Geostationary Operational Environmental Satellites
Further Actions Needed to Effectively Manage Risks Gao ID: GAO-08-183T October 23, 2007The National Oceanic and Atmospheric Administration (NOAA), with the aid of the National Aeronautics and Space Administration (NASA), 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 its report on the GOES-R series. This report (1) assesses the status and revised plans for the GOES-R procurement and (2) evaluates whether NOAA is adequately mitigating key technical and programmatic risks facing the program. To conduct this review, GAO analyzed contractor and program data and interviewed officials from NOAA and NASA.
NOAA has made progress in planning its GOES-R procurement--which is estimated to cost $7 billion and scheduled to have the first satellite ready for launch in 2014--but cost and schedules are likely to grow. Specifically, the agency completed preliminary design studies of GOES-R and recently decided to separate the space and ground elements of the program into two separate development contracts. However, this change in strategy has delayed a planned September 2007 decision to proceed with the acquisition. Further, independent estimates are higher than the program's current cost estimate and convey a low level of confidence in the program's schedule. Independent studies show that the estimated program could cost about $2 billion more, and the first satellite launch could be delayed by 2 years. As NOAA works to reconcile the independent estimate with its own program office estimate, costs are likely to grow and schedules are likely to be delayed. To address cost, schedule, and technical risks, the GOES-R program has established a risk management program and has taken steps to mitigate selected risks. For example, as of July 2007, the program office identified the lack of an integrated master schedule to be its highest priority risk and established plans to bring this risk to closure. However, more remains to be done to fully address risks. Specifically, the program has multiple risk watchlists that are not always consistent and key risks are missing from the watchlists, including risks associated with unfilled executive positions, limitations in NOAA's insight into NASA's deliverables, and insufficient funds for unexpected costs--called management reserves. As a result, the GOES-R program is at risk that problems will not be identified or mitigated in a timely manner and could lead to program cost overruns and schedule delays.
GAO-08-183T, Geostationary Operational Environmental Satellites: Further Actions Needed to Effectively Manage Risks
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Testimony:
Before the Subcommittee on Energy and the Environment, House Committee
on Science and Technology:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 2:00 p.m. EDT:
Tuesday, October 23, 2007:
Geostationary Operational Environmental Satellites:
Further Actions Needed to Effectively Manage Risks:
Statement of David A. Powner, Director:
Information Technology Management Issues:
GOES-R:
GAO-08-183T:
GAO Highlights:
Highlights of GAO-08-183T, a testimony before the Subcommittee on
Energy and Environment, House Committee on Science and Technology.
Why GAO Did This Study:
The National Oceanic and Atmospheric Administration (NOAA), with the
aid of the National Aeronautics and Space Administration (NASA), 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 its report being released today on the GOES-
R series. This report (1) assesses the status and revised plans for the
GOES-R procurement and (2) evaluates whether NOAA is adequately
mitigating key technical and programmatic risks facing the program. To
conduct this review, GAO analyzed contractor and program data and
interviewed officials from NOAA and NASA.
What GAO Found:
NOAA has made progress in planning its GOES-R procurement”which is
estimated to cost $7 billion and scheduled to have the first satellite
ready for launch in 2014”but cost and schedules are likely to grow.
Specifically, the agency completed preliminary design studies of GOES-R
and recently decided to separate the space and ground elements of the
program into two separate development contracts. However, this change
in strategy has delayed a planned September 2007 decision to proceed
with the acquisition. Further, independent estimates are higher than
the program‘s current cost estimate and convey a low level of
confidence in the program‘s schedule. Independent studies show that the
estimated program could cost about $2 billion more, and the first
satellite launch could be delayed by 2 years. As NOAA works to
reconcile the independent estimate with its own program office
estimate, costs are likely to grow and schedules are likely to be
delayed.
To address cost, schedule, and technical risks, the GOES-R program has
established a risk management program and has taken steps to mitigate
selected risks. For example, as of July 2007, the program office
identified the lack of an integrated master schedule to be its highest
priority risk and established plans to bring this risk to closure.
However, more remains to be done to fully address risks. Specifically,
the program has multiple risk watchlists that are not always consistent
and key risks are missing from the watchlists, including risks
associated with unfilled executive positions, limitations in NOAA‘s
insight into NASA‘s deliverables, and insufficient funds for unexpected
costs”called management reserves (see table for more details). As a
result, the GOES-R program is at risk that problems will not be
identified or mitigated in a timely manner and could lead to program
cost overruns and schedule delays
What GAO Recommends:
In its report, GAO is making recommendations to the Secretary of
Commerce to improve GOES-R risk management. The Secretary agreed with
the recommendations to use a program level risk list and to add
selected risks to its list, but disagreed that NOAA has insufficient
insight into NASA‘s contracts. However, NOAA has not demonstrated that
it has validated NASA‘s contractor performance and GAO remains
concerned that NOAA lacks the capability to oversee this key aspect of
the program.
