Geostationary Operational Environmental Satellites
Additional Action Needed to Incorporate Lessons Learned from Other Satellite Programs Gao ID: GAO-06-1129T September 29, 2006The National Oceanic and Atmospheric Administration (NOAA) plans to procure the next generation of geostationary operational environmental satellites, called the Geostationary Operational Environmental Satellites-R series (GOES-R). This new series is considered critical to the United States' ability to maintain the continuity of data required for weather forecasting through the year 2028. GAO was asked to summarize and update its report previously issued to the Subcommittee on Environment, Technology, and Standards--Geostationary Operational Environmental Satellites: Steps Remain in Incorporating Lessons Learned from Other Satellite Programs, GAO-06-993 (Washington, D.C.: Sept. 6, 2006). This report (1) determines the status of and plans for the GOES-R series procurement, and (2) identifies and evaluates the actions that the program management team is taking to ensure that past problems experienced in procuring other satellite programs are not repeated.
At the time of our review, NOAA was nearing the end of the preliminary design phase of its GOES-R system--which was estimated to cost $6.2 billion and scheduled to have the first satellite ready for launch in 2012. It expected to award a contract in August 2007 to develop this system. However, recent analyses of the GOES-R program cost--which in May 2006 the program office estimated could reach $11.4 billion--have led the agency to consider reducing the scope of requirements for the satellite series. Since our report was issued, NOAA officials told GAO that the agency has made a decision to reduce the scope of the program to a minimum of two satellites and to reduce the complexity of the program by canceling a technically complex instrument. NOAA has taken steps to implement lessons learned from past satellite programs, but more remains to be done. Prior satellite programs--including a prior GOES series, a polar-orbiting environmental satellite series, and various military satellite programs--often experienced technical challenges, cost overruns, and schedule delays. Key lessons from these programs include the need to (1) establish realistic cost and schedule estimates, (2) ensure sufficient technical readiness of the system's components prior to key decisions, (3) provide sufficient management at government and contractor levels, and (4) perform adequate senior executive oversight to ensure mission success. NOAA has established plans to address these lessons by conducting independent cost estimates, performing preliminary studies of key technologies, placing resident government offices at key contractor locations, and establishing a senior executive oversight committee. However, many steps 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.
GAO-06-1129T, Geostationary Operational Environmental Satellites: Additional Action Needed to Incorporate Lessons Learned from Other Satellite Programs
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United States Government Accountability Office:
GAO:
Testimony before the Committee on Science, House of Representatives:
For Release on Delivery Expected at 10:00 a.a. EDT:
Friday, September 29, 2006:
Geostationary Operational Environmental Satellites:
Additional Action Needed to Incorporate Lessons Learned from Other
Satellite Programs:
Statement of David A. Powner:
Director, Information Technology Management Issues:
GAO-06-1129T:
GAO Highlights:
Highlights of GAO-06-1129T, a testimony before the Committee on
Science, House of Representatives
Why GAO Did This Study:
The National Oceanic and Atmospheric Administration (NOAA) plans to
procure the next generation of geostationary operational environmental
satellites, called the Geostationary Operational Environmental
Satellites-R series (GOES-R). This new series is considered critical to
the United States‘ ability to maintain the continuity of data required
for weather forecasting through the year 2028.
GAO was asked to summarize and update its report previously issued to
the Subcommittee on Environment, Technology, and
Standards”Geostationary Operational Environmental Satellites: Steps
Remain in Incorporating Lessons Learned from Other Satellite Programs,
GAO-06-993 (Washington, D.C.: Sept. 6, 2006). This report (1)
determines the status of and plans for the GOES-R series procurement,
and (2) identifies and evaluates the actions that the program
management team is taking to ensure that past problems experienced in
procuring other satellite programs are not repeated.
What GAO Found:
At the time of our review, NOAA was nearing the end of the preliminary
design phase of its GOES-R system”which was estimated to cost $6.2
billion and scheduled to have the first satellite ready for launch in
2012. It expected to award a contract in August 2007 to develop this
system. However, recent analyses of the GOES-R program cost”which in
May 2006 the program office estimated could reach $11.4 billion”have
led the agency to consider reducing the scope of requirements for the
satellite series. Since our report was issued, NOAA officials told GAO
that the agency has made a decision to reduce the scope of the program
to a minimum of two satellites and to reduce the complexity of the
program by canceling a technically complex instrument.
