2). However, the 11 programs that exceeded their  initial estimated costs account for over 60 percent of total program costs  for the 30 baselined programs—$11 billion of $17.7 billion. Ten of the 15 programs with  schedule delays also experienced cost increases. Several Factors Contributed to Cost Increases and Schedule Delays, and Some Could Hamper NextGen Implementation

		A Number of Factors Have Contributed to Cost Increases and Delays

Cost increases and schedule delays occurred because of several factors,  all of which have been long-standing challenges for FAA and some of  which continue to affect programs despite FAA efforts to mitigate the  factors. Specifically, these factors include (1) additional, unanticipated  system requirements work; (2) insufficient stakeholder involvement  throughout system development; (3) underestimates of the complexity of  software development; and (4) unanticipated events, including funding  decreases or work stoppages (see table 5). Interdependencies among NextGen ATC Programs Could Slow NextGen Implementation

The interdependencies of ATC acquisition programs have become more  prominent as the NextGen program shifts from planning to  implementation, so that cost increases and schedule delays in one  program could have a cascading effect on other programs. FAA’s  acquisition management system was not designed for managing NextGen  programs in an integrated way. For Programs We Reviewed, FAA Did Not Consistently Meet All Characteristics of Quality Cost Estimates or Schedule Best Practices

		Selected Cost Estimates Were Generally Comprehensive and Well- Documented, but Accuracy and Credibility Need to Be Improved

Our review of the ADS-B, CATMT, SWIM, and WAAS cost estimates  showed that while each program followed at least some of the four  characteristics of high-quality and reliable cost estimates—well- documented, comprehensive, accurate, and credible—none of the  programs adhered closely enough to those characteristics to create a  reliable cost estimate. The four estimates did not fully meet the comprehensive  characteristic because they lacked evidence that all cost influencing  ground rules and assumptions were considered. Had an independent cost estimate been completed,  the estimating team and program team could have identified the major  differences between their estimates, reconciled those differences  where possible, and provided a synopsis of the two estimates and  their differences to acquisition program management. Our analysis found that the  contractor’s CATMT schedule substantially or fully met four of the nine  best practices: capturing all activities, assigning resources, establishing  the durations, and updating the schedule. For example, since FAA does not perform schedule  risk analysis on individual programs, it cannot predict with certainty if any  of the programs will be completed on time. It is also important that FAA develop master schedules at the individual  acquisition program level. Recommendations for Executive Action

To improve cost estimates and schedules for NextGen and other major  air traffic control acquisition programs, GAO recommends that the  Secretary of Transportation direct FAA to take the following three actions  when appropriate for major acquisition programs based on a program’s  cost, schedule, complexity, and risk:
Conduct independent cost estimates and schedule risk analysis for  major acquisition programs. Require a fully integrated master schedule for each major acquisition  program, including those that are components of NextGen. DOT and FAA responded by email and did not  comment whether or not they agreed or disagreed with our  recommendations. DOT provided comments on the results of our analysis  of the cost estimates and schedules for the four programs we reviewed in  depth. FAA’s ATC acquisitions are critical to maintaining  the NAS and transitioning to the Next Generation Air Transportation  System (NextGen) over the next 10 years. Given that some key legacy  and NextGen acquisitions have experienced schedule delays and cost  overruns, which may risk the timely implementation of NextGen, we (1)  determined whether the planned costs and schedules of current FAA ATC  acquisition programs have changed since they were first submitted to  Congress; (2) examined the reasons for any changes in planned costs  and schedules; and (3) assessed the extent to which select ATC  programs adhered to best practices for determining acquisition costs and  schedules. Schedule Risk Analysis

A best practice that the WAAS contractor schedule did not meet is  conducting a schedule risk analysis, which is not required by FAA’s  schedule specifications.
Why GAO Did This Study

The Federal Aviation Administration (FAA), partnering with other federal agencies and the aviation industry, is implementing the Next Generation Air Transportation System (NextGen), a new satellite-based air traffic management system that will replace the current radar-based system and is expected to enhance the safety and capacity of the air transport system by 2025. Concurrently, FAA continues to maintain and upgrade existing air traffic control (ATC) systems that will also be needed for NextGen. This involves acquiring and implementing new software and hardware.
GAO was asked to determine (1) how, if at all, costs and schedules of FAA ATC acquisitions programs, including those related to NextGen, have changed since they were first submitted to Congress, (2) the reasons for any such changes, and (3) the extent that selected ATC programs adhere to cost and schedule best practices. To do its work, GAO reviewed 30 programs and conducted cost and schedule analysis on four programs that had an approved baseline and were NextGen related. GAO reviewed acquisition documents and interviewed FAA officials.

What GAO Found

In a review of 30 major ATC acquisition programs, all of which will contribute to the transition to NextGen, GAO found that costs for 11 of the 30 programs have increased from their initial estimates by a total of $4.2 billion and 15 programs experienced delays. The 11 acquisitions that experienced cost increases account for over 60 percent of FAAs total acquisition costs ($11 billion of $17.7 billion) for the 30 programs. The 15 acquisitions that experienced schedule delays, of which 10 also had cost increases, ranged from 2 months to more than 14 years and averaged 48 months.
Cost increases and schedule delays occurred due to several factors, many of which have been longstanding challenges for FAA. Specifically, these have involved (1) additional or unanticipated system requirements; (2) insufficient stakeholder involvement (such as controllers input) throughout system development; (3) underestimating the complexity of software development; and (4) unanticipated events including funding shortfalls or work toppages. These challenges, if they persist, will impede the implementation of NextGen, especially in light of the interdependencies among many acquisition programs, where cost increases or delays in one program can affect the costs and schedules of other programs.
For the four programs GAO selected to analyze in depth, FAA is not consistently following the characteristics of high-quality cost estimates and scheduling best practices that GAO previously identified. Regarding cost estimates, GAO found that although all four of the programs generally provided well documented and comprehensive estimates, which are two of the four characteristics, no program fully met the two other characteristics. Specifically, each program estimate was not credible because each lacked an independent cost estimate, which provides a check against FAAs estimate and three programs lacked risk or uncertainty analysis. The estimates also lacked accuracy because they were not updated regularly or based on comparable programs. Regarding scheduling practices, most programs did not substantially or fully meet the majority of the 9 best practices GAO previously identified including developing a fully integrated master schedule of all program activities and performing a schedule risk analysis. For example, without a schedule risk analysis, FAA is unable to predict, with any degree of confidence, if the estimated completion dates are realistic. FAA is implementing new processes and organizational changes to better manage acquisitions. However, by not consistently following the characteristics of highquality cost estimate and scheduling best practices, FAA cannot provide reasonable assurance to Congress and other stakeholders that NextGen and other ATC programs will avoid additional cost increases or schedule delays.

What GAO Recommends

To better estimate the cost and completion dates for major acquisitions, FAA should, among other things, require cost and schedule risk analysis, independent cost estimates and integrated master schedules. FAA did not comment on whether or not it agreed with the recommendations.