Table: Description of Key Risks Missing from GOES-R Risk Lists:
Key Risks: Unfilled GOES-R executive leadership positions; Description:
Two senior program positions”the system program director and deputy
system program director”are currently filled by NASA and NOAA personnel
in an acting capacity until they can be permanently filled by NOAA. The
agency reported that it plans to fill the deputy system program
director role in the near future, but noted that it could take more
than 6 months to fill the system program director role.
Key Risks: Limitations in NOAA‘s insight into NASA‘s deliverables;
Description: The established NOAA/NASA interagency agreements do not
contain provisions that enable NOAA to ensure that monthly contractor
data and reports, submitted by NASA, are reliable and that they
accurately depict contractor performance.
Key Risks: Insufficient management reserve (for unexpected costs) held
by the program and a critical instrument contractor; Description: As of
May 2007, the contractor for a critical instrument”the Advanced
Baseline Imager”had less than 1 percent of funding in reserve to cover
unexpected costs associated with the 40 percent of work left to be
completed. In addition, as a result of addressing issues on the
Advanced Baseline Imager in March 2007, the reserve funding for the
overall GOES-R program dropped below 25 percent”a level that NOAA
reported it intended to establish as a lesson learned from other
satellite acquisitions. As of July 2007, the reserve level was at about
15 percent.
Source: GAO analysis.
[End of table]
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-183T]. For more information, contact
David A. Powner at (202) 512-9286 or pownerd@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
We appreciate the opportunity to participate in today's hearing on the
planned Geostationary Operational Environmental Satellites-R series
(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 2014. 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 the report we issued today on
the GOES-R program. Specifically, we (1) assessed the status and
revised plans for the GOES-R procurement and (2) evaluated whether the
National Oceanic and Atmospheric Administration (NOAA) is adequately
mitigating key technical and programmatic risks facing the GOES-R
program.[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 of the work on
which this testimony is based was performed in accordance with
generally accepted government auditing standards.
Results in Brief:
NOAA has made progress on its GOES-R procurement--which is estimated to
cost $7 billion and scheduled to have the first satellite ready for
launch in 2014--but costs and schedules are likely to grow.
Specifically, NOAA completed preliminary design studies of its GOES-R
acquisition and planned to make a decision to proceed to development
and production in September 2007. In addition, the agency recently
decided to separate the space and ground elements of the program into
two separate contracts to be managed by the National Aeronautics and
Space Administration (NASA) and NOAA, respectively. However, this
change in the GOES-R acquisition strategy has delayed the decision to
proceed with the acquisition. Further, independent estimates are higher
than the program's current cost estimate and convey a low level of
confidence in the program's schedule. Independent studies show that the
estimated program could cost about $2 billion more, and the first
satellite launch could be delayed by 2 years. As NOAA works to
reconcile the independent estimate with its own program office
estimate, costs are likely to grow and schedules are likely to be
delayed. However, NOAA officials stated that while their reconciliation
process is still ongoing, the revised cost estimate will likely be $1
billion more than the current $7 billion and the first satellite launch
will likely be delayed 1 year from 2014, rather than 2 years.
To address cost, schedule, and technical risks, the GOES-R program has
established a risk management program and has taken steps to identify
and mitigate selected risks. For example, as of July 2007, the program
office identified the lack of an integrated master schedule as its
highest priority risk. It also identified other risks including
technical challenges affecting the development of a critical instrument
and the development of requirements between the space and ground
segments. The program has also established plans for bringing these
risks to closure. However, more remains to be done to fully address
risks. Specifically, the program has multiple risk watchlists that are
not always consistent. Further, key risks are missing from the risks
lists, including risks associated with unfilled executive positions,
limitations in NOAA's insight into NASA's deliverables, and
insufficient funds for unexpected costs (called management reserve). As
a result, the program is at risk that problems will not be identified
or mitigated in a timely manner and could lead to program cost overruns
and schedule delays.
To improve NOAA's ability to effectively manage the GOES-R procurement,
in our report being released today, we are making recommendations to
ensure that the GOES-R program office manages, mitigates, and reports
on risks using a more comprehensive program-level risk list. In written
comments, the Secretary of Commerce agreed with our recommendations to
use a program level risk list and to add selected risks to its list,
but disagreed that NOAA has insufficient insight into NASA's contracts.
The Secretary cited an unparalleled transparency between the two
agencies. However, NOAA has not demonstrated that it has validated
NASA's contractor performance and we remain concerned that NOAA lacks
the capability to oversee this important aspect of the program. Given
the past problems NOAA had in obtaining insight into NASA's contracts
and the importance of this interagency relationship to the success of
the GOES-R program, we believe that this issue should be managed and
monitored as a risk.