NOAA has taken steps to implement lessons learned from past satellite
programs, but more remains to be done. Prior satellite
programs”including a prior GOES series, a polar-orbiting environmental
satellite series, and various military satellite programs”often
experienced technical challenges, cost overruns, and schedule delays.
Key lessons from these programs include the need to (1) establish
realistic cost and schedule estimates, (2) ensure sufficient technical
readiness of the system‘s components prior to key decisions, (3)
provide sufficient management at government and contractor levels, and
(4) perform adequate senior executive oversight to ensure mission
success. NOAA has established plans to address these lessons by
conducting independent cost estimates, performing preliminary studies
of key technologies, placing resident government offices at key
contractor locations, and establishing a senior executive oversight
committee. However, many steps remain to fully address these lessons
(see table). 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.
Table: Key Lessons Learned and the Activities Taken or Remaining to
Fully Address Them:
Lessons learned: Establish realistic cost and schedule estimates;
Actions taken or under way:
* Obtaining multiple independent cost estimates;
* Conducting risk analysis of schedule estimates; Actions remaining:
Ensuring objectivity when reconciling alternative estimates.
Lessons learned: Ensure sufficient technical readiness of the system‘s
components prior to critical decisions; Actions taken or under way:
Conducted preliminary studies of key technologies and components;
Actions remaining: Ensuring sufficient technical maturity before
proceeding to production.
Lessons learned: Provide sufficient management of contractors and
subcontractors; Actions taken or under way:
* Increased presence at contractor sites;
* Plan to increase number of system engineers;
* Plan to hire three specialists in earned value; Actions remaining:
Assessing the number of earned value specialists needed commensurate
with increased acquisition activities.
Lessons learned: Perform effective executive-level oversight; Actions
taken or under way: NOAA‘s program management council meets regularly
to oversee project; Actions remaining: [Empty].
Source: GAO analysis.
[End of Table]
What GAO Recommends:
In our report, we make recommendations to the Secretary of Commerce to
improve NOAA‘s ability to effectively manage the GOES-R procurement. In
written comments, the Department of Commerce agreed with the
recommendations and identified plans for implementing them.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-1129T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact David Powner at (202) 512-
9286 or pownerd@gao.gov.
[End of Section]
Mr. Chairman and Members of the Committee:
We appreciate the opportunity to participate in today's hearing on the
planned Geostationary Operational Environmental Satellites-R (GOES-R)
program. The GOES-R series is to replace the current series of
satellites which will likely begin to reach the end of their useful
lives in approximately 2012. This new series is expected to mark the
first major technological advance in GOES instrumentation since 1994.
It is also considered critical to the United States' ability to
maintain the continuity of data required for weather forecasting
through the year 2028.
As requested, our testimony summarizes and updates a report we
previously issued to your subcommittee that (1) determines the status
of and plans for the GOES-R series procurement, and (2) identifies and
evaluates the actions that the program management team is taking to
ensure that past problems experienced in procuring other satellite
programs are not repeated.[Footnote 1] In preparing for this testimony,
we relied on our work supporting the accompanying report. That report
contains a detailed overview of our scope and methodology. All the work
on which this testimony is based was performed in accordance with
generally accepted government auditing standards.
Results in Brief:
The National Oceanic and Atmospheric Administration (NOAA) is nearing
the end of the preliminary design phase of its GOES-R system, which was
initially estimated to cost $6.2 billion and scheduled to have the
first satellite ready for launch in 2012. At the time of our review,
NOAA had issued contracts for the preliminary design of the overall
GOES-R system to three vendors and expected to award a contract to one
of these vendors in August 2007 to develop the satellites. In addition,
to reduce the risks associated with developing new instruments, NOAA
issued contracts for the early development of two instruments and for
the preliminary designs of three other instruments. The agency plans to
turn these instrument contracts over to the vendor that is awarded the
contract for the overall GOES-R program. However, recent analyses of
the GOES-R program cost--which in May 2006 the program office estimated
could reach $11.4 billion--have led the agency to consider reducing the
scope of requirements for the satellite series. 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. Since then, NOAA officials told us that the agency has made a
decision to reduce the scope and complexity of the GOES-R program by
reducing the number of satellites and canceling a technically complex
instrument.
