GSA Schedule Contract GS-23F-9763H
Contract No: DTFA01-02-F-10135
Task Order No: 001



 

Grant Thornton

Table of Contents

SECTION 1.    INTRODUCTION................................................1
  1.1. Background.........................................................1
  1.2. Purpose of Feasibility Study.......................................1
SECTION 2.    METHODOLOGY.................................................2
SECTION 3.    ANALYSIS AND FINDINGS.......................................4
  3.1. Step 1: Identify Activities to Consider for Competition............4
  3.2. Step 2: Establish Criteria to Evaluate Feasibility.................4
    3.2.1. Criteria Selection.............................................4
    3.2.2. Tier Structure and Weightings..................................6
  3.3. Step 3: Test Criteria and Conduct Market Research..................7
    3.3.1. Test Criteria..................................................7
    3.3.2. Conduct Market Research........................................8
      3.3.2.1. Market Research Participants...............................9
      3.3.2.2. Market Survey Results.....................................10
  3.4. Step 4: Assess Feasibility of Competing Activities................11
    3.4.1. Criteria Scoring..............................................11
    3.4.2. Weighted Average Score and Scale..............................12
    3.4.3. Criteria Scoring Results......................................12
  3.5. Step 5: Recommend Activities to Compete...........................14
SECTION 4. SUMMARY OF RESULTS............................................13
  4.1. Overall Feasibility Results.......................................14
  4.2. Issues and Assumptions............................................17
SECTION 5. RECOMMENDATIONS AND NEXT STEPS................................19

Figures and Tables:

Figure 1: Approach to Performing Feasibility Study........................2
Figure 2: Tier Structure and Weightings...................................7
Figure 3: Feasibility Scale..............................................12

Table 1: Feasibility Study Criteria and Description.......................5
Table 2: Feasibility Study Criteria and Questions for Evaluation..........6
Table 3: Criteria Response Matrix.........................................8
Table 4: Industry Availability Responses.................................10
Table 5: Criteria Scores.................................................13
Table 6: Feasibility Results.............................................14

Appendices:
 

Appendix A: Activity Task Listing.......................................A-1
Appendix B: Criteria Evaluation Worksheets..............................B-1
Appendix C: Company Market Surveys......................................C-1

Appendices not yet available online.
 

1.1. Background

The Federal Aviation Administration (FAA) proposes to conduct a competitive sourcing study of the Flight Service Station 0FSS)/Automated Flight Service Station (AFSS) function (from here forward referred to as FSS) in accordance with Office of Management and Budget (OMB) Circular A-76 policy. A competitive sourcing study will determine whether it is more efficient and cost effective to have FSS functions performed by FAA employees or by a contractor. The Competitive Sourcing Initiative in the President's Management Agenda encourages all federal agencies to subject commercial functions, currently performed by government personnel, to competition from the private sector to drive improved performance and cost efficiency. This initiative requires that competitive sourcing studies be completed for 15% of the Fiscal Year (FY) 2000 FAA commercial activity inventory by the end of FY 2003.

The FSS function was proposed for competitive sourcing primarily as a result of conclusions reached in reports issued by the Office of Inspector General for Aviation. The Report on Automated Flight Service Stations: Significant Consolidation Benefits with OASIS, December 2001 stated that the FAA has an opportunity to significantly reduce costs if the current 61 FSS sites were consolidated in conjunction with the deployment of the Operational and Supportability Implementation System (OASIS). Another report, Management Advisory Memorandum on Acquisitions for Automated Flight Services, December 1996, recommended that the FAA explore innovative acquisition strategies for providing flight services. These reports suggest that current and future demand for flight services may be met with fewer FSS sites without compromising aviation safety.

In order for the FAA to realize maximum savings, it is important that a complete evaluation of FSS functions be conducted. One of the best methods of accomplishing this is by subjecting the function and infrastructure to competition, enabling market forces to drive efficiencies. This approach was deemed to be fairer since it allows for the Government workforce to compete for retaining the work in-house rather than direct conversion to a contract service provider. Consequently, it was determined that the FSS function was a strong candidate for competitive sourcing.

1.2. Purpose of Feasibility Study

Once FSS was proposed as a candidate for competitive sourcing, the next step was to determine the feasibility of successfully competing FSS activities with the private sector under an OMB A-76 cost comparison. Grant Thornton LLP was tasked to conduct a Feasibility Study, to help the FAA determine whether to proceed with competitively sourcing the FSS function. This report presents the methodology, feasibility criteria, and associated findings of Grant Thornton's analysis. The report also includes recommendations on which FSS activities should and should not be subjected to competitive sourcing. In addition, associated rationale to support such recommendations as well as other considerations that may be pertinent to or worthy of continued analysis are presented.
 

