[House Hearing, 110 Congress] [From the U.S. Government Publishing Office] NEXTGEN: THE FEDERAL AVIATION ADMINISTRATION'S AUTOMATIC DEPENDENT SURVEILLANCE-BROADCAST CONTRACT ======================================================================= (110-80) HEARING BEFORE THE SUBCOMMITTEE ON AVIATION OF THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS FIRST SESSION __________ OCTOBER 17, 2007 __________ Printed for the use of the Committee on Transportation and Infrastructure U.S. GOVERNMENT PRINTING OFFICE 38-514 PDF WASHINGTON DC: 2007 --------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866)512-1800 DC area (202)512-1800 Fax: (202) 512-2250 Mail Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE JAMES L. OBERSTAR, Minnesota, Chairman NICK J. RAHALL, II, West Virginia, JOHN L. MICA, Florida Vice Chair DON YOUNG, Alaska PETER A. DeFAZIO, Oregon THOMAS E. PETRI, Wisconsin JERRY F. COSTELLO, Illinois HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of JOHN J. DUNCAN, Jr., Tennessee Columbia WAYNE T. GILCHREST, Maryland JERROLD NADLER, New York VERNON J. EHLERS, Michigan CORRINE BROWN, Florida STEVEN C. LaTOURETTE, Ohio BOB FILNER, California RICHARD H. BAKER, Louisiana EDDIE BERNICE JOHNSON, Texas FRANK A. LoBIONDO, New Jersey GENE TAYLOR, Mississippi JERRY MORAN, Kansas ELIJAH E. CUMMINGS, Maryland GARY G. MILLER, California ELLEN O. TAUSCHER, California ROBIN HAYES, North Carolina LEONARD L. BOSWELL, Iowa HENRY E. BROWN, Jr., South TIM HOLDEN, Pennsylvania Carolina BRIAN BAIRD, Washington TIMOTHY V. JOHNSON, Illinois RICK LARSEN, Washington TODD RUSSELL PLATTS, Pennsylvania MICHAEL E. CAPUANO, Massachusetts SAM GRAVES, Missouri JULIA CARSON, Indiana BILL SHUSTER, Pennsylvania TIMOTHY H. BISHOP, New York JOHN BOOZMAN, Arkansas MICHAEL H. MICHAUD, Maine SHELLEY MOORE CAPITO, West BRIAN HIGGINS, New York Virginia RUSS CARNAHAN, Missouri JIM GERLACH, Pennsylvania JOHN T. SALAZAR, Colorado MARIO DIAZ-BALART, Florida GRACE F. NAPOLITANO, California CHARLES W. DENT, Pennsylvania DANIEL LIPINSKI, Illinois TED POE, Texas DORIS O. MATSUI, California DAVID G. REICHERT, Washington NICK LAMPSON, Texas CONNIE MACK, Florida ZACHARY T. SPACE, Ohio JOHN R. `RANDY' KUHL, Jr., New MAZIE K. HIRONO, Hawaii York BRUCE L. BRALEY, Iowa LYNN A WESTMORELAND, Georgia JASON ALTMIRE, Pennsylvania CHARLES W. BOUSTANY, Jr., TIMOTHY J. WALZ, Minnesota Louisiana HEATH SHULER, North Carolina JEAN SCHMIDT, Ohio MICHAEL A. ACURI, New York CANDICE S. MILLER, Michigan HARRY E. MITCHELL, Arizona THELMA D. DRAKE, Virginia CHRISTOPHER P. CARNEY, Pennsylvania MARY FALLIN, Oklahoma JOHN J. HALL, New York VERN BUCHANAN, Florida STEVE KAGEN, Wisconsin STEVE COHEN, Tennessee JERRY McNERNEY, California LAURA A. RICHARDSON, California (ii) Subcommittee on Aviation JERRY F. COSTELLO, Illinois, Chairman BOB FILNER, California THOMAS E. PETRI, Wisconsin LEONARD L. BOSWELL, Iowa HOWARD COBLE, North Carolina RICK LARSEN, Washington JOHN J. DUNCAN, Jr., Tennessee RUSS CARNAHAN, Missouri VERNON J. EHLERS, Michigan JOHN T. SALAZAR, Colorado STEVEN C. LaTOURETTE, Ohio DANIEL LIPINSKI, Illinois FRANK A. LoBIONDO, New Jersey NICK LAMPSON, Texas JERRY MORAN, Kansas ZACHARY T. SPACE, Ohio ROBIN HAYES, North Carolina BRUCE L. BRALEY, Iowa SAM GRAVES, Missouri HARRY E. MITCHELL, Arizona JOHN BOOZMAN, Arkansas JOHN J. HALL, New York, Vice Chair SHELLEY MOORE CAPITO, West STEVE KAGEN, Wisconsin Virginia STEVE COHEN, Tennessee JIM GERLACH, Pennsylvania NICK J. RAHALL, II, West Virginia MARIO DIAZ-BALART, Florida PETER A. DeFAZIO, Oregon CHARLES W. DENT, Pennsylvania ELEANOR HOLMES NORTON, District of TED POE, Texas Columbia DAVID G. REICHERT, Washington CORRINE BROWN, Florida CONNIE MACK, Florida EDDIE BERNICE JOHNSON, Texas JOHN R. `RANDY' KUHL, Jr., New ELLEN O. TAUSCHER, California York TIM HOLDEN, Pennsylvania LYNN A WESTMORELAND, Georgia MICHAEL E. CAPUANO, Massachusetts MARY FALLIN, Oklahoma DORIS O. MATSUI, California VERN BUCHANAN, Florida MAZIE K. HIRONO, Hawaii JOHN L. MICA, Florida LAURA A. RICHARDSON, California (Ex Officio) JAMES L. OBERSTAR, Minnesota (Ex Officio) (iii) CONTENTS Page Summary of Subject Matter........................................ vi TESTIMONY Brantley, Tom, President, Professional Airways Systems Specialists, AFL-CIO........................................... 5 Capezzuto, Vincent, Manager, Surveillance and Broadcast Services Program Office, Federal Aviation Administration................ 5 Kefaliotis, John, ADS-B Program Director, Defense, ITT Corporation.................................................... 5 Scovel, III, Hon. Calvin L., Inspector General, U.S. Department of Transportation.............................................. 5 Sinha, Dr. Agam N., Senior Vice President and General Manager, Center for Advanced Aviation System Development, The Mitre Corporation.................................................... 5 PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS Costello, Hon. Jerry F., of Illinois............................. 34 Mitchell, Hon. Harry E., of Arizona.............................. 42 Oberstar, Hon. James L., of Minnesota............................ 48 Salazar, Hon. John T., of Colorado............................... 52 PREPARED STATEMENTS SUBMITTED BY WITNESSES Brantley, Tom.................................................... 54 Capezzuto, Vincent............................................... 62 Kefaliotis, John................................................. 76 Scovel, III, Hon. Calvin L....................................... 83 Sinha, Dr. Agam N................................................ 100 SUBMISSIONS FOR THE RECORD Capezzuto, Vincent, Manager, Surveillance and Broadcast Services Program Office, Federal Aviation Administration, responses to questions from the Subcommittee................................ 73 Sinha, Dr. Agam N., Senior Vice President and General Manager, Center for Advanced Aviation System Development, The Mitre Corporation, responses to questions from the Subcommittee...... 110 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] HEARING ON NEXTGEN: THE FAA'S AUTOMATIC DEPENDENT SURVEILLANCE- BROADCAST, ADS-B, CONTRACT ---------- Wednesday, October 17, 2007 House of Representatives, Subcommittee on Aviation, Committee on Transportation and Infrastructure, Washington, DC. The Subcommittee met, pursuant to call, at 2:00 p.m., in Room 2167, Rayburn House Office Building, the Honorable Jerry F. Costello [Chairman of the Subcommittee] presiding. Mr. Costello. The Committee will come to order. The Ranking Member will be here momentarily, and I will go ahead and get started. The Chair will ask all Members, staff and everyone to turn electronic devices off or on vibrate. The Subcommittee is meeting today to hear testimony on NextGen: The FAA's Automatic Dependent Surveillance-Broadcast Contract that was recently entered into by the FAA. Before we begin, I ask unanimous consent to allow a new Member of our Committee, Ms. Laura Richardson, to participate in the Subcommittee hearing. Hearing no objection, so ordered. I will begin my opening statement and then recognize the opening statement by the Ranking Member or comments or remarks, and I see Mr. Hayes is sitting in for Mr. Petri. I welcome everyone to the Subcommittee hearing today. A major part of the FAA's NextGeneration Air Transportation System Plan to transform our air traffic control system is the transition from a ground-based radar to a satellite-based surveillance system. Automatic Dependent Surveillance-Broadcast or ADS-B, as it is commonly known, is key to enabling technology for that transition. Within the last 60 days, the FAA has taken two major steps forward with ADS-B. At the end of August, the FAA awarded a performance-based service contract valued at almost $1.9 billion to a consortium led by the ITT Corporation. The ITT team is required to build, own and operate a system that will provide nationwide ADS-B surveillance and broadcast services by as early as 2013. Earlier this month, the FAA published a notice of proposed rulemaking that would require aircraft operating in certain classes of airspace to equip with ADS-B Out avionics by 2020. Over the last several months, the FAA has described ADS-B as the cornerstone and the backbone of NextGen and the future of our air traffic control system. I agree that ADS-B is technology that holds enormous promise. It is potentially much more accurate than radar which may help the FAA and airspace users utilize our airspace more efficiently. It can enhance safety by providing surveillance to areas that cannot be covered by radar and by granting pilots greater situational awareness. It may also enable the FAA to avoid hundreds of millions of dollars in costs by downsizing its ground-based infrastructure. That said, reasonable expectations must be set about what relief ADS-B can realistically provide for the type of meltdown and record-setting delays our system has faced this summer. Unfortunately, the American people have been led to believe that the silver bullet solution for the gridlock that we saw this summer is a new satellite-based surveillance system. The truth is ADS-B will not provide significant tangible benefits for several years and then only in conjunction with other NextGen technologies that are many years away from implementation now. It is time for the rhetoric to stop and for the Administration to start explaining all of the ifs and whens about ADS-B and the NextGen system. Some have pointed out that ADS-B is a relatively mature technology that is not highly complex. We should not underestimate the technical challenges of building and integrating this new system into the NAS. As with any modernization program, there is clearly the potential for setbacks and slippage as far as implementation is concerned. In addition, even if the ITT team meets the FAA's ambitious schedule for deploying ground infrastructure and services, how quickly ADS-B can deliver major benefits will be determined largely by how quickly users equip. The FAA's proposed rule does not mandate ADS-B by users until the year 2020. Furthermore, some of ADS-B's most advanced applications and capabilities, like reduced separation and standards and aircraft self-separation, have received the most public attention. However, the FAA first needs to demonstrate that ADS-B performs as well as our current radar base system before these capabilities can seriously be considered. Moreover, some of these advanced capabilities require ADS-B In avionics which the FAA did not mandate in its proposed rule. Given that, the FAA has advertised ADS-B as the future of the air traffic control system. Everyone should understand that the FAA has placed a tremendous amount of responsibility in the hands of the private sector. Instead of adopting a more traditional acquisition strategy for ADS-B, the FAA had opted for a service contract approach whereby the ITT team will build the ADS-B ground stations and own and operate the equipment. The FAA will pay subscription charges for ADS-B broadcasts transmitted to aircraft and air traffic control facilities. The FAA has estimated that its contracting approach will save the Government roughly $820 million over the next 30 years and cut about five years off of the deployment schedule. Regardless, I believe that there are inherent risks in this strategy. Both Congress and the FAA must provide vigorous oversight over this contract. With that, I again welcome all of our witnesses here today, and I look forward to hearing your testimony. Before I recognize the Ranking Member, Mr. Petri, for his opening statement or remarks, I ask unanimous consent to allow two weeks for all Members to revise and extend their remarks and to permit the submission of additional statements and materials by Members and witnesses. Without objection, so ordered. With that, the Chair recognizes the distinguished Ranking Member, Mr. Petri, for an opening statement or his comments. Mr. Petri. Thank you very much, Mr. Chairman, and I would like to join you in welcoming our panelists here today and also thank you for scheduling this hearing. Two months ago, as you point out, the FAA awarded the long awaited ADS-B contract to the ITT Corporation and published a notice of proposed rulemaking on the system ground stations and equipage standards. These are two major milestones in the transition to a satellite-based surveillance air traffic control system, and I certainly would join in applauding all involved in the process. The new system will improve safety by increasing positioning accuracy and, according to our Federal Aviation Administration, has great potential to increase our capacity to handle the potential three-fold increase in traffic that is projected over the next 20 to 30 years. As we know, the transition to the new system will not be simple. I am glad we have the opportunity today to learn more about the contract itself, the contractor, ITT, and what role the new system will have in the effort to modernize our air traffic system. Strong oversight, both internally at the FAA and here in Congress, will be critical to the success of the transition. A lot is