Summary: To cope with increases in traffic volume, enhance safety margins, and boost the efficiency of the air traffic control system, the Federal Aviation Administration (FAA) in late 1981 began a multibillion dollar effort to replace and upgrade the national airspace system's equipment and facilities. This modernization effort, however, has experienced many problems in meeting cost, schedule, and performance goals. As a result, the promised benefits of the new equipment have been delayed and the aviation community's confidence in FAA's ability to manage the modernization program has been undermined. GAO has included FAA's modernization program on its list of government programs at high-risk for waste, fraud, abuse, and mismanagement. FAA is now developing a new modernization approach. This testimony discusses (1) the status of key modernization projects, (2) FAA's actions to implement recommendations to correct modernization problems, and (3) the opportunities and challenges facing FAA as it embarks upon its new modernization approach.