NOAA has taken steps to implement lessons learned from past satellite
programs, but more remains to be done. Prior satellite programs--
including a prior GOES series, a polar-orbiting environmental satellite
series, and various military satellite programs--often experience
technical challenges, cost overruns, and schedule delays. Key lessons
from these programs include the need to (1) establish realistic cost
and schedule estimates, (2) ensure sufficient technical readiness of
the system's components prior to key decisions, (3) provide sufficient
management at government and contractor levels, and (4) perform
adequate senior executive oversight to ensure mission success. NOAA has
established plans to address these lessons by conducting independent
cost estimates, performing preliminary studies of key technologies,
placing resident government offices at key contractor locations, and
establishing a senior executive oversight committee. However, many
steps remain to fully address these lessons. 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, nor has it
determined the appropriate level of resources it needs to adequately
track and oversee the program using earned value management.[Footnote
2] 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.
To improve NOAA's ability to effectively manage the GOES-R procurement,
in our accompanying report,[Footnote 3] we made recommendations to the
Secretary of Commerce to direct its NOAA Program Management Council to
establish a process for objectively evaluating and reconciling the
government and independent life cycle cost estimates once the program
requirements are finalized; to establish a team of system engineering
experts to perform a comprehensive review of the Advanced Baseline
Imager instrument to determine the level of technical maturity achieved
on the instrument before moving the instrument into production; and to
seek assistance in determining the appropriate levels of resources
needed at the program office to adequately track and oversee the
contractor's earned value management data. In written comments, the
Department of Commerce agreed with our recommendations and provided
information on its plans to implement our recommendations.
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.
Figure 1: Approximate GOES Geographic Coverage:
[See PDF for image]
Sources: NOAA (data), Map Resources (map).
[End of figure]
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).
Table 1: Summary of the Procurement History of GOES:
Series name: Original Goes[B];
Procurement duration[A]: 1970-1987;
Satellites: 1, 2, 3, 4, 5, 6, 7.
Series name: GOES I-M;
Procurement duration[A]: 1985-2001;
Satellites: 8, 9, 10, 11, 12.
Series name: GOES-N;
Procurement duration[A]: 1998-2011;
Satellites: 13, O, P, Q[C].
Series name: GOES-R;
Procurement duration[A]: 2007-2020;
Satellites: R, S, T, U.
Source: GAO analysis of NOAA data.
[A] Duration includes time from contract award to final satellite
launch.
[B] The procurement of these satellites consisted of four separate
contracts for (1) two early prototype satellites and GOES-1, (2) GOES-
2 and -3, (3) GOES-4 through -6, and (4) GOES-G (failed on launch) and
GOES-7.
[C] NOAA decided not to exercise the option for this satellite.
[End of table]
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.[Footnote 4] 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.
Figure 2: Generic GOES Data Relay Pattern:
[See PDF for image]
Source: GAO analysis of NOAA data.
[End of figure]
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.
Table 2: Summary of Key GOES-R System Improvements:
Key feature: Total products;
GOES-N (current): 41;
GOES-R: ~152.
Key feature: Downlink rate of raw data collected by instruments (from
satellite to ground stations);
GOES-N (current): 2.6 Mbps;
GOES-R: 132 Mbps.
Key feature: Broadcast rate of processed GOES data (from satellite to
users);
GOES-N (current): 2.1 Mbps;
GOES-R: 17-24 Mbps.
Key feature: Raw data storage (the length of time that raw data will be
stored at ground stations);
GOES-N (current): 0 days;
GOES-R: 30 days.
Source: GAO analysis of NOAA data.
[End of table]
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.[Footnote 5] Table 3
summarizes the originally planned instruments and their expected
capabilities.
Table 3: Expected GOES-R Series Instruments, as of June 2006:
Planned instrument: Advanced Baseline Imager;
Description: Expected to provide variable area imagery and radiometric
information of the earth's surface, atmosphere, and cloud cover. Key
features include;
monitoring and tracking severe weather,;
providing images of clouds to support forecasts, and;
providing higher resolution, faster coverage, and broader coverage
simultaneously.
