United States Government Accountability Office

GAO Testimony 

Before the Committee on Science, 

House of Representatives 

POLAR-ORBITING 

OPERATIONAL 

ENVIRONMENTAL 

SATELLITES 

Technical Problems, Cost 

Increases, and Schedule 

Delays Trigger Need for 

Difficult Trade-off 

Decisions 

Statement of David A. Powner, Director 

Information Technology Management Issues 

For Release on Delivery

Expected at 10:00 a.m. EST 

Wednesday, November 16, 2005

 

GAO-06-249T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

November 16, 2005

POLAR-ORBITING OPERATIONAL

ENVIRONMENTAL SATELLITES 

Technical Problems, Cost Increases, and 

Schedule Delays Trigger Need for 

Difficult Trade-off Decisions 

Highlights of GAO-06-249T, a testimony 

before the Committee on Science, House 

of Representatives 

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. Our 

nation’s current operational polarorbiting 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. This new satellite system 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. 

GAO was asked to discuss the 

NPOESS program’s schedule, cost, 

trends, and risks, and to describe 

plans and implications for moving

the program forward. 

The NPOESS program has experienced continued schedule delays, cost 

increases, and technical challenges over the last several years. The schedule

for the launch of the first satellite has been delayed by at least 17 months 

(until September 2010 at the earliest), and this delay could result in a gap in 

satellite coverage of at least 3 years if the last satellite in the prior series fails 

on launch (see figure below). Program life cycle cost estimates have grown 

from $6.5 billion in 2002 to $8.1 billion in 2004 and are still growing. While 

the program is currently reassessing its life cycle cost estimates, our analysis

of contractor trends as of September 2005 shows a likely $1.4 billion 

contract cost overrun—bringing the life cycle cost estimate to about $9.7 

billion. Technical risks in developing key sensors continue, and could lead to 

further cost increases and schedule delays. As a result of expected program 

cost growth, the Executive Committee responsible for the program is 

evaluating options for moving the program forward—and new cost estimates 

for those options. 

Key options under consideration in August 2005 included removing a key 

sensor from the first satellite, delaying launches of the first two satellites, 

and not launching a preliminary risk-reduction satellite. All of these options 

impact the program’s cost, schedules, and the system users who rely on 

satellite data to develop critical weather products and forecasts—although 

the full extent of that impact is not clear. Further, last week GAO was 

informed that there are nine new options now under consideration, and that 

they are likely to impact costs, schedules, and system users. Until a decision 

is made, the program remains without a plan for moving forward. Further, 

there are opportunity costs in not making a decision—some options are lost 

and others may become more difficult. Given the history of large cost 

increases and the factors that could further affect NPOESS costs and 

schedules, continued oversight, strong leadership, and timely decision 

making are more critical than ever. 

Potential Gap in Satellite Coverage 

www.gao.gov/cgi-bin/getrpt?GAO-06-249T.

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 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. Polarorbiting satellites provide data and imagery that are used by weather 

forecasters, climatologist, 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 and global climate 

monitoring through the year 2020. At your request, we will discuss the 

NPOESS program’s schedule, cost, trends, and risks, and describe plans 

and implications for moving the program forward.

This statement builds on other work we have done on environmental 

satellite programs over the last several years.1

 As agreed with your staff 

members, we plan to continue our oversight of this program. An overview 

of the approach we used to perform this work—our objectives, scope, and 

methodology, is provided in appendix I. 

Over the past several years, the NPOESS program has experienced 

continued schedule delays, cost increases, and technical challenges. The

schedule for the launch of the first satellite has been delayed by at least 17 

months (until September 2010 at the earliest), and this delay could result 

in a gap in satellite coverage of at least 3 years if the last satellite in the 

prior series fails on launch. Program life cycle cost estimates have grown 

from $6.5 billion in 2002 to $8.1 billion in 2004 and are still growing. While 

the program is currently reassessing its life cycle cost estimates, our 

analysis of contractor trends as of September 2005 shows a likely $1.4 

Results in Brief 

 1

GAO, Polar-orbiting Environmental Satellites: Information on Program Cost and

Schedule Changes, GAO-04-1054 (Washington, D.C.: September 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.: March 29, 2000); and Weather Satellites:

Planning for the Geostationary Satellite Program Needs More Attention, GAO-AIMD-97-37

(Washington, D.C.: March 13, 1997). 

