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

Letter

Background

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.

Polar Satellite Data and Products

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.

NPOESS Overview

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.

Acquisition Strategy

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.

Cost Increases, Schedule Delays, and Technical Problems Led to a Decision to Restructure the NPOESS Program

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.

Selected Climate Sensors Have Been Added Back to the Program

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.

NPOESS Experienced Schedule Delays and Cost Growth after It Was Restructured

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.

Prior Reports Recommended Steps to Mitigate Program Risks

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.

Progress Made, but Continued Instrument Problems Are Driving Costs Upward, Forcing Launch Delays, and Endangering Satellite Continuity

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.

Program Made Progress on Selected Components

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.

Technical Challenges Cause Cost Increases, Delay Schedule, and Risk Data Continuity; Key Decisions on Program’s Next Steps Are Pending

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.

Executive Committee Has Not Effectively Fulfilled Its Responsibilities

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.

Executive Committee Has Responded to Past Recommendations

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.

Key Acquisition Executive Does Not Attend Executive Committee Meetings

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.

Committee Does Not Aggressively Manage Risks

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.

Committee Decisions Do Not Achieve Desired Outcomes

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.

Program Has Assessed Alternatives, but Has Not Yet Identified a Viable Alternative for Acquiring the Last Two NPOESS Satellites

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.

Conclusions

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.

Recommendations for Executive Action

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.

Agency Comments and Our Evaluation

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.

Appendix I: Objectives, Scope, and Methodology

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.

Appendix II: Summary of the Fall 2008 Independent Review Team’s Findings and Recommendations

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.

Appendix III: Comments from the Department of Commerce

Appendix IV: Comments from the Department of Defense

Appendix V: Comments from the National Aeronautics and Space Administration

Appendix VI: GAO Contact and Staff Acknowledgments

Staff Acknowledgments

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.