Status quo implementation is not sustainable—upfront development is key
Fujisaki, 2012 (Norm, “FAA Reauthorization: Trying to Get 10 Pounds in to a 5 Pound Bag”, March 22, 2012, http://www.metronaviation.com/blogs/tasking-nextgen/2012/03/22/faa-reauthorizationtrying-to-get-10-pounds-into-a-5-pound-bag/, accessed 7/17/12)
The Reauthorization is interesting from several perspectives. It directs the Secretary of Transportation to give budgetary priority to NextGen projects. Of course, in reality, there is only so much latitude that the Secretary of Transportation and the FAA Administrator have. They can request, but the appropriators in Congress are the ones who determine how much funding is provided and where it is allocated. In a constrained budgetary environment, which this is, there is never enough funding to go around. Aviation will have to complete with every other government agency and public need.Even if the appropriators funded the FAA to the full level of the authorization, would that be enough? Over ten years ago, I was involved in doing an analysis to determine what the capital needs of the FAA ought to be. One of the driving forces turns out to be the need to refresh the existing infrastructure. Buildings last 40 years, power generators 25 years, some components 15 and 20 years, others 5 years, etc. If you could smooth your spending to maintain your infrastructure, you would replace 1/40 of your buildings each year, 1/25 of your power generators, etc. When we added it all up, it turned out we needed $1.7B each year, nearly 90% of our capital budget, just to refresh the infrastructure we had. It ate up nearly the entire capital budget, which was a little under $2B at the time. Clearly, that didn’t leave enough to pay for the myriad of new technologies that needed to be developed, built and implemented. So, we sought out ways to make the system significantly more efficient and less costly while limping along and eking out a few more years from infrastructure that had long ago passed the end of its economic service life. Under the constrained budget of that day, we figured out a way to keep the system afloat, while making progress, albeit slow progress, toward modernizing the infrastructure. Sometimes, that progress was too slow. When your progress is too slow, sometimes the support you need unravels. That happened on several occasions.Now we are in the era of NextGen, an era requiring accelerated change and investment. The capital budget is still $2.7B per year (and worth a lot less in purchasing power than the $2.4B capital budget that the FAA had 10 years ago). Does the Reauthorization provide enough funding authority to pay for NextGen and the existing infrastructure? Or, is this a case of trying to fit 10 pounds into a 5 pound bag? Clearly there isn’t enough funding to sustain the existing infrastructure plus produce all of the planned NextGen improvements. If NextGen is to become a reality, plans would be needed to shed significant portions of the existing infrastructure as soon as practical. The FAA recently announced plans to eliminate a large portion of its VOR navigational aids and transition to airspace that is no longer tied to ground navigation facilities. That is a good start. Much more needs to be done to shed costly infrastructure that could be eliminated by doing things more innovatively. A higher standard of benefit-to-cost criteria perhaps ought to be adopted to eliminate facilities that contribute little or no positive economic value.On the NextGen side of the ledger, there needs to be more focus on delivering benefits sooner. A lot of NextGen funding is going into large, new infrastructure programs. The new infrastructure is important. But, perhaps even more so at this juncture, it’s important to deliver visible improvements that can be taken to the bank, real benefits that can serve as compelling justification and build credibility to maintain political support for longer term investments. How well are we doing at fixing the most costly problems in the system today? Do we even know what the most costly problems are?
Solvency-A2: Delay Works
Gradual next gen implementation fails
Levin, 2012 (Alan, “Next Gen FAA Contracts are Still $4.2 Billion Over Budget, GAO Says”, February 24, 2012, http://www.businessweek.com/news/2012-02-24/nextgen-faa-contracts-are-4-2-billion-over-budget-gao-says.html, accessed 7/17/12)
Eleven of the 30 contracts underpinning the so-called NextGen system exceed projected costs by a total of $4.2 billion, according to a Government Accountability Office report released today. Fifteen of the contracts are behind schedule by an average of four years, the GAO report said.“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,” the agency said in the report.The U.S. Federal Aviation Administration is moving from a radar-based system of tracking aircraft to one using global- positioning satellites. The NextGen system should reduce aircraft-fuel consumption and emissions while improving safety, according to the agency. It will cost the government, and airlines and other aircraft owners as much as $42 billion by 2025, the agency estimates.