Figure 1. Approach to Performing Feasibility Study
 

Step 2: Establish Criteria to Evaluate Feasibility - This step includes identifying themes of criteria to be used as evaluation factors for testing the feasibility of each primary activity identified in Step l. For each criteria theme, a set of key questions is developed to capture the appropriate information necessary to perform the analysis. In addition, a weighted tier structure is created and each criteria question is weighted and assigned to a tier based on the level of impact it could have on feasibility. This step lays the foundation for how the analysis is performed.

Step 3: Test Criteria and Conduct Market Research - In this step, two forms of data collection are performed simultaneously. First, Grant Thornton works with FSS subject matter experts to respond to the criteria questions identified is Step 2 for each primary activity. Second, targeted commercial service providers are surveyed to assess market capability, interest, and experience. The end result of each activity provides the information necessary to perform the analysis described in Step 4.

Step 4: Assess Feasibility of Competing Activities - The criteria performance of each primary activity is scored using the methodology and guidelines set forth in the previous steps. An analysis is then performed to quantify the impact each criterion will have on the activities under study. The result is a weighted average score for each primary activity, which is measured against a scale to determine the feasibility of competing the activity.

Step 5: Recommend Activities to Compete - Using the analysis results of Step 4, a recommended list of primary activities that can be competed is derived in this step. In addition, recommendations on next steps are provided.
 

This section describes tile analysis Grant Thornton performed to conduct the Feasibility Study. Details on the analysis and findings for each step are outlined in this section of the report.

3.1. Step 1: Identify Activities to Consider for Competition

In this step, Grant Thornton created a list of the primary FSS activities to be considered for inclusion in the competitive sourcing study. We began this step by developing a list of FSS activities using the FY 2002 FAIR Act inventory that was currently under development. The list was then validated and referred through several facilitated workshop sessions with FSS subject matter experts from the FAA. The primary activities identified, and thus evaluated in this feasibility study include:

• Pre-flight pilot briefing services
• Services to aircraft in flight
• Search and rescue services
• Notices to Airmen 0NOTAM) (Note: For the purpose of this study, NOTAM was separated into Distant (D) and Local (L) and evaluated separately because of the direct affect NOTAM Ds have on the National Airspace System (NAS))
• Aviation weather and information broadcasting
• Navigation aid monitoring
• Weather observations
• En route flight advisory services (Flight Watch)
• Other FSS activities (e.g., provide international customs notifications, support other law enforcement agencies, coordinate with emergency facilities)

For each primary activity identified, we also defined specific tasks performed within each activity even though the feasibility analysis was performed at the primary activity level. This level of detail was necessary to aid in determining the feasibility of the function, because it was entirely possible that a specific task that was determined to be infeasible for study could have caused its entire primary activity to be deemed as infeasible for study depending on the importance of the specific task. It was through this identification process that we decided to separate NOTAM L and D for the purposes of this study. The specific tasks identified for each primary activity will also be useful for other phases of the competitive sourcing study. Appendix A provides a complete listing of the specific tasks.

3.2. Step 2: Establish Criteria to Evaluate Feasibility

3.2.1. Criteria Selection

After the primary activities were defined, specific criteria were established to evaluate the feasibility of subjecting the activities to competitive sourcing. The feasibility criteria are divided into four important themes: 1) Mission Accomplishment, 2) Industry Availability, 3) Security, and 4) Personnel. Table 1 depicts the criteria themes and describes the intended purpose for selecting them as evaluation factors for testing feasibility.
 

Table 1: Feasibility Study Criteria and Description

For each criteria theme, we then developed a set of key questions that would allow us to elicit the information necessary to evaluate the feasibility for each primary activity. The basic question is what aspects of a function or activity must be considered in determining whether or not it could be competed. The roundtable discussions we facilitated with FAA personnel and subsequent interviews with subject matter experts helped us refine the criteria themes and associated questions. Table 2 depicts the questions within each criteria theme that resulted from our roundtable discussions. When answered, these questions will allow us to determine the feasibility for each primary activity identified in the first step of the study.
 

1. Does the function mandate performance only by the Government?
2. Are there geographic concerns that affect how a function should be treated in different locations?
3. Are there any legal/liability issues that could have an impact on the ability of a commercial source to provide the service?
4. If the function requires certification, is certification available to contractor personnel?

1. Is there a commercial source available to provide the services?
2. Is there industry interest in submitting a proposal for the function being competed?
3. Are commercial sources currently providing these services?

1. Does the function represent a potential risk to homeland security?
2. Is security of government property compromised if contractor personnel perform the work?
3. Can a contractor provide necessary FSS services to military operations after normal duty hours?

