Polar-Orbiting Environmental Satellites
Information on Program Cost and Schedule Changes Gao ID: GAO-04-1054 September 30, 2004Our 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 satellite 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. Because of changes in funding levels after the contract was awarded, the program office recently developed a new cost and schedule baseline for NPOESS. GAO was asked to provide an interim update to (1) identify any cost or schedule changes as a result of the revised baseline and determine what contributed to these changes and (2) identify factors that could affect the program baseline in the future. In commenting on a draft of this report, DOD, NOAA, and NASA officials generally agreed with the report and offered technical corrections, which we incorporated where appropriate.
The program office has increased the NPOESS cost estimate by $1.2 billion, from $6.9 to $8.1 billion, and delayed key milestones, including the availability of the first NPOESS satellite--which was delayed by 20 months. The cost increases reflect changes to the NPOESS contract as well as increased program management costs. The contract changes include extension of the development schedule to accommodate changes in the NPOESS funding stream, increased sensor costs, and additional funds needed for mitigating risks. Increased program management funds were added for non-contract costs and management reserves. The schedule delays were the result of stretching out the development schedule to accommodate a change in the NPOESS funding stream. Other factors could further affect the revised cost and schedule estimates. First, the contractor is 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 to date, GAO estimates that the contractor will most likely overrun its contract at completion in September 2011 by at least $500 million. Second, the risks associated with the development of the critical sensors, integrated data processing system, and algorithms could also contribute to increased cost and schedule slips.
GAO-04-1054, Polar-Orbiting Environmental Satellites: Information on Program Cost and Schedule Changes
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Report to the Subcommittee on Environment, Technology, and Standards,
Committee on Science, House of Representatives:
September 2004:
POLAR-ORBITING ENVIRONMENTAL SATELLITES:
Information on Program Cost and Schedule Changes:
GAO-04-1054:
GAO Highlights:
Highlights of GAO-04-1054, a report to Subcommittee on Environment,
Technology, and Standards, Committee on Science, House of
Representatives:
Why GAO Did This Study:
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
satellite 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. Because of changes in funding levels after the contract was
awarded, the program office recently developed a new cost and schedule
baseline for NPOESS.
GAO was asked to provide an interim update to (1) identify any cost or
schedule changes as a result of the revised baseline and determine what
contributed to these changes and (2) identify factors that could affect
the program baseline in the future.
In commenting on a draft of this report, DOD, NOAA, and NASA officials
generally agreed with the report and offered technical corrections,
which we incorporated where appropriate.
What GAO Found:
The program office has increased the NPOESS cost estimate by $1.2
billion, from $6.9 to $8.1 billion, and delayed key milestones,
including the availability of the first NPOESS satellite”which was
delayed by 20 months. The cost increases reflect changes to the NPOESS
contract as well as increased program management costs. The contract
changes include extension of the development schedule to accommodate
changes in the NPOESS funding stream, increased sensor costs, and
additional funds needed for mitigating risks. Increased program
management funds were added for non-contract costs and management
reserves. The schedule delays were the result of stretching out the
development schedule to accommodate a change in the NPOESS funding
stream.
Other factors could further affect the revised cost and schedule
estimates. First, the contractor is 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 to date, GAO
estimates that the contractor will most likely overrun its contract at
completion in September 2011 by at least $500 million. Second, the
risks associated with the development of the critical sensors,
integrated data processing system, and algorithms could also
contribute to increased cost and schedule slips.