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. These satellites are uniquely positioned
to provide timely environmental data to meteorologists and their
audiences on the earth's atmosphere, its surface, cloud cover, and the
space environment. They also observe the development of hazardous
weather, such as hurricanes and severe thunderstorms, and track their
movement and intensity to reduce or avoid major losses of property and
life. Furthermore, the satellites' ability to provide broad,
continuously updated coverage of atmospheric conditions over land and
oceans is important to NOAA's weather forecasting operations.
To provide continuous satellite coverage, NOAA acquires several
geostationary 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[C];
Procurement duration[A]: 1970-1987;
Satellites[B]: 1, 2, 3, 4, 5, 6, 7.
Series name: GOES I-M;
Procurement duration[A]: 1985-2001;
Satellites[B]: 8, 9, 10, 11, 12.
Series name: GOES-N;
Procurement duration[A]: 1998-2011;
Satellites[B]: 13, O, P, Q[D].
Series name: GOES-R;
Procurement duration[A]: 2007-2016;
Satellites[B]: R, S.
Source: GAO analysis of NOAA data.
[A] Duration includes time from contract award to final satellite
launch.
[B] 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.
[C] 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.
[D] 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. NOAA is also planning the next generation of
satellites, known as the GOES-R series, which are planned for launch
beginning in 2014.
GOES-R Program--An Overview:
NOAA plans for the GOES-R program to improve on the technology of prior
series, in terms of both system and instrument improvements, 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 number of products;
GOES-N (current): 41;
GOES-R: ~68-120.
Key feature: Downlink rate of raw data collected by instruments (from
satellite to ground stations);
GOES-N (current): 2.6 Mbps;
GOES-R: 70 Mbps.
Key feature: Broadcast rate of processed GOES data (from satellite to
users);
GOES-N (current): 2.1 Mbps;
GOES-R: 40 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: 3 days.
Source: GAO analysis of NOAA data.
[End of table]
In addition to the system improvements, the instruments on the GOES-R
series are expected to significantly increase the clarity and precision
of the observed environmental data. NOAA originally planned to acquire
six different types of instruments. Furthermore, two of these
instruments--the Advanced Baseline Imager and the Hyperspectral
Environmental Suite--were considered to be the most critical because
they would provide data for key weather products. Table 3 summarizes
the originally planned instruments and their expected capabilities.
Table 3: Originally Planned GOES-R Series Instruments, as of August
2006:
Planned instrument: Advanced Baseline Imager (ABI);
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 (HES)[A];
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: Geostationary Lightning Mapper (GLM);
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.
Planned instrument: Magnetometer;
Description: Expected to provide information on the general level of
geomagnetic activity, monitor current systems in space, and permit
detection of magnetopause crossings, sudden storm commencements, and
substorms.
Planned instrument: Space Environmental In-Situ Suite (SEISS);
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 (SIS)[B]; 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.
Source: GAO analysis of NOAA data.
[A] HES was cancelled in September 2006.
[B] SIS development work was divided into two separate acquisitions,
the Solar Ultra Violet Imager and the Extreme Ultraviolet and X-Ray
Irradiance Suite.
[End of table]
More recently, however, NOAA reduced the scope of the GOES-R program
because of expectations of higher costs. In May 2006, the program
office projected that total costs, which were originally estimated to
be $6.2 billion, could reach $11.4 billion. We reported that this led
NOAA to reduce the scope and technical complexity of the baseline
program.[Footnote 2] Specifically, in September 2006, NOAA reduced the
minimum number of satellites from four to two, cancelled plans for
developing the Hyperspectral Environmental Suite, and estimated the
revised program would cost $7 billion. Table 4 provides a summary of
the timeline and scope of these key changes.
Table 4: Key Changes to the GOES-R Program:
Number of satellites;
Baseline program, as of August 2006: 4;
Program with reduced scope, as of September 2006: 2.
Planned instruments;
Baseline program, as of August 2006: 2 critical instruments and 4
noncritical instruments or instrument suites:
Critical instruments:
* Advanced Baseline Imager;
* Hyperspectral Environmental Suite;
Noncritical instruments/suites:
* Geostationary Lightning Mapper;
* Magnetometer;
* Space Environmental In-Situ Suite;
* Solar Imaging Suite;
Program with reduced scope, as of September 2006: 1 critical instrument
and 4 noncritical instruments or instrument suites:
Critical instrument:
Advanced Baseline Imager;
Noncritical instruments/suites:
* Geostationary Lightning Mapper;
* Magnetometer;
* Space Environmental In-Situ Suite;
* Two components of the former Solar Imaging Suite (the Solar Ultra
Violet Imager and Extreme Ultraviolet and X-Ray Irradiance Suite).
Life-cycle cost estimate (in then year dollars);
Baseline program, as of August 2006: $6.2-11.4 billion;
Program with reduced scope, as of September 2006: $7 billion.
End of operations and maintenance;
Baseline program, as of August 2006: 2028;
Program with reduced scope, as of September 2006: 2028[A].
