More stories of long FSS hold times and another issue

On Sat, 12 May 2007 23:21:14 -0400, "Peter R."
wrote in :

On 5/12/2007 9:03:10 AM, Nathan Young wrote:

Last time you posted, I commented that I had NEVER in 13 years of
flying waited more than 1 minute for the Kanakee FSS. Well, of course
that changed within a few days - specifically, the next time I went
flying. I held on the phone for 5 minutes, eventually hung up and
went flying in the local area.

Sorry to read that. Thank big business for that change, I guess.

This is getting interesting:

LOCKHEED MARTIN WANTS MORE FSS MONEY
(http://www.avweb.com/eletter/archive...ll.html#195180)
Lockheed Martin is looking for a 10-percent increase in the fees
it's being paid to take over flight services. According to a
report

(http://www.oig.dot.gov/StreamFile?fi...ment_w-508.pdf)
from the Department of Transportation's Office of Inspector
General, the company, which was awarded a $1.8 billion contract to
assume the function, says it's owed another $177 million, mostly
because the FAA didn't supply accurate labor cost information.
Lockheed Martin's claims are now being assessed. Meanwhile, the
DOT OIG also reported that the FAA has fined Lockheed Martin $9
million for failure to live up to service and performance
guarantees. Pilots in the Washington, D.C., area have recently
complained that FSS changes have resulted in a sharp increase in
dropped flight plans and that briefers, some of whom were in
California, didn't know the procedures for operations in
the Air Defense Identification Zone (ADIZ) that surrounds the
capital. The OIG is now preparing a report on FSS operations that
will be released later this month.
http://www.avweb.com/eletter/archive...ll.html#195180

As a prelude to ATC privatization, this issue does not inspire
confidence in either party.



http://www.oig.dot.gov/StreamFile?fi...ment_w-508.pdf
Verification of Labor Qualification and Rates: Labor costs
generally account for the largest portion of support service contract
costs. Our RESULTS audit and FAA’s own review identified incidents
when contractor staff did not meet the expected qualifications for
positions billed. For example, we found that an employee on a contract
was originally billed as an administrative assistant at an hourly rate
of $35. Four months later, the same employee was billed as an analyst
at an hourly rate of $71 without any proof of additional
qualifications. Verifying contract labor qualification for the rates
billed could potentially save FAA millions of dollars for support
services. Based on our RESULTS audit, and as part of an Agency-wide
initiative announced by the FAA Administrator to strengthen internal
controls over procurements, FAA reviewed one of its other
multiple-award programs, BITS II, and found similar problems. For
example, FAA found evidence that multiple contractors had extensively
billed FAA for employees at labor rates that were higher than their
actual education and experience warranted, as specified by terms of
the contract. FAA referred this matter to us for investigation. In one
case, we found that a contractor invoiced FAA for the services of an
employee in the labor category of “Senior Management Analyst” at a
rate of $100 per hour, instead of the proper rate of $40 per hour
based on the employee’s qualifications. Specifically, the “Senior
Management Analyst” category required an individual with 12 years of
direct experience, yet the employee in question had only 2 years of
experience. As a result of our investigation to date, 12 of 13
contractors have agreed to repay a total of $7.9 million in inflated
billings under administrative settlements with FAA. Review of
Contractor-Proposed Prices: Our audit found that FAA awarded contracts
without sufficient competition and price analyses. FAA now requires
that the Deputy Administrator approve all new contracts valued over $1
million that are awarded on a sole-source basis. While this is a step
in the right direction, FAA still needs to strengthen its review of
contractor-proposed prices. When facing inadequate competition from
bidding contractors, FAA’s contracting officers are required to
perform a price analysis to assess the fairness of contractor-proposed
prices. We 18 OIG Report Number FI-2006-072, “Audit of the Federal
Aviation Administration’s RESULTS National Contracting Service,”
September 21, 2006.
26
found that this control was not working in many incidents. For
example, we found a case where the Independent Government Cost
Estimate was prepared by the contractor to whom the contract was
awarded. We plan to follow up on FAA’s use of price and cost analysis
techniques to ensure the reasonableness of prices in contract
proposals. Controls Over the Conversion of Flight Service Stations to
Contract Operations On February 1, 2005, FAA awarded a 5-year,
fixed-price incentive contract (with 5 additional option years) to
Lockheed Martin to operate the Agency’s 58 flight service stations in
the continental United States, Puerto Rico, and Hawaii. The contract,
worth about $1.8 billion, represents one of the largest non-defense
outsourcing of services in the Federal Government. FAA anticipates
that by contracting out flight service facilities, it will save $2.2
billion over the 10-year life of the agreement. On October 4, 2005,
Lockheed Martin took over operations at the 58 flight service
stations. We are currently conducting a review of FAA’s controls over
the conversion of flight service stations to contract operations. We
plan on issuing our interim report later this month. Overall, we found
that FAA has implemented effective controls over the initial
transition of flight service stations to contract operations. These
controls include contractual performance measures that require the
contractor to achieve acceptable levels of operational performance and
service and internal mechanisms that oversee the operational and
financial aspects of the program. We also found that the Agency uses
these controls to monitor contract flight service stations and, in
some cases, penalizes the contractor for poor performance. To date,
FAA has imposed approximately $9 million in financial penalties
against the contractor for failing several contractual performance
measures. FAA is requiring the contractor to submit corrective action
plans to resolve the deficient performance measures. In addition, FAA
and the contractor are now entering the next and most critical phase
of the transition. In February, the contractor began efforts to
complete, test, and implement a new software operating system for
flight service stations and consolidate the existing 58 sites into 3
hub and 16 refurbished locations—all by the end of July.19 Any slips
in that schedule could have significant implications to the costs and
anticipated savings of the transition. 19 One facility, which was
originally planned to be refurbished, will now remain open until the
end of the year; it will then be consolidated into the Leesburg hub.
27
In addition, FAA could be facing further reductions to savings as
Lockheed Martin is requesting nearly $177 million in equitable
adjustments to the contract. Most of that adjustment ($147 million) is
based on the contractor’s claim that it was not provided the correct
labor rates when it submitted its bid. In April, FAA provided us with
the first of its planned annual variance reports comparing estimated
and actual first-year costs. This is an important tool in that it will
allow FAA to identify cost overruns, determine the reasons for the
overruns, and allow for adjustments to ensure that savings are
realized. We are currently reviewing the completed variance report and
assessing the contractor’s progress in executing the next phase of the
transition.

Totals: The total NextGen funding projected for this period is
$4,334,700,000. The total Remaining Facilities and Equipment Funds
projected for this period are $11,059,700,000. The grand total
(NextGen Funding plus Remaining Facilities and Equipment Funds) is
$15,394,400,000. Note: NextGen Funding includes the Automatic
Dependent Surveillance-Broadcast Program, the System Wide Information
Management Program, and future projects supporting NextGen. Remaining
Facilities and Equipment funds include funding for the existing
projects, facilities, and support service contracts. Total NextGen
Fiscal Year 2008 to Fiscal Year 2012 from the capital account is $4.3
billion. Source: FAA National Airspace System Capital Investment Plan
FY 2008 to FY 2012