Privatization of Government Services, an example

I’m planning a flight today from Bedford, Massachusetts (KBED) to Wilmington, Delaware (KILG). Having a few minutes of waiting time in the car, I called Flight Service to ask for the outlook for tomorrow. Phone calls to Flight Service were formerly handled by FAA employees, somewhat overpaid government workers who were based in small regional offices such as Bridgeport, CT, Burlington, VT, and Bangor, ME. The FAA Flight Service folks were often pilots themselves and they always knew a lot about local weather and procedures. The service was paid for by taxes on fuel sold to privately operated aircraft.

A couple of years ago, the Feds decided that they could save money by outsourcing Flight Service to Lockheed-Martin, the company that turned a $30 million Eurocopter into the $400 million presidential VH-71 (subject of recent Congressional inquiry when people figured out that each of these helicopters will cost the taxpayer more than an Airbus A-380). Lockheed-Martin consolidated Flight Service into a handful of central facilities, staffed with people who met the FAA’s minimum requirements.

I explained to the briefer the reason for my phone call: I wanted to know by what time I had to leave in the morning to avoid the afternoon thunderstorms that I’d see in a public forecast and that are typical in the summer. He said “There aren’t any thunderstorms in the forecast.” I was surprised and asked him to check the terminal forecasts again. He confirmed that he was looking at the 8 pm terminal forecasts, which are good for 24 or 30 hours depending on the airport. I asked him to look at the airports in between BED and ILG. He repeated that there was nothing to worry about.

When I got home, I looked at the same data that he’d look at, from the Web-based duats.com (requires pilot certificate to register; ADDS offers similar data to anyone). Here’s what I found…

Area forecast for Eastern Massachusetts: outlook VFR becoming VFR rain showers thunderstorms with rainshowers 12 noon EDT (16Z).

Southeast NY: Outlook: VFR with rain showers thunderstorms with rainshowers.

Boston terminal forecast, 9a-1p: temporarily visibility 4 miles, rain showers, mist, broken cumulonimbus at 2,000 feet [note that a cumulonimbus cloud is a component of a thunderstorm]

JFK terminal forecast, 2pm: wind 190° at 14 knots gusting to 20 knots, visibility greater than 6 miles, scattered cumulonimbus at 8,000 feet, 25,000 feet broken

Wilmington, DE (ILG) terminal forecast, 2 pm: wind 180° at 12 knots, visibility greater than 6 miles, thunderstorms in the vicinity, broken cumulonimbus at 5,000 feet.

Government privatization usually results in the perpetuation of a monopoly (in this case Lockheed-Martin is the only company which a pilot can contact to use the services that his or her fuel taxes paid for) and it is very difficult to specify quality, as perceived by the customer, in a contract.

[A few weeks ago, I was flying into the dreaded Washington, D.C. ADIZ. If you don’t have a flight plan, a squawk code, radar contact, etc., they can roll the F16s and shoot down your little 4-seater. I decided that my flight plan from the Westminster VOR to Gaithersburg (about 10 minutes in the Cirrus) was too precious to entrust to DUATS, so called Flight Service and gave them the plan over the phone. As I got closer to D.C., the controllers searched and searched but never could find my flight plan. Fortunately, they were able to use their discretion and allowed me to proceed to Gaithersburg, but Lockheed-Martin’s failure could easily have forced me to land short of the D.C. ADIZ, file a new plan via phone or Web, and take off again, a significant waste of fuel, time, and money.]

13 thoughts on “Privatization of Government Services, an example

  1. Some say that poor government services often result from the government’s enforced monopoly on that service. When a government service is outsourced to a single private entity, the monopoly remains, consumers have no choice of service providers, and competition for customers can never help to improve the service.

    I have to wonder if the Flight Service situation would be different if the government outsourced the business to two competing providers and paid them based on the numbers of customers (pilots) served. Pilots would soon find out which contractor provided the better service, and the dwindling revenues of the worse provider would provide a strong incentive for them to improve their product.

  2. Philip,

    We have this problem in spades in Australia.

    Politicians don’t understand that it’s not

    Government Run = bad, Privately Run = Good

    It’s

    Monopoly = bad, Competition = Good.

  3. I’ve completely given up trying to get anywhere with Lockheed flight service. Only once, during my private training, was I able to successfully file a VFR plan over the phone, open it from the air, and close it over the phone. Every time, except that one, I either gave up after waiting on hold for a half hour, or was unable to get somebody on a flight service frequency midair.

    I end up using DUATS and “normal” weather forecasts. For those that don’t know, wunderground.com has an excellent aviation section.

  4. Of course, this isn’t actually privatization. All the government has done here is contract the work out to a private company. If the service had been privatized, you’d have to pay for it directly, and more than one company would have the ability to offer it to you. Instead, you’ve got a private company offering nominally the same service for the same money, but in a way that saves the government (who probably doesn’t care about the quality) the overhead of having to deal with it. The company can cut the quality back as far as it likes, since the customer is not the same as the payer. In a market-based system, when a third party pays, there’s very little incentive to control costs and maintain or improve quality.

    This, btw, is the same complaint that many have been making about health insurance lately (single-payer and our current system both being criticized).

  5. Remind me again — what is the point of calling FSS?

    I was carefully trained to always call FSS when I was getting my private. Then I moved to California, and retained my Boston cell phone #. I discovered that for a period of roughly 6 months it was _impossible_ for me to talk to a California briefer from my Boston cell phone. [1] Out of frustration, I gave up, and just looked up the data online.

