United States Government Accountability Office

GAO Testimony

Before the Subcommittee on Disaster 

Prevention and Prediction, Committee on 

Commerce, Science, and Transportation, 

U.S. Senate

POLAR-ORBITING 

OPERATIONAL 

ENVIRONMENTAL 

SATELLITES 

For Release on Delivery 

Expected at 11 a.m. EST 

Thursday, March 30, 2006

Cost Increases Trigger 

Review and Place 

Program’s Direction on 

Hold 

Statement of David A. Powner, Director 

Information Technology Management Issues 

GAO-06-573T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 30, 2006

POLAR-ORBITING OPERATIONAL

ENVIRONMENTAL SATELLITES 

Cost Increases Trigger Review and Place 

Program’s Direction on Hold 

Highlights of GAO-06-573T, a testimony 

before the Subcommittee on Disaster 

Prevention and Prediction, Committee on 

Commerce, Science, and Transportation, 

US Senate 

Polar-orbiting environmental 

satellites provide data and imagery

that are used by weather 

forecasters, climatologists, and the 

military to map and monitor 

changes in weather, climate, the 

oceans, and the environment. They

are critical to long-term weather

prediction, including advance 

forecasts of a hurricane‘s path and 

intensity. Our nation’s current 

operational polar-orbiting 

environmental satellite program is 

a complex infrastructure that

includes two satellite systems, 

supporting ground stations, and 

four central data processing

centers. 

In the future, the National Polarorbiting Operational Environmental

Satellite System (NPOESS) is to 

combine the two current systems

into a single, state-of-the-art 

environment-monitoring satellite 

system. NPOESS is considered 

critical to the United States’ ability

to maintain the continuity of data

required for weather forecasting 

and global climate monitoring 

though the year 2020. The National

Oceanic and Atmospheric 

Administration (NOAA), the 

Department of Defense (DOD), and 

the National Aeronautics and Space

Administration (NASA) have 

formed a tri-agency integrated

program office to manage NPOESS. 

GAO was asked to determine the 

NPOESS program’s current status 

and plans and to discuss 

considerations in moving the 

program forward. 

The future direction of the NPOESS program—what will be delivered, at 

what cost, and by when—is currently on hold pending a decision on how to 

proceed. In recent years, the program has experienced significant cost 

increases and schedule delays, with cost estimates increasing to about $10 

billion and launch delays approaching 3 years. These factors triggered the 

need for difficult decisions about the program’s direction and capabilities. In 

mid-November 2005, GAO reported that the NPOESS executive committee 

expected to make a decision by December 2005 on the direction of the 

program. GAO noted the importance of making a decision quickly so that the

program could proceed. However, in late November 2005, NPOESS cost 

growth exceeded a legislatively mandated threshold that requires DOD to 

certify the program to Congress. This placed any decision about future 

direction on hold until certification takes place in June 2006. In the 

meantime, the program office has implemented an interim plan to continue 

work on key sensors and other program elements using fiscal year 2006

funding. Following certification, a decision on future direction should be 

clear. Proceeding will require a new program baseline and renegotiated 

contracts—efforts that could take up to a year. 

As NPOESS undergoes the Defense certification process and important 

decisions are made on how the program is to proceed, there are several 

important considerations. First, NOAA and NASA representation in the DOD 

certification process is imperative. It will be important for these agencies to 

remain active players in the deliberation of options and the final decision on 

how to move the program forward. Second, continued indecision increases 

the risk of a gap in satellite coverage if the final satellite in the predecessor 

satellite series (the Polar-orbiting Operational Environmental Satellites or 

POES) were to fail (see figure). Thus, once program direction is decided, it 

will be important to move quickly to adjust agency budgets and contracts. 

Third, continuing oversight of program and executive management is 

essential to avoid repeating past problems. 

Potential Gap in Satellite Coverage 

www.gao.gov/cgi-bin/getrpt?GAO-06-573T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David Powner 

at (202) 512-9286 or pownerd@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

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

discuss our work on the planned National Polar-orbiting Operational 

Environmental Satellite System (NPOESS) program. NPOESS is 

expected to be a state-of-the-art environment-monitoring satellite 

system that will replace two existing polar-orbiting environment 

satellite systems. Polar-orbiting satellites provide data and imagery 

that are used by weather forecasters, climatologists, and the military 

to map and monitor changes in weather, climate, the oceans, and 

the environment. The NPOESS program is considered critical to the 

United States’ ability to maintain the continuity of data required for 

weather forecasting (including severe weather events such as 

hurricanes) and global climate monitoring through the year 2020. 

Three agencies share responsibility for NPOESS: the National 

Oceanic and Atmospheric Administration (NOAA), the Department 

of Defense (DOD), and the National Aeronautics and Space 

Administration (NASA). To manage the program, these agencies 

established a tri-agency integrated program office. At your request, 

we will discuss the program’s current status and plans, as well as 

considerations in moving the program forward. 

This statement builds on other work we have done on 

environmental satellite programs over the last several years.1

 An 

overview of the approach we used to perform this work (our 

objectives, scope, and methodology) is provided in appendix I. 

