Polar-Orbiting Environmental Satellites: With Costs Increasing and Data Continuity at Risk, Improvements Needed in Tri-agency Decision Making
Published: 2009-06-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The National Polar-orbiting Operational Environmental Satellite System (NPOESS) is a tri-agency acquisition--managed by the Department of Commerce's National Oceanic and Atmospheric Administration (NOAA), the Department of Defense (DOD), and the National Aeronautics and Space Administration (NASA)--that has experienced escalating costs, schedule delays, and technical difficulties. As the often-delayed launch of its demonstration satellite draws closer, these problems continue. GAO was asked to (1) identify the status and risks of key program components, (2) assess the NPOESS Executive Committee's ability to fulfill its responsibilities, and (3) evaluate efforts to identify an alternative system integrator for later NPOESS satellites. To do so, GAO analyzed program and contractor data, attended program reviews, and interviewed agency officials.
section_title: What GAO Found
paragraphs: While selected components of the NPOESS program have made progress over the past year, the program is once again over budget and behind schedule. In terms of progress, three of the five instruments slated for a demonstration satellite (called the NPOESS Preparatory Project--NPP) have been delivered and integrated on the spacecraft; the ground-based satellite data processing system has been installed and tested at both of the locations that are to receive NPP data; and the satellites' command, control, and communications system has passed acceptance testing. However, the program's approved cost and schedule baseline are not achievable, and problems with two critical sensors continue to drive the program's cost and schedule. Costs could grow by $1 billion over the current $13.95 billion estimate, and the schedules for NPP and the first two NPOESS satellites are expected to be delayed by 7, 14, and 5 months, respectively. These delays increase the risk of a gap in satellite continuity. An independent review team established to assess key program risks recently reported that the constellation of satellites is extremely fragile, and that there could be a 3 to 5 year gap in satellite coverage if NPP, NPOESS, or other DOD satellites fail on launch. The NPOESS Executive Committee responsible for overseeing the program has made improvements over the last several years, but still has not effectively fulfilled its responsibilities. Responding to past concerns expressed by GAO and the Department of Commerce's Inspector General, the Committee now meets on a regular basis, and has sought and reacted to advice from external advisors to mitigate specific risks. However, the Committee lacks the membership and leadership needed to effectively and efficiently oversee and direct the program. Specifically, the DOD Committee member with acquisition authority does not attend Executive Committee meetings--and sometimes contradicts the Committee's decisions, the Committee does not track its action items to closure, and many of the Committee's decisions do not achieve desired outcomes. Program officials and external independent reviewers explained that it is extremely difficult for the Committee to navigate three agencies' competing requirements and priorities. Until these shortfalls are addressed, the Committee will remain ineffective. The NPOESS program has conducted two successive studies of alternatives to using the existing system integrator for the last two NPOESS satellites, but neither identified a viable alternative to the current contractor. Both studies assessed a variety of alternatives, including re-competing the entire prime contract, obtaining an independent system integrator while having the existing prime contractor continue to develop space and ground components, and having the government take over responsibility for the system's integration. The first study identified strengths and weaknesses and the second study identified high-level costs and benefits. Neither study identified an alternative that is viable. Program officials plan to conduct a final study prior to the June 2010 decision on whether to proceed with the existing prime contractor.

section_title: Letter
paragraphs: The planned National Polar-orbiting Operational Environmental Satellite  System (NPOESS) program is expected to be a state-of-the-art,  environment-monitoring satellite system that will replace two existing  polar-orbiting environmental satellite systems. Polar-orbiting satellites  provide data and imagery that are used by weather forecasters,  climatologists, and the military to map and monitor changes in weather,  climate, the oceans, and the environment. The NPOESS program is  considered critical to the United States’ ability to maintain the continuity  of data required for weather forecasting (including severe weather events  such as hurricanes) and global climate monitoring through the year 2026.
Three agencies share responsibility for the NPOESS acquisition: the  Department of Commerce’s National Oceanic and Atmospheric  Administration (NOAA), the Department of Defense (DOD)/United States  Air Force, and the National Aeronautics and Space Administration  (NASA). These agencies established a tri-agency office to manage the  NPOESS program. The program is overseen by an Executive Committee  made up of senior executives from each of the agencies. Since its  inception, NPOESS costs have doubled, launch schedules have been  repeatedly delayed, and significant functionality was cut from the  program. Even after a major restructuring, the program is still  encountering technical issues, schedule delays, and the likelihood of  further cost increases. More importantly, delays in launching the satellites  have put the program’s mission at risk.
This report responds to your request that we (1) identify the status and  risks of key program components, (2) assess the NPOESS Executive  Committee’s ability to fulfill its responsibilities, and (3) evaluate efforts to  identify an alternative system integrator for later NPOESS satellites. To  identify the status and risks to the program, we reviewed program  documentation including status briefings, monthly program management  documents, and contractor-provided earned value data. We compared the  contractor’s earned value management data to cost and schedule  estimates and evaluated reasons for variances in the contractor’s  performance. To assess the NPOESS Executive Committee’s ability to  fulfill its responsibilities, we reviewed Executive Committee  documentation, including meeting minutes. We compared the Committee’s  actions to its documented responsibilities, as well as to best practices in  investment management and oversight. To evaluate the efforts to develop  an alternative system integrator for NPOESS, we compared the  requirement for a study of alternatives to the results of two successive  studies. We also interviewed relevant agency officials from NOAA, NASA,  and DOD. In addition, this report builds on work we have done on  environmental satellites over the last several years.
