United States Government Accountability Office

GAO Testimony before the Committee on 

Science, House of Representatives 

GEOSTATIONARY 

OPERATIONAL 

ENVIRONMENTAL 

SATELLITES 

For Release on Delivery 

Expected at 10:00 a.m. EDT 

Friday, September 29, 2006

Additional Action Needed 

to Incorporate Lessons 

Learned from Other 

Satellite Programs 

Statement of David A. Powner 

Director, Information Technology Management Issues 

GAO-06-1129T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 29, 2006

GEOSTATIONARY OPERATIONAL 

ENVIRONMENTAL SATELLITES 

Additional Action Needed to Incorporate 

Lessons Learned from Other Satellite 

Programs 

Highlights of GAO-06-1129T, a testimony 

before the Committee on Science, House 

of Representatives 

The National Oceanic and 

Atmospheric Administration 

(NOAA) plans to procure the next

generation of geostationary 

operational environmental 

satellites, called the Geostationary 

Operational Environmental

Satellites-R series (GOES-R). This 

new series is considered critical to 

the United States’ ability to 

maintain the continuity of data 

required for weather forecasting 

through the year 2028. 

GAO was asked to summarize and 

update its report previously issued

to the Subcommittee on

Environment, Technology, and 

Standards—Geostationary 

Operational Environmental

Satellites: Steps Remain in 

Incorporating Lessons Learned 

from Other Satellite Programs, 

GAO-06-993 (Washington, D.C.: 

Sept. 6, 2006). This report (1) 

determines the status of and plans 

for the GOES-R series

procurement, and (2) identifies and 

evaluates the actions that the 

program management team is 

taking to ensure that past problems 

experienced in procuring other 

satellite programs are not repeated. 

What GAO Recommends

In our report, we make 

recommendations to the Secretary 

of Commerce to improve NOAA’s 

ability to effectively manage the

GOES-R procurement. In written 

comments, the Department of

Commerce agreed with the 

recommendations and identified

plans for implementing them. 

At the time of our review, NOAA was nearing the end of the preliminary 

design phase of its GOES-R system—which was estimated to cost $6.2 

billion and scheduled to have the first satellite ready for launch in 2012. It 

expected to award a contract in August 2007 to develop this system. 

However, recent analyses of the GOES-R program cost—which in May 

2006 the program office estimated could reach $11.4 billion—have led the 

agency to consider reducing the scope of requirements for the satellite 

series. Since our report was issued, NOAA officials told GAO that the 

agency has made a decision to reduce the scope of the program to a 

minimum of two satellites and to reduce the complexity of the program 

by canceling a technically complex instrument. 

NOAA has taken steps to implement lessons learned from past satellite 

programs, but more remains to be done. Prior satellite programs—including 

a prior GOES series, a polar-orbiting environmental satellite series, and 

various military satellite programs—often experienced technical challenges,

cost overruns, and schedule delays. Key lessons from these programs 

include the need to (1) establish realistic cost and schedule estimates,

(2) ensure sufficient technical readiness of the system’s components prior to 

key decisions, (3) provide sufficient management at government and 

contractor levels, and (4) perform adequate senior executive oversight to 

ensure mission success. NOAA has established plans to address these 

lessons by conducting independent cost estimates, performing preliminary 

studies of key technologies, placing resident government offices at key 

contractor locations, and establishing a senior executive oversight 

committee. However, many steps remain to fully address these lessons (see

table). Until it completes these activities, NOAA faces an increased risk that 

the GOES-R program will repeat the increased cost, schedule delays, and 

performance shortfalls that have plagued past procurements. 

Key Lessons Learned and the Activities Taken or Remaining to Fully Address Them 

Lesson learned Actions taken or under way Actions remaining 

Establish realistic cost and 

schedule estimates 

• Obtaining multiple 

independent cost estimates 

• Conducting risk analysis of 

schedule estimates 

• Ensuring objectivity

when reconciling 

alternative estimates 

Ensure sufficient technical

readiness of the system’s

components prior to critical 

decisions

• Conducted preliminary 

studies of key technologies 

and components 

• Ensuring sufficient 

technical maturity

before proceeding to 

production 

Provide sufficient

management of contractors 

and subcontractors 

• Increased presence at

contractor sites 

• Plan to increase number of 

system engineers 

• Plan to hire three specialists 

in earned value 

• Assessing the number 

of earned value 

specialists needed 

commensurate with

increased acquisition 

activities 

Perform effective executivelevel oversight 

• NOAA’s program 

management council meets 

regularly to oversee project 

Source: GAO analysis.

www.gao.gov/cgi-bin/getrpt?GAO-06-1129T.

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 Committee: 

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

the planned Geostationary Operational Environmental Satellites-R

(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 2012. 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 and updates a report we 

previously issued to your subcommittee that (1) determines the 

status of and plans for the GOES-R series procurement, and (2) 

identifies and evaluates the actions that the program management 

team is taking to ensure that past problems experienced in 

procuring other satellite programs are not repeated.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 the work on which this testimony is 

based was performed in accordance with generally accepted 

government auditing standards. 

