Geostationary Operational Environmental Satellites: Additional Action Needed to Incorporate Lessons Learned from Other Satellite Programs
Released: 2006-09-29T00:00:00

Letter

Background

Since the 1960s, geostationary and polar-orbiting environmental satellites have been used by the United States to provide meteorological data for weather observation, research, and forecasting. NOAA’s National Environmental Satellite Data and Information Service (NESDIS) is responsible for managing the civilian geostationary and polar-orbiting satellite systems as two separate programs, called GOES and the Polar Operational Environmental Satellites, respectively.

Unlike polar-orbiting satellites, which constantly circle the earth in a relatively low polar orbit, geostationary satellites can maintain a constant view of the earth from a high orbit of about 22,300 miles in space. NOAA operates GOES as a two-satellite system that is primarily focused on the United States (see fig. 1). These satellites are uniquely positioned to provide timely environmental data to meteorologists and their audiences on the earth’s atmosphere, its surface, cloud cover, and the space environment. They also observe the development of hazardous weather, such as hurricanes and severe thunderstorms, and track their movement and intensity to reduce or avoid major losses of property and life. Furthermore, the satellites’ ability to provide broad, continuously updated coverage of atmospheric conditions over land and oceans is important to NOAA’s weather forecasting operations.

To provide continuous satellite coverage, NOAA acquires several satellites at a time as part of a series and launches new satellites every few years (see table 1).

Three satellites—GOES-11, GOES-12, and GOES-13—are currently in orbit. Both GOES-11 and GOES-12 are operational satellites, while GOES-13 is in an on-orbit storage mode. It is a backup for the other two satellites should they experience any degradation in service. The others in the series, GOES-O and GOES-P, are planned for launch over the next few years. NOAA is also planning a future generation of satellites, known as the GOES-R series, which are planned for launch beginning in 2012.

Each of the operational geostationary satellites continuously transmits raw environmental data to NOAA ground stations. The data are processed at these ground stations and transmitted back to the satellite for broadcast to primary weather services both in the United States and around the world, including the global research community. Raw and processed data are also distributed to users via ground stations through other communication channels, such as dedicated private communication lines and the Internet. Figure 2 depicts a generic data relay pattern from the geostationary satellites to the ground stations and commercial terminals.

GOES-R Program—An Overview

NOAA is planning for the GOES-R program to improve on the technology of prior GOES series, in terms of both system and instrument improvements. The system improvements are expected to fulfill more demanding user requirements and to provide more rapid information updates. Table 2 highlights key system-related improvements GOES-R is expected to make to the geostationary satellite program.

The instruments on the GOES-R series are expected to increase the clarity and precision of the observed environmental data. NOAA plans to acquire five different types of instruments. The program office considered two of the instruments—the Advanced Baseline Imager and the Hyperspectral Environmental Suite—to be most critical because they would provide data for key weather products. Table 3 summarizes the originally planned instruments and their expected capabilities.

The program management structure for the GOES-R program differs from past GOES programs. Prior to the GOES-R series, NOAA was responsible for program funding, procurement of the ground elements, and on-orbit operation of the satellites, while NASA was responsible for the procurement of the spacecraft, instruments, and launch services. NOAA officials stated that this approach limited the agency’s insight and management involvement in the procurement of major elements of the system.

Alternatively, under the GOES-R management structure, NOAA has responsibility for the procurement and operation of the overall system—including spacecraft, instruments, and launch services. NASA is responsible for the procurement of the individual instruments until they are transferred to the overall GOES-R system contractor for completion and integration onto the spacecraft. Additionally, to take advantage of NASA’s acquisition experience and technical expertise, NOAA located the GOES-R program office at NASA’s Goddard Space Flight Center. It also designated key program management positions to be filled with NASA personnel. These positions include the deputy system program director role for advanced instrument and technology infusion, the project manager for the flight portion of the system, and the deputy project manager for the ground and operations portion of the system. NOAA officials explained that they changed the management structure for the GOES-R program in order to streamline oversight and fiduciary responsibilities, but that they still plan to rely on NASA’s expertise in space system acquisitions.