The FAA, which was shown a copy of the findings, didn’t say whether it agreed or disagreed, according to the report.In 2009, the GAO took the FAA off its “high-risk” list of government agencies because it had improved management of large contracts. Recent issues with agency contracts “have renewed concerns about the agency’s ability to manage complex multi- billion-dollar procurement programs,” the GAO said in the report.GPS AccuracyThe Wide-Area Augmentation System, which makes the position information from GPS accurate to within a few meters, is costing the FAA $3 billion, three times higher than initial estimates, the GAO said. It has also taken 14 years longer to complete than the FAA planned, the auditing agency said.WAAS is being built by a consortium of Raytheon Co., Tetra Tech Inc. and Lockheed Martin Corp.The Standard Terminal Automation Replacement System, the computers that display flight information to controllers handling aircraft near airports, was $1.8 billion more expensive than projected, the GAO said. The system, which was built by Raytheon, was completed in 2007, almost two years late.The contract for Automated Dependent Surveillance - Broadcast, a backbone of the NextGen system, is $44 million more than the $1.7 billion cost estimate, a 3 percent increase, the GAO said. It’s scheduled to be completed in 2014 and is on track, according to the report.Radio TransmissionsADS-B is a network of ground stations and computers that will monitor radio transmissions from the thousands of planes in the air, allowing controllers to know where the aircraft are located. Under this new system, each aircraft will use GPS to determine its own position and broadcast that once a second, a more accurate way of tracking planes than radar. The lead contractor is ITT Corp.An update to the computers that monitor high-altitude air traffic, the En-route Automation Modernization program built by Lockheed, is $330 million, or 15 percent, over budget, according to the report. It is almost four years behind schedule.Some of the cost overruns, including for the Standard Terminal Automation Replacement System and the En-route Automation Modernization program, have previously been reported by the FAA, the GAO and in the press. The GAO surveyed the status of the contracts at the request of Congress.Best PracticesThe FAA didn’t follow best practices for estimating costs of ADS-B and three other programs that the GAO analyzed in depth, according to the report. Delays and cost increases occur for several reasons, according to GAO. The FAA adds unanticipated requirements to programs; controllers and other users of new systems are not sufficiently involved in development; the complexity of software development is underestimated and unanticipated events such as funding cuts occur, the GAO said.While some of the programs are already completed or not directly related to
NextGen, delays may also slow NextGen because programs in air-traffic are so connected, according to the report.
Next gen delays crush benefits
Schofield, 2012 (Adrian, “NextGen Breakeven Shifts 2020, FAA Says”, March 22, 2012, http://www.aviationweek.com/Article.aspx?id=/article-xml/awx_03_22_2012_p0-439330.xml, accessed 7/17/12)
There is no doubt that NextGen will eventually deliver impressive savings and greater efficiency. However, due to a combination of factors the FAA has shifted out its forecast for achieving these benefits by two years. The latest guidance is part of the agency’s NextGen implementation plan, which is issued annually.According to the FAA, the breakeven point for NextGen investment will occur in 2020, while last year’s version of the plan estimated a 2018 breakeven. The breakeven is defined as the year when cumulative benefits – to the FAA and airspace users – equal the cumulative implementation costs.The new report estimates that NextGen will reduce delays by 38% by 2020, compared to the expected delay level absent any further NextGen improvements. The 38% delay reduction would yield $24 billion in cumulative savings by 2020 to the public, aircraft operators and the FAA. There would be a cumulative saving of 1.4 billion gallons of fuel and 14 million metric tons of carbon monoxide emissions over this period.While those figures are impressive, they also represent a slight slip from previous estimates. The FAA says the benefits are essentially the same as those forecast last year for 2018
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