Program To Permit Cost-Sharing of Air Traffic Modernization Projects Guidance 2005, 4186-4190 [05-1565]

Agencies

• Federal Aviation Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 70, Number 18 (Friday, January 28, 2005)]
[Notices]
[Pages 4186-4190]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-1565]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration


Program To Permit Cost-Sharing of Air Traffic Modernization 
Projects Guidance 2005

AGENCY: Federal Aviation Administration (FAA) DOT.

ACTION: Program guidance for air traffic modernization cost-share 
program.

-----------------------------------------------------------------------

SUMMARY: The FAA is authorized to approve up to 10 air traffic 
modernization cost share projects per year under Vision 100--Century of 
Aviation Reauthorization Act, (Vision 100), Public Law 108-176, Section 
183. The initial cost-share program was conducted under the 
authorization of Public Law 106-181, Section 304 of the Wendell H. Ford 
Aviation and Investment Reform Act for the 21st Century (AIR-21). Under 
the Vision 100, section 183 the FAA is now issuing program guidance 
based upon the lessons learned from the pilot program implementation. 
This guidance is to inform potential sponsors of the cost share 
program, the process to apply for the program and the criteria for 
approval for cost-sharing projects for this fiscal year. The purpose of 
Vision 100, Section 183 is to improve aviation safety and enhance 
mobility of the Nation's air transportation system by encouraging non-
Federal investment in air traffic control facilities and equipment. 
Under this program, the Secretary of Transportation may make

[[Page 4187]]

grants to eligible project sponsors. Each eligible project is limited 
to Federal funding as highlighted in section 2.3.1 with the Federal 
cost share not to exceed 33 percent of the project's facilities and 
equipment (excluding operations and maintenance) cost. A project 
sponsor means any major user of the National Airspace System as 
determined by the Secretary, including a public-use airport or a joint 
venture between a public-use airport and one or more U.S. air carriers.

DATES: The FAA's Vice President for Finance may receive initial 
sponsors' expressions of interest at any time in fiscal year 2005. 
While the agency has no proposal submission deadline, potential 
sponsors are encouraged to submit proposals as soon as possible.

ADDRESSES: Sponsors' expressions of interest/proposal should be mailed 
or delivered, in duplicate, to the Federal Aviation Administration, 
Director of Capital Expenditures Programs, 800 Independence Avenue, 
SW., Washington, DC 20590. Electronic submissions will be accepted, but 
must be followed up with a signed paper copy within five working days, 
to the address listed above. The electronic submissions should be 
mailed to Chris.Witt@faa.gov. Deliveries may be made between 8:30 a.m. 
and 5 p.m. weekdays, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Chris Witt of the Finance Capital 
Expenditure Directorate Federal Aviation Administration, 800 
Independence Avenue, SW., Washington, DC 20590; telephone (202) 267-
7646.

SUPPLEMENTARY INFORMATION:

1. Background

    In performing its mission of providing a safe and efficient air 
transportation system, the FAA operates and maintains a complex air 
traffic control system infrastructure. Vision 100, Section 183 
authorizes a program to permit cost-sharing of air traffic 
modernization projects, under which major users of the national 
aerospace system, which includes a public use airport or airport/
airline joint ventures, may procure and install facilities and 
equipment in cooperation with the FAA. The program is intended to allow 
project sponsors to achieve accelerated deployment of eligible 
facilities or equipment, and to help expand aviation infrastructure.
    The FAA is authorized to approve up to 10 projects per year under 
Vision 100, Section 183. Those sponsors whose projects were approved in 
the AIR 21 pilot program may submit additional proposals under the new 
authorization. All sponsors who anticipate submitting a request should 
review the criteria in sections 2.1 and 2.2 before submission.

2. Program Guidance

    This section provides the statutory language sponsor eligibility of 
Vision 100 section 183 and outlines FAA's supplementary criteria for 
the cost share program. The sponsor eligibility, project eligibility, 
and evaluation and screening criteria are outlined in Sections 2.1, 2.2 
and 2.6 respectively of this guidance.