Satellite Programs Often Experience Technical Problems, Cost Overruns, and Schedule Delays

Satellite programs are often technically complex and risky undertakings, and as a result, they often experience technical problems, cost overruns, and schedule delays. We and others have reported on a historical pattern of repeated missteps in the procurement of major satellite systems, including the National Polar-orbiting Operational Environmental Satellite System (NPOESS), the GOES I-M series, the Space Based Infrared System High Program (SBIRS-High), and the Advanced Extremely High Frequency Satellite System (AEHF). Table 4 lists key problems experienced with these programs.

GOES-R Procurement Activities Are Under Way, but System Requirements and Cost Estimates Are Changing

At the time of our review, NOAA was nearing the end of the preliminary design phase on its GOES-R program and planned to award a contract for the system’s development in August 2007. However, because of concerns with potential cost growth, NOAA’s plans for the GOES-R procurement are changing. To date, NOAA has issued contracts for the preliminary design of the overall GOES-R system to three vendors and expects to award a contract to one of these vendors to develop the system. In addition, to reduce the risks associated with developing new instruments, NASA has issued contracts for the early development of two instruments and for the preliminary designs of three other instruments. The agency plans to award these contracts and then turn them over to the contractor responsible for the overall GOES-R program. However, this approach is under review and NOAA may wait until the instruments are fully developed before turning them over to the system contractor. Table 5 provides a summary of the status of contracts for the GOES-R program.

According to program documentation provided to the Office of Management and Budget in 2005, the official life cycle cost estimate for GOES-R was approximately $6.2 billion (see table 6). However, program officials reported that this estimate was over 2 years old and under review.

At the time of our review, NOAA was planning to launch the first GOES-R series satellite in September 2012. The development of the schedule for launching the satellites was driven by a requirement that the satellites be available to back up the last remaining GOES satellites (GOES-O and GOES-P) should anything go wrong during the planned launches of these satellites. Table 7 provides a summary of the planned launch schedule for the originally planned GOES-R series.

However, NOAA’s plans for the GOES-R procurement are changing because of concerns with potential cost growth. Given its experiences with cost growth on the NPOESS acquisition, NOAA asked program officials to recalculate the total cost of the estimated $6.2 billion GOES-R program. In May 2006, program officials estimated that the life cycle cost could reach $11.4 billion. The agency then requested that the program identify options for reducing the scope of requirements for the satellite series. Program officials reported that there were over 10 viable options under consideration, including options for removing one or more of the planned instruments. The program office also reevaluated its planned acquisition schedule based on the potential program options. Specifically, program officials stated that if there was a decision to make a major change in system requirements, they would likely extend the preliminary design phase, delay the decision to proceed into the development and production phase, and delay the contract award date. At the time of our review, NOAA officials estimated that a decision on the future scope and direction of the program could be made by the end of September 2006.

Recent NOAA Decision on the Direction and Scope of the GOES-R Program

In mid-September 2006, NOAA officials reported that a decision on the future scope and direction of GOES-R had been made—and involved a reduction in the number of satellites and in planned program capabilities, a revised life cycle cost estimate, and the delay of key programmatic milestones. Specifically, NOAA reduced the minimum number of satellites to two. In addition, plans for developing the Hyperspectral Environmental Suite—which was once considered a critical instrument by the agency—were cancelled. Instead, the program office is exploring options that will ensure continuity of sounding data currently provided by the current GOES series. NOAA officials reported that the cost of the restructured program is not known, but some anticipate it will be close to the original program estimate of $6.2 billion. The contract award for the GOES-R system has been pushed out to May 2008. Finally, the planned launch date of the first satellite in the GOES-R series has been delayed until December 2014.

The GOES-R Program Office Has Taken Steps to Address Past Lessons Learned, but Significant Actions Remain

NOAA has taken steps to apply lessons learned from problems encountered on other satellite programs to the GOES-R procurement. Key lessons include (1) establishing realistic cost and schedule estimates, (2) ensuring sufficient technical readiness of the system’s components prior to key decisions, (3) providing sufficient management at government and contractor levels, and (4) performing adequate senior executive oversight to ensure mission success. NOAA has established plans designed to mitigate the problems faced in past acquisitions; however, many activities remain to fully address these lessons. Until it completes these activities, NOAA faces an increased risk that the GOES-R program will repeat the increased cost, schedule delays, and performance shortfalls that have plagued past procurements.

