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New Report: FAA Doesn’t Know If It’s Getting What It’s Paying for with Taxpayer Dollars

DOT Inspector General Finds Ineffective FAA Management of Key NextGen Contract

Washington, D.C., September 7, 2017 | Justin Harclerode (202) 225-9446 | comments
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For the second time in just a few weeks, the Department of Transportation Inspector General (IG) issued a critical review of important aspects of the Federal Aviation Administration’s (FAA) NextGen air traffic control modernization effort.

After recently reporting on the FAA’s unrealistic and overly optimistic business case for NextGen, the IG today released a report on the FAA’s poor management of a cornerstone component of the chronically delayed and over-budget NextGen effort, its ADS-B contract.  

The IG found that while the multi-billion dollar ADS-B contract includes provisions and requirements that would enable the FAA to effectively monitor the ADS-B services and products being provided by the contractor, the agency failed to consistently utilize these commonsense tools.  This lack of proper contract oversight means that for almost a decade, the FAA has spent taxpayer dollars on a system without even verifying, and in some cases without insisting, that contractual requirements be met.  

According to the report: “As a result of these issues, FAA cannot ensure that the millions of dollars in payments it makes to the contractor each month for ADS-B service are reasonable.”  This is just one example of poor contract management by the FAA.

Read the IG’s newest report here. The IG’s review was required by law under the FAA Modernization and Reform Act of 2012. 

“It’s astonishing that the FAA doesn’t know if it’s getting what it’s paying for with the taxpayers’ money,” said Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA).  “How many more examples does Congress need before we recognize that the federal government is incapable of managing a complex, high-tech, multi-year modernization program?  Now more than ever, we need to finally pass the broadly supported and bipartisan 21st Century AIRR Act and bring an end to the FAA’s decades of wasteful spending on failed NextGen plans.”

According to the IG report:

  • Although the ADS-B contract gives the FAA the ability to monitor whether or not the contractor is providing required ADS-B products and services, the FAA has not fully used these provisions.  According to the report, “Without full reporting, FAA cannot know whether the ADS-B products and services being provided meet all contractual requirements.”
  • Since the first few contract years, the FAA has consistently paid close to the maximum incentive fee, even when minimum system-wide performance requirements were not met, and outages occurred.
  • The ADS-B contract also includes provisions that can help the FAA ensure payments are “reasonable” but the FAA “did not effectively use these contractual tools.”
  • The IG identified limitations in the FAA’s testing process used to determine whether the contractor met all the requirements before accepting the ADS-B systems.
  • The FAA has not enforced a contract provision requiring the contractor to track and bill capital assets separately, according to the IG “without knowing these costs, FAA cannot determine whether equipment and installation prices for installations are reasonable.”
  • In some instances, the FAA actually accepted partial installations of ADS-B, even though the acceptance criteria included in the contract provide that the contractor verify complete installation before acceptance.


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    Tags: Aviation