2.1 Eligible Project Sponsors

2.1.1 Statutory Provisions of Vision 100 for Sponsor Eligibility
    A project sponsor means any major user of the National Airspace 
System as determined by the Secretary, including a public-use airport 
or a joint venture between a public-use airport and one or more U.S. 
air carriers.
2.1.2 Supplementary FAA Criteria for Sponsor Eligibility
    An eligible project sponsor is any major user of the national 
airspace system including public-use airport (or group of airports), 
either publicly or privately owned, acting on its own or in a joint 
venture with one or more U.S. air carriers. All landing facilities 
meeting these criteria are eligible, including but not limited to 
commercial service airports, reliever airports, general aviation 
airports, and heliports. Eligibility is not limited to airports; other 
National Airspace System (NAS) major users such as state or regional 
aviation activities may be eligible.
    All eligible sponsors are encouraged to participate. If selected 
for the program, the sponsor must be willing to enter into a Memorandum 
of Agreement with the FAA outlining the specific goals to be 
accomplished, the roles and responsibilities of each party, schedule 
milestones, and funding contributions of the parties. An eligible 
sponsor must have an available source of funds to execute the program.

2.2 Eligible Projects

2.2.1 Statutory Provisions for Project Eligibility
    The term `eligible project' means a project to purchase equipment 
or software relating to the Nation's air traffic control system that is 
certified or approved by the Administrator of the Federal Aviation 
Administration and that promotes safety, efficiency, or mobility. Such 
projects may include:
    a. Airport-specific air traffic facilities and equipment, including 
local area augmentation systems,* instrument landings systems, weather 
and wind shear detection equipment, and lighting improvements;
    b. Automation tools to effect improvements in airport capacity, 
including passive final approach spacing tools and traffic management 
advisory equipment; and
    c. Equipment and software that enhance airspace control procedures 
or assist in en route surveillance, including oceanic and offshore 
flight tracking.

    * Note these projects will be eligible, assuming availability 
and viability of the equipment within the time limitation 
highlighted in 2.2.2.c.

2.2.2 Supplementary FAA Criteria for Project Eligibility
    a. Projects should align with the FAA's strategic Flight Plan 
goals.
    b. The project should be consistent with FAA's air traffic 
equipment/systems infrastructure and architecture and should be a 
validated project of a FAA program. The project, when commissioned, 
should provide measurable benefits that benefit national, regional, or 
local objectives/interests and the FAA NAS.
    c. The project shall be initiated within one year of project 
approval and completed/commissioned within five years of project 
approval (allowing for an environmental impact study (if necessary), 
acquisition, supply support, training programs, etc.).
    d. Equipment and facilities should meet applicable FAA advisory 
circulars and specifications.
    e. The project should serve the general welfare of the flying 
public; it should not be used for the exclusive interest of a for-
profit entity.
    f. Any facility/equipment acquired under the project should be a 
new asset, not an asset that the sponsor has already acquired or is 
committed to acquiring.
    g. The project should have a useful and expected life of ten years 
or more, notwithstanding the possible need to replace project 
components during its operating life.
    h. The cost-share program is not the correct forum for requesting 
development of RNAV procedures.
    i. A sponsor may submit a multiple component project proposal (as 
outlined in paragraph 2.5) where each component forms part or all of an 
integrated system. The FAA reserves the option to accept one or 
multiple components of a proposal.
    j. A project may not be co-mingled with other FAA cost-sharing 
programs.
    k. All equipment and facilities should meet appropriate OSHA 
standards for employee safety and fire protection. Where land is 
involved, the property

[[Page 4188]]

should meet all environmental compliance requirements, including noise, 
hazardous material, property access, and zoning rights.

