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Previous Section | Table of Contents | Next Section V. Challenges and Opportunities"As the births of living creatures at first are ill-shapen, so are all innovations, which are the births of time. Yet notwithstanding, as those that first bring honor into their family are commonly more worthy than most that succeed, so the first precedent (if it be good) is seldom attained by imitation." - Francis Bacon (1561-1626). Essays, Civil and Moral. XXIV. Of Innovations Partnerships may satisfy many diverse functions and present innovative opportunities that might otherwise go unfilled. Panelists in this session presented examples of such opportunities, which together give an encouraging picture of the PPP environment going forward. Russ Freeman (EG&G Technical Services, Inc.) provided strong evidence of how PPPs can address options for support infrastructure under the Base Realignment and Closure (BRAC ‘95) program, designing and managing alternative and innovative uses for a former military facility. Maria Pirone (WSI), speaking for the commercial meteorology sector, discussed emergent opportunities for the management and response to specific regional weather problems such as Northeast United States winter storms. Jack Sheehan (AGATE) articulated efficient, new methods of air passenger travel that capitalize on high technology, high bandwidth applications in general aviation aircraft. Kelly Air Force Base Redevelopment Partnerships Russ Freeman, Director of Strategic Planning of EG&G Technical Management Services, Inc. in an arresting presentation, described the events leading up to what is now acknowledged as the most successful military base conversion through all rounds of base closures. Arising from the BRAC, the initial idea was for a partnership between the Air Force, the City of San Antonio, and private industry.
To fulfill their role in the partnership, the City of San Antonio created the Greater Kelly Development Corporation (which later became the Greater Kelly Development Authority or GKDA). GKDA then competitively selected a team to serve as their operating staff. EG&G led the team that won the contract to support GKDA, and thus effectively became the GKDA staff. Describing a unique series of events that characterized the Kelly closure, Freeman related how the Air Force role in the partnership changed, so that what was to be "privatization in place" became simply "privatization." This in turn became a "public/private competition," and finally, the team had to "survive a lost competition." In new agreements with the Union Pacific Railroad (UP) and the Port of Corpus Christi (PCC), GKDA and EG&G are now preparing to move beyond aircraft and aircraft engine maintenance to the establishment of an inland port. Plans call for this port to serve as a multi-modal distribution facility for trade with Mexico, Asia, and Europe as well as domestic shipments. Kelly Air Force Base Background Kelly Air Force Base was formerly an Air Force logistics center run by the Air Force Logistics Command. The base housed an industrial complex of 400 buildings located on 4,000 acres. It mostly provided maintenance functions, such as work on C-5 aircraft and the F-100 engines. The C-5 is a very large, heavy-lift aircraft, and the F-100 engine is one of the most widely used fighter aircraft engines the world. To appreciate the physical extent of Kelly’s facilities, Freeman noted that one of the buildings in which C-5 maintenance took place was one of the largest buildings in the world, a hangar with over 1 million square feet. Essentially, this hanger could handle six Boeing 747 aircraft at one time. Freeman explained that the Air Force had no real desire to close Kelly, taking a position that it wanted to maintain excess capacity in order to spool-up its weapons maintenance capabilities in case of hostilities. Without having the authority to remove Kelly from the BRAC list, the Administration instead expressed support for privatizing the base rather than closing it down. Conceptual Basis of the Kelly Partnership - Trying a New Paradigm
The initial idea was to form a partnership between the Air Force, Kelly, and the City of San Antonio. Under that plan, the base would convey property to the City and private operators would be brought by the Air Force to do the existing work. The Air Force scheduled Kelly to be the first "hot transfer"40 under BRAC ‘95. The basic idea, Freeman recounted, was that "we were going to demonstrate the idea of privatization and commercialization. This idea is that you keep doing the work the Air Force was doing there, but one of the selection factors used to bring the private party in, was that it would bring additional work to the facility." Hence, overhead costs would be spread across a wider workload, so Air Force costs would go down. Under the plan, the Air Force would continue to maintain access to the facility and as well as to the capacity to do work, but would achieve savings that would have occurred with base closure. The functional transfer of Kelly began in 1997, with complete closure and realignment occurring in July 2001. Freeman noted that, concurrent with