Results in Brief 

The National Oceanic and Atmospheric Administration (NOAA) is 

nearing the end of the preliminary design phase of its GOES-R 

system, which was initially estimated to cost $6.2 billion and 

scheduled to have the first satellite ready for launch in 2012. At the 

time of our review, NOAA had issued contracts for the preliminary 

design of the overall GOES-R system to three vendors and expected 

to award a contract to one of these vendors in August 2007 to 

develop the satellites. In addition, to reduce the risks associated 

with developing new instruments, NOAA issued contracts for the 

 1

GAO, Geostationary Operational Environmental Satellites: Steps Remain in

Incorporating Lessons Learned from Other Satellite Programs, GAO-06-993 (Washington,

D.C.: Sept. 6, 2006). 

 Page 1
early development of two instruments and for the preliminary 

designs of three other instruments. The agency plans to turn these 

instrument contracts over to the vendor that is awarded the contract 

for the overall GOES-R program. However, recent analyses of the 

GOES-R program cost—which in May 2006 the program office 

estimated could reach $11.4 billion—have led the agency to consider 

reducing the scope of requirements for the satellite series. At the 

time of our review, NOAA officials estimated that a decision on the 

future scope and direction of the program could be made by the end 

of September 2006. Since then, NOAA officials told us that the 

agency has made a decision to reduce the scope and complexity of 

the GOES-R program by reducing the number of satellites and 

canceling a technically complex instrument. 

NOAA has taken steps to implement lessons learned from past 

satellite programs, but more remains to be done. Prior satellite 

programs—including a prior GOES series, a polar-orbiting 

environmental satellite series, and various military satellite 

programs—often experience technical challenges, cost overruns, 

and schedule delays. Key lessons from these programs include the 

need to (1) establish realistic cost and schedule estimates, 

(2) ensure sufficient technical readiness of the system’s components 

prior to key decisions, (3) provide sufficient management at 

government and contractor levels, and (4) perform adequate senior 

executive oversight to ensure mission success. NOAA has 

established plans to address these lessons by conducting 

independent cost estimates, performing preliminary studies of key 

technologies, placing resident government offices at key contractor 

locations, and establishing a senior executive oversight committee.

However, many steps remain to fully address these lessons. 

Specifically, NOAA has not yet developed a process to evaluate and 

reconcile the independent and government cost estimates. In 

addition, NOAA has not yet determined how it will ensure that a 

sufficient level of technical maturity will be achieved in time for an 

upcoming decision milestone, nor has it determined the appropriate 

level of resources it needs to adequately track and oversee the 

 Page 2
program using earned value management.2

 Until it completes these 

activities, NOAA faces an increased risk that the GOES-R program 

will repeat the increased cost, schedule delays, and performance 

shortfalls that have plagued past procurements. 

To improve NOAA’s ability to effectively manage the GOES-R 

procurement, in our accompanying report,3

 we made 

recommendations to the Secretary of Commerce to direct its NOAA 

Program Management Council to establish a process for objectively 

evaluating and reconciling the government and independent life 

cycle cost estimates once the program requirements are finalized; to 

establish a team of system engineering experts to perform a 

comprehensive review of the Advanced Baseline Imager instrument 

to determine the level of technical maturity achieved on the 

instrument before moving the instrument into production; and to 

seek assistance in determining the appropriate levels of resources 

needed at the program office to adequately track and oversee the 

contractor’s earned value management data. In written comments, 

the Department of Commerce agreed with our recommendations 

and provided information on its plans to implement our 

recommendations. 

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. 

 2

Earned value management is a method that compares the value of work accomplished 

during a given period with that of the work expected in that period. 

3

GAO-06-993. 

 Page 3
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 two-satellite system that is 

primarily focused on the United States (see fig. 1). 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. 

Figure 1: Approximate GOES Geographic Coverage 

Sources: NOAA (data), Map Resources (map).

GOES-11 GOES-12 

To provide continuous satellite coverage, NOAA acquires several 

satellites at a time as part of a series and launches new satellites 

every few years (see table 1). 

 Page 4
Table 1: Summary of the Procurement History of GOES 

Series name Procurement durationaSatellites 

Original GOESb 1970–1987 1, 2, 3, 4, 5, 6, 7 

GOES I-M 1985–2001 8, 9, 10, 11, 12

GOES-N 1998–2011 13, O, P, Qc

GOES-R 2007–2020 R, S, T, U 

Source: GAO analysis of NOAA data. 

a

Duration includes time from contract award to final satellite launch.

b

The procurement of these satellites consisted of four separate contracts for (1) two early prototype 

satellites and GOES-1, (2) GOES-2 and -3, (3) GOES-4 through -6, and (4) GOES-G (failed on 

launch) and GOES-7.

c

NOAA decided not to exercise the option for this satellite. 

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.4

 NOAA is also planning a future 

generation of satellites, known as the GOES-R series, which are 

planned for launch beginning in 2012. 

