Polar-Orbiting Operational Environmental Satellites: Restructuring Is Under Way, but Challenges and Risks Remain
Published: 2007-06-07T00:00:00

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 Departments of Commerce and Defense and the National Aeronautics and Space Administration--which experienced escalating costs, schedule delays, and technical difficulties. These factors led to a June 2006 decision to restructure the program thereby decreasing its complexity, increasing its estimated cost to $12.5 billion, and delaying the first two satellites by 3 to 5 years. GAO was asked to summarize a report being released today that (1) assesses progress in restructuring the acquisition, (2) evaluates progress in establishing an effective management structure, and (3) identifies the status and key risks on the program's major segments.
section_title: What GAO Found
paragraphs: The NPOESS program office has made progress in restructuring the acquisition by establishing and implementing interim program plans guiding contractors' work activities in 2006 and 2007; however, important tasks remain to be done. Executive approvals of key acquisition documents are about 9 months late--due in part to the complexity of navigating three agencies' approval processes. Delays in finalizing these documents could hinder plans to complete contract negotiations by July 2007 and could keep the program from moving forward in fiscal year 2008 with a new program baseline. The program office has also made progress in establishing an effective management structure by adopting a new organizational framework with increased oversight from program executives and by instituting more frequent and rigorous program reviews; however, plans to reassign the recently appointed Program Executive Officer will likely increase the program's risks. Additionally, the program lacks a process and plan for identifying and filling staffing shortages, which has led to delays in key activities such as cost estimating and contract revisions. As of June 2007, key positions remain to be filled. Development and testing of major NPOESS segments--including key sensors and ground systems--are under way, but significant risks remain. For example, while work continues on key sensors, two of them--the visible/infrared imager radiometer suite and the cross-track infrared sounder--experienced significant problems and are considered high risk. Continued sensor problems could cause further cost increases and schedule delays. Additionally, while progress has been made in reducing delays in the data processing system, work remains in refining the algorithms needed to translate sensor observations into usable weather products. Given the tight time frames for completing this work, it will be important for program officials and executives to continue to provide close oversight of milestones and risks.

section_title: Letter
paragraphs: We appreciate the opportunity to participate in today’s hearing to  discuss our work on the $12.5 billion dollar National Polar-orbiting  Operational Environmental Satellite System (NPOESS) program.  NPOESS is expected to be a state-of-the-art, environment- monitoring satellite system that will replace two existing polar- orbiting 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 program: 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). To manage the NPOESS program, these  agencies established a tri-agency integrated program office. In  recent years, the program has experienced escalating costs,  schedule delays, and technical difficulties, which led to a June 2006  decision to restructure it. This decision decreased the complexity of  the program by reducing the number of satellites and sensors,  increased the estimated cost of the program to $12.5 billion, and  delayed the launches of the first two satellites by 3 and 5 years,  respectively.
As requested, this statement summarizes a report being released  today that (1) assesses the NPOESS program office’s progress in  restructuring the acquisition, (2) evaluates the program office’s  progress in establishing an effective management structure, and   (3) identifies the status and key risks facing the program’s major  segments. The report includes recommendations to NOAA, NASA,  and DOD to facilitate the restructuring of the program and to reduce  program risks. In preparing this testimony, we relied on our work  supporting the accompanying report. That report contains a detailed  overview of our scope and methodology. All the work on which this  testimony is based was performed in accordance with generally  accepted government auditing standards.
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— managed by NOAA—and the Defense Meteorological Satellite  Program (DMSP)—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 their effects.  Polar satellites also provide data used to monitor environmental  phenomena, such as ozone depletion and drought conditions, as  well as data sets that are used by researchers for a variety of studies  such as climate monitoring.
subsections: 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 through the year 2026. 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 and for satellite operations; DOD has the lead  on the acquisition; and NASA has primary responsibility for  facilitating the development and incorporation of new technologies  into the converged system. NOAA and DOD share the costs of  funding NPOESS, while NASA funds specific technology projects  and studies. The NPOESS program office is overseen by an  Executive Committee, which is made up of the Administrators of  NOAA and NASA and the Under Secretary of the Air Force.
