Polar-Orbiting Environmental Satellites: Information on Program Cost and Schedule Changes
Published: 2004-09-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Our nation's current operational polar-orbiting environmental satellite program is a complex infrastructure that includes two satellite systems, supporting ground stations, and four central data processing centers. In the future, the National Polar-orbiting Operational Environmental Satellite System (NPOESS) is to combine the two current satellite 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. Because of changes in funding levels after the contract was awarded, the program office recently developed a new cost and schedule baseline for NPOESS. GAO was asked to provide an interim update to (1) identify any cost or schedule changes as a result of the revised baseline and determine what contributed to these changes and (2) identify factors that could affect the program baseline in the future. In commenting on a draft of this report, DOD, NOAA, and NASA officials generally agreed with the report and offered technical corrections, which we incorporated where appropriate.
section_title: What GAO Found
paragraphs: The program office has increased the NPOESS cost estimate by $1.2 billion, from $6.9 to $8.1 billion, and delayed key milestones, including the availability of the first NPOESS satellite--which was delayed by 20 months. The cost increases reflect changes to the NPOESS contract as well as increased program management costs. The contract changes include extension of the development schedule to accommodate changes in the NPOESS funding stream, increased sensor costs, and additional funds needed for mitigating risks. Increased program management funds were added for non-contract costs and management reserves. The schedule delays were the result of stretching out the development schedule to accommodate a change in the NPOESS funding stream. Other factors could further affect the revised cost and schedule estimates. First, the contractor is 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 to date, GAO estimates that the contractor will most likely overrun its contract at completion in September 2011 by at least $500 million. Second, the risks associated with the development of the critical sensors, integrated data processing system, and algorithms could also contribute to increased cost and schedule slips.

section_title: Letter
paragraphs: Our nation’s operational polar-orbiting environmental satellite program is a  complex infrastructure encompassing two satellite systems, the Polar- orbiting Operational Environmental Satellites (POES) and the Defense  Meteorological Satellite Program (DMSP), as well as supporting ground  stations and four central data processing centers. The program provides  general weather information and specialized environmental products to a  variety of users, including weather forecasters, military strategists, and the  public. A tri-agency Integrated Program Office—comprised of officials  from the Department of Defense (DOD), the National Oceanic and  Atmospheric Administration (NOAA), and the National Aeronautics and  Space Administration (NASA)—is working to combine the two current  satellite systems into a single state-of-the-art environment monitoring  satellite system called the National Polar-orbiting Operational  Environmental Satellite System (NPOESS). 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.
When we testified on the NPOESS program in July 2003, we reported that  the program office was working to address changes in funding levels after  the contract was awarded, and planned to develop a new cost and schedule  baseline. Concerned with these cost and schedule changes, you asked us to  provide an interim update on the revised baseline. Specifically, our  objectives were to (1) identify any cost or schedule changes as a result of  the revised baseline and determine what contributed to these changes, and  (2) identify factors that could affect the program baseline in the future.
To address these objectives, we reviewed the new NPOESS cost and  schedule baseline and compared it to the old baseline. Then we identified  the factors that contributed to any cost increases or schedule delays. We  also analyzed program cost estimates and project management reports and  interviewed officials from the NPOESS Integrated Program Office, DOD,  NOAA, and NASA. In addition, this review builds on other work we have  done on environmental satellite programs over the last several years. As  agreed with your staff members, we plan to continue our oversight of this  program.
We conducted our work at NOAA, DOD, and NASA headquarters in the  Washington, D.C., metropolitan area between November 2003 and August  2004, in accordance with generally accepted government auditing  standards. Appendix I contains further details on our objectives, scope, and  methodology.
subsections: section_title: Background
paragraphs: Since the 1960s, the United States has operated two separate operational  polar-orbiting meteorological satellite systems: POES, managed by NESDIS  of NOAA and DMSP, managed by 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.
