Polar-Orbiting Operational Environmental Satellites
Technical Problems, Cost Increases, and Schedule Delays Trigger Need for Difficult Trade-off Decisions Gao ID: GAO-06-249T November 16, 2005Polar-orbiting environmental satellites provide data and imagery that are used by weather forecasters, climatologists, and the military to map and monitor changes in weather, climate, the oceans, and the environment. Our nation's current operational polar-orbiting environmental satellite program is a complex infrastructure that includes two satellite systems, supporting ground stations, and four central data processing centers. In the future, the National Polar-orbiting Operational Environmental Satellite System (NPOESS) is to combine the two current systems into a single, state-of-the-art environment-monitoring satellite system. This new satellite system is considered critical to the United States' ability to maintain the continuity of data required for weather forecasting and global climate monitoring through the year 2020. GAO was asked to discuss the NPOESS program's schedule, cost, trends, and risks, and to describe plans and implications for moving the program forward.
The NPOESS program has experienced continued schedule delays, cost increases, and technical challenges over the last several years. The schedule for the launch of the first satellite has been delayed by at least 17 months (until September 2010 at the earliest), and this delay could result in a gap in satellite coverage of at least 3 years if the last satellite in the prior series fails on launch. Program life cycle cost estimates have grown from $6.5 billion in 2002 to $8.1 billion in 2004 and are still growing. While the program is currently reassessing its life cycle cost estimates, our analysis of contractor trends as of September 2005 shows a likely $1.4 billion contract cost overrun--bringing the life cycle cost estimate to about $9.7 billion. Technical risks in developing key sensors continue, and could lead to further cost increases and schedule delays. As a result of expected program cost growth, the Executive Committee responsible for the program is evaluating options for moving the program forward--and new cost estimates for those options. Key options under consideration in August 2005 included removing a key sensor from the first satellite, delaying launches of the first two satellites, and not launching a preliminary risk-reduction satellite. All of these options impact the program's cost, schedules, and the system users who rely on satellite data to develop critical weather products and forecasts--although the full extent of that impact is not clear. Further, last week GAO was informed that there are nine new options now under consideration, and that they are likely to impact costs, schedules, and system users. Until a decision is made, the program remains without a plan for moving forward. Further, there are opportunity costs in not making a decision--some options are lost and others may become more difficult. Given the history of large cost increases and the factors that could further affect NPOESS costs and schedules, continued oversight, strong leadership, and timely decision making are more critical than ever.
GAO-06-249T, Polar-Orbiting Operational Environmental Satellites: Technical Problems, Cost Increases, and Schedule Delays Trigger Need for Difficult Trade-off Decisions
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Testimony:
Before the Committee on Science, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 10:00 a.m. EST:
Wednesday, November 16, 2005:
Polar-Orbiting Operational Environmental Satellites:
Technical Problems, Cost Increases, and Schedule Delays Trigger Need
for Difficult Trade-off Decisions:
Statement of David A. Powner, Director:
Information Technology Management Issues:
GAO-06-249T:
GAO Highlights:
Highlights of GAO-06-249T, a testimony before the Committee on Science,
House of Representatives:
Why GAO Did This Study:
Polar-orbiting environmental satellites provide data and imagery that
are used by weather forecasters, climatologists, and the military to
map and monitor changes in weather, climate, the oceans, and the
environment. Our nation‘s current operational polar-orbiting
environmental satellite program is a complex infrastructure that
includes two satellite systems, supporting ground stations, and four
central data processing centers.
In the future, the National Polar-orbiting Operational Environmental
Satellite System (NPOESS) is to combine the two current systems into a
single, state-of-the-art environment-monitoring satellite system. This
new satellite system is considered critical to the United States‘
ability to maintain the continuity of data required for weather
forecasting and global climate monitoring through the year 2020.
GAO was asked to discuss the NPOESS program‘s schedule, cost, trends,
and risks, and to describe plans and implications for moving the
program forward.
What GAO Found:
The NPOESS program has experienced continued schedule delays, cost
increases, and technical challenges over the last several years. The
schedule for the launch of the first satellite has been delayed by at
least 17 months (until September 2010 at the earliest), and this delay
could result in a gap in satellite coverage of at least 3 years if the
last satellite in the prior series fails on launch (see figure below).
Program life cycle cost estimates have grown from $6.5 billion in 2002
to $8.1 billion in 2004 and are still growing. While the program is
currently reassessing its life cycle cost estimates, our analysis of
contractor trends as of September 2005 shows a likely $1.4 billion
contract cost overrun”bringing the life cycle cost estimate to about
$9.7 billion. Technical risks in developing key sensors continue, and
could lead to further cost increases and schedule delays. As a result
of expected program cost growth, the Executive Committee responsible
for the program is evaluating options for moving the program
forward”and new cost estimates for those options.
Key options under consideration in August 2005 included removing a key
sensor from the first satellite, delaying launches of the first two
satellites, and not launching a preliminary risk-reduction satellite.
All of these options impact the program‘s cost, schedules, and the
system users who rely on satellite data to develop critical weather
products and forecasts”although the full extent of that impact is not
clear. Further, last week GAO was informed that there are nine new
options now under consideration, and that they are likely to impact
costs, schedules, and system users. Until a decision is made, the
program remains without a plan for moving forward. Further, there are
opportunity costs in not making a decision”some options are lost and
others may become more difficult. Given the history of large cost
increases and the factors that could further affect NPOESS costs and
schedules, continued oversight, strong leadership, and timely decision
making are more critical than ever.
Potential Gap in Satellite Coverage:
[See PDF for image]
[End of figure]
What GAO Recommends:
www.gao.gov/cgi-bin/getrpt?GAO-06-249T.