Source: GAO analysis of NOAA data.
[A] All satellites are expected to have a 15-year lifespan (5 years in
on-orbit storage plus 10 years in operation).
[End of table]
GOES-R Program Office Structure:
NOAA is solely responsible for GOES-R program funding and overall
mission success. However, since it relies on NASA's acquisition
experience and technical expertise to help ensure the success of its
programs, NOAA implemented an integrated program management structure
with NASA for the GOES-R program. Within the program office, there are
two project offices that manage key components of the GOES-R system.
These are called the flight and operations project offices. The flight
project office oversees the spacecraft, instruments, and launch
services. The operations project office oversees the ground elements
and on-orbit operations of the satellites. The project manager for the
flight project office and the deputy project manager for operations
project office are designated to be filled with NASA personnel.
Additionally, NOAA has located the program office at NASA's Goddard
Space Flight Center.
Planned GOES-R Acquisition Strategy:
NOAA's acquisition strategy was to award contracts for the preliminary
design of the GOES-R system to several vendors who would subsequently
compete for the contract to be the single prime contractor responsible
for overall system development and production. As such, in October
2005, NOAA awarded contracts for the preliminary design of the overall
GOES-R system to three vendors.[Footnote 3]
In addition, to reduce the risks associated with developing technically
advanced instruments, NASA awarded contracts for the preliminary
designs for five of the originally planned instruments. NASA expected
to subsequently award development contracts for these instruments and
to eventually turn them over to the prime contractor responsible for
the overall GOES-R program.
GOES-R Preliminary Design Studies Are Completed, but Key Program
Changes Have Been Made and Cost and Schedule Estimates Are Likely to
Grow:
NOAA has completed preliminary design studies of its GOES-R
procurement. In addition, the agency recently decided to separate the
space and ground elements of the program into two separate contracts to
be managed by NASA and NOAA, respectively. However, this change has
delayed a key decision to proceed with the acquisition, which was
planned for September 2007. Further, independent estimates are higher
than the program's current $7 billion cost estimate and convey a low
level of confidence in the program's schedule for launching the first
satellite by 2014. As NOAA works to reconcile the independent estimate
with its own program office estimate, costs are likely to grow and
schedules are likely to be delayed.
Progress Has Been Made on GOES-R Procurement Activities:
NOAA and NASA have made progress on GOES-R. The program office has
completed preliminary design studies of the overall GOES-R system and
has initiated development work on most of the planned instruments.
Specifically, the NOAA-issued contracts for the preliminary design of
the overall GOES-R system to three vendors have ended, and the designs
have been completed.
In addition, after completing preliminary designs on five of the
originally planned instruments, NASA awarded development contracts for
three of them.[Footnote 4] Further, the most critical of these
instruments--the Advanced Baseline Imager--has completed a major
development milestone. In February 2007, it passed a critical design
review gate and NASA approved the contractor to begin production of a
prototype model.
NOAA Revised its Acquisition Strategy:
NOAA recently made a number of key changes in how it plans to acquire
the GOES-R system. Originally, NOAA planned to award and manage a
single prime contract for the acquisition and operation of the
integrated system. However, an independent review team assessed the
program and found that this approach was risky.[Footnote 5] It
recommended that NOAA split the acquisition effort into two separate
contracts for the space and ground segments and have NASA manage the
space segment. The independent review team concluded that there was
less risk in continuing with this approach than there would be if NOAA
took on a new and expanded role.
In March 2007, Commerce approved NOAA's decision to implement these
recommendations. The agency revised its acquisition strategy to include
two separate contracts--the space segment and the ground segment. The
two contracts are expected to be awarded in May 2008 and August 2008,
respectively. The space segment is to be managed by a NASA-led flight
project office. As such, NASA is to be responsible for awarding and
managing the space segment contract, delivering the flight-ready
instruments to the space segment contractor for integration onto the
satellites, and overseeing the systems engineering and integration.
NOAA is to be responsible for the ground segment contract, which is to
be managed by the NOAA-led operations project office.
The revised acquisition strategy has delayed NOAA's plans to complete a
key decision milestone on whether to proceed with GOES-R development
and production in September 2007. Once this decision is made, the final
requests for proposals on the system segments are to be released. The
agency could not provide a timeframe for when this key decision
milestone would take place.
GOES-R Cost Estimates Are Likely to Grow and Schedule Estimates Are
Likely to Slip:
NOAA's current estimate that the life cycle cost of the GOES-R program
would be $7 billion is likely to grow, and its estimate that the first
satellite would be launched in December 2014 is likely to slip.
Consistent with best practices in cost estimating, in May 2007, NOAA
had two different cost estimates completed for the current GOES-R
program--one by its program office and one by an independent cost
estimating firm. The program office estimated with 80 percent
confidence that the program would cost $6.9 billion. The independent
estimating firm estimated with 80 percent confidence that the program
would cost $9.3 billion.
