FAA outsourcing raises concern

Plan for greater reliance on contractors is a challenge for the National Airspace System

The Federal Aviation Administration is depending on contractors to lift the National Airspace System out of gridlock. But some federal and industry experts are concerned that FAA is outsourcing too much control of the nation’s airspace.In August, FAA awarded ITT a $1.8 billion contract to build, own, operate and maintain a satellite surveillance system, the Automatic Dependent Surveillance-Broadcast. ADS-B is the foundation for FAA’s Next Generation Air Transportation System, which will replace today’s radar systems.Under the new contract, FAA will pay subscription charges for the satellite surveillance technology and services. ITT will transmit ADS-B broadcasts to aircraft and air traffic control facilities. FAA will retain control of system performance and the data it transmits, but some officials are worried that the contractor has too much control.FAA will need to exert strong oversight of the contract, said Calvin Scovel, the Transportation Department’s inspector general.“ A service contract is not a silver bullet for implementing ADS-B,” Scovel said. Stable requirements for air and ground components, new procedures and user benefits are needed to drive implementation, he added.ADS-B will give pilots better awareness of traffic, FAA officials said. It will support additional pilot services and coverage to areas not accessible to radar. ADS-B’s advanced applications and capabilities will also enable pilots to fly closer to one another.FAA said it expects its service contract to translate into a 30-year savings of $820 million because FAA will have less ground-based infrastructure to develop, maintain and replace.Despite those expected benefits, Rep. James Oberstar (D-Minn.), chairman of the Transportation and Infrastructure Committee, said he is concerned that FAA may lose some of its objectivity to adequately evaluate system performance because of potential over-reliance on the contractor.“We must ensure that there is some distance and separation between FAA and the ITT team that will keep the FAA in a position of day-to-day, hands-on management,” Oberstar said at an Oct. 17 hearing of the Transportation and Infrastructure Committee’s Aviation Subcommittee.FAA has not yet fully put in place the mechanisms to help it manage the complex contract, Scovel said.FAA intends to use several controls to help manage the contract, including techniques for measuring cost and schedule changes, performance metrics such as service availability, and cost-sharing arrangements for cost overruns, Scovel said.“Once they are established, FAA must execute them properly and use them to hold the contractor accountable,” Scovel said. For example, the agency will use earned value management to monitor progress in meeting costs and schedules.A key mechanism for oversight is a performance review board, but that also is not in place yet, Scovel said. The board, which will consist of agency and contractor representatives, will monitor the ADS-B system, compare contractor performance measures, review changes to the system, and resolve disagreements and program issues.“The comfort level with FAA’s contracting approach will increase only when the board is fully established, membership is finalized and roles and responsibilities are clearly defined,” Scovel said.FAA has a strong contract, said Vincent Capezzuto, director of FAA’s Surveillance and Broadcast Services Program office. The contract includes provisions for ITT to work with FAA to identify and reduce risks in the program. “We are keenly aware of the risks inherent to new technology and new procedures, and we are safeguarding against them as best we can,” he said.FAA has designed the contract with several milestone events to help it track progress and test the system as each phase is completed. If ITT is unable to achie ve the milestones, FAA may consider the company in default of the contract and may cancel the remainder of the contract, Capezzuto said. FAA has created additional incentives and disincentives throughout the contract to assure ITT’s commitment to success, he added.“We are confident that this system of carrots and sticks will afford the FAA considerable oversight of the contract, encourage the contractor to excel in performance and allow seamless integration of this important new technology,” Capezzuto said.However, an employee union official said he is worried that the contract arrangement lacks adequate safeguards to protect FAA interests. ADS-B may have negative consequences on aviation safety because FAA will rely on the contractor to certify the new system, said Tom Brantley, president of the Professional Airways Systems Specialists, which represents FAA technical employees.

ITT will be able to sell FAA data

The Federal Aviation Administration will let its contractor ITT sell
services to various aviation stakeholders as an offshoot of the Automatic Dependent Surveillance-Broadcast system (ADS-B), which will replace the FAA’s older radar systems. ITT will build, own and operate the new surveillance system for FAA.

“In essence, ITT will have a monopoly over providing ADS-B services for the next 18 years,” said Calvin Scovel, the Transportation Department’s inspector general. Those services include enhanced weather products for specific regions, such as the Gulf of Mexico, and subscription sales of traffic information.


The contractor must seek approval from FAA before releasing surveillance data, and FAA is expected to provide criteria for filtering the data as necessary.

"Because ADS-B can provide highly accurate information on aircraft, FAA will have to exercise strong oversight of which data are being sold and what they are being used for," Scovel said.

— Mary Mosquera

































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