riding on a smooth and hopefully uneventful transition to the new system. I look forward to our witnesses identifying some of the major issues associated with the transition and controls built into the contract to address those issues. Input from the national airspace system users will also clearly be very important. After all, what good is a new surveillance system if it fails to serve the users' needs? To that end, I look forward to hearing how the FAA plans to utilize technical experts from the aviation community as they move ahead with the implementation and transition to the ADS-B system. While I am pleased with the Federal Aviation Administration's progress so far, we have a long way to go before we achieve full NextGen. I look forward to working with the aviation community as we continue to move toward that goal. This new system is the first tangible step in the process, and let's make sure that we get it right. I yield back. Mr. Costello. The Chair thanks the Ranking Member and recognizes the gentleman from Colorado, Mr. Salazar, who is going to enter a statement into the record and make brief remarks. Mr. Salazar. I do want to thank you, Mr. Chairman. I just wanted to thank the FAA for their forward thinking, and I just want you to understand that the State of Colorado is fully invested in the NextGen air system. I am very concerned, however, about the air safety along the mountains and the ski country of Colorado. So I just want to make sure whenever we move forward and how we move forward, that we take into account the ski areas and the mountainous areas and Rocky Mountains area in general of this great Nation. Thank you, Mr. Chairman. I appreciate your allowing me to make a few comments. Mr. Costello. I thank the gentleman, and the Chair now recognizes the gentleman from North Carolina, Mr. Hayes. Mr. Hayes. Thank you, Mr. Chairman. I truly appreciate what you are doing here today. I think sometimes you worry about my level of enthusiasm about this project being too high, for those of you in the audience who don't know, when the Chairman sees me coming. We are going to be talking about ADS-B and how we need to have a different role here. The FAA has a great product to sell, another service to impose on folks. When we get through this, my friend, Mr. Salazar, is going to get his plane back and he is going to make sure that he has ADS-B in it because he doesn't want to live without it. It can be that good if all the different components come together and make this thing work. Mr. Scovel, we are glad to have you here today as the on- staff paid skeptic to make sure that we keep track of the things as managers and overseers that we need to do. I want to be sure that every component of aviation, whether it is AOPA, NATCA, Vinny Capezzuto, the technicians, everybody sees, appreciates and invests in a cooperative, collaborative way in this system that can provide a tremendous boost in safety first but in convenience and a whole host of other things. Don't be misled. This is not the answer to air traffic delays. It will be help, but again this is not the answer. Here, my enthusiasm comes from the fact that we have something here that the flying public and the airlines need to be on board and fully invested as quickly as possible. Implementation is the key. There are 210,000 customers sitting out there, waiting to be sold. If we give them a high quality product at the lowest possible price, which competition ensures, then not at the day but at the beginning of the day, we are gong to have something that will dramatically improve safety, convenience and people will say, gosh, for once, the Government got it right. Mr. Chairman, I got carried away. I yield back. Mr. Costello. The Chair thanks the gentleman. Let me say both Mr. Hayes and Mr. Salazar have talked to me frequently about ADS-B, and they have some very interesting ideas and are strong supporters of getting the program moving forward and getting to the point of implementation, and I appreciate that very much. The Chair will now introduce our witnesses in the order in which they are seated. Again, we welcome all of you here today. We have met in roundtable discussions with, I think, all of you in the past more than once about ADS-B, and we are pleased to have you here in the Committee hearing. First, let me introduce Mr. Vincent Capezzuto who is the Manager of the Surveillance and Broadcast Services Program Office with the FAA; the Honorable Calvin Scovel who is the paid skeptic, I have down here, Inspector General of the U.S. Department of Transportation; Mr. John Kefaliotis, who is the ADS-B Program Director, Defense with ITT Corporation; and Dr. Agam Sinha, who is the Senior Vice President and General Manager, Center for Advanced Aviation System Development with the MITRE Corporation; and Mr. Tom Brantley who is the President of the Professional Airways Systems Specialists. Gentlemen, we welcome all of you here today and, as always, your full statement will be entered into the record. The Chair would ask you to summarize your statement in five minutes or less, and we will give Members the opportunity to ask questions. With that, the Chair now recognizes Mr. Capezzuto. TESTIMONY OF VINCENT CAPEZZUTO, MANAGER, SURVEILLANCE AND BROADCAST SERVICES PROGRAM OFFICE, FEDERAL AVIATION ADMINISTRATION; THE HONORABLE CALVIN L. SCOVEL, III, INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION; JOHN KEFALIOTIS, ADS-B PROGRAM DIRECTOR, DEFENSE, ITT CORPORATION; DR. AGAM N. SINHA, SENIOR VICE PRESIDENT AND GENERAL MANAGER, CENTER FOR ADVANCED AVIATION SYSTEM DEVELOPMENT, THE MITRE CORPORATION; TOM BRANTLEY, PRESIDENT, PROFESSIONAL AIRWAYS SYSTEMS SPECIALISTS, AFL-CIO Mr. Capezzuto. Thank you, Chairman Costello and Congressman Petri. At this point, I would like to show you a quick video that will illustrate how ADS-B functions. Well, I thought I was going to show you a quick video. Mr. Costello. Now this was not covered under the ADS-B contract, was it? [Laughter.] Mr. Capezzuto. It was not, and it is also not biting into my five minutes. We will just move on if that is okay. Mr. Costello. Very good. Mr. Capezzuto. Thank you again, Mr. Chairman, Congressman Petri and Members of the Subcommittee. I am pleased to appear before you today to discuss the FAA's contract for Automatic Dependent Surveillance-Broadcast System or ADS-B, the cornerstone of NextGen. As the Director of Surveillance and Broadcast Services in the Air Traffic Organization at the FAA, I have responsibility for oversight of this performance-based contract. ADS-B is a new service for the FAA and has the potential to transform the NAS. In order to develop this service, we have crafted an innovative and closely monitored contract with the ITT Corporation. We appreciate the role that Congress has already played in developing this contract. In fact, our confidence in this contract is directly due to Congress' oversight and input as well as contributions from other Government entities and participation by the gamut of other industry stakeholders such as the pilots, the airlines and the manufacturers, to name a few. We welcome the Members' continued oversight to help us manage the contract moving forward. The ADS-B contract has scalability and flexibility which leads to greater service availability in the NAS. ADS-B equipped aircraft receive satellite signals and transmit the aircraft's precise locations to air traffic controllers and pilots. Both pilots and controllers will, for the first time, be able to see similar real-time displays of air traffic. Pilots will know with greater accuracy where their own aircraft are, and the displays will show them all the aircraft in the air and on the ground around them. In addition to improved safety in the sky, ADS-B can help reduce the risk of runway incursions. Additionally, ADS-B has the capability of increasing efficiency and capacity in the NAS which, in turn, helps to reduce the delay problem. With this technology, we will be able to provide services to the people and places that we never have before. The scalability of ADS-B allows us to adapt the technology for a variety of purposes. The contract also gives us greater flexibility because it allows us to deploy the technology more rapidly and more easily than we could have on our own and in areas where we have never had radar. General aviation pilots will have enhanced safety features in their cockpits. Pilots in Alaska will be able to navigate the rough terrain there more easily. Aircraft over the Gulf of Mexico will have greater flexibility to use different altitudes and have reduced separation minimums. With the greater coverage and accuracy of ADS-B, we will be able to predict where aircraft are and we will be making the NAS that much more reliable. The contract requires ITT to have the system ready for use by 2010 and expand coverage nationwide by 2013. The first stage of the contract is worth $207 million with options worth an additional $1.6 billion. With a system as important as ADS-B and the price tag that comes with it, we want to make sure that we are working responsibly with the taxpayers' dollars. We are keenly aware of the risks inherent to new technology and new procedures, and we are safeguarding against them as best as we can. ADS-B's potential is enormous. It is integral to our ability to achieve NextGen and to handle the tripling of today's air traffic predicted by 2025, but we do not want to oversell these capabilities. The only way we can present a realistic picture of our goals is to double-check our accomplishments along the way. We have designed the contract to include several required milestone events that will help us track progress and test the system as each piece is completed. Further, we have created additional incentives and disincentives throughout the contract to maximize the contractor's commitment to success. Finally, we have a building block plan for the contract. First, we build. Then, we test while we create the appropriate procedures for use, and only after the groundwork has been laid, do we deploy the technology nationwide. If the contractor is unable to achieve certain milestones, the FAA may consider it in default of the contract and may cancel the remainder of the contract. The first milestone is set for May 2008, when the contractor is to test the uplinking of traffic and weather information to pilots. With this aggressive time line, we are not wasting any time in requiring our contractor to deliver. These milestones give us concrete measures of the contractor's progress and if needed, allow the FAA to adjust the program early on or redirect resources as needed. Our goal is not only to test technical performance but also to test business performance. We also have other oversight measures built into the contract to include preliminary design reviews and critical design reviews that enable us to track the contractor's progress and success. We also have risk mitigation procedures in place, which require ITT to work with the FAA to resolve any issues that might arise in the course of the contract. Some of the major incentives for our contractor are embedded in the additional $1.6 billion options that the FAA can choose to exercise or not. Depending on proven contractor performance or if the FAA does not receive the benefits anticipated in a particular area, these options would allow the FAA to unilaterally stop the contract in whole or in part. Additionally, the contractor is allowed, subject to FAA approval, to develop the data for other aeronautical uses, which would result in a reduction of the costs of the contract to the FAA while allowing the contractor to recoup its investments. We are confident that this system of carrots and sticks will afford the FAA considerable oversight of the contract, encourage the contractor to excel in performance and allow seamless integration of this important new technology. FAA is a safety oversight agency first and foremost, and the certification of the data is critical to our mission to ensure safety is maintained and enhanced for the flying public. Mr. Chairman, this concludes my prepared statement. I would be happy to answer any questions that you or the other Members of the Committee may have. Mr. Costello. Thank you, Mr. Capezzuto. The Chair now recognizes the Inspector General, Mr. Scovel. Mr. Scovel. Chairman Costello, Ranking Member Petri, Members of the Subcommittee, we appreciate the opportunity to testify on the FAA's efforts to develop and deploy ADS-B. At the request of the Chairman, we are examining the risks to this important effort and FAA's contracting approach. We recognize that ADS-B has enormous potential to enhance capacity, improve safety and fundamentally change the way air traffic is managed. However, a full disclosure of costs, expected benefits and risks is needed. This is a complex, long term effort that requires significant investments from both Government and airspace users. Given FAA's history with developing new technologies and its approach for ADS-B, we believe that an extraordinary level of oversight will be required. Today, I will discuss three major