A comparison of the two cost models shows that the independent
estimator has about a 20 percent level of confidence that the program
can be completed for $6.9 billion. Further, the independent estimator
concluded that the program office estimate significantly understated
the risk of cost overruns. Other major differences between the two
estimates are contained in government costs and in the space and ground
segments. In commenting on a draft of the accompanying report, NOAA
officials noted that one of the differences between the estimates is
the inflation rate. The independent estimator assumed a higher
inflation rate than the rate that NOAA and NASA typically use. NOAA
officials noted that if the independent estimate was adjusted to NOAA's
inflation rate, the program's cost estimate--with 80 percent
confidence--would be $8.7 billion. However, we believe that the value
of an independent estimate is that it does not necessarily use the same
assumptions as the program office. By offering alternative assumptions,
the independent estimate provides valuable information for government
officials to consider when revising program cost estimates.
Program officials are reconciling the two different cost estimates and
plan to establish a new program cost estimate to be released in
conjunction with the President's fiscal year 2009 budget in February
2008. Program officials were unable to provide us information on the
reconciled estimate until it is released. Nonetheless, the revised cost
estimate will likely be $1 billion more than the current $7 billion.
Regarding schedule, NOAA's current plan to launch the first GOES-R
series satellite in December 2014 could be delayed. This schedule 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 (see table 5).
However, as part of its cost estimate, the independent estimator
performed a schedule risk analysis. The independent estimator
determined that there was less than a 50 percent chance that the first
satellite would be ready for launch by December 2014 and that a later
date would be more realistic. The estimator determined that it had 50
percent confidence that the first satellite would launch by October
2015 and 80 percent confidence that the satellite would launch by March
2017. A delay of this magnitude could affect the continuity of GOES
data should the agency experience problems with the predecessor
satellites.
Table 5: GOES-R Program Launch Schedule, as of July 2007:
Milestone: GOES-O launch[A];
Planned date: April 2008.
Milestone: GOES-P launch[A];
Planned date: April 2009.
Milestone: GOES-R satellite available for launch;
Planned date: Dec. 2014.
Milestone: GOES-S satellite available for launch;
Planned date: April 2016.
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.
[End of table]
NOAA is Taking Steps to Address Key Risks, but More Remains to Be Done:
To address cost, schedule, and technical risks, the GOES-R program
established a risk management program and has taken steps to identify
and mitigate selected risks. However, more remains to be done to fully
address a comprehensive set of risks. Specifically, the program has
multiple risk watchlists and they are not always consistent. Further,
key risks are missing from the risks lists, including risks associated
with unfilled executive positions, limitations in NOAA's insight into
NASA's deliverables, and insufficient funding for unexpected costs
(called management reserve) on a critical sensor. As a result, the GOES-
R program is at increased risk that problems will not be identified or
mitigated in a timely manner and that they could lead to program cost
overruns and schedule delays.
GOES-R Has a Risk Management Program and Is Taking Measures to Address
Selected Risks:
The GOES-R program office established a risk management program and is
tracking and mitigating selected risks. Risk management is a leading
management practice that is widely recognized as a key component of a
sound system development approach. An effective risk management
approach typically includes identifying, prioritizing, and mitigating
risks, and escalating key risks to the attention of senior management.
In accordance with leading management practices, the GOES-R program
identifies risks, assigns a severity rating to risks, tracks these
risks in a database, plans response strategies for each risk in the
database, and reviews and evaluates these risks during monthly program
risk management board meetings. Programwide and project-specific risks
are managed by different offices. The program office identifies and
tracks programwide risks--those that affect the overall GOES-R program.
NASA's flight project office and NOAA's operations project office
manage risks affecting their respective aspects of the
program.[Footnote 6] Further, the program office briefs senior
executives on top program and project risks on a monthly basis.
GOES-R Program Office Identified and Is Working to Mitigate Programwide
Risks:
As of July 2007, the program office identified three program risks
affecting the overall GOES-R program. These risks include the
development of the integrated master schedule, the ability to secure
authorization to use a key frequency band to meet the space-to-ground
communication data link requirements for the GOES-R system, and the
final approval of the GOES-R mission requirements from the NOAA Deputy
Undersecretary.
NOAA is working to mitigate and close program risks that it is
tracking. For example, the program office recently closed the risk
associated with GOES-R requirements because it had sufficiently defined
and obtained approval of these requirements. As another example, the
program office considers the lack of an integrated master schedule to
be its highest priority risk. Program officials reported that
completion of the integrated master schedule is driven by the
completion of the intermediate schedules for the ground segment and the
space-to-ground interdependencies. Key program staff members, including
a resident scheduler, meet on a weekly basis to resolve outstanding
design issues and hone these schedules. Program officials reported that
the intermediate schedules are near completion and that they plan to
have the integrated master schedule completed in Fall 2007. They expect
to remove this issue from the risk watchlist at that time.