Planned instrument: Hyperspectral Environmental Suite;
Description: Expected to provide information about the earth's surface
to aid in the prediction of weather and climate monitoring. Key
features include;
providing atmospheric moisture and temperature profiles to support
forecasts and climate monitoring,;
monitoring coastal regions for ecosystem health, water quality, coastal
erosion, and harmful algal blooms, and;
providing higher resolution and faster coverage.
Planned instrument: Space Environmental In-Situ Suite;
Description: Expected to provide information on space weather to aid in
the prediction of particle precipitation, which causes disturbance and
disruption of radio communications and navigation systems. Key features
include;
measuring magnetic fields and charged particles,;
providing improved heavy ion detection, adding low energy electrons and
protons, and;
enabling early warnings for satellite and power grid operation, telecom
services, astronauts, and airlines.
Planned instrument: Solar Imaging Suite;
Description: Expected to provide coverage of the entire dynamic range
of solar X-ray features, from coronal holes to X-class flares, as well
as estimate the measure of temperature and emissions. Key features
include;
providing images of the sun and measuring solar output to monitor solar
storms and;
providing improved imager capability.
Planned instrument: Geostationary Lightning Mapper;
Description: Expected to continuously monitor lightning activity over
the United States and provide a more complete dataset than previously
possible. Key features include;
detecting lightning strikes as an indicator of severe storms and;
providing a new capability to GOES that only previously existed on
polar satellites.
Source: GAO analysis of NOAA data.
[End of table]
GOES-R Program Office Structure:
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).[Footnote 6] Table 4 lists key problems experienced with these
programs.
Table 4: Key Problems Experienced on Selected Major Space Systems:
Problem: Insufficient technical readiness prior to critical decision
points;
NPOESS: [Empty];
GOES I-M: [Empty];
SBIRS-High: [Empty];
AEHF: [Empty].
Problem: Inadequate preliminary studies prior to the decision to award
a development contract;
NPOESS: X;
GOES I-M: X;
SBIRS-High: X;
AEHF: [Empty].
Problem: Insufficient technical maturity prior to the decision to move
to production;
NPOESS: X;
GOES I-M: X;
SBIRS-High: X;
AEHF: X.
Problem: Unrealistic cost and schedule estimates;
NPOESS: [Empty];
GOES I-M: [Empty];
SBIRS-High: [Empty];
AEHF: [Empty].
Problem: Optimistic assumptions including: savings from heritage
systems;
NPOESS: X;
GOES I-M: X;
SBIRS- High: X;
AEHF: [Empty].
Problem: Optimistic assumptions including: readiness of technology
maturity;
NPOESS: X;
GOES I-M: X;
SBIRS-High: X;
AEHF: X.
Problem: Optimistic assumptions including: constant and available
industrial base;
NPOESS: [Empty];
GOES I-M: [Empty];
SBIRS-High: X;
AEHF: [Empty].
Problem: Optimistic assumptions including: no weight growth;
NPOESS: X;
GOES I-M: [Empty];
SBIRS-High: X;
AEHF: X.
Problem: Optimistic assumptions including: no requirements growth;
NPOESS: [Empty];
GOES I-M: [Empty];
SBIRS-High: [Empty];
AEHF: X.
Problem: Optimistic assumptions including: savings from lot buys versus
single-unit purchase;
NPOESS: [Empty];
GOES I-M: [Empty];
SBIRS-High: X;
AEHF: [Empty].
Problem: Optimistic assumptions including: overly aggressive schedule;
NPOESS: X;
GOES I-M: X;
SBIRS- High: X;
AEHF: X.
Poor program and contractor management:
Problem: Quality and subcontractor issues;
NPOESS: X;
GOES I-M: X;
SBIRS-High: X;
AEHF: X.
Problem: Inadequate systems engineering capabilities;
NPOESS: X;
GOES I-M: X;
SBIRS-High: X;
AEHF: X.
Problem: Inadequate earned value management capabilities;
NPOESS: X;
GOES I-M: [Empty];
SBIRS-High: X;
AEHF: X.
Problem: Insufficient management reserve;
NPOESS: X;
GOES I-M: [Empty];
SBIRS-High: [Empty];
AEHF: X.
Problem: Ineffective contract award fee structure;
NPOESS: X;
GOES I-M: X;
SBIRS-High: X;
AEHF: [Empty].
