August 31, 1999

Thompson letter on GPRA - DOT Attachment 2

OPEN GAO RECOMMENDATIONS ON DOT

MAJOR MANAGEMENT PROBLEMS

THE ACQUISITION OF MAJOR AVIATION AND COAST GUARD SYSTEMS LACKS ADEQUATE MANAGEMENT AND PLANNING

Problem description: The U.S. Coast Guard is planning what is potentially the largest acquisition in its history. This effort, the Deepwater Capability Replacement Project, involves replacing or modernizing many of the Coast Guard’s 92 ships and 209 airplanes and helicopters. In October 1998, GAO reported that the Coast Guard needs to more thoroughly address the project’s justification and affordability. The Coast Guard initially estimated that the project would cost $9.8 billion (in constant dollars) over a 20-year period. The project is still in its early stages, but initial planning estimates call for spending $300 million starting in fiscal year 2001 and $500 million each year over the next 19 years.

Report No. and Date	Recommendation
RCED-97-110 May 14, 1997	The Secretary of Transportation should direct the Commandant of the Coast Guard to incorporate the following approach into the Coast Guard’s strategy for confronting and managing changes in the current budget climate: develop a more comprehensive strategy and corresponding plan for addressing impending budget targets, including systematically identifying and prioritizing alternatives that could be considered if future budget targets require additional spending reductions. In so doing, the Coast Guard should give serious consideration to relevant but unimplemented recommendations from past studies and options identified in its recent National Streamlining Study. The agency should also identify the legislative actions necessary to implement these alternatives. Particularly in light of capital projects, the Coast Guard should consider including a reassessment of its missions and its relationship to user groups as part of this activity.
RCED-99-6 Oct. 26, 1998	The Secretary of Transportation should direct the Commandant of the Coast Guard to (1) evaluate whether contracting teams should be instructed to base their proposals for the Deepwater Project on the assumption that the funding level will be lower than $500 million a year and (2) submit his decision on this matter to the DOT Transportation System Acquisition Review Council or other appropriate offices within DOT for approval.
RCED-99-6 Oct. 26, 1998	The Secretary of Transportation should direct the Office of the Assistant Secretary for Administration and the Coast Guard to expedite the development and issuance of updated information from internal studies to contractors involved in developing proposals for the Deepwater Project. Information should include, but not necessarily be limited to, the remaining service life of ships and aircraft, gaps between current and needed capabilities, and future service levels.
RCED-99-6 Oct. 26, 1998	The Secretary of Transportation should direct the Office of the Assistant Secretary for Administration and the Coast Guard to revise acquisition guidelines to better ensure that mission analysis projects for future projects are based on accurate and complete data on the condition of the assets, as appropriate for assets or systems in question. Such revisions should stress the importance of using rigorous engineering or other data-based evaluations to estimate the remaining service life of assets rather than using estimates made when the assets were produced or modified.
RCED-99-6 Oct. 26, 1998	The Secretary of Transportation should direct the Office of the Assistant Secretary for Administration and the Coast Guard to revise acquisition guidelines to ensure that mission analysis reports and mission needs statements disclose the methodologies and data sources used, and to expand guidelines and emphasize the importance of using more systematic data collection techniques, such as structured interviews, sampling techniques, and empirical data.
RCED-99-6 Oct. 26, 1998	The Secretary of Transportation should direct the Office of the Assistant Secretary for Administration and the Coast Guard to develop a method to better ensure that existing acquisition requirements are carried out, such as documenting the gap between current and needed capabilities. Such actions could include the use of tools like checklists of key requirements or certification that requirements have been met.
RCED-95-62 Jan. 24, 1995	To enable the Coast Guard to manage its cutter inventories more effectively between now and when the Logistics Master Plan is fully implemented, the Secretary of Transportation should direct the Commandant of the Coast Guard to, where economically feasible, consolidate at regional support centers those cutter inventories that are located at individual onshore facilities, particularly where several cutters from the same class are clustered or where the cutters’ individual onshore storage facilities are housed within a single building.
RCED-95-62 Jan. 24, 1995	To enable the Coast Guard to manage its cutter inventories more effectively between now and when the Logistics Master Plan is fully implemented, the Secretary of Transportation should direct the Commandant of the Coast Guard to make use of the current automated inventory control program mandatory on all cutters that have sufficient computer hardware and have not implemented CMplus (a computerized inventory system), consolidate and analyze inventory data for each class, and redistribute excess parts from additional cutter classes as warranted.