 1

GAO, Polar-orbiting Operational Environmental Satellites: Technical Problems, Cost 

Increases, and Schedule Delays Trigger Need for Difficult Trade-off Decisions, GAO-06-

249T (Washington, D.C.: Nov. 16, 2005); Polar-orbiting Environmental Satellites: 

Information on Program Cost and Schedule Changes, GAO-04-1054 (Washington, D.C.: 

Sept. 30, 2004); Polar-orbiting Environmental Satellites: Project Risks Could Affect

Weather Data Needed by Civilian and Military Users, GAO-03-987T (Washington, D.C.: 

July 15, 2003); Polar-orbiting Environmental Satellites: Status, Plans, and Future Data

Management Challenges, GAO-02-684T (Washington, D.C.: July 24, 2002); National 

Oceanic and Atmospheric Administration: National Weather Service Modernization and

Weather Satellite Program, GAO/T-AIMD-00-86 (Washington, D.C.: Mar. 29, 2000); and 

Weather Satellites: Planning for the Geostationary Satellite Program Needs More

Attention, GAO-AIMD-97-37 (Washington, D.C.: Mar. 13, 1997). 

Page 1 GAO-06-573T
Results in Brief 

The future direction of the NPOESS program—what will be 

delivered, at what cost, and by when—is currently on hold pending a 

decision on how to proceed. In recent years, the program has 

experienced significant cost increases and schedule delays, with 

cost estimates increasing to about $10 billion and launch delays 

approaching 3 years. These factors triggered the need for difficult 

decisions about the program’s direction and capabilities. In midNovember 2005, we reported that the NPOESS executive committee 

expected to make a decision by December 2005 on the direction of

the program. We noted the importance of making a decision quickly 

so that the program could proceed. However, in late November 

2005, NPOESS cost growth exceeded a legislatively mandated 

threshold that requires DOD to certify the program to Congress. 

This placed any decision about future direction on hold until 

certification takes place in June 2006. In the meantime, the program 

office has implemented an interim plan to continue work on key 

sensors and other program elements using fiscal year 2006 funding. 

Following certification, a decision on future direction should be 

clear. That will require a new program baseline2

 and renegotiated 

contracts—efforts that could take up to a year. 

As NPOESS undergoes the Defense certification process and 

important decisions are made on how the program is to proceed, 

there are several important considerations. First, NOAA and NASA 

representation in the DOD certification process is imperative. It will 

be important for these agencies to remain active players in the 

deliberation of options and the final decision on how to move the 

program forward. Second, continued indecision increases the risk of 

a gap in satellite coverage. NPOESS is the backup satellite for the 

final satellite in the predecessor satellite series. If this predecessor 

satellite were to fail, there could be a significant data gap until 

NPOESS is launched and operational. Thus, once a program 

direction is decided, it will be important to move quickly to adjust 

agency budgets and contracts. Third, continuing oversight of 

 2

A program baseline is a plan for what will be delivered, when it will be delivered, and at 

what cost over the life of the program.

Page 2 GAO-06-573T
program and executive management is essential to avoid repeating 

past problems. 

Background 

Since the 1960s, the United States has operated two separate 

operational polar-orbiting meteorological satellite systems: the 

Polar-orbiting Operational Environmental Satellite (POES) series, 

managed by the National Oceanic and Atmospheric Administration 

(NOAA) and the Defense Meteorological Satellite Program (DMSP), 

managed by the Department of Defense (DOD). The satellites obtain 

environmental data that are processed to provide graphical weather 

images and specialized weather products and are the predominant 

input to numerical weather prediction models. These models are a 

primary tool for forecasting weather 3 or more days in advance, 

including forecasting the path and intensity of hurricanes. The 

models are used to predict the potential impact of severe weather so

that communities and emergency managers can help prevent and 

mitigate their effects. Polar satellites also provide data used to 

monitor environmental phenomena, such as ozone depletion and 

drought conditions, as well as data sets that are used by researchers 

for a variety of studies, such as climate monitoring. 

Unlike geostationary satellites, which maintain a fixed position 

above the earth, polar-orbiting satellites constantly circle the earth 

in an almost north-south orbit, providing global coverage of 

conditions that affect the weather and climate. Each satellite makes 

about 14 orbits a day. As the earth rotates beneath it, each satellite 

views the entire earth’s surface twice a day. Currently, there are two 

operational POES satellites and two operational DMSP satellites 

that are positioned so that they can observe the earth in early 

morning, mid-morning, and early afternoon polar orbits. Together, 

they ensure that, for any region of the earth, the data provided to 

users are generally no more than 6 hours old. Figure 1 illustrates the 

current operational polar satellite configuration. Besides the four 

operational satellites, six older satellites are in orbit that still collect 

some data and are available to provide some limited backup to the 

operational satellites should they degrade or fail. In the future, both 

NOAA and DOD plan to continue to launch additional POES and 

Page 3 GAO-06-573T
DMSP satellites every few years, with final launches scheduled for 

2007 and 2011, respectively. 