    What I have learned — in my experience, all the briefers do is read you a DUATS report out loud (omitting the giant volumes of irrelevant data which make these reports so difficult to read). If you ask them any questions which can’t be answered by reading that DUATS report, they draw a blank. I hear all sorts of stories about how weather briefers give you the benefit of their knowledge and experience with the weather, and can tell you more about what to expect than you can get from reading the TAFs, and perhaps offer advice to help you make a go/no-go decision. As a relatively low-time pilot (240 hours) I would _love_ to have this available to me. When I have called Lockheed Martin’s briefers, I have not found this expertise in the briefers I have talked to.

    Last time I called them, I was at an airport, it was dark. The forecast on DUATS I got on my cell phone called for a line of thunderstorms. Some thunderstorms had passed by an hour before. I wanted to know: (a) had they blown far enough west that I shouldn’t have to worry about them, and (b) was there another line on the way? These questions should be easy to answer if the briefer could bring up a weather radar display (I didn’t have a good way of getting that up on my tiny cell phone screen). His answer: “we can only see text briefings, and don’t have access to weather radar. Sorry. All I can tell you is that some storms are forecast to be in the area.”

    Useless.

    [1] California had not yet switched over to the centralized service, but when I called the California briefers a system would automatically detect my caller ID and forward me to the centralized service — leaving me no option to get back to a California briefer.

  6. What you have describe sounds more like outsourcing than privatization. As has been pointed out real privatization would allow for competition.

    It also sounds like the government has not properly provided the right incentive Lockheed-Martin to do a competent job for pilots. If this is the case it might be that the previous service you got was not planned by the government but a happy accident of who they were filling the positions with.

    A proper outsourcing arrangement would provide incentives for a high quality of service to the customer (i.e. pilots). I would not blame Lockheed-Martin that they provide the service required by contract and no more. I would blame the government that they didn’t write the contract in such a way that that it was in Lockheed-Martin’s interest to provide a higher level of service to the customer. Remember, Lockheed-Martin has a responsibility to their share holders and the most efficient execution of the contract is part of that responsibility (i.e. fulfill the contract for the lowest cost possible).

    Since this is not a free market solution but outsourcing the advocate for the customer should be the government and the vehicle is the contract. From your description it sounds like the government has not done its duty to their customer (i.e. pilots) in ensuring a higher quality of service in the contract.

  7. Chris, the two competing providers is what DISA offers with its online collaboration services. The competing providers are paid based on usage and thereby incentivized to offer superior service.

    “…Defense Information Systems Agency (DISA) on Net-Centric Enterprise Services (NCES) Button One and Button Two, which are the two collaboration tools that DISA has placed on the Web for defensewide users.”

  8. Some of us would just be happy to fly & put up with whatever to get behind the controls, but obviously more than 1 company needs to provide the outsourcing.

  9. Anonymous: You would not be happy to fly through a thunderstorm, trust me! (Which is why it would be nice to have weather briefers who were alert to the most serious hazards to aircraft, one that even the largest airliners cannot ignore.)

  10. I’m not a pilot, but isn’t this the type of thing the NTSB would be interested in. It seems like sooner or later there will be a weather related aircraft crash + fatality that could have been avoided if the pilot had a proper weather forecast.

  11. I am a Flight Service Specialist with over 30 years of ATC experience. After the FAA crapped on all their employees by short changing them in their retirements and health benefits, many of the experienced briefers left. Trying to find ways to put in more time with Government hoping to at least get some type of retirement. I myself was 18 months short of age 50 at which time I would have been able to get a penalty fee retirement. Being 1 1/2 years short the FAA decided to penalized me 6 and 1/2 years. at 2% per year. Fair I think not, so many years of work experience force left the agency.
    Bringing in many of the new hires with no experience. Saving tons of money for Lockheed because of the lower salary being paid initially to the new hires. A lot of the new hires don’t even care about the job. Because to them it is just a JOB and as many are doing they are working on their education at the cost of the company dollar and many have told me as soon as they get a masters they will be history.

    If the rumors are true that are circulating about the FAA taking back the contract. They will loose a lot more experienced people, because enough is enough. Leaving you the pilot with an even smaller inexperienced work force.
    Good Luck and thanks for all the help you DIDN’T provide when the Flight service work force was asking YOUR help to stop this from happening.

    You are getting what you deserved

    Zweij

  12. Lockheed Martin got rid of the computer software (Oasis) that was provided by Harris to the FAA for flight service, thinking that they could do it better and because they didn’t want to pay Harris. The LM system (Flight Service 21) is a joke.

    The software often crashes, the phone lines and radio frequencies often go dead – the FSS controller now checks the local weather channel website to get the latest weather information to brief the pilot because LM doesn’t update their weather information in a timely fashion, or it crashes.

    The controller might or might not be one that was originally trained by the FAA. The FSS controller trained by the FAA had weeks and weeks of training in Oklahoma at the FAA training facility, and then over a year to check out in his area facility, todays newly hired LM controller takes only a few weeks to get checked out, total. The National Weather service used to make a controller get checked out in his specific area, but now that FSS controller might get a call in Seattle for a briefing in Florida. And the controller has to pick up those calls or they are in trouble – if they don’t pick up the call fast enough and get to the next call fast enough then LM gets a penalty deduction in their contract payment from the FAA. And so management is all over the FSS controller on the floor.

    Procedures for search and rescue, notams, etc are being lost and/or watered down as the new LM controller comes on board without the training from the senior controllers and supervisors. If you thought things were bad now, wait a few years, it is only going to get worse.

    And now LM is shutting down 7 more facilities, even though calls are not being answered or are being dropped – a vote of No Confidence would have happened years ago by the FSS controllers if they weren’t afraid they would lose the little semblance of security that they have. What was Congress thinking when they allowed this lunacy to take place? Did they really think that cutting the workforce by two thirds would be a good idea when the aviation industry for commercial and private aircraft was expanding? It had to be about the Flight Service aging workforce.

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