Page 1 GAO-06-249T 
billion contract cost overrun—bringing the life cycle cost estimate to 

about $9.7 billion. Technical risks in developing key sensors continue, and 

could lead to further cost increases and schedule delays. 

As a result of expected program cost growth, the Executive Committee 

responsible for NPOESS is evaluating options for moving the program 

forward—and new cost estimates for those options. Key options under 

consideration in August 2005 included removing a key sensor from the 

first satellite, delaying launches of the first two satellites, and not 

launching a preliminary risk-reduction satellite. All of these options impact 

the program’s cost and schedules, and the system users who rely on 

satellite data to develop critical weather products and forecasts—although 

the full extent of that impact is not clear. Further, last week we were 

informed that there are nine new options now under consideration, and all 

are likely to impact costs, schedules, and system users. Until a decision is

made, the program remains without a plan for moving forward, and there 

are opportunity costs in not making a decision—some options are lost, 

and others may become more difficult. Given the history of large cost 

increases and the factors that could further affect NPOESS costs and 

schedules, continued oversight, strong leadership, and timely decision 

making are more critical than ever. 

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

polar-orbiting meteorological satellite systems: the Polar-orbiting 

Operational Environmental Satellites (POES), 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 images, products, and models are all used by weather 

forecasters, the military, and the public. 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. 

Background 

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 

Page 2 GAO-06-249T 
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 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. 

Page 3 GAO-06-249T 
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 oceanographic products, and weather prediction 

model outputs.2

 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 polarorbiting 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. 

 2

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 4 GAO-06-249T 
Figure 2: Generic Data Relay Pattern for the Polar Meteorological Satellite System 

NPOESS Overview Given the expectation that combining the POES and DMSP programs 

would reduce duplication and result in sizable cost savings, a May 1994

Presidential Decision Directive3

 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 the National Aeronautics and Space Administration (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 the converged 

system and for satellite operations; DOD has the lead on the acquisition; 

and NASA has primary responsibility for facilitating the development and 

 3

NSTC-2, May 5, 1994. 

Page 5 GAO-06-249T 
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 

comprising the Integrated Program Office and lists their responsibilities. 

Figure 3: Organizations Coordinated by the NPOESS Integrated Program Office 

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, 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.

Page 6 GAO-06-249T 
Table 1: Expected NPOESS Instruments (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’ 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

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 

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 to the sensors and subsystems listed above, in August 2004, the

President directed NASA and the Departments of Defense, the Interior, 

and Commerce to place a LANDSAT-like imagery capability on the 

NPOESS platform. This new capability is to collect imagery data of the

earth’s surface similar to the current LANDSAT series of satellites, which 

are managed by the Department of Interior’s U.S. Geological Survey and

are reaching the end of their respective lifespans. One instrument was 

launched in 1984 and is now long past its 3-year design life; the newer 

satellite is not fully operational. LANDSAT is an important tool in 

environmental monitoring efforts, including land cover change, vegetation

mapping, and wildfire effects. The decision to add a LANDSAT-like sensor 

Page 7 GAO-06-249T 
to the NPOESS platform is currently being revisited by the President’s 

Office of Science and Technology Policy and the Office of Management 

and Budget.

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, the cross-track infrared sounder, and the advanced technology 

microwave 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 records4

 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 estimate 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 grew to $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. 

 4

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

temperature data records. 

Page 8 GAO-06-249T 
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 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.

In 2003, we reported that these schedules were subsequently changed as a 

result of changes in the NPOESS funding stream.5

 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.

6

 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 management funds were added for non-contract costs and 

management reserves. 

 5

GAO-03-987T. 

6

GAO-04-1054. 

Page 9 GAO-06-249T 
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 of the new baseline because of technical issues 

in the development of key sensors. 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. 

Over the past year, NPOESS cost increases and schedule delays have 

demonstrated worsening trends. NPOESS has continued to experience 

problems in the development of a key sensor, resulting in schedule delays

and anticipated cost increases. Further, contractor data show that costs 

and schedules are likely to continue to increase in the future. Our trend 

analysis shows that the contractor will most likely overrun costs by $1.4 

billion, resulting in a life cycle cost of about $9.7 billion, unless critical 

changes are made. Program risks, particularly with the development of 

critical sensors, could further increase NPOESS costs and delay schedules. 

Management problems at multiple levels—subcontractor, contractor, 

program office, and executive leadership—have contributed to these cost

and schedule issues. 