Environmental Cleanup of Kelly, and Superfund Concerns It happened that Kelly AFB was also contaminated, similar to being a "Superfund" site. (Technically, the Kelly cleanup is not governed by Superfund, but similar Federal legislation – the Resource Conservation and Recovery Act or RCRA.) The privatization/commercialization approach at Kelly required that facilities being transferred remain in service. It is different from closing other military bases where the base is closed, then cleaned up and then redeveloped. At Kelly, environmental cleanup activities proceeded in parallel with the hot transfer of the facilities, which remained in service performing aircraft maintenance activity. Thus, the cleanup compounded the task of hot transfer and redevelopment. Although the Air Force estimated cleanup costs at $400 million, Freeman said that EG&G thought that as things are now going, that would represent only about half of what it was going to take to conduct the actual cleanup. Such a huge cleanup juxtaposed some interesting dynamics on the redevelopment, continued Freeman. For example, contamination at the base actually extended into a minority, low-income community located adjacent to Kelly, thus creating an acrimonious environment in which to proceed with the planned redevelopment of the facility. Unexpected Developments and Changes in Strategy
Freeman detailed how the original concept of a hot-transfer, turned out to be an illegal plan. Specifically, the A-76 process (described earlier in Richard Norment’s presentation) required that all work which is "privatized" must be competed. It also requires that public sector organizations be allowed to compete for the work. As previously noted, the Air Force divided the work into several parcels that were awarded through separate competitions. A public sector organization won the first competition, an $800 million contract to perform the C-5 maintenance work at Kelly. The work was subsequently moved from Kelly. Describing this in fortuitous terms, Freeman related how "this move thus opened up the million square foot facility in which the C-5 formerly took place. GKDA/EG&G then succeeded in getting Boeing to start a new division of their company in the now vacant hangar. Thus, the loss of the C-5 work," as Freeman relates, "allowed a level of new work that the C-5 alone would not have generated." In the second competition, another public sector organization, the Air Force Maintenance Depot at Warner Robbins AFB in Oklahoma City, won the F-100 engine work in partnership with Lockheed Martin Company. Following its win, Warner Robbins and Lockheed elected to partner with KellyUSA and therefore leave much of the work at Kelly. For administrative purposes, the new contract originates at Warner Robbins in Oklahoma City, but the work remains at Kelly. EG&G/GKDA have also attracted the Pratt & Whitney Corporation (one of the first tenants at KellyUSA) to Kelly to perform aircraft engine maintenance work. Finally, Boeing recently won additional contract work that will be performed at KellyUSA, essentially doubling the space that they occupy. A new hangar, the first new industrial building, is being constructed at KellyUSA to accommodate this growth by Boeing. Thus, KellyUSA essentially has one of the premiere aircraft/engine maintenance, repair, and overhaul facilities in the world, with a rapidly growing workload, much larger than would have occurred under the privatization/commercialization arrangement that was originally envisioned at Kelly. Property Transfer Issue The original conception of the base closure and redevelopment was to privatize the workload, thus allowing the Air Force to gain a cost advantage. Freeman went on to note that "making the partnership work required that we realize there is a Federal property transfer protocol for any surplus property. The Federal government has first rights to the property, followed in order by state government, and then city government." There are also several methods of transfer, ranging, from no-cost giveaways to buying the property at fair market value. The GKDA/EG&G elected to buy the Kelly facilities at fair market value. This approach is known as an economic development conveyance (EDC). The EDC had to be completed in time to support bids on the Kelly aircraft maintenance work. This included negotiating a price for the base, figuring the maintenance required, and calculating costs for space maintenance, essential services and utilities. "All of this had to be done in a very short time period, so that people bidding on government maintenance contracts would have data to support their bid."
An early decision requiring attention, according to Freeman, was "What are we going to do in terms of the Kelly redevelopment? Are we going to rent the facilities in the condition they are in, at the price they would command in the marketplace? Alternatively, we could make a major investment in upgrading the facilities to make them ‘world class’ and charge premium rates?" The team chose to bootstrap toward the latter approach. The cost of a facility upgrade program was then built into the costing data provided to bidders for AF work, and to other prospective tenants. This created some local consternation, since local small businesses thought they should be able to lease the poor-quality warehouses at Kelly at below market rates. Safety Violations at the Base As the hot transfer proceeded, Freeman described the team’s consternation when it found out that there were numerous safety violations (e.g., violation of Air Force safety rules). He recalled how, "the Air Force had exempted itself from compliance for the simple reason that they didn’t have the money to fix the violations." However, the minute the GKDA took possession of the property, it had to fix those violations before private contractors would be allowed to continue doing the work that the Air Force had been doing in Kelly facilities. For example, the big C-5 hangar required some $65 million in upgrades, and much of this cost was to address such safety issues.