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 to
discuss our work on the planned National Polar-orbiting Operational
Environmental Satellite System (NPOESS) program. NPOESS is expected to
be a state-of-the-art environment-monitoring satellite system that will
replace two existing polar-orbiting environment satellite systems.
Polar-orbiting satellites provide data and imagery that are used by
weather forecasters, climatologist, and the military to map and monitor
changes in weather, climate, the oceans, and the environment. The
NPOESS program is considered critical to the United States' ability to
maintain the continuity of data required for weather forecasting and
global climate monitoring through the year 2020. At your request, we
will discuss the NPOESS program's schedule, cost, trends, and risks,
and describe plans and implications for moving the program forward.
This statement builds on other work we have done on environmental
satellite programs over the last several years.[Footnote 1] As agreed
with your staff members, we plan to continue our oversight of this
program. An overview of the approach we used to perform this work--our
objectives, scope, and methodology, is provided in appendix I.
Results in Brief:
Over the past several years, the NPOESS program has experienced
continued schedule delays, cost increases, and technical challenges.
The schedule for the launch of the first satellite has been delayed by
at least 17 months (until September 2010 at the earliest), and this
delay could result in a gap in satellite coverage of at least 3 years
if the last satellite in the prior series fails on launch. Program life
cycle cost estimates have grown from $6.5 billion in 2002 to $8.1
billion in 2004 and are still growing. While the program is currently
reassessing its life cycle cost estimates, our analysis of contractor
trends as of September 2005 shows a likely $1.4 billion contract cost
overrun--bringing the life cycle cost estimate to about $9.7 billion.
Technical risks in developing key sensors continue, and could lead to
further cost increases and schedule delays.
As a result of expected program cost growth, the Executive Committee
responsible for NPOESS is evaluating options for moving the program
forward--and new cost estimates for those options. Key options under
consideration in August 2005 included removing a key sensor from the
first satellite, delaying launches of the first two satellites, and not
launching a preliminary risk-reduction satellite. All of these options
impact the program's cost and schedules, and the system users who rely
on satellite data to develop critical weather products and forecasts--
although the full extent of that impact is not clear. Further, last
week we were informed that there are nine new options now under
consideration, and all are likely to impact costs, schedules, and
system users. Until a decision is made, the program remains without a
plan for moving forward, and there are opportunity costs in not making
a decision--some options are lost, and others may become more
difficult. Given the history of large cost increases and the factors
that could further affect NPOESS costs and schedules, continued
oversight, strong leadership, and timely decision making are more
critical than ever.
Background:
Since the 1960s, the United States has operated two separate
operational polar-orbiting meteorological satellite systems: the Polar-
orbiting Operational Environmental Satellites (POES), managed by the
National Oceanic and Atmospheric Administration (NOAA) and the Defense
Meteorological Satellite Program (DMSP), managed by the Department of
Defense (DOD). The satellites obtain environmental data that are
processed to provide graphical weather images and specialized weather
products and are the predominant input to numerical weather prediction
models. These images, products, and models are all used by weather
forecasters, the military, and the public. Polar satellites also
provide data used to monitor environmental phenomena, such as ozone
depletion and drought conditions, as well as data sets that are used by
researchers for a variety of studies, such as climate monitoring.
Unlike geostationary satellites, which maintain a fixed position above
the earth, polar-orbiting satellites constantly circle the earth in an
almost north-south orbit, providing global coverage of conditions that
affect the weather and climate. Each satellite makes about 14 orbits a
day. As the earth rotates beneath it, each satellite views the entire
earth's surface twice a day. Currently, there are two operational POES
satellites and two operational DMSP satellites that are positioned so
that they can observe the earth in early morning, mid morning, and
early afternoon polar orbits. Together, they ensure that, for any
region of the earth, the data provided to users are generally no more
than 6 hours old. Figure 1 illustrates the current operational polar
satellite configuration. Besides the four operational satellites, six
older satellites are in orbit that still collect some data and are
available to provide some limited backup to the operational satellites
should they degrade or fail. In the future, both NOAA and DOD plan to
continue to launch additional POES and DMSP satellites every few years,
with final launches scheduled for 2007 and 2011, respectively.
Figure 1: Configuration of Operational Polar Satellites:
[See PDF for image]
[End of figure]
Each of the polar satellites carries a suite of sensors designed to
detect environmental data that are either reflected or emitted from the
earth, the atmosphere, and space. The satellites store these data and
then transmit them to NOAA and Air Force ground stations when the
satellites pass overhead. The ground stations then relay the data via
communications satellites to the appropriate meteorological centers for
processing. The satellites also broadcast a subset of these data in
real time to tactical receivers all over the world.
Under a shared processing agreement among four satellite data
processing centers--NOAA's National Environmental Satellite Data and
Information Service (NESDIS), the Air Force Weather Agency, the Navy's
Fleet Numerical Meteorology and Oceanography Center, and the Naval
Oceanographic Office--different centers are responsible for producing
and distributing, via a shared network, different environmental data
sets, specialized weather and oceanographic products, and weather
prediction model outputs.[Footnote 2] Each of the four processing
centers is also responsible for distributing the data to its respective
users. For the DOD centers, the users include regional meteorology and
oceanography centers, as well as meteorology and oceanography staff on
military bases. NESDIS forwards the data to NOAA's National Weather
Service for distribution and use by government and commercial
forecasters. The processing centers also use the Internet to distribute
data to the general public. NESDIS is responsible for the long-term
archiving of data and derived products from POES and DMSP.