Figure 1: Configuration of Operational Polar Satellites 

Each of the polar satellites carries a suite of sensors designed to 

detect environmental data that are either reflected or emitted from

the earth, the atmosphere, and space. The satellites store these data 

and then transmit them to NOAA and Air Force ground stations 

when the satellites pass overhead. The ground stations then relay 

the data via communications satellites to the appropriate 

meteorological centers for processing. The satellites also broadcast 

a subset of these data in real time to tactical receivers all over the 

world.

Under a shared processing agreement among four satellite data 

processing centers—NOAA’s National Environmental Satellite Data 

and Information Service (NESDIS), the Air Force Weather Agency, 

the Navy’s Fleet Numerical Meteorology and Oceanography Center, 

and the Naval Oceanographic Office—different centers are 

responsible for producing and distributing, via a shared network, 

different environmental data sets, specialized weather and 

Page 4 GAO-06-573T
oceanographic products, and weather prediction model outputs.3

 

Each of the four processing centers is also responsible for 

distributing the data to its respective users. For the DOD centers, 

the users include regional meteorology and oceanography centers, 

as well as meteorology and oceanography staff on military bases. 

NESDIS forwards the data to NOAA’s National Weather Service for 

distribution and use by government and commercial forecasters. 

The processing centers also use the Internet to distribute data to the 

general public. NESDIS is responsible for the long-term archiving of 

data and derived products from POES and DMSP. 

In addition to the infrastructure supporting satellite data processing 

noted above, properly equipped field terminals that are within a 

direct line of sight of the satellites can receive real-time data directly 

from the polar-orbiting satellites. There are an estimated 150 such 

field terminals operated by U.S. and foreign governments and 

academia. Field terminals can be taken into areas with little or no 

data communications infrastructure—such as on a battlefield or a 

ship—and enable the receipt of weather data directly from the 

polar-orbiting satellites. These terminals have their own software 

and processing capability to decode and display a subset of the 

satellite data to the user. Figure 2 depicts a generic data relay 

pattern from the polar-orbiting satellites to the data processing 

centers and field terminals. 

 3

These environmental data sets, specialized weather and oceanographic products, and 

weather prediction model outputs are produced through algorithmic processing. An 

algorithm is a precise set of procedures that enable a desired end result, such as a 

measurement of natural phenomena. 

Page 5 GAO-06-573T
Figure 2: Generic Data Relay Pattern for the Polar Meteorological Satellite System 

NPOESS Overview 

With the expectation that combining the POES and DMSP programs 

would reduce duplication and result in sizable cost savings, a May 

1994 Presidential Decision Directive4 required NOAA and DOD to 

converge the two satellite programs into a single satellite program 

capable of satisfying both civilian and military requirements. The 

converged program, NPOESS, is considered critical to the United 

States’ ability to maintain the continuity of data required for weather 

forecasting and global climate monitoring through the year 2020. To 

manage this program, DOD, NOAA, and NASA formed a tri-agency 

Integrated Program Office, located within NOAA. 

Within the program office, each agency has the lead on certain 

activities. NOAA has overall program management responsibility for 

 4

NSTC-2, May 5, 1994. 

Page 6 GAO-06-573T
the converged system and for satellite operations; DOD has the lead 

on the acquisition; and NASA has primary responsibility for 

facilitating the development and incorporation of new technologies 

into the converged system. NOAA and DOD share the costs of 

funding NPOESS, while NASA funds specific technology projects 

and studies. Figure 3 depicts the organizations that make up the 

Integrated Program Office and lists their responsibilities.

Figure 3: Organizations Coordinated by the NPOESS Integrated Program Office 

Current program acquisition plans call for the procurement and 

launch of six NPOESS satellites over the life of the program, as well

as the integration of 13 instruments, consisting of 10 environmental 

sensors and 3 subsystems. Together, the sensors are to receive and 

transmit data on atmospheric, cloud cover, environmental, climate, 

oceanographic, and solar-geophysical observations. The subsystems 

are to support nonenvironmental search and rescue efforts, sensor 

survivability, and environmental data collection activities. 

According to the program office, 7 of the 13 planned NPOESS 

instruments involve new technology development, whereas 6 others 

are based on existing technologies. In addition, the program office 

considers 4 of the sensors involving new technologies critical, 

Page 7 GAO-06-573T
because they provide data for key weather products; these sensors 

are shown in bold in table 1, which lists the planned instruments and 

the state of technology on each. 

Table 1: Expected NPOESS Instruments 

Note: Critical sensors in bold. 

Instrument name Description

State of

technology

Advanced technology

microwave sounder 

Measures microwave energy released and scattered by the atmosphere and is to be 

used with infrared sounding data from NPOESS’s cross-track infrared sounder to 

produce daily global atmospheric temperature, humidity, and pressure profiles. 

New 

Aerosol polarimetry sensor Retrieves specific measurements of clouds and aerosols (liquid droplets or solid 

particles suspended in the atmosphere, such as sea spray, smog, and smoke). 

New 

Conical-scanned

microwave imager/sounder 

(CMIS) 

Collects microwave images and data needed to measure rain rate, ocean surface wind

speed and direction, amount of water in the clouds, and soil moisture, as well as 

temperature and humidity at different atmospheric levels. 

New 

Cross-track infrared

sounder

Collects measurements of the earth’s radiation to determine the vertical distribution of 

temperature, moisture, and pressure in the atmosphere. 

