U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

38–339PS 2008

GAO’S REPORT ON THE STATUS

OF NOAA’S GEOSTATIONARY

WEATHER SATELLITE PROGRAM

HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND

ENVIRONMENT

COMMITTEE ON SCIENCE AND

TECHNOLOGY

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

OCTOBER 23, 2007

Serial No. 110–66

Printed for the use of the Committee on Science and Technology

(

Available via the World Wide Web: http://www.science.house.gov

(II)

COMMITTEE ON SCIENCE AND TECHNOLOGY

HON. BART GORDON, Tennessee, Chairman

JERRY F. COSTELLO, Illinois

EDDIE BERNICE JOHNSON, Texas

LYNN C. WOOLSEY, California

MARK UDALL, Colorado

DAVID WU, Oregon

BRIAN BAIRD, Washington

BRAD MILLER, North Carolina

DANIEL LIPINSKI, Illinois

NICK LAMPSON, Texas

GABRIELLE GIFFORDS, Arizona

JERRY MCNERNEY, California

LAURA RICHARDSON, California

PAUL KANJORSKI, Pennsylvania

DARLENE HOOLEY, Oregon

STEVEN R. ROTHMAN, New Jersey

JIM MATHESON, Utah

MIKE ROSS, Arkansas

BEN CHANDLER, Kentucky

RUSS CARNAHAN, Missouri

CHARLIE MELANCON, Louisiana

BARON P. HILL, Indiana

HARRY E. MITCHELL, Arizona

CHARLES A. WILSON, Ohio

RALPH M. HALL, Texas

F. JAMES SENSENBRENNER JR.,

Wisconsin

LAMAR S. SMITH, Texas

DANA ROHRABACHER, California

ROSCOE G. BARTLETT, Maryland

VERNON J. EHLERS, Michigan

FRANK D. LUCAS, Oklahoma

JUDY BIGGERT, Illinois

W. TODD AKIN, Missouri

JO BONNER, Alabama

TOM FEENEY, Florida

RANDY NEUGEBAUER, Texas

BOB INGLIS, South Carolina

DAVID G. REICHERT, Washington

MICHAEL T. MCCAUL, Texas

MARIO DIAZ-BALART, Florida

PHIL GINGREY, Georgia

BRIAN P. BILBRAY, California

ADRIAN SMITH, Nebraska

PAUL C. BROUN, Georgia

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

HON. NICK LAMPSON, Texas, Chairman

JERRY F. COSTELLO, Illinois

LYNN C. WOOLSEY, California

DANIEL LIPINSKI, Illinois

GABRIELLE GIFFORDS, Arizona

JERRY MCNERNEY, California

MARK UDALL, Colorado

BRIAN BAIRD, Washington

PAUL KANJORSKI, Pennsylvania

BART GORDON, Tennessee

BOB INGLIS, South Carolina

ROSCOE G. BARTLETT, Maryland

JUDY BIGGERT, Illinois

W. TODD AKIN, Missouri

RANDY NEUGEBAUER, Texas

MICHAEL T. MCCAUL, Texas

MARIO DIAZ-BALART, Florida

RALPH M. HALL, Texas

JEAN FRUCI Democratic Staff Director

CHRIS KING Democratic Professional Staff Member

JAMES PAUL Democratic Professional Staff Member

SHIMERE WILLIAMS Democratic Professional Staff Member

TARA ROTHSCHILD Republican Professional Staff Member

STACEY STEEP Research Assistant

(III)

C O N T E N T S

October 23, 2007

Page

Witness List ............................................................................................................. 2

Hearing Charter ...................................................................................................... 3

Opening Statements

Statement by Representative Nick Lampson, Chairman, Subcommittee on

Energy and Environment, Committee on Science and Technology, U.S.

House of Representatives .................................................................................... 8

Written Statement ............................................................................................ 9

Statement by Representative Bob Inglis, Ranking Minority Member, Subcommittee on Energy and Environment, Committee on Science and Technology, U.S. House of Representatives ............................................................... 10

Written Statement ............................................................................................ 10

Prepared Statement by Representative Jerry F. Costello, Member, Subcommittee on Energy and Environment, Committee on Science and Technology, U.S. House of Representatives ............................................................... 11

Witnesses:

Mr. David A. Powner, Director, Information Technology Management Issues,

Government Accountability Office

Oral Statement ................................................................................................. 11

Written Statement ............................................................................................ 13

Biography .......................................................................................................... 24

Ms. Mary Ellen Kicza, Assistant Administrator for Satellite and Information

Services, National Environmental Satellite, Data, and Information Service,

National Oceanic and Atmospheric Administration (NOAA), U.S. Department of Commerce

Oral Statement ................................................................................................. 24

Written Statement ............................................................................................ 27

Biography .......................................................................................................... 31

Discussion

GOES Program Costs .......................................................................................... 32

GOES Completion Dates ..................................................................................... 34

GOES–R Procurement ......................................................................................... 35

Investing in New Satellites Technologies vs. Reopening Existing Satellites .. 36

Managing GOES and NPOESS Costs ................................................................ 36

GAO Recommendations ....................................................................................... 37

GOES Acquisition Strategy ................................................................................. 37

Contractor Performance ....................................................................................... 39

Recent Congressional Actions ............................................................................. 40

Appendix: Additional Material for the Record

Agreement, NOAA/NASA Support of the GOES–R Program .............................. 44

GOES–R Independent Review Team, Key Decision Point (KDP) C/D, Preliminary Readiness Assessment, 25 & 26 June 2007 .............................................. 54

GOES–R Management Control Plan (MCP), Version 1, December 4, 2007 ....... 95

(1)

GAO’S REPORT ON THE STATUS OF NOAA’S

GEOSTATIONARY WEATHER SATELLITE

PROGRAM

TUESDAY, OCTOBER 23, 2007

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND ENVIRONMENT, COMMITTEE ON SCIENCE AND TECHNOLOGY, Washington, DC.

The Subcommittee met, pursuant to call, at 2:08 p.m., in Room

2318 of the Rayburn House Office Building, Hon. Nick Lampson

[Chairman of the Subcommittee] presiding.

2

3

HEARING CHARTER

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

COMMITTEE ON SCIENCE AND TECHNOLOGY

U.S. HOUSE OF REPRESENTATIVES

GAO’s Report on the Status

of NOAA’s Geostationary

Weather Satellite Program

TUESDAY, OCTOBER 23, 2007

2:00 P.M.–4:00 P.M.

2318 RAYBURN HOUSE OFFICE BUILDING

Purpose

The Subcommittee on Energy and Environment meets on October 23, 2007 to continue oversight on the next-generation Geostationary Operational Environmental

Satellite (GOES) program. The Government Accountability Office has been continuing its evaluation of progress made by the National Oceanic and Atmospheric

Administration at the request of the Subcommittee, and will release their new report.

Witnesses

Mr. David Powner, Director, Information Technology Management Issues,

Government Accountability Office

Mr. Powner is the head of the GAO team that has supported the Subcommittee’s

oversight of NOAA’s major satellite programs for the past five years. GAO will discuss the findings and recommendations on NOAA’s management of the GOES–R

satellite program in the report it will release at the hearing.

Ms. Mary Ellen Kicza, Assistant Administrator for Satellite and Information

Services, NOAA

Ms. Kicza leads the National Environmental Satellite, Data and Information Systems (NESDIS) at NOAA, which operates both the geostationary and polar constellations of weather satellites. Formerly NASA’s Associate Deputy Administrator

for Systems Integration, she was hired by NOAA to bolster efforts to improve satellite program management in the wake of the severe problems suffered by the National Polar-Orbiting Operational Environmental Satellite (NPOESS) program. Ms.

Kicza now has the responsibility for execution of the GOES program to be discussed

today, and will provide NOAA’s response to the GAO report.

Background

Watching the Western Hemisphere

GOES satellites orbit 22,300 miles above the Earth’s equator, an altitude where

their orbital velocity matches the speed of Earth’s rotation. As a result, these satellites maintain the same relative position over a particular point on the planet, and

can look down to take pictures of weather patterns over the entire Western Hemisphere. A prototype satellite was launched in 1974; the first GOES satellite went

into orbit in 1975. Today, normal practice has two GOES satellites in orbit simultaneously, with one focused on each of the U.S. coasts (GOES–11 and GOES–12). A

third (GOES–13) is also kept in space as a spare to assure uninterrupted coverage.

These satellites are NOAA’s primary sources for images and other data that support the National Weather Service units forecasting severe weather. The Severe

Storm Center uses GOES to track tornadoes, hailstorms and other weather events

threatening life and property over land. For the Hurricane Center, GOES can allow

them to see developing storms in the areas of the oceans where there are no other

observational sensors. Nightly weather reports at the Nation’s local weather stations regularly bring GOES pictures into homes across America. GOES would probably be the one satellite NOAA’s forecasters would vote to save if they were allowed

to keep only one.

4

1While on the ground, GOES satellites have a letter designation based on the order in which

they were built. After launch, checkout and acceptance testing in orbit, it is changed to a number. Therefore, GOES–N is now identified as GOES–13. 2Statement of David Powner before the Subcommittee on Energy and Environment, September 29, 2006; p. 9. 3Supra., p. 8.

Keeping the Orbital Slots Full

The current GOES–R development program is the third major procurement for

GOES satellites since NOAA assumed responsibility for funding its own geostationary operational satellites in 1982. In the previous instances, NOAA purchased five GOES–Next satellites in the period from 1985–2001, and then contracted for four GOES–N satellites for the years 1998–2001. The first GOES–N

model launched in May 2006 to be the on-orbit spare1 while GOES–O and GOES– P have been completed and are in storage for later launches. NOAA in 2002 decided

not to complete the GOES–Q satellite because the existing satellites were exceeding

their expected lifetimes by significant margins.

The GOES–R program was to represent the first major upgrade to the satellite

sensors since GOES–8 went into orbit in 1994. As originally planned, NOAA would

buy four satellites and intended to spend $6.2 billion for the life cycle period 2007– 2020. Launch of the first satellite was expected in 2012. As it had with the

NPOESS program, NOAA issued instrument contracts with the intent to later

transfer them to the contractor that would win the prime contract for the overall

satellite system. NOAA also intended to take on the overall responsibility for procurement of the entire satellite system, including the spacecraft, instruments,

ground systems and integration. NOAA told GAO that this management structure

would ‘‘. . .streamline oversight and fiduciary responsibilities. . .’’ 2 in the program

and overcome barriers that NOAA believed ‘‘. . .limited the agency’s insight and

management involvement in the procurement of major elements of the system.’’ 3

By the time the Committee met for GAO’s first report on the GOES–R program

last September, some significant changes had been made. NOAA Administrator

Lautenbacher informed Members that the cost estimate for the original program

had risen to $11.4 billion. As a result, the agency reduced the number of satellites to be purchased by half, to two. The second major instrument, the

Hyperspectral Environmental Suite, was removed because the technical challenge was deemed too great. Finally, first launch availability would now be December 2014. With these changes, the program’s new life cycle (2003–2028) cost

estimate reflected in the President’s FY 2008 budget request, was $6.96 billion.

Responding to recommendations from an Independent Review Team (IRT) chaired

by former Lockheed Martin President Tom Young, NOAA also determined in March

that the GOES–R program should not follow the same acquisition strategy as

NPOESS. Rather than a single prime contractor, there would be a contract for space

systems managed for NOAA by NASA’s Goddard Space Flight Center and a separate contract for those system elements on the ground to be managed by NOAA. The

IRT argued that this would allow NOAA to benefit from the expertise in both agencies. Instruments for the spacecraft would be acquired by NASA and supplied as

government-furnished equipment to the satellite contractor. NASA should take on

the responsibility for system integration. GOES–R was the first program to be taken

on by a new Program Management Council at NOAA, where senior agency managers from NOAA would review progress on a monthly basis. Space elements will

also undergo review by management councils at Goddard Space Flight Center.

GAO’s Progress Report

I. Does NOAA buy GOES–R?

GAO’s first finding is that the change in acquisition strategy has delayed NOAA’s decision to move forward on the acquisition of GOES–R, originally planned for last

month. This would have the effect of stalling the competitions for both program segments (the space segment contract was expected to be releases in May 2008, followed by the ground system contract in August 2008). According to a briefing for

Committee staff on September 21, the Independent Review Team reported to NOAA

that they believed the ground system segment definition was some 6–12 months behind the point it needed to be to permit the agency to seek bidders. NOAA now has

a tiger team at work to satisfy the IRT concerns. The agency hopes to be able to

minimize the differences in schedule between the two system elements.

With the effort NOAA has devoted to the GOES–R program, it is highly unlikely

that a decision would be made not to go forward at this point. However, it is a reasonable question to ask whether the increase in capability offered by the proposed

5

program justifies the significant increase in cost per satellite. Originally the GOES– N series of satellites was to incorporate new capabilities beyond those provided by

GOES I–M. Instead, they proved to be quite similar in capability to their predecessors. What would be the cost to NOAA of a decision not to pursue GOES–R in

favor of continued purchases of the existing GOES design? How difficult would it

be to carry out that decision?

II. What Will GOES–R Cost?

Cost estimating is the bane of large, complex programs at federal agencies, particularly when technical boundaries are being challenged. GAO reports that the cost

estimates prepared by the program office and by an independent team differed by

some $2.4 billion—while the program office continued to cost the program at $6.9

billion, the independent team concluded that the program as currently designed

would cost $9.3 billion. Both estimates are reported at the 80 percent confidence

level (i.e., there is an 80 percent chance that if all of the assumptions in the cost

models prove accurate, then the program will ultimately cost the amount calculated

by the respective models). GAO concluded, after reviewing the materials provided by NOAA, that the $6.9

billion estimate is likely to rise. NOAA vigorously challenges GAO’s conclusion. The

agency questions GAO’s evaluation of the inflation assumptions used in both estimates, and notes that as the agency has worked to reconcile the different estimates,

the independent team’s estimate in this area now uses DOD-standard inflation assumptions and is now $600 million above the program office estimate. NOAA stated

in its response to GAO that ‘‘[t]he most conservative estimates at the 80 percent

confidence intervals bring the [program office estimate] within 12 percent of the ICE

[independent cost estimate], or $1.032 billion below the ICE [$9.3 billion].’’ If

NOAA’s statement is accepted as accurate, this indicates that the reconciled cost

estimate to be submitted in the FY 2009 President’s budget request it will be somewhere in the vicinity of $8 billion–$1 billion over the current estimate.

