Congress exempted the Federal Aviation Administration from major civil service and procurement rules 19 years ago but the Department of Transportation inspector general says little has been accomplished as a result.
“Since 1995, FAA has completed several personnel and organizational reforms, undergone multiple reorganizations, and implemented measures aimed at improving its internal operations and reducing costs,” DOT IG Calvin Scovell III told Congress Nov. 18 in testimony before the Committee on Transportation and Infrastructure.
“Despite these reforms, the agency’s total budget, operations budget, and compensation costs have nearly doubled, while productivity at its network of air traffic facilities has decreased substantially,” Scovell said.
Scovell attributed the situation to the fact that “FAA has not effectively leveraged its personnel reform authorities or implemented business-like practices to better manage operations and costs.”
The personnel reforms that were approved by Congress in 1995 “provided greater flexibility in hiring, training, and compensating personnel, as well as assigning personnel to duty locations,” Scovell said.
An additional personnel reform was approved the following year that allowed FAA to negotiate pay with its civil service employee unions and mandated the agency establish a cost-accounting system.
But FAA has mostly ignored the reforms and continued doing bureaucratic business as usual, according to the DOT IG.
“While FAA is exempt from most federal personnel laws and regulations … many of its personnel policies, such as premium pay, leave, and grievances, continue to mirror federal rules,” he said.
Scovell pointed to “FAA’s highly unionized workforce, which negotiated benefits and other personnel matters that are in line with federal regulations” to explain in part the agency’s failure to take full advantage of the 1995 reforms.
On the acquisition side, the 1995 reforms included “relief from principal acquisition and personnel laws and regulations, such as the Office of Federal Procurement Policy Act and the Federal Acquisition Regulation,” Scovell said.
The acquisition reforms also allowed FAA to develop its own procurement system, one that would be more flexible and less prescriptive than the FAR system that covers other federal departments and agencies.
Measured in dollars and cents, the FAA has gone in the opposite direction from that intended by Congress.
“Between fiscal years 1996 and 2012, FAA’s total budget grew by 95 percent, from $8.1 billion to $15.9 billion, with its operations account increasing by 108 percent, from $4.6 billion to $9.7 billion,” Scovell said. “Also, during this timeframe, FAA’s total personnel compensation and benefits costs increased by 98 percent, from $3.7 billion to $7.3 billion.”
The agency’s productivity has gone down as spending and personnel costs have increased.
“Further, FAA’s operational productivity has significantly decreased. Between fiscal years 1998 and 2012, FAA’s air traffic operations dropped 20 percent, and between fiscal years 2008 and 2012, air traffic activities per controller dropped 25 percent at terminal facilities and 16 percent at en route facilities,” he said.
Scovell acknowledged that the productivity decline is consistent with economic declines. There were two significant economic contractions during the period, including the 2001 recession and the Great Recession of 2008.
Other problems have hindered efforts to reform FAA, especially in reducing its operational costs.
“Notably, the agency has not converted any of its FAA-operated towers to the Federal Contract Tower Program since 2000,” Scovell said. “Contract towers have proven to cost less and have safety records comparable to FAA-operated towers.”
The agency has also failed to consolidate its facilities by closing those that inefficient or obsolete, he said. As a result, FAA still operates 317 facilities, “even though overall air traffic operations have decreased by 20 percent since fiscal year 1998.”
Overall, Scovell said FAA’s continuing problems are “largely due to its failure to fully adopt sound management practices, make knowledge-based decisions, and assign clear accountability for productivity and results.”
Scovell’s testimony did not come as a surprise to the committee, according to the panel’s chairman, Rep. Bill Schuster, R-Pa.
“In report after report, the Inspector General of the Department of Transportation — and the Government Accountability Office for that matter — has identified costly problems with the FAA’s management of air traffic control modernization programs,” Schuster said.
“For example, in 1998, the IG found that in carrying out one modernization program, the FAA had wasted $1 billion in taxpayer money. Sadly, the IG will testify today that this is not uncommon,” he said.
Schuster said FAA currently has 15 major acquisition programs in progress and cost increases on eight of them equalled $4.9 billion. Eight of the programs have also experienced big delays, he said.
“This waste is the result of the FAA’s inability to plan effectively and manage programs in a way that delivers reasonable, cost effective, and beneficial outcomes,” Schuster said.
Schuster’s complete opening statement can be read here.
Go here to read Scovell’s complete testimony.
Mark Tapscott is executive editor of the Washington Examiner.