New 

Data collection system Collects environmental data from platforms around the world and delivers them to 

users worldwide. 

Existing 

Earth radiation budget sensor Measures solar short-wave radiation and long-wave radiation released by the earth 

back into space on a worldwide scale to enhance long-term climate studies. 

Existing 

Ozone mapper/profiler suite Collects data needed to measure the amount and distribution of ozone in the earth’s 

atmosphere. 

New 

Radar altimeter Measures variances in sea surface height/topography and ocean surface roughness, 

which are used to determine sea surface height, significant wave height, and ocean 

surface wind speed and to provide critical inputs to ocean forecasting and climate 

prediction models. 

Existing 

Search and rescue satellite 

aided tracking system 

Detects and locates aviators, mariners, and land-based users in distress. Existing 

Space environmental sensor 

suite 

Collects data to identify, reduce, and predict the effects of space weather on 

technological systems, including satellites and radio links. 

New 

Survivability sensor Monitors for attacks on the satellite and notifies other instruments in case of an attack. Existing 

Total solar irradiance sensor Monitors and captures total and spectral solar irradiance data. Existing 

Visible/infrared imager 

radiometer suite (VIIRS) 

Collects images and radiometric data used to provide information on the earth’s clouds, 

atmosphere, ocean, and land surfaces. 

New 

Source: GAO, based on NPOESS Integrated Program Office data.

In addition, the NPOESS Preparatory Project (NPP), which is being 

developed as a major risk reduction and climate data continuity 

initiative, is a planned demonstration satellite to be launched several 

years before the first NPOESS satellite is to be launched. It is 

planned to host three of the four critical NPOESS sensors (the 

visible/infrared imager radiometer suite (VIIRS), the cross-track 

infrared sounder, and the advanced technology microwave 

Page 8 GAO-06-573T
sounder), as well as a noncritical sensor (the ozone mapper/profiler 

suite). NPP will provide the program office and the processing 

centers an early opportunity to work with the sensors, ground 

control, and data processing systems. Specifically, this satellite is 

expected to demonstrate the validity of about half of the NPOESS 

environmental data records5

 and about 93 percent of its data 

processing load. 

NPOESS Acquisition Strategy 

NPOESS is a major system acquisition that consists of three key 

phases: the concept and technology development phase, which 

lasted from roughly 1995 to early 1997; the program definition and 

risk reduction phase, which began in early 1997 and ended in August 

2002; and the engineering and manufacturing development and 

production phase, which began with the award of the development 

and production contract in August 2002 and will continue through 

the end of the program. Before the contract was awarded in 2002, 

the life cycle cost for the program was estimated to be $6.5 billion 

over the 24-year period from the inception of the program in 1995 

through 2018. Shortly after the contract was awarded, the life cycle 

cost estimate was estimated to be $7 billion. 

When the NPOESS development contract was awarded, program 

officials identified an anticipated schedule and funding stream for 

the program. The schedule for launching the satellites was driven by 

a requirement that the satellites be available to back up the final 

POES and DMSP satellites should anything go wrong during the 

planned launches of these satellites. In general, program officials 

anticipate that roughly 1 out of every 10 satellites will fail either 

during launch or during early operations after launch. 

Early program milestones included (1) launching NPP by May 2006, 

(2) having the first NPOESS satellite available to back up the final 

POES satellite launch in March 2008, and (3) having the second 

NPOESS satellite available to back up the final DMSP satellite 

 5

Environmental data records are weather products derived from sensor data records and 

temperature data records. 

Page 9 GAO-06-573T
launch in October 2009. If the NPOESS satellites were not needed to 

back up the final predecessor satellites, their anticipated launch 

dates would have been April 2009 and June 2011, respectively. 

NPOESS Has Experienced Continued Cost Increases and Schedule Delays 

Over the past several years, the NPOESS program has experienced a 

series of cost increases and schedule delays. In 2003, we reported 

that changes in the NPOESS funding stream caused a delay in the 

program’s schedule.6

 Specifically, a DOD program official reported 

that between 2001 and 2002 the agency experienced delays in 

launching a DMSP satellite, causing delays in the expected launch 

dates of another satellite. In late 2002, DOD shifted the expected 

launch date for the final satellite from 2009 to 2010. As a result, the 

department reduced funding for NPOESS by about $65 million 

between fiscal years 2004 and 2007. According to program officials, 

because NOAA is required to provide the same level of funding that 

DOD provides, this change triggered a corresponding reduction in 

funding by NOAA for those years. As a result of the reduced funding, 

program officials were forced to make difficult decisions about what 

to focus on first. The program office decided to keep NPP as close 

to its original schedule as possible, because of its importance to the 

eventual NPOESS development, and to shift some of the NPOESS 

deliverables to later years. This shift affected the NPOESS 

deployment schedule. To plan for this shift, the program office 

developed a new program cost and schedule baseline. 

After this new baseline was completed in 2004, we reported that the 

program office increased the NPOESS cost estimate from about $7 

billion to $8.1 billion, and delayed key milestones, including the 

planned launch of the first NPOESS satellite—which was delayed by 

7 months.7

 The cost increases reflected changes to the NPOESS 

contract as well as increased program management funds. 

