Air Traffic Control Modernization:

Management Challenges Associated with Program Costs and Schedules Could Hinder NextGen Implementation

GAO-12-223: Published: Feb 16, 2012. Publicly Released: Feb 16, 2012.

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Gerald L. Dillingham
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dillinghamg@gao.gov

 

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What GAO Found

In a review of 30 major ATC acquisition programs, all of which will contribute to the transition to NextGen, GAO found that costs for 11 of the 30 programs have increased from their initial estimates by a total of $4.2 billion and 15 programs experienced delays. The 11 acquisitions that experienced cost increases account for over 60 percent of FAA’s total acquisition costs ($11 billion of $17.7 billion) for the 30 programs. The 15 acquisitions that experienced schedule delays, of which 10 also had cost increases, ranged from 2 months to more than 14 years and averaged 48 months.

Cost increases and schedule delays occurred due to several factors, many of which have been longstanding challenges for FAA. Specifically, these have involved (1) additional or unanticipated system requirements; (2) insufficient stakeholder involvement (such as controllers’ input) throughout system development; (3) underestimating the complexity of software development; and (4) unanticipated events including funding shortfalls or work toppages. These challenges, if they persist, will impede the implementation of NextGen, especially in light of the interdependencies among many acquisition programs, where cost increases or delays in one program can affect the costs and schedules of other programs.

For the four programs GAO selected to analyze in depth, FAA is not consistently following the characteristics of high-quality cost estimates and scheduling best practices that GAO previously identified. Regarding cost estimates, GAO found that although all four of the programs generally provided well documented and comprehensive estimates, which are two of the four characteristics, no program fully met the two other characteristics. Specifically, each program estimate was not credible because each lacked an independent cost estimate, which provides a check against FAA’s estimate and three programs lacked risk or uncertainty analysis. The estimates also lacked accuracy because they were not updated regularly or based on comparable programs. Regarding scheduling practices, most programs did not substantially or fully meet the majority of the 9 best practices GAO previously identified including developing a fully integrated master schedule of all program activities and performing a schedule risk analysis. For example, without a schedule risk analysis, FAA is unable to predict, with any degree of confidence, if the estimated completion dates are realistic. FAA is implementing new processes and organizational changes to better manage acquisitions. However, by not consistently following the characteristics of highquality cost estimate and scheduling best practices, FAA cannot provide reasonable assurance to Congress and other stakeholders that NextGen and other ATC programs will avoid additional cost increases or schedule delays.

Why GAO Did This Study

The Federal Aviation Administration (FAA), partnering with other federal agencies and the aviation industry, is implementing the Next Generation Air Transportation System (NextGen), a new satellite-based air traffic management system that will replace the current radar-based system and is expected to enhance the safety and capacity of the air transport system by 2025. Concurrently, FAA continues to maintain and upgrade existing air traffic control (ATC) systems that will also be needed for NextGen. This involves acquiring and implementing new software and hardware.

GAO was asked to determine (1) how, if at all, costs and schedules of FAA ATC acquisitions programs, including those related to NextGen, have changed since they were first submitted to Congress, (2) the reasons for any such changes, and (3) the extent that selected ATC programs adhere to cost and schedule best practices. To do its work, GAO reviewed 30 programs and conducted cost and schedule analysis on four programs that had an approved baseline and were NextGen related. GAO reviewed acquisition documents and interviewed FAA officials.

What GAO Recommends

To better estimate the cost and completion dates for major acquisitions, FAA should, among other things, require cost and schedule risk analysis, independent cost estimates and integrated master schedules. FAA did not comment on whether or not it agreed with the recommendations.

For more information, contact Gerald L. Dillingham, Ph.D., at (202) 512-2834 or dillinghamg@gao.gov.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: Given constrained budgets, FAA should determine which programs should be subject to these recommendations, such as those that are particularly costly, complex, or on a compressed schedule.

    Agency Affected: Department of Transportation: Federal Aviation Administration

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve cost estimates and schedules for NextGen and other major air traffic control acquisition programs, the Secretary of Transportation should direct FAA, when appropriate for major acquisition programs based on a program’s cost, schedule, complexity, and risk, to conduct an assessment of major acquisition programs to ensure theymeet all of the established best practices for cost estimates andschedules contained in GAO guidance.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve cost estimates and schedules for NextGen and other major air traffic control acquisition programs, the Secretary of Transportation should direct FAA, when appropriate for major acquisition programs based on a program’s cost, schedule, complexity, and risk, to require a fully integrated master schedule for each major acquisition program, including those that are components of NextGen. An integrated master schedule should horizontally and vertically link all program activities and milestones, including government and contractor schedules and program segments.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To improve cost estimates and schedules for NextGen and other major air traffic control acquisition programs, the Secretary of Transportation should direct FAA, when appropriate for major acquisition programs based on a program’s cost, schedule, complexity, and risk, to conduct independent cost estimates and schedule risk analysis for major acquisition programs.

    Agency Affected: Department of Transportation

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

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