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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

Summary:
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. 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.