GAO also reports that the independent cost estimating team is skeptical of the

December 2014 launch availability for GOES–R. They believe there is an even

chance that GOES–R would be ready for launch in October 2015, and an 80 percent

chance that March 2017 will be the date. Again, NOAA responds that there is only

an 11-month difference between the program’s December 2014 date and the independent estimators accept this as reasonable. GAO believes that the date should be

compared to the later March 2017 date, which represents the 80 percent confidence

level.

III. Tracking Risk

GAO discussed the current types of risks being tracked by the GOES program office and the managers of the space and ground segment. There are no high-risk

(where something that could seriously disrupt the program is judged to have a high

probability of happening) issues currently identified, and NOAA has already addressed some, such as solidifying the program requirements document.

GAO noted that the risk analysis for the ground segment identified ‘‘. . .schedule

interdependencies between the flight and operations projects offices as a medium

criticality risk, but that neither the flight project office or the program identified

this risk even though it is relevant to both.’’ GAO recommended that NOAA maintain a program-level list of risk; NOAA has agreed and has made this a responsibility of the systems integration division. The Program Director will also provide

monthly updates to the NOAA Program Management Council on the full risk list.

GAO also recommended adding three other risks to the new consolidated list. The

first involved vacancies in key management positions. The System Program Director

(SPD) is currently operating in an acting role (although she has extensive experience with GOES–R as a result of her position as Deputy Assistant Administrator

for Systems in NESDIS). The Deputy System Program Director position is also filled

in an acting role. The new Assistant SPD went on duty on September 4. NOAA is

currently running a competition for the Program Director and will begin a new one

for the Deputy position (no acceptable candidate was selected after the first competition). The need for stable, long-term expertise in leadership positions for programs

like GOES–R is often cited as a lesson learned from previous program failures.

In its report, GAO notes that the Advanced Baseline Imager (ABI), the most critical sensor aboard GOES–R, is operating with only a one percent management reserve held by the contractor. This is, of course, far too low; reserves for instrument

development normally are no lower than 20 percent. NOAA responds that the

GOES–R program will maintain reserves in both of the project offices and at the

program level. Instrument contractors will draw reserves from the overall reserve

6

4 National Research Council. Earth Science and Applications from Space: National Imperatives

for the Next Decade and Beyond. National Academies Press, 2007; p. 2–11.

maintained by the Flight Project and, if necessary, from the Program Office. The

acting Program Director believes this plan requires extensive and continuing oversight by the Flight Project Manager in order to avoid depleting that reserve, and

to allow NOAA to keep control of the reserve. GAO noted that the ABI has already

suffered from technical and cost challenges that have led to one re-baselining and

call on the Project Office reserve. The Project Office reserve dropped to 15 percent

in July, although NOAA indicated in its comments that it has been increased to 20

percent. GAO estimates that the ABI program has some 40 percent of its work remaining and believes that the impact it has had on the existing reserve, even before

GOES–R enters the development and production phase, indicates trouble in the future.

Finally, GAO and NOAA disagree about the level of insight NOAA has into

NASA’s management of the program’s space segment. In July 1991, reviewing the

development of the GOES–Next satellites (what became the I–M satellites currently

in service), GAO reported to the Committee that the project was in serious trouble.

Among the reasons was that NOAA did not require NASA to conduct appropriate

engineering analyses before development of the satellites began (due to fiscal constraints and pressure to make the new satellites available for launch). Senior officials in the National Weather Service also said that NESDIS and NASA did not tell

them that the solution to the instrument-pointing accuracy requirements would be

very complex and difficult to accomplish. One of the reasons NOAA originally intended to serve as the program integrator was to overcome such communication

problems.

GAO believes that the interagency agreement NOAA and NASA reached to govern

the GOES–R program does not give NOAA—which is responsible for funding and

executing the program—enough knowledge of contractor performance in the space

segment managed by NASA. While NOAA receives contractor cost data from NASA,

GAO questions if it is sufficient for NOAA to raise questions about its validity only

with NASA. NOAA’s response argues that with NOAA persons working in the Flight

Project office at Goddard Space Flight Center, there will be extensive day-to-day

oversight. The Program Office and Flight Project office will interact regularly. Further, NOAA personnel will participate in the NASA technical reviews during the

program even before the monthly Program Management Council review at NOAA

Headquarters. This is a risk that involves the differing cultures of the two agencies

and will be reduced as NOAA assigns personnel with the appropriate technical expertise and experience to its positions in the GOES–R management structure.

The Sounder of Tomorrow

As noted earlier, one of the major changes to the GOES–R program was the decision to eliminate the Hyperspectral Environmental Suite (HES). This instrument

was intended to enhance the ability to look down through the atmosphere to determine the temperature and moisture levels at various altitudes. Such data are critical inputs to forecasting models used by the National Weather Service. In the case

of hurricane forecasting, the sensor is being designed to provide more refined measurements of winds surrounding the core of hurricanes to identify steering winds and

better predict the storm’s path. HES was also intended to improve our capability

to monitor the waters of the continental shelf and coastal areas. NOAA states that

it will be possible to use the Advanced Baseline Imager, combined with data from

weather balloons and other sensors, to obtain results equivalent to that produced

by the sounder now aboard the existing GOES satellites to meet the agency’s needs

when GOES–R becomes operational.

The recent National Research Council Earth Science Decadal Survey recommended that ‘‘. . .NOAA develop a strategy to restore the previously planned capability to make high temporal- and vertical-resolution measurements of temperature and water vapor from geosynchronous orbit.’’ 4 At the time, NOAA had three

contracts to identify ways to reduce risk in the HES instrument outstanding, and

the Survey members suggested extending them to seek some option for providing

improved sounding capability on GOES–R. While NOAA ultimately decided to allow

the contracts to expire, the contractors involved have stated to Committee staff that

sufficient insight has been gained to demonstrate an improved sounder aboard

GOES–R. Although it would not be capable of meeting the original requirements for

HES, it would represent a marked improvement over the existing sounder. However,

in April, Administrator Lautenbacher announced there would be no new geoVerDate 11-MAY-2000 11:12 Jun 21, 2008 Jkt 038339 PO 00000 Frm 00010 Fmt 6633 Sfmt 6621 C:\WORKD\E&E07\102307\38339 SCIENCE1 PsN: SCIENCE1
7

5 Iannotta, Ben. ‘‘Temperature and Humidity Sounder Will Not Fly on GOES–R.’’ Space News,

April 16, 2007; p. 10.

stationary capability until at least GOES–T. Ms. Kicza stated at the time that alternatives for a future sounder would be explored.5

NOAA has now canceled a major instrument on each of its next-generation satellite systems after investing significant resources (the Conical Microwave Imaging

Sounder on NPOESS being the other), thereby reducing the chance for improved

performance over existing satellites. In both cases, the agency said that the instruments proved too challenging. It emerged later, however, that in both cases it was

the pursuit of a particular measurement (ocean color for HES and soil moisture for

CMIS) that proved to be the bottleneck. NOAA’s process for developing requirements and managing the trade-offs invariably required when operating on technology’s leading edge proves the perceptiveness of Voltaire’s observation that ‘‘the

best is the enemy of the good.’’ One of the key issues for the Committee is to examine how we can improve the process for developing and acquiring advanced technologies for environmental monitoring and weather forecasting while maintaining

cost control over the development and acquisition of satellite systems.

8

Chairman LAMPSON. This hearing will come to order. I wish you

a good afternoon. The Subcommittee on Energy and Environment

meets today for a report on the Geostationary Operational Environmental Satellite or GOES Program. Satellites which have been

serving America since 1975, watch over the whole Western Hemisphere from their positions 22,300 miles about the Earth. They

send back the pictures that your local weather reporter shows you

every night. Those satellites provide the dramatic pictures of hurricanes that we all see when these storms are churning toward the

coast. They enable forecasters to alert us that severe weather is on

the way. It is the weather satellite no one wants to be without, especially those of us who represent the coastal areas.

Designing and flying satellites is a difficult business, and even

with years of experience there are always frustrations in bringing

new ones into service. In the early 1990s, the General Accounting

Office told Congress that the generation of GOES satellites then in

development was in serious trouble. The instruments were behind

schedule, the program cost had more than doubled, and it still was

not clear when the satellites would be launched. At least today we

are not in the position of having the last GOES satellite in orbit

with its fuel tanks almost empty.

Last year, NOAA Administrator Lautenbacher told us that the

GOES Program cost estimates had almost doubled, and in order to

bring them back within the agency’s limited budget, he was cutting

the number of satellites in half and eliminating one of the major

instruments. An independent review team took issue with NOAA’s

intent to manage the GOES Program by itself, questioning whether

there were enough people in the agency who know how to handle

satellite design and development. The Earth Science Decadal Survey issued earlier this year by the National Research Council urged

NOAA to find a way to recover the capability represented by the

eliminated sensor. Our GAO team recommended a full-scale review

of the Advanced Baseline Imager, the primary sensor, and bolstering the agency’s management capability.

NOAA has been responding to all this advice, as Mr. Kicza will

explain in her testimony. The agency decided that it did not or that

it did have to ask NASA for help and has given its sister agency

the responsibility to manager those elements of the GOES Program

that will fly in space. It will apply its own special expertise to the

grand side of the program. It has brought over NASA staff to supplement its own program and project managers. It completed the

review of the Advanced Baseline Imager. Today it is at the point

where the decision has to be made to buy GOES–R. That makes

it a good time to see where we are.

Mr. Powner from GAO has some important messages to bring out

in his statement. It appears that the program cost estimate will be

around $8 billion by the time we receive the President’s budget request this year. This is some $1 billion more than the estimate Admiral Lautenbacher gave us last year. That is not a good trend. It

concerns me to find out that we are operating with both an acting

program director and an acting deputy program director, and that

NOAA’s first attempt to fill the deputy’s slot couldn’t find someone

for the job. There appears to be strong disagreement between our

witnesses about the relationship between NOAA and NASA in

9

terms of managing the space segment of the GOES Program. I

trust Ms. Kicza will discuss that with us.

The Chair of NOAA’s Independent Review Team, Tom Young,

knows from his own experience and many reviews of what went

wrong in other satellite programs, where to look to figure out how

well a project like GOES is progressing. He has told us that the

opportunity to get GOES right is there.

So I hope today’s hearing will keep GOES moving in the right

direction. I thank you for being here, and I recognize the Ranking

Member, Mr. Inglis, for his opening remarks.

[The prepared statement of Chairman Lampson follows:]

PREPARED STATEMENT OF CHAIRMAN NICK LAMPSON

Good afternoon. The Subcommittee on Energy and Environment meets today for

a report on the Geostationary Operational Environmental Satellite, or GOES, program. These satellites, which have been serving America since 1975, watch over the

whole Western Hemisphere from their positions 22,300 miles above Earth. They

send back the pictures that your local weather reporter shows you every night.

GOES satellites provide the dramatic pictures of hurricanes that we all see when

these storms are churning toward the coast. They enable forecasters to alert us that

severe weather is on the way. It’s the weather satellite no one wants to be without,

especially those of us who represent coastal areas.

Designing and flying satellites is a difficult business, and even with years of experience there are always frustrations in bringing new ones into service. In the early

1990s, the General Accounting Office told Congress that the generation of GOES

satellites then in development was in serious trouble. The instruments were behind

schedule, the program cost had more than doubled, and it still was not clear when

the satellites would be launched. At least today we are not in the position of having

the last GOES satellite in orbit with its fuel tanks almost empty.

Last year, NOAA Administrator Lautenbacher told us that the GOES program

cost estimates had almost doubled, and in order to bring them back within the agency’s limited budget he was cutting the number of satellites in half and eliminating

one of the major instruments. An independent review team took issue with NOAA’s

intent to manage the GOES program by itself, questioning whether there were

enough people in the agency who know how to handle satellite design and development. The Earth Science Decadal Survey issued earlier this year by the National

Research Council urged NOAA to find a way to recover the capability represented

by the eliminated sensor. Our GAO team recommended a full-scale review of the

Advanced Baseline Imager (the primary sensor) and bolstering the agency’s management capability.

NOAA has been responding to all this advice, as Ms. Kicza will explain in her

testimony. The agency decided that it did have to ask NASA for help and has given

its sister agency the responsibility to manage those elements of the GOES program

that will fly in space. It will apply its own special expertise to the ground side of

the program. It has brought over NASA staff to supplement its own program and

project managers. It completed the review of the Advanced Baseline Imager. Today,

it is at the point where the decision has to be made to buy GOES–R. That makes

it a good time to see where we are.

Mr. Powner from GAO has some important messages to bring out in his statement. It appears that the program cost estimate will be around $8 billion by the

time we receive the President’s budget request this year. This is some $1 billion

more than the estimate Admiral Lautenbacher gave us last year. That is not a good

trend. It concerns me to find out that we are operating with both an acting Program

Director and an acting Deputy Program Director—and that NOAA’s first attempt

to fill the Deputy’s slot couldn’t find someone for the job. There appears to be strong

disagreement between our witnesses about the relationship between NASA and

NOAA in terms of managing the space segment of the GOES program. I trust Ms.

Kicza to discuss that with us.

The Chair of NOAA’s Independent Review Team, Tom Young, knows from his own

experience—and many reviews of what went wrong in other satellite programs—

where to look to figure out how well a project like GOES is progressing. He has told

us that the opportunity to get GOES right is there. I hope today’s hearing will keep

GOES moving in the right direction.

10

Thank you, and I recognize the Ranking Member, Mr. Inglis, for his opening remarks.

Mr. INGLIS. Thank you, Mr. Chairman. Thank you for holding

this hearing on the Geostationary Operational Environmental Satellites-R Series. This hearing continues close oversight of this vital

weather satellite program, oversight that started in the last Congress.

Last September the Government Accountability Office came before the Science Committee to report on the status of GOES–R series procurement. GAO also made recommendations on how to proceed so as to avoid any further cost overruns while ensuring that

technological development stays on schedule.

More than a year later we are meeting again with witnesses

from GAO and NOAA to discuss the status of the GOES–R Program. However, there are disagreements this time around about

GAO’s assessment of where program development stands.

I look forward to hearing if and why NOAA disagrees with GAO’s

assessment that the project costs will be nearly two billion more

than last year’s outlook, and why the satellites may not be ready

for launch until as late as 2017.

