FAA urged to revamp major modernization programs

The Federal Aviation Administration's major modernization programs have faced so many cost, schedule and performance problems that their baselines should be redefined, officials from the Transportation Department and General Accounting Office told lawmakers during a hearing Thursday.

"Many of the projects we reviewed, both old and new, do not have reliable cost, schedule, or performance estimates," Kenneth Mead, DOT's inspector general, told the House Transportation and Infrastructure Subcommittee on Aviation. "Without better information, the FAA cannot effectively plan, manage programs, or meet expectations for improving the safety, security and capacity of the National Airspace System."

In June, Mead reported that 14 of the FAA's 20 major acquisition projects have experienced growths in cost totaling more than $4.3 billion, which is more than the agency's fiscal year 2004 modernization budget of $2.9 billion.

Mead said the FAA needs to redefine its baseline cost and schedule estimates for the following four specific programs: the Wide Area Augmentation System (WAAS); the Standard Terminal Automation Replacement System (STARS); the Local Area Augmentation System (LAAS); and the Integrated Terminal Weather System (ITWS).

According to Mead, WAAS has experienced a 227 percent cost growth and is five years behind schedule; STARS has experienced an 80 percent cost growth and is seven years behind schedule; LAAS has had a 31 percent cost growth and is four years behind schedule; and ITWS has had a 4 percent cost growth and is five years behind schedule.

The most common problem leading to cost and schedule problems is the FAA's tendency to commit to major acquisitions and to enter into long-term contracts before user needs and agency requirements are fully understood, Mead said.

Mead added that other problems plaguing the FAA include: misleading and unreliable cost and schedule estimates; undertaking new, costly and complex programs while still funding programs that are significantly over cost and behind schedule; a lack of centralized control and basic contract oversight; and a lack of performance measures for assessing progress with major acquisitions while not holding managers and contractors accountable for cost growth and schedule slips.

Gerald Dillingham, director of civil aviation issues for GAO, testified that the FAA has also failed to adequately incorporate feedback from users when developing new technology and systems, which contributes to cost overruns and schedule delays.

However, Mead and Dillingham agreed that the FAA has taken steps in the last year to address management problems. They said problems in the agency began to turn around when Administrator Marion Blakey came on board a year ago, and they praised the agency for hiring Russ Chew in August as the new chief operating officer.

Dillingham said the FAA has improved management practices by developing a blueprint for modernization to manage the development of air traffic control systems; establishing processes for selecting and controlling information technology investments; introducing an integrated framework for improving software and system acquisitions; and improving cost-estimating and cost-accounting practices.

One significant exception to programs with cost overruns is the Advanced Technologies and Oceanic Procedures program, which is aimed at modernizing facilities that manage air traffic over the Atlantic and Pacific oceans, Mead said. For that program, the FAA is using a fixed-price contract that has kept requirements stable. As a result, costs associated with resolving software problems have been borne by the contractor, not the FAA, Mead said.

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