We conducted our work at the NPOESS Integrated Program Office  headquarters and at NOAA, NASA, and DOD facilities in the Washington,  D.C., metropolitan area. In addition, we conducted work at contractors’  facilities in the Los Angeles, California, area because of the importance of  these sites to development of the sensors for the program and to the  satellites’ integration. We conducted this performance audit from October  2008 to June 2009 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives. Additional details  on our objectives, scope, and methodology are provided in appendix I.
subsections: section_title: Background
paragraphs: Since the 1960s, the United States has operated two separate operational  polar-orbiting meteorological satellite systems: the Polar-orbiting  Operational Environmental Satellite (POES) series, which is managed by  NOAA, and the Defense Meteorological Satellite Program (DMSP), which  is managed by the Air Force. These satellites obtain environmental data  that are processed to provide graphical weather images and specialized  weather products. These satellite data are also the predominant input to  numerical weather prediction models, which are a primary tool for  forecasting weather 3 or more days in advance—including forecasting the  path and intensity of hurricanes. The weather products and models are  used to predict the potential impact of severe weather so that  communities and emergency managers can help prevent and mitigate its  effects. Polar satellites also provide data used to monitor environmental  phenomena, such as ozone depletion and drought conditions, as well as  data sets that are used by researchers for a variety of studies such as  climate monitoring.
subsections: section_title: Polar Satellite Data and Products
paragraphs: Polar satellites gather a broad range of data that are transformed into a  variety of products. Satellite sensors observe different bands of radiation  wavelengths, called channels, which are used for remotely determining  information about the earth’s atmosphere, land surface, oceans, and the  space environment. When first received, satellite data are considered raw  data. To make them usable, the processing centers format the data so that  they are time-sequenced and include earth location and calibration  information. After formatting, these data are called raw data records. The  centers further process these raw data records into channel-specific data  sets, called sensor data records and temperature data records. These data  records are then used to derive weather and climate products called  environmental data records (EDR). EDRs include a wide range of  atmospheric products detailing cloud coverage, temperature, humidity,  and ozone distribution; land surface products showing snow cover,  vegetation, and land use; ocean products depicting sea surface  temperatures, sea ice, and wave height; and characterizations of the space  environment. Combinations of these data records (raw, sensor,  temperature, and environmental data records) are also used to derive  more sophisticated products, including outputs from numerical weather  models and assessments of climate trends. Figure 2 is a simplified  depiction of the various stages of satellite data processing, and figure 3  depicts examples of two different weather products.
section_title: NPOESS Overview
paragraphs: With 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 the  tri-agency Integrated Program Office.
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; the Air Force 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 cost of funding NPOESS, while NASA  funds specific technology projects and studies. In addition, an Executive  Committee—made up of the administrators of NOAA and NASA and the  Under Secretary of Defense for Acquisition, Technology, and Logistics—is  responsible for providing policy guidance, ensuring agency support and  funding, and exercising oversight authority. Figure 4 depicts the  organizations that make up the NPOESS program and lists their  responsibilities.
section_title: Acquisition Strategy
paragraphs: NPOESS is a major system acquisition that was originally estimated to  cost about $6.5 billion over the 24-year life of the program from its  inception in 1995 through 2018. The program is to provide satellite  development, satellite launch and operation, and ground-based satellite  data processing. These deliverables are grouped into four main categories:  (1) the space segment, which includes the satellites and sensors; (2) the  integrated data processing segment, which is the system for transforming  raw data into EDRs and is to be located at the four processing centers;   (3) the command, control, and communications segment, which includes  the equipment and services needed to support satellite operations; and   (4) the launch segment, which includes the launch vehicle services.
When the NPOESS engineering, manufacturing, and development contract  was awarded in August 2002, the cost estimate was adjusted to $7 billion.  Acquisition plans called for the procurement and launch of six 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 were to receive and transmit data on atmospheric, cloud cover,  environmental, climatic, oceanographic, and solar-geophysical  observations. The subsystems were to support nonenvironmental search  and rescue efforts, sensor survivability, and environmental data collection  activities. The program office considered four of the sensors to be critical  because they provide data for key weather products; these sensors are in  bold in table 1, which describes each of the expected NPOESS  instruments.
In addition, a demonstration satellite, called the NPOESS Preparatory  Project (NPP), was planned to be launched several years before the first  NPOESS satellite in order to reduce the risk associated with launching  new sensor technologies and to ensure continuity of climate data with  NASA’s Earth Observing System satellites. NPP was to host three of the  four critical NPOESS sensors, as well as one other sensor and to provide  the program office and the processing centers an early opportunity to  work with the sensors, ground control, and data processing systems.  When the NPOESS development contract was awarded, the schedule for  launching the satellites was driven by a requirement that the NPOESS  satellites be available to back up the final POES and DMSP satellites  should anything go wrong during the planned launches of these satellites.  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 then planned for March 2008, and (3) having the second  NPOESS satellite available to back up the final DMSP satellite launch then  planned for 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.
section_title: Cost Increases, Schedule Delays, and Technical Problems Led to a Decision to Restructure the NPOESS Program
paragraphs: Over several years, we reported that NPOESS had experienced continued  cost increases, schedule delays, and serious technical problems. By  November 2005, we estimated that the cost of the program had grown  from $7 billion to over $10 billion. In addition, the program was  experiencing major technical problems with the VIIRS sensor and  expected to delay the launch date of the first satellite by almost 2 years.  These issues ultimately required difficult decisions to be made about the  program’s direction and capabilities.
The Nunn-McCurdy law requires DOD to take specific actions when a  major defense acquisition program growth exceeds certain cost  thresholds. Key provisions of the law require the Secretary of Defense to  notify Congress when a major defense acquisition is expected to overrun  its current baseline by 15 percent or more and to certify the program to  Congress when it is expected to overrun its current baseline by 25 percent  or more. In November 2005, NPOESS exceeded the 25 percent threshold,  and DOD was required to certify the program. Certifying a program entails  providing a determination that (1) the program is essential to national  security, (2) there are no alternatives to the program that will provide  equal or greater military capability at less cost, (3) the new estimates of  the program’s cost are reasonable, and (4) the management structure for  the program is adequate to manage and control costs. DOD established tri- agency teams—made up of DOD, NOAA, and NASA experts—to work on  each of the four elements of the certification process.