NASA Identified Flight Segment Risks and Is Working to Mitigate Them:
As of July 2007, the NASA flight project office identified four risks
affecting instrument development, all of which are classified as medium
risk. The top three risks pertain to the advanced imaging instrument,
ABI--including issues on timely and quality subcontractor delivery of a
critical part, stray light negatively impacting the performance of the
optical system, and meeting specified performance requirements on image
navigation and registration. The fourth priority risk pertains to the
improvement of subcontractor quality assurance on a key sensor for the
Space Environmental In-Situ Suite.
NASA is working to mitigate the flight segment risks that it is
tracking. For example, the ABI contractor, among other things, plans to
complete a key simulation review before the end of the year (called the
structural thermal optical performance analysis) to evaluate whether
the instrument can meet its expected performance parameters for image
navigation and registration. NASA also recently conducted a vendor
facility assessment of the Space Environmental In-Situ Suite
subcontractor to determine whether adequate quality assurance
improvements had been made to be compliant with contract requirements.
These actions are expected to help mitigate the risk.
NOAA Identified Risks in its Operations Segment and Is Working to
Mitigate Them:
As of July 2007, the NOAA operations project office identified five
risks impacting the management and development of the ground system and
operations, including one that is identified as a medium risk. These
risks include, among other things, inadequate definition of flight and
operations project interdependencies, algorithm development
responsibilities, and the adequate definition of coordination
requirements between the space and ground segments to ensure that the
two requests for proposals are consistent.
NOAA is working to mitigate the ground system and operations risks that
it is tracking. For example, for the highest priority risk regarding
schedule interdependencies, key staff from both the flight and
operations projects meet weekly in order to identify and synchronize
project schedules. The project office expects to close this risk in
Fall 2007.
Multiple Watchlists Are Not Consistent, Making it Difficult to
Prioritize and Manage Risks:
While GOES-R has implemented a risk management process, its multiple
risk watchlists are not consistent in areas where there are
interdependencies between the lists, which makes it difficult to
effectively prioritize and manage risks at the appropriate
organizational levels. Sound risk management practices call for having
a consistent prioritization approach and for significant problems to be
elevated from the component level to the program level. This is because
an issue affecting a critical component could have severe programmatic
implications and should be identified, tracked, and overseen at the
program level. In addition, program executives should be briefed
regularly on the status of key risks.
However, on the GOES-R program, the risks identified on the multiple
risk lists are inconsistent in areas where there are interdependencies
between the lists. These interdependencies include situations where a
risk is raised by one project office and affects the other project
office, but is not identified by the other project office or elevated
to the program level risk list. They also include situations where a
risk identified by a project office has programwide implications, but
is not elevated to the program level risk list. For example, the
operations project office identified schedule interdependencies between
the flight and operations project offices as a medium criticality risk,
but neither the flight project office nor the program identified this
risk even though it is relevant to both. As another example, the
operations project office identified the ground procurement schedule as
a major issue in its briefing to senior management, but this risk was
not identified on its own or on the programwide risk lists.
In addition, while the three offices brief senior management about
their key risks on a monthly basis, selected risks may not be
accurately depicted in these briefings because of the inconsistencies
among the risk watchlists. For example, both the flight and operations
project offices identified technical development issues as minor to
moderate risk areas, but the program office did not identify this item
as a risk and, when it briefed senior management, it noted that
technical development was in good shape. Figure 1 depicts examples of
inconsistencies among risk lists and briefings to senior management.
The lack of consistency in managing risks in areas where there are
interdependencies makes it difficult to ensure that all identified
risks are appropriately prioritized and managed. This situation hampers
the program office's ability to identify and mitigate risks early on
and to anticipate and manage the impact of risks on other areas of the
program.
Figure 1: Examples of Inconsistencies among GOES-R Risk Watchlists, as
of July 2007:
[See PDF for image]
GAO analysis of NASA and NOAA data.
[End of figure]
Important GOES-R Management Risks Are Missing from the Program
Watchlist:
To be effective, a risk management program should have a comprehensive
list of risks. However, several key risks that impact the GOES-R
procurement and merit agency attention are not identified in the
program's risk lists. These risks include (1) key leadership positions
that need to be filled, (2) NOAA's limited insight into NASA's
deliverables, and (3) insufficient management reserves (held by the
program and a key instrument contractor). At the conclusion of our
review for the accompanying report, program officials stated that they
are aware of these issues and are working to monitor them or address
them, as warranted. Nevertheless, until these and other programwide
risks are identified and addressed as part of a comprehensive risk
management program, there is increased likelihood that issues will be
overlooked that could affect the acquisition of the GOES-R system.
Key GOES-R Leadership Positions Need to be Filled:
The two senior GOES-R program positions--the system program director
and deputy system program director--are currently filled by NASA and
NOAA personnel in an acting capacity until they can be permanently
filled by NOAA. In addition, the acting system program director is not
able to work full time in this role because she is also on a special
assignment as the NESDIS Deputy Assistant Administrator for Systems.
