DOT OIG: DOT and FAA Lack Adequate Controls Over Their Use and Management of Other Transaction Agreements

September 2017

Congress has granted several of DOT’s Operating Administrations the authority to enter into Other Transaction Agreements (OTA). These financial instruments give agencies greater flexibility to achieve mission goals. However, because OTAs are generally exempt from Federal laws and regulations governing acquisitions and financial assistance, they can pose greater cost and performance risks than contracts, grants, and cooperative agreements.

FAA employs OTAs for a wide range of activities with significant monetary impact. However, because its OTAs are managed by a number of offices and inventoried via several different methods, FAA is unable to track all of them, provide effective oversight, or keep stakeholders fully informed about its use of the agreements. FAA policies also do not specify when it is proper to use an OTA instead of a contract or grant. In contrast, PHMSA uses OTAs for one program and has more rigorous controls over OTA usage. Furthermore, DOT and FAA lack clear, comprehensive policies to adequately manage their OTAs. Report


DOT OIG: Greater Adherence to ADS-B Contract Terms May Generate Better Performance and Cost Savings for FAA

September 2017

In 2007, the Federal Aviation Administration (FAA) awarded a more than $1.8 billion contract to develop and implement the Automatic Dependent Surveillance-Broadcast (ADS-B) system. ADS-B is a foundational component of FAA’s Next Generation Air Transportation System, and FAA envisions ADS-B eventually becoming its principal means of aircraft surveillance.

OIG found that while the ADS-B contract provides FAA the ability to monitor whether the contractor is providing required ADS-B products and services, FAA has made only limited use of these provisions. For example, while the contract identifies seven specific measures for evaluating ADS-B performance, and specifies that the contractor should validate that all seven requirements are being met, FAA required reports from the contractor on only three of the seven measures. We also found that while the ADS-B contract contains provisions that can help FAA ensure that payments are reasonable, FAA did not effectively use these contractual tools. Report


DOT OIG: Enhancements Are Needed to FAA’s Oversight of the Suspected Unapproved Parts Program

May 2017

The public depends on the Federal Aviation Administration (FAA) and the aviation industry to provide safe, reliable air transportation and ensure that aircraft are properly maintained and approved for flight. According to FAA estimates, there are approximately 7,000 commercial aircraft in service in the United States. One type of aircraft—the Boeing 737, the most widely used aircraft in the world—contains approximately 400,000 parts. FAA and the aviation industry are responsible for ensuring that all these parts are safe for use in transporting passengers. Part of this responsibility includes detecting and monitoring for Suspected Unapproved Parts (SUP)—aircraft parts that may have been manufactured without FAA approval or intentionally misrepresented.

Our audit found that FAA’s process for monitoring and investigating SUPs is not as effective as it could be, because of recordkeeping weaknesses and the lack of a management control to capture and accurately report the number of SUPs. Also, Agency oversight of industry actions to remove unapproved parts is ineffective because it does not consistently implement its process for notifying the industry about unapproved parts. As a result, FAA cannot be assured that unapproved parts have been removed from the system and no longer pose a threat to safety. Report


DOT OIG: Opportunities Exist for FAA To Strengthen Its Award and Oversight of eFAST Procurements

May 2017

In 2009, the Federal Aviation Administration (FAA) developed a small business procurement vehicle known as Electronic FAA Accelerated and Simplified Tasks (eFAST), which offers a broad range of professional and support services. As of December 2016, more than 520 small businesses have been prequalified and hold agreements under eFAST to potentially provide prime contractor services in one or more of eight functional areas. The total maximum value of these agreements is $7.4 billion over a 15-year period.

FAA’s processes for awarding eFAST procurements have areas for improvement. Specifically, FAA does not apply its own requirement to verify prospective contractor eligibility when it makes most eFAST awards. As a result, we found that 7 of 40 sample eFAST procurements—totaling over $67 million—had been awarded to firms whose small/disadvantaged eligibility status had expired. Based on this finding, we estimate that $314 million could have been put to better use by awarding those dollars to firms whose eligibility had been verified at the time of the award. Report


DOT OIG: New Disadvantaged Business Enterprise Participation is Decreasing at the Nation's Largest Airports, and Certification Barriers Exist 

January 2017

Each year, the Federal Aviation Administration (FAA) distributes over $3 billion in Federal grants for airport projects. When they accept these grants, airports are required to establish disadvantaged business enterprise (DBE) and airport concession disadvantaged business enterprise (ACDBE) programs.These programs provide small businesses owned and controlled by socially and economically disadvantaged individuals with opportunities to compete for construction, professional services, and concession contracts. 