In June 2006, DOD (with the agreement of both of its partner agencies)  certified a restructured NPOESS program, estimated to cost $12.5 billion  through 2026—an increase of $4 billion more than the prior life cycle cost  estimate. This restructuring decision delayed the launch of NPP and the  first 2 satellites by roughly 3 to 5 years—a deviation from NOAA’s  requirement to have NPOESS satellites available to back up the final POES  and DMSP satellites should anything go wrong during those launches. The  restructured program also reduced the number of satellites to be produced  by relying on European satellites for the midmorning orbit and planning to  use NPOESS satellites in the early morning and afternoon orbits. In  addition, in order to reduce program complexity, the Nunn-McCurdy  certification decision decreased the number of NPOESS sensors from 13  to 9 and reduced the functionality of 4 sensors.
In addition, a new executive position—called the Program Executive  Officer—was established to oversee the NPOESS program office and to  report directly to the Executive Committee. The Program Executive  Officer obtains weekly and monthly reports on the program’s cost,  schedule, performance, and risks from the System Program Director, and  in turn, provides monthly and quarterly updates to the Executive  Committee. Table 2 summarizes the major program changes made by the  Nunn-McCurdy certification decision, and figure 5 denotes the  configuration of the planned polar-operational satellite program in the  future.
While the Nunn-McCurdy certification decision decreased the number of  NPOESS sensors and reduced the functionality of others, it allowed for the  reintegration of the canceled sensors if other parties choose to fund them.  Table 3 describes the changes to NPOESS instruments.
The changes in NPOESS sensors affected the number and quality of the  resulting weather and environmental products, called EDRs. In selecting  sensors for the restructured program during the Nunn-McCurdy process,  decision makers placed the highest priority on continuing current  operational weather capabilities and a lower priority on obtaining selected  environmental and climate measuring capabilities. As a result, the revised  NPOESS system has significantly less capability for providing global  climate measures than was originally planned. Specifically, the number of  EDRs was decreased from 55 to 39, of which 6 are of a reduced quality.  The 39 EDRs that remain include cloud base height, land surface  temperature, precipitation type and rate, and sea surface winds. The 16  EDRs that were removed include cloud particle size and distribution, sea  surface height, net solar radiation at the top of the atmosphere, and  products to depict the electric fields in the space environment. The six  EDRs that are of a reduced quality include ozone profile, soil moisture,  and multiple products depicting energy in the space environment.
section_title: Selected Climate Sensors Have Been Added Back to the Program
paragraphs: After the 2006 Nunn-McCurdy decision, the NPOESS Executive Committee  decided to add selected sensors back to individual satellites in order to  address concerns from the climate community about the loss of key  climate data. In January 2008, the Committee approved plans to include a  replacement for the Earth radiation budget sensor (called the Clouds’ and  the earth’s radiant energy system sensor) on the NPP satellite. In addition,  in May 2008, the Committee approved plans to include a Total solar  irradiance sensor on the C1 satellite. Table 4 shows which instruments are  currently planned for NPP and the four satellites of the NPOESS program,  called C1, C2, C3, and C4. Program officials acknowledged that these  configurations could change if other parties decide to develop the sensors  that were canceled.
section_title: NPOESS Experienced Schedule Delays and Cost Growth after It Was Restructured
paragraphs: After the program was restructured, NPOESS continued to experience  schedule delays and cost growth. In June 2008, we reported that poor  workmanship and testing delays caused an additional 8-month slip to the  expected delivery date of the Visible/infrared imager radiometer suite  (VIIRS) sensor. This late delivery caused a corresponding delay in the  expected launch date of the NPP demonstration satellite, moving it to June  2010. In addition, we reported that the program life cycle costs, estimated  at $12.5 billion, were expected to rise by approximately $1 billion because  of problems experienced in the development of the VIIRS and Cross-track  infrared sounder (CrIS) sensors, the need to revise outdated operations  and support cost estimates, and the need to modify information security  requirements on ground systems. Program officials subsequently modified  their life cycle cost estimate to $13.95 billion, which included about   $1.15 billion for revised pre- and post-launch operations and support costs  and about $300 million to address development issues. The revised cost  estimate did not include funds to modify information security  requirements.
section_title: Prior Reports Recommended Steps to Mitigate Program Risks
paragraphs: In recent years, we have made a series of recommendations to mitigate  risks on the NPOESS program. In April 2007, we reported that the program  lacked a process and plan for identifying and filling key staffing shortages  and that DOD’s plans to reassign the Program Executive Officer would  unnecessarily increase risks to an already risky program. We also  reported that while the program office had made progress in restructuring  NPOESS after the June 2006 Nunn-McCurdy certification decision,  important tasks leading up to finalizing contract changes remained to be  completed. Specifically, the program had made progress in drafting key  acquisition documents, including the system engineering plan, the test and  evaluation master plan, and the memorandum of agreement between the  agencies. However, executive approval of those documents was about 6  months late at that time—due in part to the complexity of navigating three  agencies’ approval processes. To address these issues, we recommended  that NPOESS program officials develop and implement a written process  for identifying and addressing human capital needs and establish a plan to  immediately fill needed positions; that DOD delay the reassignment of the  Program Executive Officer until all sensors were delivered to NPP; and  that the appropriate agency executives finalize key acquisition documents  by the end of April 2007.