NOAA reported that it plans to fill the deputy system program director
role in the near future, but noted that it could take more than 6
months to fill the system program director role. Given the approach of
the development phase of the GOES-R acquisition and the competing
priorities of the acting system program director, it is especially
important that these key leadership positions be filled quickly. At the
conclusion of our review, agency officials stated that they are aware
of this issue and are working to fill the positions, but they did not
believe the issue warranted inclusion on the program level risk watch
list. However, without the senior level attention inherent in a sound
risk management program, it is not clear that NOAA is sufficiently
focused on the importance of establishing knowledgeable and committed
program executives, or in moving quickly to fill these critical
positions.
NOAA's Insight into NASA's Program Elements Is Limited:
NOAA's March 2007 decision to adopt an acquisition management approach
similar to prior GOES procurements could make the agency vulnerable to
repeating some of the problems experienced in the past. In particular,
our work on the GOES I-M series found that NOAA did not have the
ability to make quick decisions on problems because portions of the
procurement were managed by NASA.[Footnote 7] In fact, NOAA officials
originally intended to depart from this approach as a lesson they
learned from the GOES I-M acquisition, because it limited the agency's
insight and management involvement in the procurement of major elements
of the system.
The established NOAA/NASA interagency agreements require NASA to submit
monthly contractor cost performance reports to NOAA and to alert NOAA
should cost and schedule performance drop below certain thresholds.
NASA is currently submitting the required reports and has alerted NOAA
on major cost and schedule changes. However, these interagency
agreements do not contain provisions that enable NOAA to ensure that
the data and reports are reliable and that they accurately depict
contractor performance. To do so would entail NOAA having the ability
and means to question and validate data, such as by having direct
access to the contractor.
NASA and NOAA officials reported that the two agencies are working
together with an unparalleled level of transparency and noted that NOAA
program staff have access to contractor data and can bring any
questions with the data to the relevant NASA staff. However, they
acknowledged that this process is not documented and were not able to
demonstrate that NOAA staff had questioned contract data and that NASA
had facilitated obtaining answers to the questions. By not identifying
and mitigating this risk on its program risk list, NOAA increases the
likelihood that the GOES-R program will repeat the management and
contractor shortfalls that plagued past GOES procurements.
Recent Changes on a Key Instrument Have Reduced Program Management
Reserve Funds and Limited Contractor Reserve Funds Leave GOES-R
Vulnerable to Future Cost Increases:
A recent modification to the critical ABI instrument contract increased
its cost, thereby reducing the amount of management reserve funds held
by the program office for unexpected expenses. In September 2006, we
reported that ABI was experiencing technical challenges, that were
resulting in cost and schedule overruns. Since then, the contractor
continued missing cost and schedule targets--a trend that continued
until February 2007. At that time, NASA modified the contract to
implement a revised baseline cost and schedule. The added cost of this
modification was funded using management reserve funds held by the GOES-
R program office.[Footnote 8] As a result, the amount of reserve held
by the program office dropped below 25 percent--a level that NOAA
reported it intended to establish as a lesson learned from other
satellite acquisitions. As of July 2007, the program's reserve level
was at about 15 percent. Program officials stated that their revised
goal is to maintain between 10 and 15 percent in reserve at the program
level. While maintaining a 10 to 15 percent management reserve is on
par with other major satellite acquisitions, the depletion of
management reserves this early in the GOES-R acquisition raises
concerns that there will be insufficient reserves during the
challenging development, integration, and testing phases to come.
In addition, the contractor for the ABI instrument has a very low level
of reserve funding for unexpected costs, which means that any
unexpected problems will likely lead to cost growth on the overall GOES-
R program. As of May 2007, the contractor was holding less than 1
percent of funding in reserve to cover unexpected costs associated with
the 40 percent of work left to be completed. As such, there is a risk
that the new baseline could fail due to inadequate reserves to finish
the program. This would likely have a diminishing effect on the reserve
held by the GOES-R flight project and the program office to cover the
costs of a second revised baseline plan. Our prior work on system
acquisitions has shown inadequate reserves to be an indicator of poor
management performance that could lead to cost overruns.[Footnote 9]
Considering that GOES-R has not yet entered the development and
production phases, it will be critical for NOAA's senior executive
management to aggressively manage this risk. By not identifying,
mitigating, and tracking this risk in a programwide risk list, the GOES-
R program runs an increased risk that unanticipated issues on the ABI
instrument will lead to programwide cost overruns and schedule delays.
Implementation of GAO Recommendations Should Improve NOAA's Ability to
Effectively Manage the GOES-R Procurement:
To improve NOAA's ability to effectively manage the procurement of the
GOES-R system, we recommended in our accompanying report[Footnote 10]
that the Secretary of Commerce direct the Undersecretary of Commerce
for Oceans and Atmosphere to take the following two actions:
* Ensure that the GOES-R program office manages, mitigates, and reports
on risks using a program-level risk list that is reconciled with and
includes risks from its flight and operations project offices that
could impact the overall program.