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 environmental  data records (EDR) and is to be located at four data 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  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 4 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 or 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 is to host three of the four critical NPOESS sensors  (VIIRS, CrIS, and ATMS), as well as one other noncritical sensor  (OMPS). NPP is 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 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 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.
section_title: NPOESS Experienced Cost Increases, Schedule Delays, and Technical Problems over Several Years
paragraphs: Over the last few years, NPOESS has experienced continued cost  increases and schedule delays, requiring difficult decisions to be  made about the program’s direction and capabilities. In 2003, we  reported that changes in the NPOESS funding stream led the  program to develop a new program cost and schedule baseline.  After this new baseline was completed in 2004, we reported that the  program office increased the NPOESS cost estimate from about $7  billion to $8.1 billion; delayed key milestones, including the planned  launch of the first NPOESS satellite—which was delayed by 7  months; and extended the life of the program from 2018 to 2020. At  that time, we also noted that other factors could further affect the  revised cost and schedule estimates. Specifically, the contractor was  not meeting expected cost and schedule targets on the new baseline  because of technical issues in the development of key sensors,  including the critical VIIRS sensor. Based on its performance  through May 2004, we estimated that the contractor would most  likely overrun its contract at completion in September 2011 by $500  million—thereby increasing the projected life cycle cost to $8.6  billion. The program office’s baseline cost estimate was  subsequently adjusted to $8.4 billion.
In mid-November 2005, we reported that NPOESS continued to  experience problems in the development of a key sensor, resulting  in schedule delays and anticipated cost increases. At that time, we  projected that the program’s cost estimate had grown to about $10  billion based on contractor cost and schedule data. We reported that  the program’s issues were due, in part, to problems at multiple  levels of management—including subcontractor, contractor,  program office, and executive leadership. Recognizing that the  budget for the program was no longer executable, the NPOESS  Executive Committee planned to make a decision in December 2005  on the future direction of the program—what would be delivered, at  what cost, and by when. This involved deciding among options  involving increased costs, delayed schedules, and reduced  functionality. We noted that continued oversight, strong leadership,  and timely decision making were more critical than ever, and we  urged the committee to make a decision quickly so that the program  could proceed.
However, we subsequently reported that, in late November 2005,  NPOESS cost growth exceeded a legislatively mandated threshold  that requires DOD to certify the program to Congress. This placed  any decision about the future direction of the program on hold until  the certification took place in June 2006. In the meantime, the  program office implemented an interim program plan for fiscal year  2006 to continue work on key sensors and other program elements  using fiscal year 2006 funding.
section_title: Nunn-McCurdy Process Led to a Decision to Restructure the NPOESS Program
paragraphs: The Nunn-McCurdy law requires DOD to take specific actions when  a major defense acquisition program exceeds certain cost increase  thresholds. The law requires the Secretary of Defense to notify  Congress when a major defense acquisition is expected to overrun  its project baseline by 15 percent or more and to certify the program  to Congress when it is expected to overrun its baseline by 25  percent or more. In late November 2005, NPOESS exceeded the 25  percent threshold, and DOD was required to certify the program.  Certifying a program entailed 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. This decision approved a cost  increase of $4 billion over the prior approved baseline cost and  delayed the launch of NPP and the first two satellites by roughly 3 to  5 years. The new program also entailed establishing a stronger  program management structure, reducing the number of satellites to  be produced and launched from 6 to 4, and reducing the number of  instruments on the satellites from 13 to 9—consisting of 7  environmental sensors and 2 subsystems. It also entailed using  NPOESS satellites in the early morning and afternoon orbits and  relying on European satellites for midmorning orbit data. Table 2  summarizes the major program changes made under the Nunn- McCurdy certification decision.
The Nunn-McCurdy certification decision established new  milestones for the delivery of key program elements, including  launching NPP by January 2010, launching the first NPOESS  satellite (called C1) by January 2013, and launching the second  NPOESS satellite (called C2) by January 2016. These revised  milestones deviated from prior plans to have the first NPOESS  satellite available to back up the final POES satellite should  anything go wrong during that launch.
