[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
                          GAO REPORT ON NOAA'S
                       WEATHER SATELLITE PROGRAM

=======================================================================

                                HEARING

                               BEFORE THE

                          COMMITTEE ON SCIENCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 29, 2006

                               __________

                           Serial No. 109-66

                               __________

            Printed for the use of the Committee on Science


     Available via the World Wide Web: http://www.house.gov/science




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                                 ______

                          COMMITTEE ON SCIENCE

             HON. SHERWOOD L. BOEHLERT, New York, Chairman
RALPH M. HALL, Texas                 BART GORDON, Tennessee
LAMAR S. SMITH, Texas                JERRY F. COSTELLO, Illinois
CURT WELDON, Pennsylvania            EDDIE BERNICE JOHNSON, Texas
DANA ROHRABACHER, California         LYNN C. WOOLSEY, California
KEN CALVERT, California              DARLENE HOOLEY, Oregon
ROSCOE G. BARTLETT, Maryland         MARK UDALL, Colorado
VERNON J. EHLERS, Michigan           DAVID WU, Oregon
GIL GUTKNECHT, Minnesota             MICHAEL M. HONDA, California
FRANK D. LUCAS, Oklahoma             BRAD MILLER, North Carolina
JUDY BIGGERT, Illinois               LINCOLN DAVIS, Tennessee
WAYNE T. GILCHREST, Maryland         DANIEL LIPINSKI, Illinois
W. TODD AKIN, Missouri               SHEILA JACKSON LEE, Texas
TIMOTHY V. JOHNSON, Illinois         BRAD SHERMAN, California
J. RANDY FORBES, Virginia            BRIAN BAIRD, Washington
JO BONNER, Alabama                   JIM MATHESON, Utah
TOM FEENEY, Florida                  JIM COSTA, California
RANDY NEUGEBAUER, Texas              AL GREEN, Texas
BOB INGLIS, South Carolina           CHARLIE MELANCON, Louisiana
DAVE G. REICHERT, Washington         DENNIS MOORE, Kansas
MICHAEL E. SODREL, Indiana           DORIS MATSUI, California
JOHN J.H. ``JOE'' SCHWARZ, Michigan
MICHAEL T. MCCAUL, Texas
MARIO DIAZ-BALART, Florida


                            C O N T E N T S

                           September 29, 2006

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Sherwood L. Boehlert, Chairman, 
  Committee on Science, U.S. House of Representatives............     8
    Written Statement............................................    10

Statement by Representative Bart Gordon, Minority Ranking Member, 
  Committee on Science, U.S. House of Representatives............    10
    Written Statement............................................    11

Statement by Representative Vernon J. Ehlers, Chairman, 
  Subcommittee on Environment, Technology, and Standards, 
  Committee on Science, U.S. House of Representatives............    12
    Written Statement............................................    13

Prepared Statement by Representative David Wu, Minority Ranking 
  Member, Subcommittee on Environment, Technology, and Standards, 
  Committee on Science, U.S. House of Representatives............    14

Prepared Statement by Representative Jerry F. Costello, Member, 
  Committee on Science, U.S. House of Representatives............    14

                               Witnesses:

Vice Admiral Conrad C. Lautenbacher, Jr. (Ret.), Under Secretary 
  of Commerce for Oceans and Atmosphere, National Oceanic and 
  Atmospheric Administration
    Oral Statement...............................................    15
    Written Statement............................................    17
    Biography....................................................    21

Mr. David A. Powner, Director, Information Technology Management 
  Issues, Government Accountability Office
    Oral Statement...............................................    22
    Written Statement............................................    24

Discussion
  Estimated Cost of GOES-R Program...............................    37
  Congress' Continuing Oversight Role............................    37
  Risk of NOAA's Sole Procurement Responsibilities...............    39
  Price Estimates................................................    39
  Improvements Over NPOESS Program...............................    40
  Concerns About GOES-R and Similarities to NPOESS...............    41
  New Technologies and Increasing Costs..........................    42
  Contractors Role in the GOES-R Project.........................    43
  Data Continuity................................................    44

              Appendix: Answers to Post-Hearing Questions

Vice Admiral Conrad C. Lautenbacher, Jr. (Ret.), Under Secretary 
  of Commerce for Oceans and Atmosphere, National Oceanic and 
  Atmospheric Administration.....................................    48

Mr. David A. Powner, Director, Information Technology Management 
  Issues, Government Accountability Office.......................    57


             GAO REPORT ON NOAA'S WEATHER SATELLITE PROGRAM

                              ----------                              


                       FRIDAY, SEPTEMBER 29, 2006

                  House of Representatives,
                                      Committee on Science,
                                                    Washington, DC.

    The Committee met, pursuant to call, at 10:03 a.m., in Room 
2318 of the Rayburn House Office Building, Hon. Sherwood L. 
Boehlert [Chairman of the Committee] presiding.


                            hearing charter

                          COMMITTEE ON SCIENCE

                     U.S. HOUSE OF REPRESENTATIVES

                          GAO Report on NOAA's

                       Weather Satellite Program

                       friday, september 29, 2006
                         10:00 a.m.-12:00 p.m.
                   2318 rayburn house office building

Purpose

    On September 29, 2006 at 10:00 a.m., the House Science Committee 
will hold a hearing about the status of a critical weather satellite 
program, the National Oceanic and Atmospheric Administration's (NOAA) 
Geostationary Operational Environmental Satellite (GOES) system. NOAA 
is beginning the process of purchasing the next generation of the GOES 
system, which has been designated GOES-R. Cost estimates for the system 
have escalated, and NOAA has already announced the elimination of one 
new sensor that was to be part of the satellite. The Government 
Accountability Office (GAO) recently completed a report about GOES-R, 
``Geostationary Operational Environmental Satellites: Steps Remain in 
Incorporating Lessons Learned from Other Satellite Programs.'' The GAO 
report will be officially released at the hearing. (An embargoed copy 
of the Executive Summary of the report is attached as Appendix I.)
    Geostationary satellites maintain a fixed position above the Earth 
and provide a constant view of weather conditions. NOAA operates a two-
satellite geostationary system to provide continuous and complete 
coverage of the continental Unites States. This system provides vital 
real-time data for NOAA's weather forecasting and warning operations.
    Government satellite programs have a history of technical problems 
and major cost overruns. Most recently, NOAA and its government 
partners (the Department of Defense and the National Aeronautics and 
Space Administration) have experienced massive cost overruns on another 
weather satellite program, the National Polar-orbiting Operational 
Environmental Satellite System (NPOESS). In June, government officials 
testified to the Science Committee that the NPOESS program needs to be 
completely restructured, resulting in delays, higher costs, and more 
limited capabilities than were originally planned for the satellite.
    The GOES-R program is at a much earlier stage than NPOESS is at 
this point. NOAA has nearly completed the preliminary design of GOES-R. 
The GOES-R satellite series is intended to maintain the continuity of 
weather forecasting data through 2028 and provide the first major 
technical advance in geostationary instrumentation since 1994. Original 
estimates for GOES-R placed the total cost at $6.2 billion, but as of 
May 2006 the program office estimated costs could be as high as $11.4 
billion. In an effort to lessen these costs, NOAA is currently looking 
at options to reduce the scope and capabilities of GOES-R.
    The GAO report, requested by the Committee, examines the status of 
the GOES-R program and reasons for the cost increases and problems to 
date, and identifies program management actions NOAA should take to 
ensure past problems with satellite programs are not repeated with 
GOES-R. GAO identified four major lessons from previous satellite 
programs and found that, while NOAA has some plans to address those 
lessons, actions remain for NOAA to fully implement the lessons and 
decrease the risk of future cost overruns and technical problems.

Witnesses:

Vice Admiral Conrad C. Lautenbacher (ret.), Administrator, National 
Oceanic and Atmospheric Administration

Mr. David Powner, Director of Information Technology Management Issues, 
U.S. Government Accountability Office