SERIOUS CHALLENGES REMAIN IN RESOLVING FAA’S YEAR 2000 RISKS (NO OPEN RECOMMENDATIONS)

Problem description: FAA faces challenges in making its computer systems ready for the Year 2000. In August 1998, GAO testified that FAA was unlikely to complete all critical tests in time and that unresolved risks threatened aviation operations. The implications of FAA’s not meeting the Year 2000 deadline are enormous and could affect hundreds of thousands of people through customer inconvenience, increased airline costs, grounded or delayed flights, or degraded levels of safety. FAA has made progress in addressing its Year 2000 computing challenge. While it currently has no open recommendations in this area, GAO is continuing to monitor a number of challenges continuing to face the agency. These challenges include addressing data exchanges, international coordination, reliance on the telecommunications infrastructure, and business continuity planning.

FAA AND THE NATION’S AIRPORTS FACE FUNDING UNCERTAINTIES

Problem description: DOT and the Congress face a challenge in reaching agreement on the amount and source of long-term financing for FAA and the nation’s airports. Between 1982 and 1998, the Airport Improvement Program (AIP) provided about $2.2 billion in federal grants for rehabilitating and maintaining airport runways. However, FAA’s priority system is not equipped to determine which proposed rehabilitation projects will deliver the best return for the dollars spent.

Report No. and Date

Recommendation

RCED-98-226 July 31, 1998

To enable FAA to make the most cost-effective decisions when awarding AIP grants for runway rehabilitation projects, the Secretary of Transportation should direct the Administrator of FAA to evaluate options for improving the quality of information on airfield pavement conditions for national system airports. These options include, but are not limited to, (1) improving the existing runway condition information contained in the Airport Safety Data Program by reviewing and revising rating criteria, and providing adequate training for inspectors, (2) requiring airports to submit pavement condition index (PCI) information as part of their airport master plan or as support in applications for relevant discretionary AIP grants, or (3) requiring all airports in the national airport system to submit PCI information on a regular basis and using the information to create a pavement condition database that could be used in evaluating the cost-effectiveness of project applications and forecasting anticipated pavement needs.

AVIATION SAFETY AND SECURITY PROGRAMS NEED STRENGTHENING

Problem description: The aviation accident rate per mile traveled has remained low but flat over the last 2 decades. Unless the accident rate is reduced, however, as air travel continues to grow, the actual number of accidents will increase. GAO has identified numerous weaknesses in FAA’s inspection, oversight, and enforcement activities. While FAA is taking steps to address the shortcomings in its safety programs, eliminating those shortcomings will take considerable time and effort. In addition, while progress is being made in strengthening airport security, it will take several years to address all problem areas, and FAA’s weak computer security practices present significant vulnerabilities to the air traffic control system. Fourteen recommendations remain open relating to FAA oversight of aviation safety and security, focused on (1) targeting FAA’s resources to the most serious problems, (2) improving documentation and analysis of findings to provide early warnings of impending safety problems, (3) improving enforcement and compliance, and (4) improving computer and physical security at air traffic control facilities.

Report No. and Date	Recommendation
RCED-98-21 Oct. 24, 1997	The Secretary of Transportation should instruct the Administrator of FAA to expand the use of locally based teams for repair station inspections, particularly for facilities that are large, complex, have higher rates of noncompliance or meet predetermined risk indicators.
RCED-98-21 Oct. 24, 1997	To ensure that FAA inspectors are effectively documenting and resolving deficiencies found during inspections, the Secretary of Transportation should instruct the Administrator of FAA to monitor the implementation of the strategy to improve data quality to ensure it is completed as soon as possible so that the data used in the Safety Performance Analysis System are reliable when the system is fully implemented in 1999.
RCED-98-21 Oct. 24, 1997	To ensure that outdated regulations governing the oversight of repair stations and certification and training requirements for maintenance personnel are updated as soon as possible, the Secretary of Transportation should instruct the Administrator of FAA to expedite efforts to update the regulations and to establish and meet schedules for completing the updates.
RCED-98-21 Oct. 24, 1997	The Secretary of Transportation should instruct the Administrator of FAA to develop and use checklists or job aids for inspectors that allow a greater degree of comprehensiveness, standardization, and assurance that the repair station complies with regulatory requirements.

