February 1, 1999With a new leader and a clearer mission, the FAA may break through the technology turbulence and management miasma of the past.
ederal Aviation Administration managers must wonder what it takes to get respect. While overseeing half the world's air traffic (more than 1.7 million passengers a day) in the world's safest airspace, agency employees are aggressively pursuing a multiyear, multibillion-dollar air traffic control modernization. Within the past year, they have improved methods for detecting potential defects in aircraft engines, issued directives on suspect aircraft insulation barely two months after a foreign airline crash, disciplined airlines for hazardous materials violations, and ordered inspections of possibly faulty engines. They are conducting cutting-edge research and development in partnership with the aviation industry, fleshing out a revolutionary concept called "free flight" to head off future air traffic jams, and building innovative acquisition and personnel systems.
Despite these improvements, the media and other observers recently have reported that FAA:
The management problems that have festered at FAA for years can be traced in part to what many regard as a birth defect: the attempt in 1958, in the interests of effectiveness and efficiency, to merge the regulatory functions of the Civil Aeronautics Board and the industry-promoting functions of the Civil Aeronautics Administration. In 1996, public outcry following a series of accidents prompted a rewrite of the 1958 charter to establish beyond doubt that aviation safety was the agency's paramount responsibility. By that time, Congress also had concluded that FAA needed freedom from hiring, pay and contracting restrictions in order to meet the management challenges of air traffic control systems modernization. Accordingly, in its fiscal 1996 appropriation, FAA was granted extraordinary authority to design its own personnel and procurement systems.
Even with its augmented powers and clarified mission, FAA faces daunting aviation safety and security problems. A June 29 Business Week article found that, a year into her five-year tenure, Administrator Jane Garvey was still "surrounded by the old guard" and had not yet "dispelled the impression that the FAA is in bed with industry." FAA clearly still has weaknesses in its procurement, human resources, capital management, information technology and accounting systems. For example, FAA got off the mark quickly in 1996 with a new acquisition management system designed to reduce procurement time by 50 percent and reduce the cost of acquisitions by 20 percent within three years. But in February 1998, the General Accounting Office told a Senate subcommittee that FAA lacked the baseline data and performance measurements needed to substantiate its claims of progress toward meeting those goals.
Inadequate pay for desperately needed computer and other technical experts was a principal rationale for Congress' 1995 grant of human resources management flexibility. But not until last year did FAA unveil an 18-month test of a simplified pay-banding system, covering only about 1,200 of the agency's nearly 50,000 employees.
FAA's capital management landscape is littered by 15 years of failures, overruns and redesigns in an effort to update an air traffic control system diagnosed in the early 1980s as inadequate to keep pace with burgeoning air travel. FAA's first attempt at updating the system was an ambitious, generously funded plan designed to be phased in over several years. It failed. A more modest plan currently is being pursued under heightened management scrutiny. But it is by no means certain that improvements will be sufficient to avoid increasing flight delays and service curtailments, if not increased threats to safety, by the turn of the century. And even if those mishaps are averted, the inability of the traffic control system's computers to recognize the new millennium still may force an air travel hiatus.
FAA was relatively slow in establishing a chief information officer position reporting directly to the administrator, and issues of dividing up the responsibility for IT systems remain to be worked out. The agency's financial management corps, partly as a result of downsizing, is making slow progress in fulfilling a 3-year-old congressional mandate to develop a credible cost accounting system to aid management decision-making.
Garvey, the first FAA administrator appointed to a statutory five-year term, is widely credited with recognizing problems and trying to make changes. Since taking the agency's helm in mid-1997, she has consolidated its organizational structure, naming new leaders in key areas. She also struck a five-year labor agreement with the National Air Traffic Controllers Association and improved communications with the independent National Transportation Safety Board, though NTSB remains critical of FAA's response to safety recommendations.
The Transportation Department inspector general found serious problems with FAA's financial statements for fiscal 1996 and 1997. For 1997, the agency's reported values of property, plant and equipment, inventory and related property, tax revenues and investments were not adequately supported by financial records, auditors found.
After GAO and Congress persistently criticized FAA for accounting failures and outside observers recommended the agency operate air traffic control on a fee-for-service basis, Congress in 1995 required FAA to develop a credible cost-accounting system. When it is fully in place, FAA for the first time will amass full cost information on all its lines of business: air traffic services, research and acquisition, regulation and certification, civil aviation security, commercial space transportation, administration and airports.
In February, GAO found several of the agency's cost figures unverifiable. Auditors also found inadequate inventory counts and errors in records. For example, FAA included as assets $198 million of property no longer in existence. Such discrepancies, GAO warned, could result in FAA's making unnecessary acquisitions and being unable to pay for needed equipment.
Soon after taking control, Garvey elevated the importance of personnel issues by creating a new position, assistant administrator for human resources management, reporting directly to her. Garvey hired Glenda Tate, former top Transportation Department personnel official, for the job. The FAA strategic plan requires the human resources office and line organizations to collaborate on specific, measurable HR management goals and objectives. FAA is ahead of other agencies in this regard.