I am particularly concerned that possible launch delays will result in discontinuity of valuable forecasting data, the kind of data

that the Chairman was just referencing. If GOES–R fails to launch

until 2017, and doesn’t come online until 2019, will NASA, NOAA,

and weather forecasters lose access to the information they need to

accurately predict and observe storms?

Those of us responsible for this program, Congress, NOAA, and

NASA, cannot lightly allow delays and cost overruns. GOES–R

toady is a $6.9 billion program for two satellites. That is a lot of

taxpayer money. We expect that investment to provide a series of

weather satellites that are launched on time and provide data to

ensure the most accurate possible weather forecasting and modeling.

I look forward to hearing from our witnesses today and yield

back the balance of my time, Mr. Chairman.

[The prepared statement of Mr. Inglis follows:]

PREPARED STATEMENT OF REPRESENTATIVE BOB INGLIS

Good afternoon. Thank you, Chairman Lampson, for holding this hearing about

the Geostationary Operational Environmental Satellites-R series (GOES–R). This

hearing continues close oversight of this vital weather satellite program, oversight

that started under Republican leadership of this committee.

Last September, the Government Accountability Office came before the Science

Committee to report on the status of the GOES–R series procurement. GAO also

made recommendations on how to proceed so as to avoid any further cost overruns

while ensuring that technological development stays on schedule.

More than one year later, we are meeting again with witnesses from GAO and

the National Oceanic and Atmospheric Administration to discuss the status of the

GOES–R program. However, there are disagreements this time around about GAO’s

assessment of where program development stands. I look forward to hearing if and

why NOAA disagrees with GAO’s assessment that the project costs will be nearly

$2 billion more than last year’s outlook, and why the satellites may not be ready

for launch until as late as 2017.

I’m particularly concerned that possible launch delays will result in discontinuity

of valuable forecasting data. If GOES–R fails to launch until 2017, and doesn’t come

online until 2019, will NASA, NOAA, and weather forecasters lose access to the information they need to accurately predict and observe storms?

11

Those of us responsible for this program, Congress, NOAA, and NASA, cannot

lightly risk delays and cost overruns. GOES–R today is a $6.9 billion program for

two satellites. That is a lot of taxpayer money. We expect that investment to provide

a series of weather satellites that are launched on time and provide data to ensure

the most accurate possible weather forecasting and modeling.

I look forward to hearing from our witnesses today and yield back the balance

of my time.

Chairman LAMPSON. Thank you, Mr. Inglis. I ask unanimous

consent that all additional opening statements submitted by Subcommittee Members may be included in the record. Without objection, so ordered.

[The prepared statement of Mr. Costello follows:]

PREPARED STATEMENT OF REPRESENTATIVE JERRY F. COSTELLO

Mr. Chairman, I appreciate the Subcommittee revisiting the issue of how the development of the GOES–R satellite system is progressing. This is an important subject given the dependence we have on geostationary weather satellites for weather

forecasting. The American public has grown very accustomed to up-to-the-minute

weather information, particularly regarding hurricanes and other severe storms.

Given the loss of life and property that are at stake in these situations, maintaining

a robust program is essential. As we know, satellite development is extremely complex, but is critical to the ongoing performance of the GOES series.

The new GAO report to be released today expresses some continued concerns

about the GOES–R program, particularly surrounding the cost estimate and the

interaction between NOAA and NASA. It also indicates that some progress has been

made, and I look forward to hearing more details from Ms. Kicza about how NOAA

is working to improve the overall performance of its satellite delivery.

Mr. Chairman, oversight of federal spending is one of our most basic responsibilities. As I have said before, it becomes even more important in an era of reduced

budgets. I again commend you for holding today’s hearing and appreciate the time

and expertise of our witnesses.

Chairman LAMPSON. It is my pleasure today to introduce our witnesses. Mr. David Powner, who is the Director of Information Technology Management Issues at the Government Accountability Office. He is the head of the GAO team that has supported the Subcommittee’s oversight of NOAA’s major satellite programs for the

last five years.

And Ms. Mary Ellen Kicza is the Assistant Administrator for our

Satellite and Information Services and leads the National Environmental Satellite Data and Information Systems, NESDIS, at

NOAA, which operates both the geostationary and polar constitutions of weather satellites.

We welcome both of you.

You will each have five minutes for your spoken testimony. Your

written testimony will be included in the record for the hearing,

and when you both have completed your testimony, we will begin

with questions. Each Member will have five minutes to question

the panel, and we will get to that in a few minutes.

Mr. Powner, we will begin with you, please.

STATEMENT OF MR. DAVID A. POWNER, DIRECTOR, INFORMATION TECHNOLOGY MANAGEMENT ISSUES, GOVERNMENT

ACCOUNTABILITY OFFICE

Mr. POWNER. Chairman Lampson, Ranking Member Inglis, and

Members of the Subcommittee. We appreciate the opportunity to

testify this afternoon on our GOES–R report completed at your request. Your early oversight, Mr. Chairman, has been essential to

12

ensure that NOAA is effectively planning for this critical satellite

acquisition.

Today, as requested, I will provide an update on the GOES–R

current cost and schedule estimate, our assessment of whether

NOAA is adequately addressing key technical and programmatic

risks, and recommendations going forward.

Last September when we testified before you, Mr. Chairman, we

discussed GOES as a fourth satellite program costing over $6 billion in the cost and scope uncertainties. Specifically, the cost was

approaching $12 billion double the original estimate.

Since that time the program dropped a complex sensor, decreased the number of satellites from four to two, and revised its

lifecycle cost estimate to $7 billion with the launch of the first satellite in 2014. As the program approaches critical contract award

dates next year, the program cost estimates are growing, and

schedules are being extended. Independent studies estimate that

the two satellite program will cost about $2 billion more than the

current $7 billion program, and the first satellite is to be delayed

two years.

The reasons for the differences between the independent estimate and NOAA’s estimate include differences in government costs,

the space and ground segments, and different assumptions regarding inflation. No one commenting on our draft report told us that

the revised estimate is likely to go up $1 billion and have about

a year delay.

However, this revised estimate is not expected to be released

until February of next year with the President’s 2009 budget. Two

points regarding the cost estimate. First, most satellite programs

overrun even the most conservative independent cost estimate, and

second, we remain concerned that an estimate is being developed

more based on how acceptable it is in the next budget cycle rather

than whether it is a true reflection of what the program will cost.

Turning to risks, NOAA has established a solid risk management

program. Specifically, it has identified key risks and put in place

mitigation plans. For example, key risks include the lack of an integrated master schedule and technical risks associated with Advanced Baseline Imagery (ABI) sensor.

However, we found several areas for improvement. We found inconsistencies among GOES–R’s different risk lists. For example,

the ground segment identified interdependencies among the space

and ground segments as a key risk but the space nor the overall

program identified this.

We, therefore, recommended that NOAA use a program-wide list

that is reconciled with other risk activities. NOAA acknowledged

that this is needed and now has an updated program-wide risk list.

We also found that several important key risks were not being

acknowledged and made recommendations that NOAA acknowledge

these risks, develop mitigation plans, and report the status of these

key risks to senior executives. These risks include key leadership

positions that need to be filled, NOAA’s limited insight into NASA’s

deliverables, and the early depletion of management reserves, expanding on each of these. Two senior GOES–R Program positions,

the system program director and the deputy director, are currently

13

1GAO, Geastationary Operational Environmental Satellites: Progress Has Been Made, But Improvements Are Needed to Effectively Manage Risks, GAO–08–18 (Washington, D.C.: Oct. 23,

2007).

filled by personnel in acting capacities. NOAA’s working aggressively to fill these positions.

In prior GOES acquisitions an issue with NOAA’s limit was

NOAA’s limited insight into the portions of the procurement managed by NASA. During our review we heard that this continues to

be an issue. In particular, when it comes to NOAA’s ability to review key costs and schedule information for the space segment that

NASA is responsible for.

NOAA disagreed with our assessment recommendation in this

area and has reported an unparalleled level of transparency between the two agencies. Given the past problems NOAA has experienced obtaining insights into NASA’s contracts, we believe that

NOAA should acknowledge this risk and manage it appropriately.

We also remain concerned about the early depletion of management reserves at the early stage of this acquisition. NOAA has

downplayed the risk, stating that their overall program reserve is

consistent with best practices. We, however, believe that this

should be managed aggressively since it is likely to result in increased program costs.

In summary, Mr. Chairman, NOAA is positioning itself to more

effectively manage the GOES–R acquisitions. However, moving forward a realistic cost and schedule estimate is needed, as is even

more aggressive risk management.

This concludes my statement. Thank you for your oversight of

this important satellite acquisition.

[The prepared statement of Mr. Powner follows:]

PREPARED STATEMENT OF DAVID A. POWNER

Mr. Chairman and Members of the Subcommittee:

We appreciate the opportunity to participate in today’s hearing on the planned

Geostationary Operational Environmental Satellites–R series (GOES–R) program.

The GOES–R series is to replace the current series of satellites, which will likely

begin to reach the end of their useful lives in approximately 2014. This new series

is expected to mark the first major technological advance in GOES instrumentation

since 1994. It is also considered critical to the United States’ ability to maintain the

continuity of data required for weather forecasting through the year 2028.

As requested, our testimony summarizes the report we issued today on the

GOES–R program. Specifically, we (1) assessed the status and revised plans for the

GOES–R procurement and (2) evaluated whether the National Oceanic and Atmospheric Administration (NOAA) is adequately mitigating key technical and programmatic risks facing the GOES–R program.1 In preparing for this testimony, we

relied on our work supporting the accompanying report. That report contains a detailed overview of our scope and methodology. All of the work on which this testimony is based was performed in accordance with generally accepted government auditing standards.

Results in Brief

NOAA has made progress on its GOES–R procurement—which is estimated to

cost $7 billion and scheduled to have the first satellite ready for launch in 2014—

but costs and schedules are likely to grow.

Specifically, NOAA completed preliminary design studies of its GOES–R acquisition and planned to make a decision to proceed to development and production in

September 2007. In addition, the agency recently decided to separate the space and

ground elements of the program into two separate contracts to be managed by the

National Aeronautics and Space Administration (NASA) and NOAA, respectively.

However, this change in the GOES–R acquisition strategy has delayed the decision

14

to proceed with the acquisition. Further, independent estimates are higher than the

program’s current cost estimate and convey a low level of confidence in the program’s schedule. Independent studies show that the estimated program could cost

about $2 billion more, and the first satellite launch could be delayed by two years.

As NOAA works to reconcile the independent estimate with its own program office

estimate, costs are likely to grow and schedules are likely to be delayed. However,

NOAA officials stated that while their reconciliation process is still ongoing, the revised cost estimate will likely be $1 billion more than the current $7 billion and the

first satellite launch will likely be delayed one year from 2014, rather than two

years.

To address cost, schedule, and technical risks, the GOES–R program has established a risk management program and has taken steps to identify and mitigate selected risks. For example, as of July 2007, the program office identified the lack of

an integrated master schedule as its highest priority risk. It also identified other

risks including technical challenges affecting the development of a critical instrument and the development of requirements between the space and ground segments.

The program has also established plans for bringing these risks to closure. However,

more remains to be done to fully address risks. Specifically, the program has multiple risk watch lists that are not always consistent. Further, key risks are missing

from the risks lists, including risks associated with unfilled executive positions, limitations in NOAA’s insight into NASA’s deliverables, and insufficient funds for unexpected costs (called management reserve). As a result, the program is at risk that

problems will not be identified or mitigated in a timely manner and could lead to

program cost overruns and schedule delays.

To improve NOAA’s ability to effectively manage the GOES–R procurement, in

our report being released today, we are making recommendations to ensure that the

GOES–R program office manages, mitigates, and reports on risks using a more comprehensive program-level risk list. In written comments, the Secretary of Commerce

agreed with our recommendations to use a program level risk list and to add selected risks to its list, but disagreed that NOAA has insufficient insight into NASA’s

contracts. The Secretary cited an unparalleled transparency between the two agencies. However, NOAA has not demonstrated that it has validated NASA’s contractor

performance and we remain concerned that NOAA lacks the capability to oversee

this important aspect of the program. Given the past problems NOAA had in obtaining insight into NASA’s contracts and the importance of this interagency relationship to the success of the GOES–R program, we believe that this issue should be

managed and monitored as a risk.

Background

Since the 1960s, geostationary and polar-orbiting environmental satellites have

been used by the United States to provide meteorological data for weather observation, research, and forecasting. NOAA’s National Environmental Satellite Data and

Information Service (NESDIS) is responsible for managing the civilian geostationary

and polar-orbiting satellite systems as two separate programs, called GOES and the

Polar Operational Environmental Satellites, respectively.

Unlike polar-orbiting satellites, which constantly circle the Earth in a relatively

low polar orbit, geostationary satellites can maintain a constant view of the Earth

from a high orbit of about 22,300 miles in space. NOAA operates GOES as a twosatellite system that is primarily focused on the United States. These satellites are

uniquely positioned to provide timely environmental data to meteorologists and

their audiences on the Earth’s atmosphere, its surface, cloud cover, and the space

environment. They also observe the development of hazardous weather, such as hurricanes and severe thunderstorms, and track their movement and intensity to reduce or avoid major losses of property and life. Furthermore, the satellites’ ability

to provide broad, continuously updated coverage of atmospheric conditions over land

and oceans is important to NOAA’s weather forecasting operations.

To provide continuous satellite coverage, NOAA acquires several geostationary

satellites at a time as part of a series and launches new satellites every few years

(see Table 1).

15

Three satellites—GOES–11, GOES–12, and GOES–13—are currently in orbit.

Both GOES–11 and GOES–12 are operational satellites, while GOES–13 is in an

on-orbit storage mode. It is a backup for the other two satellites should they experience any degradation in service. The others in the series, GOES–O and GOES–P,

are planned for launch over the next few years. NOAA is also planning the next

generation of satellites, known as the GOES–R series, which are planned for launch

beginning in 2014.

GOES–R Program—An Overview

NOAA plans for the GOES–R program to improve on the technology of prior series, in terms of both system and instrument improvements, to fulfill more demanding user requirements and to provide more rapid information updates. Table 2 highlights key system-related improvements GOES–R is expected to make to the geostationary satellite program.