According to the program office, contract changes included 

extension of the development schedule, increased sensor costs, and 

additional funds needed for mitigating risks. Increased program 

 6

GAO-03-987T. 

7

GAO-04-1054. 

Page 10 GAO-06-573T
management funds were added for noncontract costs and 

management reserves. 

At that time, we also noted that other factors could further affect the 

revised cost and schedule estimates. Specifically, the contractor was 

not meeting expected cost and schedule targets on the new baseline 

because of technical issues in the development of key sensors, 

including the critical VIIRS sensor. Based on its performance 

through May 2004, we estimated that the contractor would most 

likely overrun its contract at completion in September 2011 by $500 

million. In addition, we reported that risks associated with the 

development of the critical sensors, integrated data processing 

system, and algorithms, among other things, could contribute to 

further cost increases and schedule slips. 

Most recently, in our November 2005 testimony, we noted that 

NPOESS schedules, costs, and trends had continued to worsen.8

 We 

reported that over the past year, NPOESS cost increases and 

schedule delays demonstrated worsening trends, and that there 

were continuing problems in the development of a key sensor. We 

further noted that contractor data showed that costs and schedules 

were likely to continue to increase in the future. Our trend analysis 

at the time showed that the contractor would most likely overrun 

costs by $1.4 billion, resulting in a life cycle cost of about $9.7 

billion, unless critical changes were made. We also noted that 

program risks, particularly with the development of critical sensors, 

could further increase NPOESS costs and delay schedules. At the 

November hearing, program officials confirmed that the program’s 

life cycle cost estimate would likely grow to $10 billion unless 

critical changes were made to the program. Table 2 provides a 

summary of recent growth in program cost estimates. 

As for schedule changes, in November 2005, we noted that the 

program office anticipated at least a 10-month delay in the launch of 

the first satellite (totaling at least a 17-month delay from the time the 

contract was awarded) and a 6-month delay in the launch of the 

second satellite. A summary of those schedule changes is shown in 

 8

GAO-06-249T. 

Page 11 GAO-06-573T
table 3. The effect of these delays is evident in the widening gap 

between when the last POES satellite is expected to launch and 

when the first NPOESS satellite could be available if needed as a 

backup. This is significant because if the last POES satellite fails on 

launch, it will be at least 3 years before the first NPOESS satellite 

could be launched. During that time, critical weather and 

environmental observations would be unavailable—and military and 

civilian weather products and forecasts could be significantly 

degraded. 

Table 2: Changes in NPOESS Life Cycle Cost Estimates through November 2005

As of Life cycle cost estimate Life cycle range

July 2002 $6.5 billion 1995–2018 

July 2003 $7.0 billion 1995–2018 

September 2004 $8.1 billion 1995–2020 

November 2005 $10 billionaTo be determined 

Source: GAO analysis, based on Integrated Program Office data. 

a

Anticipated decisions on program direction are likely to affect this estimate. 

Page 12 GAO-06-573T
Table 3: Changes in NPOESS Schedule Estimates as of November 2005 

Milestones 

As of August 

2002 contract 

award

As of February 

2004 

(rebaseline) 

As of August 

2005 

Net change from 

contract award

Minimum 

change from 

rebaseline Potential data gap

NPP launch May 2006 October 2006 April 2008 23-month delay 18-month 

delay 

Not applicable

Final POES launch a March 2008 March 2008 December 2007 4-month advance Not applicable

First NPOESS 

satellite planned for 

launch 

April 2009 November 

2009 

September 

2010 

17-month delay 10-month 

delay 

Not applicable

First NPOESS 

satellite launch if 

needed to back up the 

final POES 

March 2008 February 2010bDecember 

2010c

33-month delay 3-year data gap if 

final POES fails on 

launch 

Final DMSP launch a October 2009 May 2010 October 2011 24-month delay Not applicable

Second NPOESS 

satellite planned for 

launch 

June 2011 June 2011 December 2011 6-month delay 6-month delay Not applicable

Source: GAO analysis, based on NPOESS Integrated Program Office data. 

a POES and DMSP are not part of the NPOESS program. Their launch dates are provided because of

their relevance to the NPOESS satellite schedules.

b A program official reported that if the first NPOESS satellite is needed to back up the final POES 

satellite, the contractor will prepare the satellite to be launched in a different orbit with a different suite

of sensors. These factors will prevent launch from taking place until February 2010. 

C

If the first NPOESS satellite is needed to back up the final POES satellite, the contractor will prepare 

the satellite to be launched in a different orbit with a different suite of sensors, adding 3 months to the 

September 2010 launch date. 