NPOESS Schedules, 

Costs, and Trends 

Continue to Worsen 

NPOESS Sensor Problems 

Triggered Schedule Delays 

and Cost Increases 

NPOESS has continued to experience problems in the development of a 

key sensor, resulting in schedule delays and anticipated cost increases. In

early 2005, the program office learned that a subcontractor could not meet 

cost and schedule due to significant technical issues on the visible/infrared 

imager radiometer suite (VIIRS) sensor—including problems with the 

cryoradiator,

7

 excessive vibration of sensor parts, and errors in the 

sensor’s solar calibration. These technical problems were further 

complicated by inadequate process engineering and management 

oversight by the VIIRS subcontractor. To address these issues, the 

program office provided additional funds for VIIRS, capped development 

funding for the conical-scanned microwave imager/sounder (CMIS) and 

the ozone mapper/profiler suite sensors, and revised its schedule in order 

to keep the program moving forward. 

 7

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

components of the sensor. 

Page 10 GAO-06-249T 
By the summer of 2005, the program office reported that significant 

technical issues had been resolved—but they had a significant impact on 

the overall NPOESS program. Regarding NPOESS schedule, 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 recent schedule changes is shown in table 2. 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 would be significantly degraded.

As for NPOESS costs, program officials reported that the VIIRS 

development problems caused the program to overrun its budget, and that 

they need to reassess options for funding the program. They did not 

provide an updated cost estimate, noting that new cost estimates are 

under development. A summary of recent program cost growth is shown 

in table 3. 

Page 11 GAO-06-249T 
Table 2: Program Schedule Changes

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 launchaMarch 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 launchaOctober 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 three months to 

the September 2010 launch date.

Table 3: Program Life Cycle Cost Changes 

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 To be determined To be determined 

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

Page 12 GAO-06-249T 
In addition to the overall program office cost and schedule estimates, it is 

valuable to assess contractor data to monitor the contractor’s progress in 

meeting deliverables since contractor costs comprise a substantial portion

of the overall program costs. NPOESS contractor data show a pattern of 

cost and schedule overruns—and a most likely contract cost growth of 

about $1.4 billion. 

Trends in Contractor Data 

Show Continued Cost and 

Schedule Overruns; 

Overall Costs Projected to 

Grow 

One method project managers use to track contractor progress on 

deliverables is earned value management. This method, used by DOD for 

several decades, 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. Cost 

variances compare the earned value of the completed work with the actual 

cost of the work performed. For example, if a contractor completed $5 

million worth of work and the work actually cost $6.7 million, there would 

be a –$1.7 million cost variance. Schedule variances are also measured in 

dollars, but they compare the earned value of the work completed to the

value of work that was expected to be completed. For example, if a 

contractor completed $5 million worth of work at the end of the month, 

but was budgeted to complete $10 million worth of work, there would be a 

–$5 million schedule variance. Positive variances indicate that activities 

are costing less or are completed ahead of schedule. Negative variances 

indicate that activities are costing more or are falling behind schedule.

These cost and schedule variances can then be used in estimating the cost 

and time needed to complete the program. 

Using contractor-provided data, our analysis indicates that NPOESS cost 

performance continues to experience negative variances. Figure 4 shows 

the 6-month cumulative cost variance for the NPOESS contract. From 

March 2005 to September 2005, the contractor exceeded its cost target by

$103.7 million, which is about 9 percent of the contractor’s budget for that

time period. The contractor has incurred a total cost overrun of $253.8 

million with NPOESS development only about 36 percent complete. This 

information is useful because trends often tend to continue and can be

difficult to reverse unless management attention is focused on key risk 

areas and risk mitigation actions are aggressively pursued. Studies have 

shown that, once programs are 15 percent complete, the performance 

indicators are indicative of the final outcome. 

Based on contractor performance from March 2005 to September 2005, we 

estimate that the current NPOESS contract will overrun its budget—worth 

approximately $3.4 billion—by between $788 million and $2 billion. Our 

projection of the most likely cost overrun is about $1.4 billion. The 

Page 13 GAO-06-249T 
contractor, in contrast, estimates about a $371 million overrun at 

completion of the NPOESS contract. Adding our projected $1.4 billion 

overrun to the prior $8.1 billion life cycle cost estimate and the project 

office’s estimated need for $225 million in additional management costs 

brings the total life cycle cost of the program to about $9.7 billion. 

