Posted on October 27th, 2010
The U.S. DOT Inspector General (IG), the FAA’s fiscal watchdog, recently issued a report titled “FAA faces significant risks in implementing the Automatic Dependent Surveillance-Broadcast program and realizing benefits.” The IG examined key risks to the FAA’s ADS-B implementation and assessed strengths and weaknesses of its contracting approach. In 2007, the FAA awarded ITT a phased or “segmented” contract that was eventually expected to cost around $4 billion. ITT would design, build, install, operate and maintain the approximately 800 nationwide ADS-B ground stations, and would fund these activities itself, save for five initial “key sites” at Miami, Louisville, Philadelphia, the Gulf of Mexico and Juneau, Alaska, which the FAA would pay for in segment one of the contract. The remaining stations are forecast for 2013 completion, with ITT providing ADS-B service to the FAA for $90 million per year until 2020, when this cost will be renegotiated. But the IG questioned the FAA’s resulting in-house technical oversight capabilities due to “knowing very little about a system that is expected to be the foundation of NextGen.” The IG reported that FAA data shows that using its normal equipment ownership approach would have saved around $600 million. The FAA responded that, over the long term, this extra cost would be recovered by sharing the income from ITT’s sale of the ADS-B data to airports and other parties. The report also expanded on several other financial concerns, including ADS-B avionics.