Background About GOES-R

    The GOES-R satellites are designed to maintain a fixed position at 
high altitude above the Earth and provide a constant view of weather 
conditions in the United States. They orbit at the same speed as the 
Earth rotates, and so appear to hover above a set position on the 
ground. They complement other weather satellites (polar-orbiting 
satellites) that circle the Earth at low altitude and provide global 
coverage of weather and climate conditions. NOAA has flown 
geostationary satellites since 1970.
    GOES-R satellites are being built to carry instruments, or sensors, 
to measure a number of atmospheric features important to real-time 
detection and tracking of severe weather such as thunderstorms and 
hurricanes. GOES satellites are also important for NOAA's daily and 
hourly weather forecasts. Original plans for GOES-R included four 
satellites, each carrying five sensors, described in detail below. 
GOES-R will be the first major technical upgrade for NOAA's 
geostationary satellites since 1994. (New GOES satellites have been 
launched since 1994, but they have not been more advanced than their 
predecessors.)
Originally Planned GOES-R Sensors
    Original plans for GOES-R, developed in 2003, included three 
sensors for weather forecasting and two for detecting solar flares that 
can interfere with communications and other electrical systems. The key 
sensors for weather data are the Advanced Baseline Imager (ABI) and the 
Hyperspectral Environmental Suite (HES). ABI will provide images of the 
Earth's surface, atmosphere and cloud cover that help track severe 
weather and support regular weather forecasts. ABI will provide higher 
resolution and faster coverage than the current capabilities. For 
example, current GOES satellites provide updated pictures every 25 
minutes and ABI is to provide updated images every five minutes.
    HES was supposed to provide significantly advanced ``sounder'' 
information compared to capabilities on current satellites. Sounders 
like HES provide three-dimensional vertical profiles of atmospheric 
temperature and humidity. These profiles are fundamental information 
for the computer models used to provide daily weather forecasts. 
Original GOES-R plans also called for HES to provide images of coastal 
waters to help scientists monitor events like harmful algal blooms or 
assist in fisheries management.
    Earlier this month, NOAA decided HES was too complicated and the 
technology was not mature enough to include it on GOES-R. NOAA is 
currently examining other options to provide sounder capabilities on 
GOES-R.
    The third weather forecasting sensor on GOES-R will be the 
Geostationary Lightning Mapper (GLM). In the past, the government has 
flown lightning mappers on polar-satellites for research purposes, but 
GOES-R will be the first time the U.S. flies a lightning mapper on a 
geostationary satellite for operational purposes. NOAA expects that the 
GLM will provide improved capabilities for tracking thunderstorms and 
severe weather events.
    The other two sensors planned for GOES-R are the Space 
Environmental In-Situ Suite (SEISS) and the Solar Imaging Suite (SIS). 
Together these sensors will detect solar storms and track dangerous 
solar flares that come towards the Earth. NOAA forecasts and warns 
about solar storms because the storms can: cause damage to 
communication satellites, electric transmission lines and electric 
transformers; interfere in ground-based communications with airline 
pilots; be fatal to astronauts on space flights and in the 
International Space Station; and potentially harm airplane passengers 
flying polar routes.
GOES-R Management, Timeline, and Budget
    GOES-R is the first time NOAA is taking on primary responsibility 
for managing the procurement of a major weather satellite. In the past, 
NOAA relied on NASA to procure and launch the GOES satellites. For 
GOES-R, NOAA is responsible for the overall satellite, while NASA will 
assist in procuring individual instruments.
    NOAA expects the current GOES satellites to last at least until 
2016. Current plans for GOES-R will launch the first satellite in 2014, 
leaving two years for calibrating the new satellite before it needs to 
be fully operational. This timeline is consistent with how NOAA 
typically schedules geostationary satellite launches and calibration.
    NOAA began internal design of and planning for GOES-R in 2003. In 
October 2005, NOAA awarded three contracts for the preliminary design 
phase of GOES-R. During this phase of the program, the three private 
contractors develop detailed technical, schedule and cost plans for the 
overall GOES-R system based on the original design described above. The 
preliminary design phase ends in December 2006. Based on work performed 
during the preliminary design phase, NOAA will issue a Request for 
Proposals for system acquisition and operations and then will make a 
final decision on the prime contractor for GOES-R.
    However, results thus far from the preliminary design phase 
indicate that NOAA underestimated the cost and technical complexity of 
the GOES-R satellites and sensors. The original cost for a series 
consisting of four satellites and five sensors was estimated at $6.2 
billion. However, more recent and more detailed cost estimates indicate 
that costs would be close to $12 billion. Also, based on preliminary 
design work, NOAA decided earlier this month that HES was too 
complicated and the technology was not mature enough to include it on 
GOES-R. Given the rising cost estimates and technical challenges, NOAA 
is currently examining options for scaling back the GOES-R program. 
NOAA is looking at options that include building only two satellites, 
and removing HES and providing less advanced sounder capabilities.
    Originally, NOAA planned to select the prime contractor by July 
2007. The process of re-designing the satellite will delay that 
selection until May 2008.
    In addition to selecting a prime contractor, NOAA will also issue 
contracts for the individual sensors on GOES-R. NOAA has already 
selected a contractor for building ABI and for SEISS, and expects to 
select the contractor for SIS in spring 2007. By starting work on key 
sensors now, NOAA hopes to allow plenty of time to mitigate any 
technical problems that may occur while developing the equipment.

Lessons Learned from Past Problems with Government Satellites

    Government satellite programs have a history of technical problems 
and major cost overruns. GAO examined four major satellite procurement 
programs and identified key lessons learned from those procurements 
that it recommends NOAA apply to the GOES-R procurement.
Lesson #1: Establish Realistic Cost and Schedule Estimates
    Many experts have found that satellite acquisition programs tend to 
produce unrealistically low cost and schedule estimates. Contractors 
have incentive to come in with low estimates to make their bids more 
competitive, and agencies have incentive to produce low estimates to 
make the programs appealing to budget reviewers and the Congress.
    For GOES-R, NOAA has commissioned three costs estimates (one by 
GOES-R officials, one by NOAA's budget office, and one by an 
independent cost estimating group), but currently has no firm plans for 
how to reconcile the government and independent life-cycle cost 
estimates once the program requirements are completed. Thus, GAO 
recommends NOAA establish a formal process for objectively evaluating 
and reconciling the government and independent life cycle cost 
estimates for the program.
Lesson #2: Ensure Sufficient Technical Readiness of the System's 
        Components Prior to Key Decisions
    Satellite programs are technically complex and often experience 
problems as equipment is being built. To mitigate the technical risk, 
managers establish key decision points to make sure the technology 
meets certain requirements before moving on in the program. However, in 
past programs adequate requirements were not always established for key 
decision points. For example, for the most problematic sensor in the 
NPOESS program (VIIRS), a key decision point known as the critical 
design review proceeded with officials reviewing only a paper design 
for the sensor. Most experts agree that normally a critical design 
review should include building a model unit, not just reviewing designs 
on paper.
    NOAA has performed preliminary studies of some of the GOES-R 
technologies but GAO recommends much more extensive reviews by 
technical experts before sensors go into production. In particular, GAO 
is concerned about the Advanced Baseline Imager (ABI). ABI is similar 
to VIIRS and is based on the same legacy NASA sensor (MODIS). ABI will 
cost $360 million and has already experienced technical problems that 
led to cost overruns of $6 million, so far. GAO projects those overruns 
could reach as high as $23 million if NOAA does not put in place more 
rigorous technical and management review milestones for ABI.
Lesson #3: Provide Sufficient Management at Government- and Contractor-
        Levels
    Another problem systemic in satellite procurement is poor 
management. On the government side, this can mean inadequate expertise 
in systems engineering and project management, inappropriate contractor 
award fees, inadequate reserve funds, and lack of close oversight of 
the contractor.
    For GOES-R, NOAA plans to increase the number of resident systems 
engineers and project management experts and to place government staff 
at each of the contractors' locations to more closely oversee day-to-
day program management. Additionally, NOAA intends to structure the 
award fee process for GOES-R in a manner consistent with 
recommendations from a recent report by the Department of Commerce 
Inspector General and other experts.
    The GAO report commends NOAA for the management action taken to 
date, but points out that, especially since GOES-R marks the first time 
NOAA is taking on a major satellite acquisition by itself, NOAA may 
need more technical experts than it currently plans to hire.
Lesson #4: Perform Adequate Senior Executive Oversight to Ensure 
        Mission Success
    Timely and informed decisions from senior officials are vital to 
successful satellite programs. GAO and others have stated that the lack 
of timely decisions by senior management in the NPOESS was a major 
factor in the large cost overruns and schedule delays for that program. 
With GOES-R, NOAA has established a council of high-level officials who 
meet monthly to review the program. GAO recommends that this council 
closely review the results of all preliminary studies and independent 
assessments of the program.

Witness Questions:

    The witnesses were asked to address the following questions in 
their testimony.
Vice Admiral Conrad C. Lautenbacher (ret.), Administrator, National 
        Oceanic and Atmospheric Administration

        1.  What new processes for satellite procurement has NOAA 
        implemented as a result of lessons learned from previous 
        programs, such as the National Polar-orbiting Operational 
        Environmental Satellite System?

        2.  Do you agree with the following recommendations from the 
        Government Accountability Office (GAO)'s report, 
        ``Geostationary Operational Environmental Satellites: Steps 
        Remain in Incorporating Lessons Learned from Other Satellite 
        Programs?''

                a.  Develop a process to evaluate and reconcile the 
                independent and program cost estimates once final 
                program decisions are made.

                b.  Develop a process to validate the level of 
                technical maturity and contractor management procedures 
                achieved on the Advanced Baseline Imager prior to 
                critical design reviews.

                c.  Determine the appropriate level of resources needed 
                to adequately track and oversee the GOES-R program.

                d.  Ensure that the NOAA Program Management Council 
                reviews all preliminary studies and independent 
                assessments on technical maturity of the system and its 
                components so that an informed decision can be made 
                about the level of technical complexity it is taking on 
                when proceeding past key decision milestones.

        3.  What specific steps have you taken and will you take to 
        address each of GAO's recommendations listed in question two?

Mr. David Powner, Director of Information Technology Management Issues, 
        Government Accountability Office

        1.  Please outline the major findings and recommendations of 
        your report, ``Geostationary Operational Environmental 
        Satellites: Steps Remain in Incorporating Lessons Learned from 
        Other Satellite Programs.''

        2.  Given its current schedule and procedures, what are the 
        greatest risks facing the GOES-R program as it moves ahead?

