More Concerns for FAA’s NextGen

June 23, 2010

A report from the Department of Transportation’s inspector general expresses more concerns about the Federal Aviation Administration’s ability to implement its Next Generation Air Transportation System (NextGen). NextGen is a $40 billion overhaul of the nation’s air traffic control system that would replace old-fashioned radar technology with modern satellite-based GPS navigation. 

The following are some of the report’s findings:
  • The FAA is behind in making decisions on key design issues. It was supposed to have made decisions on 51 issues in 2009, but only made 11. As a result, the inspector general says “automated air and ground capabilities originally planned for 2025 may not be implemented until 2035 or later and could cost the Government and airspace users significantly more than the projected cost estimate of $40 billion.” 
  • The inspector general says the FAA doesn’t have the “necessary skill sets and expertise to manage and execute NextGen.” 
  • The FAA has failed to effectively coordinate with partner agencies like the Department of Defense. The inspector general says that the FAA could leverage the DOD’s expertise on research and development, but has not done so “due in part to a culture that is reluctant to embrace technologies not developed in-house.” 
  • The inspector general warns that unless the FAA’s managerial deficiencies are addressed, “NextGen may not deliver the expected long-term benefits and ultimately puts billions of taxpayer dollars at risk.” 
A Cato essay on the FAA’s air traffic control system explains that the agency has long had trouble implementing new technologies:
Delays and cost overruns on major technology projects have been common. For example, the Advanced Automation System project was launched in the early 1980s and was originally expected to cost $2.5 billion and be completed by 1996. But by 1994, estimated project costs had soared to $7.6 billion and the project was seven years behind schedule. The FAA terminated some parts of the AAS program and restructured others, but $1.5 billion of spending ended up being completely wasted.
More recently, a 2005 study by the Department of Transportation’s Office of Inspector General looked at 16 major air traffic control upgrade projects and found that the combined costs had risen from $8.9 billion to $14.5 billion. The cost of the Standard Terminal Automation Replacement System project had jumped 194 percent to $2.7 billion and was seven years behind schedule. The OIG said that the STARS project was “facing obsolescence” even before it was completed. Meanwhile, the cost of the Wide Area Augmentation System project had jumped 274 percent to $3.3 billion and was 12 years behind schedule. A Government Accountability Office analysis in 2005 found similar cost overruns and delays in these projects.
The solution is to remove the ATC system from the FAA and make it a self-supporting entity, funded directly by its customers. A non-civil-service organization could attract the best private-sector managers and engineers skilled at implementing complex technology projects. For example, Canada’s private, nonprofit ATC corporation, Nav Canada, has been widely praised for its solid management and successful investment in new technologies.



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