points. First, realistic expectations need to be set for the benefits ADS-B will deliver in terms of capacity and reducing delays. ADS-B will not provide near term capacity benefits or relief from record level delays at the Nation's most congested airports. FAA's plans call for the ADS-B ground infrastructure to be in place by 2013, and airspace users are not expected to be equipped with new avionics until 2020. FAA does expect to see benefits in the 2009 time frame in the Gulf of Mexico from ADS-B where radar coverage is limited. We note that FAA intends to mandate ADS-B Out, the broadcast of aircraft information to ground systems, but the majority of benefits rely on ADS-B In and the display of this information in the cockpit. However, costs and requirements for ADS-B In and cockpit displays, which could shift more responsibility to the pilot, are not well understood. We think FAA needs to provide Congress and stakeholders with a much clearer path for moving forward with ADS-B and realizing much needed capacity improvements. Second, ADS-B has demonstrated important benefits in Alaska where radar coverage is limited. However, ADS-B implementation in the continental United States, which involves supplementing and ultimately replacing radar, is a complex undertaking. The widespread introduction of ADS-B faces a number of risks. They include user acceptance, frequency congestion concerns, development and approval of procedures that can capitalize on ADS-B and software modifications to existing controller displays and automation systems. All these risks could materially affect the cost schedule and expected benefits of ADS-B. Finally, FAA has decided to rely on a service contract approach for ADS-B. This means that the Government will not own the ground infrastructure but will pay for broadcast services. A heretofore unseen level of FAA contract oversight will be needed. Over the years, we have documented numerous problems with FAA's major acquisitions that resulted in million dollar cost increases and schedule slips measured in years. Problems are directly traceable to, among other things, poor contract oversight. FAA has never before relied on a service contract to introduce a revolutionary technology into the NAS. As we testified last week, the experiences with flight service stations underscore the importance of strong oversight of contractor efforts. Important lessons learned focus on greater insight into contractor efforts and how problems are solved. The stakes are much higher with ADS-B and the need for oversight greatly amplified. To FAA's credit, the Agency intends to use several controls to help manage the contract, including techniques for measuring cost and schedule changes and performance metrics. However, these controls are not fully in place. Once established, FAA must execute them properly and hold the contractor accountable. An important oversight mechanism is the establishment of a performance control board. This board, comprised of FAA and contractor personnel, is expected to monitor ADS-B performance, review changes to the system and mutually resolve disagreements, all very important responsibilities. This board is not yet in place, and its charter is not finalized. The overall comfort level with FAA's approach will increase only when this board is firmly established, and roles and responsibilities clearly defined. Key watch items for FAA oversight going forward include managing requirements and having the right in-house expertise and skill mix for effective management and oversight. It cannot be business as usual with ADS-B. A different model of oversight is needed. The Air Traffic Organization must shift its role from providing a service to maintaining direct, sustained oversight. We are concerned that FAA could find itself in a situation where it knows little about the system that is expected to be the foundation of NextGen. FAA must take steps to ensure it effectively addresses this risk. This concludes my statement, Mr. Chairman. I would be pleased to answer any questions you or other Members of the Subcommittee might have. Mr. Costello. The Chair thanks you, Mr. Scovel, and now recognizes, for five minutes to summarize his testimony, Mr. Kefaliotis. Mr. Kefaliotis. Thank you, Chairman. ITT wishes to thank the Committee for the opportunity to testify about ADS-B, the vital program which is an essential building block of the NextGen air transportation system. We recognize the critical role of the Committee in exercising program oversight and in authorizing the necessary taxpayer dollars to make the program viable. ITT, along with our teammates, is honored to have been selected to be the FAA's partner in the ADS-B program and, through this program, to serve the Nation's air traffic control needs. ITT believes the FAA is to be commended for the efficient and professional manner in which this procurement was conducted. Salient elements of the FAA's procurement process were open and frequent communications with industry, adherence to the process and schedule promulgated early and procurement activities, and an effective statement of Government requirements. ITT believes the contracting approach developed by the Government strikes a proper balance between allowing contractor efficiency and providing solid means for FAA oversight and control of ITT activity. Notably, the contract provides a period and processes to ensure that the developed service fully meets defined requirements to include safety, security and radio frequency spectrum constraints, allows for continuous Government monitoring of deployed service, and provides significant financial incentives for contractor team performance. Finally, an FAA-defined performance control board allows continuous involvement of the FAA in system development, deployment and operation. The contracting approach has also provided a mechanism to ensure the continuity of the service for which ADS-B assets are deployed. The FAA required vendors to submit succession plans as a part of their proposals. ITT's plan appoints AT&T a successor for the very unlikely contingency of a triggering event. In closing, I would like to reiterate that ITT is proud to have been chosen to be the FAA's partner in this vital initiative and state that ITT and its contractor team are fully committed to the success of this program. Thank you again for the opportunity to appear before you today, and I would be pleased to respond to any questions you may have. Mr. Costello. Thank you. The Chair now recognizes Dr. Sinha. Mr. Sinha. Good afternoon, Chairman Costello, Congressman Petri and Members of the Subcommittee. ADS-B is a well defined, tested and globally accepted system concept for air traffic control surveillance. Although first made operational in the United States, specifically in Alaska, ADS-B now is being accepted and introduced around the world for ATC applications. It is used for tracking aircraft, both while in flight and on the airport surface. Aircraft pilots and ground vehicles' drivers also use ADS-B to monitor positions and velocities of other aircraft and ground vehicles. ADS-B provides highly accurate, plus or minus three feet, position of aircraft; faster update, one second, for better tracking; speed and direction data of the aircraft and the ground vehicles. In addition, ADS-B ground stations can be sited and installed more easily than radars, permitting aircraft surveillance in heretofore inaccessible geographic locations such as the Gulf of Mexico and Alaska. There are two fundamentally distinct types of ADS-B avionics configurations, commonly known as ADS-B Out and ADS-B In. With ADS-B Out, an aircraft or ground vehicle transmits ADS-B reports but does not receive reports from other ADS-B sources. With ADS-B In, they can not only transmit reports but also receive reports from other aircraft, ground vehicles or ADS-B ground stations. These reports can include graphical and textual weather information as well as other flight information such as pilot reports and Notice to Airmen. The improved surveillance, accuracy, integrity, latency and availability made possible by ADS-B will enable reduced aircraft separation standards to improve NAS capacity; comprehensive tracking of aircraft and vehicles operating in the air and on the airport surface to improve safety, security and operational effectiveness; improved access to under- utilized airspace and airports; improved four-dimensional trajectory information for better gate to gate airport operating efficiency and flight path conformance monitoring; flexible assignment of responsibilities on the ground and in the cockpit as needed to support decision-making and workload balancing; adaptive flexible spacing and sequencing of aircraft; improved collaborative air traffic management among flight and airport operators, service providers and other stakeholders. Add to these improvements, the reduced weather impacts to traffic flow and airport access made possible by the use of an accurate weather picture and other advisory information; and we can see that ADS-B is an enabler of several key NextGen capabilities. However, the extent of ADS-B's benefits mentioned earlier will vary depending on the environment, whether it is radar or non-radar, and the aircraft equipage, ADS-B Out or ADS-B In, and how many aircraft are equipped. Additional ADS-B benefits are possible based on new concepts in varying stages of exploration such as improved approach operations in instrument conditions due to the ability to electronically see proximate aircraft. This can help us increase the capacity for paired approaches to closely spaced parallel runways as well as independent approaches to parallel runways down to 2,500 feet; improved departure operations in the most congested terminal areas by reductions in departure spacing afforded through delegation to flight crews; improved safety in the air through enhancements to onboard collision avoidance systems and on the airport surface through direct cockpit warnings of potential conflicting traffic; reduced controller workload through more equitable sharing of spacing and separation assurance responsibilities between ATC and pilots. In closing, let me summarize my main messages. ADS-B is a well defined, tested and globally accepted surveillance technology that provides better performance than legacy technologies. ADS-B offers benefits from both mandated ADS-B Out and voluntary ADS-B In capabilities, and they accrue to both the FAA and NAS users. The timely realization of ADS-B benefits is dependent on achieving appropriate ground automation system upgrades. This is beyond other ground automation systems like ERAM, avionics equipage and operational procedures. ADS-B is a cornerstone capability for NextGen as several of the key NextGen improvements require it. It is imperative that ADS-B associated research and program implementation as well as the other NAS systems it leverages be managed closely so that the full set of projected benefits can be achieved. Mr. Chairman, this concludes my testimony. I would be happy to answer any questions the Committee may have. Mr. Costello. Thank you. The Chair now recognizes Mr. Brantley. Mr. Brantley. Chairman Costello, Congressman Petri and Members of the Subcommittee, thank you for inviting PASS to testify on the ADS-B contract. PASS represents more than 11,000 FAA employees throughout the United States and overseas including the employees who install, repair and certify the systems making up our air traffic control system. When fully implemented, ADS-B can be a useful tool for pilots and air traffic controllers to use in maintaining proper separation of aircraft while allowing more efficient use of our Nation's airways. PASS and the employees we represent welcome this advancement in air traffic control technology, but we will not give up our focus on safety in all modernization efforts. It is our understanding that the FAA plans that ADS-B, unlike our current radar systems, will not be properly certified and all maintenance will be the responsibility of the contractor. Certification is a process in which a certificated FAA technician checks and tests systems or equipment periodically to ensure that the systems or equipment can safely remain in service and provide the advertised service while not negatively impacting any aspect of the NAS. Certification is also performed before returning a repaired system to service. The FAA's own orders label certification as an inherently governmental function and, as such, it can only be accomplished by FAA employees. For decades, all NAS systems and services directly affecting the flying public were required to be certified. However, shortly after the ADS-B contract was awarded, the FAA made changes to its time-tested certification program. In its update to the maintenance handbook effective October 1st, 2007, the FAA changed the order so that only FAA-owned systems can be certified. In other words, the FAA has not only changed the criteria to allow ADS-B to be deployed without requiring certification but actually went so far as to prohibit full and appropriate certification of