Delaying the launch of the first NPOESS satellite means that if the  final POES satellite fails on launch, satellite data users would need  to rely on the existing constellation of environmental satellites until  NPP data become available—almost 2 years later. Although NPP  was not intended to be an operational asset, NASA agreed to move  NPP to a different orbit so that its data would be available in the  event of a premature failure of the final POES satellite. However,  NPP will not provide all of the operational capability planned for the  NPOESS spacecraft. If the health of the existing constellation of  satellites diminishes—or if NPP data are not available, timely, and  reliable—then there could be a gap in environmental satellite data.  Table 3 summarizes changes in key program milestones over time.
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. Specifically,  of the 13 original sensors, 5 sensors remain unchanged, 3 were  replaced with less capable sensors, 1 was modified to provide less  functionality, and 4 were cancelled. Table 4 shows the changes to  NPOESS sensors, including the 4 identified in bold as critical  sensors.
The changes in NPOESS sensors affected the number and quality of  the resulting weather and environmental products, called  environmental data records or EDRs. In selecting sensors for the  restructured program, the agencies 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 6 EDRs that are of a reduced quality include  ozone profile, soil moisture, and multiple products depicting energy  in the space environment.
section_title: NPOESS Acquisition Restructuring Is Well Under Way, but Key Steps Remain to Be Completed
paragraphs: Since the June 2006 decision to revise the scope, cost, and schedule  of the NPOESS program, the program office has made progress in  restructuring the satellite acquisition; however, important tasks  remain to be done. Restructuring a major acquisition program like  NPOESS is a process that involves identifying time-critical and high- priority work and keeping this work moving forward, while  reassessing development priorities, interdependencies, deliverables,  risks, and costs. It also involves revising important acquisition  documents including the memorandum of agreement on the roles  and responsibilities of the three agencies, the acquisition strategy,  the system engineering plan, the test and evaluation master plan, the  integrated master schedule defining what needs to happen by when,  and the acquisition program baseline. Specifically, the Nunn- McCurdy certification decision required the Secretaries of Defense  and Commerce and the Administrator of NASA to sign a revised  memorandum of agreement by August 6, 2006. It also required that  the program office, Program Executive Officer, and the Executive  Committee revise and approve key acquisition documents including  the acquisition strategy and system engineering plan by September  1, 2006, in order to proceed with the restructuring. Once these are  completed, the program office can proceed to negotiate with its  prime contractor on a new program baseline defining what will be  delivered, by when, and at what cost.
The NPOESS program office has made progress in restructuring the  acquisition. Specifically, the program office has established interim  program plans guiding the contractor’s work activities in 2006 and  2007 and has made progress in implementing these plans. The  program office and contractor also developed an integrated master  schedule for the remainder of the program—beyond fiscal year  2007. This integrated master schedule details the steps leading up to  launching NPP by September 2009, launching the first NPOESS  satellite in January 2013, and launching the second NPOESS satellite  in January 2016. Near-term steps include completing and testing the  VIIRS, CrIS, and OMPS sensors; integrating these sensors with the  NPP spacecraft and completing integration testing; completing the  data processing system and integrating it with the command,  control, and communications segment; and performing advanced  acceptance testing of the overall system of systems for NPP.
However, key steps remain for the acquisition restructuring to be  completed. Although the program office made progress in revising  key acquisition documents, including the system engineering plan,  the test and evaluation master plan, and the acquisition strategy  plan, it has not yet obtained the approval of the Secretaries of  Commerce and Defense and the Administrator of NASA on the  memorandum of agreement among the three agencies, nor has it  obtained the approval of the NPOESS Executive Committee on the  other key acquisition documents. As of June 2007, these approvals  are over 9 months past due. Agency officials noted that the  September 1, 2006, due date for the key acquisition documents was  not realistic given the complexity of coordinating documents among  three different agencies.