Freeman outlined laborious steps: "We had to redo the existing business plan, figure out fair value and negotiate the purchase, transfer the facility, get the money to upgrade, and schedule the upgrades. All of this had to be done in a very short time, so that interested parties could have cost information in order to bid the Air Force’s aircraft maintenance work." He emphasized, however, that the cost of doing all of this was not what caused private sector bidders to lose the work to the public sector. This situation made EG&G/GKDA see the need for a business plan and record of accomplishment. KPMG, EG&G’s financial planner on the GKDA team put together a business plan and a financial model for the redevelopment. The business plan and financial model considered the use of each building or building footprint by the redevelopment. This data was used to estimate the rental income from every existing or proposed building on the base, according to the desired type of occupant, expected occupancy date, rental rate, square footage, etc. The plan also looked at the cost and timing of improvements to buildings as well as streets and other infrastructure. The Financial/Business Plan put it all together in one place, and it serves as a model for marketing and pricing space to prospective tenants. Renegotiating the Purchase Price and Terms, and Selling the Utilities Freeman also talked about subsequent actions taken:
In effect, he declared, the net cost of the base to GKDA for the Kelly property was zero. This is an important success story. They capitalized the GKDA with a $20 million infusion by selling the utilities on the base. The carefully constructed business plan was instrumental in their ability to sell the utilities. In most base closures, a utility company will be reluctant to pay any significant amount for the base utilities. There are three reasons for this: 1) where a company service area surrounds the base the company looks at the base as an existing customer. This means that they would not normally expect to increase their customer base by acquiring the base utility. (On the contrary, if the base is closing, they will gain a system with few or no customers, which means they are losing customers when one compares the situation with pre-closure.) That means in turn, that the utility company would normally bid no more for the based utility than the depreciated value of the assets. With no customers on the base, the company may not even want the utility assets at all, for the following reasons. 2) Bases have over-designed utilities because they are intended to allow spin-up, or a rapid increase in the level of activity at the base in case of hostilities. 3) The military also generally designs utilities on a base to different standards. This means that the utility company will expect the base system to require a lot of component replacement in order to get it to conform to their system. If the system is not made to conform to company standards, it will then require "non-standard, or high cost" maintenance. Inventive Management and Financing – the Marketing of Kelly
In the case of Kelly, the business plan showed many potential new customers for the utility companies, and that made for a totally different story. Not only did the local power company buy the utilities, but it paid a premium for them because they bought them as a going-concern rather than a depreciated set of assets. "We capitalized the GKDA," remarked Freeman. However, perhaps more important, "by selling the utilities we were able to achieve upgrades without increasing rates for the Air Force bidders and other KellyUSA tenants. The acquiring utility provides service at published rates which are governed by the State Public Utility Commission. Sale of the utilities transferred deferred maintenance to the utility’s books. That means that present customers will help to pay for upgrading the utilities on Kelly. Those customers will benefit in the future when other parts of the system need to be expanded and KellyUSA tenants will help to defray the cost. Financing companies looked at the duty to share revenue with the Air Force. Thus, completing the cost renegotiation, bargaining with the Air Force for it to pay costs related to the environmental cleanup, selling the utilities, and transferring utility upgrade costs to utility purchasers, produced the following two outcomes:
With the base now an unencumbered asset, GKDA is able to use the capital markets to raise funds for capital improvement projects. Revenue bonds are being used, in part, to fund the new hangar that GKDA/EG&G are building for Boeing. In regard to the contamination issues, GKDA/EG&G encountered another obstacle. Federal environmental law includes a concept called "strict/joint and several liability (S/JSL)." This means that anyone who had anything to do with an environmental problem at any time may be liable for addressing the entire problem. Specifically, this presents a potential "tail of liability" problem for the Air Force. Suppose, for example, that the GKDA were to bring in a "bad" company that contaminated their leasehold property and then went bankrupt. The S/JSL doctrine would mean that the Air Force could be liable for cleaning up the problem caused by the bankrupt KellyUSA tenant. Anticipating such potential consequences, the Department of Defense has an official policy on "property transfer." The policy is, "if something [a specific building or facility] contributed to contamination, the DOD will not permit it to continue in existence/use." The Department will either close or dismantle the facility and place a deed restriction on the property. The deed restriction will prevent the new owner (GKDA in the case of Kelly) from putting anything similar to the dismantled facility in the same location. Pausing to emphasize the implications of that policy, Freeman remarked, "think what that does to the Kelly hot transfer. Clearly all the engine maintenance and repair facilities are what caused the existing contamination. If this policy were to have governed the Kelly redevelopment, we would not have been able to use these facilities. We would have had to totally reconfigure the whole base."