Problems involving multiple levels of management—including 

subcontractor, contractor, program office, and executive 

leadership—played a role in bringing the NPOESS program to its 

current state. For example, the VIIRS sensor development issues 

were attributed, in part, to the subcontractor’s inadequate project 

management. Specifically, after a series of technical problems, 

internal review teams sent by the prime contractor and the program 

office found that the subcontractor had deviated from a number of 

contract, management, and policy directives set out by the main 

office and that both management and process engineering were 

inadequate. Neither the contractor nor the program office had 

recognized the underlying problems in time to fix them. After these 

issues were identified, the subcontractor’s management team was 

replaced. Further, in January 2005, the NPOESS Executive 

Committee (Excom) called for an independent review of the VIIRS 

Page 13 GAO-06-573T
problems. This independent review, delivered in August 2005, 

reported that the program management office did not have the 

technical system engineering support it needed to effectively 

manage the contractor, among other things. We also reported that 

the involvement of NPOESS executive leadership had wavered from 

frequent heavy involvement to occasional meetings with few 

resulting decisions. Specifically, the Excom had met five times over 

the preceding 2 years. Most of these meetings did not result in major 

decisions, but rather triggered further analysis and review. 

Sound management is critical to program success. In our reviews of 

major acquisitions throughout the government, we have reported 

that key factors determining a project’s ability to be delivered on 

time, within budget, and with promised functionality include sound 

program management, contractor oversight, risk identification and 

escalation, and effective and timely executive level oversight.9

 Given 

the history of large cost increases and the factors that could further 

affect NPOESS costs and schedules, we reported that continued 

oversight, strong leadership, and timely decision making are more 

critical than ever. 

NPOESS Status and Plans: Decision on Program’s Future Direction 

on Hold, Interim Efforts Under Way 

The future direction of the NPOESS program—what will be 

delivered, at what cost, and by when—is currently on hold pending a 

decision on how to proceed. Over the last few years, NPOESS has 

experienced continued cost increases and schedule delays, requiring 

difficult decisions about the program’s direction and capabilities. 

In mid-November 2005, we reported that the NPOESS executive 

committee expected to make a decision in December 2005 on the 

direction of the program. This involved deciding among options 

 9

For example, GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January

2005) and Major Management Challenges and Program Risks: Department of 

Transportation, GAO-03-108 (Washington, D.C.: January 2003). 

Page 14 GAO-06-573T
involving increased costs, delayed schedules, and reduced 

functionality. We urged the committee to make a decision quickly so 

that the program could proceed. However, in late November 2005, 

NPOESS cost growth exceeded a legislatively mandated threshold 

that requires the Department of Defense to certify the program to 

Congress. This placed any decision about the future direction of the 

program on hold until the certification takes place in June 2006. 

In the meantime, the program office has implemented an interim 

plan to continue work on key sensors and other program elements 

using fiscal year 2006 funding. Following certification, a decision on 

future direction should be clear. That will require developing a new 

program baseline and renegotiating contracts—efforts that could 

take up to a year. 

Nunn-McCurdy Process Puts Program Direction on Hold 

The Nunn-McCurdy Act10 requires DOD to take specific actions when 

a major system acquisition exceeds certain cost thresholds. Key 

provisions require the Secretary of Defense to notify Congress when 

a major defense acquisition is expected to overrun its project 

baseline by 15 percent or more, and to certify the program to 

Congress when it is expected to overrun its baseline by 25 percent 

or more. Certification is an assurance that 

● the program is essential to national security, 

● there are no alternatives to the program that will provide equal 

or greater military capability at less cost, 

● the new estimates of the program’s cost are reasonable, and 

● the management structure for the program is adequate to 

manage and control cost. 

In August 2005, the NPOESS program office determined that it could 

not execute its planned program within the constraints of its current 

baseline and notified its executive committee. In turn, Congress was 

 1010 U.S.C. section 2433, as amended by Pub. Law No. 109-163, Div. A, section 802. 

Page 15 GAO-06-573T
notified that the program was expected to overrun its baseline by 15 

percent. Subsequently, in late November 2005, it was determined 

that at completion the final program cost would be greater than 25 

percent over its baseline. At the beginning of January 2006, DOD 

notified Congress that NPOESS was expected to overrun its baseline 

by more than 25 percent and began the process of certifying the 

program. 

The Nunn-McCurdy Act pertains to Defense acquisitions, but 

because NPOESS is a joint program, the certification process was 

expanded to include input from NOAA and NASA. Specifically, the 

Defense Acquisition Executive, who is responsible for the 

certification process, invited the NPOESS executive committee 

members to participate in the process, with principal stakeholders 

from each NPOESS partner agency serving as intermediaries 

between the executive committee members and working groups set 

up to address each of the four certification elements. Additionally, 

these working groups are made up of DOD, NOAA, and NASA 

personnel, as well as others (such as representatives of the NPOESS 

senior user advisory group) as warranted. 

As part of the certification process, DOD is evaluating options for 

the future of the program. These options could include reducing the 

number or function of NPOESS satellites, relying on European 

satellites, increasing costs, delaying planned launch dates, or 

canceling the program. According to Defense officials, a decision is 

expected to be announced during the first week of June 2006. 

However, the completion of the certification process does not end 

the negotiations on this program. Any major cost changes will need 

to be worked into the respective agencies’ budgets, and any major 

program changes will need to be worked into a new baseline 

describing what will be delivered by when and then negotiated with 

the contractor. According to program office officials, a revised 

baseline will likely take 6 to 12 months to develop and implement 

from the time a decision is made. 