In addition to the system improvements, the instruments on the GOES–R series

are expected to significantly increase the clarity and precision of the observed environmental data. NOAA originally planned to acquire six different types of instruments. Furthermore, two of these instruments—the Advanced Baseline Imager and

the Hyperspectral Environmental Suite—were considered to be the most critical because they would provide data for key weather products. Table 3 summarizes the

originally planned instruments and their expected capabilities.

16

2GAO, Geostationary Operational Environmental Satellites: Additional Action Needed to Incorporate Lessons Learned from Other Satellite Programs, GAO–06–1129T (Washington, D.C.: Sept.

29, 2006) and Geostationary Operational Environmental Satellites: Steps Remain in Incorporating Lessons Learned from Other Satellite Programs, GAO–06–993 (Washington, D.C.: Sept.

6, 2006).

More recently, however, NOAA reduced the scope of the GOES–R program because of expectations of higher costs. In May 2006, the program office projected that

total costs, which were originally estimated to be $6.2 billion, could reach $11.4 billion. We reported that this led NOAA to reduce the scope and technical complexity

of the baseline program.2 Specifically, in September 2006, NOAA reduced the minimum number of satellites from four to two, canceled plans for developing the

Hyperspectral Environmental Suite, and estimated the revised program would cost

$7 billion. Table 4 provides a summary of the timeline and scope of these key

changes.

17

3These were called Program Definition and Risk Reduction contracts.

GOES–R Program Office Structure

NOAA is solely responsible for GOES–R program funding and overall mission success. However, since it relies on NASA’s acquisition experience and technical expertise to help ensure the success of its programs, NOAA implemented an integrated

program management structure with NASA for the GOES–R program. Within the

program office, there are two project offices that manage key components of the

GOES–R system. These are called the flight and operations project offices. The

flight project office oversees the spacecraft, instruments, and launch services. The

operations project office oversees the ground elements and on-orbit operations of the

satellites. The project manager for the flight project office and the deputy project

manager for operations project office are designated to be filled with NASA personnel. Additionally, NOAA has located the program office at NASA’s Goddard

Space Flight Center.

Planned GOES–R Acquisition Strategy

NOAA’s acquisition strategy was to award contracts for the preliminary design of

the GOES–R system to several vendors who would subsequently compete for the

contract to be the single prime contractor responsible for overall system development and production. As such, in October 2005, NOAA awarded contracts for the

preliminary design of the overall GOES–R system to three vendors.3

In addition, to reduce the risks associated with developing technically advanced

instruments, NASA awarded contracts for the preliminary designs for five of the

originally planned instruments. NASA expected to subsequently award development

contracts for these instruments and to eventually turn them over to the prime contractor responsible for the overall GOES–R program.

GOES–R Preliminary Design Studies Are Completed, But Key Program

Changes Have Been Made and Cost and Schedule Estimates Are

Likely to Grow

NOAA has completed preliminary design studies of its GOES–R procurement. In

addition, the agency recently decided to separate the space and ground elements of

the program into two separate contracts to be managed by NASA and NOAA, respectively. However, this change has delayed a key decision to proceed with the acquisition, which was planned for September 2007. Further, independent estimates

are higher than the program’s current $7 billion cost estimate and convey a low

level of confidence in the program’s schedule for launching the first satellite by

2014. As NOAA works to reconcile the independent estimate with its own program

office estimate, costs are likely to grow and schedules are likely to be delayed.

18

4 NASA has not yet issued a development contract for the Geostationary Lightning Mapper.

This contract is expected to be awarded at the end of October 2007. 5This independent review team, comprised of former senior industry and government space

acquisition experts, was hired by NOAA to assess the adequacy of the GOES–R program’s management approach, acquisition strategy, and resource availability, among other things.

Progress Has Been Made on GOES–R Procurement Activities

NOAA and NASA have made progress on GOES–R. The program office has completed preliminary design studies of the overall GOES–R system and has initiated

development work on most of the planned instruments. Specifically, the NOAAissued contracts for the preliminary design of the overall GOES–R system to three

vendors have ended, and the designs have been completed.

In addition, after completing preliminary designs on five of the originally planned

instruments, NASA awarded development contracts for three of them.4 Further, the

most critical of these instruments—the Advanced Baseline Imager—has completed

a major development milestone. In February 2007, it passed a critical design review

gate and NASA approved the contractor to begin production of a prototype model.

NOAA Revised Its Acquisition Strategy

NOAA recently made a number of key changes in how it plans to acquire the

GOES–R system. Originally, NOAA planned to award and manage a single prime

contract for the acquisition and operation of the integrated system. However, an

independent review team assessed the program and found that this approach was

risky.5 It recommended that NOAA split the acquisition effort into two separate contracts for the space and ground segments and have NASA manage the space segment. The independent review team concluded that there was less risk in continuing

with this approach than there would be if NOAA took on a new and expanded role.

In March 2007, Commerce approved NOAA’s decision to implement these recommendations. The agency revised its acquisition strategy to include two separate

contracts—the space segment and the ground segment. The two contracts are expected to be awarded in May 2008 and August 2008, respectively. The space segment is to be managed by a NASA-led flight project office. As such, NASA is to be

responsible for awarding and managing the space segment contract, delivering the

flight-ready instruments to the space segment contractor for integration onto the

satellites, and overseeing the systems engineering and integration. NOAA is to be

responsible for the ground segment contract, which is to be managed by the NOAAled operations project office.

The revised acquisition strategy has delayed NOAA’s plans to complete a key decision milestone on whether to proceed with GOES–R development and production in

September 2007. Once this decision is made, the final requests for proposals on the

system segments are to be released. The agency could not provide a timeframe for

when this key decision milestone would take place.

GOES–R Cost Estimates Are Likely to Grow and Schedule Estimates Are

Likely to Slip

NOAA’s current estimate that the life cycle cost of the GOES–R program would be $7 billion is likely to grow, and its estimate that the first satellite would be

launched in December 2014 is likely to slip. Consistent with best practices in cost

estimating, in May 2007, NOAA had two different cost estimates completed for the

current GOES–R program—one by its program office and one by an independent

cost estimating firm. The program office estimated with 80 percent confidence that

the program would cost $6.9 billion. The independent estimating firm estimated

with 80 percent confidence that the program would cost $9.3 billion.

A comparison of the two cost models shows that the independent estimator has about a 20 percent level of confidence that the program can be completed for $6.9

billion. Further, the independent estimator concluded that the program office estimate significantly understated the risk of cost overruns. Other major differences between the two estimates are contained in government costs and in the space and

ground segments. In commenting on a draft of the accompanying report, NOAA officials noted that one of the differences between the estimates is the inflation rate.

The independent estimator assumed a higher inflation rate than the rate that

NOAA and NASA typically use. NOAA officials noted that if the independent estimate was adjusted to NOAA’s inflation rate, the program’s cost estimate—with 80

percent confidence—would be $8.7 billion. However, we believe that the value of an

independent estimate is that it does not necessarily use the same assumptions as

the program office. By offering alternative assumptions, the independent estimate

provides valuable information for government officials to consider when revising

program cost estimates.

19

Program officials are reconciling the two different cost estimates and plan to establish a new program cost estimate to be released in conjunction with the President’s fiscal year 2009 budget in February 2008. Program officials were unable to

provide us information on the reconciled estimate until it is released. Nonetheless,

the revised cost estimate will likely be $1 billion more than the current $7 billion.

Regarding schedule, NOAA’s current plan to launch the first GOES–R series satellite in December 2014 could be delayed. This schedule was driven by a requirement that the satellites be available to back up the last remaining GOES satellites

(GOES–O and GOES–P) should anything go wrong during the planned launches of

these satellites (see Table 5). However, as part of its cost estimate, the independent

estimator performed a schedule risk analysis. The independent estimator determined that there was less than a 50 percent chance that the first satellite would

be ready for launch by December 2014 and that a later date would be more realistic.

The estimator determined that it had 50 percent confidence that the first satellite

would launch by October 2015 and 80 percent confidence that the satellite would

launch by March 2017. A delay of this magnitude could affect the continuity of

GOES data should the agency experience problems with the predecessor satellites.

NOAA Is Taking Steps to Address Key Risks, But More Remains to Be Done

To address cost, schedule, and technical risks, the GOES–R program established

a risk management program and has taken steps to identify and mitigate selected

risks. However, more remains to be done to fully address a comprehensive set of

risks. Specifically, the program has multiple risk watch lists and they are not always consistent. Further, key risks are missing from the risks lists, including risks

associated with unfilled executive positions, limitations in NOAA’s insight into

NASA’s deliverables, and insufficient funding for unexpected costs (called management reserve) on a critical sensor. As a result, the GOES–R program is at increased

risk that problems will not be identified or mitigated in a timely manner and that

they could lead to program cost overruns and schedule delays.

GOES–R Has a Risk Management Program and Is Taking Measures to Address Selected Risks

The GOES–R program office established a risk management program and is

tracking and mitigating selected risks. Risk management is a leading management

practice that is widely recognized as a key component of a sound system development approach. An effective risk management approach typically includes identifying, prioritizing, and mitigating risks, and escalating key risks to the attention of

senior management.

In accordance with leading management practices, the GOES–R program identifies risks, assigns a severity rating to risks, tracks these risks in a database, plans

response strategies for each risk in the database, and reviews and evaluates these

risks during monthly program risk management board meetings. Program-wide and

project-specific risks are managed by different offices. The program office identifies

and tracks program-wide risks—those that affect the overall GOES–R program.

NASA’s flight project office and NOAA’s operations project office manage risks afVerDate 11-MAY-2000 11:12 Jun 21, 2008 Jkt 038339 PO 00000 Frm 00023 Fmt 6633 Sfmt 6621 C:\WORKD\E&E07\102307\38339 SCIENCE1 PsN: SCIENCE1
20

6 NASA’s GOES–R flight project office is responsible for the spacecraft, instruments, and

launch services. NOAA’s GOES–R operations project office is responsible for the ground elements and on-orbit operations of the satellites.

fecting their respective aspects of the program.6 Further, the program office briefs

senior executives on top program and project risks on a monthly basis.

GOES–R Program Office Identified and Is Working to Mitigate Programwide Risks

As of July 2007, the program office identified three program risks affecting the

overall GOES–R program. These risks include the development of the integrated

master schedule, the ability to secure authorization to use a key frequency band to

meet the space-to-ground communication data link requirements for the GOES–R

system, and the final approval of the GOES–R mission requirements from the

NOAA Deputy Under Secretary.

NOAA is working to mitigate and close program risks that it is tracking. For example, the program office recently closed the risk associated with GOES–R requirements because it had sufficiently defined and obtained approval of these requirements. As another example, the program office considers the lack of an integrated

master schedule to be its highest priority risk. Program officials reported that completion of the integrated master schedule is driven by the completion of the intermediate schedules for the ground segment and the space-to-ground inter-dependencies. Key program staff members, including a resident scheduler, meet on a weekly basis to resolve outstanding design issues and hone these schedules. Program officials reported that the intermediate schedules are near completion and that they

plan to have the integrated master schedule completed in Fall 2007. They expect

to remove this issue from the risk watch list at that time.

NASA Identified Flight Segment Risks and Is Working to Mitigate Them

As of July 2007, the NASA flight project office identified four risks affecting instrument development, all of which are classified as medium risk. The top three

risks pertain to the advanced imaging instrument, ABI—including issues on timely

and quality subcontractor delivery of a critical part, stray light negatively impacting

the performance of the optical system, and meeting specified performance requirements on image navigation and registration. The fourth priority risk pertains to the

improvement of subcontractor quality assurance on a key sensor for the Space Environmental In-Situ Suite.

NASA is working to mitigate the flight segment risks that it is tracking. For example, the ABI contractor, among other things, plans to complete a key simulation

review before the end of the year (called the structural thermal optical performance

analysis) to evaluate whether the instrument can meet its expected performance parameters for image navigation and registration. NASA also recently conducted a

vendor facility assessment of the Space Environmental In-Situ Suite subcontractor

to determine whether adequate quality assurance improvements had been made to

be compliant with contract requirements. These actions are expected to help mitigate the risk.

NOAA Identified Risks in its Operations Segment and Is Working to Mitigate Them

As of July 2007, the NOAA operations project office identified five risks impacting

the management and development of the ground system and operations, including

one that is identified as a medium risk. These risks include, among other things,

inadequate definition of flight and operations project inter-dependencies, algorithm

development responsibilities, and the adequate definition of coordination requirements between the space and ground segments to ensure that the two requests for

proposals are consistent.

NOAA is working to mitigate the ground system and operations risks that it is

tracking. For example, for the highest priority risk regarding schedule inter-dependencies, key staff from both the flight and operations projects meet weekly in order

to identify and synchronize project schedules. The project office expects to close this

risk in Fall 2007.

Multiple Watch Lists Are Not Consistent, Making It Difficult to Prioritize

and Manage Risks

While GOES–R has implemented a risk management process, its multiple risk

watch lists are not consistent in areas where there are inter-dependencies between

the lists, which makes it difficult to effectively prioritize and manage risks at the

appropriate organizational levels. Sound risk management practices call for having

a consistent prioritization approach and for significant problems to be elevated from

21

the component level to the program level. This is because an issue affecting a critical component could have severe programmatic implications and should be identified, tracked, and overseen at the program level. In addition, program executives

should be briefed regularly on the status of key risks.

However, on the GOES–R program, the risks identified on the multiple risk lists

are inconsistent in areas where there are inter-dependencies between the lists.

These inter-dependencies include situations where a risk is raised by one project office and affects the other project office, but is not identified by the other project office or elevated to the program level risk list. They also include situations where

a risk identified by a project office has program-wide implications, but is not elevated to the program level risk list. For example, the operations project office identified schedule inter-dependencies between the flight and operations project offices as

a medium criticality risk, but neither the flight project office nor the program identified this risk even though it is relevant to both. As another example, the operations

project office identified the ground procurement schedule as a major issue in its

briefing to senior management, but this risk was not identified on its own or on the

program-wide risk lists.

In addition, while the three offices brief senior management about their key risks

on a monthly basis, selected risks may not be accurately depicted in these briefings

because of the inconsistencies among the risk watch lists. For example, both the

flight and operations project offices identified technical development issues as minor

to moderate risk areas, but the program office did not identify this item as a risk

and, when it briefed senior management, it noted that technical development was

in good shape. Figure 1 depicts examples of inconsistencies among risk lists and

briefings to senior management.