Because of liabilities associated with the "S/JSL doctrine," companies like Boeing or Lockheed would not be interested in locating on a base such as Kelly, with potential liabilities in the hundreds of millions of dollars. This is because the S/JSL doctrine would make them potentially liable for the entire base cleanup if they were to so much as "drop a can of paint." To address this policy issue, the team developed a risk management plan for all base facilities. It provided a due diligence basis for the risk management – i.e., if a company follows the plan, the GKDA and EG&G could almost guarantee that such a company would not add anything to existing contamination at the base. The team gained regulatory acceptance of the program. In addition, environmental insurance was added so that in case of an accident, the insurance could be relied upon to restore the site to the condition that existed before the leak occurred. Freeman added that they are also working on adding stop loss insurance to the base cleanup plan, so if the Air Force forgot something, stop-loss insurance would kick in. These contingencies essentially create an environmental safe harbor. Such a safe harbor is what allows GKDA/EG&G to get a waiver of the DOD no-transfer/deed restriction policy, and it is what allows companies like Boeing and Lockheed to feel secure in moving into what is effectively a Superfund site. (As noted previously, the Kelly cleanup is technically not governed by Superfund, but rather by similar legislation – the Resource Conservation and Recovery Act – without incurring the risk implied by the S/JSL doctrine.) Kelly Redevelopment - the EG&G - Kelly Partnership Model To make a partnership work, you have to work the problem. In support of the GKDA, EG&G’s role was to create the organization, get it staffed, get it capitalized, and help the Authority solve the critical environmental issues. "What kind of partnership are we looking at now for getting beyond aircraft maintenance at Kelly?" asked Freeman. "The business plan specifies a partnership between local government, business, and educational institutions." Freeman cites this as a "well established model. It’s the model that Austin, Texas - containing within its borders the state government and the university – used to convert itself into one of the hot electronic growth cities in the U.S." The basic idea, explained Freeman, is that "business opportunity is the best growth stimulant. What this model says is that the role of government is to facilitate and differentiate. The role of business is to create and do business – value-added commerce. The role of educational institutions is to train the workforce and provide a workforce to assist the local business base, to invest in keeping the community at the cutting edge of the businesses that have located in or developed within the city."41 EG&G’s goal is to make Kelly the place where every company in the aircraft industry wants to be. With Kelly as its benchmark, predicts Freeman, the company could then shop around and try to find a better deal. "We want to make sure that the best deal they can find is at KellyUSA. How do we do that, and what are the steps in the process?" he inquired. First, target specific industries such as aerospace, logistics, communications, and electronics. Then designate development zones, attract a flagship company (e.g., Boeing or Lockheed), and attract clusters. Once the redevelopment has achieved a critical economic base, then the focus should turn to differentiation. Differentiation involves investing in continual improvement in productivity. The two key cost elements in high-tech industry are labor and materials. Thus, the KellyUSA model is to invest in education, training, and research aimed at continual improvement in labor and materials productivity within the KellyUSA targeted industries. Role of Education at Kelly
In the KellyUSA model detailed by Freeman, training, education, and research occupy a prominent place in the redevelopment process. Saint Phillips Community College is a focal point for target industry worker training, maintaining a role traditionally provided by the Air Force. The Kelly Academy, now being established on the property, is a focal point for high school outreach. The academy provides skills that facilitate entry of high school students into community college, and/or into technical jobs at KellyUSA industry. It also includes outreach to lower grades. The University of Texas at San Antonio (UTSA) is establishing a Kelly Material Sciences Center. The Center is backed by a commitment to establish graduate degrees in engineering and business for key engineering and management skills needed by KellyUSA targeted industry. The Kelly Laboratory will become the nucleus of a research faculty at UTSA. The Center will provide a dedicated research faculty and research opportunities for University faculty and students. It will have an evolving partnership with target industries focused on meeting needs for people and materials. Its goal is to become a center of excellence in transportation systems and safety. The Kelly Inland Port Initiative San Antonio and the Kelly complex occupy a unique geographic position. This location is the nexus of three major