Each of the operational geostationary satellites continuously 

transmits raw environmental data to NOAA ground stations. The 

data are processed at these ground stations and transmitted back to 

the satellite for broadcast to primary weather services both in the 

United States and around the world, including the global research 

community. Raw and processed data are also distributed to users 

via ground stations through other communication channels, such as 

dedicated private communication lines and the Internet. Figure 2

depicts a generic data relay pattern from the geostationary satellites 

to the ground stations and commercial terminals. 

 4

Satellites in a series are identified by letters of the alphabet when they are on the ground 

and by numbers once they are in orbit. 

 Page 5
Figure 2: Generic GOES Data Relay Pattern 

Source: GAO analysis of NOAA data.

Ground station

GOES satellite

Raw environmental data 

sent to ground station

Processed environmental 

data sent back to GOES

Processed environmental 

data broadcast to users

User

User

Communications link

GOES-R Program—An Overview 

NOAA is planning for the GOES-R program to improve on the 

technology of prior GOES series, in terms of both system and 

instrument improvements. The system improvements are expected 

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. 

Table 2: Summary of Key GOES-R System Improvements 

Key feature GOES-N (current) GOES-R 

Total products 41 ~152

Downlink rate of raw data collected by 

instruments (from satellite to ground stations) 

2.6 Mbps 132 Mbps

Broadcast rate of processed GOES data (from 

satellite to users) 

2.1 Mbps 17–24 Mbps

 Page 6
Key feature GOES-N (current) GOES-R 

Raw data storage (the length of time that raw 

data will be stored at ground stations) 

0 days 30 days

Source: GAO analysis of NOAA data. 

The instruments on the GOES-R series are expected to increase the 

clarity and precision of the observed environmental data. NOAA 

plans to acquire five different types of instruments. The program 

office considered two of the instruments—the Advanced Baseline 

Imager and the Hyperspectral Environmental Suite—to be most 

critical because they would provide data for key weather products. 5

Table 3 summarizes the originally planned instruments and their 

expected capabilities. 

 5

After our report was issued on September 6, 2006, NOAA officials told us that the agency 

has decided to cancel its plans for the development of the Hyperspectral Environmental 

Suite but expects to explore options that will ensure continuity of data provided by the 

current GOES series. 

 Page 7
Table 3: Expected GOES-R Series Instruments, as of June 2006 

Planned instrument Description

Advanced Baseline Imager Expected to provide variable area imagery and radiometric information of the earth's

surface, atmosphere, and cloud cover. Key features include

• monitoring and tracking severe weather, 

• providing images of clouds to support forecasts, and 

• providing higher resolution, faster coverage, and broader coverage

simultaneously. 

Hyperspectral Environmental Suite Expected to provide information about the earth’s surface to aid in the prediction of 

weather and climate monitoring. Key features include

• providing atmospheric moisture and temperature profiles to support forecasts

and climate monitoring, 

• monitoring coastal regions for ecosystem health, water quality, coastal erosion, 

and harmful algal blooms, and

• providing higher resolution and faster coverage. 

Space Environmental In-Situ Suite Expected to provide information on space weather to aid in the prediction of particle 

precipitation, which causes disturbance and disruption of radio communications and

navigation systems. Key features include

• measuring magnetic fields and charged particles, 

• providing improved heavy ion detection, adding low energy electrons and 

protons, and

• enabling early warnings for satellite and power grid operation, telecom services, 

astronauts, and airlines. 

Solar Imaging Suite Expected to provide coverage of the entire dynamic range of solar X-ray features, from 

coronal holes to X-class flares, as well as estimate the measure of temperature and

emissions. Key features include

• providing images of the sun and measuring solar output to monitor solar storms

and 

• providing improved imager capability. 

Geostationary Lightning Mapper Expected to continuously monitor lightning activity over the United States and provide a

more complete dataset than previously possible. Key features include 

• detecting lightning strikes as an indicator of severe storms and 

• providing a new capability to GOES that only previously existed on polar 

satellites. 

Source: GAO analysis of NOAA data. 

GOES-R Program Office Structure 

The program management structure for the GOES-R program differs 

from past GOES programs. Prior to the GOES-R series, NOAA was 

responsible for program funding, procurement of the ground 

elements, and on-orbit operation of the satellites, while NASA was 

responsible for the procurement of the spacecraft, instruments, and 

launch services. NOAA officials stated that this approach limited the 

agency’s insight and management involvement in the procurement 

of major elements of the system.

 Page 8
Alternatively, under the GOES-R management structure, NOAA has 

responsibility for the procurement and operation of the overall 

system—including spacecraft, instruments, and launch services. 

NASA is responsible for the procurement of the individual 

instruments until they are transferred to the overall GOES-R system 

contractor for completion and integration onto the spacecraft. 

Additionally, to take advantage of NASA’s acquisition experience 

and technical expertise, NOAA located the GOES-R program office 

at NASA’s Goddard Space Flight Center. It also designated key 

program management positions to be filled with NASA personnel. 

These positions include the deputy system program director role for 

advanced instrument and technology infusion, the project manager 

for the flight portion of the system, and the deputy project manager 

for the ground and operations portion of the system. NOAA officials 

explained that they changed the management structure for the 

GOES-R program in order to streamline oversight and fiduciary 

responsibilities, but that they still plan to rely on NASA’s expertise 

in space system acquisitions. 