Finalizing these documents is critical to ensuring interagency  agreement and will allow the program office to move forward in  completing other activities related to restructuring the program.  These other activities include completing an integrated baseline  review with the contractor to reach agreement on the schedule and  work activities, and finalizing changes to the NPOESS development  and production contract. Program costs are also likely to be  adjusted during upcoming negotiations on contract changes—an  event that the Program Director expects to occur by July 2007.  Completion of these activities will allow the program office to lock  down a new acquisition baseline cost and schedule. Until key  acquisition documents are finalized and approved, the program  faces increased risk that it will not be able to complete important  restructuring activities in time to move forward in fiscal year 2008  with a new program baseline in place. This places the NPOESS  program at risk of continued delays and future cost increases.
section_title: Progress Has Been Made in Establishing an Effective NPOESS Management Structure, but Executive Turnover Increases Risks and Staffing Problems Remain
paragraphs: The NPOESS program has made progress in establishing an  effective management structure, but—almost a year after this  structure was endorsed during the Nunn-McCurdy certification  process—the Integrated Program Office still faces staffing problems.  Over the past few years, we and others have raised concerns about  management problems at all levels of the NPOESS program,  including subcontractor and contractor management, program  office management, and executive-level management. Two  independent review teams also noted a shortage of skilled program  staff, including budget analysts and system engineers. Since that  time, the NPOESS program has made progress in establishing an  effective management structure—including establishing a new  organizational framework with increased oversight by program  executives, instituting more frequent subcontractor, contractor, and  program reviews, and effectively managing risks and performance.  However, DOD’s plans for reassigning the Program Executive  Officer in the summer of 2007 increase the program’s risks.  Additionally, the program lacks a staffing process that clearly  identifies staffing needs, gaps, and plans for filling those gaps. As a  result, the program office has experienced delays in getting core  management activities under way and lacks the staff it needs to  execute day-to-day management activities.
subsections: section_title: NPOESS Program Has Made Progress in Establishing an Effective Management Structure and Increasing Oversight Activities, but Executive Turnover Will Increase Program Risks
paragraphs: The NPOESS program has made progress in establishing an  effective management structure and increasing the frequency and  intensity of its oversight activities. Over the past few years, we and  others have raised concerns about management problems at all  levels of management on the NPOESS program, including  subcontractor and contractor management, program office  management, and executive-level management. In response to  recommendations made by two different independent review teams,  the program office began exploring options in late 2005 and early  2006 for revising its management structure.
In November 2005, the Executive Committee established and filled a  Program Executive Officer position, senior to the NPOESS Program  Director, to streamline decision making and to provide oversight to  the program. This Program Executive Officer reports directly to the  Executive Committee. Subsequently, the Program Executive Officer  and the Program Director proposed a revised organizational  framework that realigned division managers within the Integrated  Program Office responsible for overseeing key elements of the  acquisition and increased staffing in key areas. In June 2006, the  Nunn-McCurdy certification decision approved this new  management structure and the Integrated Program Office  implemented it. Figure 1 provides an overview of the relationships  among the Integrated Program Office, the Program Executive  Office, and the Executive Committee, as well as key divisions within  the program office.
Operating under this new management structure, the program office  implemented more rigorous and frequent subcontractor, contractor,  and program reviews, improved visibility into risk management and  mitigation activities, and institutionalized the use of earned value  management techniques to monitor contractor performance. In  addition to these program office activities, the Program Executive  Officer implemented monthly program reviews and increased the  frequency of contacts with the Executive Committee. The Program  Executive Officer briefs the Executive Committee in monthly  letters, apprising committee members of the program’s status,  progress, risks, and earned value, and the Executive Committee now  meets on a quarterly basis—whereas in the recent past, we reported  that the Executive Committee had met only five times in 2 years.
Although the NPOESS program has made progress in establishing an  effective management structure, this progress is currently at risk.  We recently reported that DOD space acquisitions are at increased  risk due in part to frequent turnover in leadership positions, and we  suggested that addressing this will require DOD to consider  matching officials’ tenure with the development or delivery of a  product. In March 2007, NPOESS program officials stated that DOD  is planning to reassign the recently appointed Program Executive  Officer in the summer 2007 as part of this executive’s natural career  progression. As of June 2007, the Program Executive Officer has  held this position for 19 months. Given that the program is currently  still being restructured, and that there are significant challenges in  being able to meet critical deadlines to ensure satellite data  continuity, such a move adds unnecessary risk to an already risky  program.