1. Are there any human resource issues concerning the function that could have an impact on the feasibility of competing FSS services?

Table 2: Feasibility Study Criteria and Questions for Evaluation

While Table 2 represents the final set of criteria we used to evaluate overall feasibility, there were other criteria we evaluated that were purposely omitted. The primary reason for exclusion was that some of these criteria were evaluated to support the Business Case Analysis more than the Feasibility Assessment. We also dropped a few other criteria after undergoing a criteria-ranking exercise, which were deemed unfit to determine feasibility.

3.2.2. Tier Structure and Weightings

We recognized that not all of the criteria questions have the same weight or impact on the feasibility of competing a particular activity. For this reason, we designed a weighting scheme that enabled us to rank the criteria in order of importance. The "tier structure" we built is as follows:

Tier 1 - Criteria in this level can determine feasibility without consideration of other criteria in Tiers 2 and 3. In other words, if an activity does not pass these criteria, there is no need to further evaluate the feasibility because the activity will automatically be deemed not feasible to be competed.

Tier 2 - Criteria in this level significantly impact feasibility but must be evaluated with the consideration of other criteria. Failing to pass one question in this tier will not prevent an activity from being feasible, but it does warrant further evaluation and consideration based on the other criteria in Tiers 2 and 3.

Tier 3 - Criteria in this level have the lowest impacts on feasibility but are important to evaluate. These criteria cannot alone determine the feasibility but may have impacts based on the results from Tier 2 and other Tier 3 questions.

Using these definitions as guidelines, we then set the overall weightings for each tier and assigned the criteria to appropriate tiers. As Tier 1 definition suggests, those criteria questions that were considered "showstoppers" were assigned to this level. By applying a weighting of 50% to Tier 1, we assured that any primary activity that does not pass the criteria question in Tier 1 would in fact be a "No Go" even without taking into account any of the other criteria. We also ranked the criteria in order of importance and set the weightings within each tier, as indicated by the percentages under the criteria. By design, all of the criteria within each tier sum to 100%, as do the three weightings of Tiers l, 2, and 3. Figure 2 below depicts the tier structure and weightings, and outlines the specific criteria contained within each level.

Figure 2: Tier Structure and Weighting

3.3. Step 3: Test Criteria and Conduct Market Research

3.3.1. Test Criteria

In this phase, we collected relevant data to help test the feasibility of competing each primary activity defined. We accomplished this by conducting a workshop with subject matter experts from the FAA to address important issues, debate critical points, and obtain answers to the criteria questions defined in Section 3.2.1. All criteria were evaluated with direct input from FAA personnel with the exception of those in the industry Availability theme. The criteria in Industry Availability were assessed using the results of the Market Research, which is discussed in the next section. As Table 3 illustrates, the end product of this effort was a populated matrix, designed to capture whether a primary activity "passes" or "fails" the criteria test. This matrix was used as a primary, source, along with the market research results, for the feasibility analysis described in Section 3.4. Appendix B contains the detailed responses by FSS subject matter experts to each criteria question for all primary activities evaluated.

Table 3: Criteria Response Matrix

3.3.2. Conduct Market Research

Industry Availability is a key factor in determining the feasibility of competing FSS activities. For this reason, we conducted market research to evaluate the criteria within this theme. The instrument we used was a high-level
market survey designed to answer three primary questions:

1) Are there commercial sources available that have the capabilities to provide FSS services?

2) Are there commercial sources that would be interested in providing FSS services to the FAA?

3) Are there commercial sources currently in providing FSS services?

The survey details services currently performed by FSS personnel, such as pre-flight briefings and services to aircraft in flight, and captures whether the commercial source currently has the capability to provide each service.

Other questions addressed in the survey, which will be used in other parts of this competitive sourcing study (e.g. Business Case Analysis), include:

1. Does the commercial service have the capabilities to provide FSS services in the regions currently served by the FAA (e.g. central, eastern, etc.)?
2. What is the level of interest for the commercial course to bid on FSS services given some of the constraints?

   a) Service handling (i.e. one contract, for all services vs. separate contracts for individual or a combination of services)

   b) Geographic handling (i.e., one contract for all geographic locations vs. separate contracts for individual or a combination of geographic locations)

   c) Inclusion/exclusion of facilities and equipment maintenance

A total of 12 companies were targeted for market research and selected based on three different criteria:

1. Known industry leaders in aviation services
2. Candidates identified through independent research conducted by Grant Thornton
3. Candidates recommended by the FAA

The companies selected and pre-approved by the FAA were DynCorp, EDS, Harris, Lockheed Martin, Midwest Air Traffic Control Services, NAV Canada, Northrop Grumman, Raytheon, Robinson/Van Buren, SAIC, SERCO, and Signal Corporation. The survey was conducted by initially contacting the selected companies to determine participation interest and establish an appropriate point of contact. The point of contact was then sent a copy of the survey to prepare for a follow-up phone interview, during which we captured actual survey results and discussed other related topics. As the market research remits in this section will describe, the information and data collected from these companies were key inputs into our analysis and valuable in shaping the final remits of this feasibility study.