In addition to the infrastructure supporting satellite data processing
noted above, properly equipped field terminals that are within a direct
line of sight of the satellites can receive real-time data directly
from the polar-orbiting satellites. There are an estimated 150 such
field terminals operated by U.S. and foreign governments and academia.
Field terminals can be taken into areas with little or no data
communications infrastructure--such as on a battlefield or a ship--and
enable the receipt of weather data directly from the polar-orbiting
satellites. These terminals have their own software and processing
capability to decode and display a subset of the satellite data to the
user. Figure 2 depicts a generic data relay pattern from the polar-
orbiting satellites to the data processing centers and field terminals.
Figure 2: Generic Data Relay Pattern for the Polar Meteorological
Satellite System:
[See PDF for image]
[End of figure]
NPOESS Overview:
Given the expectation that combining the POES and DMSP programs would
reduce duplication and result in sizable cost savings, a May 1994
Presidential Decision Directive[Footnote 3] required NOAA and DOD to
converge the two satellite programs into a single satellite program
capable of satisfying both civilian and military requirements. The
converged program, NPOESS, is considered critical to the United States'
ability to maintain the continuity of data required for weather
forecasting and global climate monitoring through the year 2020. To
manage this program, DOD, NOAA, and the National Aeronautics and Space
Administration (NASA) formed a tri-agency Integrated Program Office,
located within NOAA.
Within the program office, each agency has the lead on certain
activities. NOAA has overall program management responsibility for the
converged system and for satellite operations; DOD has the lead on the
acquisition; and NASA has primary responsibility for facilitating the
development and incorporation of new technologies into the converged
system. NOAA and DOD share the costs of funding NPOESS, while NASA
funds specific technology projects and studies. Figure 3 depicts the
organizations comprising the Integrated Program Office and lists their
responsibilities.
Figure 3: Organizations Coordinated by the NPOESS Integrated Program
Office:
[See PDF for image]
[End of figure]
Program acquisition plans call for the procurement and launch of six
NPOESS satellites over the life of the program, as well as the
integration of 13 instruments, consisting of 10 environmental sensors
and 3 subsystems. Together, the sensors are to receive and transmit
data on atmospheric, cloud cover, environmental, climate,
oceanographic, and solar-geophysical observations. The subsystems are
to support nonenvironmental search and rescue efforts, sensor
survivability, and environmental data collection activities. According
to the program office, 7 of the 13 planned NPOESS instruments involve
new technology development, whereas 6 others are based on existing
technologies. In addition, the program office considers 4 of the
sensors involving new technologies critical, because they provide data
for key weather products; these sensors are shown in bold in table 1,
which lists the planned instruments and the state of technology on
each.
Table 1: Expected NPOESS Instruments (critical sensors in bold):
Instrument name: Advanced technology microwave sounder;
Description: Measures microwave energy released and scattered by the
atmosphere and is to be used with infrared sounding data from NPOESS'
cross-track infrared sounder to produce daily global atmospheric
temperature, humidity, and pressure profiles;
State of technology: New.
Instrument name: Aerosol polarimetry sensor;
Description: Retrieves specific measurements of clouds and aerosols
(liquid droplets or solid particles suspended in the atmosphere, such
as sea spray, smog, and smoke);
State of technology: New.
Instrument name: Conical-scanned microwave imager/sounder;
Description: Collects microwave images and data needed to measure rain
rate, ocean surface wind speed and direction, amount of water in the
clouds, and soil moisture, as well as temperature and humidity at
different atmospheric levels;
State of technology: New.
Instrument name: Cross-track infrared sounder;
Description: Collects measurements of the earth's radiation to
determine the vertical distribution of temperature, moisture, and
pressure in the atmosphere;
State of technology: New.
Instrument name: Data collection system;
Description: Collects environmental data from platforms around the
world and delivers them to users worldwide;
State of technology: Existing.
Instrument name: Earth radiation budget sensor;
Description: Measures solar short-wave radiation and long-wave
radiation released by the earth back into space on a worldwide scale to
enhance long-term climate studies;
State of technology: Existing.
Instrument name: Ozone mapper/profiler suite;
Description: Collects data needed to measure the amount and
distribution of ozone in the earth's atmosphere;
State of technology: New.
Instrument name: Radar altimeter;
Description: Measures variances in sea surface height/topography and
ocean surface roughness, which are used to determine sea surface
height, significant wave height, and ocean surface wind speed and to
provide critical inputs to ocean forecasting and climate prediction
models;
State of technology: Existing.
Instrument name: Search and rescue satellite aided tracking system;
Description: Detects and locates aviators, mariners, and land-based
users in distress;
State of technology: Existing.
Instrument name: Space environmental sensor suite;
Description: Collects data to identify, reduce, and predict the effects
of space weather on technological systems, including satellites and
radio links;
State of technology: New.
Instrument name: Survivability sensor;
Description: Monitors for attacks on the satellite and notifies other
instruments in case of an attack;
State of technology: Existing.
Instrument name: Total solar irradiance sensor;
Description: Monitors and captures total and spectral solar irradiance
data;
State of technology: Existing.
Instrument name: Visible/infrared imager radiometer suite;
Description: Collects images and radiometric data used to provide
information on the earth's clouds, atmosphere, ocean, and land
surfaces;
State of technology: New.
Source: GAO, based on NPOESS Integrated Program Office data.
[End of table]
In addition to the sensors and subsystems listed above, in August 2004,
the President directed NASA and the Departments of Defense, the
Interior, and Commerce to place a LANDSAT-like imagery capability on
the NPOESS platform. This new capability is to collect imagery data of
the earth's surface similar to the current LANDSAT series of
satellites, which are managed by the Department of Interior's U.S.
Geological Survey and are reaching the end of their respective
lifespans. One instrument was launched in 1984 and is now long past its
3-year design life; the newer satellite is not fully operational.