Efforts to Improve Reliability of Cost and Schedule Estimates are Under Way, but Key Steps Remain in Reconciling Cost Estimates

We and others have reported that space system acquisitions are strongly biased to produce unrealistically low cost and schedule estimates in the acquisition process. Our past work on military space acquisitions has indicated that during program formulation, the competition to win funding is intense and has led program sponsors to minimize their program cost estimates. NOAA programs face similar unrealistic estimates. For example, the total development cost of the GOES I-M acquisition was over three times greater than planned, escalating from $640 million to $2 billion. Additionally, the delivery of the first satellite was delayed by 5 years.

NOAA has several efforts under way to improve the reliability of its cost and schedule estimates for the GOES-R program. NOAA’s Chief Financial Officer has contracted with a cost-estimating firm to complete an independent cost estimate, while the GOES-R program office has hired a support contractor to assist with its internal program cost estimating. The program office is re-assessing its estimates based on preliminary information from the three vendors contracted to develop preliminary designs for the overall GOES-R system. Once the program office and independent cost estimates are completed, program officials intend to compare them and to develop a revised programmatic cost estimate that will be used in its decision on whether to proceed into system development and production. In addition, NOAA has planned for an independent review team—consisting of former senior industry and government space acquisition experts—to provide an assessment of the program office and independent cost estimates for this decision milestone. To improve its schedule reliability, the program office is currently conducting a schedule risk analysis in order to estimate the amount of adequate reserve funds and schedule margin needed to deal with unexpected problems and setbacks. Finally, the NOAA Observing System Council submitted a prioritized list of GOES-R system requirements to the Commerce Undersecretary for approval. This list is expected to allow the program office to act quickly in deleting lower priority requirements in the event of severe technical challenges or shifting funding streams.

While NOAA acknowledges the need to establish realistic cost and schedule estimates, several hurdles remain. As discussed earlier, the agency was considering—during the time of our review—reducing the requirements for the GOES-R program to mitigate the increased cost estimates for the program. Prior to this decision, the agency’s efforts to establish realistic cost estimates could not be fully effective in addressing this lesson. In addition, NOAA suspended the work being performed by its independent cost estimator. Now that the program scope and direction is being further defined, it will be important for the agency to restart this work. Further, the agency has not yet developed a process to evaluate and reconcile the independent and program office cost estimates once final program decisions are made. Without this process, the agency may lack the objectivity necessary to counter the optimism of program sponsors and is more likely to move forward with an unreliable estimate. Until it completes this activity, NOAA faces an increased risk that the GOES-R program will repeat the cost increases and schedule delays that have plagued past procurements.

Preliminary Studies Are Under Way, but Steps Remain in Determining Components’ Technical Maturity

Space programs often experience unforeseen technical problems in the development of critical components as a result of having insufficient knowledge of the components and their supporting technologies prior to key decision points. One key decision point is when an agency decides on whether the component is sufficiently ready to proceed from a preliminary study phase into a development phase; this decision point results in the award of the development contract. Another key decision point occurs during the development phase when an agency decides whether the component is ready to proceed from design into production (also called the critical design review). Without sufficient technical readiness at these milestones, agencies could proceed into development contracts on components that are not well understood and enter into the production phase of development with technologies that are not yet mature.

In 1997, NOAA began preliminary studies on technologies that could be used on the GOES-R instruments. These studies target existing technologies and assessed how they could be expanded for GOES-R. The program office is also conducting detailed trade-off studies on the integrated system to improve its ability to make decisions that balance performance, affordability, risk, and schedule. For instance, the program office is analyzing the potential architectures for the GOES-R constellation of satellites—the quantity and configuration of satellites, including how the instruments will be distributed over these satellites. These studies are expected to allow for a more mature definition of the system specifications.

NOAA has also developed plans to have an independent review team assess project status on an annual basis once the overall system contract has been awarded. In particular, this team will review technical, programmatic, and management areas; identify any outstanding risks; and recommend corrective actions. This measure is designed to ensure that sufficient technical readiness has been reached prior to the critical design review milestone. The program office’s ongoing studies and plans are expected to provide greater insight into the technical requirements for key system components and to mitigate the risk of unforeseen problems in later acquisition phases.