3.3.2.1. Market Research Participants

Of the 12 commercial sources we targeted for the market survey, three companies agreed to participate. These companies are Midwest Air Traffic Control Services, SAIC, and SERCO. Before the results of the market study are presented, a brief description of each company's background is provided.

Midwest Air Traffic Control Services, Inc. - has been providing air traffic control, weather observation and reporting, NAVAID reporting, and control tower equipment maintenance services since 1978. Midwest currently provides support and controls over three million annual aircraft movements at over sixty airports across the United States. Midwest currently has employees who are licensed and certified by the National Weather Service (NWS), Federal Communications Commission (FCC) and the FAA. Its key customers include the US Air Force, Air National Guard, the NW Arkansas Regional Airport, Salisbury-Wicomico County Airport and the Friedman Memorial Airport Air Traffic Control Tower.

SAIC - is the largest employee-owned research and engineering firm in the nation. SAIC and its subsidiaries have more than 40,000 employees with offices in over 150 cities worldwide. They are primarily an reformation systems and technology company, but provide various other services to clients in the health care, energy, and transportation industries. They currently assist the FAA in the development and modernization of civil aviation and the national airspace. They also provide air traffic control operations, system engineering and integration services, physical and information security, and information technology services to major clients such as the NASA, FAA, major airports, and major airliners.

SERCO - is a non-government provider of air traffic services, It operates on a global basis and handles about 6 million aircraft movements each year at 90 airports. It provides primary air traffic services including air traffic control to Civil Aviation Authority (CAA), FAA, Transport Canada and international Civil Aviation Organization (ICAO), air traffic engineering, meteorological services, aeronautical information services, aviation systems development and air traffic control training. SERCO is a publicly held corporation in the London Stock
Exchange and employs approximately 32,000 people. Its key customers include National Science Foundations, US Air National Guard, Canadian Department of National Defense, and Canadian Department of National Defense.

3.3.2.2. Market Survey Results

The primary objective of the market research was to obtain answers to criteria questions within the Industry Availability criteria theme discussed in previous sections. Specifically, the criteria questions were:

A. Commercial Capabilities: Is there a commercial source available to provide the services?
B. Commercial Interest: Is there industry interest in submitting a proposal for the function being competed?
C. Commercial Experience: Are commercial sources currently providing these services?

Overall, our market research findings support the feasibility of competing FSS activities based on these three criteria. Midwest, SAIC, and SERCO all indicated that they have the capabilities to provide and are currently providing, if not all, most of the primary activities identified in the FSS function. They also demonstrated strong interest in delivering FSS services to the FAA. For NOTAM D, SERCO indicated that it is currently providing this service to customers outside the United States. Table 4 provides the criteria evaluation results based on the survey responses received.
 

Table 4: Industry Availability Responses
 

• There appears to be interest in the industry to offer service packages that would include facilities and equipment maintenance through various contractual arrangements (e.g. Private Finance Initiative (PFI), whereby the FAA sold and leased-back the facilities and equipment)
• SERCO stated that it would consider providing the funding for consolidating sites into large FSS "centers" thereby reducing the total number of FSSs, as part of its offer package.
• Both Midwest and SERCO demonstrated stronger preference for bidding on one contract for all services or separate contracts for specific combinations of services than bidding on separate contracts for individual services. SERCO stated that taking on numerous contracts for individual services would be difficult to manage and limit opportunities to innovate because of the increased administrative workload associated with contract management.
• SAIC indicated that they would be willing to bid only if there was a single contract for the entire FSS infrastructure.
• All companies indicated that they have the capabilities to provide FSS services in all FAA regions.

See Appendix C for individual company survey results, which provide additional details on each company's capabilities, experience, and background.

3.4. Step 4: Assess Feasibility of Competing Activities

In this step, an analysis was performed to quantify the impact each criterion will have on the activity under study. The following sections describe the analytical methodology Grant Thornton applied and the results of this analysis.

3.4.1. Criteria Scoring

Using the tier structure and weightings, we scored the answer to each criteria question (i.e., results of Steps 3.3.1 and 3.3.2.2) for each primary activity. Each criteria test was given a score of either a "1" or a "0", where:

1 = Positive Impact on Feasibility to Compete
0 = Negative Impact on Feasibility to Compete.

