Summary

The Federal Aviation Administration (FAA) began a multibillion dollar modernization effort in 1981 to improve the safety, the capacity, and the efficiency of the nation's air traffic control system. FAA's most recent estimate is that it will spend about $41 billion on this effort through 2004. Despite some successes in deploying new modernization systems during the past 20 years, FAA has often failed to deliver major systems on time and within budget. Implementing disciplined acquisition management practices is crucial if agencies are to consistently deliver new systems within established cost, schedule, and performance goals. In light of past problems and continuing concerns about key projects funded under this program, this testimony discusses the (1) causes of the problems that have plagued FAA's modernization program for nearly two decades and (2) agency's recent efforts to overcome these problems. GAO also raises concerns about the readiness of FAA and others to meet Year 2000 requirements.

GAO noted that: (1) from the inception of the air traffic control modernization program to today, FAA has not consistently followed a disciplined management approach for acquiring new systems; (2) in the 1980s and early 1990s, FAA did not follow the phased approach of federal acquisition guidance designed to help mitigate the cost, schedule, and performance risk associated with the development of major systems; (3) FAA believed it could develop and install new systems more quickly by combining several of the five phases outlined in this guidance; (4) however, as a result of not following this disciplined, phased approach, FAA often encountered major difficulties such as those associated with developing the Advanced Automation System; (5) in 1995, Congress exempted FAA from many federal procurement rules and regulations; (6) in April 1996, FAA implemented an acquisition management system, which emphasized the need for a disciplined approach to acquisition management; (7) however, GAO found continuing weaknesses in key areas such as how FAA monitors the status of projects throughout their life cycles; (8) FAA has taken a number of steps to overcome problems with past modernization efforts; (9) FAA has moved away from its practice of taking on large, complex projects all at once and is now acquiring new systems by using a more incremental approach; (10) in addition, FAA is no longer making unilateral decisions about air traffic control modernization; (11) instead, it has been working actively with the aviation community to make decisions more collaboratively; (12) furthermore, FAA has begun to address some of the root causes of its modernization problems by implementing processes to help: (a) improve its ability to estimate and account for project costs; (b) develop a complete architecture for modernizing the National Airspace System; (c) reduce the risks associated with software development; and (d) reform the organization's culture, including providing incentives to make managers more accountable; (13) while FAA has delivered some of its major systems, it must be recognized that many of these projects encountered difficulties in meeting their original cost and schedule goals, and the baselines were subsequently revised; and (14) FAA has taken critical steps over the past year to address problems associated with the date change to the year 2000, but much work remains to be done to help ensure that FAA and other key players such as airports have made needed fixes and have contingency plans in place so that operations can continue should problems arise.