2.3 Funding

2.3.1 Statutory Provisions for Funding
    The Federal share of the cost of an eligible project carried out 
under the program shall not exceed 33 percent. No project may receive 
more than $5,000,000 in Federal funding. The sponsor's share of the 
cost of an eligible project shall be provided from non-Federal sources, 
including revenues collected pursuant to Title 49, United States Code 
40117.
2.3.2 Supplementary FAA Criteria for Funding
    FAA is not obligated to fund one-third of the total project costs; 
rather, FAA's share may not exceed this threshold. The project sponsor 
must provide two-thirds or more of the total project cost. The Federal 
and non-Federal shares of project cost may take the form of in-kind 
contributions. Equipment in FAA's inventory that has not been 
previously deployed qualifies as eligible equipment. If selected for 
the program, a sponsor may use passenger facility charge (PFC) revenues 
to acquire and install eligible facilities and equipment, but not to 
fund their operation or maintenance. Normal PFC processing procedures 
under Federal Aviation Regulation 14 CFR part 158 will be used to 
approve the imposition of a PFC or the use of PFC revenue as the non-
Federal share of a program project.
    Federal contributions applied to any other Federal project or grant 
may not be used to satisfy the sponsor's cost share under this program.
    The following criteria apply to the calculation of the cost-sharing 
ratio:
    a. Project costs are limited to those costs that the FAA would 
normally incur in conventional facilities and equipment funding (e.g., 
if land/right-of-way must be acquired or leased for a project, its cost 
can be included in the cost-sharing ratio only if FAA would otherwise 
incur it in conventional program funding).
    b. Operations and maintenance costs of the project, both before and 
after any sponsor-elected project transfer to the FAA, will not be 
considered as part of the cost-share contribution. However, these costs 
must be identified.
    c. Non-Federal funding may include cash, substantial equipment 
contributions that are wholly utilized as an integral part of the 
project, and personnel services dedicated to the proposed project prior 
to commissioning, as long as such personnel are not otherwise supported 
with Federal funds. The non-Federal cost may include in-kind 
contributions (e.g., buildings). In-kind contributions will be 
evaluated as to whether they present a cost that FAA would otherwise 
incur in conventional facilities and equipment funding.
    d. Aside from in-kind contributions, only funds expended by the 
sponsor after the project approval date will be eligible for inclusion 
in the cost-sharing ratio.
    e. Unless otherwise specified by these criteria, the principles and 
standards for determining costs should be conducted in accordance with 
OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal 
Governments.
    f. As with other U.S. DOT cost-sharing grants, it is inappropriate 
for a management/administrative fee to be included as part of the 
sponsor's contribution. This does not prohibit appropriate fee payments 
to vendors or others that may provide goods or services to support the 
project.
    FAA funding decisions will be based on the project evaluation and 
project selection processes discussed later in this notice.
    The U.S. Department of Transportation and the Comptroller General 
of the United States have the right to obtain and assess all documents 
pertaining to the use of Federal and non-Federal contributions for 
selected projects. Sponsors should maintain sufficient documentation 
during negotiations and during the life of the project to substantiate 
costs.

2.4 Transfer of Facility or Equipment to FAA

2.4.1 Statutory Provisions for Facility or Equipment Transfer
    Notwithstanding any other provision of law, and upon agreement by 
the Administrator, a project sponsor may transfer, without 
consideration, to the FAA, facilities, equipment, and automation tools, 
the purchase of which was assisted by a grant made under this section 
if such facilities, equipment or tools meet Federal Aviation 
Administration operation and maintenance criteria.
2.4.2 Supplementary FAA Criteria for Facility or Equipment Transfer
    Project transfers to the FAA will be at the sponsor's election and 
in accordance with the criteria listed below.
    a. At the time of transfer, the project should be operable and 
maintainable by the FAA and should comply with FAA Order 6700.20, Non-
Federal Navigational Aids and Air Traffic Control Facilities, or any 
successor Order then in effect.
    b. In the event of transfer, software code, data rights, and 
support tools should be provided to the FAA at no cost to the FAA.
    If the project is not transferred to the FAA, the sponsor remains 
liable for all operations and maintenance costs, including the costs of 
capital sustainment.