Satellites Collect and Transmit Meteorological Data Worldwide:
[See PDF for image]
[End of table]
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To view the full product, including the scope and methodology, click
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[End of section]
Contents:
Letter:
Results in Brief:
Background:
NPOESS Overview:
NPOESS Costs Have Increased, and Schedules Have Been Delayed:
NPOESS Could Experience Further Cost and Schedule Increases:
Conclusions:
Agency Comments:
Appendix:
Appendix I: Objectives, Scope, and Methodology:
Tables:
Table 1: Expected NPOESS Instruments (critical sensors in bold), as of
August 31, 2004:
Table 2: Cost Increases Resulting from the Revised Plan (dollars in
millions):
Table 3: Program Schedule Changes:
Figures:
Figure 1: Configuration of Operational Polar Satellites:
Figure 2: Generic Data Relay Pattern for the Polar Meteorological
Satellite System:
Figure 3: Organizations Coordinated by the NPOESS Integrated Program
Office:
Figure 4: Cumulative Cost Variance of the NPOESS Program over a 15-
Month Period:
Figure 5: Cumulative Schedule Variance of the NPOESS Program over a 15-
Month Period:
Figure 6: Key Program Risks as Identified by the NPOESS Program Office,
as of February 2004:
Abbreviations:
CMIS: conical-scanned microwave imager/sounder:
CrIS: cross-track infrared sounder:
DMSP: Defense Meteorological Satellite Program:
DOD: Department of Defense:
NASA: National Aeronautics and Space Administration:
NESDIS: National Environmental Satellite, Data, and Information
Service:
NOAA: National Oceanic and Atmospheric Administration:
NPOESS: National Polar-orbiting Operational Environmental Satellite
System:
NPP: NPOESS Preparatory Project:
POES: Polar-orbiting Operational Environmental Satellites:
VIIRS: visible/infrared imager radiometer suite:
Letter September 30, 2004:
The Honorable Vernon J. Ehlers:
Chairman:
The Honorable Mark Udall:
Ranking Member:
Subcommittee on Environment, Technology, and Standards:
Committee on Science:
House of Representatives:
Our nation's operational polar-orbiting environmental satellite
program is a complex infrastructure encompassing two satellite systems,
the Polar-orbiting Operational Environmental Satellites (POES) and the
Defense Meteorological Satellite Program (DMSP), as well as supporting
ground stations and four central data processing centers. The program
provides general weather information and specialized environmental
products to a variety of users, including weather forecasters, military
strategists, and the public. A tri-agency Integrated Program Office--
comprised of officials from the Department of Defense (DOD), the
National Oceanic and Atmospheric Administration (NOAA), and the
National Aeronautics and Space Administration (NASA)--is working to
combine the two current satellite systems into a single state-of-the-
art environment monitoring satellite system called the National Polar-
orbiting Operational Environmental Satellite System (NPOESS). 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.
When we testified on the NPOESS program in July 2003,[Footnote 1] we
reported that the program office was working to address changes in
funding levels after the contract was awarded, and planned to develop a
new cost and schedule baseline. Concerned with these cost and schedule
changes, you asked us to provide an interim update on the revised
baseline. Specifically, our objectives were to (1) identify any cost or
schedule changes as a result of the revised baseline and determine what
contributed to these changes, and (2) identify factors that could
affect the program baseline in the future.
To address these objectives, we reviewed the new NPOESS cost and
schedule baseline and compared it to the old baseline. Then we
identified the factors that contributed to any cost increases or
schedule delays. We also analyzed program cost estimates and project
management reports and interviewed officials from the NPOESS Integrated
Program Office, DOD, NOAA, and NASA. In addition, this review builds on
other work we have done on environmental satellite programs over the
last several years.[Footnote 2] As agreed with your staff members, we
plan to continue our oversight of this program.
We conducted our work at NOAA, DOD, and NASA headquarters in the
Washington, D.C., metropolitan area between November 2003 and August
2004, in accordance with generally accepted government auditing
standards. Appendix I contains further details on our objectives,
scope, and methodology.
Results in Brief:
The program office has increased the NPOESS cost estimate by $1.2
billion, from $6.9 to $8.1 billion, and delayed key milestones,
including the expected availability of the first NPOESS satellite--
which was delayed by 20 months. The cost increases reflect changes to
the NPOESS contract as well as increased program management funds.
According to the program office, contract changes include 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. The schedule
delays were the result of stretching out the development schedule to
accommodate a change in the NPOESS funding stream.