 Page 9
Satellite Programs Often Experience Technical Problems, Cost Overruns, and Schedule 

Delays 

Satellite programs are often technically complex and risky 

undertakings, and as a result, they often experience technical 

problems, cost overruns, and schedule delays. We and others have 

reported on a historical pattern of repeated missteps in the 

procurement of major satellite systems, including the National 

Polar-orbiting Operational Environmental Satellite System 

(NPOESS), the GOES I-M series, the Space Based Infrared System 

High Program (SBIRS-High), and the Advanced Extremely High 

Frequency Satellite System (AEHF).6

 Table 4 lists key problems 

experienced with these programs. 

 6

GAO, Defense Acquisitions: Space System Acquisition Risks and Keys to Addressing 

Them, GAO-06-776R (Washington, D.C.: June 1, 2006); Polar-orbiting Operational

Environmental Satellites: Cost Increases Trigger Review and Place Program’s Direction 

on Hold, GAO-06-573T (Washington, D.C.: Mar. 30, 2006); 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); Defense Acquisitions: 

Despite Restructuring, SBIRS High Program Remains at Risk of Cost and Schedule 

Overruns, GAO-04-48 (Washington, D.C.: Oct. 31, 2003); Military Space Operations: 

Common Problems and Their Effects on Satellite and Related Acquisitions, GAO-03-825R

(Washington, D.C.: June 2, 2003); Defense Acquisitions: Assessments of Major Weapon 

Programs, GAO-03-476 (Washington, D.C.: May 15, 2003); Weather Satellites: Action 

Needed to Resolve Status of the U.S. Geostationary Satellite Program, GAO/NSIAD-91-252

(Washington, D.C.: July 24, 1991). Defense Science Board/Air Force Scientific Advisory 

Board Joint Task Force, Report on the Acquisition of National Security Space Programs

(May 2003). 

 Page 10
Table 4: Key Problems Experienced on Selected Major Space Systems 

Problem NPOESS GOES I-M SBIRS–High AEHF 

Insufficient technical readiness prior to critical decision points 

Inadequate preliminary studies prior to the decision to award a development 

contract 

X X X

Insufficient technical maturity prior to the decision to move to production X X X X

Unrealistic cost and schedule estimates

Optimistic assumptions including: 

• savings from heritage systems X X X

• readiness of technology maturity X X X X

• constant and available industrial base X

• no weight growth X X X

• no requirements growth X

• savings from lot buys versus single-unit purchase X

• overly aggressive schedule X X X X

Poor program and contractor management

Quality and subcontractor issues X X X X

Inadequate systems engineering capabilities X X X X

Inadequate earned value management capabilities X X X

Insufficient management reserve X X

Ineffective contract award fee structure X X X

Poor senior executive level oversight

Infrequent meetings X 

Inability to make timely decisions X 

Other 

Unstable funding stream X X X

Unstable requirements X X

Source: GAO analysis of NOAA and DOD data. 

GOES-R Procurement Activities Are Under Way, but System 

Requirements and Cost Estimates Are Changing 

At the time of our review, NOAA was nearing the end of the 

preliminary design phase on its GOES-R program and planned to 

award a contract for the system’s development in August 2007. 

However, because of concerns with potential cost growth, NOAA’s 

plans for the GOES-R procurement are changing. To date, NOAA has 

issued contracts for the preliminary design of the overall GOES-R 

system to three vendors and expects to award a contract to one of 

these vendors to develop the system. In addition, to reduce the risks 

associated with developing new instruments, NASA has issued 

 Page 11
contracts for the early development of two instruments and for the 

preliminary designs of three other instruments.7

 The agency plans to 

award these contracts and then turn them over to the contractor 

responsible for the overall GOES-R program. However, this 

approach is under review and NOAA may wait until the instruments 

are fully developed before turning them over to the system 

contractor. Table 5 provides a summary of the status of contracts 

for the GOES-R program. 

Table 5: Status of GOES-R Program Contracts, as of September 6, 2006 

Contract item

Date contract 

was awarded for 

design

Planned date

contract will be 

awarded for 

development

Instruments 

Advanced Baseline Imager May 2001 September 2004 

(actual)

Space Environmental In-Situ Suite December 2004 August 2006

(actual)

Solar Imaging Suite September 2004 September 2006

Hyperspectral Environmental Suite June 2004 June 2007

Geostationary Lightning Mapper February 2006 August 2007

GOES-R System 

Acquisition and Operations October 2005 August 2007

Source: NOAA. 

According to program documentation provided to the Office of 

Management and Budget in 2005, the official life cycle cost estimate 

for GOES-R was approximately $6.2 billion (see table 6). However, 

program officials reported that this estimate was over 2 years old 

and under review. 

 7

The development contract for the Space Environmental In-Situ Suite instrument was 

issued after we completed our review. 

 Page 12
Table 6: GOES-R Program Life Cycle Cost Estimate, as of June 2006 

Major cost category 

Dollars in

millions

System level $533

Space segment 2,494

Ground segments 729

Launch segment 686

Operations and support 1,147

Government program office 637

Total $6,226

Source: NOAA. 