Consequently, if the answer to a criteria question supported the feasibility to compete an activity, it received a score of 1. Conversely, if it did not support the feasibility to subject an activity to a competitive sourcing study, it received a score of 0. For example, if the question was asking whether a commercial source is available to provide FSS services, and the answer was "yes", it received a score of "1". If the answer to the question, "Does the function mandate performance only by the Government?" was "no" it still received a score of "1" because the end result is that it is feasible to study the activity in question based on this criterion. As these examples attempt to show, an answer "yes" did not always score a "l" and an answer "no" did not always score a "0".

3.4.2. Weighted Average Score and Scale

For each primary activity within the FSS function, a final score was calculated  to determine "Go" or "No Go" to whether the activity should be subjected to competitive sourcing. This number is a weighted average figure of all the scores the primary activity received in the criteria tests, using the weight percentages defined in Section 3.2.2. All final scores range from a scale of 0 to 1, where:

Figure 3: Feasibility Scale

We set 0.75 as the threshold for determining "Go" or "No Go". The rationale behind this is that a primary activity must "pass" the Tier 1 criteria, which is weighted at 50%, and achieve at least 25% "passing" rate within Tiers 2 and 3. By strategically assigning the percentages to each tier, the scoring system contains a built in mechanism to ensure a primary activity passes both the question in Tier 1 and at least half of the questions in Tier 2 and 3 to be considered feasible. Consequently, if a primary activity does not pass the question in Tier 1, the maximum score it can return is 0.50 even if it passes every other criterion in the other two tiers, and thus would be a "No Go". Conversely, if a primary activity does pass the question in Tier 1 but does not pass any of the criteria in Tiers 2 and 3, it also would return a final score of 0.50 and would still be a "No Go". The list of primary activities we identified as "Go" and "No Go" using this methodology is provided in Section 3.

3.4.3. Criteria Scoring Results

In the previous sections we described the scoring system, tier structure, assignment of criteria questions to appropriate tiers, and criteria ranking and weighting. This section brings all of these steps together including the results from the interviews with FAA personnel, the market research, and the scoring process. As discussed previously, the criteria questions were answered from multiple sources including market research and interviews with FAA subject matter experts. See Appendix B for FAA's detailed responses to criteria questions for all primary, activities evaluated.

Once we had the answers for each criteria question, we converted the results into scores using the "1" and "0' system explained in Section 3.4.1. in some cases, the criteria question was deemed to be "Not Applicable" for a particular primary activity. For example, for the question "If function requires certification, is certification available to contractor personnel?" the answer was "N/A" if there is no certification required for that primary activity. In those cases, a response of "N/A" reflects a positive response and thus was given a score of "l" during the conversion process. In the case where "N/A" meant the criteria question could not be scored for that particular primary activity, the weighting was distributed among the other questions in the tier. The following table portrays the scoring result for each primary activity and the weighted average score for each tier.

Table 5: Criteria Scores

In answering the criteria questions and developing the scores, we made the following set of assumptions:

1. Contractor personnel can obtain security clearances required to perform FSS work.
2. National Weather Service (NWS) certifications can be issued to contractor personnel for work related to weather observation.
3. Military operations will accept support from contractor personnel for the services FSS currently provides.
4. Commercial sources will have adequate liability coverage.
5. Foreign countries are willing to work with non-FAA employees (Note: This only applies to those FSS sites that have international interfaces.

3.5. Step 5: Recommend Activities to Compete

In this last step of the study, we developed a list of the primary FSS activities that can be included in the competitive sourcing study and those that cannot, based on the outcomes of the criteria evaluation described above. These specific results are provided in section 4.

Section 4. Summary of Results

This section provides the final results of the feasibility study Grant Thornton conducted, using the methodology and analysis outlined in Sections 2 and 3 above. It illustrates the final criteria evaluation scores and summarizes Grant Thornton's recommendations on activities that are and are not feasible for competitive sourcing. This section also discusses other issues and considerations that did not affect the outcome of the feasibility study but warrant further consideration in the Business Case Analysis or other phases of the competitive sourcing study.

4.1. Overall Feasibility Results

Once we had the weighted average score for each primary activity by tier, the next step was to calculate the Total Weighted Average Score for each activity across all tiers. Table 6 summarizes the scores for each primary activity across all the tiers and calculates the Total Weighted Average Score for each primary activity, taking into account the weights applied to each tier. Based on the Total Weighted Average Score, it also displays the results for each primary activity on whether it is a "Go" or a "No Go" depending on the 0.75 threshold.