        3.  What information should Congress and the public have to 
        ensure the GOES-R program remains on track?

Appendix I: Executive Summary from GAO Report


    Chairman Boehlert. The hearing will come to order. Just let 
me outline what we expect this morning. We will probably just 
get through a couple of opening statements, mine and Mr. 
Gordon's, and then the bells will ring. So it is going to be a 
hectic morning, and Admiral and Mr. Powner, you understand how 
this place operates, and this is the getaway day. It may be 30 
hours in length, but in any event it is going to be a rather 
hectic day, so with your indulgence we will try to proceed in 
an orderly manner. The Speaker doesn't really accede to our 
wishes all the time, and we would go forward without any 
interruption.
    This may well be the last hearing for me as Chairman, and 
for the Committee in this session because we are due to 
complete our business today and then go off back to the 
districts and then come back for what is affectionately 
referred to as a lame duck session, and so we are unlikely to 
have hearings then. But I want to take the privilege of the 
Chair at the last hearing to thank our very capable 
professional staff led by the Chief of Staff, Mr. David 
Goldston, and Mr. Chuck Atkins, the Chief of Staff for the 
minority. These guys and their entire team have been absolutely 
magnificent.
    And I think, Admiral, you would have to acknowledge that 
while they are persistent in their probing but they are just so 
professional in their daily conduct, and I think all of us owe 
them a debt of gratitude. And then I am sorry that it is so 
hectic because usually we have a full complement here, but we 
don't today because everybody is scattered to the wind and 
doing a lot of last minute things before departing the Nation's 
Capitol. But I want to say to Mr. Gordon, I could not have had 
a better partner in this endeavor, and I think this Science 
Committee has done itself proud. And I am fond of saying, and 
many of you have heard me say this, that when legislation is 
reported out of this committee, and significant legislations 
has year after year, I take pride in saying the fingerprints of 
just about everybody is all over the legislation.
    We listen to our Democrat colleagues. We don't always agree 
but we always listen and we always have a dialogue, and so I 
couldn't be prouder than I am as I begin to take leave from 
this institution of their performance of all Members of this 
committee, Republican and Democrat alike. Mr. Gordon, I thank 
you.
    Mr. Gordon. Mr. Chairman, if you would, just allow me just 
a moment. As usual, I often times concur with your remarks, and 
I once again concur with them today, but also to let you know 
that there was a rumor that this meeting called on the last day 
of our session was potentially an attempt to continue the 
goodbye tour for additional accolades, and I am sure this 
goodbye tour is not going to be over with any time soon but you 
will be less staffed.
    And so what I wanted to do, I am glad that Mary Ann is here 
today because I know she is going to be staffing the Sherry's 
goodbye tour, and this is for the road staff. So if you would 
take that over to Mary Ann, we would appreciate that.
    Chairman Boehlert. Thank you very much, and thank you for 
acknowledging my bride who is, I tell everyone, my biggest 
booster and most constructive critic. Ladies and gentlemen, let 
me proudly present the First Lady of the Science Committee. 
Mary Ann, you are being introduced. Thank you very much. With 
that, let us get right on to the business as is the usual in 
this committee. I want to welcome everyone here for what may 
very well be the final hearing of my tenure, and we picked a 
vital and future-looking subject for this hearing, the 
procurement of the next generation of weather satellites known 
as GOES-R.
    As I think everyone knows, our past hearings on weather 
satellites have not been very happy occasions for everybody. 
The polar satellite program, NPOESS, was entirely to use a 
description of one of my grandsons, out of whack, over budget, 
behind schedule, losing capability, and, quite honestly, we 
have to concede grossly mismanagement, and there is shared 
blame all the way around. One reason the NPOESS program got 
that way was inadequate oversight, and that includes inadequate 
oversight by the leadership at the National Oceanic and 
Atmospheric Administration, and inadequate oversight by those 
of us who have the responsibility in the Congress.
    In the case of NPOESS, we are now getting monthly updates 
from NOAA, and I hope the Committee will have periodic hearings 
to keep the NPOESS procurement process transparent, the public 
informed, and the agency and its contractors on its toes. And 
now early on in the procurement process, we are going to 
inaugurate that same open continued oversight approach for 
GOES-R. This should be the first of many hearings on this 
critical weather satellite program. The GOES-R hearings ought 
to go better than NPOESS hearings have so far. I am happy to 
say that it now appears that NOAA has indeed been learning from 
past mistakes, and I want to compliment Admiral Lautenbacher 
for that, his openness, his willingness to interact with us, 
his providing of vital information so that we can assess it in 
a timely fashion.
    With GOES-R, NOAA is trying to evaluate its technology 
assumptions early and trying not to overreach. NOAA has put 
together stellar independent cost review teams and what looks 
like an appropriate senior management team. Once again, 
congratulations. Neither of these steps was taken in the case 
of NPOESS, and NOAA is taking action now for GOES-R precisely 
to avoid repeating past mistakes and that is reassuring. At the 
same time, there are some red flags already for us. The budget 
estimates for GOES-R are already close to doubling. Now this is 
very early in the process exactly when NOAA can make design 
changes to control costs in the end but still it is not 
comforting that the estimates were so far off so early.
    Also, NOAA is already dropping an advanced sensor. Again, 
this in many ways might be a good thing. Untried, problematic 
technology shouldn't be used on operational satellites but it 
means that GOES-R may represent much less of a technical 
advance than had been hoped. So one of our tasks today is to 
get a clear fix on the current status of GOES-R, its cost and 
capabilities, with the understanding that this information will 
continue to change. But our most important task is to set up a 
system of congressional oversight. That is our responsibility, 
and, quite frankly, we have not measured up to the task in the 
past with respect to NPOESS, and we must concede that.
    We have got to make sure that NOAA has set up a system of 
internal oversight to prevent future problems. The very helpful 
Government Accountability Office study that is being released 
today should guide NOAA and this committee as we insure that 
NOAA has taken all the steps necessary to increase the chances 
of success, and as we determine what information Congress and 
the public need as the project moves ahead. The data from 
weather satellites have become features of our every day lives 
and they help protect life and property, but we need to be sure 
that we are getting the best satellite feasible for the lowest 
possible cost. That is our responsibility. That requires 
constant vigilance and today we start that oversight. Mr. 
Gordon.
    [The prepared statement of Chairman Boehlert follows:]
          Prepared Statement of Chairman Sherwood L. Boehlert
    I want to welcome everyone here for what may very well be the final 
hearing of my tenure. And we picked a vital and future-looking subject 
for this hearing--the procurement of the next generation of weather 
satellites, known as GOES-R.
    As I think everyone knows, our past hearings on weather satellites 
have not been very happy occasions for anybody. The polar satellite 
program, NPOESS, was entirely out of whack--over budget, behind 
schedule, losing capability and grossly mismanaged.
    One reason the NPOESS program got that way was inadequate 
oversight--and that includes inadequate oversight by the leadership at 
the National Oceanic and Atmospheric Administration (NOAA) and 
inadequate oversight by us. We are asking NOAA to learn from its 
mistakes, and we're going to try to do the same.
    In the case of NPOESS, we are now getting monthly updates from 
NOAA, and I hope the Committee will have periodic hearings to keep the 
NPOESS procurement process transparent, the public informed and the 
agency and its contractors on their toes. And now, early on in the 
procurement process, we are going to inaugurate that same open, 
continual oversight approach for GOES-R. This should be the first of 
many hearings on this critical weather satellite program.
    The GOES-R hearings ought to go better than NPOESS hearings have so 
far. I am happy to say that it appears that NOAA has indeed been 
learning from its mistakes, and I want to compliment Admiral 
Lautenbacher for that.
    With GOES-R, NOAA is trying to evaluate its technology assumptions 
early and not overreach. NOAA has put together stellar independent cost 
review teams and what looks like an appropriate senior management team. 
Neither of these steps was taken in the case of NPOESS, and NOAA is 
taking action now for GOES-R precisely to avoid repeating past 
mistakes. That's reassuring.
    At the same time, there are some red flags already for us. The 
budget estimates for GOES-R are already close to doubling. Now, this is 
very early in the process--exactly when NOAA can make design changes to 
control costs in the end. But still, it's not comforting that the 
estimates were so far off so early. Also, NOAA is already dropping an 
advanced sensor. Again, this is in many ways a good thing--untried, 
problematic technology shouldn't be used on operational satellites. But 
it means that GOES-R may represent much less of a technological advance 
than had been hoped.
    So one of our tasks today is to get a clear fix on the current 
status of GOES-R--its costs and capabilities--with the understanding 
that that information will continue to change. But our more important 
task is to set up a system of Congressional oversight and to make sure 
that NOAA has set up a system of internal oversight to prevent future 
problems.
    The very helpful Government Accountability Office (GAO) study that 
is being released at today's hearing should guide NOAA and this 
committee as we ensure that NOAA has taken all the steps necessary to 
increase the chances of success, and as we determine what information 
Congress and the public need as the project moves ahead.
    The data from weather satellites have become features of our 
everyday lives, and they help protect life and property. But we need to 
be sure that we are getting the best satellites feasible for the lowest 
cost possible. That requires constant vigilance, and today we start 
that oversight.
    Mr. Gordon.

    Mr. Gordon. Thank you, Mr. Chairman. As usual, you have 
well set forth that this morning's hearing is to hear testimony 
on NOAA's plans to require the next series of Geostationary 
Environmental Satellites, a series known as GOES-R. The 
satellite pictures are a familiar site to anyone viewing a 
weather forecast. These satellites are essential to monitoring 
the development of severe storms. Whenever a hurricane is 
threatening our coastal areas it is the GOES image that we see 
the eye and the rotating clouds of the storm. We simply must 
insure continuity of this satellite information to maintain our 
ability to accurately forecast this weather.
    We are still at a very early stage of this program. We have 
an opportunity to take steps to avoid problems with this 
acquisition such as the problems you put forth and that we 
experienced with the polar satellite procurement or NPOESS. We 
simply cannot afford to repeat the mistakes of the polar 
program. The Administration has taken initial steps to obtain 
realistic cost estimates and to determine the degree of 
technical difficulty associated with the planned sensors for 
this system. The Administration has also taken steps to hire 
technical experts and to establish an executive oversight 
committee for this program.
    I commend you, Admiral Lautenbacher, for these actions. 
However, Mr. Powner of the Government Accountability Office 
will testify this morning additional steps must be taken to 
limit risk of cost and schedule overruns. We expect to see a 
realistic cost assessment for this program before the system 
contract is awarded. We expect a realistic assessment of the 
technical challenges associated with the development of the 
sensors and adequate reserves to be able--or be put aside to 
deal with the problems that will inevitably arise.
    Finally, we expect the Executive Committee overseeing this 
program to pay attention to its development and to act 
decisively and expeditiously when problems are identified. 
Again, I would like to thank Mr. Powner and members of the GAO 
team for his fine work and assistance to the Committee in our 
oversight of NOAA's satellite programs. The Committee will 
continue to watch the development of this program closely over 
the next few years. I hope we can work cooperatively to achieve 
our common goal of delivering important and improved weather 
forecasting information. Thank you.
    [The prepared statement of Mr. Gordon follows:]