Following up on these recommendations, in May 2008, we reported that  program officials had documented the program’s staffing process and  made progress in filling selected budgeting and system engineering  vacancies. DOD, however, reassigned the Program Executive Officer in  July 2007 and replaced this person with a new Program Executive Officer.  We also reported that executive approval of key acquisition documents  was more than a year late at that time and reiterated our prior  recommendation that the agencies immediately complete these activities.  The last of these acquisition documents was approved in December 2008.
section_title: Progress Made, but Continued Instrument Problems Are Driving Costs Upward, Forcing Launch Delays, and Endangering Satellite Continuity
paragraphs: Over the past year, selected components of the NPOESS program— including the ground segment and selected sensors—have made progress.  However, the program’s approved cost and schedule baseline is not  achievable, and problems with two critical sensors continue to drive the  program’s cost and schedule. Costs are expected to grow by about   $1 billion from the current $13.95 billion cost estimate, and the schedules  for NPP and the first two NPOESS satellites are expected to be delayed by  7, 14, and 5 months, respectively. These delays endanger the continuity of  weather and climate satellite data because there will not be a satellite  available as backup should a satellite fail on launch or in orbit. Program  officials reported that they are assessing alternatives for mitigating risks,  and that they plan to propose a new cost and schedule baseline by June  2009.
subsections: section_title: Program Made Progress on Selected Components
paragraphs: With over $4 billion expended on the program through the end of fiscal  year 2008, the program is well under way. Over the past year, selected  components of the NPOESS program have made progress. Specifically,  three of the five instruments slated for NPP have been delivered and  integrated on the spacecraft; the ground-based satellite data processing  system has been installed and tested at both of the locations that are to  receive NPP data; and the satellites’ command, control, and  communications system has passed acceptance testing. Details on the  status of key components are provided in table 5.
section_title: Technical Challenges Cause Cost Increases, Delay Schedule, and Risk Data Continuity; Key Decisions on Program’s Next Steps Are Pending
paragraphs: While the program has made progress, problems with two critical sensors  continue to drive the program’s cost and schedule. Specifically, ongoing  challenges with VIIRS development, design, and workmanship have led to  additional cost overruns and delayed the instrument’s delivery to NPP. In  addition, problems discovered during environmental testing on CrIS led  the contractor to further delay its delivery to NPP and added further  unanticipated costs to the program. To address these issues, the program  office halted or delayed activities on other components (including the  development of a sensor planned for the C1 satellite) and redirected those  funds to fixing VIIRS and CrIS. As a result, those other activities now face  cost increases and schedule delays.
Program officials acknowledge that NPOESS will cost more than the  $13.95 billion previously estimated, but they have not yet adopted a new  cost estimate. Program officials estimated that program costs will grow by  about $370 million due to recent technical issues experienced on the  sensors and the costs associated with halting and then restarting work on  other components of the program. In addition, the costs associated with  adding new information security requirements to the program could reach  $200 million. This estimate also does not include approximately   $410 million for operations and support costs for the last two years of the  program’s life cycle (2025 and 2026). Thus, we anticipate that the overall  cost of the program could grow by about $1 billion from the current   $13.95 billion estimate—especially given the fact that difficult integration  and testing of the sensors on the NPP and C1 spacecrafts has not yet  occurred. Program officials reported that they plan to revise the  program’s cost estimate over the next few weeks and to submit it for  executive-level approval in June 2009.
As for the program’s schedule, program officials estimate that the delivery  of VIIRS to the NPP contractor will be delayed, resulting in a further delay  in the launch of the NPP satellite to January 2011, a year later than the  date estimated during the program restructuring—and seven months later  than the June 2010 date that was established last year. In addition,  program officials estimated that the first and second NPOESS satellites  would be delayed by 14 and 5 months, respectively, because selected  development activities were halted or slowed to address VIIRS and CrIS  problems. The program’s current plans are to launch C1 in March 2014 and  C2 in May 2016. Program officials notified the Executive Committee and  DOD’s acquisition authority of the schedule delays, and under DOD  acquisition rules, are required to submit a new schedule baseline by June  2009. See table 6 for changes in key program milestones over time.
These launch delays have endangered our nation’s ability to ensure the  continuity of polar-orbiting satellite data. The final POES satellite, called  NOAA-19, is in an afternoon orbit and is expected to have a 5-year lifespan.  Both NPP and C1 are planned to support the afternoon orbit. Should the  NOAA-19 satellite fail before NPP is launched, calibrated, and operational,  there would be a gap in satellite data in that orbit. Further, the delays in C1  mean that NPP will not be the research and risk reduction satellite it was  originally intended to be. Instead, it will have to function as an operational  satellite until C1 is in orbit and operational—and if C1 fails on launch or in  early operations, NPP will be needed to function until C3 is available,  currently planned for 2018. The delay in the C2 satellite launch affects the  early morning orbit. There are three more DMSP satellites to be launched  in the early and midmorning orbits. DOD is revisiting the launch schedules  for these satellites to try to extend them as long as possible. An  independent review team, established to assess key program risks,  recently reported that the constellation of satellites is extremely fragile  and that a single launch failure of DMSP or of the NPP satellite could  result in a gap in satellite coverage from 3 to 5 years. Figure 6 shows the  current and planned satellites and highlights gaps where the constellation  is at risk.
Although the program’s approved cost and schedule baseline is not  achievable and the polar satellite constellation is at risk, the Executive  Committee has not yet made a decision on how to proceed with the  program. Specifically, the Committee has not approved a new program  schedule and a realistic cost estimate or determined whether it will  mitigate or accept the risk of a potential gap in satellite continuity.  Program officials plan to propose new cost and schedule baselines in June  2009. However, the Executive Committee does not have an estimate for  when it will make critical decisions on cost, schedule, and risk mitigation.  Program officials reported that they are addressing immediate funding  constraints by deferring selected activities to later fiscal years in order to  pay for VIIRS and CrIS problems, delaying the launches of NPP, C1, and  C2, and assessing alternatives for mitigating the risk that VIIRS will  continue to experience problems—including the possibility of purchasing  a legacy imaging sensor to replace VIIRS on C1. Without an executive-level  decision to do so, the program is proceeding on a course that is deferring  cost growth, delaying launches, and risking its underlying mission of  providing operational weather continuity to the civil and military  communities.