all systems it does not own. PASS has learned that the FAA intends to perform what it is calling service certification on ADS-B which would allow the FAA to certify the service based on users telling the Agency that the service works. In other words, the controllers will have to rely on the users_pilots and vendors_to tell the FAA that there is a problem. There will be no internal FAA quality checks as there are today. PASS is certain that ADS-B must be fully and appropriately certified to ensure its safe operation. In the opinion of the experts, FAA technicians in the field, with the complete elimination of system certification for systems not owned by the FAA, there will be no way to independently determine if the system is safe. It should also be noted that this new interpretation of the Agency's certification criteria would apply not only to ADS-B but also to any system or service that is not owned by the FAA. Any future contract awarded by the Agency that provides for vendor-owned equipment or services would be barred from the FAA certification program. The NAS is not just one piece of equipment but rather a complex, integrated system that includes thousands of distinct smaller systems, all of which interface with one another, and aviation safety depends on oversight of the entire system. FAA employees are the only people anywhere with such a detailed knowledge of the intricacies associated with NAS systems and operations. Placing responsibility for a system as vital to air traffic as ADS-B entirely in the hands of the private sector threatens the safety of the flying public. Furthermore, in order to have sufficient redundancy to avoid service interruptions, there also must be employees present who fully understand the different types of service. Since ADS-B will be an entirely vendor-run operation, the Agency will be held hostage to the vendor's response time which will, at the very least, result in longer delays and will leave the FAA with no in-house capability should the vendor fail to live up to the contract. PASS strongly supports modernization of the NAS but never in a manner that compromises the very foundation of safety upon which our current system is based. PASS asks that Congress direct the FAA to fully and appropriately certify all NAS systems and services, including ADS-B, that meet the criteria for certification as defined by the Agency prior to October 1st, 2007, without regard for ownership of such systems and services. Thank you, Mr. Chairman, and I would entertain any questions that anyone may have. Mr. Costello. I thank you, Mr. Brantley. Mr. Scovel, in my opening statement, I raised concerns, as you did, with the issue of raising unrealistic expectations on the part of the Administration. I am not here today to beat up on the Administration. I support ADS-B. I think we are moving in the right direction, but when the Administration came out with their budget proposal on February the 14th and throughout the process until we passed the House bill, the message to the American public and to the Congress was pass our budget proposal because we have to move forward with NextGen. As we went through the busiest season that we have seen in recent history, this summer, and had unprecedented delays and cancellations, the people kept hearing, well, we need NextGen, and it was like we are going down to Target or Wal-Mart or some place and buy something off the shelf, plug it in and our problems are going away. One, you raised the same issue in your statement that we need to be realistic as to what NextGen can deliver in terms of delays and capacity and so on. I wonder if you might elaborate on your statement. Mr. Scovel. Thank you, Mr. Chairman. You mentioned the term, realistic expectations, and we would certainly second the use of that term. As you and other Members of the Subcommittee have noted, ADS-B will have no impact on delays at the Nation's busiest airports in the near term. As Mr. Capezzuto and others have stated today, the contract between FAA and ITT calls for installation of the ground infrastructure by the year 2013. FAA has mandated, or proposes to mandate, the initiation of ADS-B Out aboard user aircraft not until the year 2020. Clearly, that is a long time from where we stand today in late 2007. I should also note, however, that ADS-B Out, which is the initial part of the system that will be implemented, does not propose to have the promise to address congestion and delays at the Nation's busiest airports. It is only the second part of the ADS-B system, the ADS-B In system, that will allow aircraft and other users conceivably to reduce separation standards and increase capacity. So we would urge caution on the part of the Committee and other members of the aviation industry and the traveling public before they invest too much unrealistic expectations in ADS-B itself. Mr. Costello. I also noted in your statement and I think Mr. Brantley as well--and I will ask you, Mr. Brantley to comment on this--one is that you are concerned that the FAA may find itself in a situation where ITT knows a lot about the system and the FAA knows very little about the system. I made note in my opening statement that we are all aware that under the contract, that ITT will build, own and operate the system and will have a contractual arrangement where they will actually purchase for transition. I just wonder if you will elaborate, Mr. Brantley as well, your concerns about the FAA, at some point, knowing very little about this new system and ITT folks knowing a lot about it which might imply to some that ITT would have a monopoly on this system. Mr. Scovel. Yes, Mr. Chairman, we should note that our assessment at this time indicates that FAA has negotiated a very robust and aggressive contract with ITT. It has been successful in that regard. The skill set that it brought to the contracting process up to this point has given it this enviable position. The contract as it goes forward, however, will unroll in a series of phases, and certainly the initial phase between now and 2013 presents the need for FAA to have a skill set. As ADS- B Out unrolls to 2020, perhaps a different skill set will be needed, and certainly with the advent of ADS-B In and full implementation throughout the NAS of ADS-B's capability, yet another skill set may be needed. Given the length of time between 2007 and when full ADS-B capabilities may be realized, 2020 or in the years immediately following that, skills currently available in FAA may move out. They may retire. They will move on. Certainly, FAA will be challenged at each step along the way to acquire the skills that will be necessary to give it the robust contractual oversight capability that it will need. Currently, we see going forward, and this would be for the immediate future, that a skill set would be needed along these lines: telecommunications expertise, signals processing, and systems engineering and integration. Finally, when we are talking about user involvement and potentially the use of pilots and human factors needed in order to fully implement ADS-B, FAA will need to have expertise in that area in order to ensure that the contract can be properly executed. Mr. Costello. Mr. Brantley, would you briefly follow with your concerns? Mr. Brantley. Yes, Mr. Chairman. In addition to what Mr. Scovel said, and I do agree with his assessment on the assumption that everything works well and that the vendor remains in place, my concern is, however unlikely or remote the chance, if the Agency found itself in a position where it had to take over the ground stations--either the vendor defaulted or the Agency decided that they weren't performing and they canceled the contract or whatever the case--the Agency would not have the in-house capability to do so. So, at that point, they would no longer have a choice. They would be essentially stuck even if they felt that the vendor couldn't perform. Mr. Costello. Mr. Capezzuto, would you like to respond to the concerns expressed by Mr. Scovel and Mr. Brantley on that issue? Mr. Capezzuto. Yes, sir. Thank you. As I understand it, I just want to point out that the contract let to ITT is really a sub-element of a full system. As was mentioned by Mr. Scovel, the avionics is the driving force behind this. It is really about having the aircraft with the proper avionics, and that is where the accuracy and integrity information is actually collected. So this is the inverse of looking at radar. Where radar derives the information, now the information comes from GPS and avionics. That information is transferred to the ITT sub- element which is then brought to our service delivery points where the FAA is playing the systems integrator. Our role is to pull this together, collect the data, submit that data to our regulator to get approval to use it for air traffic controllers to separate air traffic with. To do any of this, we are governed by our safety management system, and that is first and foremost to us. Whenever we build a system, we are governed by the safety management system and we put the proper controls in place. Mr. Costello. What does that mean, the proper controls in place? Mr. Capezzuto. The way this contract was developed, we have three years to develop it co-jointly with ITT. I know we call it a service contract, but we are actually going through design reviews with them. We have designed the performance specifications and provided it to them. We are doing the oversight as they develop the system so that we build in security and safety up front. After the deployment of this, we will have the capability to recognize what that proper data is at the service delivery point, and these are quantified requirements, things like availability or latency. These are things that can be measured, and you use those for certification of that information. Mr. Costello. So those who may be concerned, as Mr. Scovel just mentioned and Mr. Brantley, about turnover as time goes on, you have no concerns about that? Mr. Capezzuto. I think the other piece that is missing in this conversation is that the radar that we are going to keep in there as the backup. As part of this investment, we are only really removing 50 percent of our secondary surveillance radars, which essentially are overlapped right now and not used as a redundant function. So what we are doing is slimming our particular inventory of secondary surveillance radars, but we have two things going for us. One, we are keeping all the primary radars, and we are keeping 50 percent of the secondary surveillance radars in our inventory as the capability of a backup. Then, additionally, we have in the specification of the contract that the provider has to have an independent validation of the information that is coming from ADS-B or the avionics. So, in all cases, we have the capability. Then, finally, as we do today, we have procedural backups. Mr. Costello. We have other Members here who have questions. I have a final question, and then I will come back. I do have a few others. Mr. Brantley, you talked about the certification process and that the FAA came back and changed it. I wonder if you might elaborate on the current system as far as certification is concerned versus what the FAA has proposed or what the change has done. Mr. Brantley. Certainly, thank you, Mr. Chairman. Currently, any system, there are several criteria, but the two main ones, any system that is providing real-time positional information or that is providing data that is used by pilots or air traffic controllers, that is going to affect what a plane does, anything that meets those criteria has to be certified. Now that had no restrictions based on who owned the system or service. However, the change that the Agency made seems specifically targeted, at least in part, to allow the approach the Agency has chosen to take with ADS-B. I think it would be hard to argue that ADS-B won't meet that criteria. It may be a matter of time. The argument may be over when it meets the criteria, but it will. So I think that is at least part of what is driving the change in certification. I think also we need to keep in mind while the Agency talks about verifying or certifying the data, that is one step in certifying a system or service today. There are many other things that are checked. There are tests run on the systems themselves. There are system parameters checked. There are interfaces with other system. So it is not just the data that comes out the end that is checked to certify something today. Apparently, the approach that is going to be taken here is the Agency will verify just the data and based on that, without having any knowledge of what is going on with the system itself, they will certify the service. Mr. Costello. The Chair now recognizes the Ranking Member, Mr. Petri. Mr. Petri. Thank you very much. It is fascinating. I wonder if maybe you, Mr. Capezzuto or one of the other panel members could discuss this from the point of view not of the FAA or the contractors but from the point of view of the pilots or the airline companies, the users. How is this? They have to make expenditures and