corridors, including the main trade route through Laredo to Mexico. Interstate 35 runs from San Antonio to Chicago and is the main north-south corridor to the Midwest. Interstate 37 to Corpus Christi enables access to the seventh largest deep-water port in the United States. Interstate 10 is the southernmost east-west corridor and serves much of the freight destined for (or arriving from) Southern California. In addition, San Antonio serves a number of major railroad lines. Kelly also had one of the largest runways in the region. This runway was realigned to Lackland AFB, adjacent to Kelly and not scheduled for closure. Freeman describes it a "heavy-left runway with amazing commercial capacity." A joint-use agreement with Lackland enables the redeveloped base, KellyUSA, to use this unique runway. The Inland Port idea is an effort to diversify the KellyUSA development by focusing on another aspect of the transportation industry. It is stimulated by yet another privatization initiative at Kelly. The Defense Logistics Agency (DLA) once operated a major distribution center at Kelly, comprising resources of over a million square feet. EG&G produced the winning bid on the contract to privatize the DLA facility, which is now viewed as a vital cog in the inland port concept.
What will make an inland port work? Timing, infrastructure, and KellyUSA’s unique location are all key, says Freeman. In regard to timing, international trade is growing, DLA privatization is ongoing, the PCC is undergoing aggressive expansion, and the merger between UP and Southern Pacific creates opportunity. In addition, there is new commercial access to the Kelly runway. With strategic assets, and a strategic location stated Freeman, KellyUSA is in a position to take advantage of emerging business opportunity. This is the stimulus for developing a multi-modal inland port. EG&G/GKDA began marketing KellyUSA as an inland port with a three-way signed agreement between the GKDA, PCC, and UP. The agreement permits joint marketing of Kelly/UP rail facilities and the PCC deep-water port. The marketing efforts have demonstrated a demand, but they have also demonstrated a need for facility improvements in order to serve that demand. They are now in the process of preparing a joint plan for the development of improvements that will make the inland port a reality. Freeman predicts that Kelly will be the next hot inland port in the United States. Audience Questions Freeman then fielded some questions from the audience. Dr. Richard John asked who was EG&G’s client in the redevelopment. "The GKDA," replied Freeman, "has been the client right from the beginning. Essentially, EG&G is the GKDA staff." Dr. John followed with an inquiry about whether EG&G can put its own money into the initiative. Freeman responded, "Yes, we can do and will do whatever it takes to make our client successful, and that has included putting our own money into the process." Continuing, Dr. John asked the determinants of EG&G’s profit. Freeman explained that, "We have a negotiated contract with the city under which we are paid a fee." He indicated that it is a unique contract. For example, EG&G must pass half the work to small and minority business subcontractors. Freeman also indicated that there might be an upcoming opportunity to negotiate a fixed price contract with the Air Force, on behalf of the GKDA, for environmental cleanup. Freeman also further informed the audience of an EG&G policy decision, that if EG&G were selected to support GKDA in development of such a contract, no EG&G incentives would be built into such a contract. Another question concerned the status of the environmental cleanup at Kelly. Freeman replied that the cleanup continues, noting that what started as a $300 million effort is now at $400 million and climbing. Stimulating the Community to Participate in Weather Partnerships WSI Corporation is a leading supplier of real-time weather data, imagery, and weather forecast services to commercial customers in the broadcast, aviation, energy, and government markets. WSI also produces Intellicast.com, an online site aimed toward recreational and outdoor activities. The company pioneered the computerization of raw weather data for packaging into customized formats. Among its products, WSI developed the first nationwide mosaic of NEXRAD radar data, produced the first international satellite imagery, and developed a digital satellite network for briefing airline pilots. The company also markets visualization products that translate weather data into three-dimensional dynamic images. WSI enjoys widespread recognition of its value-added broadcast products such as Doppler radar mosaics and loops presented by broadcast meteorologists.42 Weather Products Are Important to Many Economic Sectors Weather events, ranging from the minor to the catastrophic, are factors influencing almost every sector of the economy. Growing interdependencies between the meteorological community and sectors such as transportation, electric utilities, and financial markets have created a growing demand for both traditional and customized weather information. Stepping in to satisfy these demands, hundreds of private meteorological services now do business with clients at local, regional, national, and international levels. These range from emergency management offices, to trucking companies, merchant marine vessels, real estate developers and a myriad of others. 