At the time of our review, NOAA was planning to launch the first 

GOES-R series satellite in September 2012.8

 The development of the 

schedule for launching the satellites 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. Table 7 provides a summary 

of the planned launch schedule for the originally planned GOES-R 

series. 

Table 7: GOES-R Program Schedule, as of September 6, 2006 

Milestone Planned date

GOES-O launchaApril 2008

GOES-P launchaOctober 2009b

GOES-R satellite available for launch September 2012

GOES-S satellite available for launch April 2014

GOES-T satellite available for launch October 2015

GOES-U satellite available for launch April 2017

End of operations and maintenance 2028

Source: NOAA. 

a

GOES-O and GOES-P are not part of the GOES-R series program. Their launch dates are provided 

because of their relevance to the GOES-R series satellite schedules. 

b

Because GOES satellites have been operating longer than expected, NOAA is considering moving 

the planned launch of the GOES-P satellite to July 2011. 

 8

After our report was issued on September 6, 2006, NOAA officials told us that the planned 

launch schedule was being delayed. The expected launch of the first GOES-R series

satellite is now planned for December 2014.

 Page 13
However, NOAA’s plans for the GOES-R procurement are changing 

because of concerns with potential cost growth. Given its 

experiences with cost growth on the NPOESS acquisition, NOAA 

asked program officials to recalculate the total cost of the estimated 

$6.2 billion GOES-R program. In May 2006, program officials 

estimated that the life cycle cost could reach $11.4 billion. The 

agency then requested that the program identify options for 

reducing the scope of requirements for the satellite series. Program 

officials reported that there were over 10 viable options under 

consideration, including options for removing one or more of the 

planned instruments. The program office also reevaluated its 

planned acquisition schedule based on the potential program 

options. Specifically, program officials stated that if there was a 

decision to make a major change in system requirements, they 

would likely extend the preliminary design phase, delay the decision

to proceed into the development and production phase, and delay 

the contract award date. At the time of our review, NOAA officials 

estimated that a decision on the future scope and direction of the 

program could be made by the end of September 2006. 

Recent NOAA Decision on the Direction and Scope of the GOES-R Program 

In mid-September 2006, NOAA officials reported that a decision on 

the future scope and direction of GOES-R had been made—and 

involved a reduction in the number of satellites and in planned 

program capabilities, a revised life cycle cost estimate, and the delay 

of key programmatic milestones. Specifically, NOAA reduced the 

minimum number of satellites to two. In addition, plans for 

developing the Hyperspectral Environmental Suite—which was 

once considered a critical instrument by the agency—were 

cancelled. Instead, the program office is exploring options that will 

ensure continuity of sounding data currently provided by the current 

GOES series.

9

 NOAA officials reported that the cost of the 

restructured program is not known, but some anticipate it will be 

 9

The Hyperspectral Environmental Suite was intended to be the successor to the sounder 

instrument onboard the current GOES series. The sounder measures radiated energy at

different depths (altitudes) and also records surface and cloud-top temperatures and ozone 

distribution. 

 Page 14
close to the original program estimate of $6.2 billion. The contract 

award for the GOES-R system has been pushed out to May 2008. 

Finally, the planned launch date of the first satellite in the GOES-R 

series has been delayed until December 2014. 

The GOES-R Program Office Has Taken Steps to Address Past 

Lessons Learned, but Significant Actions Remain 

NOAA has taken steps to apply lessons learned from problems 

encountered on other satellite programs to the GOES-R 

procurement. Key lessons include (1) establishing realistic cost and 

schedule estimates, (2) ensuring sufficient technical readiness of the 

system’s components prior to key decisions, (3) providing sufficient 

management at government and contractor levels, and 

(4) performing adequate senior executive oversight to ensure 

mission success. NOAA has established plans designed to mitigate 

the problems faced in past acquisitions; however, many activities 

remain to fully address these lessons. Until it completes these 

activities, NOAA faces an increased risk that the GOES-R program 

will repeat the increased cost, schedule delays, and performance 

shortfalls that have plagued past procurements. 

Efforts to Improve Reliability of Cost and Schedule Estimates are Under Way, but Key 

Steps Remain in Reconciling Cost Estimates 

We and others have reported that space system acquisitions are 

strongly biased to produce unrealistically low cost and schedule 

estimates in the acquisition process.10 Our past work on military 

space acquisitions has indicated that during program formulation, 

the competition to win funding is intense and has led program 

sponsors to minimize their program cost estimates. NOAA programs 

face similar unrealistic estimates. For example, the total 

development cost of the GOES I-M acquisition was over three times 

 10GAO, Space Acquisitions: Stronger Development Practices and Investment Planning 

Needed to Address Continuing Problems, GAO-05-891T (Washington, D.C.: July 12, 2005). 

Defense Science Board/Air Force Scientific Advisory Board Joint Task Force, Report on the 

Acquisition of National Security Space Programs (May 2003). 

 Page 15
greater than planned, escalating from $640 million to $2 billion. 

Additionally, the delivery of the first satellite was delayed by 5 years. 