Between fiscal years 2012 and 2014, the number of existing DBE firms working at the 65 largest airports decreased by 31 percent, and the number of new DBE firms working at these airports decreased by 76 percent. Report




DOT OIG: FAA Lacks Adequate Controls To Accurately Track and Award Its Sole-Source Contracts

May 2016

FAA took limited actions to reduce its use of sole-source contracts and did not achieve a sustained reduction in its use of these contracts between fiscal years 2008 and 2014. The number of FAA’s new sole-source contracts fluctuated from year to year, and the Agency awarded a total of 624 sole-source contracts, with a total value of about $2.2 billion, during this period. Specifically, FAA did not report 81 sole-source contracts valued at $166 million during fiscal years 2012 through 2014. 

OIG projects that the total estimated value of sole-source contracts that did not fully comply with key Acquisition Management System (AMS) pre-award requirements is $962 million, or 51 percent of the total. 25 of 34 sole-source contracts in OIG's sample required a written procurement plan; yet, 18 of those contracts, valued at $61.6 million, lacked the required plan.  Report

Media Coverage

Law 360DOT Watchdog Says FAA Must Rein In Sole-Source Contracts



DOT OIG: FAA Reforms Have Not Achieved Expected Cost, Efficiency, and Modernization Outcomes

January 2016

While FAA has implemented the provisions of past reform legislation, these efforts have not achieved anticipated cost savings and operational efficiencies. FAA’s total budget, operations account, and total personnel compensation and benefits costs doubled while air traffic facility productivity declined. Between fiscal years 1996 and 2012, FAA’s total budget grew by 95 percent, from $8.1 billion to $15.9 billion, and its total personnel, compensation, and benefits (PC&B) costs increased by 98 percent, from $3.7 billion to $7.3 billion. Report

Media Coverage

The Hill: Watchdog finds inefficiencies in US airline oversight


DOT OIG: FAA Lacks Effective Internal Controls for Oversight of Accountable Personal Property Federal Aviation Administration

January 2016

As of March 31, 2014, the Federal Aviation Administration (FAA) reportedly owned approximately $733 million of non-capitalized accountable personal property. 

FAA has not fully implemented effective internal controls for managing personal property. OIG estimates that FAA may not be able to locate approximately 15,000 personal property assets on record, with a combined acquisition value of more than $32.5 million. OIG also estimates that approximately 36,000 personal property asset records with an acquisition cost of $164million have incomplete or inaccurate information. Report.


DOT OIG: Enhanced FAA Oversight Could Reduce Hazards Associated With Increased Use of Flight Deck Automation

January 2016

FAA has established certain requirements governing the use of flight deck automation during commercial operations. In particular, FAA has developed limitations regarding minimum altitudes at which autopilot can be engaged and how automated systems within the cockpit are configured to provide ease of use. 

According to the report, FAA does not have a process to ensure that air carrier pilots are trained to use and monitor automation systems while also maintaining proficiency in manual flight operations. Report

Media Coverage

The Hill: Watchdog: FAA failing to ensure pilots are trained to fly manually

Associated Press: APNewsBreak: Government not ensuring pilot skills are sharp




DOT OIG: There are Significant Differences Between FAA and Foreign Countries’ Processes for Operating Air Navigation Systems 

September 2015

The four countries DOT OIG examined—Canada, the United Kingdom, Germany, and France—have separated their air traffic control functions from their safety oversight and regulatory functions. While safety and regulatory functions remain government-controlled, each nation has commercialized its air traffic control function into an ANSP using various organizational structures. 

No recommendations were made by the OIG, but challenges the FAA to rethink their organization. Report

Media Coverage

Airlines.org: Government Watchdog Report Bolsters Case for ATC Reform




DOT OIG: ADS-B Benefits Are Limited Due to a Lack of Advanced Capabilities and Delays in User Equipage

September 2014

Since fiscal year 2004, the Federal Aviation Administration (FAA) has been developing the Next Generation Air Transportation System (NextGen) to increase the safety and efficiency of the National Airspace System (NAS). To execute this transition, FAA is developing the Automatic Dependent Surveillance-Broadcast (ADS-B) system,1 which is expected to leverage new and existing technologies to provide aircraft information to pilots and air traffic controllers during all phases of flight. 

FAA determined that the total costs for the current ADS-B program, including funding that has already been spent, now outweigh the projected benefits of the program by as much as $588 million. Report

Media Coverage



DOT OIG: Airport Privatization: Limited Interest despite FAA's Pilot Program 

November 2014

Nearly all the 3,330 airports in the national airport system in the United States are publicly-owned and operated. However, some argue that the private sector could better fund and operate airports than public owners. GAO reported in 1996 that many barriers to full privatization existed in the United States. In 1996, Congress created the APPP which reduced some of the barriers to privatization. However, over the program’s 18 years only two airports have privatized and one of them has reverted to public control. 

Several factors reduce both public and private sector interest in airport privatization in the U.S.—such as higher financing costs for privatized airports and the possible lack of state and local property tax exemptions. 

Furthermore, public sector airport owners have found ways to gain some of the potential benefits of privatization without ceding control under full privatization, such as entering airport management contracts and joint development agreements for managing and building an airport terminal. Report