Table 6. Feasibility Results

According to the results of the weighted average scoring system, the issuance of Notices to Airmen-Distant (NOTAM-Ds) is the only primary, activity performed by FSS personnel that is not feasible for further study. NOTAM D failed to pass the first tier because the nature of the work performed (e.g. obtaining, classifying, and formatting NOTAM Ds) in this area impacts the status of National Airspace System. For that reason, the activity mandates performance by the Government only. All other primary activities however scored high enough to be deemed feasible for competition, in some cases, there is a potential risk inherent in having the services provided by a commercial source, but those risks were not substantial enough to warrant excluding them from further study. For example, within a primary activity there may be a single task that could represent a risk to homeland security but overall, the primary activity is not inherently governmental. The following paragraphs provide detailed descriptions of the final results and supporting arguments for each primary activity.

Pre-flight Pilot Briefing Services
Pre-flight Pilot Briefing Services contains several tasks that have the potential to affect the overall feasibility of the activity. Some of the concerns include liability issues related to interpreting weather data, making Visual Flight Rules (VFR) Flight Not Recommended (VNR) recommendations, and air traffic clearance relays. The potential to compromise homeland security, a scenario that can be impacted by providing advisories on airspace status and military routes and disseminating NOTAMs, was another significant issue. After much consideration however, it was determined that the activity does not mandate performance by the Government only. For one, there are commercial sources that expressed great interest in providing Pre-flight Pilot Briefing Services and exhibited the capabilities to do so. Also, our market research findings suggest that commercial sources can obtain adequate coverage to mitigate the liability risks associated with this area. Consequently, the activity can be commercially provided if adequate security measures are taken and the contractor obtains appropriate levels of liability coverage. The stated concerns are reflected in the overall score for this activity through a lower score than many of the other activities. However, the final score does meet the 0.75 threshold and therefore the activity is considered feasible for further study.

Services to Aircraft in Flight
This primary activity contains many of the same tasks performed within Pre-flight Pilot Briefing Services. With that in mind, all of the same issues and concerns are relevant for this activity as well as the assumptions that were made. As with Pre-flight Pilot Briefing Services, the concerns, though significant, do not prevent the activity from being performed by a commercial source. As a result, Services to Aircraft in Flight received an overall score similar to that of Pre-flight Pilot Briefing Services, and therefore meets the threshold, making this activity feasible for further study.

Search and Rescue Services
Search and rescue services are presently supplemented by Civil Air Patrol (CAP), state and local police, and airport operations and are currently being performed by contractors elsewhere. Therefore, these services can be provided by a commercial source and do not require performance by the Government. Through our market research survey, industry expressed interest in and exhibited the capability to perform the services. These services do not present a risk to either homeland security or government property. While the largest issue regarding this activity is liability, commercial sources indicated that they possess adequate levels of insurance to address potential Liability issues. As a result, search and rescue services scored extremely high on the criteria evaluation scorecard and are determined to be feasible for further study.

Notices to Airmen - Local (NOTAM L)
Unlike NOTAM D's, the issuance of a NOTAM L does not modify or manipulate the NAS. While there are valid security concerns related to NOTAM L's, the assumption was made that requiring security clearance from commercial source personnel providing the services will mitigate the risk. NOTAM L's therefore do not mandate performance by the Government only and can be provided by a commercial source if liability and security concerns are properly addressed. There are no other significant concerns that would prevent a commercial source from providing the service and therefore the activity is feasible for further study.

Notices to Airmen - Distant (NOTAM D)
Although our market research suggests that there is industry capability and experience to provide NOTAM D services (e.g. SERCO provides NOTAM D services to customers abroad), it was determined that the NOTAM D activity mandates performance by the Government only. This is due to the reason that the nature of the work (i.e. obtaining, classifying, and formatting NOTAM Ds) can modify or manipulate the NAS. In addition, there is the potential to compromise military activities during crisis. Also of specific concern are those NOTAMs that indicate the President's movements and/or nuclear facilities. Because this activity does not pass the first tier question, it cannot pass the 0.75 threshold and therefore is determined to be infeasible for further study.

Aviation Weather and Information Broadcasting
It was determined that the activity of recording and broadcasting weather observations, advisories and forecasts does not mandate performance by the Government only. The NWS uses automated and recorded methods to produce similar products. Industry currently has the capability and the interest in performing these services. Having a commercial source provide the service does not represent a security risk or liability issue. There is no need for commercial personnel to obtain certification, as there is no interpretation of weather data involved with this activity. As a result, the broadcasting activity is determined to be feasible for further study by achieving a final score over 0.75.