2.5 Application Procedures

    Unlike the cost share pilot program, for this fiscal year all 
applications will be reviewed upon receipt and selected based upon 
individual merit and alignment with the FAA's goals and objectives as 
outlined in the strategic planning documents. The statutory limit is 
ten projects per fiscal year. The following application procedures will 
be used when applying for cost-share:
    a. The purpose of the application is provide sufficient information 
to conduct detained analysis that evaluates cost, benefits, risk, 
alignment with strategic direction of the proposed project and to 
compare the proposal with other NAS needs. It is suggested that the 
sponsor contact the FAA's cost share office to discuss the potential 
project before the applicant expends excessive resources on the project 
application.
    b. Eligible sponsors may submit multiple projects and projects with 
multiple components, but each piece of equipment/activity must be 
identified and costed separately, with appropriately defined benefits 
and should be listed in priority order. An example of a multiple 
component project would be an instrument landing system (ILS) project 
that may include in addition to the ILS equipment, middle markers and 
runway lighting for a complete package. The FAA reserves the option to 
accept one or multiple pieces of each proposal.
    c. Projects that would be good candidates for this program may 
include equipment and systems that monitor weather, support runway 
incursion reduction, and support regional interest.
    d. Under this program, either the FAA or the sponsor may acquire 
and/or install facilities or equipment. In the case where the FAA 
manages the procurement, existing FAA contracts will be used where 
possible.
    e. Proposals for new air traffic control towers will only be 
considered if they enhance the National Airspace System. Per FAA Order 
6030.1, FAA Policy on Relocation, movement of an existing air traffic 
control tower for the convenience/benefit of only the airport

[[Page 4189]]

will not be considered. Requests for towers will be considered 
utilizing the criteria in Order 7031.2C, Airway Planning Standards 
Number One (APS-1).
2.5.2. Formal Application and Selection of Projects
    The proposal should not be more than thirty pages in length. During 
the evaluation process each sponsor should submit an application with 
the following elements needed by the FAA to evaluate the merits of the 
application.
    a. Project Description: The project description should contain: (1) 
The identity of the submitting sponsor (including point-of-contact's 
name, mailing address, telephone number, fax number, and e-mail 
address) and all participating authorities or entities in the case of 
joint ventures; (2) project name and location; and (3) a detailed 
project description. In addition, the sponsor must provide a statement 
of intent to transfer the project to the FAA, including anticipated 
transfer date, or intent not to transfer the project to the FAA.
    b. Projected Benefits: All applications should describe the need 
for the project and demonstrate it's measurable contributions to 
safety, efficiency, capacity, productivity and as applicable, at the 
airport, regional, and system-wide levels. The sponsor may conduct its 
own analysis, or where the FAA has the equipment/system on an 
acquisition waterfall the sponsor may opt to summarize existing FAA 
cost benefit analysis, and/or may use the investment criteria in FAA 
Order 7031.2C, Airway Planning Standard Number One.
    c. Economic Analysis: Supporting the projected benefits review the 
applicant should conduct an economic analysis. The analysis should 
include a schedule of project costs, including: (1) Up-front costs 
broken down into proposed shares between the sponsor and the FAA; and 
(2) annual and life-cycle operations and maintenance costs before and 
after transfer to the FAA (if the sponsor elects to transfer). The 
level of effort devoted to the analyses should be tailored to the scope 
and cost of the project. For complex programs FAA guidance can be found 
in Report FAA-APO-98-4, Economic Analysis of Investment and Regulatory 
Programs--Revised Guide, and Report FAA-APO-98-8, Economic Values for 
Evaluation of Federal Aviation Administration Investment and Regulatory 
Programs.
    d. Schedule: The Schedule should list all significant proposed 
project dates, including the start date, completion date, date of 
project transfer to the FAA (if applicable), and key interim milestone 
dates.
    e. Financial Plan: The Financial Plan should contain: (1) The 
proposed local and Federal cost shares, (2) evidence of the sponsor's 
ability to provide funds for its cost share (e.g., approved local 
appropriation or Memorandum of Agreement); and (3) any commitment the 
sponsor might choose to offer for the assumption and liability of cost 
overruns aside from the liability criterion provided earlier in this 
notice.
    f. Letter of Commitment: Sponsors should demonstrate a commitment 
to the project, as evidenced by a Letter of Commitment signed by all 
project participants (including any participating air carriers). The 
letter should, at a minimum, include a list of the participating 
agencies and organizations in the proposed project; the roles, 
responsibilities and relationship of each participant; and the name, 
address, and telephone number of the individual representing the 
sponsor.
    g. Letter of Acknowledgement/Support: The application will include 
a letter of acknowledgment/support from the applicable State Department 
of Transportation and/or other appropriate jurisdiction (to avoid 
circumventing State and metropolitan planning processes). It is the 
intent of FAA Headquarters for the appropriate projects to include the 
FAA's Regional Office in the project review cycle. It would be in the 
best interest of the applicant to pre-coordinate the projects with the 
appropriate FAA Regional Office.
    The FAA will review and evaluate the application using a panel of 
technical program experts and senior managers based on the criteria 
outlined below in Section 2.6. Following its evaluations, the review 
panel will recommend to the FAA's Air Traffic Operations Senior Vice 
President for Finance and the appropriate Vice President under whose 
area of responsibility the system will be installed, if the application 
in their view should be accepted. If the FAA selects a project for 
inclusion in the cost share program, an agreement will be executed 
between the sponsor and the FAA.

