Mitre: FAA telecom overhaul could face cost overruns

Delays in the Federal Aviation Administration's telecommunications overhaul could pose cost problems, according to a report from technology research firm Mitre.

The FAA Telecommunications Infrastructure (FTI) program was supposed to save money by consolidating multiple telecom networks into one system operated by Harris. In July 2002, the FAA awarded the company a contract for the 15-year project that could ultimately be worth billions of dollars.

Before FTI, MCI had been supplying some telecom services through the Leased Interfacility National Airspace System Communications System (LINCS). It links 5,000 locations and carries more than 20,000 connections, enabling air traffic controllers to communicate with one another and with pilots. It transmits radar, weather and other data. In February 2002, the FAA awarded MCI a follow-on contract to smooth the transition to FTI.

In April, FAA officials hired Mitre to conduct an independent assessment of transition risks. A summary of the July 25 report, released by FAA officials, notes that site and service schedules have slipped since January.

The transition must get back on track “to ensure successful completion of the transition prior to the expiration of some existing service contracts,” the summary states.

The FAA funds LINCS and FTI. LINCS’ five-year continuation is worth as much as $604 million.

Management of the new telecom system has also provoked the ire of the Transportation Department’s assistant inspector general for aviation and special program audits.

In May, the assistant IG issued a report criticizing the FAA for the growing costs, which are counterproductive to FTI’s savings. The report states that since the FAA reset the baseline for FTI in December 2004, program costs have increased from $1.9 billion to $2.4 billion, “the bulk of which -- $2.1 billion -- will be funded from the operations account.”

“We note that FAA has already reduced FTI cost savings by $30 million, due to delays implementing FTI,” the report states.