Navigation Aid Monitoring
The activity of Navigation Aid Monitoring is a partial indicator of the integrity of the NAS and alerts FSS of any malfunction. The activity is in direct support of the NOTAM function, of which NOTAM Ds were deemed not feasible for further study because of the security issues relating to the direct impact on the NAS. In addition, liability issues may exist associated with litigation resulting from system failures and improper operation of monitoring systems. However, aviation service providers currently provide this service to airports or airliners across the world. Despite the security and liability concerns inherent in performing this activity, it was determined that the activity does not mandate performance by the Government only. It is assumed that both issues will be addressed by any potential commercial source. Because of these liability and security issues, Navigation Aid Monitoring scored slightly lower in Tiers 2 and 3. However, the total score remained higher than the 0.75 threshold and therefore this activity is determined to be feasible for further study.

Weather Observations
The activity of observing and recording weather is currently being performed by commercial service providers in many locations and therefore it was determined that the activity does not mandate performance by the Government only. Through our market research, industry proved to have the capability' and also expressed interest in performing tile services for tile FAA should the services become subject to competition. In addition, the activity of observing and recording weather does not pose a risk to either homeland security or government property and does not represent a significant liability concern. However, the one concern related to Weather Observation is the potential need for certification. The assumption was made during our evaluation that the NWS will in fact provide certifications to contractor personnel for weather observation. Therefore, with no significant concerns in any of the criteria in Tiers 2 and 3, the activity of observing weather scored well over the 0.75 threshold required and is determined to be feasible for further study.

En Route Flight Advisory Services (Flight Watch)
En Route Flight Advisory Services include monitoring current weather and providing pilots with weather advisories, information broadcasting, and NOTAMs that may affect a pilot during the flight plan. The biggest concern regarding this activity is the liability issue associated with a commercial source assuming responsibility for the interpretation of weather data. For example, flight watch briefings can be a target of litigation following an aircraft accident, k was assumed for the purposes of this study that contractor personnel could obtain certifications to interpret weather data through the NWS. Furthermore, it is also assumed, and has been validated through market research to some degree, that commercial sources will be able to attain adequate levels of liability insurance. This activity does not pose a security risk or geographical concern of any kind. For these reasons, En Route Flight Advisory Services do not mandate performance by the Government only and scored significantly higher than the 0.75 required to be feasible for further study.

Other FSS Activities
Other FSS Activities include providing international customs notifications and providing support to other federal and law enforcement agencies. It was widely determined that these activities, though they impact other agencies, do not mandate performance only by the Government. These activities may represent a risk to homeland security but the extent cannot accurately be detem~ined as the landscape of homeland security is currently dynamic. There is also the potential of compromising sensitive law enforcement and security data. However, the assumption for the purposes of this study was that any security concerns related to supporting other federal agencies would be addressed by requiring specific levels of security clearance from potential commercial sources. With security as the main issue that would prevent this activity from being feasible, Other FSS Activities scored well on almost all other criteria in Tiers 2 and 3, making ir feasible for further study.

4.2. Issues and Assumptions

As we analyzed the feasibility of each primary activity above, we identified themes or issues that will need to be addressed as the FAA moves into the next stages of the competitive sourcing process. The following is a list of these themes and a brief description of theh' current or future impacts on the FSS function and the FAA.

Security
Security risk was an issue that raised many questions and resulted in numerous discussions throughout the feasibility evaluation process. The question at hand is whether security of the United States and it's properties (e.g. information, systems, etc.) will be compromised if the FSS function is performed by a commercial source. This question has significance now more than ever due to recent tragedies that occurred in this country. The assumptions that were made as we assessed and scored the feasibility of primary activities against the security criteria were that commercial sources are equipped to maintain adequate level of homeland security and are able to receive appropriate security clearances required to perform classified tasks within the FSS function. These assumptions will need further evaluation and validation in the next stages of this competitive sourcing study.

Liability
Liability was one of the major concerns that surfaced during the feasibility assessment. The point in question is if a commercial source provides FSS services to the FAA, who is liable or legally responsible for the litigations that may result from accidents, errors, and violations that occur during performance of FSS work? For example, the FAA is liable for providing accurate weather data so as not to endanger the lives of pilots and their passengers.  While our market research results show that service providers in the private sector are equipped with sufficient liability insurance, this is a topic that needs to be scrutinized in detail to ensure that questions on roles as well as other potential issues are addressed.

Certifications
Through discussions with FSS subject matter experts, we discovered that some FSS work requires only certified employees to perform the job. For example, the NWS currently certifies FSS employees to monitor, record and track weather conditions. An assumption that we made when we performed the criteria scoring was that non-FAA service providers would also be able to receive this certification. As the study progresses, this assumption will need to be confirmed since the inclusion of these activities could be invalid if only FAA employees can perform the work. Because the feasibility analysis was purposely maintained at a high level, pilot weather briefing is the only activity identified as requiring certification thus far. However, it should be anticipated that additional activities that require certifications might be discovered.