Figure 4: Cumulative Cost Variance of the NPOESS Contract over a 6-Month Period 

Our analysis also indicates that the contract is showing a negative 

schedule variance. Figure 5 shows the 6-month cumulative schedule 

variance of NPOESS. From March 2005 to September 2005, the contractor

was unable to complete $27.8 million worth of scheduled work. In 

September, the contractor was able to improve its overall schedule 

performance because of an unexpectedly large amount of work being 

completed on the spacecraft (as opposed to the sensors). It was not a 

reflection of an improvement in the contractor’s ability to complete work

on the critical sensors. Specifically, performance on the development of 

critical sensors over the past 6 months continued to be poor, which 

indicates that schedule performance will likely remain poor in the future. 

This is of concern because an inability to meet contract schedule 

performance could be a predictor of future rising costs, as more spending

is often necessary to resolve schedule overruns. 

Page 14 GAO-06-249T 
Figure 5: Cumulative Schedule Variance of the NPOESS Contract over a 6-Month

Period

Risks Could Further Affect 

NPOESS Cost and 

Schedules 

Risk management is a leading management practice that is widely 

recognized as a key component of a sound system development approach. 

An effective risk management approach typically includes identifying, 

prioritizing, resolving, and monitoring project risks. 

Program officials reported that they recognize several risks with the 

overall program and critical sensors that, if not mitigated, could further 

increase costs and delay the schedule. In accordance with leading 

management practices, the program office developed a NPOESS risk 

management program that requires assigning a severity rating to risks that 

bear particular attention, placing these risks in a database, planning 

response strategies for each risk in the database, and reviewing and 

evaluating risks in the database during monthly program risk management 

board meetings. 

The program office identifies risks in two categories: program risks, which 

affect the whole NPOESS program and are managed at the program office 

level, and segment risks, which affect only individual segments8

 and are 

 8

These segments are identified as (1) overall system integration, (2) the launch segment, (3) 

the space segment, (4) the interface data processing segment, and (5) the command, 

control, and communications segment. 

Page 15 GAO-06-249T 
managed at the integrated product team level. The program office has 

identified 17 program risks, including 10 medium to medium-high risks. 

Some of these risks include the delivery of four sensors (VIIRS, CMIS, the 

cross-track infrared sounder and the ozone mapper/profiler suite) and the 

integrated data processing system; and the uncertainty that algorithms will 

meet system performance requirements. Figure 6 identifies the 17 program 

risks and their assigned levels of risk. 

Page 16 GAO-06-249T 
Figure 6: Key Program Risks as Identified by the NPOESS Program Office, as of August 2005 

Managing the risks associated with the development of VIIRS, the ozone 

mapper/profiler suite, the cross-track infrared sounder, the integrated data

processing system, and algorithm performance is of particular importance 

because these are to be demonstrated on the NPP satellite that is currently 

scheduled for launch in April 2008. The risks with the development of 

CMIS are also important because CMIS is one of the four critical sensors 

providing data for key weather products. 

Page 17 GAO-06-249T 
At present, the program office considers two critical sensors—VIIRS and 

CMIS—to present key program risks because of technical challenges that 

each is facing. In addition to the previously reported VIIRS problems, the 

sensor continues to experience significant problems dealing with the 

technical complexity of the ground support equipment. The testing of 

optical and solar diffuser components has also been more challenging than 

expected and is taking longer than planned to complete. In addition, the 

delivery of components for integration onto the sensor, including the 

electronics material from two subcontractors, has been behind schedule 

due to technical challenges. Until the current technical issues are resolved, 

delays in the VIIRS delivery and integration onto the NPP satellite remain a 

potential threat to the expected launch date of the NPP. 

The CMIS sensor is experiencing schedule overruns that may threaten its 

expected delivery date. Based on the prime contractor’s analysis, late 

deliveries of major CMIS subsystems will occur unless the current 

schedule is extended. For example, the simulator hardware is already 

expected to be delivered late, based on the current contractual 

requirement of December 2006. CMIS also continues to experience 

technical challenges in the design of the radio frequency receivers, the 

structure, and the antenna. In addition, extensive effort has been 

expended to resolve system reliability and thermal issues, among other 

things. To the program office’s credit, it is aware of these risks and is using 

its risk management plans to help mitigate them. 