LANDSAT is an important tool in environmental monitoring efforts,
including land cover change, vegetation mapping, and wildfire effects.
The decision to add a LANDSAT-like sensor to the NPOESS platform is
currently being revisited by the President's Office of Science and
Technology Policy and the Office of Management and Budget.
In addition, the NPOESS Preparatory Project (NPP), which is being
developed as a major risk reduction and climate data continuity
initiative, is a planned demonstration satellite to be launched several
years before the first NPOESS satellite is to be launched. It is
planned to host three of the four critical NPOESS sensors (the
visible/infrared imager radiometer suite, the cross-track infrared
sounder, and the advanced technology microwave sounder), as well as a
noncritical sensor (the ozone mapper/profiler suite). NPP will provide
the program office and the processing centers an early opportunity to
work with the sensors, ground control, and data processing systems.
Specifically, this satellite is expected to demonstrate the validity of
about half of the NPOESS environmental data records[Footnote 4] and
about 93 percent of its data processing load.
NPOESS Acquisition Strategy:
NPOESS is a major system acquisition that consists of three key phases:
the concept and technology development phase, which lasted from roughly
1995 to early 1997; the program definition and risk reduction phase
which began in early 1997 and ended in August 2002; and the engineering
and manufacturing development and production phase, which began with
the award of the development and production contract in August 2002 and
will continue through the end of the program. Before the contract was
awarded in 2002, the life cycle cost estimate for the program was
estimated to be $6.5 billion over the 24-year period from the inception
of the program in 1995 through 2018. Shortly after the contract was
awarded, the life cycle cost estimate grew to $7 billion.
When the NPOESS development contract was awarded, program officials
identified an anticipated schedule and funding stream for the program.
The schedule for launching the satellites was driven by a requirement
that the satellites be available to back up the final POES and DMSP
satellites should anything go wrong during the planned launches of
these satellites. In general, program officials anticipate that roughly
1 out of every 10 satellites will fail either during launch or during
early operations after launch.
Early program milestones included (1) launching NPP by May 2006, (2)
having the first NPOESS satellite available to back up the final POES
satellite launch in March 2008, and (3) having the second NPOESS
satellite available to back up the final DMSP satellite launch in
October 2009. If the NPOESS satellites were not needed to back up the
final predecessor satellites, their anticipated launch dates would have
been April 2009 and June 2011, respectively.
In 2003, we reported that these schedules were subsequently changed as
a result of changes in the NPOESS funding stream.[Footnote 5] A DOD
program official reported that between 2001 and 2002 the agency
experienced delays in launching a DMSP satellite, causing delays in the
expected launch dates of another satellite. In late 2002, DOD shifted
the expected launch date for the final satellite from 2009 to 2010. As
a result, the department reduced funding for NPOESS by about $65
million between fiscal years 2004 and 2007. According to program
officials, because NOAA is required to provide the same level of
funding that DOD provides, this change triggered a corresponding
reduction in funding by NOAA for those years. As a result of the
reduced funding, program officials were forced to make difficult
decisions about what to focus on first. The program office decided to
keep NPP as close to its original schedule as possible, because of its
importance to the eventual NPOESS development, and to shift some of the
NPOESS deliverables to later years. This shift affected the NPOESS
deployment schedule. To plan for this shift, the program office
developed a new program cost and schedule baseline.
After this new baseline was completed in 2004, we reported that the
program office increased the NPOESS cost estimate from about $7 billion
to $8.1 billion, and delayed key milestones, including the planned
launch of the first NPOESS satellite--which was delayed by 7
months.[Footnote 6] The cost increases reflected changes to the NPOESS
contract as well as increased program management funds. According to
the program office, contract changes included extension of the
development schedule, increased sensor costs, and additional funds
needed for mitigating risks. Increased program management funds were
added for non-contract costs and management reserves.
We also noted that other factors could further affect the revised cost
and schedule estimates. Specifically, the contractor was not meeting
expected cost and schedule targets of the new baseline because of
technical issues in the development of key sensors. Based on its
performance through May 2004, we estimated that the contractor would
most likely overrun its contract at completion in September 2011 by
$500 million. In addition, we reported that risks associated with the
development of the critical sensors, integrated data processing system,
and algorithms, among other things, could contribute to further cost
increases and schedule slips.
NPOESS Schedules, Costs, and Trends Continue to Worsen:
Over the past year, NPOESS cost increases and schedule delays have
demonstrated worsening trends. NPOESS has continued to experience
problems in the development of a key sensor, resulting in schedule
delays and anticipated cost increases. Further, contractor data show
that costs and schedules are likely to continue to increase in the
future. Our trend analysis shows that the contractor will most likely
overrun costs by $1.4 billion, resulting in a life cycle cost of about
$9.7 billion, unless critical changes are made. Program risks,
particularly with the development of critical sensors, could further
increase NPOESS costs and delay schedules. Management problems at
multiple levels--subcontractor, contractor, program office, and
executive leadership--have contributed to these cost and schedule
issues.
NPOESS Sensor Problems Triggered Schedule Delays and Cost Increases:
NPOESS has continued to experience problems in the development of a key
sensor, resulting in schedule delays and anticipated cost increases. In
early 2005, the program office learned that a subcontractor could not
meet cost and schedule due to significant technical issues on the
visible/infrared imager radiometer suite (VIIRS) sensor--including
problems with the cryoradiator,[Footnote 7] excessive vibration of
sensor parts, and errors in the sensor's solar calibration. These
technical problems were further complicated by inadequate process
engineering and management oversight by the VIIRS subcontractor. To
address these issues, the program office provided additional funds for
VIIRS, capped development funding for the conical-scanned microwave
imager/sounder (CMIS) and the ozone mapper/profiler suite sensors, and
revised its schedule in order to keep the program moving forward.