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. Today, there are two operational POES satellites and two operational  DMSP satellites that are positioned so that they can observe the earth in  early morning, mid morning, and early afternoon polar orbits. Together,  they ensure that for any region of the earth, the data provided to users are  generally no more than 6 hours old. Figure 1 illustrates the current  operational polar satellite configuration. Besides the four operational  satellites, six older satellites are in orbit that still collect some data and are  available to provide some limited backup to the operational satellites  should they degrade or fail. In the future, both NOAA and DOD plan to  continue to launch additional POES and DMSP satellites every few years,  with final launches scheduled for 2008 and 2011, respectively.
Each of the polar satellites carries a suite of sensors designed to detect  environmental data that is either reflected or emitted from the earth, the  atmosphere, and space. The satellites store these data and then transmit  them to NOAA and Air Force ground stations when the satellites pass  overhead. The ground stations then relay the data via communications  satellites to the appropriate meteorological centers for processing. The  satellites also broadcast a subset of these data in real time to tactical  receivers all over the world.
Under a shared processing agreement among the four processing centers— NESDIS, the Air Force Weather Agency, 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. Each  of the four processing centers is also responsible for distributing the data  to its respective users. For the DOD centers, the users include regional  meteorology and oceanography centers, as well as meteorology and  oceanography staff on military bases. NESDIS forwards the data to NOAA’s  National Weather Service for distribution and use by government and  commercial forecasters. The processing centers also use the Internet to  distribute data to the general public. NESDIS is responsible for the long- term archiving of data and derived products from POES and DMSP.
In addition to the infrastructure supporting satellite data processing noted  above, properly equipped field terminals that are within a direct line of  sight of the satellites can receive real-time data directly from the polar- orbiting satellites. There are an estimated 150 such field terminals operated  by U.S. and foreign governments, academia, and many are operated by  DOD. 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.
section_title: NPOESS Overview
paragraphs: Given the expectation that combining the POES and DMSP programs  would reduce duplication and result in sizable cost savings, a May 1994  Presidential Decision Directive 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. To  manage this program, DOD, NOAA, and NASA formed a tri-agency  Integrated Program Office located within NOAA.
Within the program office, each agency has the lead on certain activities.  NOAA has overall program management responsibility for the converged  system, as well as satellite operations; DOD has the lead on the acquisition;  and NASA has primary responsibility for facilitating the development and  incorporation of new technologies into the converged system. NOAA and  DOD share the costs of funding NPOESS, while NASA funds specific  technology projects and studies. Figure 3 depicts the organizations  coordinated by the Integrated Program Office and their responsibilities.
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 11 environmental systems and 2 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 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  presents the planned instruments and the state of technology on each.
In addition, the NPOESS Preparatory Project (NPP), which is being  developed as a major risk reduction initiative, is a planned demonstration  satellite to be launched in 2006, several years before the first NPOESS  satellite launch in 2009. It is scheduled 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 one other 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 records and about 93  percent of its data processing load.
subsections: section_title: NPOESS Acquisition Strategy
paragraphs: When the NPOESS development contract was awarded, program office  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.
Key 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.
These schedules were changed as a result of changes in the NPOESS  funding stream. 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 DMSP satellite. In late 2002,  DOD shifted the expected launch date for the final DMSP satellite from  2009 to 2010. As a result, DOD reduced funding for NPOESS by about $65  million between fiscal years 2004 and 2007. According to NPOESS program  officials, because NOAA is required to provide no more funding than 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.
section_title: NPOESS Costs Have Increased, and Schedules Have Been Delayed
paragraphs: The program office has increased the NPOESS life cycle cost estimate by  $1.2 billion, from $6.9 to $8.1 billion, and delayed key milestones— including the expected availability of the first NPOESS satellite, which was  delayed by 20 months. The cost increases reflect changes to the NPOESS  contract as well as increased program management funds. The contract  changes include 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. The schedule delays were the result of stretching out the  development schedule to accommodate the change in the NPOESS funding  stream. In addition, the delayed launch dates of the NPOESS satellites have  extended the maintenance and operation of the satellite system from 2018  to 2020.
When we testified on the NPOESS program in July 2003, we reported that  the program office was working to develop a new cost and schedule  baseline due to a change in the NPOESS funding stream. The program  office completed its efforts to revise the NPOESS cost and schedule  baseline in December 2003.
