong oversight of contractors. These difficulties with hierarchy and empowerment were also reflected in their attitudes regarding accountability. One major factor deterring employees from working together is FAA’s organization of key players in the acquisition process into different divisions whose stovepipes or upward lines of authority and communications are separate and distinct. FAA’s acquisitions of major ATC systems have been impaired because its employees resisted making needed changes in the agency’s approach to both specific acquisitions and its acquisition process as a whole. Recognizing the need to improve its management of acquisitions through cultural change, FAA has developed and begun implementing a reform effort. However, FAA will not know whether this system has the potential to create and sustain a more constructive culture unless the agency is able to fully establish the integrated product teams and gain the strong commitment of all stakeholders to the new system. Over the years, GAO reports have focused on these deficiencies.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Federal Aviation Administration's (FAA) management of its acquisition process, focusing on: (1) whether the FAA organizational culture has contributed to persistent acquisition problems; and (2) potential management improvements that could result from FAA organizational change.

What GAO Found

GAO found that: (1) the FAA organizational culture has been an underlying cause of FAA acquisition problems; (2) employees' attitudes do not reflect FAA focus on accountability, coordination, or adaptability; (3) FAA acquisition officials make little or no mission needs analyses, set unrealistic cost and schedule estimates, and begin production before systems development and testing is completed; (4) FAA fails to enforce accountability for defining systems requirements or for contract oversight; (5) the hierarchical FAA structure fosters a controlling environment, diminishes employee empowerment, and impedes information sharing; (6) FAA operations and development divisions have separate and distinct lines of authority and communications, which impedes coordination; (7) FAA officials are resistant to making needed changes in their acquisition process because FAA culture rewards conservatism and conformity and discourages innovation; (8) recognizing its need to improve the acquisition process through cultural change, FAA implemented a reform effort based on cross-functional, integrated product teams, and introduced a new acquisition management system; (9) FAA believes the product teams will improve accountability and coordination and infuse a more mission-oriented focus into the acquisition process; and (10) FAA has approved only one product team plan because it is still having difficulty in gaining the strong commitment of all employees who have a stake in the acquisition process and in forging partnerships across organizational divisions.