RCED-98-6 Feb. 27, 1998	To strengthen FAA’s inspection process to provide more complete and accurate information on potential problems in aviation safety and security—so that information can provide early warning of potential risks and serve as a basis for allocating the agency’s inspection resources—the Secretary of Transportation should direct the Administrator of FAA to revise FAA Order 2150.3A to require that FAA’s inspection staff report all observed problems and violations in their respective program offices’ tracking systems.
RCED-98-6 Feb. 27, 1998	To strengthen FAA’s inspection process to provide more complete and accurate information on potential problems in aviation safety and security—so that information can provide early warning of potential risks and serve as a basis for allocating the agency’s inspection resources—the Secretary of Transportation should direct the Administrator of FAA to develop guidance for inspectors to distinguish major from minor violations, improve FAA’s inspection databases to incorporate these distinctions, and develop a plan for focusing on FAA’s resources on the violations with the greatest potential impact on aviation safety and security.
RCED-98-6 Feb. 27, 1998	To strengthen FAA’s enforcement process and the agency’s capacity to better encourage and monitor compliance with aviation safety and security regulations, the Secretary of Transportation should direct the Administrator of FAA to take steps to improve the usefulness of FAA’s databases for identifying and targeting enforcement resources to the most serious aviation safety and security problems by (1) updating the cost estimates to directly link FAA’s inspection and enforcement tracking systems and moving forward on this initiative if it would prove cost-effective and could streamline the enforcement process and (2) developing a process for distinguishing major from minor enforcement cases and for focusing FAA’s resources on the cases with the greatest potential impact on aviation safety and security.
RCED-98-6 Feb. 27, 1998	To strengthen FAA’s enforcement process and the agency’s capacity to better encourage and monitor compliance with aviation safety and security regulations, the Secretary of Transportation should direct the Administrator of FAA to require legal staff to inform inspectors periodically of the status of cases and to explain why penalties are reduced.
RCED-98-7 Nov. 24, 1997	To help ensure that airlines appropriately train pilots in crew resource management principles under part 121 of the federal aviation regulations and that FAA inspectors are able to uniformly evaluate this training, the Secretary of Transportation should direct the Administrator of FAA to develop a process that airlines must follow for creating a crew resource management curriculum with measurable criteria under part 121 as it has for the Advanced Qualification Program.
AIMD-98-155 May 18, 1998	The Secretary of Transportation should direct the Administrator of the FAA to develop and execute a plan to inspect the 187 air traffic control (ATC) facilities that have not been inspected in over 4 years and correct any weaknesses identified so that these ATC facilities can be granted physical security accreditation as expeditiously as possible but no later than April 30, 1999.
AIMD-98-155 May 18, 1998	The Secretary of Transportation should direct the Administrator of FAA to correct identified physical security weaknesses at inspected facilities so that these ATC facilities can be granted physical security accreditation as expeditiously as possible but no later than April 30, 1999.
AIMD-98-155 May 18, 1998	The Secretary of Transportation should direct the Administrator of FAA to ensure that the required annual or triennial follow-up inspections are conducted, deficiencies are promptly corrected, and accreditation is kept current for all ATC facilities, as required by FAA policy.
AIMD-98-155 May 18, 1998	The Secretary of Transportation should direct the Administrator of FAA to assess, certify, and accredit all ATC systems, as required by FAA policy, as expeditiously as possible but no later than April 30, 1999.
AIMD-98-155 May 18, 1998	The Secretary of Transportation should direct the Administrator of FAA to ensure that all systems are assessed, certified, and accredited at least every 3 years, as required by federal policy.