Problem: Poor senior executive level oversight:
Problem: Infrequent meetings;
NPOESS: X;
GOES I-M: [Empty];
SBIRS-High: [Empty];
AEHF: [Empty].
Problem: Inability to make timely decisions;
NPOESS: X;
GOES I-M: [Empty];
SBIRS-High: [Empty];
AEHF: [Empty].
Problem: Other;
NPOESS: [Empty];
GOES I-M: [Empty];
SBIRS-High: [Empty];
AEHF: [Empty].
Problem: Unstable funding stream;
NPOESS: X;
GOES I-M: [Empty];
SBIRS- High: X;
AEHF: X.
Problem: Unstable requirements;
NPOESS: [Empty];
GOES I-M: [Empty];
SBIRS-High: X;
AEHF: X.
Source: GAO analysis of NOAA and DOD data.
[End of table]
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[Footnote 7]. 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.
Table 5: Status of GOES-R Program Contracts, as of September 6, 2006:
Contract item: Instruments: Advanced Baseline Imager;
Date contract was awarded for design: May 2001;
Planned date contract will be awarded for development: September 2004
(actual).
Contract item: Instruments: Space Environmental In-Situ Suite;
Date contract was awarded for design: December 2004;
Planned date contract will be awarded for development: August 2006;
(actual).
Contract item: Instruments: Solar Imaging Suite;
Date contract was awarded for design: September 2004;
Planned date contract will be awarded for development: September 2006.
Contract item: Instruments: Hyperspectral Environmental Suite;
Date contract was awarded for design: June 2004;
Planned date contract will be awarded for development: June 2007.
Contract item: Instruments: Geostationary Lightning Mapper;
Date contract was awarded for design: February 2006;
Planned date contract will be awarded for development: August 2007.
Contract item: GOES-R System: Acquisition and Operations;
Date contract was awarded for design: October 2005;
Planned date contract will be awarded for development: August 2007.
Source: NOAA.
[End of table]
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.
Table 6: GOES-R Program Life Cycle Cost Estimate, as of June 2006:
Major cost category: System level;
Dollars in millions: $533.
Major cost category: Space segment;
Major cost category: Ground segments;
Dollars in millions: 729.
Major cost category: Launch segment;
Dollars in millions: 686.
Major cost category: Operations and support;
Dollars in millions: 1,147.
Major cost category: Government program office;
Dollars in millions: 637.
Major cost category: Total;
Dollars in millions: $6,226.
Source: NOAA.
[End of table]
At the time of our review, NOAA was planning to launch the first GOES-
R series satellite in September 2012.[Footnote 8] 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.
Table 7: GOES-R Program Schedule, as of September 6, 2006:
Milestone: GOES-O launch[A];
Planned date: April 2008.
Milestone: GOES-P launch[A];
Planned date: October 2009[B].
Milestone: GOES-R satellite available for launch;
Planned date: September 2012.
Milestone: GOES-S satellite available for launch;
Planned date: April 2014.
Milestone: GOES-T satellite available for launch;
Planned date: October 2015.
Milestone: GOES-U satellite available for launch;
Planned date: April 2017.
Milestone: End of operations and maintenance;
Planned date: 2028.
Source: NOAA.
[A] GOES-O and GOES-P are not part of the GOES-R series program. Their
launch dates are provided because of their relevance to the GOES-R
series satellite schedules.
[B] Because GOES satellites have been operating longer than expected,
NOAA is considering moving the planned launch of the GOES-P satellite
to July 2011.
[End of table]
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.[Footnote 9] 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.[Footnote 10] 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[Footnote 11] 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.[Footnote 12] The key drivers of poor management
included inadequate systems engineering and earned value
management[Footnote 13] 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.[Footnote 14]
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.[Footnote 15] 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,[Footnote 16] we recommended that the
Secretary direct its NOAA Program Management Council to take the
following three actions:
² 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.
² 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.
² 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.
FOOTNOTES
[1] GAO, Geostationary Operational Environmental Satellites: Steps
Remain in Incorporating Lessons Learned from Other Satellite Programs,
GAO-06-993 (Washington, D.C.: Sept. 6, 2006).
[2] Earned value management is a method that compares the value of work
accomplished during a given period with that of the work expected in
that period.
