Case Studies 11 and 13: From FAA Acquisitions, GAO-12-223, February 16, 2012

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

To determine the extent to which selected ATC programs adhered to best practices for determining acquisition costs and schedules, we conducted an in-depth review of 4 of the 30 acquisition programs: 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). In addition to conducting interviews, we collected documentation and analyzed and summarized the views and information we collected. We also performed a schedule risk analysis of the WAAS program to determine the likelihood of the project’s finishing on schedule.

FAA was not consistently following the characteristics of high-quality cost estimates and scheduling best practices for the four programs GAO analyzed. 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, whether 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 high-quality cost estimate and scheduling best practices, FAA cannot provide reasonable assurance to the Congress and other stakeholders that NextGen and other ATC programs will avoid additional cost increases or schedule delays.