buy some equipment or rent it. At what stage is it going to make sense for them to do it if there is a dual system out there and we are phasing this in? How is this really going to work? Could you discuss that? Is there a plan? I am thinking in the back of my mind we are going to digital TV, and everyone is saying out there that they are going to send coupons eventually to people to equip it. Maybe it is different than that. Maybe the pilots and the industry is already way ahead of the Government, and they have the stuff in their boxes already. Could you discuss how the two things are going to work together? Mr. Capezzuto. Let me start by saying that ADS-B has been in the Agency's research and development area for probably nine years. The cargo airline industry, a series of other airlines, pioneer airlines have basically participated in the development and testing and demonstration of this technology over those nine years. We have essentially accelerated this or moved to the next phase with implementation based on those successes both up in Alaska and right here in the Ohio River Valley. So there were a lot of demonstrations that proved where the technology was. We are essentially right now working on what is called an Air Traffic Management Advisory Council. We have an ADS-B Working Group that will have access to the aviation industry as the customer of the NAS where they understand the development of the strategy of this program, where we discuss some of the issues, such as the backup analysis which was done in concert with aviation industry, so they understood what we were delivering and what the decision meant. In fact, they also participated in the development of the business case that we put forward to go through the investment analysis that concluded in awarding this contract. So I would say that the industry has been involved. I think what we recently chartered this summer was an Aviation Rulemaking Committee as part of doing the Notice of Proposed Rulemaking. Again, many of the same members from the ATMAC ADS-B Working Group were involved, but now it has expanded even further. In that group, we were chartered with our first deliverable, which was a report to talk about how you can early incentivize the operators such that they wouldn't wait until 2018 or 2019 to comply to the 2020 rule. In that report, which is now out on the web, it represented the aviation industry's desire to see incentives, either in the form of manufacturers being provided incentives or tax rebates where they could lower the cost of ADS-B. Likely that would increase equipage at an earlier rate and at a higher magnitude and then we would also look at incentives for the airlines in such a way that they would also be incentivized to acquire ADS- B at an earlier state. Just one other thing to point out is we are working also with our international partners. In Canada, they deploying ADS- B in the Hudson Bay. In Australia, they are using ADS-B right now to separate air traffic in the en route or high altitude. Europe currently has a program under SESAR. CASCADE is the name of the program, in which they are looking to develop pioneer programs and move forward with this. We are working in concert with the rest of the world so that we globally can implement this properly. Mr. Petri. With the international carriers, there will be continuity. So when they fly from one airspace to another, it will be compatible or the same system? Mr. Capezzuto. Yes, sir. We have been working closely with them to ensure that we have total global interoperability. Mr. Petri. Do you have an idea of what kind of investment we are talking for different categories of plane users? Mr. Capezzuto. Yes, sir. If you are talking about the total cost, as you are calling it, for the user it is approximately $6.9 billion, and that captures the 210,000 aircraft. Most of the 200,000 are general aviation, and you are looking at about 10,000 in the air transport category. Mr. Petri. A person who is buying a Piper, well, probably not a Piper. They wouldn't participate in this necessarily. They would use a smaller system. If you are buying one of these corporate jets, how much would that cost? Mr. Capezzuto. The price varies as a function of if you are buying a brand new corporate jet and it already has a multi- function type display, already has GPS on board. So you can see prices for the general aviation community. It ranges from $10,000 to $15,000. When you are looking at the air transport, it is upwards of $40,000, $50,000, and it can go upwards of $160,000. It depends on the vintage of the aircraft. As you know, if you are doing retrofits versus it coming off the assembly line as a forward fit, then you really get a huge reduction in the cost. The prices I was giving you were the capture, acquire, acquisition costs and then implementation of it into your aircraft. Mr. Petri. The new planes are already having it or it is on the drawing board? Mr. Capezzuto. Well, by putting out the Notice of Proposed Rulemaking, what we have done is sent a strong signal of what the standards are for the development of ADS-B Out is. What has been going on are some of the manufacturers have been going on risk and building it into the system. So, today, there are aircraft with ADS-B in it. Europe, as well, has enforced this through some of their rules. What is happening is people are deploying with a version of the standard. What we just did by putting out the Notice of Proposed Rulemaking is we clarified what version of the standard we are interested in at the FAA. Mr. Petri. Thank you. Mr. Capezzuto. You are welcome, sir. Mr. Costello. The Chair recognizes the gentleman from Colorado, Mr. Salazar. Mr. Salazar. Thank you, Mr. Chairman. I have the same concerns as Mr. Petri has. Most of us that own small planes outfit them with a 430 Garmin. Is that going to be usable in this case? Would it be part of the system or are we going have to scrap that and toss it out and put something else into our airplanes, Mr. Capezzuto? Mr. Capezzuto. I understand your concern, sir. I mean what we are looking at right now is that the aviation manufacturers are looking to combine the avionics so that if you have a current mode A/C type transponder, what you can do is remove that and replace it with a unit that does the same function as well as ADS-B. So right now, Garmin does produce a system that is available, and it is ADS-B capable. Also, that is what they are using up in Alaska right now, and it is very successful. Mr. Salazar. If someone isn't equipped with this equipment, he won't be allowed to fly into certain airspace, is that correct? Mr. Capezzuto. Correct. The rule is an airspace rule. If we move forward with this, it would go into effect in 2010. You would have to comply by 2020. So, essentially, you are operating up until 2020 without it or you choose to equip early. You mentioned that we would deploying ADS-B ground infrastructure by 2013. As part of that infrastructure, we would be providing an uplink capability, which essentially will allow weather to be viewed in the cockpit, and so we are looking at that as one of the ways to incentivize the general aviation community, such that they can acquire weather in the cockpit if they would buy the ADS-B equipment. Mr. Salazar. Thank you. I have a question that Dr. Kagen wanted to ask. I hope I can read his writing here: Privatization of essential safety- oriented programs does not allow for our Government to walk away from its responsibilities. How will the FAA control a private corporation without owning it? Mr. Scovel, would you like to respond to that? Mr. Scovel. Yes, sir, let me give it a try. As I understand the question, how will FAA control a private organization, a private company? Through the contract mechanism, and our review indicates to date that FAA has negotiated a robust contract. Through controls in that contract, FAA will attempt to control the performance and cost and schedule metrics. It has indicated that it will require ITT to use the earned value management system, which is a process developed by DOD to keep contracts on schedule and on budget. Perhaps, most important, FAA indicates that it, along with ITT, will comprise a performance control board which will monitor progress and evaluate effectiveness of execution of the contract as it goes along. If I can borrow Mr. Hayes' term for myself, as the paid skeptic, we think at this point that all of those are to be commended, and we want to give due credit to FAA for inserting in the contract at this point those controls. If we have skepticism, it is due to the need to see proper execution and management of that contract as we go forward. We stand right now really at the starting line. Much needs to be done very quickly, even in the next few months. So we will have a track record built very soon and, at that point, we and you should be able to reach a plenary opinion, at least, as to FAA's success on contract execution. Mr. Salazar. Thank you, Mr. Chairman. I yield back. Mr. Costello. Thank you. The Chair now recognizes the gentleman from North Carolina, Mr. Hayes. Mr. Hayes. Thank you, Mr. Chairman. I hope you took my comment as a compliment, Mr. Scovel, because we need some skeptics around here when Government is at their work. Several questions here, Vinny, you can do a seven-minute statement in five minutes. When you and I first met, I had to get you to talk southern and slow you down. I did the math. Just so people understand, in my basic math, you could equip every one of those airplanes today for $1,260,000. Now that is oversimplification, but the point is the technology, given the competition and the desire of the part of the aviation community to use it because it is a tool that makes them safer and saves them fuel and all kinds of things, is the key for Mr. Salazar and my friend, Leonard, and others to getting this thing done. We have to reverse the role of Government. You have kind of done it by the way you have done this very innovative contract. Mr. Kefaliotis, we are really depending on you to demonstrate how well private industry can mesh with Government. As we have done with the RCI program for military housing, it can be done and should be done. Having said all that, we are going to reverse it now. It is not the Government mandating you do something. The Government has come up with a way to do something that is so much better, people need to be lining up to get it like they did for iPhone at 4:00 in the morning. We have gone from NDBs and ADFs--which are just way needle ball, and air speed--to something that is incredibly easy to use, incredibly accurate. Mr. Brantley has very good foresight into what we are dong here, and we are certainly not ignoring him. I would ask FAA, as in the past with the very important relationship there, to make sure that everybody understands what is going on. Let me get over here to a question before my time runs out. When we first started talking about this, my greatest criticism of the FAA is they came in selling the price, not the product. I finally figured out what the product was. I have been to Alaska twice, flown with it. I have been to China. A couple of guys, a Navy pilot and two former FAA employees, are building the system, selling it, installing it and maintaining it in China out of their hangar which is about like a garage. So the simplicity and the effectiveness is there. It is proven. It is not something that just appeared today. Those are the things that give me reason to be encouraged, enthusiastic and optimistic if we can look into the future. Vinny, you talked about the mode C transponders. Can you update folks on where we are now? When we first started, you had to have a box up in the plane, but six months ago that was the box. Now the box is integrated into a transponder. What do you see as the potential for the industry to bring in new technologies, smaller, lighter, less expensive? Give us a peek into that. Mr. Capezzuto. I think this is exciting for the manufacturing industry, and they have been waiting for us to send that signal that we are moving forward with this. The contract award and the NPRM are certainly two strong signals to them. In fact, I just briefed the GA Manufacturers Association last week. In there, we are basically opening up the doors and allowing them to see what this contract is about. I will tell you there was a proposal. As part of the proposal process, ITT offered to spend corporate dollars, not out of our contract, but they will provide us insight and they will, at the Performance Control Board, provide us with status on how they are doing with this. What they have done is partnered through their Memorandum of Agreement with avionics manufacturers. Essentially, they realize that the worth of this contract is tied to avionics and people equipping early, and so to do that they are investing their own dollars in the development of a joint avionics package that basically combines ADS-B with the current mode A/C transponders. Therefore, it now allows these new radios to replace your old radios, be interoperable with TCAS, the Traffic Collision Avoidance