February 18, 2012
By Dan Namowitz
Costs that exceed estimates by $4.2 billion and widespread scheduling setbacks highlight a new Government Accountability Office report to Congress evaluating FAA acquisition programs to implement the transition to the Next Generation Air Transportation System.
The GAO report faulted the FAA for its methods that developed cost estimates, and for failing to adopt “best practices” that the GAO had previously recommended for managing FAA programs.
The GAO examined 30 acquisition programs associated with the transition to NextGen. The $4.2 billion in higher costs came primarily from 11 programs that account for 60 percent of total acquisition costs of $17.7 billion.
Fifteen of 30 programs faced delays that average four years, the report said, adding that overall NextGen implementation could be impeded as a result.
“The three programs with the largest cost increases—totaling more than $4 billion—are key to ATC modernization,” it said.
To evaluate FAA cost estimating and scheduling practices, the GAO conducted in-depth reviews from August 2010 to February 2012 of the Automatic Dependent Surveillance-Broadcast (ADS-B) system, the Collaborative Air Traffic Management Technologies (CATMT) system, the System Wide Information Management (SWIM) system, and the Wide Area Augmentation System (WAAS)—all “baseline” NextGen programs.
The audits came at the stage of NextGen development focused on implementing midterm improvements by 2018, and long-term improvements by 2025. NextGen planning began in 2003.
Shutdown raised costs
Long-standing challenges that still affect the FAA’s ability to control costs and schedules included unanticipated system requirements, insufficient involvement of stakeholders, failure to plan for the complexity of needed software, or unanticipated events “including funding decreases or work stoppages.” Among those was the July 2011 furlough of some FAA employees and a freeze on contractor funding during a partial program shutdown that arose from congressional wrangling over FAA reauthorization legislation.
The report credited the FAA for taking steps to improve management, pointing to to the agency reorganizing its NextGen planning office and some large acquisition programs. But GAO noted that the resulting gains could come at the cost of prolonging the programs,
It said that none of the four baseline programs reviewed had been analyzed for costs using methods with enough high-quality characteristics to provide a “reliable” cost estimate.
“We determined that the schedules for the four programs we reviewed are unreliable because none met or substantially met all nine of the best practices for developing a reliable schedule,” it said.
A lack of analyzing risk to schedule expectations threatened the reliability of the integrated master schedule that the FAA was developing for NextGen, the GAO said.
The GAO recommended that the FAA seek independent cost estimates and risk analysis for major acquisition programs, design master schedules that “link all program activities and milestones,” and assess all major acquisition programs’ adherence to “established best practices” from past GAO guidance.
The Department of Transportation and the FAA both declined to state whether they agreed or disagreed with the recommendations in the report.
Dan Namowitz is an aviation writer and flight instructor. He has been a pilot since 1985 and an instructor since 1990.
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