Management issues 'eroding' FAA telecom deal: IG

The Federal Aviation Administration's centralized telecommunications network is falling behind schedule and may not produce the savings and benefits the new system was expected to provide, the Transportation Department's inspector general said.

In a new report, the IG said the FAA's Telecommunication Initiative, a 15-year contract awarded to Harris Corp. of Melbourne, Fla., is being dogged by management issues and will likely be delayed.

'As a result, the benefits that FAA expected to achieve by reducing its operations costs are eroding, while the risk of not being completed on time is increasing,' the report said.

FAA selected Harris as the FTI prime contractor for the five-year, $1.7 billion contract in 2002. The deal was re-baselined in December 2004 to $2.4 billion, and the agency expected launch the system in December 2007.

The agency estimates that FTI, which will consolidate seven existing FAA-owned and leased telecommunications networks, will save about $820 million over the next 11 years.

But in early 2005 the contract began falling behind schedule because FAA's Joint Resources Council, the agency's procurement decisionmaker, did not and has not set firm deadlines and requirements to the FTI program office.

'Until FAA develops a realistic schedule and effective transition plan, it will be difficult to hold the FTI contractor accountable or determine when the FTI transition will be completed,' the IG said.

In fact, FAA has only pulled the plug on about 3 percent of its legacy system and has accumulated a significant backlog of uncompleted work, the IG said. For example, the report said FAA did not realize $32.6 million in reduced operating costs in fiscal 2005 'due to the limited progress in disconnecting legacy circuits.'

In response to the report, the FAA said it would adopt stronger cost and schedule metrics based on earned-value management, a tool that can be used as an early indicator of potential cost overruns and delays.

The IG recommended that the agency require Harris to send monthly program management information reports with EVM data, although it may be too little, too late.

'EVM data would have been useful to assist FAA management to monitor costs overruns for several fixed-price elements of the FTI contract,' the report said.

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