Summary: GAO reviewed the Federal Aviation Administration's (FAA) acquisition of the Advanced Automation System (AAS) to determine whether it is a technically and economically sound investment.
GAO found that: (1) the current AAS acquisition strategy does not adequately mitigate technical risks and does not provide for suitable operational simulation of the advanced automation features; and (2) AAS, as currently planned, may not be economically justified. GAO believes that the FAA strategy has unacceptably high risks and may result in significant cost increases, schedule delays, and performance deficiencies. GAO also believes that: (1) a fixed price for untested hardware may result in higher costs because the contractor's risk may be reflected in higher fixed prices to compensate for the system's unproven producibility; (2) requirement changes to correct performance problems can lead to significant additional costs even in a fixed-price contract; (3) software, which constitutes a major portion of AAS development, and cost risk will be developed using a cost-plus type contract; and (4) having only one contractor during the concurrent development, test, and production phase limits risk-reduction opportunities typically achieved through cost and technical competition.