Other factors could further affect the revised cost and schedule
estimates. Specifically, the contractor is 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 to date, we
estimate that the contractor will most likely overrun its contract at
completion in September 2011 by $500 million. In addition, risks
associated with the development of the critical sensors, integrated
data processing system, and algorithms, among other things, could also
contribute to increased cost and schedule slips.
In commenting on a draft of this report, DOD, NASA, and NOAA officials
generally agreed with the report and offered technical corrections,
which we incorporated where appropriate.
Background:
Since the 1960s, the United States has operated two separate
operational polar-orbiting meteorological satellite systems: POES,
managed by NESDIS of NOAA and DMSP, managed by 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. Today, 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 2008 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 is 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 the four processing centers-
-NESDIS, the Air Force Weather Agency, 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 3] 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, academia, and
many are operated by DOD. 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 4] 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. To manage this program, DOD,
NOAA, and NASA formed a tri-agency Integrated Program Office located
within NOAA.
Within the program office, each agency has the lead on certain
activities. NOAA has overall program management responsibility for the
converged system, as well as 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 coordinated by the Integrated Program Office and
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 11 environmental systems
and 2 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 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 presents the planned
instruments and the state of technology on each.
Table 1: Expected NPOESS Instruments (critical sensors in bold), as of
August 31, 2004:
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, the NPOESS Preparatory Project (NPP), which is being
developed as a major risk reduction initiative, is a planned
demonstration satellite to be launched in 2006, several years before
the first NPOESS satellite launch in 2009. It is scheduled 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 one other 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 5] and about 93 percent
of its data processing load.
NPOESS Acquisition Strategy:
When the NPOESS development contract was awarded, program office
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.
Key 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.
These schedules were changed as a result of changes in the NPOESS
funding stream. 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 DMSP satellite.
In late 2002, DOD shifted the expected launch date for the final DMSP
satellite from 2009 to 2010. As a result, DOD reduced funding for
NPOESS by about $65 million between fiscal years 2004 and 2007.
According to NPOESS program officials, because NOAA is required to
provide no more funding than 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.
NPOESS Costs Have Increased, and Schedules Have Been Delayed:
The program office has increased the NPOESS life cycle cost estimate by
$1.2 billion, from $6.9 to $8.1 billion, and delayed key milestones--
including the expected availability of the first NPOESS satellite,
which was delayed by 20 months. The cost increases reflect changes to
the NPOESS contract as well as increased program management funds. The
contract changes include 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. The schedule delays were the result of
stretching out the development schedule to accommodate the change in
the NPOESS funding stream. In addition, the delayed launch dates of the
NPOESS satellites have extended the maintenance and operation of the
satellite system from 2018 to 2020.
When we testified on the NPOESS program in July 2003, we reported that
the program office was working to develop a new cost and schedule
baseline due to a change in the NPOESS funding stream. The program
office completed its efforts to revise the NPOESS cost and schedule
baseline in December 2003.
As a result of the revised baseline, the program office increased the
NPOESS cost estimate by $638 million, from $6.9 to $7.5 billion. The
program office attributed the $638 million cost increase to extending
the development schedule to accommodate the changing funding stream,
increased sensor costs, and additional funds needed for mitigating
risks. The program office has since increased funds for non-contract
costs and management reserves, which raised its estimate by an
additional $562 million to bring the NPOESS life cycle cost estimate to
$8.1 billion. According to program officials, non-contract costs
included oversight expenses for the prime contract and sensor
subcontracts. Management reserves, which are a part of the total
program budget and should be used to fund undefined but anticipated
work, are expected to last through 2020.[Footnote 6] Table 2 shows a
breakdown of the cost increases resulting from the revised plan.
Table 2: Cost Increases Resulting from the Revised Plan (dollars in
millions):
Effort: NPOESS cost estimate before revised plan;
Amount: $6,950.
Effort: Changes to the NPOESS Contract: Inflationary impacts of delays
to accommodate funding cuts;
Amount: $112.
Effort: Changes to the NPOESS Contract: Impact of slowed start and
contract extension resulting from delaying the first NPOESS satellite
and stretching out several sensor deliveries;
Amount: $406.