NOAA has several efforts under way to improve the reliability of its 

cost and schedule estimates for the GOES-R program. NOAA’s Chief 

Financial Officer has contracted with a cost-estimating firm to 

complete an independent cost estimate, while the GOES-R program 

office has hired a support contractor to assist with its internal 

program cost estimating. The program office is re-assessing its 

estimates based on preliminary information from the three vendors 

contracted to develop preliminary designs for the overall GOES-R 

system. Once the program office and independent cost estimates are 

completed, program officials intend to compare them and to 

develop a revised programmatic cost estimate that will be used in its 

decision on whether to proceed into system development and 

production. In addition, NOAA has planned for an independent 

review team—consisting of former senior industry and government 

space acquisition experts—to provide an assessment of the program 

office and independent cost estimates for this decision milestone. 

To improve its schedule reliability, the program office is currently 

conducting a schedule risk analysis in order to estimate the amount 

of adequate reserve funds and schedule margin needed to deal with 

unexpected problems and setbacks. Finally, the NOAA Observing 

System Council11 submitted a prioritized list of GOES-R system 

requirements to the Commerce Undersecretary for approval. This 

list is expected to allow the program office to act quickly in deleting

lower priority requirements in the event of severe technical 

challenges or shifting funding streams. 

While NOAA acknowledges the need to establish realistic cost and 

schedule estimates, several hurdles remain. As discussed earlier, the 

agency was considering—during the time of our review—reducing 

the requirements for the GOES-R program to mitigate the increased 

cost estimates for the program. Prior to this decision, the agency’s 

 11NOAA’s Observing System Council is the principal advisory council for NOAA's earth

observation and data management activities. It includes members from each NOAA line 

office, other relevant councils, and program offices. The Assistant Administrator for 

Satellite and Information Services and the Assistant Administrator for Weather Services 

serve as the co-chairs of the council. 

 Page 16
efforts to establish realistic cost estimates could not be fully 

effective in addressing this lesson. In addition, NOAA suspended the 

work being performed by its independent cost estimator. Now that 

the program scope and direction is being further defined, it will be 

important for the agency to restart this work. Further, the agency 

has not yet developed a process to evaluate and reconcile the 

independent and program office cost estimates once final program 

decisions are made. Without this process, the agency may lack the 

objectivity necessary to counter the optimism of program sponsors 

and is more likely to move forward with an unreliable estimate. 

Until it completes this activity, NOAA faces an increased risk that 

the GOES-R program will repeat the cost increases and schedule 

delays that have plagued past procurements. 

Preliminary Studies Are Under Way, but Steps Remain in Determining Components’ 

Technical Maturity 

Space programs often experience unforeseen technical problems in 

the development of critical components as a result of having 

insufficient knowledge of the components and their supporting 

technologies prior to key decision points. One key decision point is 

when an agency decides on whether the component is sufficiently 

ready to proceed from a preliminary study phase into a development 

phase; this decision point results in the award of the development 

contract. Another key decision point occurs during the development 

phase when an agency decides whether the component is ready to 

proceed from design into production (also called the critical design 

review). Without sufficient technical readiness at these milestones, 

agencies could proceed into development contracts on components 

that are not well understood and enter into the production phase of 

development with technologies that are not yet mature. 

In 1997, NOAA began preliminary studies on technologies that could

be used on the GOES-R instruments. These studies target existing 

technologies and assessed how they could be expanded for GOES-R.

The program office is also conducting detailed trade-off studies on 

the integrated system to improve its ability to make decisions that 

balance performance, affordability, risk, and schedule. For instance,

the program office is analyzing the potential architectures for the 

GOES-R constellation of satellites—the quantity and configuration 

of satellites, including how the instruments will be distributed over 

 Page 17
these satellites. These studies are expected to allow for a more 

mature definition of the system specifications.

NOAA has also developed plans to have an independent review team 

assess project status on an annual basis once the overall system 

contract has been awarded. In particular, this team will review 

technical, programmatic, and management areas; identify any 

outstanding risks; and recommend corrective actions. This measure 

is designed to ensure that sufficient technical readiness has been 

reached prior to the critical design review milestone. The program 

office’s ongoing studies and plans are expected to provide greater 

insight into the technical requirements for key system components 

and to mitigate the risk of unforeseen problems in later acquisition 

phases. 

However, the progress currently being made on a key instrument 

currently under development—the Advanced Baseline Imager—has 

experienced technical problems and could be an indication of more 

problems to come in the future. These problems relate to, among 

other things, the design complexity of the instrument’s detectors 

and electronics. As a result, the contractor is experiencing negative 

cost and schedule performance trends. As of May 2006, the 

contractor incurred a total cost overrun of almost $6 million with 

the instrument’s development only 28 percent complete. In addition, 

from June 2005 to May 2006, it was unable to complete 

approximately $3.3 million worth of work. Unless risk mitigation 

actions are aggressively pursued to reverse these trends, we project 

the cost overrun at completion to be about $23 million. 