System, and be interoperable with our radar as we go through the transition point. I think those are innovations that we will see other avionics manufacturers jump on. Mr. Hayes. Absolutely. Let me cut you off just a minute before my time runs out and bring Mr. Kefaliotis in. Speak to Mr. Brantley's concerns and Mr. Scovel's and also to the issue of what is in this for private industry in terms of the incentives for being really successful and the new equipment and processes that can be developed out of this. Mr. Kefaliotis. Congressman Hayes, on our side, we are installing a highly robust redundant architecture, a highly reliable system. The Government has as, I think, another innovation, specified technical performance measures against which the Government will judge the quality of the service we provide. We, IIT, have instrumented our system such that those technical performance measures will be constantly monitored. We will provide data to the Government, to the FAA through an interface, so the FAA can also constantly monitor our performance parameters. We have proposed, and the Government has accepted, an aggressive financial incentives penalties clause in the operational phase such that if we deliver services that do not meet the technical performance standards defined in the contract, we suffer pretty significant financial penalties. So, in terms of what the contract has done and what we plan on deploying, we are deploying a highly robust, scalable, safe and secure architecture that will meet the Government's needs. In regard to certification, the FAA has specified, and again we are independently instrumenting our system and will constantly monitor the technical performance of our system. The Government has required us to independently deliver to a certification server in FAA premises, data relevant to the performance of our system with which the Government can independently evaluate and monitor our performance and certified data. So we feel very good about what we are doing, and we think the Government has done a very good job of ensuring that they can monitor us. We believe significantly in ADS-B technology. We believe it will deliver a significant benefit to the flying public and promises a potential for eventually dramatically enhancing the capabilities of the national airspace system. Thank you. Mr. Hayes. Thank you, Mr. Chairman. Sorry, I ran over. Maybe we will get another crack at it. Mr. Costello. Thank you. The Chair now recognizes the gentleman from Washington, Mr. Larsen. Mr. Larsen. Thank you, Mr. Chairman. Mr. Kefaliotis, under the contract that ITT has with the FAA, is there anticipation of any use of the GPS system, of the current system, or you are anticipating changes made to the GPS system that will increase the capacity of the GPS system? Right now, in the Armed Services Committee, we are struggling with do we go to 3F or stick with what we have. I am wondering what is your assumption about the capacity that that ADS-B will use of the GPS system and what is your assumption of the future of the GPS system and increased capacity within it. Mr. Kefaliotis. Our design for the ground infrastructure takes advantage of airborne GPS receivers and the data linking of position data from aircraft to our ground system. So, in that sense, just as an adjunct, the navigation system onboard doesn't have to be GPS. It just has to be a navigation system that meets the performance requirements. But that said, GPS is the system that will meet performance requirements, and a robust GPS network is essential to the successful operation of this system. Mr. Larsen. I would agree with that statement. My question is the assumption that the contract makes about the available capacity as we roll out ADS-B in the use of GPS. Mr. Kefaliotis. Congressman, I apologize. I am not sure I understand the question. In terms of the number of satellites and the constellation and the robustness of the GPS constellation? Mr. Larsen. Yes. Mr. Kefaliotis. Our contract assumes the baseline GPS constellation. The rulemaking requires navigational accuracy for a position parameter that is quite stringent, and a robust constellation will dramatically aid in achieving that parameter. Mr. Larsen. Okay. Well, it is an important question because we are walking through this in the Armed Services Committee as well. Mr. Capezzuto, what incentives do either GA pilots or transport airlines have to install the avionics between 2013 and 2020 or between now and 2020 other than that they damn well better? Mr. Capezzuto. Okay, so, again working closely with the aviation community is a recognition that we believe there will be some benefits essential to the operations of the NAS, which translates into their operational capabilities. When we did the business case for this, it identifies pretty deep benefit pools in certain areas, and some of them are really ADS-B Out only, which I can say is in the economic analysis of the Notice of Proposed Rulemaking. Essentially, the translation of air traffic control efficiency is a function of having more accurate information, higher update information, which translates into less deviations, which again is fuel savings. That is a pretty big thing, but it also translates into emissions as well. When you look at the concept of emissions, noise and fuel savings, we make a pretty good, robust case for just ADS-B Out. Certainly, in the en route environment, high altitude airspace and some in the terminal environment, and in the non- radar airspace is really where we get to see some of those benefits earlier, such as the Gulf of Mexico, Alaska and Colorado. Those are primary areas where we could exploit this earlier on. Fundamentally, putting this building block in place allows us to have a stable baseline to build ADS-B In. That is the key to NextGen. Mr. Larsen. Sure. Is FAA then planning on proposing any specific set of incentives to enhance deployability of ADS-B In to get them all right here? Mr. Capezzuto. Yes, and the example I will use would be in Alaska. In our business case, we have outlined where you will have better access to certain airports. This is not just about ADS-B. We are also providing weather at the destination airport. In some cases in the Gulf of Mexico, we are putting in surveillance, communications and weather, so it is a full service provision to deliver to the Houston center. In that case, we are able to develop new routes. We are calling them performance routes. Mr. Larsen. Sure. So what kind of discussions have you had with larger aircraft regarding the--sorry, I am getting distracted by that vote call. What specific conversations have you had with larger aircraft like the Boeings of the world about retrofitting as well as discussions about putting them in on the front end? Mr. Capezzuto. We have had some very robust discussions with Boeing and Airbus. We have been involved with the manufacturers of the actual equipment like Rockwell Collins. Mr. Larsen. Can you give us a flavor of the content of those discussions? Mr. Capezzuto. Sure. They are members of this ATMAC, Air Traffic Management Advisory Council, ADS-B Work Group. We, essentially, have been developing the strategy for execution for the last 16 months. In those discussions is the challenge of what is out there today and can you use what is out there today. As I indicated earlier, people have been deploying ADS-B to a lesser standard. The question is, in the time frame over the next 10 years, are there things we can do with that to keep continue leveraging of the ADS-B, traction, if you want to call it that, but, essentially, also we were able to acquire those costs and embed them into the economic analysis both for the business case and the NPRM. We have worked closely with the industry to make sure that we have certainty around the numbers that you see, and so therefore you are looking at what I would say is a very strong business case in the sense that we believe the data that is in there. The return on investment time frame is a little scary when you look at it, but this is a building block. It is an infrastructure improvement, and those have long returns on investment. Essentially, we are not taking credit for all the future capabilities that are out there either, and that is really the place that we want to explore. Mr. Larsen. I would enjoy exploring that with Mr. Scovel when I have another five minutes. Thank you. Mr. Costello. I thank the gentleman. The Chair will announce that we have two votes on the floor. We have about 13 minutes left. At this time, I will recognize Mr. Duncan from Tennessee. After his questioning is over, then we will recess, go to the floor, vote and be back in approximately 30 minutes. So we would ask the witnesses to stay, if you would, and we have at least one other round of questions. Mr. Duncan is recognized. Mr. Duncan. Well, thank you, Mr. Chairman. I don't believe I am going to have enough time to really get into this, so maybe I can come back and do this, but I will start with this. Mr. Capezzuto, I don't think there is anybody in the Congress, even the pilots, who have the details or maybe even the capability to really do the rigorous analysis of this deal that we have to hope that your team has done. So we have to rely on you. But, in the hopes that maybe I can understand it a little bit better, it says in one of our papers on this: The total value of the contract, which has a number of options extending through 2025, is $1.86 billion. Segment one is a $207 million cost plus incentive fee contract. Can you tell me, $207 million, is that the maximum cost of Segment one or will the incentives add a lot of money to that? I am not really clear from that sentence. Mr. Capezzuto. That 207 represents a target fee of 8 percent that is included in that number. I just want to point out this is a cost plus incentive fee with a cost-share clause as well. So, if they overrun, not only does the fee go down, it can go as low as 4 percent, but they will also start paying for the cost overrun as well. Mr. Duncan. In your team's analysis of this, how much markup or how much profit do you think is in there for this? I have never seen a team quite this elaborate, involving this many big companies and so forth, anyway. Mr. Capezzuto. That fee translates to $15 million out of $207 million. Mr. Duncan. Fifteen million. Mr. Capezzuto. Yes, sir. Mr. Duncan. Is that pretty consistent through the remaining $1.86 billion, would you say? Mr. Capezzuto. No. We broke this up into like a hybrid set of contracts. What you have for the first one is a cost plus incentive fee with a cost-share because it is a development contract. So there is some risk there, and we want to make sure we design in the safety and security we mentioned earlier. We participate in that. All the other deliverables are firm fixed price, and they are pre-negotiated, and they are in the contract now. Mr. Duncan. Then I am also curious. It says the total value of the contract is $1.86 billion, yet we are talking about a contract that extends to 2025. Now in the STARS program and some of these programs in the past, we have had huge cost overruns. How did you analyze it because we don't really know where we are going to be in 2020, financially? I mean we don't know what inflation is going to happen or going to have occurred in all that time. What has gone into that? How did you arrive at that $1.86 billion? Maybe I just better come back for this. Mr. Costello. We have a little over nine minutes left, so if you want to take that. Mr. Duncan. Okay, well, go ahead. You see what I am getting at, I think. Mr. Capezzuto. I do. Essentially, what we do is we negotiate with the vendor, and we look at their outlay versus what we had done in our independent Government cost estimate. We negotiate those prices. We set up option break points. So the subscription charges they would be applying to us are on an annual basis. Essentially, what we do is we would be paying them on an annual basis once we prove the design works. Just to point out, the FAA would own the paper design of this system. At the end of the day, the configuration of that system is ours. We manage it. As we move forward, we essentially would be turning on service volume. We are buying this like you buy cable TV or a cell phone. You are turning on service volumes, and once you turn them on, you pay annual prices on it. What we do is we have break points. At 2016, is a decision point on whether or not we continue paying those subscriptions for all the service volumes because they should all be turned on, and then another break point at 2021. Mr. Duncan. How confident are you that by the year 2025, we have spent no more than $1.86 billion on this contract? Mr. Capezzuto. Well, the reason we have a lot of confidence in this is we built in penalties as well. So it is a function of them delivering the service as we measure. Mr. Duncan. Let me ask one more quick question. We read all the time that in these defense contractors, they hire all the retired admirals and generals, and then, boy, they get just exorbitant, whopping profits in almost all these big defense