Inspector General Reports on FAA’s Efforts to Modernize the NAS

Critics and supporters of ATC commercialization will find useful information.

Inspector General of the U.S. Department of Transportation Calvin L. Scovel III’s recent report to the House Committee on Transportation and Infrastructure about the FAA’s progress in modernizing the nation’s airspace might add fuel to the fire to those supporting the effort to separate the U.S. air traffic control system from the 60-year old agency. Scovel suggested, however, that commercialization of the ATC systems in the UK, Canada, France and Germany offers useful lessons to both sides of the debate. He suggested, for example, that “policy makers need to consider other important factors, such as the unique scale and complexity of the United States NAS,” before making any significant changes to the largest ATC system on the planet.

Over the past two decades, Scovel explained, “Congress has granted FAA authority to reform the agency’s operations, acquisition practices, technology delivery and cost management. FAA has taken several steps in response,” such as when in 2012 the agency combined both terminal and enroute services to create the Air Traffic Service, an effort he said eliminated surplus senior staff while reducing overhead expenses. In 2005, the FAA awarded Lockheed Martin a 10-year contract to operate the flight service stations in the U.S., Puerto Rico and Hawaii, saving the agency some $2.13 billion over a 13-year period.

However, Scovel reported that despite these positive changes, the agency’s budget has nearly doubled in the past 20 years, “but has not realized corresponding cost and operational efficiencies. In addition, longstanding management problems have led to further delays with the FAA’s efforts to deliver new technologies and major acquisitions.” FAA’s reform efforts have also not improved operational productivity. The FAA’s budget increases occurred at a time when workforce levels have actually dropped over the past two decades, and also as the number of air traffic facilities has remained flat.

The DOT report identified missed opportunities including the FAA’s inability to leverage personnel reform flexibilities, as well as a failure to improve controller productivity while reducing facility costs, not to mention missing opportunities to improve delivery of technologies like NextGen. Ongoing major system acquisitions experienced a cumulative cost increase of $3.8 billion beyond FAA’s original estimates and delays ranging from seven to 174 months, with an average delay of 51 months. Scovel’s team also said the FAA had not done enough to reduce its use of sole-source contracts as the OMB asked in 2009.

The IG did look closely at how the UK, France, Germany and Canada created the commercial ATC systems they currently operate. Unlike the FAA, those countries “do not embark on large modernization efforts or conduct extensive aviation research and development work, but rather implement new technologies incrementally. For example, Nav Canada used a phased-in approach to develop and introduce Controller/Pilot Data Link Communications (CPDLC).” These countries also make extensive use of off-the-shelf technologies whenever possible rather than create legacy systems from scratch.

Scovel reminded legislators to remember as they consider changing the system, that the US ATC system services four times as much IFR traffic as its nearest neighbor NavCanada, not to mention more than four times more GA traffic. The FAA also employs 10 times more air traffic controllers than NavCanada. Against an annual budget of $120 million, NavCanada considers a $10 million acquisition a large project. These numbers pale in comparison when measured against the FAA’s $2.6 billion budget.

The IG report detailed other valuable lessons learned, most importantly that ATC system safety did not suffer after the move to commercialization. Additionally, the IG team realized “the importance of resolving several transition issues … including determining which functions to transfer, the timing of the transition and how the government would conduct safety oversight with the newly created entity.” There were also employee transition issues to consider, and the IG understood the need to deal with financial issues such as how to value the assets that might be transferred, and determining when the right time to make the change might be.

Scovel’s testimony concluded, to the chagrin of commercialization proponents, that many of the key risk and management challenges the report identified “will persist, regardless of potential changes to the FAA’s structure.”

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