Contract Towers

Excerpts from the Inspector General's Report
The DOT Office of Inspector General recently performed a review of the contract tower program, as well as an evaluation of an FAA draft study on the merits of the program. Here are a few excerpts from the I.G. findings.
• "We found that contract towers continue to provide services that are comparable to the quality and safety of FAA-operated towers."
• "We also found that FAA's study did not fully consider several key factors of expanding the program that should be further analyzed and reported to Congress. We are recommending that FAA revise its draft study of expanding the Contract Tower Program to provide Congress a better perspective of the feasibility, costs, and benefits of expanding the program."
• "FAA's estimated cost savings were understated because the agency used FY1998 cost figures. We estimate that annual average savings would be approximately $881,000 per tower. However, these savings would be subject to several offsetting expenses."
• "To have credibility, FAA's study should have given much greater weight to the potential impact that controllers from contracted VFR towers could have in offsetting future increases in system demand and addressing existing staffing shortfalls."
• "It is essential that FAA thoroughly analyze any and all opportunities to offset the rising costs of its operations. Expanding the Contract Tower Program provides the agency with one such opportunity."
• "In its study, FAA concluded that no savings could be realized from expanding the Contract Tower Program because of a July, 1998, Memorandum of Agreement between FAA and NATCA (National Air Traffic Controllers Association). As a result of those requirements, FAA concluded there could be no net savings from expanding the program because the agreement prohibits a decrease in the number of FAA personnel."
• "We found that FAA's new contract solicitation contains specific provisions requiring contractors to report and certify monthly the number of controllers at each location and the hours they worked. These procedures should help ensure that contractors adhere to required facility staffing plans under the new contract."
• "Users at contract locations continue to be supportive of the Contract Tower Program and believe the services they receive are comparable to FAA-operated towers."

Origins of the Program; Potential for Expansion
BALTIMORE — Spencer Dickerson serves as executive director of the U.S. Contract Tower Association, as well as executive VP of the American Association of Airport Executives. He recently shared his thoughts on the contract tower program during AAAE's annual convention.

On the origins of the contract tower program ...
"The program has been around since 1982, and for a number of years there were only 20 or 30 contract towers, so nobody paid attention to it. Toward the late ’80s it started to grow, and it really started to take off after the National Performance Review that the Vice President headed up in 1993. An item in the report said: Expand the contract tower program. OMB (Office of Management & Budget) had been pushing it for a number of years; GAO (General Accounting Office) said FAA was missing opportunities to do further contracting. But it was the NPR that really got it going.

"Now we're up to 189 contract towers. I think that number will be 210, 220 sometime next year. Enplanements are up, general aviation activity is increasing significantly, so a lot of these facilities that didn't have towers are seeing a need. And, there's already about 40 or 50 non-fed towers out there. So, there's still a big market of facilities for this program, just from non-fed towers. Towers that are over the 1.0 (benefit/cost qualifying formula) that aren't in the program are waiting for funding.

"The whole thing is VFR versus IFR. The FAA determined that VFR service is inherently non-governmental. Once a government agency determines something is non-governmental, then you do a cost analysis of who can do it more economically — government or the private sector.

"The advantage of getting in the FAA program is that then they are inspected by FAA, the controllers are all certified by FAA. So, there are now safety enhancements because it's now under the FAA umbrella, versus a non-federal tower in which they can basically do what they want."

On expanding the program ...
"The issue of expansion is a very interesting one. Our official position is we're silent on the issue. It's not something we should be pushing and advocating, because FAA needs to make sure they're comfortable with the decision in terms of cost-savings, safety, and the overall operation of the system.

"One of the things that we're going to be pursuing is making tower construction at those airports that are eligible for the contract tower program eligible for AIP entitlements. Right now, AIP money cannot be used to build a tower. We're saying, make it eligible for entitlements only at airports that are eligible for the contract tower program."