            Prepared Statement of Representative Bart Gordon

    We are here this morning to hear testimony on NOAA's plans to 
acquire the next series of geostationary environmental satellites--the 
series known as GOES-R.
    The GOES satellite pictures are a familiar sight to anyone viewing 
a weather forecast. These satellites are essential to monitoring the 
development of severe storms. Whenever a hurricane is threatening our 
coastal areas, it is the GOES images that we see of the eye and the 
rotating clouds of the storm.
    We simply must ensure continuity of this satellite information to 
maintain our ability to accurately forecast the weather.
    We are still at a very early stage of this program. We have an 
opportunity to take steps to avoid problems with this acquisition such 
as the problems we are experiencing with the polar satellite 
procurement--NPOESS. We simply cannot afford to repeat the mistakes of 
the polar program.
    The Administration has taken initial steps to obtain realistic cost 
estimates and to determine the degree of technical difficulty 
associated with the planned sensors for this system. The Administration 
has also taken steps to hire technical experts and to establish an 
executive oversight committee for this program.
    I commend you, Admiral Lautenbacher, for these actions.
    However, as David Powner of the Government Accountability Office 
will testify this morning, additional steps must be taken to limit 
risks of cost and schedule overruns.
    We expect to see a realistic cost estimate for this program before 
a system contract is awarded. We expect a realistic assessment of the 
technical challenges associated with the development of the sensors and 
adequate reserves to be put aside to deal with the problems that will 
inevitably arise.
    Finally, we expect the Executive Committee overseeing this program 
to pay attention to its development and to act decisively and 
expeditiously when problems are identified.
    I would like to thank David Powner and the member of his GAO team 
for their fine work and assistance to the Committee in our oversight of 
NOAA's satellite programs. The Committee will continue to watch the 
development of this program closely over the next few years. I hope we 
can work cooperatively to achieve our common goal of delivering 
improved weather forecasting to the Nation.

    Chairman Boehlert. Now for the distinguished Chairman of 
the Subcommittee, Dr. Ehlers.
    Mr. Ehlers. Thank you, Mr. Chairman. I am very pleased that 
the Committee is holding this hearing today on another of the 
Nation's critical weather satellite programs, the next 
generation of the National Oceanic and Atmospheric 
Administration's Geostationary Operational Environmental 
Satellite, known as GOES-R. But first, Mr. Chairman, on this 
occasion of your presumably last hearing as Chair, I want to 
thank you from the bottom of my heart for the incomparable 
leadership you have given this committee. Your unwavering 
support for science and technology has warmed the cockles of my 
scientific heart, and with your easy manner and open-minded 
approach to every issue you tackle, you have served this 
committee, this Congress, and the American people well, and I 
thank you for it.
    The fact that the last hearing of Chairman Boehlert's 
tenure is on this satellite program should help us focus our 
attention on the importance of GOES-R, and how seriously we 
need to take our role in ensuring its success. NOAA has 
operated geostationary weather satellites since the 1970s. It 
is not hyperbole to say that these satellites save lives, many 
lives. They help the National Weather Service to better 
understand and monitor severe weather events such as tornadoes 
and hurricanes and of course the resultant floods, and they are 
critical to the timely delivery of the alerts and warnings that 
lead people to safety before disaster strikes.
    I am frequently reminded of my childhood in Minnesota where 
we had the storms, we called them cyclones at that time, but 
the tornadoes, the storms, came up unexpectedly. The only 
warning was to look at the sky and see what was happening. We 
had a number of lives lost in the communities I have lived in 
simply because there was no warning system. People had to use 
their own eyes and ears and often could not reach shelter in 
time. Today, we don't have. The ongoing problems with other 
satellite programs have made it clear that we in Congress must 
take our oversight responsibilities seriously. Failure to do so 
can cost our communities dearly. Therefore, I look forward to 
hearing what the Government Accountability Office will tell us 
about the state of GOES-R and how NOAA is applying lessons to 
learn from past satellite programs.
    I also look forward to hearing from NOAA about what they 
see as the biggest challenges to the success of GOES-R, and, 
most importantly, how they will address these challenges. I am 
particularly concerned about how NOAA will move the program 
forward in light of the recent cancellation of HES, the 
Hyperspectral Environmental Suite. The way NOAA fills the gap 
left by this instrument will affect how our nation observes and 
forecasts weather for the next two decades, so it is critical 
that we get this right.
    I believe that NOAA is earnest. They are trying to get this 
program right and I applaud their efforts. However, good 
intentions are not enough. We all have to work on this 
together. I expect this hearing to be the beginning of an 
ongoing dialogue with NOAA, the GAO, and our committee as we 
all work together as one to ensure the success of this 
important program. I thank out witnesses for being here. I 
would love to stay. Unfortunately, I have to go and dedicate 
the new botanic garden with Ms. Bush, but I will return as soon 
as I can, and perhaps I could even persuade to come along and 
enjoy the rest of the hearing with us.
    [The prepared statement of Mr. Ehlers follows:]

         Prepared Statement of Representative Vernon J. Ehlers

    Thank you Chairman Boehlert. I am pleased the Committee is holding 
this hearing today on another of this nation's critical weather 
satellite programs: the next generation of the National Oceanic and 
Atmospheric Administration's Geostationary Operational Environmental 
Satellite, known as GOES-R.
    But first, on the occasion of his last hearing as Chair, I thank my 
friend, Sherry Boehlert, for his incomparable leadership of our 
committee. His unwavering support for science and technology, along 
with his easy manner and open-minded approach to every issue he 
tackles, has served this committee, this Congress, and the American 
people well.
    The fact that the last hearing of Chairman Boehlert's tenure is on 
this satellite program should help focus our attention on the 
importance of GOES-R, and how seriously we need to take our role in 
ensuring its success. NOAA has operated geostationary weather 
satellites since the 1970's. It is not hyperbole to say these 
satellites save lives--they help the National Weather Service to better 
understand and monitor severe weather events such as tornadoes and 
hurricanes and are critical to the timely delivery of the alerts and 
warnings that lead people to safety before disaster strikes.
    The ongoing problems with other satellite programs have made it 
clear that we in Congress must take our oversight responsibilities 
seriously--failure to do so can cost our communities dearly. Therefore, 
I look forward to hearing what the Government Accountability Office 
will tell us today about the state of GOES-R, and how NOAA is applying 
lessons learned from past satellite programs. I also look forward to 
hearing from NOAA about what they see as the biggest challenges to the 
success of GOES-R, and--most importantly--how they will address those 
challenges. I am particularly concerned about how NOAA will move the 
program forward in light of the recent cancellation of HES, the 
Hyperspectral Environmental Suite. The way NOAA fills the gap left by 
this instrument will affect how our nation observes and forecasts 
weather for the next two decades, so it is critical that we get this 
right.
    I believe that NOAA is earnest--they are trying to get this program 
right and I applaud their efforts so far. However, good intentions are 
not enough. I expect this hearing to be the beginning of an ongoing 
dialogue between NOAA, the GAO, and our committee as we all work to 
ensure the success of this important program.
    I thank our excellent witnesses for being here, and I yield back 
the balance of my time.

    Chairman Boehlert. Dr. Ehlers, don't go too far. We are 
advised that in five to seven minutes a vote will start on the 
Floor, so we are going to get right to the opening statements. 
Before doing so, I want to acknowledge something that is going 
to happen. The Nation has been well served by a very 
distinguished government employee, Max Mayfield, who at the end 
of this year has announced his intention to retire. He is the 
Director of the National Hurricane Center in Miami, one of the 
true stars in the otherwise sorry saga of Hurricane Katrina. 
Just an absolutely able, committed, professional public 
servant. And, Admiral Lautenbacher, you know how good he is. 
And very dependent on weather satellites.
    And my wife reports to me, and she knows, that he is also a 
matinee idol because all over America during Hurricane Katrina 
the TV sets were on and people were glued to it, and the most 
credible information came from this dedicated and able guy, and 
we thank him. With that, Admiral, you are up.
    [The prepared statement of Mr. Wu follows:]
             Prepared Statement of Representative David Wu
    Thank you, Mr. Chairman, for calling this hearing today.
    The GOES program has provided us with vital weather forecasting 
information for the past four decades. The last significant 
technological improvements to GOES were adopted in 1994. It is 
reasonable to expect that we could consider expanding our capabilities 
for an expected launch of the GOES-R series in 2012.
    We all realize that increased capabilities come at a price--in the 
case of satellite systems at a significant price. I am in agreement 
with Ranking Member Gordon that we must have realistic cost estimates 
and technology assessments of any upgraded sensor capabilities so that 
we can make an informed judgment about how much technological 
improvement we need and can afford. Expanded technological capabilities 
require not only improvements to satellite instrumentation, but 
expanded ground systems and data management and analytical capabilities 
to get full value for our money.
    In all of these considerations, continuity of service must be the 
top priority.
    I encourage you, Admiral Lautenbacher, to heed the recommendations 
included in the GAO report we are releasing today. I also encourage you 
to maintain open, frank communication with this committee as the 
program moves forward.
    Mr. Powner, I would also like to express my thanks to you and your 
team for this report and for the other fine work you have done for us 
on NOAA's satellite programs.
    I thank the witnesses for appearing before us today and I look 
forward to your testimony.

    [The prepared statement of Mr. Costello follows:]

         Prepared Statement of Representative Jerry F. Costello

    Good morning. I want to thank the witnesses for appearing before 
our committee to discuss the National Oceanic and Atmospheric 
Administration (NOAA)'s next generation Geostationary Operational 
Environmental Satellite Program, known as GOES-R.
    Since the 1960s, NOAA has operated geostationary satellites that 
provide images and data on atmospheric, oceanic, and climatic 
conditions over the continental United States and Hawaii. These 
satellites are best known for creating the hurricane pictures you see 
on television and the data to help forecast the weather. Providing our 
communities with accurate and timely information to predict and track 
weather and natural disasters is critical to our economic security and 
national safety.
    This past summer, my congressional district suffered from severe 
thunderstorms and rain, causing damage and destruction throughout our 
communities. I know how beneficial weather forecasts and warnings to 
help communities prepare for a natural disaster. However, these 
predictions are not perfect and there are instances when the scale and 
magnitude of some storms are not accurate. I am pleased NOAA continues 
to take steps to implement lessons learned from past satellite 
programs, and acknowledges that more remains to be done.
    Today's hearing focuses on NOAA's plan for the GOES-R program to 
replace the current series of satellites before they reach the end of 
their usefulness by approximately 2012. Chairman Boehlert and Ranking 
Member Gordon requested the Government Accountability Office (GAO) to 
determine the status of and plans for the GOES-R series procurement and 
identify and evaluate the actions that the program management team is 
taking to ensure that past problems experienced in procuring other 
satellite programs are not repeated.
    I look forward to hearing from GAO on its findings and 
recommendations to the Secretary of Commerce. Thank you Mr. Chairman.