Effort: Changes to the NPOESS Contract: Additional tasks related to
sensors;
Amount: $64.
Effort: Changes to the NPOESS Contract: Preparation cost of the
revised plan effort;
Amount: $13.
Effort: Changes to the NPOESS Contract: Additional funds required for
risk mitigation;
Amount: $43.
Effort: Total revised plan costs;
Amount: $638.
Effort: Changes to Program Management Costs: Additional non-contract
costs and management reserves;
Amount: $536.
Effort: Changes to Program Management Costs: Increase in program office
costs;
Amount: $26.
Effort: NPOESS cost estimate after revised plan;
Amount: $8,150.
Source: NPOESS Integrated Program Office data.
[End of table]
Recently, program officials reported that a new life cycle cost
estimate would be developed by the contractor and program office. The
program office expects to brief its executive oversight committee on
the results of its cost estimate analysis by December 2004. The new
cost estimate will be used to help develop the NPOESS fiscal year 2007
budget request. Officials reported that the new estimate is necessary
in order to ensure that the program will be adequately funded through
its life.
In addition to increasing the cost estimate, the program office has
delayed key milestones, including the expected availability of the
first satellite, which was delayed by 20 months. The program office
attributed the schedule delays to stretching out the development
schedule to accommodate the changing funding stream. Table 3 shows
program schedule changes for key milestones.
Table 3: Program Schedule Changes:
Milestones: NPP launch;
As of August 2002 contract award: May 2006;
As of February 2004 after the revised plan: October 2006;
Change from contract award to the revised plan: 5-month delay.
Milestones: Final POES launch[A];
As of August 2002 contract award: March 2008;
As of February 2004 after the revised plan: March 2008.
Milestones: First NPOESS satellite available for launch;
As of August 2002 contract award: March 2008;
As of February 2004 after the revised plan: November 2009;
Change from contract award to the revised plan: 20-month delay[B].
Milestones: First NPOESS satellite planned for launch;
As of August 2002 contract award: April 2009;
As of February 2004 after the revised plan: November 2009[C];
Change from contract award to the revised plan: 7-month delay.
Milestones: Final DMSP launch[A];
As of August 2002 contract award: October 2009;
As of February 2004 after the revised plan: May 2010[D].
Milestones: Second NPOESS satellite available for launch;
As of August 2002 contract award: October 2009;
As of February 2004 after the revised plan: June 2011;
Change from contract award to the revised plan: 20-month delay.
Milestones: Second NPOESS satellite planned for launch;
As of August 2002 contract award: June 2011;
As of February 2004 after the revised plan: June 2011;
Change from contract award to the revised plan: No change.
Milestones: Third NPOESS satellite available for launch;
As of August 2002 contract award: March 2011;
As of February 2004 after the revised plan: May 2013;
Change from contract award to the revised plan: 26- month delay.
Milestones: Third NPOESS satellite planned for launch;
As of August 2002 contract award: May 2013;
As of February 2004 after the revised plan: June 2013;
Change from contract award to the revised plan: 1- month delay.
Milestones: Fourth NPOESS satellite available for launch;
As of August 2002 contract award: June 2012;
As of February 2004 after the revised plan: May 2014;
Change from contract award to the revised plan: 23- month delay.
Milestones: Fourth NPOESS satellite planned for launch;
As of August 2002 contract award: November 2015;
As of February 2004 after the revised plan: November 2015;
Change from contract award to the revised plan: No change.
Milestones: End of operations and maintenance;
As of August 2002 contract award: 2018;
As of February 2004 after the revised plan: 2020;
Change from contract award to the revised plan: 2-year extension.
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] In our July 2003 testimony (GAO-03-987T), we reported a 21-month
delay with launch availability in December 2009. However, since then,
the program office has accelerated this date.
[C] 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.
[D] In commenting on a draft of this report, DOD officials noted that
the current launch date is October 2011.