Program Office Has Interim Efforts Under Way 

The NPOESS Integrated Program Office has several initiatives under 

way—both to improve its management of the program and to keep 

Page 16 GAO-06-573T
NPOESS sensor development moving forward—as it waits for 

completion of the Nunn-McCurdy process. To address concerns 

about program management that we and others have raised, the 

program office has 

● increased staffing of cost analysts and earned value management 

experts to improve contractor and subcontractor oversight, 

● increased the presence of system engineers on sensor development 

initiatives, 

● developed a proposal for restructuring the program office and 

overall satellite program to allow for clearer decision-making 

authority and more timely decisions, and 

● taken steps to improve communications among the program office, 

tri-agency executives, and contractors. 

These initiatives should help improve program management, but 

they are not yet fully implemented—and will not guarantee success. 

The proposed management changes still need to be approved, 

funded, and implemented. Further, NPOESS development is 

technically challenging. Thus, stringent oversight and risk 

management will continue to be important throughout the life of the 

project. 

As for continuing sensor development, because any major changes 

to the program will not be known until the certification process is 

completed, the program office has implemented an interim plan to 

continue work on key sensors and other program elements within 

the fiscal year 2006 funding profile. Officials stated that they chose 

work activities that would be needed regardless of the option 

chosen for the future direction of the program. 

Based on contractor-provided data, our analysis indicates that 

NPOESS is making mixed progress against the fiscal year 2006 

interim plan. Between October 2005 and January 2006, the 

contractor outperformed its program cost and schedule targets and 

completed some unplanned work. However, the contractor 

continued to experience cost overruns on the development of its 

critical sensors—VIIRS and CMIS. The primary cost drivers were the 

Page 17 GAO-06-573T
extensive manpower beyond what was planned to resolve technical 

issues. 

The development of VIIRS is of particular importance because it is 

to be demonstrated on the NPP satellite, which is currently 

scheduled for launch in April 2008. While CMIS is not part of NPP, 

its development is important because it is one of four critical 

sensors providing data for key weather products. Over the past year,

work on CMIS was deferred in order to fund efforts to fix VIIRS and 

to keep NPP on schedule. 

In November, we reported that VIIRS was experiencing continued 

problems dealing with the technical complexity of the ground 

support equipment. VIIRS also experienced problems with the 

development of the cryoradiator,11 excessive vibration of sensor 

parts, and errors in the sensor’s solar calibration. Since November, 

the program office has taken positive steps to contain these 

technical risks. In particular, VIIRS now has a baseline plan for 

serial development of the sensor design, an approach that is 

intended to minimize rework. The program office also added 

decision gates to provide management review and approval of 

progress. 

We also reported in November on the problems experienced on 

CMIS. Specifically, CMIS continued to face technical challenges in 

the design of the receivers, the sensor structure, and the antenna 

calibration system. In addition, it experienced system reliability and 

thermal issues, among other things. Since November, work has been 

ongoing to simplify the CMIS design. These design changes are 

intended to reduce the weight of the CMIS structure by moving 

several subsystems from the instrument onto the spacecraft. 

Additionally, the program office reported that the contractor has 

demonstrated that a complex component of the CMIS receiver is 

feasible. 

 11The cryoradiator is a key component of the VIIRS sensor. It is intended to cool down 

components of the sensor. 

Page 18 GAO-06-573T
While positive measures have been taken in the development of 

both of these sensors, the program office continues to consider 

VIIRS to be a high-risk initiative because of technical challenges that 

it is facing. VIIRS is fast approaching a critical developmental 

milestone that will determine the extent of progress made. 

Specifically, a prototype is expected to begin thermal vacuum 

testing in summer 2006. This testing will assess the stability of the 

current sensor design. If the current design fails to meet its 

performance metrics, VIIRS could be in danger of falling further 

behind in cost and schedule. Program officials acknowledge that 

CMIS requires a watchful eye, but note that there is more time 

available to meet its development requirements. To the program 

office’s credit, however, it is aware of these risks and is using its risk 

management plans to help mitigate them. 

Considerations in Moving the NPOESS Program Forward 

As NPOESS undergoes the Nunn-McCurdy certification process and 

important decisions are made on how the program is to proceed, 

there are several important considerations. 

● NOAA and NASA representation in the DOD Nunn-McCurdy 

certification process is imperative. As a joint program, NPOESS is 

expected to fulfill many military, civilian, and research requirements 

for environmental data. Thus, it is important that all agency partners 

have a voice in the DOD proceedings. As noted earlier, DOD has 

included NOAA and NASA in its process—both in an executive 

advisory capacity and on the teams working to address each of the 

four certification requirements. Further, NOAA and NASA officials 

reported that they believe that they are being effectively involved in 

the certification process. However, because this is a DOD process 

and decision, and because Defense requirements differ from NOAA 

and NASA requirements, there is risk that the chosen alternative 

could sacrifice NOAA and NASA requirements. It will be important 

for NOAA and NASA to remain active players in the deliberation of 

options and the final decision on how to move the program forward. 