section_title: NPOESS Program Has Filled Key Vacancies but Lacks a Programwide Staffing Process
paragraphs: The NPOESS program office has filled key vacancies but lacks a  staffing process that identifies programwide staffing requirements  and plans for filling those needed positions. Sound human capital  management calls for establishing a process or plan for determining  staffing requirements, identifying any gaps in staffing, and planning  to fill critical staffing gaps. Program office staffing is especially  important for NPOESS, given the acknowledgment by multiple  independent review teams that staffing shortfalls contributed to past  problems. Specifically, these review teams noted shortages in the  number of system engineers needed to provide adequate oversight  of subcontractor and contractor engineering activities and in the  number of budget and cost analysts needed to assess contractor  cost and earned value reports. To rectify this situation, the June  2006 certification decision directed the Program Director to take  immediate actions to fill vacant positions at the program office with  the approval of the Program Executive Officer.
Since the June 2006 decision to revise NPOESS management  structure, the program office has filled multiple critical positions,  including a budget officer, a chief system engineer, an algorithm  division chief, and a contracts director. In addition, on an ad hoc  basis, individual division managers have assessed their needs and  initiated plans to hire staff for key positions. However, the program  office lacks a programwide process for identifying and filling all  needed positions. As a result, division managers often wait months  for critical positions to be filled. For example, in February 2006, the  NPOESS program estimated that it needed to hire up to 10 new  budget analysts. As of September 2006, none of these positions had  been filled. As of April 2007, program officials estimated that they  still needed to fill 5 budget analyst positions, 5 systems engineering  positions, and 10 technical manager positions. The majority of the  vacancies—4 of the 5 budget positions, 4 of the 5 systems  engineering positions, and 8 of the 10 technical manager positions— are to be provided by NOAA. NOAA officials noted that each of  these positions is in some stage of being filled—that is, recruitment  packages are being developed or reviewed, vacancies are being  advertised, or candidates are being interviewed, selected, and  approved.
The program office attributes its staffing delays to not having the  right personnel in place to facilitate this process, and it did not even  begin to develop a staffing process until November 2006. Program  officials noted that the tri-agency nature of the program adds  unusual layers of complexity to the hiring and administrative  functions because each agency has its own hiring and performance  management rules. In November 2006, the program office brought in  an administrative officer who took the lead in pulling together the  division managers’ individual assessments of needed staff and has  been working with the division managers to refine this list. This new  administrative officer plans to train division managers in how to  assess their needs and to hire needed staff, and to develop a process  by which evolving needs are identified and positions are filled.  However, there is as yet no date set for establishing this basic  programwide staffing process. As a result of the lack of a  programwide staffing process, there has been an extended delay in  determining what staff is needed and in bringing those staff on  board; this has resulted in delays in performing core activities, such  as establishing the program office’s cost estimate and bringing in  needed contracting expertise. Additionally, until a programwide  staffing process is in place, the program office risks not having the  staff it needs to execute day-to-day management activities.
In commenting on a draft of our report, Commerce stated that  NOAA implemented an accelerated hiring model. More recently, the  NPOESS program office reported that several critical positions were  filled in April and May 2007. However, we have not yet evaluated  NOAA’s accelerated hiring model and, as of June 2007, over 10 key  positions remain to be filled.
section_title: Major Program Segments Are Under Development, but Significant Risks Remain
paragraphs: Major segments of the NPOESS program—the space segment and  ground systems segment—are under development; however,  significant problems have occurred and risks remain. The program  office is aware of these risks and is working to mitigate them, but  continued problems could affect the program’s overall cost and  schedule. Given the tight time frames for completing key sensors,  integrating them on the NPP spacecraft, and developing, testing, and  deploying the ground-based data processing systems, it will be  important for the NPOESS Integrated Program Office, the Program  Executive Office, and the Executive Committee to continue to  provide close oversight of milestones and risks.
subsections: section_title: Space Segment—Progress Made, but Key Sensors Continue to Face Major Risks
paragraphs: The space segment includes the sensors and the spacecraft. Four  sensors are of critical importance—VIIRS, CrIS, OMPS, and ATMS— because they are to be launched on the NPP satellite in September  2009. Initiating work on another sensor, the Microwave  imager/sounder, is also important because this new sensor— replacing the cancelled CMIS sensor—will need to be developed in  time for the second NPOESS satellite launch. Over the past year, the  program made progress on each of the sensors and the spacecraft.  However, two sensors, VIIRS and CrIS, have experienced major  problems. The status of each of the components of the space  segment is described in table 5.