However, the progress currently being made on a key instrument currently under development—the Advanced Baseline Imager—has experienced technical problems and could be an indication of more problems to come in the future. These problems relate to, among other things, the design complexity of the instrument’s detectors and electronics. As a result, the contractor is experiencing negative cost and schedule performance trends. As of May 2006, the contractor incurred a total cost overrun of almost $6 million with the instrument’s development only 28 percent complete. In addition, from June 2005 to May 2006, it was unable to complete approximately $3.3 million worth of work. Unless risk mitigation actions are aggressively pursued to reverse these trends, we project the cost overrun at completion to be about $23 million.

While NOAA expects to make a decision on whether to move the instrument into production (a milestone called the critical design review) in January 2007, the contractor’s current performance raises questions as to whether the instrument designs will be sufficiently mature by that time. Further, the agency does not have a process to validate the level of technical maturity achieved on this instrument or to determine whether the contractor has implemented sound management and process engineering to ensure that the appropriate level of technical readiness can be achieved prior to the decision milestone. Until it does so, NOAA risks making a poor decision based on inaccurate or insufficient information—which could lead to unforeseen technical problems in the development of this instrument.

Efforts to Strengthen Government and Contractor Management are Under Way, but Significant Work on Program Controls Remain

In the past, we have reported on poor performance in the management of satellite acquisitions. The key drivers of poor management included inadequate systems engineering and earned value management capabilities, unsuitable allocation of contract award fees, inadequate levels of management reserve, and inefficient decision-making and reporting structure within the program office.

NOAA has taken numerous steps to restructure its management approach on the GOES-R procurement in an effort to improve performance and to avoid past mistakes. These steps include:

The program office revised its staffing profile to provide for government staff to be located on-site at prime contractor and key subcontractor locations.

The program office plans to increase the number of resident systems engineers from 31 to 54 to provide adequate government oversight of the contractor’s system engineering, including verification and validation of engineering designs at key decision points (such as the critical design review milestone).

The program office has better defined the role and responsibilities of the program scientist, the individual who is expected to maintain an independent voice with regard to scientific matters and advise the program manager on related technical issues and risks.

The program office also intends to add three resident specialists in earned value management to monitor contractor cost and schedule performance.

NOAA has work under way to develop the GOES-R contract award fee structure and the award fee review board that is consistent with our recent findings, the Commerce Inspector General’s findings, and other best practices, such as designating a non-program executive as the fee-determining official to ensure objectivity in the allocation of award fees.

NOAA and NASA have implemented a more integrated management approach that is designed to draw on NASA’s expertise in satellite acquisitions and increase NOAA’s involvement on all major components of the acquisition.

The program office reported that it intended to establish a management reserve of 25 percent consistent with the recommendations of the Defense Science Board Report on Acquisition of National Security Space Programs.

While these steps should provide more robust government oversight and independent analysis capabilities, more work remains to be done to fully address this lesson. Specifically, the program office has not determined the appropriate level of resources it needs to adequately track and oversee the program and the planned addition of three earned value management specialists may not be enough as acquisition activities increase. By contrast, after its recent problems and in response to the independent review team findings, NPOESS program officials plan to add 10 program staff dedicated to earned value, cost, and schedule analysis. An insufficient level of established capabilities in earned value management places the GOES-R program office at risk of making poor decisions based on inaccurate and potentially misleading information. Finally, while NOAA officials believe that assuming sole responsibility for the acquisition of GOES-R will improve their ability to manage the program effectively, this change also elevates NOAA’s risk for mission success. Specifically, NOAA is taking on its first major system acquisition and an increased risk due to its lack of experience. Until it fully addresses the lesson of ensuring an appropriate level of resources to oversee its contractor, NOAA faces an increased risk that the GOES-R program will repeat the management and contractor performance shortfalls that have plagued past procurements.

NOAA Has Established a Senior Executive Committee to Perform Oversight Role

We and others have reported on NOAA’s significant deficiencies in its senior executive oversight of NPOESS. The lack of timely decisions and regular involvement of senior executive management was a critical factor in the program’s rapid cost and schedule growth.