LACK OF AVIATION COMPETITION CONTRIBUTES TO HIGH FARES AND POOR SERVICE FOR SOME COMMUNITIES (NO OPEN RECOMMENDATIONS)

Problem description: While deregulation of the airline industry is generally considered to be a success by DOT and others, a number of small- and medium-sized communities have experienced higher fares and worse service since the airline industry was deregulated in 1978. Deterrents to new entrant airlines include FAA-imposed limits on the number of takeoffs or landings at Chicago’s O’Hare, Washington’s Ronald Reagan National, and New York’s Kennedy and LaGuardia airports; the dominance of a few airlines serving many major airports; and certain marketing strategies of established carriers. Additionally, proposed alliances between the nation’s six largest airlines raise concerns about competition. While GAO has no open recommendations under this management challenge, it continues to monitor this area. In response to GAO recommendations, and to enhance competition, DOT has begun to grant a limited number of slots to new entrants at O’Hare and LaGuardia airports. In addition, DOT has issued a controversial draft policy that identifies anticompetitive behavior and factors that DOT will consider if it decides to pursue formal enforcement actions to correct such behavior. Finally, a number of bills have been introduced, but not passed in the Congress that address barriers to competition.

DOT NEEDS TO CONTINUE IMPROVING OVERSIGHT OF SURFACE TRANSPORTATION PROJECTS

Problem description: Many large-dollar highway and transit projects, each costing hundreds of millions to billions of dollars, continue to incur cost increases, experience delays, and have difficulties acquiring needed financing. GAO has found, particularly for large-dollar projects, that costs have increased and financing has become more difficult at the same time that federal, state, and local governments must deal with the need for balanced budgets and many competing priorities. This situation is even more critical in light of the recently passed 6-year, $218 billion Transportation Equity Act for the 21^st Century, which will fund thousands of new major highway and mass transit projects.

Report No. and Date	Recommendation
RCED-98-89 Apr. 3, 1998	To continue FTA’s progress in improving grant oversight on a nationwide basis, the Secretary of Transportation should direct the Administrator of FTA to require all regional staff to consistently apply established procedures and practices for monitoring and correcting grantees’ noncompliance to ensure standardization throughout FTA.
RCED-98-89 Apr. 3, 1998	The Secretary of Transportation should ensure that the Administrator of FTA requires all regional staff to provide information on triennial reviews to the Triennial Review Information System on a consistent basis so that it can be used as the monitoring and tracking mechanism that FTA originally intended it to be. FTA should quickly move to incorporate the results of other specialized reviews, such as financial management oversight and procurement reviews, into the system so that all instances in which grantees are not in compliance with federal requirements can be monitored and tracked to their proper resolution.
RCED-98-89 Apr. 3, 1998	The Secretary of Transportation should require the Administrator of FTA to (1) enforce the time frames established by FTA for resolving noncompliance findings and closing out triennial reviews and (2) abide by established reporting time frames.
RCED-98-89 Apr. 3, 1998	The Secretary of Transportation should require that the Administrator of FTA have the Office of Oversight monitor the way regional staff are implementing oversight procedures and policies to ensure dependable and consistent application throughout the agency.
RCED-99-44 Jan. 14, 1999	In implementing the TIFIA program, the Secretary of Transportation should direct appropriate department officials to evaluate the economic feasibility of projects applying for the program’s funds.
RCED-99-44 Jan. 14, 1999	Before providing a substantial amount of federal dollars to projects, the Secretary of Transportation should obtain and independently evaluate information including (1) a capital cost estimate based on detailed engineering plans (2) a finance plan that is based on the detailed cost estimate and that specifies the source and security of all public and private sector financial commitments and (3) an operating plan that enumerates the project’s future revenues and assesses the risks to the federal credit instrument should revenues be lower than projected.
RCED-99-44 Jan. 14, 1999	The Secretary of Transportation should ensure that the environmental review process has been completed before it makes substantial TIFIA program funding commitments.

AMTRAK’S FINANCIAL CONDITION IS TENUOUS (NO OPEN RECOMMENDATIONS)

Problem description: Since it began operating in 1971, Amtrak has never been profitable and, in recent years, has had to borrow money to meet its operating expenses. Since its inception, Amtrak has received nearly $23 billion in federal subsidies for operating and capital expenses. Despite efforts to control expenses and increase revenues, Amtrak’s financial condition has substantially deteriorated in recent years, and it is likely to remain heavily dependent on federal assistance well into the future. While it currently has no open recommendations concerning this management challenge, GAO continues to monitor Amtrak’s financial situation. Amtrak has stated that it will eliminate the need for federal operating support by 2002. If Amtrak requires federal operating subsidies after December 2002, the Amtrak Reform and Accountability Act of 1997, which ends federal subsidies, also provides for the Congress to consider either restructuring or liquidating Amtrak.