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Extravagance at the FAA
Despite sequestration, the agency overspends, and then furloughs air-traffic controllers.

Control tower at Reagan National Airport in Washington, D.C.

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Andrew Stiles

In congressional testimony on Wednesday, Federal Aviation Administration (FAA) chief Michel Huerta cited his agency’s Next Generation Air Transportation System — NextGen for short — as an example of the critical “investments” the federal government is making and must continue to make in air-traffic-control infrastructure, even as controllers are being furloughed, causing widespread delays and disruption at the nation’s airports.

NextGen is an ambitious multiyear, multibillion-dollar project to increase air-traffic efficiency through technological innovation. Representative Hal Rogers (R., Ky.) asked Huerta whether, “in light of the current situation,” funding for NextGen projects should “have priority over the operation of commercial airspace.”

Huerta complained that he lacked the “flexibility” to transfer funding between the respective accounts. (Never mind that he could have requested more flexibility from Congress at any time but didn’t.) And though Senate voted late Thursday to provide more flexibility to end the furloughs, Huerta suggested during the hearing that fully funding NextGen projects should remain a top priority. “These projects will have important benefits for efficiency long-term,” he said, “and I think we need to get on with making those investments to ensure efficiency.”

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But in reality, the NextGen project illustrates the extent to which the FAA has been a shockingly poor steward of taxpayer dollars in recent years. A February 2012 report from the Government Accountability Office (GAO) found that of the 30 air-traffic-control modernization programs tied to NextGen, 15 experienced delays, and 11 exceeded their initial cost estimates by a total of $4.2 billion, or nearly 25 percent of the total cost for all 30 programs. Part of the problem, according to the report, was that the FAA was consistently producing cost estimates that were “not credible.” In many cases the FAA declined to include any risk or uncertainty analysis in its estimates, or did not bother to conduct an independent cost estimate to verify its predictions. Further, its scheduling practices were woefully inadequate.

Because the FAA did not follow “the characteristics of high-quality cost estimates and scheduling best practices,” it “cannot provide reasonable assurance to Congress and other stakeholders that NextGen and other [air-traffic-control] programs will avoid additional cost increases or schedule delays,” the report concluded.

A subsequent report from the office of the inspector general of the Department of Transportation detailed significant concerns surrounding the FAA’s En Route Automation Modernization (ERAM), a program for management of high-altitude air traffic and a key component of NextGen. Originally scheduled for completion in 2010, ERAM is unlikely to be completed before 2016, the report estimated, and could end up costing as much as $500 million more than its initial $2.1 billion price tag. The discrepancy was directly attributable to “fundamental program management weaknesses” within the FAA; managers set unrealistic expectations, failed to review budgets, ignored early warning signs, and “actively withheld and suppressed bad news” from their superiors.

The FAA did not finalize cost estimates for 16 of 57 designated tasks before authorizing contractors to begin work on them, according to the report, providing “little incentive to control costs.” The agency also did not adequately review vendor invoices and had failed to catch nearly $70,000 in “fraudulent travel expenses.” Perhaps most striking, the FAA had awarded contractor bonuses — incentives to encourage effective cost management — of more than $150 million when the project was already at least $330 million over budget.

The FAA continues to insist that furloughing air-traffic controllers — dramatically inconveniencing millions of airline passengers — is an unavoidable consequence of sequestration. Republican lawmakers, members of the airline industry, two former U.S. solicitors general, and some FAA employees beg to differ.

Under sequestration, the FAA must find $600 million in savings out of its $16 billion annual budget. But even after those cuts are made, the agency’s budget will still be larger than it was in 2009, when air travel operated without serious disruption. In fact, the FAA’s post-sequester funding will be even more than what it asked for in President Obama’s fiscal-year 2013 budget resolution. Domestic air travel has declined 27 percent since 2000, but the FAA’s operations budget has since grown by nearly $3 billion, or 30 percent.

Republicans on the House and Senate transportation committees have identified $2.7 billion in annual non-personnel expenses — including $500 million in consultant fees, and $179 million in employee travel expenses — that could be cut or diverted to avoid furloughs for air-traffic controllers. They make up less than a third of the FAA’s 47,000-employee work force, which  includes “community planners” and “environmental protection specialists.”

Republicans have repeatedly sought more information about the FAA’s budget and its sequestration plans, but have been repeatedly denied. For example, they have asked why the FAA needs its own fleet of 46 aircraft (as of 2010), which is half again as large as the entire Afghan air force and costs more than $140 million a year to operate.

Perhaps the FAA could avoid furloughs by diverting funding for employee conferences? The agency spent $8 million on conferences in 2010, $5 million of which went toward three conferences held in Atlanta over a three-week period.

“This is rank politicism,” Senator Tom Coburn said Thursday. “It’s cynical and it’s shameful what the FAA, and the Department of Transportation, and this administration is doing.”

— Andrew Stiles is a political reporter for National Review Online.



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