The lack of consistency in managing risks in areas where there are inter-dependencies makes it difficult to ensure that all identified risks are appropriately

prioritized and managed. This situation hampers the program office’s ability to identify and mitigate risks early on and to anticipate and manage the impact of risks

on other areas of the program.

Important GOES–R Management Risks Are Missing From the Program

Watch List

To be effective, a risk management program should have a comprehensive list of

risks. However, several key risks that impact the GOES–R procurement and merit

agency attention are not identified in the program’s risk lists. These risks include

(1) key leadership positions that need to be filled, (2) NOAA’s limited insight into

NASA’s deliverables, and (3) insufficient management reserves (held by the program

and a key instrument contractor). At the conclusion of our review for the accompanying report, program officials stated that they are aware of these issues and are

working to monitor them or address them, as warranted. Nevertheless, until these

and other program-wide risks are identified and addressed as part of a comprehenVerDate 11-MAY-2000 11:12 Jun 21, 2008 Jkt 038339 PO 00000 Frm 00025 Fmt 6633 Sfmt 6621 C:\WORKD\E&E07\102307\38339 SCIENCE1 PsN: SCIENCE1
22

7GAO–06–993. 8This reserve is intended to cover expected costs above those projected by the contractor and

unexpected costs in solving problems during a system development program.

sive risk management program, there is increased likelihood that issues will be

overlooked that could affect the acquisition of the GOES–R system.

Key GOES–R Leadership Positions Need to Be Filled

The two senior GOES–R program positions—the system program director and

deputy system program director—are currently filled by NASA and NOAA personnel

in an acting capacity until they can be permanently filled by NOAA. In addition,

the acting system program director is not able to work full time in this role because

she is also on a special assignment as the NESDIS Deputy Assistant Administrator

for Systems. NOAA reported that it plans to fill the deputy system program director

role in the near future, but noted that it could take more than six months to fill

the system program director role. Given the approach of the development phase of

the GOES–R acquisition and the competing priorities of the acting system program

director, it is especially important that these key leadership positions be filled

quickly. At the conclusion of our review, agency officials stated that they are aware

of this issue and are working to fill the positions, but they did not believe the issue

warranted inclusion on the program level risk watch list. However, without the senior level attention inherent in a sound risk management program, it is not clear

that NOAA is sufficiently focused on the importance of establishing knowledgeable

and committed program executives, or in moving quickly to fill these critical positions.

NOAA’s Insight into NASA’s Program Elements Is Limited

NOAA’s March 2007 decision to adopt an acquisition management approach similar to prior GOES procurements could make the agency vulnerable to repeating

some of the problems experienced in the past. In particular, our work on the GOES

I–M series found that NOAA did not have the ability to make quick decisions on

problems because portions of the procurement were managed by NASA.7 In fact,

NOAA officials originally intended to depart from this approach as a lesson they

learned from the GOES I–M acquisition, because it limited the agency’s insight and

management involvement in the procurement of major elements of the system.

The established NOAA/NASA interagency agreements require NASA to submit

monthly contractor cost performance reports to NOAA and to alert NOAA should

cost and schedule performance drop below certain thresholds. NASA is currently

submitting the required reports and has alerted NOAA on major cost and schedule

changes. However, these interagency agreements do not contain provisions that enable NOAA to ensure that the data and reports are reliable and that they accurately

depict contractor performance. To do so would entail NOAA having the ability and

means to question and validate data, such as by having direct access to the contractor.

NASA and NOAA officials reported that the two agencies are working together

with an unparalleled level of transparency and noted that NOAA program staff have

access to contractor data and can bring any questions with the data to the relevant

NASA staff. However, they acknowledged that this process is not documented and

were not able to demonstrate that NOAA staff had questioned contract data and

that NASA had facilitated obtaining answers to the questions. By not identifying

and mitigating this risk on its program risk list, NOAA increases the likelihood that

the GOES– program will repeat the management and contractor shortfalls that

plagued past GOES procurements.

Recent Changes on a Key Instrument Have Reduced Program Management Reserve

Funds and Limited Contractor Reserve Funds Leave GOES–R Vulnerable to Future Cost Increases

A recent modification to the critical ABI instrument contract increased its cost,

thereby reducing the amount of management reserve funds held by the program office for unexpected expenses. In September 2006, we reported that ABI was experiencing technical challenges, that were resulting in cost and schedule overruns. Since

then, the contractor continued missing cost and schedule targets—a trend that continued until February 2007. At that time, NASA modified the contract to implement

a revised baseline cost and schedule. The added cost of this modification was funded

using management reserve funds held by the GOES–R program office.8 As a result,

the amount of reserve held by the program office dropped below 25 percent—a level

that NOAA reported it intended to establish as a lesson learned from other satellite

23

9GAO–06–993. 10G110–08–18.

acquisitions. As of July 2007, the program’s reserve level was at about 15 percent.

Program officials stated that their revised goal is to maintain between 10 and 15

percent in reserve at the program level. While maintaining a 10 to 15 percent management reserve is on par with other major satellite acquisitions, the depletion of

management reserves this early in the GOES–R acquisition raises concerns that

there will be insufficient reserves during the challenging development, integration,

and testing phases to come.

In addition, the contractor for the ABI instrument has a very low level of reserve

funding for unexpected costs, which means that any unexpected problems will likely

lead to cost growth on the overall GOES–R program. As of May 2007, the contractor

was holding less than one percent of funding in reserve to cover unexpected costs

associated with the 40 percent of work left to be completed. As such, there is a risk

that the new baseline could fail due to inadequate reserves to finish the program.

This would likely have a diminishing effect on the reserve held by the GOES–R

flight project and the program office to cover the costs of a second revised baseline

plan. Our prior work on system acquisitions has shown inadequate reserves to be

an indicator of poor management performance that could lead to cost overruns.9

Considering that GOES–R has not yet entered the development and production

phases, it will be critical for NOAA’s senior executive management to aggressively

manage this risk. By not identifying, mitigating, and tracking this risk in a program-wide risk list, the GOES–R program runs an increased risk that unanticipated

issues on the ABI instrument will lead to program-wide cost overruns and schedule

delays.

Implementation of GAO Recommendations Should Improve NOAA’s Ability

to Effectively Manage the GOES–R Procurement

To improve NOAA’s ability to effectively manage the procurement of the GOES–

R system, we recommended in our accompanying report10 that the Secretary of

Commerce direct the Undersecretary of Commerce for Oceans and Atmosphere to

take the following two actions:

• Ensure that the GOES–R program office manages, mitigates, and reports on

risks using a program-level risk list that is reconciled with and includes risks

from its flight and operations project offices that could impact the overall program.

• Include the following risks on the program-wide risk list, develop plans to

mitigate them, and report to senior executives on progress in mitigating

them:

• unfilled or temporary GOES–R program leadership positions,

• insufficient program insight on NASA contract performance, and

• insufficient management reserve on the critical Advanced Baseline

Imager instrument and at the GOES–R program level.

In written comments, Commerce agreed with our recommendations to use a program level risk list and to add selected risks to its list. The department reported

that NOAA has established a consolidated program-wide risk list that is to be used

to evaluate risks during monthly internal and external reviews. Further, NOAA acknowledges the risks associated with having unfilled leadership positions and insufficient management reserves and is working to mitigate these risks. However, the

department disagreed with our recommendation to manage and mitigate the risk

that NOAA has insufficient insight into NASA’s contracts. The department cited an

unparalleled level of transparency between the two agencies and listed multiple regular meetings that the two agencies hold to ensure close coordination. While an improved working relationship between the two agencies is critical, NOAA has not provided any evidence that it has been able to effectively question and validate data

on NASA’s contractor performance. Given the past problems that NOAA has experienced in obtaining insight into NASA’s contracts and the importance of this interagency relationship to the success of the GOES–R program, we believe that this

issue should be managed and monitored as a risk.

NOAA also requested that we acknowledge its effort to reconcile its program estimate with the independent estimate and reflect a 20 percent possibility that the

program could cost $1 billion more than the current estimate of $7 billion, rather

than $2 billion more. We acknowledge this in our report; however, the reconciliation

effort is not complete and NOAA did not provide us with a reconciled estimate.

24

In summary, although NOAA has made progress in the GOES–R procurement,

changes in the GOES–R acquisition strategy could lead to cost overruns and schedule delays if not managed effectively. Over the last year, NOAA has completed preliminary design studies of its GOES–R system and decided to separate the space

and ground elements of the program into two contracts and have NASA oversee the

system integration effort. Current program plans call for a two-satellite program— estimated to cost about $7 billion—with launch of the first satellite in December

2014. However, independent studies show that the program’s cost could increase by about $2 billion and that the first launch could be delayed by at least two years.

NOAA has taken steps to identify and address key risks but more could be done

to effectively manage risks from a program-wide perspective. In particular, the program has multiple risk watch lists that are not consistent in areas where there are

inter-dependencies and key risks have not been elevated for program-wide attention.

Also, several risks that warrant NOAA’s attention have not been placed on any

watch list. Specifically, the top two leadership positions are only temporarily filled;

NOAA does not have the ability and means to obtain insight into NASA contracts

in order to validate contractor performance data; and insufficient management reserves to handle unexpected problems on a critical instrument and at the program

level are likely to affect overall program costs when any unexpected problems arise.

Until NOAA manages and addresses a comprehensive set of program risks, the

agency’s ability to effectively manage the GOES–R acquisition will be significantly

weakened and could lead to substantial program overruns and delays.

Mr. Chairman, this concludes my statement. I would be happy to answer any

questions that you or Members of the Subcommittee may have at this time.

BIOGRAPHY FOR DAVID A. POWNER

Experience

Twenty years’ experience in information technology issues in both public and private sectors.

Education

Business Administration, University of Denver

Senior Executive Fellows Program, Harvard University, John F. Kennedy School of

Government

Dave is currently responsible for a large segment of GAO’s information technology

(IT) work, including systems development, IT investment management, health IT,

and cyber critical infrastructure protection reviews.

In the private sector, Dave has held several executive-level positions in the telecommunications industry, including overseeing IT and financial internal audits, and

software development associated with digital subscriber lines (DSL).

At GAO, Dave has led teams reviewing major IT modernization efforts at Cheyenne Mountain Air Force Station, the National Weather Service, the Federal Aviation Administration, and the Internal Revenue Service. These reviews covered many

information technology areas including software development maturity, information

security, and enterprise architecture.

Chairman LAMPSON. Thank you, Mr. Powner.

Ms. Kicza.

STATEMENT OF MS. MARY ELLEN KICZA, ASSISTANT ADMINISTRATOR FOR SATELLITE AND INFORMATION SERVICES, NATIONAL ENVIRONMENTAL SATELLITE, DATA, AND INFORMATION SERVICE, NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA), U.S. DEPARTMENT OF COMMERCE

Ms. KICZA. Mr. Chairman and Members of the Subcommittee, I

am Mary Kicza, Assistant Administrator for the National Environmental Satellite, Data, and Information Service within the National Oceanic and Atmospheric Administration. Today we are here

to talk about NOAA’s next generation geostationary satellite program, GOES–R.

As you said, GOES spacecraft are critical to hurricane and other

severe weather forecasting because they are constantly taking imVerDate 11-MAY-2000 11:12 Jun 21, 2008 Jkt 038339 PO 00000 Frm 00028 Fmt 6633 Sfmt 6601 C:\WORKD\E&E07\102307\38339 SCIENCE1 PsN: SCIENCE1
25

ages and collecting data above the United States. We have two geostationary satellites operating in space; one over the east coast and

one over the west coast. We do maintain a spare satellite in orbit

in case of any problems with the operational satellites. We just

launched GOES–N, our current on-orbit spare, and we are finishing building two satellites, O and P, which will launch, provide

data until GOES–R is launched in 2014.

We are in the final design phase of GOES–R. We plan to release

requests for proposals in early 2008, and to award contracts for

building the new satellites and ground systems by the end of 2008.

GOES–R remains on track for a 2014 launch to maintain continuity for the GOES–N series.

My written testimony details significant changes we have made

to strengthen our management of the GOES–R Program. We maintain overall program management responsibility with NOAA for

GOES–R. NASA manages the flight project, which includes building and integrating the instruments and the spacecraft and procuring the launch vehicle. NOAA manages the ground system

project, which includes all ground stations and algorithm development.

These changes place the government in a direct oversight role for

each of the key elements of the GOES–R Program; the spacecraft,

the instruments, and the supporting ground systems. We have instituted specific matrix and milestones to ensure problems are

quickly identified and fixed. We continue to have outside independent experts look at our program, and we will make changes as

necessary.

NOAA continues to value the insight and reviews by GAO, and

I would like to respond to the recommendations in the recent GAO

report. As David said, recommendation number one relates to assuring that risks highlighted in one area are examined for their potential program-wide implications. NOAA agreed with this recommendation, and it has already begun to implement a consolidated risk list that the GOES–R system program director regularly

reviews. The NOAA Program Management Council is briefed

monthly on the top risks and the strategies for resolving and closing these risks.

Recommendation number two directs that NOAA add the following risks to the program-wide risk list. These include unfilled

or temporary GOES–R Program leadership positions, insufficient

program insight on NASA contract performance, and insufficient

management reserve on the critical advanced baseline imagery instrument, and at the GOES–R Program level.

NOAA agrees with highlighting the risks associated with filling

the leadership positions. The GAO in their draft report had highlighted three vacancies as being of concern. One has been filled.

The remaining two are in the final decision stages. The status of

filling key vacancies is tracked on a weekly basis at the staff level

and formally reviewed on a monthly basis at NOAA’s Program

Management Council meeting.

The GOES–R Program is currently being led full-time by Ms.

Abigail Harper. She is my Deputy Assistant Administrator for Systems Acquisitions. Ms. Harper is highly qualified with multiple

26

years experience in satellite systems acquisitions and in satellite

systems safety and mission assurance.

Meanwhile, NOAA has expedited its search for the GOES–R Systems Program Director. I have completed all of the interviews of

the highly-qualified candidates and will be forwarding my selection

to Vice Admiral Lautenbacher within the week.

We do not fully understand GAO’s concern with respect to

NOAA’s insight into NASA’s performance. We do have unprecedented insight into NASA contract performance. Our GOES–R Program is co-located at NASA Goddard with the flight project and the

ground project. Our program interacts with the projects on a daily

basis.

Additionally, we have a comprehensive management control plan

which clearly outlines roles, responsibilities, authorities, and reporting requirements.

