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January 30, 2007 - The FAA is focused on operating like a business, using the best practices from the private sector to operate more efficiently and effectively. To do this, we are improving financial management, implementing cost efficiency measures, changing the way we manage human capital, and increasing operating efficiency. By managing our resources more effectively, the agency is better able to accomplish its operational goals.

Improved Financial Management

  • Enforcing disciplined investment analysis and reviews of capital investments by ATO Executive Committee and the Senior Executive Joint Resources Committee
  • Using modern tools like EVM to track program performance of major programs
  • Restructuring or terminating redundant and underperforming programs
  • Providing more timely and accurate financial information to ensure informed decision-making and drive improved results
  • Implementing internal controls
  • Continuing to expand and improve the Cost Accounting System to accurately identify the costs of agency activities
  • Improving management of capital assets

Improved Cost Efficiency

  • Completed the largest civilian A-76 competition in history
    • The effort will save $2.2 billion over the life of the program while reducing the number of facilities from 58 to 20 and introducing state-of-the-art technology.
  • Consolidating facilities and services
    • ATO Service Area Consolidation effort is consolidating support functions from nine service areas to three. This will allow us to provide better service to customers while saving an estimated $360 to 460 million over the next ten years.
    • Accounting services consolidation is already saving over $4 million per year.
    • Consolidating IT resources such as servers and help desks.
  • Other cost efficiency measures
    • Increased controller productivity by 10 percent by 2010.
    • Reduced ATO overhead expenses by cutting management levels, reducing executive ranks by 20 percent, and reducing the non-safety workforce.
    • Implemented best practices from the private sector in the procurement of administrative supplies, equipment, and IT hardware that will achieve $5 million in savings annually at no cost to the agency.
    • Instituted new oversight procedures for acquisitions requiring the Deputy Administrator to approve any non-competitive support service contract of $1 million or more and CFO approval of any acquisition totaling $10 million or more.
    • Backfilling open positions with new employees at lower pay grades when possible.

Human Capital Reform

  • Instituted "Pay for Performance" system that ties annual pay increases to achievement of performance targets. Accountability for results is systemic throughout our organization, with 80% of our employees on the pay-for-performance system, including our executives.

Increasing Operating Efficiencies

  • ISO 9001 Certification of AVS organization means the agency's safety oversight organization meets the same standards as the aviation industry and provides consistent service and customer satisfaction.
  • Domestic Reduced Vertical Separation Minimum (DRVSM) helps provide more economical and efficient aircraft operations. DRVSM created an additional six layers of cruise levels at higher altitudes enabling aircraft to operate at more fuel-efficient cruising altitudes while also increasing system capacity.

Evidence that our strategy to operate like a business is working

  • We have successfully implemented new financial reporting and acquisition systems.
  • In 2005, GAO took FAA off the high risk list for financial management after five years.
  • We have received five consecutive clean audits although we had a narrow qualified opinion in FY06.
  • We have received three consecutive awards for excellence in financial reporting.
  • Over the last several years, ATO reduced its non-safety workforce by 1,600 or 16%.
  • Over 90% of major programs are within 10% of budget and on schedule.
  • Cost efficiency measures implemented as part of the business planning process have resulted in recurring cost efficiencies of over $180 million per year.