The Federal Aviation Administration plays by its own rules, because it has the authority to use a personalized set of acquisition regulations rather than the standard federal rules. On Monday, the Government Accountability Office said FAA's rules needed improvement.
In a report (GAO-05-23) to the House Government Reform Committee, GAO auditors said the FAA's rules, known as the Acquisition Management System, led to preventable breakdowns in the acquisition process. Those breakdowns included unexpected cost increases and systems that do not function properly. The report called for incorporating of more executive input, as well as clearer guidelines for decision-making.
The report also recommended that the FAA develop written criteria outlining the "key decision points" in the acquisition process and focus specifically on software needs. The FAA has been on GAO's list of high-risk agencies for management issues since 1995.
Also in 1995, the agency received permission from Congress to develop its own set of acquisition rules instead of following the Federal Acquisition Regulation used by the rest of the government. FAA officials argued that the standard rules were inflexible and led to the performance problems and cost overruns that plagued the agency in the 1980s and early 1990s. At the time, the GAO opposed the change.
Chip Mather, co-founder of Acquisition Solutions Inc., which works with federal agencies on acquisition efforts, said the FAR has been unfairly criticized. "The perception that FAR was inflexible was based on a very conservative approach," he said.
The main difference between the FAA's Acquisition Management System and the FAR, he added, is that former makes it more difficult for companies bidding on projects to lodge protests of the agency's decisions. AMS also differs from the FAR because it includes rules for program management, not just contracting.
Drew Crockett, a spokesman for Rep. Tom Davis, R-Va., chairman of the House Government Reform Committee, said, "It's too early to definitely say whether the FAA's new Acquisition Management System has been successful or not, although it appears that the agency is still running into the same problems as it did under the Federal Acquisition Regulation." He added that GAO wanted to look into the situation and asked Davis to be the requester of the report.
Beverly Norwood, an assistant director of GAO's physical infrastructure team, which wrote the report, said the watchdog agency now believes that the FAA should work to improve its regulatory framework. "We're saying, 'FAA, go ahead and operate under AMS, but we think you need to look at best management practices within that framework,' " she said.
The report comes on the heels of two memos from the Transportation Department's inspector general on the FAA. One focused on aging terminals and the other on problems with the FAA's policies on transporting hazardous materials.
The FAA responded orally to GAO regarding the report. GAO summarized the agency's comments as follows: "FAA officials told us that they have made great strides in improving their acquisition of major [air traffic control] systems under AMS; however, they recognize that there is room for improvement and are firmly committed to implementing best practices for acquisitions." The report added that FAA officials generally agreed with GAO's findings.
Norwood said that although other reports often include written agency responses, it's standard for the FAA to provide only oral comments.
The FAA did not respond to requests for additional comments.
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