contracts. Mr. Scovel, have you looked into how many former FAA employees or would you look into that sometime and see how many are working for these companies that are involved in these contracts? I think it would be something interesting for you to look at sometime. I yield back, Mr. Chairman. Mr. Costello. I thank the gentleman. At this time, the Subcommittee will stand in recess for 30 minutes. We would ask the witnesses to be back at the table. We do have three votes now. It was two votes a minute ago. Now it is three. So it is about 30 minutes. The Subcommittee stands in recess. [Recess.] Mr. Costello. The Subcommittee will come to order. It looks like we have a few Members that are coming back. We will start on a second round of questions. Vinny, let me ask you why the rulemaking is at 2020 as opposed to 2019 or 2021. How did you arrive at the year 2020? Mr. Capezzuto. Essentially, we took a look at the amount of aircraft that would have to be retrofitted. If you look at the GA community with 200,000 aircraft, even with 10 years, that is 20,000 aircraft a year that would have to be retrofitted. So that is a fairly aggressive schedule actually. That was pretty much one of the drivers. The other component was we wanted to work with industry and demonstrate that we were going to make this investment and not pull away. This has been brought to our attention as something that they were concerned with. So we did the best we could to lay out an aggressive schedule to put that ground infrastructure in place, and the best we came up with was 2013. Technically, you would equip. You would want to see that ground infrastructure in place as well, so the capabilities are there starting in 2010. We will be putting in the ground infrastructure--this is the uplink capability--but by 2013, it will be completed. So, really, you are looking at seven years of using the service nationwide. Mr. Costello. I am going to ask you a couple of questions about how Mr. Scovel complimented the FAA for the contract and said it is a robust contract, and I want to talk a little bit about that in a second. Just for the record and so the Subcommittee Members know, in putting the contract together as far as ITT's responsibilities and what needs to be accomplished and time lines and targets, who else was consulted in the process? PASS is represented here, Mr. Brantley at the table. He has 11,000 members that he represented. The air traffic controllers are an integral part of operating this system once it is up and running. I wonder if you would tell how much input the agencies and stakeholders here were involved? Mr. Capezzuto. Sure. As I mentioned earlier, when we set up the program office for implementation which was approximately January 2006, one of the first things we did was develop a governance structure. In that governance structure, we have stakeholders which essentially are internal to the FAA both on the regulatory side and the Air Traffic Organization. So you have people from airports involved. We have our safety oversight organization, the people that put together the economic analysis, our policy people for the NPRM and, on the ATO side, essentially, all the vice presidents for the Air Traffic Organization. Once a month, we meet. We, essentially, bring the program issues to the table and we discuss things and consolidate on an answer. The other piece of that governance structure is also the ATMAC which started in February 2006. The Air Traffic Management Advisory Council, essentially the steering group, established us as a work group and then that is where we meet once a month over at RTCA. Typically, what we are doing is we develop the strategy. Those strategies are basically the interdependencies of the program, and the things that were in the contract basically are peeled out from that. Additionally, what we did is by June 2006, we had gone for our first investment analysis, which really was a strong signal that we were funded to move forward with ADS-B. Starting at that point in June, 2006, we had our first industry day, and we had three of those industry days where we worked with the manufacturers, the people that came to the industry days and solicited information. We presented and had dialogue and all this kind of merged together to create the product as you see in the contract. Mr. Costello. Mr. Brantley, we would like to hear from you as well. Were either you, personally, or your organization or your members consulted? Mr. Brantley. No, Mr. Chairman, we weren't. With respect to modernization efforts, we would very much like to be involved. I think our members have a lot to offer the Agency, but beginning about four years ago the Agency informed us that our participation was no longer welcome or needed and we have not been involved since. Prior to that, we were involved in the ADS-B program. Mr. Costello. But somewhere around three or four years ago, you were told that you were no longer welcome. Mr. Brantley. Yes, sir. Mr. Costello. I wonder if you would respond to that. Mr. Capezzuto. Sure, I would like to actually. Prior to the implementation phase, moving forward, so September 2005, was a key decision point for the FAA to select ADS-B as the technology and move forward. Prior to that was the test and demonstration work that occurred up in Alaska. In fact, what we developed there is certified by PASS. Our employees were involved with the development of certification process and procedures for those particular elements that validated the requirements. That is what basically gave the confidence in moving forward in selecting ADS-B over radar and over multilateration at that point in time. Those were the three alternatives. At the conclusion of that investment decision, we moved forward, and basically they moved into implementation and set up a program office. So we have been in, I would say, a planning state since January 2006, up until this point. We have gone through three additional joint resource councils, which are investment decisions, that acquired the funding for the full program to award the contract. So, all the requirements that we are talking about were validated in the test and demonstration phase with the use of the employees of the FAA. Mr. Costello. It is troubling to me, personally, and I think to other Members of this Committee. We have held hearings on the flight service station contract with Lockheed Martin. We have held hearings on the issue of safety in the workplace and air traffic control towers and other FAA facilities. It has been apparent in the past that when the Administration is making decisions that they are not consulting with all of the stakeholders, and I think that was noted by both the GAO and I think maybe even Mr. Scovel's predecessor and maybe even Mr. Scovel. I don't want to speak for you. There is a disconnect, and I just had that discussion with a few Members of this Subcommittee earlier today. You are not the person that can correct that problem, but certainly we need to take that up with the Acting Administrator. It is troubling, and it is not in the best interest of what we want as the final product in improving, in this case, the air traffic control system. Let me ask Mr. Scovel a final question. In your testimony, you indicate that ITT will have a monopoly over providing ADS-B services for the next 18 years. I wonder if you might talk a little bit about your concerns regarding competition and consumer issues as a result of one contractor that will be in charge and have, I think in your words, a monopoly over the ADS-B services for the next 18 years. Mr. Scovel. Yes, Mr. Chairman, ITT will have virtually a monopoly over the service, the information that is generated through the ADS-B system. FAA owns the data, but through the contract, FAA has consented to ITT being able to market, to package, to sell that data to users who might be interested. They might include air carriers. Our information is that UPS indicated they would certainly be interested, airports as well. Then they would find a multitude of uses, and we know that ITT is certainly looking on that prospect favorably. As a policy decision, the FAA and the Administration are certainly free to enter into a contract with these terms. We do have concerns about the nature of the data that is being transmitted, that is being permitted to be used in this fashion, perhaps marketing concerns as well with competition factors. We would urge FAA to examine and carefully regulate, if appropriate, this use of data generated by the contract as it goes forward. Mr. Costello. I thank you. The Chair now recognizes the Ranking Member, Mr. Petri. Mr. Petri. Thank you very much. I am not sure if more than one member of the panel may want to address this subject, but we are all pretty familiar with the radar-based system and all of the NORAD and all the different things that we have in place to try to provide security in our airspace. How will this new system work? Is there a separate system. Has this been scrutinized? Are there ways this will enhance our security or help us to deal with unauthorized entrance into our airspace more effectively and this kind of thing? Mr. Capezzuto. As part of the governance structure I mentioned earlier, DoD participates at the stakeholders' meeting that we discussed, and our involvement with them is looking at ways that we could exploit the technology. Specific applications that have been coming up are right here in the ADIZ, the Air Defense Identification Zone, where if you are ADS-B equipped, it is obvious who you are. You have your identification, and therefore you can exploit that as knowing they are friendly as opposed to worrying if they are foe, the same thing in their special use airspace or the military operations area. So there are ways of exploiting the capability of identification coming off the aircraft now and being able to take advantage of it. Mr. Petri. Staff tells me they are worrying about people pretending to be someone else or spoofing, I guess. I guess we don't want to go into what you do, but do you have ways of dealing with spoofers? Mr. Capezzuto. Correct. In the specification, it is called out that you have to have a means for independent validation of the actual aircraft that we are surveilling. So that means they have to have another method that is independent of using ADS-B. The concern with spoofing deals with the power level of the signal that comes down from the satellite, which is very low, and you can perturb it and you can make it to look like something else. So it is vulnerable from that angle. What we have requested in the specification is that we have independent validation of those targets. To point out, they can do that with their own means, the contractor can, but we also have our radars in place. When you combine all that information, you are able to validate that that target truly is who they are. Mr. Costello. The Chair recognizes the gentleman from North Carolina, Mr. Hayes. Mr. Hayes. I will pass. Mr. Costello. The gentleman from Michigan is recognized, and we will just give him his time and not yours, Mr. Hayes. How is that? Mr. Ehlers is recognized? Mr. Ehlers. Thank you, Mr. Costello. I apologize for the late arrival, but I was at another Committee meeting where I am the Ranking Member, and I had to be there. Fortunately, they gave up when votes came, so I dashed over here. Mr. Hayes, I understand has already played his usual role as a staunch defender of general aviation, but there is one specific question I wanted to ask to see if you have any guidance on. There are a great many older general aviation planes around, Cessnas 152, 172, 182, some older and some more recent. I think ADS-B is a great thing and, as a student pilot, I would love to have it because it is very hard today to operate the aircraft and be aware of all the airplanes around you. But I am concerned about the cost. If you have a airplane that is worth only twenty to forty thousand dollars, you think twice about adding to much to it. Plus, many of these planes are owned by individuals who don't have high incomes. If they had higher incomes, they would buy better airplanes. Can you give me a ballpark figure of what the cost is going to be for someone trying to put an ADS-B unit in an older airplane like that? I know that it will be easy to make the transition, but I still worry about the cost. Can you give me any figures on that? Mr. Capezzuto. I understand your concerns on that. In fact, Alaska probably provides us with the best image of what that was because there were over 400 aircraft that got retrofitted, and some of these were the type that it wasn't just about putting in a new piece of equipment. You had to make major modifications to the panel, wiring, antennas. So all that provided us with rich information to get a good feel for it. You hear us using numbers that are like 10K to 18K, and when we say the 18K, you are really pushing that. That is the ones that were more invasive to the actual aircraft. Also, I would suggest that as we start this off, the early adopters are going to end up probably paying a little bit more, but over time I