As a result of the revised baseline, the program office increased the  NPOESS cost estimate by $638 million, from $6.9 to $7.5 billion. The  program office attributed the $638 million cost increase to extending the  development schedule to accommodate the changing funding stream,  increased sensor costs, and additional funds needed for mitigating risks.  The program office has since increased funds for non-contract costs and  management reserves, which raised its estimate by an additional $562  million to bring the NPOESS life cycle cost estimate to $8.1 billion.  According to program officials, non-contract costs included oversight  expenses for the prime contract and sensor subcontracts. Management  reserves, which are a part of the total program budget and should be used  to fund undefined but anticipated work, are expected to last through 2020.  Table 2 shows a breakdown of the cost increases resulting from the revised  plan.
Recently, program officials reported that a new life cycle cost estimate  would be developed by the contractor and program office. The program  office expects to brief its executive oversight committee on the results of  its cost estimate analysis by December 2004. The new cost estimate will be  used to help develop the NPOESS fiscal year 2007 budget request. Officials  reported that the new estimate is necessary in order to ensure that the  program will be adequately funded through its life.
In addition to increasing the cost estimate, the program office has delayed  key milestones, including the expected availability of the first satellite,  which was delayed by 20 months. The program office attributed the  schedule delays to stretching out the development schedule to  accommodate the changing funding stream. Table 3 shows program  schedule changes for key milestones.
A result of the program office extension of several critical milestone  schedules is that less slack is built into the schedules for managing  development and production issues. For example, the first NPOESS  satellite was originally scheduled to be available for launch by March 2008  and to launch by April 2009. This enabled the program office to have 13  months to resolve any potential problems with the satellite before its  expected launch. Currently, the first NPOESS satellite is scheduled to be  available for launch by November 2009 and to launch the same month. This  will allow the program office less than one month to resolve any problems.  The program office has little room for error, and should something go  wrong in development or production, the program office would have to  delay the launch further.
section_title: NPOESS Could Experience Further Cost and Schedule Increases
paragraphs: NPOESS costs and schedules could continue to increase in the future. The  contractor’s continued slippage of expected cost and schedule targets  indicates that the NPOESS contract will most likely be overrun by $500  million at contract completion in September 2011. Program risks,  particularly with the development of critical sensors to be demonstrated on  the NPP satellite, could also increase costs and delay schedules for  NPOESS.
subsections: section_title: Current Shortfalls in Cost and Schedule Targets Could Require Additional Funds to Meet Launch Deadlines
paragraphs: To be effective, project managers need information on project deliverables  and on a contractor’s progress in meeting those deliverables. One method  that can help project managers track 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 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 was experiencing negative variances before the revised plan  was implemented in December 2003, and continued to deteriorate after the  implementation of the revised plan. Figure 4 shows the 15-month  cumulative cost variance for the NPOESS contract. From March 2003 to  November 2003, the contractor exceeded its cost target by $16.1 million,  which is about 4.5 percent of the contractor’s budget for that time period.  From December 2003 to May 2004, the contractor exceeded its cost target  by $33.6 million, or about 5.7 percent of the contractor’s budget. The  contractor has incurred a total cost overrun of about $55 million with  NPOESS development less than 20 percent complete. This information is  useful because trends tend to continue and can be difficult to reverse.  Studies have shown that, once programs are 15 percent complete, the  performance indicators are indicative of the final outcome.
Our analysis also indicates that the program is showing a negative schedule  variance. Figure 5 shows the 15-month cumulative schedule variance of  NPOESS. From March 2003 to November 2003, the contractor recovered  almost $11 million worth of planned work in the schedule. Program  officials reported that within this time period, the program office ordered  the contractor to stop some work until the new baseline was established.  This work stoppage contributed to schedule degradation between March  2003 and August 2003. In September 2003, the program office implemented  portions of the revised plan, which resulted in an improvement in schedule  performance. The revised plan alleviated some of the cumulative schedule  overrun by delaying the deadline for first unit availability by 20 months.  However, based on our analysis, the cumulative schedule variance  indicates slippage in the new schedule. Since December 2003, the  contractor has been unable to complete approximately $19.7 million worth  of scheduled work. The current inability to meet contract schedule  performance could be a predictor of future rising costs, as more spending  is often necessary to resolve schedule overruns.