Regarding the recommendation highlighting the reserve posture

as a risk, NOAA believes there are sufficient reserves on the Advanced Baseline Imagery instrument and at the program level.

When the GAO had reviewed the program earlier this year, the

program had not yet allocated the management reserves to the

project level. We were holding it at the program level. This may

have led to an incorrect interpretation by the GAO as to the reserve posture. The program does maintain a budget that reflects at

least a 25 percent management reserve. Today, the GOES–R Program maintains reserve at both the program level and the project

level, and we believe that these reserves are sufficient to manage

risks.

We also have concerns about GAO cost and schedule assertions.

We have worked hard to reconcile the independent estimate with

the program estimate. Early in the cost estimation efforts the two

estimates did diverge in several areas due to differing assumptions.

As a part of the reconciliation process, the program estimate has,

in fact, increased, and the independent estimate has decreased.

The estimates are now within 12 percent of each other.

The independent estimator has indicated that the program estimate represents a reasonable cost estimate at this stage of the development. The updated cost estimate is, in fact, informing our

2009 budget process.

Additionally, the independent estimator has also indicated that

the two schedules are essentially in agreement with each other

within the capability of current modeling, schedule estimating models to predict.

In concluding, I want to take the opportunity to thank Mr.

Powner for the recommendations offered. We are taking appropriate action to respond to the concerns, and I do appreciate the

Committee’s continued interest in NOAA’s satellite programs. We

are strengthening our management of these programs. We do have

a fully-functioning, operational satellite with backup systems in

place, and we are pleased to be working on the next generation

GOES–R.

At this point I will be happy to answer any questions you have.

[The prepared statement of Ms. Kicza follows:]

27

PREPARED STATEMENT OF MARY ELLEN KICZA

Introduction

Mr. Chairman and Members of the Subcommittee, I am Mary E. Kicza, Assistant

Administrator of the National Environmental Satellite, Data, and Information Service (NESDIS). NESDIS is part of the National Oceanic and Atmospheric Administration (NOAA), within the Department of Commerce (DOC). I appreciate the opportunity to discuss with you today NOAA’s environmental satellite programs and to

highlight their importance to our hurricane and other severe weather forecasting

and warning capabilities. NOAA has made significant progress in the development

of the next generation Geostationary Operational Environmental Satellites–R Series

(GOES–R) program since the September 29, 2006 hearing.

NOAA’s satellite acquisitions are complex and difficult development efforts. I will

be the first to acknowledge that NOAA does not have a strong track record with

regard to recent satellite acquisition development efforts. We appreciate the Government Accountability Office’s (GAO’s) recognition that, in the GOES–R acquisition,

‘‘progress has been made.’’ NOAA is working hard to prevent schedule and budget

problems from occurring in our satellite programs. We have implemented several

changes to strengthen the review, cost estimating and program control processes

within our satellite development programs in response to lessons learned from programs including the National Polar-orbiting Operational Environmental Satellite

Systems (NPOESS) and from the recommendations of outside reviewers, such as the

GAO.

We value the GAO’s reviews of GOES–R. In fact, GAO’s recommendations place

emphasis on some areas where NOAA is already proactively engaged: obtaining an

independent cost estimate and reconciling differences with the program cost estimates; assuring that we are paying proper attention to managing risk; and putting

in place protocols similar to those used by the National Aeronautics and Space Administration (NASA) for milestone decision points for satellite acquisition programs.

We thank the GAO for its recommendations and look forward to its continued review of the program.

What are Geostationary Satellites?

NOAA has operated geostationary operational environmental satellites (GOES)

since the 1970s. These satellites are located more than 22,000 miles above the equator and provide near continuous images and data on atmospheric, oceanic, and climatic conditions over the continental United States and Hawaii. These satellites are

best known for creating the hurricane pictures you see on television, but they also

provide the data to help forecast the weather and are critical to detecting and tracking severe weather. Advances in hurricane prediction depend not only on improved

observations such as those from satellites, but also on improved data assimilation,

computer models, and continued research to better understand the inner workings

of hurricanes.

We operate two geostationary satellites, one over the east coast and the other over

the west coast. To protect against a loss of satellite coverage, we maintain a spare

satellite in space that can be repositioned and brought out of storage in a matter

of hours to take the place of a failed satellite. Given the importance of these satellites, continuity of operations remains our highest priority.

What is GOES–R?

Individual GOES satellites have a letter designation through their development

until they are launched, placed in orbit, and have completed a rigorous checkout

procedure. They are then given numeric designations for their operational lifetimes.

The operational satellites in space now, GOES–11 and GOES–12, are the last two

satellites of the GOES I–M series. The next series of geostationary satellites is

called GOES–N, and this series consists of the same instruments as the GOES I–

M series. The first of the GOES–N series satellites was launched in May 2006 and

is currently serving as the on-orbit spare. The final two satellites from this series—

GOES–O and GOES–P—are already built and will be launched over the next several years. We are still in the preliminary design phase of development for the next

generation of GOES satellites, called GOES–R, which will ensure uninterrupted satellite data continuity when the GOES–N series ends. Current assessments indicate

that GOES–R must be launched at the end of 2014 to provide continuous geostationary data. The GOES–R series will include advancement beyond the GOES–

N series, particularly in instrument capability. GOES–R will provide forecasters and

scientists with a new suite of greatly improved instruments. These new instruments

will enhance our current capability to track and monitor severe weather on Earth

28

with greatly improved imagery and scan rates. Solar environmental monitoring instruments will provide a significant advance for space weather forecasting.

We have committed, during the preliminary design phase of GOES–R, to thoroughly examine the program to confirm its readiness to proceed into the acquisition

phase. This has involved changing the management and acquisition strategy, implementing regular senior NOAA and NASA reviews of the program, and subjecting

the program to independent review and cost estimates. These efforts are yielding

valuable results by identifying areas that require additional attention and providing

the appropriate resources to address those areas. We believe we are on a sound

track going forward.

Status of GOES–R

During 2006 and 2007, NOAA and NASA conducted a top-to-bottom review of the

program with input from an Independent Review Team of senior satellite acquisition experts, the user community, and reports from the three preliminary design

contractors. These efforts led to a revision of our plans to ensure we have a program

that maintains data continuity, allows for technical advances, and is affordable.

Specifically, we had to acknowledge that to actually build our concept for GOES–

R would be much more expensive than we first thought. As a result, we made the

decision not to award a contract to build the Hyperspectral Environmental Suite

given its risk and technological challenges. In addition we made a decision in March

2007 to change the program management structure to take advantage of the unique

organizational expertise of NOAA and NASA. NASA has a long history of managing

successful satellite acquisitions, while NOAA has a long history of developing successful ground systems for operational weather satellites. This change incorporated

important lessons learned from other major systems acquisitions projects. Key elements of the new management strategy are:

• NOAA has overall program responsibility and total program funding.

• NASA manages development of spacecraft and instruments, and provides

launch services.

• NOAA manages development of ground systems and operates the system on

orbit.

• NASA leads government systems engineering, integration activity and mission assurance.

• For each of the GOES–R program projects (ground, flight, and integration)

NOAA and NASA partner closely, with NOAA staff providing direct support

(i.e., as deputy program managers) to NASA-led elements, and vice versa.

We also changed our acquisition strategy to align with the new management

strategy by replacing the single, prime contract approach with two primary contracts, one for the space segment and one for the ground segment. The combination

of the new management and acquisition strategy will reduce program risk and

maximize our potential for fielding a high performing satellite system on schedule

and within budget. To document this management change and other major aspects

of the program, NOAA and NASA signed a Memorandum of Understanding in June

2007 and will shortly implement detailed operating procedures documented in the

GOES–R Management Control Plan (MCP). The MCP, patterned after a NASA Program Plan, will implement the current NOAA/NASA program management practices and guide responsibilities of NOAA and NASA for the GOES–R Program.

NOAA has benefited from the 2005 decision to create a jointly staffed NOAA/

NASA program office at the Goddard Space Flight Center. Prior to 2005, NASA conducted all of GOES acquisition activities for NOAA, and NOAA maintained a small

liaison staff at the Goddard Space Flight Center. Collocation of NOAA and NASA

program personnel at the Center facilitates communication between the flight and

ground projects, permits effective joint program systems engineering and integration, and encourages a collaborative NOAA/NASA team environment. NOAA and

NASA personnel work side-by-side. The overall GOES–R program management

team has access to the satellite acquisition expertise and experience in place at Goddard Space Flight Center, including engineering and program management reviews

of GOES–R.

Status of Spacecraft and Ground System Acquisition

To prepare for the 2008 spacecraft source selection, a joint NOAA/NASA team is

reviewing industry responses to a draft Request for Proposals (RFP) received in

mid-September. The spacecraft project has successfully concluded the review which

allows the Request for Proposals to go forward. We are now in the process of finalizing the RFP. At present, four instruments are currently in the implementation

29

phase, one (the geostationary lightning mapper) is nearing implementation and the

sixth (the magnetometer) will be procured as part of the spacecraft acquisition. Instruments will be delivered to the spacecraft contractor as government-furnished

equipment for integration on the spacecraft. Appendix 1 provides a list of the instruments and their status.

The ground project is nearing completion of the reviews necessary to allow the

project to go out for proposal. We anticipate a draft RFP for the ground segment

will be released in January 2008. NOAA and NASA are working towards releasing

the final spacecraft and ground RFPs in early 2008. NASA and NOAA will release

the final spacecraft and ground RFPs following appropriate NASA and NOAA/DOC

reviews and approvals.

Since the GAO issued its report in September 2006, the Independent Review

Team has met twice to provide recommendations to NOAA concerning program

readiness for the acquisition phase. The GAO’s most recent report indicates that,

while NOAA and NASA are taking the right steps to put together a sound GOES– R Program, there is still work to be done before proceeding into the acquisition

phase, especially in the ground system. Identifying and addressing issues before the

acquisition phase begins is a key lesson learned from the NPOESS program. Once

we begin the acquisition phase and the contracts are in place, the workforce engaged in implementing the program ramps up sharply. Fixing problems during the

acquisition phase is more costly given the larger workforce involved. That is why

it is so important to take the time to identify and address the problems during the

program definition phase. We want to enter the acquisition phase with a program

that will succeed with all risks appropriately identified and tracked.

Status of the Cost Estimate

NOAA has hired outside experts to develop the program cost estimates. This cost

estimating team works for the GOES–R program office and is developing the Program Office Estimate. In addition, we have hired an independent team to examine

the Program Office Estimate. This independent team works for the NOAA Chief Financial Officer and has provided an Independent Cost Estimate. The Independent

Cost Estimate group and the GOES–R Program are actively working to clarify assumptions and understand the differences in the cost estimates developed through

their review.

The GAO Report

GAO has provided regular reviews of our GOES–R Series acquisition for many

years and we appreciate the perspective that the GAO professionals provide. We

have met with GAO and provided information and feedback on its most recent report. I will summarize this information for you today.

I am pleased that the GAO report recognizes we have taken steps to apply the

lessons learned from other satellite programs to the procurement of GOES–R. I understand we have more work to do to improve the overall management of these complex and high risk programs, and the joint NOAA/NASA team is fully committed

to making further improvements.

Specifically, the GAO provided two recommendations related to program-wide

risk:

21Recommendation number one: Ensure that the GOES–R Program Office manages, mitigates and reports on risks using a program-level risk list that is reconciled

with and includes risks from both flight and operations project offices that could impact the overall program.

NOAA agrees with the recommendation and has directed the GOES–R Program

Office to maintain a consolidated program-wide risk list and use this list in internal

and external reviews of the program. The GOES–R risk management process includes regular review of project risks by the program and selective elevation of

project risks at the program level for mitigation and management. The System Engineering and Integration Division of the GOES–R Program is responsible for maintaining the program risk list which is reviewed at least monthly by the GOES–R

System Program Director. The GOES–R System Program Director briefs the NOAA

Program Management Council monthly on the top risks and the strategies for resolving and closing them.

Recommendation number two: Include the following risks on the program-wide

risk list, develop plans to mitigate them and report to senior executives on progress

in mitigating them:

– Unfilled or temporary GOES–R program leadership positions,

– Insufficient program insight on NASA contract performance, and

30

– Insufficient management reserve on the critical Advanced Baseline Imager instrument and at the GOES–R program level.

NOAA agrees with the need to track the leadership positions and has a structured

process in place to do so. The status of the filling these vacancies is reviewed at

the monthly Program Management Council meetings. On an acting basis, the

GOES–R program is being led by two highly qualified individuals with multiple

years experience in satellite and major systems acquisitions. NOAA has requested

that the NOAA Workforce Management Office expedite a nationwide advertisement

and search for a permanent GOES–R System Program Director.

NOAA realizes that to have the necessary insight into NASA contract performance it is not simply sufficient to have co-located and intermingled staff. That is

why NOAA and NASA are drafting a comprehensive Management Control Plan that

will establish the framework for Program and Project performance. NOAA will assure that the finalized Plan provides NOAA a sufficient degree of insight and guidance to meet NOAA’s responsibility for mission success.

Finally, NOAA does not agree with the assertion that there are insufficient reserves on the Advanced Baseline Imager instrument and at the GOES–R program

level. It is important to note that the funding level used by GAO as the baseline

for this evaluation is not the same amount that NOAA actually budgeted for this

instrument. NOAA budgeted more funding than the contract amount, and withheld

the difference as a management reserve at the GOES–R program level, rather than

in the specific instrument budgets. While at the time of the GAO review in March

through August, the GOES–R Program had not allocated this management reserve

to the projects, the reserve funding has now been allocated and is sufficient to manage the anticipated program risk. The GOES–R Program currently maintains reserves at the Program level and at the Flight and Ground Project levels. The System Program Director holds the project managers responsible for managing their

projects and reserves. The current level of management reserve for the Advanced

Baseline Imager at the program and project levels are sufficient.

While not a recommendation, GAO has asserted the following in the body of the

report: ‘‘. . . independent estimates are higher than the program’s current cost estimate and convey a low level of confidence in the program’s schedule. Independent

studies show that the estimated program could cost about $2 billion more, and the

first satellite launch could be delayed by two years.’’