section_title: Executive Committee Has Not Effectively Fulfilled Its Responsibilities
paragraphs: While the NPOESS Executive Committee has made improvements over the  last several years in response to prior recommendations, it has not  effectively fulfilled its responsibilities and does not have the membership  and leadership it needs to effectively or efficiently oversee and direct the  NPOESS program. Specifically, the DOD Executive Committee member  with acquisition authority does not attend committee meetings—and  sometimes contradicts the Committee’s decisions, the Committee does not  aggressively manage risks, and many of the Committee’s decisions do not  achieve desired outcomes. Independent reviewers, as well as program  officials, explained that the tri-agency structure of the program makes it  very difficult to effectively manage the program. Until these shortfalls are  addressed, the Committee is unable to effectively oversee the NPOESS  program—and important issues involving cost growth, schedule delays,  and satellite continuity will likely remain unresolved.
subsections: section_title: Executive Committee Has Responded to Past Recommendations
paragraphs: In November 2005, we reported that the Executive Committee did not  meet on a regular basis and that most of its meetings did not result in  major decisions, but instead triggered further analysis and review. In  addition, in May 2006, the Department of Commerce’s Inspector General  reported that the Committee did not effectively challenge the program’s  optimistic assessments and recommended that it provide more vigilant  oversight. Since then, the Committee has met regularly on a quarterly basis  and held interim teleconferences as needed.
The Committee has also sought and reacted to advice from external  advisors by, among other actions, authorizing a government program  manager to reside onsite at the VIIRS contractor’s facility to improve  oversight of the sensor’s development on a day-to-day basis. More  recently, the Executive Committee sponsored a broad-based independent  review of the NPOESS program and is beginning to respond to its  recommendations. The independent review team’s findings and  recommendations are provided in appendix II.
section_title: Key Acquisition Executive Does Not Attend Executive Committee Meetings
paragraphs: As established by the 1995 and 2008 memorandums of agreement signed  by all three agencies, the members of the NPOESS Executive Committee  are (1) the Under Secretary of Commerce for Oceans and Atmosphere;   (2) the Under Secretary of Defense for Acquisition, Technology, and  Logistics; and (3) the NASA Administrator. Because DOD has the lead  responsibility for the NPOESS acquisition, the Under Secretary of Defense  for Acquisition, Technology, and Logistics, was also designated as the  milestone decision authority—the individual with the authority to approve  a major acquisition program’s progression in the acquisition process, as  well as any changes to the cost, schedule, and functionality of the  acquisition. The intent of the tri-agency memorandums was that  acquisition decisions would be agreed to by the Executive Committee  before a final acquisition decision is made by the milestone decision  authority.
However, DOD’s acquisition authority has never attended an Executive  Committee meeting. This individual delegated the responsibility for  attending the meetings—but not the authority to make acquisition  decisions—to the Under Secretary of the Air Force. Therefore, none of the  individuals who attend the Executive Committee meetings for the three  agencies have the authority to approve the acquisition program baseline or  major changes to the baseline. As a result, agreements between committee  members have been overturned by the acquisition authority, leading to  significant delays. For example, the details of the program’s acquisition  program baseline were agreed to by members of the Executive Committee,  but were overruled by the office of the Under Secretary of Defense for  Acquisition, Technology, and Logistics. This required several months of  extensive renegotiation. In addition, after the Executive Committee  members agreed to a revised tri-agency memorandum of agreement and it  was signed by the Secretary of Commerce and the Administrator of NASA,  the Under Secretary of Acquisition, Technology, and Logistics refused to  approve the document, and it took over a year to finalize it. Crucially, this  year-long disagreement focused on whether the Under Secretary should  consult with or coordinate with members of the Executive Committee on  matters related to NPOESS. In August 2008, the Under Secretary of  Commerce for Oceans and Atmosphere wrote to the Under Secretary of  Defense for Acquisition, Technology, and Logistics, expressing concern  that DOD did not recognize the management role of the tri-agency  NPOESS Executive Committee or its responsibility, authority, and  accountability to make decisions that represent the respective agency  positions.
At the conclusion of our review, DOD agency officials stated that the  absence of the Under Secretary of Defense for Acquisition, Technology,  and Logistics at Executive Committee meetings is not the root cause of the  Executive Committee’s problems, but acknowledged that this individual’s  presence at the meetings could be helpful in streamlining the flow of  information and the decision-making process.
section_title: Committee Does Not Aggressively Manage Risks
paragraphs: Best practices note that oversight of large investments is a critical part of  the investment life cycle and call for oversight boards to take corrective  actions at the first sign of cost, schedule, and performance problems. They  also call for oversight boards to ensure that corrective actions and related  efforts are executed by the project management team and tracked until the  desired outcomes occur. To provide this oversight, the Executive  Committee holds quarterly meetings during which the program’s progress  is reviewed using metrics that provide an early warning of cost, schedule,  and technical risks.
Although the Executive Committee meets quarterly to review program  progress and risks, and the results of those meetings are recorded in  meeting minutes, the Committee does not routinely document action items  or track those items to closure. Specifically, in the four meetings held  between March 2007 and January 2008, the Committee explicitly  documented 12 action items, but did not explicitly document action items  in the three meetings from May to December 2008. Instead, 5 actions were  implied in the text of the meeting minutes and at least 1 action item to  proceed with a modified schedule for VIIRS was not recorded at all.  Further, the Executive Committee did not routinely track the closure of its  action items. Some action items were not discussed in later meetings and  in cases where an item was discussed, it was not always clear what action  was taken, whether it was effective, and whether the item was closed.  Specifically, of the 18 action items we identified between March 2007 and  December 2008, 7 were clearly closed and 11 were not. For example, in  May 2008, the Executive Committee asked DOD’s Cost Analysis  Improvement Group and the program office to reconcile their cost  estimates, but it is not clear from the meetings that took place after this  one whether this action was taken and what the result was. Also in May  2008, the Committee directed the prime contractor and others to  investigate the root causes of technical issues; again, it is not clear  whether this was completed or what the results were.
