FAA programs encounter cost growth

Acquisitions related to the National Airspace System modernization effort are off schedule and over budget, according to a recent inspector general's report.

A June 26 report issued by the Transportation Department's Office of Inspector General showed that the Federal Aviation Administration's major acquisitions have experienced a cost growth of more than $4.3 billion.

This growth is significantly higher than the FAA's fiscal 2004 $2.9 billion request for facilities and equipment. Furthermore, of the 20 projects examined, 13 were found to have implementation delays of one to seven years.

The IG's report recommends that the FAA updates the cost, schedule and performance baselines for its major acquisitions and assesses progress with performance goals. The FAA seeks to increase the capability, efficiency, security and safety of the National Airspace System.

Some of the FAA's existing major programs are the Wide Area Augmentation System (WAAS), the Standard Terminal Automation Replacement System (STARS), the Local Area Augmentation System and the Integrated Terminal Weather System. Problems with these programs have created costly interim systems, a reduction in units procured and the deferral of other modernization projects.

WAAS, a new satellite-based navigation system, has become the most costly acquisition. It has had a 227 percent cost growth and has been delayed by five years.

The STARS program is operational in Philadelphia but has accounted for an 80 percent cost growth, and its implementation schedule has been delayed by seven years. The FAA will not deploy STARS at the largest sites, such as Chicago and Denver, for at least two years.

The FAA has other billion-dollar projects that have potential for cost growth. These acquisitions include the En Route Automation Replacement Modernization (ERAM) and the Next-Generation Air/Ground Communications (Nexcom).

Costing $2.1 billion, ERAM will provide facilities that control high-altitude traffic with new software and hardware. The FAA is expected to spend more than $260 million annually on ERAM beginning in fiscal 2005.

Nexcom's $986 million cost reflects only the first stage of a larger program that will replace the National Airspace System's existing air-to-ground communications with digital systems.


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