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FAA acquisitions face delays, growing costs

Transportation’s IG finds problems with major projects.

The Transportation Department's inspector general urged the Federal Aviation Administration Tuesday to reevaluate certain acquisition projects, noting substantial cost growth and delays.

In a review of 16 projects worth a total of $14.5 billion, the IG found that 11 had grown in cost by a total of $5.6 billion and nine faced delays ranging from two to 12 years. The projects included new equipment for air traffic controllers and new technology designed to prevent accidents on runways.

One acquisition project, which involved the purchase of surveillance radar for small airports, ballooned 35 percent, from an original cost estimate of $743.3 million to more than $1 billion. The project, which is being run by Raytheon, originally was scheduled to be completed this year but now is not expected to finish until 2013.

A Raytheon spokesman said the company has performed on schedule and cost for the last six years, and that budget holdups caused the schedule delays referred to in the report. The company also said that the IG report exaggerated some of the cost estimates.

The report recommended that FAA develop a new strategy to ensure that acquisitions are delivered on time and within estimated costs, in addition to reevaluating whether certain projects should be continued and determining baseline costs. The IG questioned, for example, whether a global positioning system project should be pursued in full, because its completion depends partly on uncertain Defense Department plans to enhance GPS satellites.

"Until the new baselines are established and FAA revalidates program benefits, FAA will not be in position to manage its overall modernization portfolio or set expectations for what can be accomplished within existing and projecting funding levels," the report stated.

While it did not specify the reasons for the delays and cost increases, the report said programs often face requirement changes and technical difficulties, and that FAA often lacks the information it would need to make more accurate cost and timing predictions.

Transportation's IG office has long been concerned with FAA acquisition, which is included on its November 2004 list of top management challenges at the department. FAA has been working toward a $48.6 billion modernization of its air traffic control system since the early 1980s.

FAA uses its own acquisition rules, which are separate from the Federal Acquisition Regulation that most agencies are required to follow. In December, the Government Accountability Office said those rules needed to be improved.

"While our efforts are just under way, we'll be working vigorously to complete the re-baselining of these complex programs as quickly as we can," said Tammy Jones, an FAA spokeswoman. She said FAA agreed with the IG's recommendations.

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