After Hours Military Operations Support
At several FSS locations, the FAA provides support to military operations after normal duty hours (e.g. pre-flight briefings and weather broadcasting). In our analysis, we made an assumption that military customers are willing to accept services provided by non-FAA employees. This is a topic of issue that is currently being investigated by the subject matter experts at the FAA.

International Liaison
At selected FSS sites, there are agreements in place with Mexico, Canada and Cuba for airspace and facilities sharing. These agreements allow the United States to occupy specified airspace within the boundaries of these countries. An assumption was made that if a commercial source provides FSS services, the FAA counterparts of these countries would be willing to interface with contract employees. This is a question that has not been answered yet, which could ultimately impact competitive sourcing strategy going forward.

Facilities and Equipment Maintenance
Our market research indicates that there is commercial interest in providing maintenance services for the FSS facilities and equipment. Currently FAA delivers these services through the Airways Facilities Service as a part of providing these services for the entire NAS. Whether maintenance of FSS facilities and equipment should be included with the FSS function in this study is an FAA decision. We recommend additional exploration and coordination of this issue with Airway Facilities Services.

Section 5. Recommendations and Next Steps

Based on the analysis and results of tiffs feasibility assessment, the following actions are recommended for next steps:

1. Validate Assumptions - As discussed in Section 4.2, there were some important assumptions we made as we assessed feasibility and formulated our final recommendations on which activities are feasible for further analysis. These assumptions should be validated before a final determination is made on the specific FSS activities that are feasible for competitive sourcing. Some of the themes are in the process of being validated, while others are awaiting resolution from decision makers in the FAA.
    
2. Address FSS Infrastructure - Another important "next step" is to make decisions on how the current FSS infrastructure will be scoped into the solicitation. Specifically, it is recommended that the FAA evaluate the advantages and the disadvantages of dictating the FSS infrastructure in the solicitation versus allowing potential service providers to propose their own infrastructure solutions (i.e., what sites should remain open, what sites should be consolidated, etc.). This decision is crucial, as it will determine the methodology for the Business Case Analysis and future A-76 efforts.
    
3. Conduct Business Case Analysis - As a result of this feasibility study, the activities deemed feasible for competition should be subjected to further evaluation in the Business Case Analysis. The Business Case Analysis should address economic implications associated with the competitive sourcing study. The primary objective of the Business Case Analysis should be to design a solicitation that will result in the best value to the FAA. This can be achieved by: 1) examining the possibility of more than one solicitation separated by certain activities or geographic areas and 2) defining the scope of the FSS functional requirements to be competed and ultimately included in the FSS Performance Work Statement (PWS). A cost benefit analyses on different contracting types (e.g. fixed price, cost reimbursable, etc.) and A-76 methods (i.e., full cost comparison, streamlined, and direct conversion) should also be performed to define best value solutions for the FAA.
4. Analyze Supervisory and Administrative Activities - Supervisory and administrative activities will be treated the same as primary activities in that there will be a process of detailing the activities in terms of tasks and subtasks. This process will enable a thorough analysis that will identify those tasks that are inherently governmental versus those tasks that are commercial in nature. Since many of the commercial activities will eventually be included in the Performance Work Statement (PWS), this process of detailing activities will take place during the Business Case Analysis as the scope of the PWS is defined more explicitly. As with primary tasks, supervisory and administrative tasks identified as inherently governmental cannot be subjected to competitive sourcing. Some supervisory and administrative activities directly support the accomplishment of primary activities, and it is likely that they will be classified the same as the primary activity it supports. For example, there will need to be some supervision over those who obtain, classify, and format NOTAM D's. Since the NOTAM D activity was deemed inherently governmental, the associated supervision of these NOTAM D activities must also be inherently governmental.
5. Develop Action and Communication Plans - Once Grant Thornton has completed the Business Case Analysis, we will begin developing a detailed Action Plan and Communication Plan that will serve as the basis for our competitive sourcing strategy. The Action Plan should specify the activities that will be accomplished, schedule of milestones, the composition of the competitive sourcing team along with roles and responsibilities, and other pertinent information needed to conduct the A-76 cost comparison study. The Communication Plan should outline methods of delivering important information to affected employees, outside stakeholders, and other interested parties in the A-76 process. The intent of this plan should be to communicate study goals and objectives in a clear and concise manner and provide a mechanism for feedback and positive upward interaction for affected personnel within the FAA.