While NOAA expects to make a decision on whether to move the 

instrument into production (a milestone called the critical design 

review) in January 2007, the contractor’s current performance raises 

questions as to whether the instrument designs will be sufficiently 

mature by that time. Further, the agency does not have a process to 

validate the level of technical maturity achieved on this instrument 

or to determine whether the contractor has implemented sound 

management and process engineering to ensure that the appropriate 

level of technical readiness can be achieved prior to the decision 

milestone. Until it does so, NOAA risks making a poor decision 

based on inaccurate or insufficient information—which could lead 

 Page 18
to unforeseen technical problems in the development of this 

instrument.

Efforts to Strengthen Government and Contractor Management are Under Way, but 

Significant Work on Program Controls Remain 

In the past, we have reported on poor performance in the 

management of satellite acquisitions.12 The key drivers of poor 

management included inadequate systems engineering and earned 

value management13 capabilities, unsuitable allocation of contract 

award fees, inadequate levels of management reserve, and 

inefficient decision-making and reporting structure within the 

program office. 

NOAA has taken numerous steps to restructure its management 

approach on the GOES-R procurement in an effort to improve 

performance and to avoid past mistakes. These steps include: 

• The program office revised its staffing profile to provide for 

government staff to be located on-site at prime contractor 

and key subcontractor locations. 

• The program office plans to increase the number of resident 

systems engineers from 31 to 54 to provide adequate 

government oversight of the contractor’s system engineering, 

including verification and validation of engineering designs at 

key decision points (such as the critical design review 

milestone).

• The program office has better defined the role and 

responsibilities of the program scientist, the individual who is 

expected to maintain an independent voice with regard to 

scientific matters and advise the program manager on related 

technical issues and risks. 

 12GAO-06-573T, GAO-06-249T, GAO/NSIAD-91-252, Defense Acquisitions: DOD Has Paid 

Billions in Award and Incentive Fees Regardless of Acquisition Outcomes, GAO-06-66 

(Washington, D.C.: Dec. 19, 2005), and Weather Satellites: Cost Growth and Development

Delays Jeopardize U.S. Forecasting Ability, GAO/NSIAD-89-169 (Washington, D.C.: June 

30, 1989). 

13Earned value management is a method, used by DOD for several decades, to track a 

contractor’s progress in meeting project deliverables. It compares the value of work 

accomplished during a given period with that of the work expected in that period. 

Differences from expectations are measured in both cost and schedule variances. 

 Page 19
• The program office also intends to add three resident 

specialists in earned value management to monitor 

contractor cost and schedule performance. 

• NOAA has work under way to develop the GOES-R contract 

award fee structure and the award fee review board that is 

consistent with our recent findings, the Commerce Inspector 

General’s findings, and other best practices, such as 

designating a non-program executive as the fee-determining 

official to ensure objectivity in the allocation of award fees. 

• NOAA and NASA have implemented a more integrated 

management approach that is designed to draw on NASA’s 

expertise in satellite acquisitions and increase NOAA’s 

involvement on all major components of the acquisition. 

• The program office reported that it intended to establish a 

management reserve of 25 percent consistent with the 

recommendations of the Defense Science Board Report on 

Acquisition of National Security Space Programs.14

While these steps should provide more robust government oversight 

and independent analysis capabilities, more work remains to be 

done to fully address this lesson. Specifically, the program office has 

not determined the appropriate level of resources it needs to 

adequately track and oversee the program and the planned addition 

of three earned value management specialists may not be enough as 

acquisition activities increase. By contrast, after its recent problems 

and in response to the independent review team findings, NPOESS 

program officials plan to add 10 program staff dedicated to earned 

value, cost, and schedule analysis. An insufficient level of 

established capabilities in earned value management places the 

GOES-R program office at risk of making poor decisions based on 

inaccurate and potentially misleading information. Finally, while 

NOAA officials believe that assuming sole responsibility for the 

acquisition of GOES-R will improve their ability to manage the 

program effectively, this change also elevates NOAA’s risk for 

mission success. Specifically, NOAA is taking on its first major 

system acquisition and an increased risk due to its lack of 

 14Defense Science Board/Air Force Scientific Advisory Board Joint Task Force, Report on 

the Acquisition of National Security Space Programs (May 2003). 

 Page 20
experience. Until it fully addresses the lesson of ensuring an 

appropriate level of resources to oversee its contractor, NOAA faces 

an increased risk that the GOES-R program will repeat the 

management and contractor performance shortfalls that have 

plagued past procurements. 

NOAA Has Established a Senior Executive Committee to Perform Oversight Role 

We and others have reported on NOAA’s significant deficiencies in 

its senior executive oversight of NPOESS.15 The lack of timely 

decisions and regular involvement of senior executive management 

was a critical factor in the program’s rapid cost and schedule 

growth. 

NOAA formed its program management council in response to the 

lack of adequate senior executive oversight on NPOESS. In 

particular, this council is expected to provide regular reviews and 

assessments of selected NOAA programs and projects—the first of 

which is the GOES-R program. The council is headed by the NOAA 

Deputy Undersecretary and includes senior officials from 

Commerce and NASA. The council is expected to hold meetings to 

discuss GOES-R program status on a monthly basis and to approve 

the program’s entry into subsequent acquisition phases at key 

decision milestones—including contract award and critical design 

reviews, among others. Since its establishment in January 2006, the 

council has met regularly and has established a mechanism for 

tracking action items to closure. 