According to program office documents, cost and schedule overruns that  occurred before December 2003 were caused by planning activities related  to the revised plan, as well as by technical issues related to the  development of the critical sensors and the spacecraft communications  software. Since the completion of the revised plan, the program’s ability to  meet the new performance goals continues to be hampered by technical  issues with the design complexity, testing, and integration, among other  things, of the critical sensors. These technical issues could cause further  cost and schedule shortfalls.
Based on contractor performance from December 2003 to May 2004, we  estimate that the current NPOESS contract—which ends in September  2011 and is worth approximately $3.4 billion—will overrun its budget by  between $372 million and $891 million. Our projection of the most likely  cost overrun will be about $534 million, or about 16 percent of the contract.  The contractor, in contrast, estimates about a $130 million overrun at  completion of the NPOESS contract.
section_title: Risks Could Further Affect NPOESS Cost and Schedule
paragraphs: 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 segments and are  managed at the integrated product team level. The program office has  identified 21 program risks, including 14 medium to medium-high risks.  Some of these risks include the development of three critical sensors (the  visible/infrared imager radiometer suite (VIIRS), the cross-track infrared  sounder (CrIS), and the conical-scanned microwave imager/sounder  (CMIS)) and the integrated data processing system; the uncertainty that  algorithms will meet system performance requirements; and the effort to  obtain a security certification and accreditation. Figure 6 includes the 21  program risks and their assigned levels of risk.
Managing the risks associated with the development of VIIRS and CrIS, the  integrated data processing system, and algorithm performance is of  particular importance because these are to be demonstrated on the NPP  satellite currently scheduled for launch in October 2006. Any delay in the  NPP launch date could affect the overall NPOESS program because the  success of the program depends on the lessons learned in data processing  and system integration from the NPP satellite.
At present, the program office considers the three critical sensors—VIIRS,  CMIS, and CrIS—to be key program risks because of technical challenges  that each is facing. VIIRS’s most severe technical issue, relating to flight- quality integrated circuits, was recently resolved; however, the program  office continues to consider the schedule for the VIIRS sensor acquisition  to be high risk. The prime contractor’s analysis of the current schedule  indicated that the present schedule is unlikely to be achieved, considering  the technical risks, the optimistically planned integration and test phase,  and the limited slack in the schedule at this stage of the program. VIIRS is  experiencing ongoing technical issues on major subcontracts related to the  motors, rotating telescope, and power supply. As a result of the numerous  ongoing issues—many of which affect system performance—significantly  more modeling, budget allocation work, and performance reviews have  been required than were originally planned. 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 and CrIS sensor acquisitions are experiencing schedule overruns  that may threaten their respective expected delivery dates. CMIS technical  challenges include unplanned redesigns for receiver and antenna  components, system reliability issues, and thermal issues. A significant  amount of CrIS’s developmental progress has been impeded by efforts to  address a signal processor redesign, vibration issues in an optical  instrument, and the late subcontract deliveries of some parts.
To the program office’s credit, it is aware of these risks and is using its risk  management plans to help mitigate them. We plan to further evaluate the  risk mitigation strategies of the Integrated Program Office in a follow-on  review.
section_title: Conclusions
paragraphs: The next generation polar-orbiting environmental satellite program,  NPOESS, recently underwent a replanning effort that increased the  NPOESS cost estimate by $1.2 billion, from $6.9 to $8.1 billion and delayed  key milestones, including the expected availability of the first satellite by  20 months.
Other factors could further affect the revised cost and schedule estimates.  Specifically, the current shortfalls in performance targets indicate that the  NPOESS contract will most likely be overrun by $500 million at completion  in September 2011 and program risks could contribute to additional cost  and schedule slips. The program office is planning to develop new cost  estimates but has not yet determined the impact of these risks.