Current Program Issues 

Due, In Part, to Problems 

at Multiple Management 

Levels 

Problems involving multiple levels of management—including

subcontractor, contractor, program office, and executive leadership—have 

played a role in bringing the NPOESS program to its current state. As 

noted earlier, 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 VIIRS 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 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 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. Additionally, the 

Page 18 GAO-06-249T 
involvement of NPOESS executive leadership has wavered from frequent 

heavy involvement to occasional meetings with few resulting decisions. 

Specifically, the Excom has met five times over the last 2 years. Most of 

these meetings did not result in major decisions, but rather triggered 

further analysis and review. For instance, program officials and the 

program’s Tri-agency Steering Commitee9

 identified five options to present 

at the executive committee meeting in mid-August 2005 and expected to

receive direction on how to proceed with the project. The Excom did not 

select an option. Instead, it requested further analysis of the options by 

another independent review team, and an independent cost estimate by 

DOD’s Cost Analysis Improvement Group. 

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

acquisitions throughout the government, we have reported that sound 

program management, contractor oversight, risk identification and 

escalation, and effective and timely executive level oversight are key 

factors determining a project’s ability to be delivered on time, within 

budget, and with promised functionality.10 Given the history of large cost 

increases and the factors that could further affect NPOESS costs and 

schedules, continued oversight, strong leadership, and timely decision 

making are more critical than ever. 

In August 2005, the program office briefed its Executive Committee on the 

program’s cost, schedule, and risks. The program office noted that the 

budget for the program was no longer executable and offered multiple 

alternatives for reconfiguring the program. Specifically, the program office 

and contractor developed 26 options during the March to August 2005

timeframe. Of these options, the Tri-agency Steering Committee selected 

five options, shown in table 4. All of these options alter the costs, 

schedules, and deliverables for the program. While the options’ 

preliminary life cycle cost estimates range from $8.8 billion to $9.2 billion, 

they all involve reductions in functionality and limited probabilities for 

meeting schedules within the cited budgets. None of the options presented 

Options for Moving 

Forward Are under 

Consideration, but 

Cost, Schedule, and 

Impact on Users Are 

Not Fully Understood 

 9

The Tri-agency Steering Committee reviews and consolidates issues for the Executive 

Committee and provides oversight of the program office. 

10For 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 19 GAO-06-249T 
discussed the potential for adding funding in the short term to hold off 

longer-term life cycle cost increases. 

Table 4: Selected program options

Option description

Estimated cost 

increasea

/ 

Preliminary life 

cycle cost estimate 

Schedule change on first and 

second planned satellite launches 

(called C-1 and C-2) 

Probability of 

meeting

schedule 

within cited 

budget Performance change: 

Delay first and second

NPOESS satellite launches 

and do not include the CMIS 

sensor on C-1 

$948 million/ 

$9.0 billion 

C-1 launch delayed by 10 months; 

C-2 launch delayed by 6 months 

50 percent CMIS sensor not 

included on C-1 

Cancel the last POES 

satellite; delay launch of C-1 

and C-2; and do not include 

the CMIS sensor on C-1 

$948 million/ 

$9.0 billion 

C-1 launch delayed by 16 months 

C-2 launch delayed by 16 months 

75 percent CMIS sensor not 

included on C-1 

Cancel NPP; delay C-1 and 

C-2 launches 

$758 million/ 

$8.9 billion 

C-1 launch delayed by 10 months; 

C-2 launch delayed by 6 months 

40 percent 

Cancel NPP; delay C-1 and 

C-2 launches; and defer 

CMIS until C-2

$676 million/ 

$8.8 billion 

C-1 launch delayed by 10 months; 

C-2 launch delayed by 6 months 

70 percent CMIS sensor not 

included on C-1 

Cancel C-1, use European 

satellite data in its place 

$1.105 billion/ 

$9.2 billion 

C-1 cancelled;

C-2 unchanged 

60 percent Does not meet critical 

performance 

requirements 

Source: NPOESS Integrated Program Office data.

a

Cost increases include contract costs and $225 million for the program office. 

Project officials anticipated that at its August meeting, the Excom would 

decide on an option and provide directions for keeping the project moving. 

However, Excom officials requested further analysis and detailed cost 

estimates, and they deferred a decision among alternatives until December 

2005. 