think the market forces will lower those prices. We are speculating somewhere on the order of 30 percent reduction. Mr. Ehlers. Are you saying that about 10K would put the basic unit in the average plane? Mr. Capezzuto. For the general aviation type aircraft. Mr. Ehlers. Yes, right. Okay, so the 30 percent off that would get it down to roughly $7,000. Okay. Thank you very much. That is helpful. I will be happy to yield the remainder of my time to Mr. Hayes. Mr. Hayes. Thank you, Mr. Chairman and Mr. Ehlers. Vinny, you are working for the Government. We don't want any more $600 hammers now. Six thousand dollars you can get the box six months ago. It has gone down since then. We don't want to mislead people. Vinny, what I want you to talk about is the level of equipage. You can equip so that you can transmit. You don't have to have an extensive multifunction display to receive. There is a lot of angst among the aviation community because of what the FAA has done to them in the past. We better not do it to them again here. So talk about the levels of equipage, if you are going to be a transmitting ADS-B guy, transmit and receive and on up, if you would talk about that a little bit. Mr. Capezzuto. You have heard the terms earlier called ADS- B Out and ADS-B In. ADS-B Out is you can just have the pure function of transmitting your information. The new services that can be provided are basically expanding our service volume. So today radars have floors, and they don't see below the floors. In places like Alaska, we learned that you can't see below the radar. You are basically doing procedural separation. With ADS-B and the way we deploy the infrastructure, ADS-B Out can now feed the air traffic controllers where they can provide air traffic control separation services. So that is an example of just utilizing ADS-B Out. Other examples of applications for ADS-B Out would be search and rescue. There is definitely improvement in that case. In Embry-Riddle, they could use it just strictly for collecting the data on the ground and then replaying it for looking at how their student pilots are doing and use it for training purposes. Now you bring it to the next level, ADS-B In is, if I am transmitting out information, that is an enabler for other aircraft to receive it and display it. That is where you get that increased situational awareness. So not only can you see traffic, but now we have the opportunity to upload weather to the cockpit, and so you are talking about the ADS-B components essentially providing more information into the cockpit to increase the situational awareness, which translates into safety. Mr. Hayes. Thank you, Mr. Chairman. Can I carry on? Vinny, you are talking over our heads again. What I am looking for is a handheld unit for $1,295, out and in. It is certainly possible. This is a BlackBerry, sitting out there on the ground at National Airport, looking at the weather over at Montebello, knowing exactly what is going on despite what the guy in the front is telling us. This kind of technology, given competition, is absolutely in my opinion, if handled properly, again because people want it and because Mr. Kefaliotis and other manufacturers have a 220,000 customers base that they want to sell to. That is what I am anticipating that we want to do. Again, the various ways that we can incentivize folks to equip, AOPA was talking during our break period about ways that we can use the system more effectively. My question for you and Mr. Kefaliotis is under the contract, it doesn't speak directly to the fact that if you want another unit in Grand Rapids, a ground station, and they don't have one, what would be the process and does the contract allow for that increased coverage using the same ADS and AWARS and all that routine? Hey, we need it. FAA, can you help us? How would you deal with that under the contract? Mr. Capezzuto. The contract was set up in a very flexible manner. Two things that occurred this year: In some of the reauthorization language, there was discussion about using airport improvement funds for airports to acquire the ground infrastructure. What that does is provide the expansion of our ground infrastructure beyond our baseline. It also would accommodate possibilities of acquiring the radios that you would use in vehicles such as your fire trucks and safety vehicles. Then the contract has in it what we call generic service volumes. So we would be able to use funds from other sources to essentially purchase this capability, and then we have multiple ways of taking airport improvement funds and funneling it through this contract vehicle so that you can open new service volumes. Mr. Hayes. So 220,000 customers just went almost into infinity. I mean basically in terms of users. Of course, for a ground vehicle, you wouldn't have the same requirements as a multifunction display. I was giving Mr. Petri a hard time about high definition TV. I don't have one of those. I don't know how to work it. I do know you don't need a multifunction display in your pickup truck that is on the airport, but if you want it, you could put it there. So folks that are sport pilots and things like that, they should be able to transmit for a very inexpensive figure. Everybody agree with that? Again, Mr. Brantley, we have not forgotten you. The Chairman was absolutely correct. We got to have everybody onboard if the general public, and that is who is involved here, is going to benefit to the maximum amount. I don't know whether the clock is going up or down. I yield back, Mr. Chairman. Mr. Costello. I thank the gentleman. Just a final question for Mr. Scovel and I guess too, Mr. Capezzuto, maybe you can comment as well. Mr. Scovel, in your written testimony, you have a chart in here, Table 1 ADS-B Key Milestones. Of course, you have project completion date of October, 2007 for the NPRM issued and second is February of 2008, critical design review for the ground system. Then August of 2008, the key site initial operating capacity of broadcast service at Fort Myers. From your standpoint, when is the next major project or the next major step in the completion of ADS-B that the FAA needs to be watching carefully and this Subcommittee needs to be watching carefully to see if, in fact, the contractor is performing as the contract calls for. Mr. Scovel. Mr. Chairman, I would pick the very first item that you mentioned off the list that appears in the chart in our written testimony. The notice of proposed rulemaking was issued a short while ago. The comments to that rule are due from industry in early January. Those comments should give us a pretty good indication of how industry views the long term prospects for this program. We know and FAA itself has identified for us, in its view, its primary risk being user acceptance and aircraft equipage. If those comments in response to the notice of proposed rulemaking come back and really hit that point hard and pound it home, then we will know that FAA has an uphill job in properly executing the contract. We are confident that industry recognizes the potential, but it is rather the timetable, the mandate and the articulation of the user benefits, long term, which really will result from ADS-B In. We should see some of those indications in their comments to the proposed rule. Mr. Costello. In the legislation that we passed out of the House, H.R. 2881, in that legislation, we asked the IG's Office to submit an annual report to the Congress concerning ADS-B. I am wondering when is the next scheduled report that you are to submit to the Congress on ADS-B? Mr. Scovel. I will need to check with my staff, sir, and get back with you on that. I don't have it readily available. We are certainly prepared and look forward to meeting the Committee's requests. Mr. Costello. I thank you. Mr. Hayes, if you have further questions, I would be happy to allow you more time. Mr. Hayes. Thank you, Mr. Chairman. I think it would be very instructive for those of us who remain for this video to be shown. It graphically demonstrates the space and the time savings involved in ADS-B, so if you wouldn't mind. The other thing is when I was in Alaska the last time, is it Dan Hill in Alaska, Vinny, that is supervisor at Anchorage, or Jim Hill? Jim Hill, he took me through and met with the controllers and supervisors and the FAA. It was fascinating because the test area initially is in Bethel, Alaska. If you will put up a map of Alaska in your mind, it is a huge area in the Yukon and Kuskokwim delta area, a tremendous amount of fishing, a lot of airplanes, fish spotting. One of the controllers' brother works there in an airplane. So the combination of the controller seeing it from the inside and the brother with the airplane and the difference in time with the airplane that is equipped in being able to land under low visibility conditions was dramatic. These are real world examples. Again, where we are in uncontrolled airspace like Mr. Salazar was talking about in Colorado, it gives you a shot in the arm, not a NASCAR shot, just a shot in the arm. I think this would be very helpful. Could you run that for us, Vinny, and tell us what you are showing us? [Referenced video played.] Mr. Capezzuto. Okay, what you are looking at is basically the airspace that is considered oceanic. As you look at that light shaded, blue area, that is about 100,000 square miles of what we call oceanic airspace. And so, as you see aircraft leaving either out of Mexico, what you are seeing is that is radar coverage up to the light blue area. Once they go into that light blue area, what we do is we sanitize the airspace around the aircraft because we really don't have any surveillance capability. That is about 120 miles behind an aircraft and then 50 miles on either side of it. So that is a fairly large volume of airspace that is considered sanitized. From a safety perspective, that is great, but we could make better use of that airspace. As they approach on the United States coast, you will also notice that we pick them up in radar coverage. This gives you an example of the capacity constrained by our separation standards as a function of keeping safe separation between the aircraft. Then to point out, there is also a whole lot of low altitude activity going on, and it goes pretty far out as well because they are doing deep oil exploration. There are a lot of platforms on the base underneath this, and we would like to exploit those platforms and deploy our ADS-B infrastructure. Again, that is something we could not accomplish with radars. We have these nice, tight, small units that can be deployed on the oil platforms, providing services now that you can see that we can clearly put five mile separation. So you have increased capacity. You have reduced ground delays. You provide surveillance not only for the high altitude but you are also providing it for the low altitude. Now we can provide or extend our surveillance capabilities offshore, 200 miles out and provide the helicopter operators with surveillance. As I mentioned, this was kind of a win-win situation. We worked closely with the Helicopter Association International to get access to those platforms. In kind contributions from them are providing the transportation, the electricity, the telecommunications and the space, and that is probably some of the most highly priced real estate in the world plus getting access on those platforms. It worked out to be a pretty good deal where they gave us access. We were able to deploy our infrastructure or will be able to deploy our infrastructure. It will give us high altitude capability and low altitude capability. Mr. Hayes. You can do that in other places where you don't have radar as well. Mr. Capezzuto. That is correct. Mr. Hayes. Pacific, Atlantic, Colorado, Alaska. Mr. Capezzuto. Absolutely. Mr. Costello. Very good. Mr. Ehlers, any other comment or question? Mr. Ehlers. As soon as they get down to 500 bucks, I will be first in line to buy one, but I first have to buy the airplane too. [Laughter.] Mr. Costello. We thank all of you for being here to testify and to answer our questions. This is an issue that we will be following very closely as I know the Inspector General and the FAA will. We, of course, all have the same goal in mind, and that is to get the system up and running, implement it and get the maximum use of it as early as we possibly can. The FAA, quite frankly, not only this Administration but previous administrations, they do not have the best track record in following through on contracts and monitoring them. We hope that will not be the case with ITT and with ADS-B. It will be the responsibility of the FAA to monitor it, to make sure that ITT is performing. It will be our responsibility in this Subcommittee to provide aggressive oversight to make certain that the contract is being followed and implemented as it is spelled out and to make certain that the FAA is providing the right oversight as well. With that, we thank the witnesses, and the Subcommittee stands adjourned. [Whereupon, at 4:25 p.m., the Subcommittee was adjourned.] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]