According to the Program Executive Officer, the closing of an action item  is not always explicitly tracked because it typically involves gathering  information that is presented during later Committee meetings.  Nonetheless, by not rigorously documenting action items—including  identifying the party responsible for the action, the desired outcome, and  the time frame for completion—and then tracking the action items to  closure, the Executive Committee is not able to ensure that its actions  have achieved their intended results and to determine whether additional  changes or modifications are still needed. This impedes the Committee’s  ability to effectively oversee the program, direct risk mitigation activities,  and obtain feedback on the results of its actions.
section_title: Committee Decisions Do Not Achieve Desired Outcomes
paragraphs: Best practices in investment management call for oversight of large  investments throughout their life cycles. Government guidance calls for  oversight boards to take corrective actions at the first sign of cost,  schedule, and performance slippages in order to mitigate risks and achieve  successful outcomes. The NPOESS Executive Committee generally took  immediate action to mitigate the risks that were brought before them;  however, a majority of these actions were not effective—that is, they did  not fully resolve the underlying issues or result in a successful outcome.  Specifically, of 22 significant risks forwarded to the Executive Committee  between January and December 2008, the Committee took some action to  mitigate 17 of the risks and decided to monitor the other 5 risks.  Committee actions included approving modifications to the VIIRS  schedule and directing the program to modify key acquisition documents  to resolve disagreements, to establish an onsite government manager at a  subcontractor’s facility, and to develop a plan for the way forward for the  program once it was determined that the program could not execute its  baseline on time within its budget.
However, the Committee’s actions either did not result in successful  outcomes or were inefficient in achieving successful outcomes. Of the 22  risks presented to the Executive Committee, 18 involved cost, schedule,  and technical issues on the VIIRS and CrIS sensors, and 4 involved barriers  to gaining approval of key acquisition documents. The Committee’s  actions on the sensor development risks accomplished interim successes  by improving the government’s oversight of a subcontractor’s activities  and guiding next steps in addressing technical issues—but even with  committee actions, the sensors’ performance has continued to falter and  affect the rest of the program. Independent reviewers reported that the tri- agency structure of the program complicated the resolution of sensor risks  because any decision could be revisited by another agency. In addition,  while the government’s onsite program manager is responsible for  managing deliverables of a critical sensor, this individual reported that the  plurality of customers with different expectations and priorities made it  difficult to move the sensor development effort forward.
As for the 4 risks involving barriers to gaining approval of key acquisition  documents, by the end of 2008, all of the acquisition documents had been  completed. However, the path to achieving this successful outcome was  inefficient. For example, it took over 2 years and countless iterations by  multiple levels of management in three different agencies to complete the  tri-agency memorandum of agreement. The leader of an independent  review team charged with reviewing key program risks recently reported  that the Executive Committee is “at best… inefficient.” Program officials  explained that interagency disagreements and differing priorities make it  difficult to effectively resolve issues. In addition, two independent  advisors noted that the tri-agency aspect of the program makes it difficult  to make decisions that balance the needs of all three agencies.
The Committee’s inability to make effective and efficient decisions is  further complicated when difficult risks are not escalated in a timely  manner. While most risks are raised to the Committee within months of  the time they surface at the program level, selected interagency issues  lingered before being brought before the Executive Committee.  Specifically, an interagency disagreement regarding the appropriate level  of security requirements was discussed and studied for 2 years before the  Committee was notified—and the Committee still has not been asked to  make a decision on this issue.
At the conclusion of our review, DOD officials reported that part of the  problem in escalating risks is that, in violation of interagency agreements  and inconsistent with DOD acquisition policy, two senior NOAA officials  review and limit what the Program Executive Officer provides to the  Executive Committee. NOAA officials and the Program Executive Officer  strongly disagreed with this statement. NASA officials commented that  NOAA’s enhanced oversight provides a healthy set of checks and balances  to the program.
section_title: Program Has Assessed Alternatives, but Has Not Yet Identified a Viable Alternative for Acquiring the Last Two NPOESS Satellites
paragraphs: When NPOESS was restructured in June 2006, the program included two  satellites (C1 and C2) and an option to have the prime contractor produce  the next two satellites (C3 and C4). In approving the restructured program,  DOD’s decision authority noted that he reserved the right to use a different  satellite integrator for the final two satellites, and that a decision on  whether to exercise the option was to be made in June 2010. To prepare  for this decision, DOD required a tri-agency assessment of alternative  management strategies. This assessment was to examine the feasibility of  an alternative satellite integrator, to estimate the cost and schedule  implications of moving to an alternative integrator, and within one year, to  provide a viable alternative to the NPOESS Executive Committee.
To address DOD’s requirement, the NPOESS Program Executive Officer  sponsored two successive alternative management studies; however,  neither of the studies identified a viable alternative to the existing satellite  integrator. The first study, conducted in 2007, identified three alternatives  to the existing satellite integrator, including (1) re-competing the entire  prime contract, (2) obtaining an independent system integrator while  having the existing prime contractor continue to develop space and  ground components, and (3) having the government take over  responsibility for the system integration. The study identified the relative  strengths and weaknesses of the alternatives and recommended that the  program remain with the existing prime contractor for C3 and C4 because  doing otherwise would increase cost and schedule risks. It did not quantify  these costs or risks. The second alternative management study, conducted  in 2008, identified the same alternatives to the current system integrator  and assessed their relative cost, schedule, and performance risks to the  program. The study determined that the alternatives to the system  integrator were not viable options because of their potential costs, and  because the prime contractor’s performance had been meeting  requirements. This study also recommended staying with the prime  contractor for C3 and C4. Both of these studies also assessed other  aspects of program management—including the government’s executive  and program management and the contractors’ management—and made  recommendations to improve them.