[End of table]
A result of the program office extension of several critical milestone
schedules is that less slack is built into the schedules for managing
development and production issues. For example, the first NPOESS
satellite was originally scheduled to be available for launch by March
2008 and to launch by April 2009. This enabled the program office to
have 13 months to resolve any potential problems with the satellite
before its expected launch. Currently, the first NPOESS satellite is
scheduled to be available for launch by November 2009 and to launch the
same month. This will allow the program office less than one month to
resolve any problems. The program office has little room for error, and
should something go wrong in development or production, the program
office would have to delay the launch further.
NPOESS Could Experience Further Cost and Schedule Increases:
NPOESS costs and schedules could continue to increase in the future.
The contractor's continued slippage of expected cost and schedule
targets indicates that the NPOESS contract[Footnote 7] will most likely
be overrun by $500 million at contract completion in September 2011.
Program risks, particularly with the development of critical sensors to
be demonstrated on the NPP satellite, could also increase costs and
delay schedules for NPOESS.
Current Shortfalls in Cost and Schedule Targets Could Require
Additional Funds to Meet Launch Deadlines:
To be effective, project managers need information on project
deliverables and on a contractor's progress in meeting those
deliverables. One method that can help project managers track 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 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 was experiencing negative variances before the revised plan
was implemented in December 2003, and continued to deteriorate after
the implementation of the revised plan. Figure 4 shows the 15-month
cumulative cost variance for the NPOESS contract. From March 2003 to
November 2003, the contractor exceeded its cost target by $16.1
million, which is about 4.5 percent of the contractor's budget for that
time period. From December 2003 to May 2004, the contractor exceeded
its cost target by $33.6 million, or about 5.7 percent of the
contractor's budget. The contractor has incurred a total cost overrun
of about $55 million with NPOESS development less than 20 percent
complete. This information is useful because trends tend to continue
and can be difficult to reverse. Studies have shown that, once programs
are 15 percent complete, the performance indicators are indicative of
the final outcome.
Figure 4: Cumulative Cost Variance of the NPOESS Program over a 15-
Month Period:
[See PDF for image]
[End of figure]
Our analysis also indicates that the program is showing a negative
schedule variance. Figure 5 shows the 15-month cumulative schedule
variance of NPOESS. From March 2003 to November 2003, the contractor
recovered almost $11 million worth of planned work in the schedule.
Program officials reported that within this time period, the program
office ordered the contractor to stop some work until the new baseline
was established. This work stoppage contributed to schedule degradation
between March 2003 and August 2003. In September 2003, the program
office implemented portions of the revised plan, which resulted in an
improvement in schedule performance. The revised plan alleviated some
of the cumulative schedule overrun by delaying the deadline for first
unit availability by 20 months. However, based on our analysis, the
cumulative schedule variance indicates slippage in the new schedule.
Since December 2003, the contractor has been unable to complete
approximately $19.7 million worth of scheduled work. The current
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 Program over a 15-
Month Period:
[See PDF for image]
[End of figure]
According to program office documents, cost and schedule overruns that
occurred before December 2003 were caused by planning activities
related to the revised plan, as well as by technical issues related to
the development of the critical sensors and the spacecraft
communications software. Since the completion of the revised plan, the
program's ability to meet the new performance goals continues to be
hampered by technical issues with the design complexity, testing, and
integration, among other things, of the critical sensors. These
technical issues could cause further cost and schedule shortfalls.
Based on contractor performance from December 2003 to May 2004, we
estimate that the current NPOESS contract--which ends in September 2011
and is worth approximately $3.4 billion--will overrun its budget by
between $372 million and $891 million. Our projection of the most
likely cost overrun will be about $534 million, or about 16 percent of
the contract. The contractor, in contrast, estimates about a $130
million overrun at completion of the NPOESS contract.
Risks Could Further Affect NPOESS Cost and Schedule:
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 21 program risks, including 14
medium to medium-high risks. Some of these risks include the
development of three critical sensors (the visible/infrared imager
radiometer suite (VIIRS), the cross-track infrared sounder (CrIS), and
the conical-scanned microwave imager/sounder (CMIS)) and the integrated
data processing system; the uncertainty that algorithms will meet
system performance requirements; and the effort to obtain a security
certification and accreditation. Figure 6 includes the 21 program risks
and their assigned levels of risk.