 STATEMENT OF VICE ADMIRAL CONRAD C. LAUTENBACHER, JR. (RET.), 
UNDER SECRETARY OF COMMERCE FOR OCEANS AND ATMOSPHERE, NATIONAL 
             OCEANIC AND ATMOSPHERIC ADMINISTRATION

    Admiral Lautenbacher. Thank you very much. Chairman 
Boehlert, Ranking Member Gordon, distinguished Members of the 
Committee and staff, I appreciate the opportunity to engage in 
a discussion of GOES-R and to report on our progress. Before I 
start talking about the satellite programs, allow me to express 
my appreciation to the Chairman for his leadership and his 
conduct of hearings and oversight of NOAA in the past during 
his tenure. We have gone through the tenure together. At the 
time that I started was about the time when I started with 
CORE. Chairman Boehlert was coming on line. I appreciate the 
truly bipartisan nature of the hearings and the interest in our 
programs, and I appreciate your leadership. On behalf of all of 
NOAA, we thank you for your interest in our programs and their 
value to the country.
    I also want to thank Chairman Ehlers before he goes to the 
botanical gardens. His personal leadership allowed the passing 
of a NOAA Organic Act on the House floor, truly a historic 
occasion. Congressmen have been trying for years to do that, 
and we thank you. As the Committee knows if there is any one 
piece of legislation that I believe would help us to manage 
better and to release and unleash the power of the NOAA concept 
is an Organic Act agreed to by Congress. So thank you very 
much. We appreciate your leadership. You have been a great 
inspiration to those of us in the agency.
    Because of the bipartisan nature and because I really 
believe this, I want to thank Congressman Gordon and 
Congressman Wu as well for the partnership because if you 
didn't care about these programs they wouldn't get any air time 
at all, so I am very pleased to be here with you and to discuss 
these and have the future laid out and work on the best 
solution for the country, so thank you.
    As mentioned in the opening statements, the Committee is 
familiar with the NPOESS program. We have had several hearings 
on it. This is a discussion on the next generation 
Geostationary Operational Environmental Satellite Program. It 
is called GOES-R. We name them by letters as they--before they 
are launched, and when they are launched and successful they 
become numbers so if you hear the numbers when they are in 
orbit they become numbers. These satellites, remember, are geo 
positioned. They are 23,000 miles above the equator. We have 
two of them that are constantly looking at the Atlantic and the 
Pacific, and they do give you these spectacular pictures that 
you see of hurricanes. They also help us to provide information 
for forecasts and warnings for severe weather, as mentioned, 
such as thunderstorms and beginning of the fronts that can 
create tornadoes and that sort of thing.
    Now we are in the early stages of the acquisition process 
for the next generation of GOES satellites called GOES-R. So we 
are about five years ahead of where we were on NPOESS, and this 
is the opportunity that we have to have this discussion at this 
point to define the system to make sure it is the best possible 
system technologically for the cost and the money that the 
Nation is willing to pay for it so I appreciate this 
opportunity. We have made significant changes to our GOES-R 
program management, as I hope to demonstrate as I go through 
here. Because of the direction from this committee, the reviews 
from the GAO, and the DOC inspector general, the reason recent 
Nunn-McCurdy certification process and our own internal 
reviews.
    We have made those changes not because of today's hearing 
necessarily but because we believe they are right, and we have 
been doing them for the past several years as the lessons have 
been coming out. We have been modifying our approach to GOES-R 
and trying to incorporate in a very timely manner the right 
way, the best way, to manage these programs for the future. 
Should I stop? Go ahead? All right.
    Chairman Boehlert. Go right ahead.
    Admiral Lautenbacher. There are bells ringing, and just to 
make sure. Some of the changes that we have made include the 
creation of a NOAA program management council. This is 
something that NOAA has not had before. This is to back stop 
our normal chain of command process, which I am sure you are 
aware of, but this is a senior management council. It is made 
up of our senior NOAA personnel, the leaders that are 
responsible for cost, schedule and performance technically 
budgetarily and administratively. It also includes NASA experts 
who meet. They come, we meet--have this council meet monthly to 
review this program. We have also created a group of users of 
satellite data, a broad-based group, which developed the 
initial recommendation for the requirements and they also meet 
regularly to assess the preliminary design.
    My deputy and I meet regularly to discuss the 
recommendations from these two groups, and we make decisions 
based on these recommendations. We provide the Department of 
Commerce with quarterly briefings on the program, and I brief 
the Deputy Secretary and the Secretary of Commerce as needed. 
In fact, there is a schedule to brief them very shortly on the 
current status. We are using the full capabilities and 
processes at NASA for the development of the GOES-R system, 
including their independent technical and engineering reviews, 
and also NASA will manage the sensor contracts. We have hired 
teams of independent satellite experts and independent cost 
estimators to provide periodic reviews and address the concerns 
raised by NOAA senior leadership.
    We have also hired a highly competent and respected former 
NASA program manager for the GOES-R program. The program office 
is increasing staff to support robust systems engineering and 
oversight of the contractors, which will include on site 
representatives at the contractor and major subcontractors. 
Presently, we have three contractor teams developing 
preliminary designs and identifying program risks. When they 
are finished, NOAA and the Department of Commerce will decide 
on a system design and award a contract. Our three contractor 
teams and our independent review team have provided feedback on 
preliminary design concepts, and they are three in nature.
    First of all, to realize and actually build this concept 
that we had been working on for GOES-R would be much more 
expensive and much riskier than we had first thought. Number 
two, one of the proposed sensors of the five that are on this--
projected to be on this satellite, the HES or Hyperspectral 
Environmental Suite, is not technically mature enough that 
would impact the spacecraft, the ground systems, and it would 
jeopardize a launch in 2014, which is the right time to launch 
for continued continuity. And, third of all, based on our 
conversations with GAO and our continued internal review, we 
can make further improvements in the way the acquisition will 
be managed, and we are doing so.
    We are revising our plans to insure we have a program that 
maintains data continuity, allows for technical advances, and 
is affordable. Regarding the cost, preliminary cost estimates, 
and there were rough cost estimates that were created before we 
had full requirements in line, increased from a number of 
roughly $6.2 billion to a potential of $11.4 billion, learned 
from these studies that the contractors are doing for us. Most 
of this increase in required budget was because we revised 
inflation assumptions in our cost models. Cost models at 
inflation which was well out of date, that is about $2.6 
billion of the increase as inflation changes. The revised 
estimate also would provide for $800 million for increased 
management reserves based on expert recommendations and lessons 
learned from NPOESS.
    In addition, the cost of the spacecraft ground system and 
sensors from the technological complexity increased by about 
$1.5 billion. That was the rough orders of magnitude of the 
issues that we are tacking at this point. In response to those 
increased cost estimates, the program office assembled a team 
of experts to develop multiple program options to reduce cost 
and risk and to look at a optimal solution. The team provided 
information to the program management council and the user 
group, which examined the option and provided me with 
recommendations. We are still in that process but to date the 
following items have been accomplished.
    While the Hyperspectral Environmental Sensor potentially 
could have provided a major improvement in our ability to 
characterize the atmosphere and the coastal environment we have 
decided not to award a contract to build the HES sensor at this 
time for this satellite. It does not mean we are giving up on 
HES. It means we are deferring it and trying to build the 
proper technological base before it can be instituted and put 
on an operational satellite.
    [The prepared statement of Admiral Lautenbacher follows:]

     Prepared Statement of Vice Admiral Conrad C. Lautenbacher, Jr.

Introduction

    Chairman Boehlert, Ranking Member Gordon, and Members of the 
Committee, I am Conrad C. Lautenbacher, Under Secretary for Oceans and 
Atmosphere at the Department of Commerce (DOC) and head of the National 
Oceanic and Atmospheric Administration (NOAA).
    Before I talk about satellites, I would like to thank Chairman 
Boehlert for his thoughtful leadership and friendship over the past 
several years. I truly appreciate the bipartisan manner in which you 
conduct the Science Committee and your strong support for NOAA. You and 
your staff have been good to work with--always thorough and fair. We 
will miss your leadership and wish you the best in retirement. I also 
want to thank Chairman Ehlers who, although he is not retiring, will no 
longer be our Subcommittee Chairman in the next Congress. Chairman 
Ehlers has invested a considerable amount of time and effort into 
learning our issues and become quite an expert on our agency. I 
personally appreciate your leadership and efforts to pass a NOAA 
Organic Act. By passing the Organic Act on the House Floor last week, 
you accomplished something many Members had tried and failed to do over 
the last 20 years. It was a testament to your dedication and your 
abilities, and I thank you.

What are geostationary satellites?

    While the Committee is familiar with NOAA's next generation polar-
orbiting environmental satellite program (NPOESS), I am here to discuss 
NOAA's next generation Geostationary Operational Environmental 
Satellite Program, known as GOES-R. NOAA has operated geostationary 
satellites since the 1970s. These satellites--located more than 22,000 
miles above the equator--provide images and data on atmospheric, 
oceanic, and climatic conditions over the continental United States and 
Hawaii. These satellites are best known for creating the hurricane 
pictures you see on television, but they also provide data to help 
forecast the weather and provide warnings for severe weather such as 
thunderstorms. We operate two geostationary satellites, one over the 
east coast and the other over the west coast. To protect against a loss 
of satellite coverage, we maintain a spare satellite on-orbit that can 
be repositioned to take the place of a failed satellite.

What is GOES-R?

