Aviation Traffic System Update Costs Escalate

The Federal Aviation Administration disclosed Thursday that the projected cost to update the nation’s aging air-traffic control system has jumped another $1 billion to $6.9 billion, more than double the original $3.3 billion estimate.

FAA Administrator David Hinson vowed to reduce the ultimate cost overrun, which would rank as one of the largest in federal history. The latest increase comes only three months after the FAA announced a similar $1-billion cost increase in the project, headed by IBM Corp.

Technical problems have also led to at least a 20-month delay in the project, known as the Advanced Automation System. The FAA estimates it has only a 50% chance of successfully getting the project completed by 1998.

When the program was launched in 1984, it was considered crucial to air safety. At that time, the agency said its 20-year-old computers, radar screens and software were no longer up to the task of handling the nation’s expanding air traffic.

But on Thursday, FAA officials and outside experts insisted that the old equipment is still safe.

Asked what went wrong, Hinson said he did not know for sure, but he has requested the Navy and an internal FAA engineering group to assess the technical problems.

“We have spent $2.3 billion to date, almost all of it has resulted in useful hardware and software,” Hinson said. “We really haven’t wasted any money on this program. We haven’t spent $6.9 billion and we are not 20 months late yet. This whole exercise is intended to avoid that outcome.”

But Congress and the General Accounting Office have long contended that the program was fraught with technical risks that were being ignored. As far back as 1987, the GAO had found the program had massive cost overruns and was behind schedule.

Software has been the biggest single problem in the cost overruns and delays, according to an expert who has helped the FAA investigate the program.

The Advanced Automation System will require a massive software system tying together 20 air traffic centers around the nation and a few hundred airport towers. In addition, the system has hundreds of new automated computer work stations.

Industry sources have raised concerns that IBM is having difficulty achieving the FAA’s goal that the system be up and running 99.999995% of the time--a standard that means the system would be down only three seconds per year. Known as the “seven nines” goal, it has raised significant technical problems, according to an industry expert.

IBM’s work on the system is covered mostly under a “cost plus” type contract that leaves taxpayers the bill for the cost increases. The company has forfeited much of its profit on the program, FAA officials said. Nonetheless, the program could be in deep political trouble.