[3] GAO-06-993.
[4] Satellites in a series are identified by letters of the alphabet
when they are on the ground and by numbers once they are in orbit.
[5] After our report was issued on September 6, 2006, NOAA officials
told us that the agency has decided to cancel its plans for the
development of the Hyperspectral Environmental Suite but expects to
explore options that will ensure continuity of data provided by the
current GOES series.
[6] GAO, Defense Acquisitions: Space System Acquisition Risks and Keys
to Addressing Them, GAO-06-776R (Washington, D.C.: June 1, 2006); Polar-
orbiting Operational Environmental Satellites: Cost Increases Trigger
Review and Place Program's Direction on Hold, GAO-06-573T (Washington,
D.C.: Mar. 30, 2006); Polar-orbiting Operational Environmental
Satellites: Technical Problems, Cost Increases, and Schedule Delays
Trigger Need for Difficult Trade-off Decisions, GAO-06- 249T
(Washington, D.C.: Nov. 16, 2005); Polar-orbiting Environmental
Satellites: Information on Program Cost and Schedule Changes, GAO-04-
1054 (Washington, D.C.: Sept. 30, 2004); Defense Acquisitions: Despite
Restructuring, SBIRS High Program Remains at Risk of Cost and Schedule
Overruns, GAO-04-48 (Washington, D.C.: Oct. 31, 2003); Military Space
Operations: Common Problems and Their Effects on Satellite and Related
Acquisitions, GAO-03-825R (Washington, D.C.: June 2, 2003); Defense
Acquisitions: Assessments of Major Weapon Programs, GAO-03-476
(Washington, D.C.: May 15, 2003); Weather Satellites: Action Needed to
Resolve Status of the U.S. Geostationary Satellite Program, GAO/NSIAD-
91-252 (Washington, D.C.: July 24, 1991). Defense Science Board/Air
Force Scientific Advisory Board Joint Task Force, Report on the
Acquisition of National Security Space Programs (May 2003).
[7] The development contract for the Space Environmental In-Situ Suite
instrument was issued after we completed our review.
[8] After our report was issued on September 6, 2006, NOAA officials
told us that the planned launch schedule was being delayed. The
expected launch of the first GOES-R series satellite is now planned for
December 2014.
[9] The Hyperspectral Environmental Suite was intended to be the
successor to the sounder instrument onboard the current GOES series.
The sounder measures radiated energy at different depths (altitudes)
and also records surface and cloud-top temperatures and ozone
distribution.
[10] GAO, Space Acquisitions: Stronger Development Practices and
Investment Planning Needed to Address Continuing Problems, GAO-05-891T
(Washington, D.C.: July 12, 2005). Defense Science Board/Air Force
Scientific Advisory Board Joint Task Force, Report on the Acquisition
of National Security Space Programs (May 2003).
[11] NOAA's Observing System Council is the principal advisory council
for NOAA's earth observation and data management activities. It
includes members from each NOAA line office, other relevant councils,
and program offices. The Assistant Administrator for Satellite and
Information Services and the Assistant Administrator for Weather
Services serve as the co-chairs of the council.
[12] GAO-06-573T, GAO-06-249T, GAO/NSIAD-91-252, Defense Acquisitions:
DOD Has Paid Billions in Award and Incentive Fees Regardless of
Acquisition Outcomes, GAO-06-66 (Washington, D.C.: Dec. 19, 2005), and
Weather Satellites: Cost Growth and Development Delays Jeopardize U.S.
Forecasting Ability, GAO/NSIAD-89-169 (Washington, D.C.: June 30,
1989).
[13] Earned value management is a method, used by DOD for several
decades, to track a contractor's progress in meeting project
deliverables. It compares the value of work accomplished during a given
period with that of the work expected in that period. Differences from
expectations are measured in both cost and schedule variances.
[14] Defense Science Board/Air Force Scientific Advisory Board Joint
Task Force, Report on the Acquisition of National Security Space
Programs (May 2003).
[15] GAO-06-573T; Department of Commerce Office of Inspector General,
Poor Management Oversight and Ineffective Incentives Leave NPOESS
Program Well Over Budget and Behind Schedule, OIG-17794-6-0001 (May 8,
2006).
[16] GAO-06-993.
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