By the summer of 2005, the program office reported that significant
technical issues had been resolved--but they had a significant impact
on the overall NPOESS program. Regarding NPOESS schedule, the program
office anticipated at least a 10-month delay in the launch of the first
satellite (totaling at least a 17-month delay from the time the
contract was awarded) and a 6-month delay in the launch of the second
satellite. A summary of recent schedule changes is shown in table 2.
The effect of these delays is evident in the widening gap between when
the last POES satellite is expected to launch and when the first NPOESS
satellite could be available if needed as a backup. This is significant
because if the last POES satellite fails on launch, it will be at least
3 years before the first NPOESS satellite could be launched. During
that time, critical weather and environmental observations would be
unavailable--and military and civilian weather products and forecasts
would be significantly degraded.
As for NPOESS costs, program officials reported that the VIIRS
development problems caused the program to overrun its budget, and that
they need to reassess options for funding the program. They did not
provide an updated cost estimate, noting that new cost estimates are
under development. A summary of recent program cost growth is shown in
table 3.
Table 2: Program Schedule Changes:
Milestones: NPP launch;
As of August 2002 contract award: May 2006;
As of February 2004 (rebaseline): October 2006;
As of August 2005: April 2008;
Net change from contract award: 23-month delay;
Minimum change from rebaseline: 18-month delay;
Potential data gap: Not applicable.
Milestones: Final POES launch[A];
As of August 2002 contract award: March 2008;
As of February 2004 (rebaseline): March 2008;
As of August 2005: December 2007;
Net change from contract award: 4-month advance;
Potential data gap: Not applicable.
Milestones: First NPOESS satellite planned for launch;
As of August 2002 contract award: April 2009;
As of February 2004 (rebaseline): November 2009;
As of August 2005: September 2010;
Net change from contract award: 17-month delay;
Minimum change from rebaseline: 10-month delay;
Potential data gap: Not applicable.
Milestones: First NPOESS satellite launch if needed to back up the
final POES;
As of August 2002 contract award: March 2008;
As of February 2004 (rebaseline): February 2010[B];
As of August 2005: December 2010[C];
Net change from contract award: 33-month delay;
Potential data gap: 3-year data gap if final POES fails on launch.
Milestones: Final DMSP launch[A];
As of August 2002 contract award: October 2009;
As of February 2004 (rebaseline): May 2010;
As of August 2005: October 2011;
Net change from contract award: 24-month delay;
Potential data gap: Not applicable.
Milestones: Second NPOESS satellite planned for launch;
As of August 2002 contract award: June 2011;
As of February 2004 (rebaseline): June 2011;
As of August 2005: December 2011;
Net change from contract award: 6-month delay;
Minimum change from rebaseline: 6-month delay;
Potential data gap: Not applicable.
Source: GAO analysis, based on NPOESS Integrated Program Office data.
[A] POES and DMSP are not part of the NPOESS program. Their launch
dates are provided because of their relevance to the NPOESS satellite
schedules.
[B] A program official reported that if the first NPOESS satellite is
needed to back up the final POES satellite, the contractor will prepare
the satellite to be launched in a different orbit with a different
suite of sensors. These factors will prevent launch from taking place
until February 2010.
[C] If the first NPOESS satellite is needed to back up the final POES
satellite, the contractor will prepare the satellite to be launched in
a different orbit with a different suite of sensors, adding three
months to the September 2010 launch date.
[End of table]
Table 3: Program Life Cycle Cost Changes:
As of: July 2002;
Life cycle cost estimate: $6.5 billion;
Life cycle range: 1995-2018.
As of: July 2003;
Life cycle cost estimate: $7.0 billion;
Life cycle range: 1995-2018.
As of: September 2004;
Life cycle cost estimate: $8.1 billion;
Life cycle range: 1995-2020.
As of: November 2005;
Life cycle cost estimate: To be determined;
Life cycle range: To be determined.
Source: GAO analysis, based on NPOESS Integrated Program Office data.
[End of table]
Trends in Contractor Data Show Continued Cost and Schedule Overruns;
Overall Costs Projected to Grow:
In addition to the overall program office cost and schedule estimates,
it is valuable to assess contractor data to monitor the contractor's
progress in meeting deliverables since contractor costs comprise a
substantial portion of the overall program costs. NPOESS contractor
data show a pattern of cost and schedule overruns--and a most likely
contract cost growth of about $1.4 billion.
One method project managers use to track contractor progress on
deliverables is earned value management. This method, used by DOD for
several decades, 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. Cost
variances compare the earned value of the completed work with the
actual cost of the work performed. For example, if a contractor
completed $5 million worth of work and the work actually cost $6.7
million, there would be a -$1.7 million cost variance. Schedule
variances are also measured in dollars, but they compare the earned
value of the work completed to the value of work that was expected to
be completed. For example, if a contractor completed $5 million worth
of work at the end of the month, but was budgeted to complete $10
million worth of work, there would be a -$5 million schedule variance.
Positive variances indicate that activities are costing less or are
completed ahead of schedule. Negative variances indicate that
activities are costing more or are falling behind schedule. These cost
and schedule variances can then be used in estimating the cost and time
needed to complete the program.