Program officials regularly track risks associated with various  NPOESS components and work to mitigate them. Having identified  both VIIRS and CrIS as high risk, OMPS as moderate risk, and the  other components as low risk, the program office is working closely  with the contractors and subcontractors to resolve sensor problems.  Program officials have identified work-arounds that will allow them  to move forward in testing the VIIRS engineering unit and have  approved the flight unit to proceed to a technical readiness review  milestone. Regarding CrIS, as of March 2007, a failure review board  identified root causes of its structural failure, identified plans for  resolving them, and initiated inspections of sensor modules and  subsystems for damage. An agency official reported that there is  sufficient funding in the fiscal year 2007 program office’s and  contractor’s management reserve funds to allow for troubleshooting  both VIIRS and CrIS problems. However, until the CrIS failure  review board fully determines the amount of rework that is  necessary to fix the problems, it is unknown if additional funds will  be needed or if the time frame for CrIS’s delivery will be delayed.  According to agency officials, CrIS is not on the program schedule’s  critical path, and there is sufficient schedule margin to absorb the  time it will take to conduct a thorough failure review process.
Managing the risks associated with the development of VIIRS and  CrIS is of particular importance because these components are to be  demonstrated on the NPP satellite, currently scheduled for launch in  September 2009. 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. Additionally, continued sensor  problems could lead to higher final program costs.
section_title: Ground Segment—Progress Has Been Made, but Work Remains
paragraphs: Development of the ground segment—which includes the interface  data processing system, the ground stations that are to receive  satellite data, and the ground-based command, control, and  communications system—is under way and on track. However,  important work pertaining to developing the algorithms that  translate satellite data into weather products within the integrated  data processing segment remains to be completed. Table 6 describes  each of the components of the ground segment and identifies the  status of each.
The NPOESS program office plans to continue to address risks  facing IDPS development. Specifically, the IDPS team is working to  reduce data processing delays by seeking to limit the number of data  calls, improve the efficiency of the data management system,  increase the efficiency of the algorithms, and increase the number of  processors. The program office also developed a resource center  consisting of a logical technical library, a data archive, and a set of  analytical tools to coordinate, communicate, and facilitate the work  of algorithm subject matter experts on algorithm development and  calibration/validation preparations. Managing the risks associated  with the development of the IDPS system is of particular importance  because this system will be needed to process NPP data.
section_title: Implementation of GAO Recommendations Should Reduce Program Risks
paragraphs: Because of the importance of effectively managing the NPOESS  program to ensure that there are no gaps in the continuity of critical  weather and environmental observations, in our accompanying  report we made recommendations to the Secretaries of Defense  and Commerce and to the Administrator of NASA to ensure that the  responsible executives within their respective organizations  approve key acquisition documents, including the memorandum of  agreement among the three agencies, the system engineering plan,  the test and evaluation master plan, and the acquisition strategy, as  quickly as possible but no later than April 30, 2007. We also  recommended that the Secretary of Defense direct the Air Force to  delay reassigning the recently appointed Program Executive Officer  until all sensors have been delivered to the NPOESS Preparatory  Program; these deliveries are currently scheduled to occur by July  2008. We also made two additional recommendations to the  Secretary of Commerce to (1) develop and implement a written  process for identifying and addressing human capital needs and for  streamlining how the program handles the three different agencies’  administrative procedures and (2) establish a plan for immediately  filling needed positions.
In written comments, all three agencies agreed that it was important  to finalize key acquisition documents in a timely manner, and DOD  proposed extending the due dates for the documents to July 2, 2007.  Because the NPOESS program office intends to complete contract  negotiations by July 4, 2007, we remain concerned that any further  delays in approving the documents could delay contract  negotiations and thus increase the risk to the program.