The Program Executive Officer plans to conduct a final assessment of  alternatives prior to the June 2010 decision on whether to exercise the  option to have the current system integrator produce the next two  NPOESS satellites. Program officials explained that the program’s evolving  costs, schedules, and risks could mean that an alternative that was not  viable in the past would become viable. For example, if the prime  contractor’s performance no longer meets basic requirements, an  alternative that was previously too costly to be considered viable might  become so.
section_title: Conclusions
paragraphs: Continued problems in the development of critical NPOESS sensors have  contributed to growing costs and schedule delays. Costs are now expected  to grow by as much as $1 billion over the prior life cycle cost estimate of  $13.95 billion, and problems in delivering key sensors have led to delays in  launching NPP and the first two NPOESS satellites—by a year or more for  NPP and the first NPOESS satellite. These launch delays have endangered  our nation’s ability to ensure the continuity of polar-orbiting satellite data.  Specifically, if any planned satellites fail on launch or in orbit, there would  be a gap in satellite data until the next NPOESS satellite is launched and  operational—a gap that could last for 3 to 5 years.
The NPOESS Executive Committee responsible for making cost and  schedule decisions and addressing the many and continuing risks facing  the program has not yet made important decisions on program costs,  schedules, and risks—or identified when it will do so. In addition, the  Committee has not been effective or efficient in carrying out its oversight  responsibilities. Specifically, the individual with the authority to make  acquisition decisions does not attend committee meetings; corrective  actions are not identified in terms of desired outcomes, resources, and  time frames for completion; these actions are not tracked to closure; and  selected risks are not escalated in a timely manner. Until the Committee’s  shortfalls are addressed, important decisions may not be effective and  issues involving cost increases, schedule delays, and satellite continuity  may remain unresolved.
section_title: Recommendations for Executive Action
paragraphs: To improve the timeliness and effectiveness of acquisition decision- making on the NPOESS program, we recommend that the Secretary of  Defense direct the Under Secretary of Defense for Acquisition,  Technology, and Logistics to attend and participate in NPOESS Executive  Committee meetings.
We also recommend that the Secretaries of Defense and Commerce and  the Administrator of NASA direct the NPOESS Executive Committee to  take the following five actions:    establish a realistic time frame for revising the program’s cost and    develop plans to mitigate the risk of gaps in satellite continuity;  track the Committee’s action items from inception to closure; improve the Committee’s ability to achieve successful outcomes by  identifying the desired outcome associated with each of the Committee’s  actions, as well as time frames and responsible parties, when new action  items are established; and improve the Committee’s efficiency by establishing time frames for  escalating risks to the Committee for action so that they do not linger  unresolved at the program executive level.
section_title: Agency Comments and Our Evaluation
paragraphs: We received written comments on a draft of this report from the Secretary  of Commerce (see app. III), the Deputy Assistant Secretary of Defense  (see app. IV), and the Associate Deputy Administrator of NASA (see app.  V). In their comments, NASA and NOAA agreed with our findings and  recommendations and identified plans to implement them. For example,  NASA noted that it would work closely with DOD and NOAA to ensure  that a realistic time frame was established for cost and schedule baselines  and to develop plans to mitigate program risks. NOAA noted that it  planned to mitigate risk, in part by accelerating the development of  environmental products—and planned to use more data from NPP than it  had originally planned. Regarding our recommendations to track  Executive Committee actions and ensure successful outcomes by  identifying the desired outcome associated with each action as well as  time frames and responsible parties, both NASA and NOAA noted that they  would work with the Program Executive Officer to ensure that these  actions happen in a timely and effective manner. Finally, regarding our  recommendation to improve the Executive Committee’s efficiency by  establishing time frames for escalating risks to the Committee, both NASA  and NOAA noted that they would work with the Program Executive  Officer to ensure that this was done. NOAA also provided technical  comments on the report, which we incorporated as appropriate.
In its written comments, DOD concurred with one and partially concurred  with our other recommendations. Regarding our recommendation to have  the appropriate official attend Executive Committee meetings, the agency  partially concurred and noted that the Under Secretary of Acquisition,  Technology, and Logistics would evaluate the necessity of attending future  Executive Committee meetings. DOD also reiterated that the Under  Secretary of the Air Force was delegated the authority to attend the  meetings. While we acknowledge that the Under Secretary delegated  responsibility for attending these meetings, it is an inefficient way to make  decisions and achieve outcomes. In the past, agreements between  Executive Committee members have been overturned by the Under  Secretary, leading to significant delays in key decisions.
In addition, DOD partially concurred with our recommendations that the  Executive Committee establish a realistic time frame for revising the  program’s cost and schedule baselines, and develop plans to mitigate the  risk of data gaps. For both recommendations, DOD noted that the program  office should develop the plans, which would then be reviewed by the  Executive Committee. We agree that the program is responsible for  revising the cost and schedule baselines and developing risk mitigation  plans, and that the Executive Committee is responsible for approving  these plans. However, our recommendations focused on implementing  these activities. Until the Committee establishes a time frame for making  decisions on the program’s cost and schedule baseline and endorses risk  mitigation plans, there is a continued risk that the program will encounter  further delays or gaps in satellite data continuity.
DOD concurred with our recommendation that the Executive Committee  track action items and noted that it will recommend that the Program  Executive Officer establish a Web-based tracking system so that all  agencies can review the action items and their status.
Regarding our recommendation to identify the desired outcomes,  responsible parties, and time frames associated with the Committee’s  corrective actions, DOD partially concurred and noted that the tri-agency  memorandum of agreement empowers the System Program Director and  Program Executive Officer to achieve successful outcomes. While we  agree that the memorandum establishes these executives’ responsibilities,  it is the responsibility of the Executive Committee to define expectations  associated with their directed actions—including desired outcomes, who  is accountable, and time frames for completion. In past Executive  Committee meetings, these expectations have not been defined.
DOD partially concurred with our recommendation to establish time  frames for escalating risks to the Executive Committee, and noted that the  Program Executive Officer should be able to do so. However, DOD  expressed concern that interference by the other agencies had weakened  the Program Executive Officer’s ability to perform as intended. We  acknowledge that there is a disagreement among the three agencies on the  appropriate level of oversight of the program; however, we believe that  one of the roles of the Executive Committee members should be to ensure  that risks are escalated in a timely manner. Until time frames are  established, risks may continue to linger unresolved at the program level.