1991 Public/Private Partnership and Policy Statement Maria Pirone, Director of Global Data Products at WSI, noted that PPPs involving the weather community have been known for at least 10 years.43 She specifically cited the 1991 Policy Statement that established a PPP between the NWS and private meteorology services.44 That Policy Statement established guidelines for appropriate data collection and forecasting activities of both the private sector and the NWS (the current landscape of responsibilities may be seen in Figure 5). Again, however, the term "partnership" proves elusive in its definition. Financial arrangements, so much a critical part of many PPPs, do not appear in the 1991 partnership, except in the most indirect way. Pirone continued her talk covering the current business environment, changes impacting transportation, successful programs, challenges, and opportunities. Current Business Environment Pirone maintains that weather’s role is constantly being redefined in many markets. Technology is driving new applications and easing the access to a variety of products and services. As quickly as new weather players emerge, others are acquired or dismantled. The weather industry is in a constant state of flux.
A number of business choices face commercial meteorology providers. Some may attempt to maintain their current market share, by reducing costs. Others may seek to broaden their market share through consolidation and alliances with similar or complementary organizations, or through global expansion. Still others may offer new products and services related to their current business offerings. Finally, some firms may opt to exit their current business, perhaps entering an auxiliary industry or go out of business entirely.
Figure 5. U.S. Weather Industry Model Changes Impacting Transportation Pirone presented participants with data on emerging trends facing transportation, such as electronic commerce. As suggested by Pirone’s data, even disregarding the potential impact of e-commerce-generated sales, analysts expect traffic congestion to increase by 50 percent over the next 10 years. Rising popularity of catalog and online shopping in apparel, books, gifts, home furnishings, and other items are leading to sharp growth in merchant sales. Higher volumes of e-commerce activity should thus translate to more shipments via transportation modes such as trucking, air, rail, and local courier deliveries. Recent reported e-commerce sales for the first quarter of 1999 were $36.19 billion. One year later, sales more than doubled to $60.34 billion. By 2004, some analysts project e-commerce transactions to produce $3.2 trillion in sales. Successful Programs Build Bridges
Pirone contends that future success of the current model for weather products depends on the ability of the weather community to build bridges to the user community, identifying and addressing their specific needs. To that end, the public sector has a role to play in stimulating the market and the industry to the benefits of the partnership programs. She affirms that there must be a clear path to the industry’s return on investment – leveraging existing products and services ultimately reduces risk. She sees eventual government withdrawal in providing some weather services. The aviation industry operates in a different competitive environment that the surface transportation industry. FAA-related weather programs often show success. As Pirone explained, "They share certain characteristics: regulatory in nature, safety is the primary goal, and demonstration programs are frequently used to test the concept." Pirone evidenced FAA projects such as the mode "S" Cockpit, Terminal Weather Information for Pilots (TWIP), CDMnet, and CAPSTONE. Mode "S" is a secondary surveillance and communication system that supports air traffic control, and could support other data link services such as weather information, directly to the cockpit. TWIP is an FAA-Industry initiative that integrates weather and communications technology to demonstrate the transmission of weather information directly to the pilot. CDM is an FAA initiative to provide improved operational service through sharing of information between the airlines and the FAA. CDMnet is the umbrella term used to describe a collection of private Intranets connected to each other at the CDMnet hub site located at the Volpe Center. CAPSTONE is a 3-year test and evaluation program for several technologies that will increase the safety and efficiency of Alaska and the NAS. It aims to address mid-air collisions and controlled flight into terrain, provide data linking weather and other information into the cockpit, implement air traffic services, and improve runway safety. The National Ocean Partnership Program (NOPP) is another success story. Under NOPP, government, industry and academia organizations engage in applied R&D partnerships for coastal and global ocean products and services. Typically lasting 2 to 5 years, these programs specifically involve products aimed at the user community. Future Challenges and Opportunities
