	The ATO Has Made Progress in Addressing Key Challenges and Needs to Continue

The ATO inherited a decades-long legacy of cost, schedule, and  performance problems in the ATC modernization program. Despite  successes to date, these acquisition programs will require sustained  management attention to help ensure that they remain within their cost,  schedule, and performance targets. ATO Is Taking Some Positive Steps to Address Legacy Acquisition Problems

The ATO has already taken some steps to control the legacy problems  identified with the ATC modernization program. Additionally, the ATO has established collaborative teams of  technical experts and ATC system users, reorganized air traffic services  and the research and acquisition organization along functional lines of  business to bring stakeholders together and integrate goals, rewarded  cooperation by linking investments to operations, started preparing  agency planning documents in a format consistent with that prescribed by  the Office of Management and Budget, begun implementing portions of a  cost accounting system, and reduced layers of management from 11 to 7 to  help address the hierarchical nature of the organization. Additionally, we  view the decision to cut major systems as an indication that the ATO is  willing to make difficult decisions to suspend major ATC system  acquisitions that are not achieving their intended goals—even after a  substantial investment of agency resources. However, as we reported last fall, the Acquisition Management System still  does not ensure that FAA uses a knowledge-based approach to acquisition  that is characteristic of the best procurement practices used in  commercial entities or by DOD. Finally, FAA has made progress in improving its process for acquiring  software-intensive systems. Unless FAA demonstrates a strong commitment to  process improvement and establishes a consistent, institutional approach  to implementing and evaluating this process improvement, the agency  risks taking a major step backwards in its capabilities for ATC systems and  software. To Address the Challenges of Modernizing and Expanding the NAS While Living within Its Means, the ATO Has a Number of Options

The ATO faces multiple challenges: (1) expanding and modernizing the  NAS to accommodate an expected 25-percent increase in the volume of air  traffic over the next 10 years; (2) hiring thousands of air traffic controllers  to replace those expected to retire over the next decade; (3) working with  the new JPDO to coordinate the research efforts of diverse federal  agencies to transform the NAS to meet potential air travel needs of 2025;  and (4) addressing aging infrastructure. The ATO plans to continue modernizing and expanding the capacity of the  NAS to accommodate an expected 25-percent increase in air traffic volume  over the next 10 years. 1.) The ATO will be challenged to harness the efforts of the diverse agencies  that participate in the JDPO, including DOD, the Department of Homeland  Security and the National Aeronautics and Space Administration, and to  align these efforts with the goals of the national plan. This will have to change under the JPDO paradigm. To provide the $4.4 billion needed for its major system acquisitions while  remaining within its budget targets through fiscal year 2009, the ATO has  made significant cuts elsewhere in its capital funding plans. 2.) However, when forwarding its budget  submission for administration and congressional review, the ATO does not  highlight the programs slated for increased or reduced funding and does  not identify the impact of these decisions on ATC and NAS modernization. Such information would make clear how constrained budgets will affect  NAS modernization and how the ATO is working to live within its means. The ATO Has Options to Increase Its Prospects for Success

Contracting out more services and proposing legislation to provide  borrowing authority are two options proposed by aviation experts to  improve the ATO’s chances of success. Federal Aviation Administration: Challenges for Transforming into a  High-Performing Organization. Air Traffic Control: FAA’s Modernization Efforts—Past, Present, and  Future.
Why GAO Did This Study

Congress's formation of the Air Traffic Organization (ATO) and the Joint Planning and Development Office (JPDO), both within the Federal Aviation Administration (FAA), represent the latest efforts to address the monumental challenges of modernizing the national airspace system (NAS) during the first quarter of the twenty-first century. For more than two decades, FAA has been working to modernize the air traffic control (ATC) system, but projects have repeatedly missed cost, schedule, and performance targets. Consequently, ATC modernization has been on GAO's list of high-risk federal programs since 1995. The ATO's focus is on a rolling 10- year outlook to operate and modernize the NAS. By contrast, the JPDO's vision is longer term, focused on coordinating the research efforts of diverse federal agencies to achieve a common goal of meeting potential air traffic demands in 2025. This statement discusses (1) GAO's assessment of the ATO's efforts to date in addressing some of the key challenges for the ATC modernization program and (2) challenges that lie ahead for the ATO and options that it could consider in addressing the needs of the NAS over the next decade, as well as longer-term needs defined by the JPDO.

What GAO Found

The ATO is taking a number of positive steps to address the legacy cost, schedule, and performance problems that have affected the ATC modernization program for the past two decades. For example, the ATO is beginning to involve stakeholders early and throughout a system's development; has demonstrated a willingness to cut major acquisitions that are not meeting their goals, even after investing significant resources; and has improved its management of information technology. However, the ATO does not use a knowledge-based approach to acquisitions, characteristic of best commercial and federal practices, which would help avoid cost, schedule, and performance problems. Additionally, the ATO has used a process improvement model in several software-intensive acquisitions. However, because the ATO has not mandated use of the model in all such acquisitions, it risks taking a major step backwards in its capabilities for ATC systems and software. Finally, the ATO is taking steps to change the culture of its component organizations by, for example, replacing a personality-driven culture with one that is more sustainable and stable. Continued management attention in this area will be important to the organization's success. The ATO faces the challenges of (1) modernizing and expanding NAS capacity to accommodate an expected 25-percent increase in the volume of air traffic over the next 10 years, (2) hiring thousands of air traffic controllers to replace those expected to retire over the next decade, (3) working with the new JPDO to coordinate the research efforts of diverse federal agencies to transform the NAS to meet potential air travel needs of 2025, and (4) addressing aging infrastructure. To fund its major system acquisitions through fiscal year 2009 while remaining within projected budget targets, the ATO has substantially reduced funding for other areas. However, the ATO does not provide administration and congressional decisionmakers with information about the impact of the reduced funding on NAS modernization. To deal with these challenges, some aviation experts suggested options that the ATO could consider, including contracting out more services and incurring debt to obtain multiyear funding for capital investments (an option requiring legislative change). Our work and some experts also suggest clarifying budget submissions to show decisionmakers how constrained budgets affect NAS modernization and how the ATO is working to live within its means.