    The final two GOES satellites in the current GOES-N series have 
been built. We are in the early stages of the acquisition process for 
the next generation of GOES satellites, called GOES-R. Given the long 
lead time needed for satellite development, acquisition work is 
required now to ensure continuity of satellite coverage.
    At first, we envisioned GOES-R as a satellite series that would 
contain significant technological advancements. We looked at ways to 
expand the use of GOES data for other NOAA missions, such as ocean and 
coastal observations that support fisheries management and marine 
research. The 2003 preliminary system design concept was for a 
combination of the five sensors to be flown on as many as eight 
satellites. The preliminary cost estimate of $6.2 billion identified in 
the GAO report was developed in 2004 and presented in the FY 2006 
President's Budget. This figure has been revised over time as the 
program has moved forward.
    The five sensors included an advanced imager, a hyperspectral 
suite, two solar weather sensors, and a lightning mapper. The Advanced 
Baseline Imager (or A-B-I) is the main sensor which fulfills NOAA's 
critical mission requirements. This sensor will provide significant 
advancements over current GOES imagers by taking pictures five times 
faster and have the ability to zoom in to view specific severe weather 
events, while at the same time continue to look at the rest of the 
United States. We currently do not have this capability and must 
constantly make decisions about what to focus on, which impacts our 
ability to forecast weather. The Hyperspectral Environmental Suite 
(HES) was conceived as an advanced sounder and coastal water imager 
that would provide a profile of atmospheric temperature and moisture 
content used in weather forecasting and take images of coastal areas 
for water quality monitoring and coastal hazard assessment. The Solar 
Imaging Suite (SIS) will provide pictures of the sun to detect solar 
flares, while the Space Environmental in-Situ Suite (SEISS) will 
measure the space radiation environment. The Geostationary Lightning 
Mapper (GLM) will help us better detect lightning and improve our 
capabilities to forecast and track severe weather.
    The planned launch readiness date--based on the projected life 
expectancy of current satellites and the requirement to preserve 
continuity of the imaging mission--was projected to be in 2012. NOAA 
reevaluates the need date for GOES-R based on the performance of the 
operational satellites; this analysis has led to revisions of the GOES-
R launch date. Continuing analyses of our current satellites indicates 
that the on-orbit GOES satellites are lasting longer than predicted and 
a 2014 launch readiness date is now warranted.
    As noted earlier, GOES-R is still in the design phase and we have 
yet to award a prime contract for acquisition of this satellite series. 
Presently, three contractor teams are developing preliminary designs 
and identifying program risks, and when they are finished, NOAA and the 
Department of Commerce will decide on the system design and award a 
contract. The ABI instrument is under contract and being developed, and 
the contract for development of the SEISS instrument was just signed. 
NASA is managing all of our sensor contracts and is providing technical 
guidance and support for the whole program.

Lessons Learned from NPOESS and Other Reviews

    NOAA is applying lessons learned from the NPOESS program and other 
recent reviews of space systems. We are implementing these lessons into 
our management and acquisition strategy. We have made significant 
changes to our GOES-R program management and oversight based on 
direction from this committee, reviews from the Government 
Accountability Office (GAO), the DOC Inspector General, the recent 
NPOESS Nunn-McCurdy certification process, and our own internal 
reviews.
    I created a NOAA Program Management Council chaired by my Deputy, 
which is made up of senior NOAA and NASA personnel and meets monthly to 
review the program. This group assesses the technical, budget, and 
schedule performance of the program. It reviews proposed new activities 
and/or changes in scope of the program to ensure risk and budget 
impacts to existing programs are understood and realistic. This group 
provides recommendations on whether the program should move forward at 
all major milestones, such as contract award, critical design reviews, 
test readiness reviews and launch readiness. The PMC can also recommend 
alternative actions including terminations. During these monthly 
meetings members openly question the program director and can request 
further information or actions the program office must fulfill. Each 
meeting begins with a review of any open action item.
    In addition, I have a group consisting of the NOAA users of the 
satellite data, which also reports to my Deputy. As we designed the 
original concept for GOES-R, the user group developed the initial 
requirements and meets regularly to assess the extent to which the 
preliminary designs meet the requirements. This group is critical as we 
move forward with finalizing sensors and the satellite system to ensure 
GOES-R will meet NOAA's requirements for data and products.
    As both of the groups report to my Deputy, it is his job to 
arbitrate any differences of opinions between the two groups. My Deputy 
and I meet regularly to discuss the recommendations from the groups and 
I make decisions based on these recommendations. We provide the 
Department of Commerce with quarterly briefings on the program and I 
brief the Deputy Secretary and Secretary as needed.
    We have co-located the GOES-R program office at NASA Goddard Space 
Flight Center and are using the full capabilities and processes at NASA 
for the development of the GOES-R system. This includes NASA's 
processes for independent technical and engineering reviews. The 
program reports on a monthly basis to a NASA Program Management Council 
which is chaired by the Goddard Deputy Director.
    We hired a team of independent satellite experts to provide 
periodic reviews and address specific concerns raised by NOAA senior 
leadership. We also hired two cost estimating teams to independently 
develop the program estimates. One will work for the GOES-R program 
office and develop the Program Office Estimate. The other cost 
estimating team works for the NOAA Chief Financial Officer, who reports 
to my Deputy, to provide an Independent Cost Estimate. Our goal is to 
ensure that the program will have a realistic and executable budget in 
place that provides sufficient reserves to handle development issues 
that arise. NOAA also hired a highly competent and respected former 
NASA program manager, Anthony Comberiate, for the GOES-R program. The 
GOES-R program has increased staff to support robust systems 
engineering and oversight of the contractors, including on-site 
representatives at the prime contractors and at major subcontractors.

What did we learn about GOES-R?

    As we proceed through the preliminary design phase, our three 
contractor teams and our Independent Review Team have provided feedback 
on our design concepts:

        1.  To actually build our concept for GOES-R would be much more 
        expensive and riskier than we first thought;

        2.  One of the proposed sensors, the Hyperspectral 
        Environmental Suite (HES) is not technologically mature enough, 
        would impact the spacecraft and the ground systems, and would 
        not allow us to launch in 2014; and

        3.  Further improvements could be made in the way the 
        acquisition will be managed.

    Based on this information we are revising our plans to ensure we 
have a program that maintains data continuity, allows for technical 
advances, and is affordable. The good news is that this is the right 
time to make changes to the plans--before we let a contract to build 
the satellites.

Why have the cost estimates increased so much?

    The preliminary cost estimates to build this new system went from 
$6.2 billion to around $11.4 billion. Most of the increase was because 
we revised the inflation assumptions in our cost models, which added 
about $2.6 billion to the total. The estimates were also revised to 
provide for increased management reserves/margins based on expert 
recommendations and lessons learned from NPOESS. This added an 
additional $800 million. The cost of spacecraft, ground system and 
sensors increased about $1.5 billion. The remaining increase covers the 
launch, operation and support segments of GOES-R. This increase in the 
life cycle cost estimate reflects new inputs from NASA and others.
    In response to the increasing cost estimates for the program, the 
program office assembled a team of cost and technical experts and 
developed multiple program options to reduce cost and risk. The team 
provided information to the PMC and the user group, which examined the 
options and provided me with recommendations. These recommendations are 
being considered and decisions will be incorporated in the FY 2008 
President's Budget.

Why not build HES?

    One decision we have made is not to award a contract to build the 
HES sensor given its risks and technological challenges. HES is a large 
and complex instrument. The combination of instrument development 
challenges, magnitude of required spacecraft accommodations, and ground 
product implications, provided a high level of risk. Given input from 
the Program Management Council, input from the program office, the 
contractor and the independent review team, I determined HES created 
too much risk for the GOES-R program. While HES potentially could have 
provided a major improvement in our ability to characterize the 
atmosphere and the coastal environment, we did not think it was prudent 
to accept that much risk in an operational satellite for an acquisition 
program. We are examining alternate ways to maintain today's sounding 
capability for GOES-R. While not including the HES on GOES-R we are 
going to complete the HES preliminary design and risk reduction work 
that is currently under contract. This work will be of value to the 
user group which is actively working this issue with the program office 
as I have also asked the program office to look at alternatives to add 
a HES-like instrument on research satellites or future GOES satellites. 
Fulfilling the coastal waters component of the sounder capability 
remains a NOAA priority. NOAA has initiated a separate analysis of 
alternatives to examine possible future approaches for providing 
hyperspectral sounding and coastal waters imaging.
    In addition to architectural changes, we have decided to provide 
the sensors to the prime contractor as Government Furnished Equipment. 
This will ensure more direct Government oversight of these critical 
developments allowing the prime contractor to focus on the spacecraft, 
ground system, and integration. We are also examining the division of 
labor between NOAA and NASA. In the past, NOAA has provided the funding 
and NASA managed the contract for NOAA. We are discussing with NASA 
whether this model is the most appropriate one for the GOES-R Program.

The GAO Report

    We have also provided information to the GAO about GOES-R, which is 
why we are here today. I am pleased the GAO report recognizes we 
continue to incorporate the lessons learned from problems of other 
satellite programs into the GOES-R procurement. I realize more remains 
to be done and I am committed to doing it.
    Specifically, the GAO provided three recommendations:

Recommendation number one: Once the scope of the program has been 
finalized, establish a process for objectively evaluating and 
reconciling the government and independent life cycle cost estimates.
    We will establish a process to reconcile the cost estimates, and I 
will ensure this process is reviewed by our Independent Review Team. We 
will examine how NASA and the Department of Defense reconcile cost 
estimates and tailor a process that is most appropriate for NOAA.