* Include the following risks on the programwide risk list, develop
plans to mitigate them, and report to senior executives on progress in
mitigating them:
- unfilled or temporary GOES-R program leadership positions,
- insufficient program insight on NASA contract performance, and:
- insufficient management reserve on the critical Advanced Baseline
Imager instrument and at the GOES-R program level.
In written comments, Commerce agreed with our recommendations to use a
program level risk list and to add selected risks to its list. The
department reported that NOAA has established a consolidated
programwide risk list that is to be used to evaluate risks during
monthly internal and external reviews. Further, NOAA acknowledges the
risks associated with having unfilled leadership positions and
insufficient management reserves and is working to mitigate these
risks. However, the department disagreed with our recommendation to
manage and mitigate the risk that NOAA has insufficient insight into
NASA's contracts. The department cited an unparalleled level of
transparency between the two agencies and listed multiple regular
meetings that the two agencies hold to ensure close coordination. While
an improved working relationship between the two agencies is critical,
NOAA has not provided any evidence that it has been able to effectively
question and validate data on NASA's contractor performance. Given the
past problems that NOAA has experienced in obtaining insight into
NASA's contracts and the importance of this interagency relationship to
the success of the GOES-R program, we believe that this issue should be
managed and monitored as a risk.
NOAA also requested that we acknowledge its effort to reconcile its
program estimate with the independent estimate and reflect a 20 percent
possibility that the program could cost $1 billion more than the
current estimate of $7 billion, rather than $2 billion more. We
acknowledge this in our report; however, the reconciliation effort is
not complete and NOAA did not provide us with a reconciled estimate.
In summary, although NOAA has made progress in the GOES-R procurement,
changes in the GOES-R acquisition strategy could lead to cost overruns
and schedule delays if not managed effectively. Over the last year,
NOAA has completed preliminary design studies of its GOES-R system and
decided to separate the space and ground elements of the program into
two contracts and have NASA oversee the system integration effort.
Current program plans call for a two-satellite program--estimated to
cost about $7 billion--with launch of the first satellite in December
2014. However, independent studies show that the program's cost could
increase by about $2 billion and that the first launch could be delayed
by at least 2 years.
NOAA has taken steps to identify and address key risks but more could
be done to effectively manage risks from a programwide perspective. In
particular, the program has multiple risk watchlists that are not
consistent in areas where there are interdependencies and key risks
have not been elevated for programwide attention. Also, several risks
that warrant NOAA's attention have not been placed on any watchlist.
Specifically, the top two leadership positions are only temporarily
filled; NOAA does not have the ability and means to obtain insight into
NASA contracts in order to validate contractor performance data; and
insufficient management reserves to handle unexpected problems on a
critical instrument and at the program level are likely to affect
overall program costs when any unexpected problems arise. Until NOAA
manages and addresses a comprehensive set of program risks, the
agency's ability to effectively manage the GOES-R acquisition will be
significantly weakened and could lead to substantial program overruns
and delays.
Mr. Chairman, this concludes my statement. I would be happy to answer
any questions that you or members of the subcommittee 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, Colleen Phillips (Assistant Director), and
Teresa Smith.
[End of section]
Footnotes:
[1] GAO, Geostationary Operational Environmental Satellites: Progress
Has Been Made, but Improvements Are Needed to Effectively Manage Risks,
GAO-08-18 (Washington, D.C.: Oct. 23, 2007).
[2] GAO, Geostationary Operational Environmental Satellites: Additional
Action Needed to Incorporate Lessons Learned from Other Satellite
Programs, GAO-06-1129T (Washington, D.C.: Sept. 29, 2006) and
Geostationary Operational Environmental Satellites: Steps Remain in
Incorporating Lessons Learned from Other Satellite Programs, GAO-06-993
(Washington, D.C.: Sept. 6, 2006).
[3] These were called Program Definition and Risk Reduction contracts.
[4] NASA has not yet issued a development contract for the
Geostationary Lightning Mapper. This contract is expected to be awarded
at the end of October 2007.
[5] This independent review team, comprised of former senior industry
and government space acquisition experts, was hired by NOAA to assess
the adequacy of the GOES-R program's management approach, acquisition
strategy, and resource availability, among other things.
[6] NASA's GOES-R flight project office is responsible for the
spacecraft, instruments, and launch services. NOAA's GOES-R operations
project office is responsible for the ground elements and on-orbit
operations of the satellites.
[7] GAO-06-993.
[8] This reserve is intended to cover expected costs above those
projected by the contractor and unexpected costs in solving problems
during a system development program.
[9] GAO-06-993.
[10] GAO-08-18.
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