The centerpiece of FAA personnel reform is the pilot test of pay banding for employees and of total compensation for senior executives. Begun last year, the test is scheduled to run for 18 months. FAA also has eliminated time-in-grade requirements for promotions. The agency announces job openings on the Internet and is automating applications processing and simplifying its use of temporary employees. FAA also has created a library of standard, two-page job descriptions. Managers confirm that hiring is faster and easier, even for some highly technical positions.
With five major unions representing approximately 30,000 employees--64 percent of its workforce--FAA gives a good deal of attention to labor relations. In terms of both numbers and history, the most important relationship is with the National Air Traffic Controllers Association, successor to the Professional Air Traffic Controllers Organization, which was wiped out in the 1981 controllers' strike.
Last June 15, the agency and NATCA announced a five-year labor agreement. It includes an incentive scheme of extra pay for controllers who meet specified agency safety and performance goals and augmented pay for work at the busiest air traffic hubs. In return, the union agreed to productivity gains by allowing controllers to be assigned training, briefing and quality assurance tasks while not controlling traffic.
The Federal Managers Association denounced FAA's plan to pay for controllers' raises by eliminating 700 supervisory positions. FMA officials pointed out that an earlier initiative inspired by Vice President Al Gore's reinventing government team to reduce the proportion of supervisors had been abandoned by FAA as detrimental to air traffic control. In November, Transportation Inspector General Kenneth Mead recommended that the FAA carefully analyze how essential duties currently performed by supervisors would be handled before cutting back.
The FAA's information technology management was largely decentralized until last year, when the agency created the chief information officer position, two years after most agencies of similar size hired CIOs. FAA's slow response to IT reform reflects lingering resistance in agency offices around the country to headquarters control. Each line of business remains responsible for its own systems, and FAA still hasn't determined which level of the organization will allocate IT resources.
FAA's IT effectiveness is inextricably linked to the lengthy and turbulent modernization of the air traffic control system. Some heartening advances have been made within the past year, such as the timely beginning of the installation of the Display System Replacement for controlling traffic between airports. But observers expect further delays and cost overruns with the larger Standard Terminal Automation Replacement System (STARS) that does the same at major airports.
GAO also has suggested that air traffic control systems are vulnerable to malicious attacks that could disrupt traffic and cause collisions. Last May, GAO found FAA "ineffective in all critical areas included in our computer security review--facilities physical security, operational systems information security, future systems modernization security, and management structure and policy implementation" (AIMD-98-155).
On the other hand, FAA officials are highly optimistic about the agency's management of the year 2000 problem. A centralized Y2K program office, working with counterpart offices in each FAA business line, keeps managers informed. A recent review of a critical hardware system indicated it would sail through the turn of the century and operate until 2007. Late last year, FAA reported that 153 of 155 critical systems had been satisfactorily repaired. GAO auditors said they doubted all necessary fixes would be in place on time but noted FAA was preparing a continuity plan to deal with possible systems failure.
The FAA has unified its planning, programming and budgeting through the Facilities and Equipment/Capital Investment Plan, which is used for 15-year National Airspace Architecture planning and five-year programming and budgeting. While the agency attempts to continually update its database of capital assets, GAO has found that certain large assets are incorrectly accounted for. FAA also reports that inadequate maintenance funding has hampered efforts to keep assets in good condition. However, the agency uses a risk management process to minimize adverse effects of deferred maintenance.
In a creative approach to formulating an acquisition strategy for the largest single telecommunications program the agency has ever undertaken, the FAA has turned for advice to a broad-based industry group. The FAA will work with the Government Electronics and Information Technology Association, an 80-company group located in Arlington, Va., on how best to procure a ground-to-ground transmission, switching and network management system for voice, data and video communications. The system is estimated to cost $2.75 billion over several years beginning in 2000.
Plans Take Flight
FAA's fiscal 1993 strategic plan was its first. The plan presented goals for a decade and beyond, crafted out of conversations with industry leaders as well as agency managers. In 1996, planning was expanded to produce FAA's first Government Performance and Results Act five-year plan. Because of its early start, FAA was able to produce a GPRA performance plan for fiscal 1998, a year earlier than required.
FAA's strategic and performance plans helped the Transportation Department win the highest GPRA grades awarded by House Majority Leader Dick Armey, R-Texas. FAA won special notice for specific and measurable performance indicators. With "Safer Skies," a comprehensive plan to reduce the rate of aviation accidents by 80 percent over the next 10 years, Garvey has given high visibility to a clear, measurable goal.
The agency continues to experiment with other results-based initiatives. The FAA's Oklahoma City Logistics Center, for example, plans to give up its annual appropriation by fiscal 2000, deriving all of its income by marketing services to other FAA organizations. The center, which supplies equipment, parts and services to the air traffic control system, already has substantially reduced its overall budget, repair unit costs and cycle time, while markedly improving customer responsiveness.
FAA officials ultimately hope to convert the air-traffic control operation into a performance-based organization, which would be given broad exemptions from procurement and personnel rules in exchange for tough performance standards. But first, they must focus on correcting management shortcomings. Garvey's candor about the need for change and her early organizational and personnel changes give reason to believe management improvements may be on the way.
|Managing for Results||B|
Number of employees
February 1, 1999