Recommendation number two: Perform a comprehensive review of the 
Advanced Baseline Imaginer Sensor (called A-B-I) before it enters 
production.
    The report highlights the problems the contractor is experiencing 
with ABI, the one sensor in actual development. This sensor fulfills 
our mission critical imaging requirements. NOAA and NASA are working 
closely to ensure performance of the instrument meets these 
requirements. We believe we understand the current technical problems 
and the contractor has a realistic plan to develop the sensor. Given 
the importance of this instrument and lessons learned from the NPOESS 
Visible/Infrared Imager/Radiometer Suite (VIIRS) sensor, I agree with 
GAO that we need to ensure we are technologically ready to move forward 
through the critical milestones of development and production. NASA has 
several reviews of the sensor planned by government experts outside of 
the program, and NOAA will have independent experts regularly assess 
the progress of the sensor development at critical phases along with 
reviews by the NOAA PMC. GAO was also concerned about the potential for 
ABI cost overruns and schedule delays. We agree with GAO and we have 
budgeted for additional cost and schedule contingencies in line with 
GAO estimates to cover these challenges. We believe these actions will 
ensure the sensor will be ready to fly in 2014.

Recommendation number three: Seek assistance from an independent review 
team to determine the appropriate level of people and resources needed 
to track and oversee the contractor's performance using specific 
metrics.
    We agree with GAO about the importance of monitoring critical 
metrics that help illuminate the cost and schedule performance of the 
contractors. NOAA is hiring at least three additional people to aid in 
the implementation of Earned Value Management program management. As 
the program grows, we will adjust accordingly while seeking input and 
advice from NASA experts and our Independent Review Team.

What are NOAA's next steps?

    Given the analysis that our preliminary concepts for GOES-R are 
significantly riskier and more expensive than previously thought and 
would likely not be ready for a 2014 launch, NOAA and DOC are 
reevaluating the GOES-R program. As we evaluate and attempt to balance 
cost, schedule, risk, and performance, our number one priority is to 
ensure continuity of existing imagery data.
    We are providing the three contractor teams developing the 
preliminary designs for GOES-R three additional months. We want them to 
refine their designs by removing the HES sensor and providing at least 
existing sounding capability. We instructed them to develop a system 
that will have the remaining four sensor suites on each satellite, thus 
reducing the minimum number of satellites needed from three to two. We 
expect to have the preliminary design proposals at the end of this 
year. Then the program office, the PMC and the user group will provide 
me with recommendations on the final design for GOES-R, which will 
include the cost, schedule, performance and risk for the program. I 
will then provide my recommendations to the Secretary who will decide 
whether to move forward with a contract. It will then be about one year 
to develop and award a contract, which would occur in the summer of 
2008.

Conclusion

    As I have said before, satellites are very complicated and 
difficult machines to build. But, their capabilities are critical to 
NOAA's mission to predict the Earth's environment. I believe we are 
making significant strides in developing a better process for designing 
and acquiring our satellites. My goal is to have a process in place 
that will provide my successors with the best information to make the 
best decisions.
    Once again, I appreciate the efforts of the Committee, in 
particular Chairman Boehlert, in working with us as we develop this 
process. I would be happy to answer any questions you may have.

         Biography for Vice Admiral Conrad C. Lautenbacher, Jr.
    A native of Philadelphia, Pa., retired Navy Vice Admiral Conrad C. 
Lautenbacher, Ph.D., is serving as the undersecretary of commerce for 
oceans and atmosphere. He was appointed Dec. 19, 2001. Along with this 
title comes the added distinction of serving as the eighth 
Administrator of the National Oceanic and Atmospheric Administration. 
He holds an M.S. and Ph.D. from Harvard University in applied 
mathematics.
    Lautenbacher oversees the day-to-day functions of NOAA, as well as 
laying out its strategic and operational future. The agency manages an 
annual budget of $4 billion. The agency includes, and is comprised of, 
the National Environmental Satellite, Data and Information Services; 
National Marine Fisheries Service; National Ocean Service; National 
Weather Service; Oceanic and Atmospheric Research; Marine and Aviation 
Operations; and the NOAA Corps, the Nation's seventh uniformed service. 
He directed an extensive review and reorganization of the NOAA 
corporate structure to meet the environmental challenges of the 21st 
century.
    As the NOAA Administrator, Lautenbacher spearheaded the first-ever 
Earth Observation Summit, which hosted ministerial-level representation 
from several dozen of the world's nations in Washington July 2003. 
Through subsequent international summits and working groups, he worked 
to encourage world scientific and policy leaders to work toward a 
common goal of building a sustained Global Earth Observation System of 
Systems (GEOSS) that would collect and disseminate data, information 
and models to stakeholders and decision makers for the benefit of all 
nations individually and the world community collectively. The effort 
culminated in an agreement for a 10-year implementation plan for GEOSS 
reached by the 55 member countries of the Group on Earth Observations 
at the Third Observation Summit held in Brussels February 2005.
    He also has headed numerous delegations at international 
governmental summits and conferences around the world, including the 
U.S. delegation to 2002 Asia-Pacific Economic Cooperation Ocean 
Ministerial Meeting in Korea, and 2002 and 2003 meetings of the World 
Meteorological Organization and Intergovernmental Oceanographic 
Commission in Switzerland and France, as well as leading the Commerce 
delegation to the 2002 World Summit on Sustainable Development in South 
Africa.
    Before joining NOAA, Lautenbacher formed his own management 
consultant business, and worked principally for Technology, Strategies 
& Alliances Inc. He was president and CEO of the Consortium for 
Oceanographic Research and Education (CORE). This not-for-profit 
organization has a membership of 76 institutions of higher learning and 
a mission to increase basic knowledge and public support across the 
spectrum of ocean sciences.
    Lautenbacher is a graduate of the U.S. Naval Academy (Class of 
1964), and has won accolades for his performance in a broad range of 
operational, command and staff positions both ashore and afloat. He 
retired after 40 years of service in the Navy. His military career was 
marked by skilled fiscal management and significant improvements in 
operations through performance-based evaluations of processes.
    During his time in the Navy, he was selected as a Federal Executive 
Fellow and served at the Brookings Institution. He served as a guest 
lecturer on numerous occasions at the Naval War College, the Army War 
College, the Air War College, The Fletcher School of Diplomacy, and the 
components of the National Defense University.
    His Navy experience includes tours as Commanding Officer of USS 
HEWITT (DD-966), Commander Naval Station Norfolk; Commander of Cruiser-
Destroyer Group Five with additional duties as Commander U.S. Naval 
Forces Central Command Riyadh during Operations Desert Shield and 
Desert Storm, where he was in charge of Navy planning and participation 
in the air campaign. As Commander U.S. Third Fleet, he introduced joint 
training to the Pacific with the initiation of the first West Coast 
Joint Task Force Training Exercises (JTFEXs).
    A leader in the introduction of cutting-edge information 
technology, he pioneered the use of information technology to mount 
large-scale operations using sea-based command and control. As 
Assistant for Strategy with the Chief of Naval Operations Executive 
Panel, and Program Planning Branch Head in the Navy Program Planning 
Directorate, he continued to hone his analytic skills resulting in 
designation as a specialist both in Operations Analysis and Financial 
Management. During his final tour of duty, he served as Deputy Chief of 
Naval Operations (Resources, Warfare Requirements and Assessments) in 
charge of Navy programs and budget.
    Lautenbacher lives in Northern Virginia with his wife Susan who is 
a life-long high school and middle school science teacher.

    Chairman Boehlert. Admiral, under the circumstances that is 
a good place to stop. And I applaud that last statement, and 
all of your statement. Here is what we plan to do. We are going 
to give Mr. Powner an opportunity for his full five-minute 
statement, and then we are going to recess, go over and answer 
the call at the House. There are two votes. We should be back 
in about 20 minutes or so, and then we will have some limited 
questioning because we have your full statements. And we have 
the open dialogue back and forth and so we will follow it up 
with that open dialogue and some written questions. Mr. Powner.

    STATEMENT OF MR. DAVID A. POWNER, DIRECTOR, INFORMATION 
 TECHNOLOGY MANAGEMENT ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Powner. Chairman Boehlert, Ranking Member Gordon, and 
Members of the Committee, we appreciate the opportunity to 
testify this morning on our GOES-R report completed at your 
request. The next generation of geostationary environmental 
satellites is critical for future weather forecasting and 
tracking severe weather. NOAA is currently early in the 
acquisition cycle as the prime contract is expected to be 
awarded in 2008. Your early oversight, Mr. Chairman, has been 
essential to insure that NOAA is establishing a management team 
and processes that will help to avoid repeating the problems 
recently experienced on NPOESS and other major satellite 
acquisition
    Today, as requested, I will summarize three key points 
starting with the current cost and schedule estimate of GOES-R, 
lessons learned from previous satellite acquisitions and 
recommendations going forward. GOES-R acquisition is the fourth 
series of GOES satellites that have been acquired since 1970. 
As originally planned, this acquisition is to consist of four 
satellites that would each contain five sensors that are 
expected to significantly increase the amount and precision of 
environmental data. NOAA has three vendors currently working on 
preliminary designs and plans to award a contract to one of 
them in May, 2008.
    NASA is responsible for the sensors having awarded final 
contracts on two of the five and preliminary design contracts 
on the remaining three. The first GOES-R satellite is expected 
to be launched in 2014, and the final one is to provide 
coverage through 2028. Regarding costs, Mr. Chairman, when we 
began our review for you the life cycle cost was reported at 
6.2 for four satellites. During our review, we learned that the 
cost could be in the $11 billion to $12 billion range, double 
the original estimate. We concluded our review last month with 
the future scope and direction in limbo, and a commitment from 
NOAA that a decision would be made by the end of this month. 
NOAA last week told us that the GOES-R life cycle cost could be 
close to the original $6.2 billion range, but now it only 
includes two satellites, and we dropped one of the technically 
complex sensors, HES.
    Although the cost per satellite is not good news, NOAA's 
early attention to reducing this acquisition's technical 
complexity and more fully understanding its requirements prior 
to awarding the prime contract is. Our review also showed that 
NOAA's management team is taking into consideration key lessons 
learned from the recent NPOESS and prior GOES experiences, but 
that even more attention to past problems is needed. Past 
problems experienced with these acquisitions include poor cost 
and schedule estimates, technical complexity that exceeds the 
contractors' and government's abilities to deliver, 
insufficient contract oversight, and ineffective executive 
involvement.
    NOAA has established plans to address many of the past 
problems that focus on conducting independent cost estimates, 
performing preliminary studies of key technologies, placing 
resident government offices at key contractor locations and 
establishing a senior executive oversight committee. However, 
additional actions are needed to better position NOAA for 
success. We made a number of recommendations to address these 
actions that include establishing processes to insure that NOAA 
has an accurate independent life cycle estimate, performing a 
comprehensive review of one of the critical sensors to fully 
understand the level of technical complexity and having an 
independent review team assess the adequacy of key resources 
needed to oversee the contractor's performance.
    In summary, Mr. Chairman, NOAA's attention to requirements 
and this acquisition's technical complexity prior to contract 
award is commendable but recent direction still leaves our 
government with an extremely costly and complex acquisition 
that is essential for our nation's warning and forecasting 
operations through nearly 2030. Key risks facing this program 
include obtaining an accurate cost estimate and realistic 
schedule, balancing the pressure to increase the level of 
technical complexity to advance science with budget realities 
and the need to control costs and schedules, securing adequate 
systems engineering expertise to oversee contractor 
performance, and having early and frequent executive level 
involvement that holds both contractor and government personnel 
accountable.
    There is also additional risk in that NOAA is for the first 
time responsible for managing a satellite acquisition instead 
of NASA. Given this, it will be important to leverage NASA's 
expertise and to aggressively and continuously manage the risks 
that always seem to plague these large satellite acquisitions. 
This concludes my statement. Chairman Boehlert, thank you for 
your many years of service to our nation.
    [The prepared statement of Mr. Powner follows:]