Unlike the FAA, the FHWA lacks the regulatory authority to develop weather initiatives (the principal exception being the Foretell partnership discussed earlier). Severe weather events impacting ground transportation are limited, and mostly involve snow and ice events that impede winter travel. Despite the technological sophistication of modern weather products and tools, every region of the country has its own specific transportation concerns, thus requiring regional programs and tailored products that may or may not have applicability elsewhere. This becomes an investment and payoff problem for weather providers such as WSI. Overcoming a public culture conditioned to expect "free" weather information, commercial companies may be reluctant to assume the risk of investments needed to fine-tune products aimed at specialized markets. This is where partnership activity may help, spreading risks and leveraging joint resources. In addition, participants must also work to define the value of such programs to state and local agencies, or other end users targeted under the business plan or master plan. Pirone identified some opportunities to develop programs that have regional interest and would solve regional problems. These included winter storms in the Midwest and Northeast, hurricane evacuation in the southeast, and severe weather in the tornado belt. Such opportunities and the projects that support them require active teaming from industry, government, and academia. AGATE and the Small Aircraft Transportation System (SATS) The Advanced General Aviation Transport Experiments (AGATE) consortium is a cost sharing industry-university-government alliance initiated by NASA to create the technological basis for revitalization of the U.S. general aviation industry. A PPP founded in 1994, AGATE aimed to develop affordable new technology, industry standards, and certification methods for airframe, cockpit, flight training systems, and airspace infrastructure for a next-generation, single pilot, four-to-six place, near all-weather light airplanes. The AGATE alliance has more than 50 members from industry, universities, the FAA and other government agencies. SATS is one of five other NASA programs closely coupled to AGATE.45 The facilitator for AGATE is the AGATE Alliance Association Inc. (AAAI). Jack Sheehan, Executive Director of AAAI, outlined AGATE’s successes and what he envisions for SATS. NASA, in partnership with FAA and state and local airport authorities, is leading the SATS R&D program, which is focused on maturing technologies needed for a small aircraft transportation system; i.e., SATS. U.S. General Aviation Redux
In Sheehan’s opinion, AGATE and similar investments have created a favorable environment for the revitalization of the U.S. general aviation industry. These initiatives have produced new capabilities, new consumer expectations, and a rejuvenated technology deployment capacity. Facilitating these developments have been strategic partnerships – such as AGATE – between the government and industry. Sheehan believes that the time is now right for the introduction of SATS technology. Taking the broad view of technological innovation in air transportation, Sheehan presented a time-line chart to participants (see Figure 6). Relying on the theory of S-curves referenced earlier in Bob Knisely’s talk, he offered the audience a scenario wherein SATS becomes the mode of choice for air travel, particularly in regions not served well by the hub-and- spoke model. "Time (speed) is gold," asserted Sheehan. Gridlock, Hublock, and Inaccessibility Remarking to the audience that, "Current solutions to gridlock are limited to two dimensions," Sheehan went on to show how existing air travel infrastructure is geographically constrained. Implications flowing from trends such as electronic commerce will demand even more transportation accessibility. Sheehan contends that while U.S. airspace is abundant, most American communities are not accessible by affordable air transportation. The majority of potential travelers live away from the hub-and-spoke networks that have come to typify air travel routes in the past dozen years or so. Additionally, only 1 in 10 airports are equipped for all-weather operation. According to Sheehan, inaccessibility and "hublock" have now become formidable constraints on economic opportunity. A New Generation of Cockpits, Propulsion, and Aircraft? Initially, the SATS focus is to prove that four new operating capabilities will enable safe and affordable access to virtually any runway in the nation in most weather conditions. These new operating capabilities rely on on-board computing, advanced flight controls, Highway in the Sky displays, and automated air traffic separation and sequencing technologies. The SATS long-term vision is a safe travel alternative, freeing people, goods, and services from transportation delays, by creating access to more communities in less time. According to Sheehan’s projections, the SATS vision will reduce public travel times by half in 10 years and by two-thirds in 25 years. 
Figure 6. Revolutions in Higher Speed Travel |
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 U.S. Department of Transportation |