In addition, the Department of Commerce agreed with our  recommendation to develop and implement a written process for  identifying and addressing human capital needs and to streamline  how the program handles the three different agencies’  administrative procedures. The department also agreed with our  recommendation to plan to immediately fill open positions at the  NPOESS program office. Commerce noted that NOAA identified the  skill sets needed for the program and has implemented an  accelerated hiring model and schedule to fill all NOAA positions in  the NPOESS program. Commerce also noted that NOAA has made  NPOESS hiring a high priority and has documented a strategy— including milestones—to ensure that all NOAA positions are filled  by June 2007.
DOD did not concur with our recommendation to delay reassigning  the Program Executive Officer, noting that the NPOESS System  Program Director responsible for executing the acquisition program  would remain in place for 4 years. The Department of Commerce  also noted that the Program Executive Officer position is planned to  rotate between the Air Force and NOAA. Commerce also stated that  a selection would be made before the departure of the current  Program Executive Officer to provide an overlap period to allow for  knowledge transfer and ensure continuity. However, over the last  few years, we and others (including an independent review team  and the Commerce Inspector General) have reported that ineffective  executive-level oversight helped foster the NPOESS program’s cost  and schedule overruns. We remain concerned that reassigning the  Program Executive at a time when NPOESS is still facing critical  cost, schedule, and technical challenges will place the program at  further risk.
In addition, while it is important that the System Program Director  remain in place to ensure continuity in executing the acquisition,  this position does not ensure continuity in the functions of the  Program Executive Officer. The current Program Executive Officer  is experienced in providing oversight of the progress, issues, and  challenges facing NPOESS and coordinating with Executive  Committee members as well as the Defense acquisition authorities.  Additionally, while the Program Executive Officer position is  planned to rotate between agencies, the memorandum of agreement  documenting this arrangement is still in draft and should be flexible  enough to allow the current Program Executive Officer to remain  until critical risks have been addressed.
Further, while Commerce plans to allow a period of overlap  between the selection of a new Program Executive Officer and the  departure of the current one, time is running out. The current  Program Executive Officer is expected to depart in early July 2007,  and as of early June 2007, a successor has not yet been named.  NPOESS is an extremely complex acquisition, involving three  agencies, multiple contractors, and advanced technologies. There is  not sufficient time to transfer knowledge and develop the sound  professional working relationships that the new Program Executive  Officer will need to succeed in that role. Thus, we remain convinced  that given NPOESS current challenges, reassigning the current  Program Executive Officer at this time would not be appropriate.
In summary, NPOESS restructuring is well under way, and the  program has made progress in establishing an effective management  structure. However, key steps remain in restructuring the  acquisition, including completing important acquisition documents  such as the system engineering plan, the acquisition program  baseline, and the memorandum of agreement documenting the three  agencies’ roles and responsibilities. Until these key documents are  finalized, the program is unable to finalize plans for restructuring  the program. Additionally, the program office continues to have  difficulty filling key positions and lacks a programwide staffing  process. Until the program establishes an effective and repeatable  staffing process, it will have difficulties in identifying and filling its  staffing needs in a timely manner. Having insufficient staff in key  positions impedes the program office’s ability to conduct important  management and oversight activities, including revising cost and  schedule estimates, monitoring progress, and managing technical  risks. The program faces even further challenges if DOD proceeds  with plans to reassign the Program Executive Officer this summer.  Such a move would add unnecessary risk to an already risky  program.
In addition, the likelihood exists that there will be further cost  increases and schedule delays because of technical problems on key  sensors and pending contract negotiations. Major program  segments—including the space and ground segments—are making  progress in their development and testing. However, two critical  sensors have experienced problems and are considered high risk,  and risks remain in developing and implementing the ground-based  data processing system. Given the tight time frames for completing  key sensors, integrating them, and getting the ground-based data  processing systems developed, tested, and deployed, continued  close oversight of milestones and risks is essential to minimize  potential cost increases and schedule delays.
Mr. Chairmen, this concludes my statement. I would be happy to  answer any questions that you or members of the committee may  have at this time.
If you have any questions on matters discussed in this testimony,  please contact me at (202) 512-9286 or by e-mail at  pownerd@gao.gov. Other key contributors to this testimony include  Colleen Phillips (Assistant Director), Carol Cha, and Teresa Smith.
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