Figure 6: Key Program Risks as Identified by the NPOESS Program Office,
as of February 2004:
[See PDF for image]
[End of figure]
Managing the risks associated with the development of VIIRS and CrIS,
the integrated data processing system, and algorithm performance is of
particular importance because these are to be demonstrated on the NPP
satellite currently scheduled for launch in October 2006. Any delay in
the NPP launch date could affect the overall NPOESS program because the
success of the program depends on the lessons learned in data
processing and system integration from the NPP satellite.
At present, the program office considers the three critical sensors--
VIIRS, CMIS, and CrIS--to be key program risks because of technical
challenges that each is facing. VIIRS's most severe technical issue,
relating to flight-quality integrated circuits, was recently resolved;
however, the program office continues to consider the schedule for the
VIIRS sensor acquisition to be high risk. The prime contractor's
analysis of the current schedule indicated that the present schedule is
unlikely to be achieved, considering the technical risks, the
optimistically planned integration and test phase, and the limited
slack in the schedule at this stage of the program. VIIRS is
experiencing ongoing technical issues on major subcontracts related to
the motors, rotating telescope, and power supply. As a result of the
numerous ongoing issues--many of which affect system performance--
significantly more modeling, budget allocation work, and performance
reviews have been required than were originally planned. 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 and CrIS sensor acquisitions are experiencing schedule
overruns that may threaten their respective expected delivery dates.
CMIS technical challenges include unplanned redesigns for receiver and
antenna components, system reliability issues, and thermal issues. A
significant amount of CrIS's developmental progress has been impeded by
efforts to address a signal processor redesign, vibration issues in an
optical instrument, and the late subcontract deliveries of some parts.
To the program office's credit, it is aware of these risks and is using
its risk management plans to help mitigate them. We plan to further
evaluate the risk mitigation strategies of the Integrated Program
Office in a follow-on review.
Conclusions:
The next generation polar-orbiting environmental satellite program,
NPOESS, recently underwent a replanning effort that increased the
NPOESS cost estimate by $1.2 billion, from $6.9 to $8.1 billion and
delayed key milestones, including the expected availability of the
first satellite by 20 months.
Other factors could further affect the revised cost and schedule
estimates. Specifically, the current shortfalls in performance targets
indicate that the NPOESS contract will most likely be overrun by $500
million at completion in September 2011 and program risks could
contribute to additional cost and schedule slips. The program office is
planning to develop new cost estimates but has not yet determined the
impact of these risks.
Given the history of large cost increases and the factors that could
further affect NPOESS costs and schedules, continued oversight is more
critical than ever. Accordingly, we plan to continue our review of this
program.
Agency Comments:
We provided a draft of this report to the Secretary of Commerce,
Secretary of Defense, and the Administrator of NASA for review and
comment. The departments generally agreed with the report and provided
written and oral technical corrections, which have been incorporated as
appropriate.
NOAA, Integrated Program Office, DOD officials, including the System
Program Director of the NPOESS Integrated Program Office and the
Assistant for Environmental Monitoring from the Office of the Assistant
Secretary of Defense, noted that changes in funding levels, triggered
after the contract was awarded, were the primary reason for
rebaselining the program's costs and schedules. These funding level
changes caused them to delay the development of the NPOESS system and
led them to renegotiate the NPOESS contract. We revised our report to
clarify the factors leading up to revising the baseline.
Additionally, NOAA officials commented that the Integrated Program
Office continues to aggressively manage the NPOESS program to ensure it
is completed within cost, schedule, and performance. In regard to our
estimate that the contract will overrun by at least $500 million, NOAA
officials reported that the agency will manage the contract to ensure
that any cost overrun is identified and addressed. To this end, NOAA
has asked the contractor to develop a new life cycle cost estimate.