NOAA formed its program management council in response to the lack of adequate senior executive oversight on NPOESS. In particular, this council is expected to provide regular reviews and assessments of selected NOAA programs and projects—the first of which is the GOES-R program. The council is headed by the NOAA Deputy Undersecretary and includes senior officials from Commerce and NASA. The council is expected to hold meetings to discuss GOES-R program status on a monthly basis and to approve the program’s entry into subsequent acquisition phases at key decision milestones—including contract award and critical design reviews, among others. Since its establishment in January 2006, the council has met regularly and has established a mechanism for tracking action items to closure.

The establishment of the NOAA Program Management Council is a positive action that should support the agency’s senior-level governance of the GOES-R program. In moving forward, it is important that this council continue to meet on a regular basis and exercise diligence in questioning the data presented to it and making difficult decisions. In particular, it will be essential that the results of all preliminary studies and independent assessments on technical maturity of the system and its components be reviewed by this council so that an informed decision can be made about the level of technical complexity it is taking on when proceeding past these key decision milestones. In light of the recent uncertainty regarding the future scope and cost of the GOES-R program, the council’s governance will be critical in making those difficult decisions in a timely manner.

Implementation of GAO Recommendations Should Improve NOAA’s Efforts to Implement Lessons Learned

To improve NOAA’s ability to effectively manage the GOES-R procurement, in our accompanying report, we recommended that the Secretary direct its NOAA Program Management Council to take the following three actions:

Once the scope of the program has been finalized, establish a process for objectively evaluating and reconciling the government and independent life cycle cost estimates.

Perform a comprehensive review of the Advanced Baseline Imager, using system engineering experts, to determine the level of technical maturity achieved on the instrument, to assess whether the contractor has implemented sound management and process engineering, and to assert that the technology is sufficiently mature before moving the instrument into production.

Seek assistance from an independent review team to determine the appropriate level of resources needed at the program office to adequately track and oversee the contractor’s earned value management. Among other things, the program office should be able to perform a comprehensive integrated baseline review after system development contract award, provide surveillance of contractor earned value management systems, and perform project scheduling analyses and cost estimates.

In written comments, Commerce agreed with our recommendations and provided information on its plans to implement our recommendations. In particular, Commerce intends to establish a process for evaluating and reconciling the various cost estimates and to analyze this process and the results with an independent review team comprised of recognized satellite acquisition experts. The agency is also planning to have this independent review team provide assessments of the Advanced Baseline Imager’s technical maturity and the adequacy of the program management’s staffing plans.

In summary, the procurement of the next series of geostationary environmental satellites—called the GOES-R series—is at a critical juncture. Recent concerns about the potential for cost growth on the GOES-R procurement have led the agency to reduce the scope of requirements for the satellite series. According to NOAA officials, the current plans call for acquiring 2 satellites and moving away from a technically complex new instrument in favor of existing technologies. While reducing the technical complexity of the system prior to contract award and defining an affordable program are sound business practices, it will be important for NOAA to balance these actions with the agencies’ long term need for improving geostationary satellites over time.

While NOAA is positioning itself to improve the acquisition of this system by incorporating the lessons learned from other satellite procurements including the need to establish realistic cost estimates, ensure sufficient government and contractor management, and obtain effective executive oversight, further steps remain to fully address selected lessons and thereby mitigate program risks. Specifically, NOAA has not yet developed a process to evaluate and reconcile the independent and government cost estimates. In addition, NOAA has not yet determined how it will ensure that a sufficient level of technical maturity will be achieved in time for an upcoming decision milestone or determined the appropriate level of resources it needs to adequately track and oversee the program using earned value management. Moreover, problems that are frequently experienced on major satellite acquisitions, including insufficient technical maturity, overly aggressive schedules, inadequate systems engineering capabilities, and insufficient management reserve will need to be closely monitored throughout this critical acquisition’s life cycle. To NOAA’s credit, it has begun to develop plans for implementing our recommendations. These plans include, among other things, establishing a process to evaluate and reconcile the various cost estimates and obtaining assessments from an independent review team on the technical maturity of a key instrument in development and the adequacy of the program management’s staffing plans. However, until it addresses these lessons, NOAA faces an increased risk that the GOES-R program will repeat the increased cost, schedule delays, and performance shortfalls that have plagued past procurements.

Mr. Chairman, 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 Carol Cha, Neil Doherty, Nancy Glover, Kush Malhotra, Colleen Phillips, and Karen Richey.

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