Going Direct: Case Study: When Private Companies Were Given A Big FAA Job

Think privatization is the way to go for more efficient operation? Consider this case from just 20 years ago. One of the major arguments for President Trump’s proposed ATC Modernization…

Think privatization is the way to go for more efficient operation? Consider this case from just 20 years ago.

One of the major arguments for President Trump's proposed ATC Modernization plan is that private companies are inherently more efficient than governmental agencies. The example for this case is the FAA's slow moving Nex-Gen airspace modernization program. Critics claim with some justification that the program is way behind schedule and over budget. But the argument then that making air traffic control operations a private venture doesn't seem to jibe with the FAA's recent history on this subject. Indeed, instead of private industry saving the day, in several noteworthy cases, the FAA was forced to cancel programs for non-performance and take charge of getting the program back on track.

No example of this is perhaps more dramatic than that of the development of WAAS. Today, we take for granted the wide area augmentation system, which is the technological backbone of the augmented GPS system that is the foundation for many elements of Nex-Gen, from RNAV approaches to RNP to ADS-B and runway safety technologies. But the success of WAAS was far from a given.

The original 1995 contract was issued to Wilcox Electric, which performed so badly the FAA had to cancel its $1.8 billion contract for cause within a year of Wilcox getting to work on it. The next player, Hughes Electronics, was under fire for years after it assumed ownership of the program---Hughes was later acquired by Raytheon Systems. Under its auspices, the program was late by several years and went billions over budget. The FAA's original cost estimate for WAAS was less than a billion dollars. Within five years, in 2000, Congress was investigating program delays and cost overruns. At that point, the program under Raytheon was 15 months behind schedule and around $4 billion over budget.

Originally scheduled for deployment in 1999, WAAS finally launched for public use in mid-2003, four years late and billions over budget.

The FAA has traditionally blamed at least part of its program completion and cost overrun problems on its revolving funding mechanism, which is tied to annual budgetary battles, so while Congress is fond of slamming the FAA for its failures, many of them, the FAA has long pointed out, are at least partially the fault of Congress itself.

So the administration's claims that a private sector firm will be able to "more quickly and securely implement Next Generation (NextGen) technology" flies in the face of the story of the private industry's poor record of performance in the development of WAAS.

But perhaps of even greater concern to general aviation advocates is the administration's claim that a privatized ATC will be able to "expand the availability of the National Airspace System (NAS) for all users."

There is no record of private firms overseeing ATC operations in the United States, but if the record of countries like Australia, Canada and many in the EU is any indication, private industry's performance on this count could be even tougher to achieve.


If you want more commentary on all things aviation, go to our Going Direct blog archive.

A commercial pilot, editor-in-Chief Isabel Goyer has been flying for more than 40 years, with hundreds of different aircraft in her logbook and thousands of hours. An award-winning aviation writer, photographer and editor, Ms. Goyer led teams at Sport Pilot, Air Progress and Flying before coming to Plane & Pilot in 2015.
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