NOAA strongly disagrees with this statement and is currently working with the

program and independent cost estimators to resolve the differences. It is critical

that this assertion be put into its proper context. Early in the cost estimation effort,

the program office and independent estimates were divergent in several areas due

to differing assumptions, which is not uncommon for programs of the magnitude of

GOES–R. Accurate comparison of the two cost estimates requires an assessment of

each estimate’s ground rules and assumptions. Resolution of issues related to instrument design complexity, software scope, and inflation factors can have huge effects on revised estimates. As work with the independent estimator has progressed,

we have resolved numerous differences in ground rules and assumptions and have

seen the two cost estimates begin to converge. We expect to achieve even closer convergence as we continue to resolve the remaining differences in assumptions.

As with the two cost estimates, the reconciliation efforts associated with the

schedule estimates have identified some key assumption differences that should result in some convergence in the schedule estimates. However, it should be noted

that the two schedules essentially agree with each other (within the capability of

current schedule estimating models to predict).

Conclusion

I appreciate the Committee’s continued interest in NOAA’s satellite programs. It

is widely acknowledged that satellites are very complicated and difficult systems to

design, build, and operate. However, their capabilities play a role in NOAA’s mission to observe and predict the Earth’s environment and to provide critical information used in protecting life and property.

We are making significant strides in developing a better process for designing and

acquiring our satellites. We have fully functioning operational satellites with backup

systems in place, and we are working on the next generation that will provide significant improvements in our ability to forecast the weather. I would be happy to

answer any questions you may have.

31

Appendix 1

GOES–R Instrument Status

• Advanced Baseline Imager (ABI)

– Implementation phase

– Contractor: ITT Corporation, Fort Wayne, IN

• Space Environmental In-Situ Suite (SEISS)

– Implementation phase

– Contractor: Assurance Technology Corporation, Carlisle, MA

• Extreme Ultra Violet/X-Ray Irradiance Sensor (EXIS)

– Implementation phase

– Contractor: Laboratory for Atmospheric and Space Physics, Boulder, CO

• Solar Ultra Violet Imager (SUVI)

– Implementation phase

– Contractor: Lockheed-Martin Advanced Technology Corp, Palo Alto, CA

• Magnetometer

– To be procured as part of spacecraft contract

• Geostationary Lightning Mapper (GLM)

– Contract to be awarded Fall 2007

BIOGRAPHY FOR MARY ELLEN KICZA

Mary Ellen Kicza is the Assistant Administrator for Satellite and Information

Services. Before coming to NOAA, Ms. Kicza served as the Associate Deputy Administrator for Systems Integration at NASA. As a senior leader within NASA, she was

responsible for assuring that mission and mission support elements were effectively

aligned and integrated to execute NASA’s vision and mission.

Over the course of her career, Ms. Kicza has served with distinction in a variety

of technical, managerial and leadership posts in which she has been involved in the

development, launch and support of satellite systems as well as multi-faceted research and development programs. In these roles, she has acquired extensive experience, not only in executing scientific and engineering programs but also in strategic

planning, budget formulation, and workforce and facilities planning. In addition, she

has significant experience in building and maintaining effective relationships with

the Office of Management and Budget, the Office of Science and Technology Policy,

the Defense Department, Congress, the aerospace industry and a diverse research

community.

Ms. Kicza’s accomplishments have won her two SES Meritorious Service Awards,

NASA’s Distinguished Service and Scientific Achievement Medals, and numerous

other awards. Ms. Kicza began her career as an engineer at McClellan Air Force

Base in California, developing and testing software for Air Force satellite communications systems. In 1982, Ms. Kicza joined NASA’s Kennedy Space Center where

she served as a lead engineer, participating in the preparation of Atlas Centaur and

Shuttle Centaur launch vehicles in support of NASA, DOD and NOAA satellites.

Since that time, Ms. Kicza has served as a program manager, as Deputy Director

of the Solar System Exploration Division, Assistant Associate Administrator for

Space Science, Associate Center Director for Goddard Space Flight Center, and Associate Administrator for Biological/Physical Research. In these roles, Ms. Kicza led

and managed large, complex ground-based and space flight programs, many of

which are international in scope, in support of U.S. space and earth science programs. As the Associate Center Director at Goddard, she managed a diverse scientific and engineering community of approximately 3,100 civil servants and 6,000

contractors. Ms. Kicza received her Bachelor’s Degree in Electrical and Electronics

Engineering from California State University, and a Master’s Degree in Business

Administration from the Florida Institute of Technology.

32

DISCUSSION

Chairman LAMPSON. Thank you very much, Ms. Kicza. We have

a vote. I don’t know why we have that goofy alarm. Somebody

made the decision they liked it, I guess.

We are going to continue to go forward and see how far we can

get through this. So let me begin with Mr. Powner.

GOES PROGRAM COSTS

NOAA uses an 80 percent confidence level in its cost estimating.

My understanding is that leaves a 20 percent chance that the

quoted cost will be exceeded. So the cost numbers reported for

GOES represents floors, not ceilings. Right?

Mr. POWNER. Correct. Well, there is a chance that, at an 80 percent confidence level, there is a 20 percent chance it actually could

go up or down is really what it says. So it is always going up, so

correct.

Chairman LAMPSON. Does the estimate give a limit to the possible program costs?

Mr. POWNER. It does not give a limit. No.

Chairman LAMPSON. Ms. Kicza, according to the comments

NOAA submitted to GAO, the most conservative estimates at the

80 percent confidence intervals bring the program office estimate

within 12 percent of the Independent Cost Estimate (ICE) or

$1.032 billion below the ICE. The ICE is $9.3 billion. This implies

that the program office estimate is now $8.3 billion. This is a billion dollars above NOAA’s estimate at last year’s hearing.

Can I assume that this will be the cost estimate reported in the

President’s budget estimate in February?

Ms. KICZA. No, sir. I am not sure how you are working your

math, but right now our current program office estimate is between

$7–$8 billion, and that is within the 12 percent of the current independent estimate. I believe the independent cost estimate numbers

came down from what you may have earlier quoted.

Chairman LAMPSON. Where will we find that additional—last

year it was seven, and it is going to be—— Ms. KICZA. We are at $6.9 billion with President’s FY 2008,

budget, and as we had indicated last year we still had to go

through the Independent Cost Estimate and reconcile. And that is,

in fact, the process we are going through.

Chairman LAMPSON. Okay. So that number is going to be a higher number. Will that——

Ms. KICZA. The number that we are dealing with now is the current program office estimate, is higher than the $6.9 billion. It is

between $7–$8 billion, and it is part of our FY 2009 discussions.

Chairman LAMPSON. And that will be in the President’s budget

in February?

Ms. KICZA. Yes, sir.

Chairman LAMPSON. Will NOAA be getting the additional money

to cover that?

Ms. KICZA. As I have indicated, we are in dialogue with the Administration on what we believe is an appropriate budget for the

GOES–R Program. I think we have good rationale for indicating

the need for the additional budget. We are budgeting at the 80 perVerDate 11-MAY-2000 11:12 Jun 21, 2008 Jkt 038339 PO 00000 Frm 00036 Fmt 6633 Sfmt 6601 C:\WORKD\E&E07\102307\38339 SCIENCE1 PsN: SCIENCE1
33

cent cost confidence level, and we think that is a reasonable approach to take at this stage of the program.

Chairman LAMPSON. Mr. Powner, in your experience, which of

the cost estimates is the most believable and why?

Mr. POWNER. Well, if you look at it from a historical perspective and just to clarify this, there is, right now at $6.9 billion and the

independent cost estimate was at $9.3 billion. And that is in our

report, and you can see allegations that NOAA disagrees with that

statement. All we were reporting was what the independent cost

estimators came up with.

Now, clearly, there is this reconciliation that is going on right now. No one has seen that. Okay. So we hear it is between $7–$8

billion. We haven’t seen that. Historically if you look at NPOESS

and these other satellite acquisitions, the independent cost estimate becomes a reality or typically it is exceeded. So hopefully, we

are hopeful that NOAA is right, and we are at a lower cost, but

if you look historically, we are in the ballpark of the $9.3 billion

with the independent cost estimator.

Chairman LAMPSON. Do you want to comment?

Ms. KICZA. Yeah. As I had said earlier, I think we all agree that

we should be budgeting at the 80 percent cost confidence level.

That is the right thing to do at this space in the game, and we particularly want to get a sound cost estimate before we get the major

contractors on board. We have an 80 percent cost estimate at the

program office level. The independent cost estimator had an 80 percent cost estimate. The reconciliation process is an approach of understanding the differences between the two cost estimates, seeing

where they converge, and then coming forward with what we believe is a rational cost estimate to be presenting in the President’s

fiscal year 2009 budget.

We won’t exactly reconcile, but for every area that we don’t specifically reconcile on, we will have a good reason for why we believe

our number is the better number.

Chairman LAMPSON. Mr. Powner, how should Congress react

when it receives these differing cost estimates? How do we assure

that the cost estimating process give us an accurate estimate of a

likely program cost and not an estimate trying to stay within a figure likely to be approved by the OMB?

Mr. POWNER. Well, I think the key is to look at where the differences lie and whether the assumptions and rationale on those

differences makes sense from an oversight perspective. Clearly, we

don’t know exactly where those are at the moment, but if you look

at like independent cost estimators, whether it is GOES or

NPOESS, they typically look at historical data. It is more heavily

influenced by historical data. There is a lot of other information internal to the program that only Ms. Kicza and her staff has right

now that are driving these decisions, and I think from an oversight

perspective, whether it is yourself or GAO helping you with that,

we really need to look at those assumptions and whether they are

reasonable.

Chairman LAMPSON. Thanks. Mr. Inglis.

Mr. INGLIS. Ms. Kicza, I guess it is, if I am understanding this right, you think that the independent estimate is $7–$8 billion.

Right?

34

Ms. KICZA. A program office estimate is between $7–8 billion,

and it represents what the program believes is a sound 80 percent

cost confidence estimate.

Mr. INGLIS. And the independent estimate is?

Ms. KICZA. The independent estimate will be a little bit higher

than that, and those areas where there are differences we will explain the differences and the rationale for why we believe the estimate that we are coming forward with is a correct estimate.

I would like to take the opportunity to also say that we are not

trying to bring in an estimate that the Administration will accept.

We are bringing in an estimate that we believe is a sound estimate

to execute the program successfully.

Mr. INGLIS. And when will, what is the process by which you are

going to explain those differences? When will that be and or can

you tell us now what the differences are?

Ms. KICZA. I can tell you where the key areas of difference are.

Yes. It is in the amount of maturity of the software, so you will see

some deltas in the software development area. You will see some

deltas in the area of instrument development and some deltas in

the area of systems engineering. In all cases the program estimate

increased its estimate, and I believe we have a sound basis for the

numbers that we have identified in our estimate.

Mr. INGLIS. And when is that, when do you intend to make those

explanations available with specificity?

Ms. KICZA. We can make them available as part of the ’09, budget process, and we are also having that independently looked at by

our independent review team.

Mr. INGLIS. Which, I guess, is driving some of the Chairman’s

questions about, it sounds like it is connected to the budget process.

Ms. KICZA. Yes, it is. Absolutely.

Mr. INGLIS. But then that you, I guess that brings up the possibility of being fit into the budget process I think is the, is at least

the theory that the Chairman is pursuing.

And it is not really reflecting what is happening in the program.

It reflects rather that the budget exigencies rather than the program’s natural expenses.

Ms. KICZA. At this point what we have delivered as a budget that

we believe is a rational budget at the 80 percent cost confidence

level, and I have no indication that it would be anything other than

that.

GOES COMPLETION DATES

Mr. INGLIS. How about the time estimate differences? The time

to completion. What is, the delivery dates. When, what is with the

discrepancy there? You are thinking that it is going to be operational when?

Ms. KICZA. We plan to have it available for launch for the December 2014 timeframe. We have had that looked at both internal

and external of the program. I think it is a rational launch date

to proceed to with sufficient schedule reserve.

What the independent estimator has indicated is that within the

ability of the current models to predict, the two estimates are essentially the same.

35

Mr. INGLIS. So the independent analysis agrees—— Ms. KICZA. Right.

Mr. INGLIS.—with your analysis, 2014?

Ms. KICZA. Within the ability of models to predict. So they are

saying it could be as much as a year later than what we are, but

the models are not, they don’t have a high enough fidelity to be

able to discern between those two dates.

Mr. INGLIS. So you are saying 2014. They may be saying 2015.

Ms. KICZA. Yes, sir.

Mr. INGLIS. I wonder where I get the 2017 number. Do you have

any idea?

Ms. KICZA. It was an earlier point in the independent process. So

through the reconciliation process we have reduced that delta.

Mr. POWNER. Can I clarify that?

Mr. INGLIS. Yeah.

Mr. POWNER. 2014, $6.9 billion, 2014, was the current estimate.

The independent assessors came up with the $9.3 billion cost and

then about a two-year delay into the 2017 timeframe. So when we

heard back from NOAA on our report, what they told us that they

anticipated instead of a $2 billion overrun and a two-year delay, a

$1 billion overrun and a one-year delay. Now, today we are hearing

a 2014, delivery. So we are a little confused because the one time

we were $2 billion more and two out, and then they replied back

one billion more and only one out instead of two. And today I am

hearing 2014. So we probably need to get that cleared up.

But what we have was an original estimate of 2014, in the independent assessment and the rest of this is just kind of in the fog,

Ranking Member Inglis, because we don’t see any data on that.

Ms. KICZA. What I will clarify is what we provided back is where

the independent estimate is coming in versus what I have been

talking about as the program estimate. The independent estimate

went from $9.2 billion and two years down within, to a one-year

beyond where we are estimating. Similarly, both in cost and schedule, the independent estimate through the reconciliation process

has come down, and from our perspective the program office estimate in terms of cost has increased in part of the reconciliation

process.

Mr. INGLIS. Thank you, Mr. Chairman.

Chairman LAMPSON. Okay. We have only a couple minutes left

before our vote. We will have to be in recess until we make those

votes. There are three, one 15-minute, which is almost over, and

two fives, so we will be coming back, and we are in recess.

[Recess.]

Ms. GIFFORDS. [Presiding] Good afternoon. I don’t look like Nick

Lampson, but I am Gabrielle Giffords, and this meeting is officially

resumed.

GOES–R PROCUREMENT

Just following up on the Congressman’s questions, this question

is for Ms. Kicza. Has NOAA yet made a final decision to purchase

the GOES–R?

Ms. KICZA. I think it is very important to remember that we are

still in the formulation phase for GOES–R. This is the time when

we are trying to settle on the cost, the scope, and the schedule. We

36

have not yet made the decision to go out and procure those major

contracts for ground and space segments. We are approaching that

decision now.