New Options Under 

Consideration Would 

Affect Cost, Schedule, and 

System Users; Full Extent 

Unknown 

Last week, we learned that in addition to the five options presented in 

August 2005, program executives are considering nine new options. While 

we were not provided any details about the nine new options, program 

officials informed us that they too will affect NPOESS costs, schedule, and

promised functionality for system users—although their full impact is not 

yet clear. Program officials expect the Excom to decide on a limited 

number of options on November 22, 2005, and to obtain independent cost

estimates of those options and make a decision to implement one of the 

options in December 2005. After a decision is made, the prime contractor

Page 20 GAO-06-249T 
will need time to develop more precise cost estimates and the program 

office with need to renegotiate the contract. Until a decision is made, the 

program remains without a plan for moving forward. Further, there are 

opportunity costs in not making a decision—that is, some options may no 

longer be viable, contractors are not working towards a chosen solution, 

and other potential options become more difficult to implement 

Clearly, timely decisions are needed to allow the program to move forward 

and for satellite data users to start planning for any data shortfalls they 

may experience. Until a decision is made on how the program is to 

proceed, the contractor and program office cannot start to implement the 

chosen solution and some decisions, such as the ability to hold schedule 

slips to a minimum, become much more difficult. 

In summary, NPOESS is a program in crisis. Over the last few years, it has 

been troubled by technical problems, cost increases, and schedule delays. 

Looking forward, technical challenges persist; costs are likely to grow; and 

schedule delays could lead to gaps in satellite coverage. Program officials 

and executives are considering various options for dropping functionality 

in order to handle cost and schedule increases, but the full impact of these 

options is not clear. Moving forward, continued oversight, strong 

leadership, and informed and timely decision making are more critical 

than ever. 

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

questions that you or other members of the Committee may have at this 

time. 

If you have any questions regarding this testimony, please contact David 

Powner at (202) 512-9286 or by email at pownerd@gao.gov. Individuals 

making contributions to this testimony include Carol Cha, Neil Doherty, 

Joanne Fiorino, Kathleen S. Lovett, Colleen Phillips, and Karen Richey. 

Contact and 

Acknowledgements 

Page 21 GAO-06-249T 
Page 22 GAO-06-249T 

Appendix I: Objectives, Scope, and 

Methodology 

Our objectives were to (1) discuss the National Polar-orbiting Operational

Environmental Satellite System (NPOESS) program’s schedule, cost, 

trends, and risks and (2) describe plans and implications for 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 met with officials from the Department 

of Defense, the National Aeronautics and Space Administration, and 

NOAA’s National Weather Service and National Environmental Satellite 

Data and Information Service to discuss user needs for the program. 

To identify schedule and cost changes, we reviewed program office 

contract data, the Executive Committee minutes and briefings, and an 

independent review team study, and we interviewed program officials. We 

compared changes in NPOESS cost and schedule estimates to prior cost 

and schedule estimates as reported in our July 20021

 and July 2003 

testimonies2

 and in our September 2004 report.3

To identify trends that could affect the program baseline in the future, we 

assessed the prime contractor’s cost and schedule performance. To make 

these assessments, we applied earned value analysis techniques4

 to data 

from contractor cost performance reports. We compared the cost of work 

completed with the budgeted costs for scheduled work for a 6-month 

period, from March to September 2005, to show trends in cost and 

schedule performance. We also used data from the reports to estimate the 

likely costs at the completion of the prime contract through established 

earned value formulas. This resulted in three different values, with the 

middle value being the most likely. We used the base contract without 

options for our earned value assessments. 

 1

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

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

2

GAO, 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). 

3

GAO, Polar-orbiting Environmental Satellites: Information on Program Cost and

Schedule Changes, GAO-04-1054 (Washington, D.C.: September 30, 2004). 

4

The earned value concept is applied as a means of placing a dollar value on project status. 

It is a technique that compares budget versus actual costs versus project status in dollar 

amounts. For our analysis, we used standard earned value formulas to calculate cost and

schedule variance and forecast the range of cost overrun at contract completion. 
To identify risks, we reviewed program risk management documents and 

interviewed program officials. Further, we evaluated earned value cost 

reports to determine the key risks that negatively affect NPOESS’s ability 

to maintain the current schedule and cost estimates. 

To assess options and implications for moving the program forward, we 

reviewed the five options presented at the Executive Committee briefing

and met with representatives of the National Weather Service and National 

Environmental Satellite Data and Information Service to obtain their views 

on user’s needs and priorities for satellite data. 

NOAA 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 in the Washington, D.C., metropolitan area, between June 2005 and 

November 2005, in accordance with generally accepted government 

auditing standards. 

Page 23 GAO-06-249T (310497) 
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