2.6 Application Evaluation and Screening Criteria

    The FAA will review each of the applications based upon the 
individual merit of the application. The FAA will consider the 
following elements in evaluating an application:
    a. Compliance with statutory criteria, FAA's supplemental criteria, 
and application procedures.
    b. Degree to which the project provides benefits that contributes 
to the FAA's documented goals and objectives.
    c. Qualitative and quantifiable benefits to the airport, region, 
and national airspace system.
    d. Likelihood of project success in terms of cost, schedule and 
performance and achieving proposed benefits/outcomes.
    e. Evidence that the project can be implemented in accordance with 
the proposed schedule.
    f. Ability of sponsor to provide its cost share.
    g. Availability of FAA resources.
    h. Degree of Federal leveraging (degree to which the proposal 
minimizes the ratio of Federal costs to total project costs).
    i. Cost to the FAA: post-transfer life-cycle operating and 
maintenance costs.

2.7 Schedule Summary

    Applications may be submitted at any time during the fiscal year. 
The time required for reviewing and approving/disapproving the typical 
application is outlined below.

------------------------------------------------------------------------
                 Milestone                           Time frame
------------------------------------------------------------------------
Applications
Applications due to FAA...................  Anytime.
FAA Responses to Sponsor's Application      One month after receipt of
 requesting additional information (may      application.
 not be necessary).
FAA Announcement of Decision..............  Three months after receipt
                                             of application.
------------------------------------------------------------------------

2.8 Project Implementation Information

    During the life of the project, the FAA may collect data from the 
sponsor and conduct (with non-project funds) independent evaluations of 
the project's impact on safety, efficiency, and mobility objectives. 
This will allow the FAA to ascertain the success of the program.

3. Impact of Revised Guidelines

    Under the Vision 100--Section 183, the guidelines shall not be 
subject to administrative rulemaking requirements under subchapter II 
of chapter 5 of title 5.

4. References

    The following list outlines references cited above:

    OMB Circular A-87, Cost Principles for State, Local, and Indian 
Tribal Governments, revised August 29, 1997.
    Report FAA-APO-98-4, Economic Analysis of Investment and 
Regulatory

[[Page 4190]]

Programs--Revised Guide. Available upon request from FAA's Office of 
Aviation Policy and Plans, telephone (202) 267-3308. It may also be 
found on the Internet at: https://api.hq.faa.gov/apo_pubs.htm.
    Report FAA-APO-98-8, Economic Values for Evaluation of Federal 
Aviation Administration Investment and Regulatory Programs. 
Available upon request from the FAA's Office of Aviation Policy and 
Plans, telephone (202) 267-3308. It may also be found on the 
Internet at: https://api.hq.faa.gov/apo_pubs.htm.
    FAA Order 6030.1, FAA Policy on Relocation. Available upon 
request from the FAA telephone (202) 646-2310.
    FAA Order 7031.2C, Airway Planning Standard Number One, through 
Change 12. Available upon request from the FAA's Office of Aviation 
Policy and Plans, Telephone (202) 267-3308.
    FAA Order 6700.20, Non-Federal Navigational Aids and Air Traffic 
Control Facilities. Available upon request from the FAA's NAS 
Operations Program Office, telephone (202) 267-3034.

    Issued in Washington, DC on January 24, 2005.
J. Robbins Tucker, Jr.,
Director of Finance Capital Expenditures.
[FR Doc. 05-1565 Filed 1-27-05; 8:45 am]
BILLING CODE 4910-13-M