DOT Minces No Words in Latest FAA NextGen Audit

Although the attempt to corporatize the nation’s ATC system has been sent to a semi-permanent holding pattern, the criticism of how the FAA has been managing the NextGen project to update the national airspace system continues. The DOT’s Inspector General in a recent report said it received 17 hotline complaints “alleging serious problems and abuse related to the agency’s management of NextGen developmental funds.” One complaint said, “Senior [FAA] leaders promoted an environment of hostility, fear, and reprisal toward those who point out mismanagement.” The IG chose not to discuss this complaint in its recent report “due to pending administrative proceedings and potential litigation.”

The House Committee on Appropriations also tasked the IG with investigating how funding is managed and learn if any measurable results for some NextGen projects have been achieved to date. In a snapshot, the IG looked at $1.7 billion spent by the FAA on developmental projects aimed at testing and demonstrating the value of upgrades on a per project basis. The IG’s analysis reviewed approximately 11.6 percent of the NextGen projects created between 2009 and 2015, valued at about $195 million of the $1.7 billion. The IG believed the sample was sufficient to project their findings over the remainder of the agency’s work at the 90-percent confidence level.

While this report is certainly not the first criticism by the IG of NextGen, it appears to be one of the harshest. In its findings, the Inspector General's lambasted the FAA for mismanagement, offering harsh criticisms worthy of little more than about a "D+" if the efforts had been academic.

The report discovered that of the 22 project level agreements evaluated, a dozen did not even line up with the FAA’s high-priority NextGen investment decisions. The FAA defines a PLA as an internal control mechanism to ensure individual projects remain within the original scope and budget. The IG said the FAA lacked leadership stability resulting from unclear roles and responsibilities, lack of involvement by key managers and a lack of accountability by top senior officials to address PLA weaknesses.

The IG gigged the agency for not having a framework to manage project oversight. The FAA was also not clear about which developmental projects are eligible for funding and funded some work without any PLA at all. The agency lacked a paper trail to evaluate whether or not the work actually met the goals of advancing NextGen, or whether the projects should be terminated or continued.

The IG made six recommendations mainly focused around controls and the reporting of outcomes, two of which the FAA agreed to. The FAA did not accept other criticisms sitting down however, arguing back that some of the IG’s conclusions were incorrect, as was some of the content used to explain the agency’s perceived shortcomings. In one major pushback, the FAA called the sample size the IG used for its evaluation too small to be representative of the agency’s overall process. In response, the IG simply said it considers four of the six recommendations related to NextGen as “unresolved.”

The IG concluded that the FAA still seems unable to overcome significant weaknesses in transparency, accountability and project oversight. Without a fix to these major issues, “the FAA will remain challenged in completing the NextGen upgrades.”