Using contractor-provided data, our analysis indicates that NPOESS cost
performance continues to experience negative variances. Figure 4 shows
the 6-month cumulative cost variance for the NPOESS contract. From
March 2005 to September 2005, the contractor exceeded its cost target
by $103.7 million, which is about 9 percent of the contractor's budget
for that time period. The contractor has incurred a total cost overrun
of $253.8 million with NPOESS development only about 36 percent
complete. This information is useful because trends often tend to
continue and can be difficult to reverse unless management attention is
focused on key risk areas and risk mitigation actions are aggressively
pursued. Studies have shown that, once programs are 15 percent
complete, the performance indicators are indicative of the final
outcome.
Based on contractor performance from March 2005 to September 2005, we
estimate that the current NPOESS contract will overrun its budget--
worth approximately $3.4 billion--by between $788 million and $2
billion. Our projection of the most likely cost overrun is about $1.4
billion. The contractor, in contrast, estimates about a $371 million
overrun at completion of the NPOESS contract. Adding our projected $1.4
billion overrun to the prior $8.1 billion life cycle cost estimate and
the project office's estimated need for $225 million in additional
management costs brings the total life cycle cost of the program to
about $9.7 billion.
Figure 4: Cumulative Cost Variance of the NPOESS Contract over a 6-
Month Period:
[See PDF for image]
[End of figure]
Our analysis also indicates that the contract is showing a negative
schedule variance. Figure 5 shows the 6-month cumulative schedule
variance of NPOESS. From March 2005 to September 2005, the contractor
was unable to complete $27.8 million worth of scheduled work. In
September, the contractor was able to improve its overall schedule
performance because of an unexpectedly large amount of work being
completed on the spacecraft (as opposed to the sensors). It was not a
reflection of an improvement in the contractor's ability to complete
work on the critical sensors. Specifically, performance on the
development of critical sensors over the past 6 months continued to be
poor, which indicates that schedule performance will likely remain poor
in the future. This is of concern because an inability to meet contract
schedule performance could be a predictor of future rising costs, as
more spending is often necessary to resolve schedule overruns.
Figure 5: Cumulative Schedule Variance of the NPOESS Contract over a 6-
Month Period:
[See PDF for image]
[End of figure]
Risks Could Further Affect NPOESS Cost and Schedules:
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, resolving, and monitoring project risks.
Program officials reported that they recognize several risks with the
overall program and critical sensors that, if not mitigated, could
further increase costs and delay the schedule. In accordance with
leading management practices, the program office developed a NPOESS
risk management program that requires assigning a severity rating to
risks that bear particular attention, placing these risks in a
database, planning response strategies for each risk in the database,
and reviewing and evaluating risks in the database during monthly
program risk management board meetings.
The program office identifies risks in two categories: program risks,
which affect the whole NPOESS program and are managed at the program
office level, and segment risks, which affect only individual
segments[Footnote 8] and are managed at the integrated product team
level. The program office has identified 17 program risks, including 10
medium to medium-high risks. Some of these risks include the delivery
of four sensors (VIIRS, CMIS, the cross-track infrared sounder and the
ozone mapper/profiler suite) and the integrated data processing system;
and the uncertainty that algorithms will meet system performance
requirements. Figure 6 identifies the 17 program risks and their
assigned levels of risk.
Figure 6: Key Program Risks as Identified by the NPOESS Program Office,
as of August 2005:
[See PDF for image]
[End of figure]
Managing the risks associated with the development of VIIRS, the ozone
mapper/profiler suite, the cross-track infrared sounder, the integrated
data processing system, and algorithm performance is of particular
importance because these are to be demonstrated on the NPP satellite
that is currently scheduled for launch in April 2008. The risks with
the development of CMIS are also important because CMIS is one of the
four critical sensors providing data for key weather products.
At present, the program office considers two critical sensors--VIIRS
and CMIS--to present key program risks because of technical challenges
that each is facing. In addition to the previously reported VIIRS
problems, the sensor continues to experience significant problems
dealing with the technical complexity of the ground support equipment.
The testing of optical and solar diffuser components has also been more
challenging than expected and is taking longer than planned to
complete. In addition, the delivery of components for integration onto
the sensor, including the electronics material from two subcontractors,
has been behind schedule due to technical challenges. Until the current
technical issues are resolved, delays in the VIIRS delivery and
integration onto the NPP satellite remain a potential threat to the
expected launch date of the NPP.
The CMIS sensor is experiencing schedule overruns that may threaten its
expected delivery date. Based on the prime contractor's analysis, late
deliveries of major CMIS subsystems will occur unless the current
schedule is extended. For example, the simulator hardware is already
expected to be delivered late, based on the current contractual
requirement of December 2006. CMIS also continues to experience
technical challenges in the design of the radio frequency receivers,
the structure, and the antenna. In addition, extensive effort has been
expended to resolve system reliability and thermal issues, among other
things. To the program office's credit, it is aware of these risks and
is using its risk management plans to help mitigate them.
Current Program Issues Due, In Part, to Problems at Multiple Management
Levels:
Problems involving multiple levels of management--including
subcontractor, contractor, program office, and executive leadership--
have played a role in bringing the NPOESS program to its current state.
As noted earlier, VIIRS sensor development issues were attributed, in
part, to the subcontractor's inadequate project management.
Specifically, after a series of technical problems, internal review
teams sent by the prime contractor and the program office found that
the VIIRS subcontractor had deviated from a number of contract,
management, and policy directives set out by the main office and that
both management and process engineering were inadequate. Neither the
contractor nor the program office recognized the underlying problems in
time to fix them. After these issues were identified, the
subcontractor's management team was replaced. Further, in January 2005,
the NPOESS Executive Committee (Excom) called for an independent review
of the VIIRS problems. This independent review, delivered in August
2005, reported that the program management office did not have the
technical system engineering support it needed to effectively manage
the contractor, among other things. Additionally, the involvement of
NPOESS executive leadership has wavered from frequent heavy involvement
to occasional meetings with few resulting decisions. Specifically, the
Excom has met five times over the last 2 years. Most of these meetings
did not result in major decisions, but rather triggered further
analysis and review. For instance, program officials and the program's
Tri-agency Steering Committee[Footnote 9] identified five options to
present at the executive committee meeting in mid-August 2005 and
expected to receive direction on how to proceed with the project. The
Excom did not select an option. Instead, it requested further analysis
of the options by another independent review team, and an independent
cost estimate by DOD's Cost Analysis Improvement Group.
