Committee Hears Of Management Problems, Cost Increases

Federal auditors, including the Inspector General of the Department of Transportation (DOT) and the U.S. Government Accountability Office (GAO), testifying before Congress Wednesday pointed to problems and rising costs in the FAA's critical NextGen air traffic control modernization effort. Witnesses said that FAA’s poor management continues to delay NextGen progress, and the agency has failed to develop adequate benchmarks and a long-term plan for implementing the multi-billion dollar project to transition the nation’s air traffic control system from ground-based radar and antiquated 1950s technology to a modern satellite-based system.

“NextGen is critical to our aviation system and touches every aspect of FAA’s mission,” said U.S. Rep. Tom Petri (R-WI) (pictured), Chairman of the Aviation Subcommittee. “We are currently spending more than a billion dollars each year on the program, and it is essential that we get it right. From the beginning, the case for NextGen has centered on the FAA’s ability to deliver operational benefits to airspace users to increase efficiency, decrease user and agency costs, decrease environmental impacts, and most importantly, improve safety. NextGen is also considered a job creator, allowing for continued growth in this vitally important industry.”
 
“We cannot continue to rely on outdated technology if we are going to ensure our aviation system is as efficient and safe as possible,” said Transportation and Infrastructure Committee Chairman John L. Mica (R-FL). “Unfortunately, as pointed out by the Inspector General and others, the very foundation of our modernization program is experiencing significant problems. We need to get a better handle on this important program. It’s not a question of money, it’s a question of management.”
 
Petri added, “As efforts to produce NextGen’s benefits have evolved, it has always remained critical to demonstrate real progress year over year. That includes delivery of benefits in the near term, as well as making the policy decisions to guide the long-term efforts.”

While DOT Inspector General Calvin L. Scovel III (pictured) did not question the importance of NextGen, he clearly outlined his concerns with FAA’s execution of the program. He concurred that NextGen delays have not arisen because of any funding issues, but rather because of management issues. Scovel said, “FAA has not approved total cost, schedule, or performance baselines for any of NextGen’s transformational programs nor developed an integrated master schedule for managing and executing NextGen.”
 
As stated simply by another witness, Tom Captain of Deloitte, LLP, “The business case appears to be an open and shut case. The real challenge is in its execution.”
 
The agency’s shortcomings in managing NextGen have led to a general failure to deliver many of the expected benefits thus far, and delays in significant elements of the modernization initiative have resulted in escalating costs. Scovel and GAO’s Director of Physical Infrastructure Issues Dr. Gerald Dillingham highlighted significant dysfunction with the FAA’s ERAM program. ERAM, which is critical for laying the foundation for NextGen, refers to the upgrade of the system that processes flight radar data, provides communications and generates display data for air traffic controllers.
 
“Significant software-related problems have pushed ERAM’s schedules well beyond original completion dates and increased costs by hundreds of millions of dollars,” stated Scovel in his testimony. “These problems have exposed a number of fundamental programmatic and contract management concerns.” Additional costs as a result of delays in ERAM are currently expected to be as high as $500 million. Not only does this raise concerns with ERAM itself, but the integration of NextGen components means that delays and problems with one program impact the other elements of the overall system.

According to Dillingham (pictured), “some acquisitions have been delayed, which has impacted the timelines of other dependent systems, and the potential exists for other acquisitions to also encounter delays. These delays have resulted in increased costs and reduced benefits. Going forward, FAA must focus on delivering systems and capabilities in a timely fashion to maintain its credibility with industry stakeholders, whose adoption of key technologies is crucial to NextGen’s success.”
 
Successful management of NextGen is critical to gaining the confidence of aviation system users, who will be asked to make significant investments in expensive NextGen compatible avionics. “However, industry and users are expressing concerns about the effort’s pace and execution since FAA has yet to clarify timelines for improvements at key sites or integrate recommendations from other key areas that are critical to this initiative,” said Scovel.
 
As many of today’s panelists pointed out, the FAA simply has not properly identified adequate metrics, benchmarks, baselines and timetables for delivering NextGen benefits. Scovel noted that the FAA has taken some steps to address this concern, adding, “However, as requirements continue to evolve, programs are left with no clear end-state and decision makers lack sufficient information to assess progress.
 
“While FAA recognizes the need for an integrated master schedule to manage the implementation of these NextGen capabilities, it has not yet developed one. Without a master schedule, FAA will continue to face the challenges of fully mitigating operational, technical, and programmatic risks, and prioritizing trade-offs among its NextGen programs,” Scovel said.

Speaking for the FAA, Deputy Administrator Michael Huerta (pictured) suggested that some of the responsibility lies with legislators. "In order to achieve these benefits, we know that we need to continue working with our partners in the aviation community," Huerta said. "Making sure that we are all on the same page about our expectations, our obligations, and our capabilities is essential to the successful planning, development, and execution of NextGen. But there is a chicken-and-egg nature to the economic and policy decisions that will have the most influence over the extent and timing of future benefits."

Huerta did not specifically mention the lack of a long-term FAA funding measure as one of the issues with delays in the implementation of the system, but he did thank members of the committee for approving an FAA reorganization, which he called a "critical step in moving forward with the changes that will lay the foundation for our success as an agency in the next 15 years." The "reprogramming" approval allowed the agency to create a NextGen office that will report to Huerta, and provided for the creation of an Assistant Administrator for NextGen. He also said a key to the success of the program is cooperation between the FAA and the aviation community, but pointed out that lawmakers have a large role to play as well. "We are working steadily and carefully to bring NextGen to fruition. We have mapped out our course and we are moving towards our goals, and we look forward to your continued guidance and oversight as we go forward."

FMI: http://transportation.house.gov, www.faa.gov