The establishment of the NOAA Program Management Council is a 

positive action that should support the agency’s senior-level 

governance of the GOES-R program. In moving forward, it is 

important that this council continue to meet on a regular basis and 

exercise diligence in questioning the data presented to it and making 

difficult decisions. In particular, it will be essential that the results 

of all preliminary studies and independent assessments on technical 

maturity of the system and its components be reviewed by this 

 15GAO-06-573T; Department of Commerce Office of Inspector General, Poor Management 

Oversight and Ineffective Incentives Leave NPOESS Program Well Over Budget and

Behind Schedule, OIG-17794-6-0001 (May 8, 2006). 

 Page 21
council so that an informed decision can be made about the level of

technical complexity it is taking on when proceeding past these key 

decision milestones. In light of the recent uncertainty regarding the 

future scope and cost of the GOES-R program, the council’s 

governance will be critical in making those difficult decisions in a 

timely manner. 

Implementation of GAO Recommendations Should Improve NOAA’s 

Efforts to Implement Lessons Learned 

To improve NOAA’s ability to effectively manage the GOES-R 

procurement, in our accompanying report,16 we recommended that 

the Secretary direct its NOAA Program Management Council to take

the following three actions: 

• Once the scope of the program has been finalized, establish a 

process for objectively evaluating and reconciling the 

government and independent life cycle cost estimates. 

• Perform a comprehensive review of the Advanced Baseline 

Imager, using system engineering experts, to determine the 

level of technical maturity achieved on the instrument, to 

assess whether the contractor has implemented sound 

management and process engineering, and to assert that the 

technology is sufficiently mature before moving the 

instrument into production. 

• Seek assistance from an independent review team to 

determine the appropriate level of resources needed at the 

program office to adequately track and oversee the 

contractor’s earned value management. Among other things, 

the program office should be able to perform a 

comprehensive integrated baseline review after system 

development contract award, provide surveillance of 

contractor earned value management systems, and perform 

project scheduling analyses and cost estimates. 

 16GAO-06-993. 

 Page 22
In written comments, Commerce agreed with our recommendations 

and provided information on its plans to implement our 

recommendations. In particular, Commerce intends to establish a 

process for evaluating and reconciling the various cost estimates 

and to analyze this process and the results with an independent 

review team comprised of recognized satellite acquisition experts. 

The agency is also planning to have this independent review team 

provide assessments of the Advanced Baseline Imager’s technical 

maturity and the adequacy of the program management’s staffing 

plans. 

In summary, the procurement of the next series of geostationary 

environmental satellites—called the GOES-R series—is at a critical 

juncture. Recent concerns about the potential for cost growth on the 

GOES-R procurement have led the agency to reduce the scope of 

requirements for the satellite series. According to NOAA officials, 

the current plans call for acquiring 2 satellites and moving away 

from a technically complex new instrument in favor of existing 

technologies. While reducing the technical complexity of the system 

prior to contract award and defining an affordable program are 

sound business practices, it will be important for NOAA to balance 

these actions with the agencies’ long term need for improving 

geostationary satellites over time.

While NOAA is positioning itself to improve the acquisition of this 

system by incorporating the lessons learned from other satellite 

procurements including the need to establish realistic cost 

estimates, ensure sufficient government and contractor 

management, and obtain effective executive oversight, further steps 

remain to fully address selected lessons and thereby mitigate 

program risks. Specifically, NOAA has not yet developed a process 

to evaluate and reconcile the independent and government cost 

estimates. In addition, NOAA has not yet determined how it will 

ensure that a sufficient level of technical maturity will be achieved 

in time for an upcoming decision milestone or determined the 

appropriate level of resources it needs to adequately track and 

oversee the program using earned value management. Moreover, 

 Page 23
problems that are frequently experienced on major satellite 

acquisitions, including insufficient technical maturity, overly 

aggressive schedules, inadequate systems engineering capabilities, 

and insufficient management reserve will need to be closely 

monitored throughout this critical acquisition’s life cycle. To 

NOAA’s credit, it has begun to develop plans for implementing our 

recommendations. These plans include, among other things, 

establishing a process to evaluate and reconcile the various cost 

estimates and obtaining assessments from an independent review 

team on the technical maturity of a key instrument in development 

and the adequacy of the program management’s staffing plans. 

However, until it addresses these lessons, NOAA faces an increased 

risk that the GOES-R program will repeat the increased cost, 

schedule delays, and performance shortfalls that have plagued past 

procurements. 

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

answer any questions that you or members of the committee may 

have at this time. 

If you have any questions on matters discussed in this testimony, 

please contact me at (202) 512-9286 or by e-mail at 

pownerd@gao.gov. Other key contributors to this testimony include 

Carol Cha, Neil Doherty, Nancy Glover, Kush Malhotra, Colleen 

Phillips, and Karen Richey. 

(310830) Page 24
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