Sound management is critical to program success. In our reviews of
major acquisitions throughout the government, we have reported that
sound program management, contractor oversight, risk identification and
escalation, and effective and timely executive level oversight are key
factors determining a project's ability to be delivered on time, within
budget, and with promised functionality.[Footnote 10] Given the history
of large cost increases and the factors that could further affect
NPOESS costs and schedules, continued oversight, strong leadership, and
timely decision making are more critical than ever.
Options for Moving Forward Are under Consideration, but Cost, Schedule,
and Impact on Users Are Not Fully Understood:
In August 2005, the program office briefed its Executive Committee on
the program's cost, schedule, and risks. The program office noted that
the budget for the program was no longer executable and offered
multiple alternatives for reconfiguring the program. Specifically, the
program office and contractor developed 26 options during the March to
August 2005 timeframe. Of these options, the Tri-agency Steering
Committee selected five options, shown in table 4. All of these options
alter the costs, schedules, and deliverables for the program. While the
options' preliminary life cycle cost estimates range from $8.8 billion
to $9.2 billion, they all involve reductions in functionality and
limited probabilities for meeting schedules within the cited budgets.
None of the options presented discussed the potential for adding
funding in the short term to hold off longer-term life cycle cost
increases.
Table 4: Selected program options:
Option description: Delay first and second NPOESS satellite launches
and do not include the CMIS sensor on C-1;
Estimated cost increase[A]/Preliminary life cycle cost estimate: $948
million/$9.0 billion;
Schedule change on first and second planned satellite launches (called
C-1 and C-2): C-1 launch delayed by 10 months; C-2 launch delayed by 6
months;
Probability of meeting schedule within cited budget: 50 percent;
Performance change: CMIS sensor not included on C-1.
Option description: Cancel the last POES satellite; delay launch of C-
1 and C-2; and do not include the CMIS sensor on C-1;
Estimated cost increase[A]/Preliminary life cycle cost estimate: $948
million/$9.0 billion;
Schedule change on first and second planned satellite launches (called
C-1 and C-2): C-1 launch delayed by 16 months; C-2 launch delayed by 16
months;
Probability of meeting schedule within cited budget: 75 percent;
Performance change: CMIS sensor not included on C-1.
Option description: Cancel NPP; delay C-1 and C-2 launches;
Estimated cost increase[A]/Preliminary life cycle cost estimate: $758
million/$8.9 billion;
Schedule change on first and second planned satellite launches (called
C-1 and C-2): C-1 launch delayed by 10 months; C-2 launch delayed by 6
months;
Probability of meeting schedule within cited budget: 40 percent.
Option description: Cancel NPP; delay C-1 and C-2 launches; and defer
CMIS until C-2;
Estimated cost increase[A]/Preliminary life cycle cost estimate: $676
million/$8.8 billion;
Schedule change on first and second planned satellite launches (called
C-1 and C-2): C-1 launch delayed by 10 months; C-2 launch delayed by 6
months;
Probability of meeting schedule within cited budget: 70 percent;
Performance change: CMIS sensor not included on C-1.
Option description: Cancel C-1, use European satellite data in its
place;
Estimated cost increase[A]/Preliminary life cycle cost estimate: $1.105
billion/$9.2 billion;
Schedule change on first and second planned satellite launches (called
C-1 and C-2): C-1 cancelled; C-2 unchanged;
Probability of meeting schedule within cited budget: 60 percent;
Performance change: Does not meet critical performance requirements.
Source: NPOESS Integrated Program Office data.
[A] Cost increases include contract costs and $225 million for the
program office.
[End of table]
Project officials anticipated that at its August meeting, the Excom
would decide on an option and provide directions for keeping the
project moving. However, Excom officials requested further analysis and
detailed cost estimates, and they deferred a decision among
alternatives until December 2005.
New Options Under Consideration Would Affect Cost, Schedule, and System
Users; Full Extent Unknown:
Last week, we learned that in addition to the five options presented in
August 2005, program executives are considering nine new options. While
we were not provided any details about the nine new options, program
officials informed us that they too will affect NPOESS costs, schedule,
and promised functionality for system users--although their full impact
is not yet clear. Program officials expect the Excom to decide on a
limited number of options on November 22, 2005, and to obtain
independent cost estimates of those options and make a decision to
implement one of the options in December 2005. After a decision is
made, the prime contractor will need time to develop more precise cost
estimates and the program office with need to renegotiate the contract.
Until a decision is made, the program remains without a plan for moving
forward. Further, there are opportunity costs in not making a decision-
-that is, some options may no longer be viable, contractors are not
working towards a chosen solution, and other potential options become
more difficult to implement:
Clearly, timely decisions are needed to allow the program to move
forward and for satellite data users to start planning for any data
shortfalls they may experience. Until a decision is made on how the
program is to proceed, the contractor and program office cannot start
to implement the chosen solution and some decisions, such as the
ability to hold schedule slips to a minimum, become much more
difficult.
In summary, NPOESS is a program in crisis. Over the last few years, it
has been troubled by technical problems, cost increases, and schedule
delays. Looking forward, technical challenges persist; costs are likely
to grow; and schedule delays could lead to gaps in satellite coverage.