We are sending copies of this report to interested congressional  committees, the Secretary of Commerce, the Secretary of Defense, the  Administrator of NASA, the Director of the Office of Management and  Budget, and other interested parties. In addition, this report will be  available on the GAO Web site at http://www.gao.gov.
If you have any questions about this report, please contact me at (202) 512- 9286 or at pownerd@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in Appendix VI.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to (1) identify the status and risks of key National  Polar-orbiting Operational Environmental Satellite System (NPOESS)  program components, (2) assess the NPOESS Executive Committee’s  ability to fulfill its responsibilities, and (3) evaluate efforts to identify an  alternative system integrator for later NPOESS satellites.
To evaluate the status and risks of key program components, we reviewed  briefings and monthly program management reports. We analyzed earned  value management data to assess the contractors’ performance against  cost and schedule estimates and evaluated reasons for variances in the  contractors’ performance. We obtained adequate assurance that these  agency-provided data had been tested and were sufficient for our  assessment purposes. We reviewed cost reports and program risk  management documents and interviewed program officials to determine  program and program segment risks that could negatively affect the  program’s ability to maintain the current schedule and cost estimates. We  also interviewed agency officials from the Department of Defense (DOD),  National Aeronautics and Space Administration (NASA), and National  Oceanic and Atmospheric Administration (NOAA) and the NPOESS  program office to determine the status and risks of the key program  segments. We interviewed senior-level officials representing the prime  contractor and the subcontractor responsible for developing a critical  sensor. We also observed senior-level management review meetings to  obtain information on the status of the NPOESS program.
To assess the NPOESS Executive Committee’s ability to fulfill its  responsibilities, we reviewed the presidential directive that established  NPOESS and the 1995 and 2008 memorandums of agreement signed by all  three agencies to determine the responsibilities and membership of the  Executive Committee. We analyzed Executive Committee meeting minutes  to determine the attendees of the meetings, the action items that were  identified, and whether those action items were tracked to closure. We  reviewed monthly briefings from the Program Executive Officer’s Program  Management Council to identify the key risks and issues facing the  program. We then compared these risks and issues to the matters brought  to the Executive Committee’s attention in monthly letters and meeting  minutes to determine whether those risks were escalated. In addition, we  analyzed the Executive Committee’s response to the identified risks and  issues to determine whether and how the Committee responded. Finally,  we interviewed senior officials in the NPOESS program office and  program executive office.
To evaluate efforts to identify an alternative system integrator for later  NPOESS satellites, we reviewed the Acquisition Decision Memorandum  that identified the need for a study of alternatives. We reviewed briefings  from two alternative management studies and analyzed the alternatives  presented in those briefings. We reviewed program plans and status for  addressing the recommendations of those studies. We interviewed the  chair of the 2008 alternative management study and senior officials from  the NPOESS program office regarding steps taken to close the studies’  recommendations. We also interviewed the Program Executive Officer to  understand the next steps to be taken by the program.
We primarily performed our work at the NPOESS Integrated Program  Office and at DOD, NASA, and NOAA offices in the Washington, D.C.,  metropolitan area. In addition, we conducted work at the Los Angeles,  California, facilities of the prime contractor, the subcontractor responsible  for a critical sensor, and the Defense Contract Management Agency groups  overseeing those contractors. We conducted this performance audit from  October 2008 to June 2009 in accordance with generally accepted  government auditing standards. Those standards require that we plan and  perform the audit to obtain sufficient, appropriate evidence to provide a  reasonable basis for our findings and conclusions based on our audit  objectives. We believe that the evidence obtained provides a reasonable  basis for our findings and conclusions based on our audit objectives.
section_title: Appendix II: Summary of the Fall 2008 Independent Review Team’s Findings and Recommendations
paragraphs: To address programwide risks and challenges, the National Polar-orbiting  Operational Environmental Satellite System (NPOESS) Executive  Committee sponsored an independent review of the program in Fall 2008.  In March 2009, the independent review team reported on its findings to the  Executive Committee. Its findings were that  the program has a low probability of success in its current configuration; the program, as configured after the Nunn-McCurdy certification, places  continuity of data at high risk because of the inability to recover from a  launch or spacecraft failure;   cost has become the most important parameter, over mission success;  the Executive Committee is at best inefficient; the program office suffers from a lack of space acquisition infrastructure  typically found at space acquisition centers; the program is making questionable decisions because of the pressure put  on it by near-term budget needs; the highest probability of success is with the current contractor team for  both NPOESS and the Visible/infrared imager radiometer suite; the NPOESS Preparatory Project (NPP) satellite is an operational asset; the priorities of the Air Force and the National Oceanic and Atmospheric  Administration are not aligned; and the current budget is inadequate.
To address these findings, the independent review team recommended  that the Committee    address the continuity issues by defining the “right” program to meet the  country’s weather and climate needs;   determine how to co-locate the program office at an acquisition center;    determine an appropriate budget for the program;    accelerate the schedule of the third and fourth NPOESS satellites;    use NPP data operationally;    assess whether to launch NPP on schedule or on an anticipated need date    change the culture to put mission need first;    stop looking at options for VIIRS and NPOESS; and    either fund the program at an 80 percent confidence level or reduce the  content of the program so that it can be funded at an 80 percent  confidence instead of a 50 percent confidence level.
section_title: Appendix III: Comments from the Department of Commerce
section_title: Appendix IV: Comments from the Department of Defense
section_title: Appendix V: Comments from the National Aeronautics and Space Administration
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Colleen M. Phillips, Assistant  Director; Kate Agatone; Carol Cha; Neil Doherty; Kaelin P. Kuhn; Kathleen  S. Lovett; and Lee McCracken made key contributions to this report.