Report cites ballooning cost in NextGen rollout

GAO validates industry concerns

December 8, 2010

The FAA’s large-scale overhaul of the air transportation system lacks clear goals and performance metrics and could cost much more than initially estimated, a new report from the Government Accountability Office (GAO) finds.

The FAA has recently focused on near- and mid-term capabilities for its rollout of the satellite-based Next Generation air transportation system (NextGen) and has worked to incorporate industry input into those plans. But the report identified gaps in the FAA’s longer-term planning. Implementing NextGen could cost up to four times early estimates, and implementing certain capabilities depends on decisions the agency has not yet made, the GAO concludes. In addition, the FAA and policy committee overseeing the project have not established performance goals or metrics to measure their progress—and the FAA has yet to make the business case for equipage with new technology, it says. The report was requested by House Transportation and Infrastructure Committee Ranking Member and incoming Chairman John Mica (R-Fla.) and aviation subcommittee Ranking Member Tom Petri (R-Wis.).

“This report validates many of the concerns raised by members of the industry and portrays the need for critical oversight of the FAA’s NextGen initiatives,” said AOPA Senior Director of Airspace and Modernization Heidi Williams.

The FAA’s initial cost estimate for implementing NextGen was $40 billion; the report concludes that realizing the highest capabilities by 2025 could cost as much as $160 billion. A longer timeline lowers that number, but bringing the cost down to the $40 billion range means cutting back on capabilities on the ground and in the air, the report explains.

While the FAA has identified capabilities and broad performance areas for NextGen, the GAO report criticizes the agency and the committee overseeing the effort for not identifying clear goals or settling on a set of metrics to measure their performance. It recommends that the FAA work with stakeholders to develop outcome-based performance metrics and goals for NextGen overall and for specific programs and capabilities. The report notes that the FAA has begun to respond to similar recommendations from the NextGen Mid-Term Implementation Task Force, in which AOPA participated.

It also notes that that the FAA has yet to make many key decisions that would determine the direction of NextGen, such as “how to provide incentives for operators to install avionics equipment on their aircraft where a clear business case is not evident, how environmental reviews can be expedited, and how much additional airport capacity will be needed.”

The government might find financial or other incentives desirable to speed the deployment of new equipment, the GAO reports, a decision that will depend on the technology and its potential to provide a return on public and private investment.

“In particular, FAA must focus on delivering near-term operational benefits to users of the airspace by completing activities that will capitalize on users’ past investment in aircraft avionics,” the report notes. “Efforts to develop more-efficient procedures, redesign airspace, develop performance standards, and reduce aircraft separation standards will help build trust and confidence in FAA’s ability to deliver benefits to users and provide incentives for users, especially commercial airlines, to invest in additional equipment for their aircraft.” AOPA continues to maintain that general aviation equipage with NextGen technology, particularly Automatic Dependent Surveillance-Broadcast (ADS-B), should be benefits-driven.