Program officials and executives are considering various options for
dropping functionality in order to handle cost and schedule increases,
but the full impact of these options is not clear. Moving forward,
continued oversight, strong leadership, and informed and timely
decision making are more critical than ever.
This concludes my statement. I would be pleased to respond to any
questions that you or other members of the Committee may have at this
time.
Contact and Acknowledgements:
If you have any questions regarding this testimony, please contact
David Powner at (202) 512-9286 or by email at pownerd@gao.gov.
Individuals making contributions to this testimony include Carol Cha,
Neil Doherty, Joanne Fiorino, Kathleen S. Lovett, Colleen Phillips, and
Karen Richey.
[End of section]
Appendix I: Objectives, Scope, and Methodology:
Our objectives were to (1) discuss the National Polar-orbiting
Operational Environmental Satellite System (NPOESS) program's schedule,
cost, trends, and risks and (2) describe plans and implications for
moving the program forward. To accomplish these objectives, we focused
our review on the Integrated Program Office, the organization
responsible for the overall NPOESS program. We also met with officials
from the Department of Defense, the National Aeronautics and Space
Administration, and NOAA's National Weather Service and National
Environmental Satellite Data and Information Service to discuss user
needs for the program.
To identify schedule and cost changes, we reviewed program office
contract data, the Executive Committee minutes and briefings, and an
independent review team study, and we interviewed program officials. We
compared changes in NPOESS cost and schedule estimates to prior cost
and schedule estimates as reported in our July 2002[Footnote 11] and
July 2003 testimonies[Footnote 12] and in our September 2004
report.[Footnote 13]
To identify trends that could affect the program baseline in the
future, we assessed the prime contractor's cost and schedule
performance. To make these assessments, we applied earned value
analysis techniques[Footnote 14] to data from contractor cost
performance reports. We compared the cost of work completed with the
budgeted costs for scheduled work for a 6-month period, from March to
September 2005, to show trends in cost and schedule performance. We
also used data from the reports to estimate the likely costs at the
completion of the prime contract through established earned value
formulas. This resulted in three different values, with the middle
value being the most likely. We used the base contract without options
for our earned value assessments.
To identify risks, we reviewed program risk management documents and
interviewed program officials. Further, we evaluated earned value cost
reports to determine the key risks that negatively affect NPOESS's
ability to maintain the current schedule and cost estimates.
To assess options and implications for moving the program forward, we
reviewed the five options presented at the Executive Committee briefing
and met with representatives of the National Weather Service and
National Environmental Satellite Data and Information Service to obtain
their views on user's needs and priorities for satellite data.
NOAA officials generally agreed with the facts presented in this
statement and provided some technical corrections, which we have
incorporated. We performed our work at the Integrated Program Office,
DOD, NASA, and NOAA in the Washington, D.C., metropolitan area, between
June 2005 and November 2005, in accordance with generally accepted
government auditing standards.
FOOTNOTES:
[1] GAO, Polar-orbiting Environmental Satellites: Information on
Program Cost and Schedule Changes, GAO-04-1054 (Washington, D.C.:
September 30, 2004); Polar-orbiting Environmental Satellites: Project
Risks Could Affect Weather Data Needed by Civilian and Military Users,
GAO-03-987T (Washington, D.C.: July 15, 2003); Polar-orbiting
Environmental Satellites: Status, Plans, and Future Data Management
Challenges, GAO-02-684T (Washington, D.C.: July 24, 2002); National
Oceanic and Atmospheric Administration: National Weather Service
Modernization and Weather Satellite Program, GAO/T-AIMD-00-86
(Washington, D.C.: March 29, 2000); and Weather Satellites: Planning
for the Geostationary Satellite Program Needs More Attention, GAO-AIMD-
97-37 (Washington, D.C.: March 13, 1997).
[2] These environmental data sets, specialized weather and
oceanographic products, and weather prediction model outputs are
produced through algorithmic processing. An algorithm is a precise set
of procedures that enable a desired end result, such as a measurement
of natural phenomena.
[3] NSTC-2, May 5, 1994.
[4] Environmental data records are weather products derived from sensor
data records and temperature data records.
[5] GAO-03-987T.
[6] GAO-04-1054.
[7] The cryoradiator is a key component of the VIIRS sensor. It is
intended to cool down components of the sensor.
[8] These segments are identified as (1) overall system integration,
(2) the launch segment, (3) the space segment, (4) the interface data
processing segment, and (5) the command, control, and communications
segment.
[9] The Tri-agency Steering Committee reviews and consolidates issues
for the Executive Committee and provides oversight of the program
office.
[10] For example, GAO, High-Risk Series: An Update, GAO-05-207
(Washington, D.C.: January 2005) and Major Management Challenges and
Program Risks: Department of Transportation,GAO-03-108 (Washington,
D.C.: January 2003).
[11] GAO, Polar-orbiting Environmental Satellites: Status, Plans, and
Future Data Management Challenges, GAO-02-684T (Washington, D.C.: July
24, 2002).
[12] GAO, Polar-orbiting Environmental Satellites: Project Risks Could
Affect Weather Data Needed by Civilian and Military Users, GAO-03-987T
(Washington, D.C.: July 15, 2003).
[13] GAO, Polar-orbiting Environmental Satellites: Information on
Program Cost and Schedule Changes, GAO-04-1054 (Washington, D.C.:
September 30, 2004).
[14] The earned value concept is applied as a means of placing a dollar
value on project status. It is a technique that compares budget versus
actual costs versus project status in dollar amounts. For our analysis,
we used standard earned value formulas to calculate cost and schedule
variance and forecast the range of cost overrun at contract completion.