INVESTING IN NEW SATELLITES TECHNOLOGIES VS.

REOPENING EXISTING SATELLITES

Ms. GIFFORDS. Okay. And a pretty basic question. With what we

know now is it better to invest the limited resources for geostationary weather satellites by reopening the line of existing satellites, expensive though it may be, or to continue with the developing of the new technologies with GOES–R with the threat of the

constantly rising costs that could possibly leave us without those

improved capabilities?

Ms. KICZA. That is a really good question, and in fact, when we

were going through our series of options that we were examining

last summer as a part of this effort, we looked at whether or not

it would be cost effective to look at simply duplicating the GOES–

N series, which is the current line. And what we found is that because of the mission design life for that series, you would have to

buy three spacecraft, where with GOES–R you have to buy two.

You would not have the capability, but it would be a comparable

cost. And it would still require the same approach. You would still

have to go out with a new procurement.

So we didn’t see any schedule benefit, no cost benefit, and we

would lose the cost we had already sunk into the development for

GOES–R.

MANAGING GOES AND NPOESS COSTS

Ms. GIFFORDS. There is also reality that NOAA is already struggling with a second highly-complex satellite program, the NPOESS,

and the level of resources does not appear to be able to meet the

real needs of both programs simultaneously. What, therefore, is the

best course of action to pursue, assuming that there is no sudden

influx of or increase of funds for NOAA?

Ms. KICZA. Well, right now the NPOESS Program, the Polar Orbiting Satellite Series, is a joint program with NOAA and DOD. We

each share half of the costs of that development, and it is fully

funded at this point in time. The only area where we are working

for an updated cost estimate is on GOES–R.

Both satellite series are needed to support our operational weather forecasting capability.

Ms. GIFFORDS. Let me just get the clarification. So you believe

that you can accomplish both with the funds that you currently

have available to you?

Ms. KICZA. We are increasing the cost estimate for GOES–R, and

the NPOESS Program is currently fully funded.

Ms. GIFFORDS. And how much is that increase going to be for?

Ms. KICZA. We have indicated that it is, right now we are at $6.9

billion. The increase is between, to bring it up between $7–$8 billion.

37

GAO RECOMMENDATIONS

Ms. GIFFORDS. Mr. Powner, with all the work that you have been

asked to do in your area, what would you offer some recommendations to deal with this conundrum?

Mr. POWNER. A couple key areas that I would like to highlight

in terms of perhaps where we have had some disagreements is on

the management reserve. It is early stage of this program. I think

if you look at the independent review team recommendations on

GOES, the recommendation is that we have a 25 percent management reserve. That was the target.

When we completed our report, the management reserve had decreased for the program now, overall, down to 15 percent. We

heard today it is now back up to 15 with the renegotiating of numbers. It is important that we maintain an adequate management

reserve, because there is a lot of technical complexity involved

here, and that really needs to be looked at.

The other thing that we feel strongly about, and we have had

some disagreements, Ms. Kicza and I have discussed this, is the insights into NASA’s activities. Historically, that has been a problem

on these prior GOES satellite acquisitions. We have heard this

morning, this afternoon that there is unparalleled transparency in

the two agencies that are working together.

Well, but also when I read Ms. Kicza’s statement, I see comments in here that there are frameworks being established so that

we can have the appropriate insight and guidance. We still need

to work on that and make, keep that on our radar screen to make

sure we have adequate insights into NASA’s activities.

Ms. GIFFORDS. Mr. Powner, would you recommend more Q GOES

satellites or go forward with the GOES–R?

Mr. POWNER. That is a very good question. Two things. We would

need to see two things in order to answer that question. One, we

would want to know exactly what the cost of GOES–R is to be. We

hear it is between $7–$8 billion. We hear that an independent cost

estimator says it could be as high as $9.3 billion. Historically those

independent estimates have come true. Resurrecting the prior Q

satellite, you know, we hear that you have to, we understand you

have to start assembly lines and the whole bit, but exactly what

that would cost, we don’t have any firm numbers. So you would

need that cost, the actual cost of GOES–R, and have a true cost

benefit analysis to determine what is best going forward.

Ms. GIFFORDS. And when do you think we are going to have

those numbers by?

Mr. POWNER. Well, what we have heard this afternoon is we will

not have a current GOES–R estimate until the President’s budget

comes out in the February timeframe. In terms of resurrecting the

Q option, I don’t believe that that is in the works right now.

Ms. GIFFORDS. Congressman Inglis, I am going to turn the questions over to you.

GOES ACQUISITION STRATEGY

Mr. INGLIS. Thank you, Madam Chair. Let us see. Ms. Kicza, in

your testimony and the testimony of Mr. Powner, you mentioned

the splitting of the acquisition contract into a flight segment and

38

1Program Definition and Risk Reduction

a ground segment. And what was the rationale behind splitting the

two aspects of the acquisition and contract?

Ms. KICZA. Okay. Over the course of the last year we have done

a lot of examination, examination of the current contracting structures resident with NOAA, examination of recent reports, both IG

and GAO about the pros and cons of different contracting strategies, and we had our own independent review team led by Tom

Young, who offered recommendations. We made the decision to go

from a single systems prime to split contracts to assure that we

had government oversight on every key element of the GOES–R

System; the spacecraft the ground systems, and the instruments.

We believe, and that is also very consistent with the way our primary partner, NASA Goddard, has traditionally done this type of

acquisition. So the acquisition allows us to benefit from each agencies’ core competencies. It is consistent with our partner’s traditional use, and it provides direct government oversight on all the

key elements.

All of those we felt were reasonable reasons to proceed with a

change in the contracting and management strategy.

Mr. INGLIS. And GAO says the splitting of the contracts caused

delays in the program. Do you find that to be the case?

Ms. KICZA. We did have some delay as a result, about three to

six months in terms of extending the current PDRR1 contract so we

could get additional information, and then revving up our own capability internally.

So, yes, we did have some delay as a result of that. We also uncovered some things that I think we would not have otherwise seen

and have been able to take action in preparing for the major acquisitions.

Mr. INGLIS. Mr. Powner, you have any comment on those things?

Mr. POWNER. The only comment is that the short delay extending

the awarding of those contracts, that probably makes sense because

those preliminary design reviews and those meetings for those key

decision points are very critical going forward. I think historically

when you look at NPOESS a lot of times we push decisions through

rather quickly instead of actually having a real solid design review

in the critical technical reviews prior. So that delay makes sense.

Mr. INGLIS. Ms. Kicza, Ms. Giffords was just mentioning the Q

line and the possibility of resurrection, resurrecting that line. Is

that current technology, or is it outdated technology?

Ms. KICZA. Let me talk a little bit about that. The original series

N, O, and P was an N, O, P, Q. We had planned for four satellites.

In 2003, we made the decision not to exercise that option on that

procurement and for good reasons. We ended up getting a more

powerful launch vehicle that allowed us to extend the lifetime of

the N, O, P spacecraft. That option is no longer available to us. We

would have to go out with a separate procurement. So we would

have to go out and procure new spacecraft. The instruments aren’t

there. We would have to go build new instruments again, and so

we didn’t find, and we would have to build three spacecraft as opposed to two spacecraft, which is what we have got with the 10-

year mission life on GOES–R.

39

We went through that analysis last year as part of the decision

to go from four to two. We did a wide number of options on where

we should go and the continuity of the N Series was one of the options that we examined.

CONTRACTOR PERFORMANCE

Mr. INGLIS. Thank you. I have no further questions.

Ms. GIFFORDS. Mr. Powner, your report seems to state that

NOAA can’t discuss both the cost and also the schedule data directly with contractors on the space segment. Why do you think

that the GAO considers that such a significant issue?

Mr. POWNER. Well, I think there are processes that are currently

being established right now so that NOAA does have insights into

the, what is going on from the NASA component of this. That is

very important. If you look, for instance, if you look, if you compare

this to the NPOESS Program where we have joint program with

NOAA and DOD and the scrubbing of some of the cost and schedule data from the contractors, that has proven a very effective best

practice, even down to the point where they scrub that data on a

weekly basis, and they get ahead of the curve and anticipate problems with both costs and schedule.

Something like that would be a good model to consider with the

GOES Program.

Ms. GIFFORDS. Ms. Kicza, did the management documents that

you described in your testimony give NOAA, the managers, the authority to obtain any data they believe is needed to manage the

GOES–R Program?

Ms. KICZA. Yes. In fact, the way the program is structured, the

program office manages the cost data that comes in, and we matrix

that support into the project. So we have complete insight into

what is going on with the contracts, who they are performing in

terms of cost and schedule.

I agree with David that we really need to keep a close eye and

a firm handle on insight into how the contractors are performing.

I believe we have that at his point in time. We were talking about

it before we started the hearing. We have to make sure that we

keep our eyes on it. We don’t let the, you know, let it get out of

our sight, because then it should become a risk. Right now I personally don’t believe it is a risk because we do have eyes on it.

And so that was my rationale for not agreeing. It is not to say

it is not important to keep a good close eye on how the contractors

are performing, whether that be on the space segment side, which

is NASA’s, or on the ground segment side, which is NOAA’s.

Ms. GIFFORDS. One final question. The disagreement in your

statements considering management of program reserves, to me focuses on how the reserves are distributed, but isn’t it really a question of whether there will be sufficient reserves to carry the program to its conclusion?

Ms. Kicza, you said that it will, but Mr. Powner says that the

Advanced Baseline Imager already made a hefty call in reserves

and still has 40 percent of its work remaining. Should this committee be concerned that you will run out of reserves as happened

with the NPOESS Program?

40

Ms. KICZA. As I had indicated in my testimony, right now we are

developing an estimate or have an estimate which keeps 25 percent

management reserve overall on the program. In fact, more than

that. We have, at the time that Mr. Powner’s team was looking at

it, they did not see that reserve posture because we had not allocated it down to the project. So they saw a small amount of reserve

on the instrument contract. They saw no reserve at the project

level.

Since that time we have allocated reserve. We have 25 percent

on the flight project, 30 percent on the ground project. We require

the flight project manager to maintain a minimum of 20 percent

unliened reserve on cost to go, and we actually visually check that

on a monthly basis at my level. I can see where his liens are and

whether or not he is keeping that threshold that we think is best

business practices.

Ms. GIFFORDS. But is the total reserve left to carry through, it

is going to be left to carry through to the next program?

Ms. KICZA. No. It is not going to carry through. The reason you

put reserve on the programs is you expect you will spend it by the

time you launch. But you always want to have it there because

you, when you need it, you need to have ready access.

Ms. GIFFORDS. Okay. But it is going to get us to the launch then?

Ms. KICZA. Yes, absolutely, and beyond. We have reserve posture

for the operational, operation of those satellites as well.

Ms. GIFFORDS. Okay. Let me just follow up with one last question. Does the contractor for the Advanced Baseline Imager have

any of its own money set aside to reserves?

Ms. KICZA. The contractor does keep a small reserve, but traditionally with the way NASA manages contracts, they tend to keep

very little reserve in the contract, and they hold it at the project

level, and then they control the allocation back to the contract

when it is time to do so.

Ms. GIFFORDS. Do we know how much of that reserve exists?

Ms. KICZA. As I said, right now they are at 25 percent, and they

are expected to keep 20 percent unliened on cost to go, and that

is being maintained.

RECENT CONGRESSIONAL ACTIONS

Mr. INGLIS. I have just one more question, Madam Chair, and

that is, Ms. Kicza, the Senate included language in the CJS appropriations bill that would require a Nunn-McCurdy type review for

NOAA in the event of cost overruns, and the House passed similar

language in the last Congress, but there is some differences between those provisions. And maybe you could tell us how those provisions would affect NOAA’s ability to manage programs like

GOES.

Ms. KICZA. Yes, and actually I appreciate the question. First of

all, I want to indicate that I appreciate that type of Congressional

oversight, and I think it is entirely appropriate for Congress to hold

us accountable to deliver spacecraft on cost, on schedule, and within program scope.

As you noted, the Senate has an amendment out, the House has

recently passed an amendment relative to NASA. I would like to

41

2Preliminary Design Review

3These documents appear in the Appendix.

indicate that the Senate amendment does pose some difficulties for

us.

First of all, it would propose baselining the program at last

year’s cost estimate. Typically in spacecraft acquisition you baseline a program in terms of performance measurements and measuring against baseline at the time of PDR.2 We are not there yet.

We are about a year and a half away from that.

I fully expect to be baselined and measured against baseline. We

need to make sure it is the right baseline to be measured against.

The Senate amendment also has a prohibition on spending current and prior year funds until the certification process is completed. And so they would basically turn off the fund faucet while

we are certifying, in the event we say we are going to have a cost

overrun. That would basically halt the program in its tracks and

prevent us from being able to launch. We are concerned about that.

We have looked at the NASA language. We find that language

to be more consistent with what we would expect in a satellite acquisition system, and as I said, from the get go, we expect to be

held accountable for delivering a program.

Mr. INGLIS. No further questions.

Ms. GIFFORDS. Ms. Kicza, would you please submit for the record

the following documents? The June 15 memorandum of understanding between NOAA and NASA for the GOES–R Program, also

the GOES–R management control plan, and the report submitted

from the Independent Review Team to NOAA, except the January

3, 2007, report that has already been provided?3

Ms. KICZA. Absolutely.

Ms. GIFFORDS. In closing, the Subcommittee would like to wish

fair weather to Captain Garner Yates, who is with us today, of the

NOAA Commissioned Corps, who is retiring from federal service

this Friday. Captain Yates has served as NOAA’s Congressional liaison for satellite issues for a very long time, and we know that

this has not been an easy job in the past few years, but our staff

is going to miss you. And we thank you for your service to the Federal Government.

I would also like to thank all of you for appearing before the Subcommittee this afternoon. Under the rules of the Committee, the

record will be held open for two weeks for Members to submit additional statements and any additional questions they might have for

witnesses. If there is no further questions, then this meeting is adjourned. Thank you.

Ms. KICZA. Thank you.

[Whereupon, at 3:30 p.m., the Subcommittee was adjourned.]

(43)

Appendix:

ADDITIONAL MATERIAL FOR THE RECORD

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125

126

127

128

129

130

131

132

133

134

135

136

137

138

139

140

141

142

143

144

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

166

167

168

169

170

171

172

173

174

175