● Indecision increases the risk of a gap in satellite data. The 

potential for a gap in polar-orbiting satellite data is increasing with 

Page 19 GAO-06-573T
every day of delay on the NPOESS program. Specifically, if th

satellite in the predecessor satellite series (the Polar-orbiting 

Operational Environmental Satellites or POES) were to fail, there 

would be a gap in satellite coverage until the first NPOESS sat

was launched and put into operation (see fig. 2). 

e final

ellite

at

Coverage 

Such a gap could 

have a devastating effect on our national ability to forecast severe 

weather events, such as those associated with future hurricane 

seasons. Since a decision on how the NPOESS program is to

proceed is not expected until June 2006, and there will likely be

least another year while a new baseline is established and the

contract modified, it is important that the departments move 

expeditiously to fund their chosen program direction and to 

implement contract changes. 

Figure 4: A Potential Gap in Satellite

● Continuing oversight of program and executive management is 

arranted. Management problems at multiple levels—

e program

s

w

subcontractor, contractor, project office, and executive oversight—

led to NPOESS recent cost and schedule overruns. As th

implements a new management structure and increased contractor 

oversight, it will be important to measure and report on the progres

of these changes so as to not repeat past problems. 

Page 20 GAO-06-573T
In summary, in November 2005, we reported that NPOESS was “a 

s,

n.

n in

o

ed.

This concludes my statement. I would be pleased to respond to any 

Contact and Acknowledgements 

program in crisis” because of technical problems on critical sensor

escalating costs, poor management at multiple levels, and the lack 

of a decision on how to proceed with the program. Today, the 

program is still troubled, and its future direction is not yet know

The program office and contractor are addressing problems on the

critical sensors and have adopted strategies that are expected to 

reduce risks on these sensors. Additionally, the program office is

working to address management challenges by increasing program

office skills and staffing, increasing contractor oversight, and 

restructuring the program office to allow for more timely and 

authoritative decisions. Further, the Nunn-McCurdy certificatio

June 2006 is expected to result in a firm decision on how to proceed

with the program. Over the next few months, it will be important for 

all of the agency partners to have a voice in the final decision on 

how to proceed. Once this decision is made, it will be important t

move quickly to implement the decision in agency budgets and 

contracts. Further, as the project continues, it will be critical to

ensure that the management issues of the past will not be repeat

questions that you or other members of the Subcommittee may have

at this time. 

If you have any questions regarding this testimony, please contact

David Powner at (202) 512-9286 or by e-mail at pownerd@gao.gov. 

Individuals making contributions to this testimony include Colleen

Phillips (Assistant Director), Carol Cha, Barbara Collier, Neil 

Doherty, Kathleen S. Lovett, and Karen Talley. 

Page 21 GAO-06-573T
Appendix I. Objectives, Scope, and Methodology 

Our objectives were to determine the National Polar-orbiting 

Operational Environmental Satellite System’s (NPOESS) current 

status and plans, and to discuss considerations in moving the 

program forward. To accomplish these objectives, we focused our 

review on the Integrated Program Office, the organization 

responsible for the overall NPOESS program. We also interviewed 

officials from the Department of Defense (DOD), the National 

Aeronautics and Space Administration (NASA), and NOAA’s 

National Weather Service and National Environmental Satellite Data 

and Information Service to determine plans for the program. 

To identify schedule and cost changes related to NPOESS’s status 

we reviewed program office data and interviewed program officials. 

We compared changes in NPOESS cost and schedule estimates to 

prior cost and schedule estimates as reported in our July 2002, July 

2003, and November 2005 testimonies and in our September 2004 

report.12 

To further analyze trends that could affect the program in fiscal year 

2006, we assessed the prime contractor’s cost and schedule 

performance. To make these assessments, we applied earned value 

analysis techniques13 to data from the contractor earned value and 

variance analysis reports. We compared the cost of work completed 

with the budgeted costs for scheduled work during January 2006 to 

 12GAO, Polar-orbiting Environmental Satellites: Status, Plans, and Future Data

Management Challenges, GAO-02-684T (Washington, D.C.: July 24, 2002); Polar-orbiting 

Environmental Satellites: Project Risks Could Affect Weather Data Needed by Civilian

and Military Users, GAO-03-987T (Washington, D.C.: July 15, 2003); Polar-orbiting 

Environmental Satellites: Information on Program Cost and Schedule Changes, GAO-04-

1054 (Washington, D.C.: September 30, 2004); and Polar-orbiting Operational 

Environmental Satellites: Technical Problems, Cost Increases, and Schedule Delays

Trigger Need for Difficult Trade-off Decisions, GAO-06-249T (Washington, D.C.:

November 16, 2005). 

13Earned value analysis is a means of placing a dollar value on a project’s status in order to 

compare budget versus actual costs versus project status in dollar amounts. For our 

analysis, we used standard earned value formulas to calculate cost and schedule variances.

Page 22 GAO-06-573T
show trends in cost and schedule performance against the interim 

plan for fiscal year 2006. 

NOAA and DOD officials generally agreed with the facts presented 

in this statement and provided some technical corrections, which 

we have incorporated. We performed our work at the Integrated 

Program Office, DOD, NASA, and NOAA offices in the Washington, 

D.C., metropolitan area, between February 2006 and March 2006, in 

accordance with generally accepted government auditing standards. 

Page 23 GAO-06-573T

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