Given the history of large cost increases and the factors that could further  affect NPOESS costs and schedules, continued oversight is more critical  than ever. Accordingly, we plan to continue our review of this program.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Secretary of Commerce, Secretary  of Defense, and the Administrator of NASA for review and comment. The  departments generally agreed with the report and provided written and oral  technical corrections, which have been incorporated as appropriate.
NOAA, Integrated Program Office, DOD officials, including the System  Program Director of the NPOESS Integrated Program Office and the  Assistant for Environmental Monitoring from the Office of the Assistant  Secretary of Defense, noted that changes in funding levels, triggered after  the contract was awarded, were the primary reason for rebaselining the  program’s costs and schedules. These funding level changes caused them  to delay the development of the NPOESS system and led them to  renegotiate the NPOESS contract. We revised our report to clarify the  factors leading up to revising the baseline.
Additionally, NOAA officials commented that the Integrated Program  Office continues to aggressively manage the NPOESS program to ensure it  is completed within cost, schedule, and performance. In regard to our  estimate that the contract will overrun by at least $500 million, NOAA  officials reported that the agency will manage the contract to ensure that  any cost overrun is identified and addressed. To this end, NOAA has asked  the contractor to develop a new life cycle cost estimate.
NOAA and DOD officials also noted that in August 2004, the President  directed the Departments of Defense, the Interior, Commerce, and NASA to  place a LANDSAT-like imagery capability on the NPOESS platform. This  new capability will 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 lifespans. Officials expect that this new sensor will be funded  separately and will not affect the NPOESS program’s cost or schedule.  Accordingly, while this recent event is important to the NPOESS program,  it does not change the results of our report.
We are sending copies of this report to the Secretary of Commerce, the  Secretary of Defense, and the Administrator of NASA. In addition, copies  will be available at no charge on the GAO Web site at http://www.gao.gov.  Should you have any questions about this report, please contact me at (202)  512-9286 or Colleen Phillips, Assistant Director, at (202) 512-6326. We can  also be reached by e-mail at pownerd@gao.gov and phillipsc@gao.gov,  respectively. Other key contributors to this report included Carol Cha,  Barbara Collier, John Dale, Neil Doherty, Karen Richey, and Eric Winter.
section_title: Objectives, Scope, and Methodology
paragraphs: Our objectives were to (1) identify any cost or schedule changes as a result  of the revised baseline and determine what contributed to these changes  and (2) identify factors that could affect the program baseline in the future.  To accomplish these objectives, we focused our review on the Integrated  Program Office, the organization responsible for the overall National Polar- orbiting Operational Environmental Satellite System (NPOESS) program.
To identify any cost or schedule changes as a result of the revised baseline,  we reviewed the new NPOESS cost and schedule baseline and compared it  to the old acquisition baseline, as reported in our July 2003 testimony. To  determine the factors that contributed to the cost and schedule changes in  the new baseline, we reviewed program office plans and management  reports. We also interviewed IPO officials to discuss these contributing  factors.
To identify factors that could affect the program baseline in the future, we  assessed the prime contractor’s performance related to cost and schedule.  To make these assessments, we applied earned value analysis techniques  to data captured in contractor cost performance reports. We compared the  cost of work completed with the budgeted costs for scheduled work for a  15-month period, from March 2003 to May 2004, 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. We reviewed these cost reports  and program risk management documents and interviewed program  officials to determine the key risks that negatively affect NPOESS’s ability  to maintain the current schedule and cost estimates. We reviewed  independent cost estimates performed by the Air Force Cost Analysis  Agency and compared them with the program office cost estimates in order  to determine possible areas for cost growth. To assess the potential effect  of the NOAA-N Prime satellite incident on the current program baseline, we  reviewed documentation related to the POES accident and alternatives for  moving forward and interviewed officials from the National Aeronautics  and Space Administration (NASA) and NOAA’s National Environmental  Satellite, Data, and Information Service.
We obtained comments on a draft of this report from officials at the  Department of Defense (DOD), NOAA, and NASA, and incorporated these  comments as appropriate.
We performed our work at the Integrated Program Office, DOD, NASA, and  NOAA in the Washington, D.C., metropolitan area between November 2003  and August 2004 in accordance with generally accepted government  auditing standards.
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