NOAA and DOD officials also noted that in August 2004, the President
directed the Departments of Defense, the Interior, Commerce, and NASA
to place a LANDSAT-like imagery capability on the NPOESS platform. This
new capability will 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 lifespans. Officials expect that this new sensor will be
funded separately and will not affect the NPOESS program's cost or
schedule. Accordingly, while this recent event is important to the
NPOESS program, it does not change the results of our report.
We are sending copies of this report to the Secretary of Commerce, the
Secretary of Defense, and the Administrator of NASA. In addition,
copies will be available at no charge on the GAO Web site at
[Hyperlink, http://www.gao.gov]. Should you have any questions about
this report, please contact me at (202) 512-9286 or Colleen Phillips,
Assistant Director, at (202) 512-6326. We can also be reached by e-mail
at [Hyperlink, koontzl@gao.gov] and [Hyperlink, deferrarij@gao.gov],
respectively. Other key contributors to this report included Carol
Cha, Barbara Collier, John Dale, Neil Doherty, Karen Richey, and Eric
Winter.
Signed by:
David A. Powner:
Director, Information Technology Management Issues:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Our objectives were to (1) identify any cost or schedule changes as a
result of the revised baseline and determine what contributed to these
changes and (2) identify factors that could affect the program baseline
in the future. To accomplish these objectives, we focused our review on
the Integrated Program Office, the organization responsible for the
overall National Polar-orbiting Operational Environmental Satellite
System (NPOESS) program.
To identify any cost or schedule changes as a result of the revised
baseline, we reviewed the new NPOESS cost and schedule baseline and
compared it to the old acquisition baseline, as reported in our July
2003 testimony.[Footnote 9] To determine the factors that contributed
to the cost and schedule changes in the new baseline, we reviewed
program office plans and management reports. We also interviewed IPO
officials to discuss these contributing factors.
To identify factors that could affect the program baseline in the
future, we assessed the prime contractor's performance related to cost
and schedule. To make these assessments, we applied earned value
analysis techniques[Footnote 10] to data captured in contractor cost
performance reports. We compared the cost of work completed with the
budgeted costs for scheduled work for a 15-month period, from March
2003 to May 2004, 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. We reviewed these cost reports and
program risk management documents and interviewed program officials to
determine the key risks that negatively affect NPOESS's ability to
maintain the current schedule and cost estimates. We reviewed
independent cost estimates performed by the Air Force Cost Analysis
Agency and compared them with the program office cost estimates in
order to determine possible areas for cost growth. To assess the
potential effect of the NOAA-N Prime satellite incident on the current
program baseline, we reviewed documentation related to the POES
accident and alternatives for moving forward and interviewed officials
from the National Aeronautics and Space Administration (NASA) and
NOAA's National Environmental Satellite, Data, and Information Service.
We obtained comments on a draft of this report from officials at the
Department of Defense (DOD), NOAA, and NASA, and incorporated these
comments as appropriate.
We performed our work at the Integrated Program Office, DOD, NASA, and
NOAA in the Washington, D.C., metropolitan area between November 2003
and August 2004 in accordance with generally accepted government
auditing standards.
(310453):
FOOTNOTES
[1] 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).
[2] 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); 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.: Mar. 29,
2000); and Weather Satellites: Planning for the Geostationary Satellite
Program Needs More Attention, GAO-AIMD-97-37 (Washington, D.C.: Mar.
13, 1997).
[3] 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.
[4] NSTC-2, May 5, 1994.
[5] Environmental data records are weather products derived from sensor
data records and temperature data records.
[6] The prime contract provides options available to the program office
that would enable the contractor to support the NPOESS system through
2020.
[7] The prime contract includes the development of the first two NPOESS
satellites as well as instruments and support for NPP. It is worth
about $3.4 billion. The contract also includes options to procure four
more satellites and operate the NPOESS system through 2020, which would
bring the total value of the contract up to $4.5 billion. The program
cost estimate of $8.1 billion includes this contract, its options,
program office costs, sensor developments prior to contract award, and
satellite operations and maintenance.
[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] 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).
[10] The earned value concept is applied as a means of placing a dollar
value on project status. It is a technique that compares budget vs.
actual costs vs. 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.
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