                 Prepared Statement of David A. Powner

           GEOSTATIONARY OPERATIONAL ENVIRONMENTAL SATELLITES

  Additional Action Needed to Incorporate Lessons Learned from Other 
                           Satellite Programs
Why GAO Did This Study
    The National Oceanic and Atmospheric Administration (NOAA) plans to 
procure the next generation of geostationary operational environmental 
satellites, called the Geostationary Operational Environmental 
Satellites-R series (GOES-R). This new series is considered critical to 
the United States' ability to maintain the continuity of data required 
for weather forecasting through the year 2028.
    GAO was asked to summarize and update its report previously issued 
to the Subcommittee on Environment, Technology, and Standards--
Geostationary Operational Environmental Satellites: Steps Remain in 
Incorporating Lessons Learned from Other Satellite Programs, GAO-06-993 
(Washington, D.C.: Sept. 6, 2006). This report (1) determines the 
status of and plans for the GOES-R series procurement, and (2) 
identifies and evaluates the actions that the program management team 
is taking to ensure that past problems experienced in procuring other 
satellite programs are not repeated.
What GAO Recommends
    In our report, we make recommendations to the Secretary of Commerce 
to improve NOAA's ability to effectively manage the GOES-R procurement. 
In written comments, the Department of Commerce agreed with the 
recommendations and identified plans for implementing them.
What GAO Found
    At the time of our review, NOAA was nearing the end of the 
preliminary design phase of its GOES-R system--which was estimated to 
cost $6.2 billion and scheduled to have the first satellite ready for 
launch in 2012. It expected to award a contract in August 2007 to 
develop this system. However, recent analyses of the GOES-R program 
cost--which in May 2006 the program office estimated could reach $11.4 
billion--have led the agency to consider reducing the scope of 
requirements for the satellite series. Since our report was issued, 
NOAA officials told GAO that the agency has made a decision to reduce 
the scope of the program to a minimum of two satellites and to reduce 
the complexity of the program by canceling a technically complex 
instrument.
    NOAA has taken steps to implement lessons learned from past 
satellite programs, but more remains to be done. Prior satellite 
programs--including a prior GOES series, a polar-orbiting environmental 
satellite series, and various military satellite programs--often 
experienced technical challenges, cost overruns, and schedule delays. 
Key lessons from these programs include the need to (1) establish 
realistic cost and schedule estimates, (2) ensure sufficient technical 
readiness of the system's components prior to key decisions, (3) 
provide sufficient management at government and contractor levels, and 
(4) perform adequate senior executive oversight to ensure mission 
success. NOAA has established plans to address these lessons by 
conducting independent cost estimates, performing preliminary studies 
of key technologies, placing resident government offices at key 
contractor locations, and establishing a senior executive oversight 
committee. However, many steps remain to fully address these lessons 
(see table). Until it completes these activities, NOAA faces an 
increased risk that the GOES-R program will repeat the increased cost, 
schedule delays, and performance shortfalls that have plagued past 
procurements.




Mr. Chairman and Members of the Committee:

    We appreciate the opportunity to participate in today's hearing on 
the planned Geostationary Operational Environmental Satellites-R (GOES-
R) program. The GOES-R series is to replace the current series of 
satellites which will likely begin to reach the end of their useful 
lives in approximately 2012. This new series is expected to mark the 
first major technological advance in GOES instrumentation since 1994. 
It is also considered critical to the United States' ability to 
maintain the continuity of data required for weather forecasting 
through the year 2028.
    As requested, our testimony summarizes and updates a report we 
previously issued to your subcommittee that (1) determines the status 
of and plans for the GOES-R series procurement, and (2) identifies and 
evaluates the actions that the program management team is taking to 
ensure that past problems experienced in procuring other satellite 
programs are not repeated.\1\ In preparing for this testimony, we 
relied on our work supporting the accompanying report. That report 
contains a detailed overview of our scope and methodology. All the work 
on which this testimony is based was performed in accordance with 
generally accepted government auditing standards.
---------------------------------------------------------------------------
    \1\ GAO, Geostationary Operational Environmental Satellites: Steps 
Remain in Incorporating Lessons Learned from Other Satellite Programs, 
GAO-06-993 (Washington, D.C.: Sept. 6, 2006).
---------------------------------------------------------------------------

Results in Brief

    The National Oceanic and Atmospheric Administration (NOAA) is 
nearing the end of the preliminary design phase of its GOES-R system, 
which was initially estimated to cost $6.2 billion and scheduled to 
have the first satellite ready for launch in 2012. At the time of our 
review, NOAA had issued contracts for the preliminary design of the 
overall GOES-R system to three vendors and expected to award a contract 
to one of these vendors in August 2007 to develop the satellites. In 
addition, to reduce the risks associated with developing new 
instruments, NOAA issued contracts for the early development of two 
instruments and for the preliminary designs of three other instruments. 
The agency plans to turn these instrument contracts over to the vendor 
that is awarded the contract for the overall GOES-R program. However, 
recent analyses of the GOES-R program cost--which in May 2006 the 
program office estimated could reach $11.4 billion--have led the agency 
to consider reducing the scope of requirements for the satellite 
series. At the time of our review, NOAA officials estimated that a 
decision on the future scope and direction of the program could be made 
by the end of September 2006. Since then, NOAA officials told us that 
the agency has made a decision to reduce the scope and complexity of 
the GOES-R program by reducing the number of satellites and canceling a 
technically complex instrument.
    NOAA has taken steps to implement lessons learned from past 
satellite programs, but more remains to be done. Prior satellite 
programs--including a prior GOES series, a polar-orbiting environmental 
satellite series, and various military satellite programs--often 
experience technical challenges, cost overruns, and schedule delays. 
Key lessons from these programs include the need to (1) establish 
realistic cost and schedule estimates, (2) ensure sufficient technical 
readiness of the system's components prior to key decisions, (3) 
provide sufficient management at government and contractor levels, and 
(4) perform adequate senior executive oversight to ensure mission 
success. NOAA has established plans to address these lessons by 
conducting independent cost estimates, performing preliminary studies 
of key technologies, placing resident government offices at key 
contractor locations, and establishing a senior executive oversight 
committee. However, many steps remain to fully address these lessons. 
Specifically, NOAA has not yet developed a process to evaluate and 
reconcile the independent and government cost estimates. In addition, 
NOAA has not yet determined how it will ensure that a sufficient level 
of technical maturity will be achieved in time for an upcoming decision 
milestone, nor has it determined the appropriate level of resources it 
needs to adequately track and oversee the program using earned value 
management.\2\ Until it completes these activities, NOAA faces an 
increased risk that the GOES-R program will repeat the increased cost, 
schedule delays, and performance shortfalls that have plagued past 
procurements.
---------------------------------------------------------------------------
    \2\ Earned value management is a method that compares the value of 
work accomplished during a given period with that of the work expected 
in that period.
---------------------------------------------------------------------------
    To improve NOAA's ability to effectively manage the GOES-R 
procurement, in our accompanying report,\3\ we made recommendations to 
the Secretary of Commerce to direct its NOAA Program Management Council 
to establish a process for objectively evaluating and reconciling the 
government and independent life cycle cost estimates once the program 
requirements are finalized; to establish a team of system engineering 
experts to perform a comprehensive review of the Advanced Baseline 
Imager instrument to determine the level of technical maturity achieved 
on the instrument before moving the instrument into production; and to 
seek assistance in determining the appropriate levels of resources 
needed at the program office to adequately track and oversee the 
contractor's earned value management data. In written comments, the 
Department of Commerce agreed with our recommendations and provided 
information on its plans to implement our recommendations.
---------------------------------------------------------------------------
    \3\ GAO-06-993.
---------------------------------------------------------------------------

Background

    Since the 1960s, geostationary and polar-orbiting environmental 
satellites have been used by the United States to provide 
meteorological data for weather observation, research, and forecasting. 
NOAA's National Environmental Satellite Data and Information Service 
(NESDIS) is responsible for managing the civilian geostationary and 
polar-orbiting satellite systems as two separate programs, called GOES 
and the Polar Operational Environmental Satellites, respectively.
    Unlike polar-orbiting satellites, which constantly circle the earth 
in a relatively low polar orbit, geostationary satellites can maintain 
a constant view of the earth from a high orbit of about 22,300 miles in 
space. NOAA operates GOES as a two-satellite system that is primarily 
focused on the United States (see Fig. 1). These satellites are 
uniquely positioned to provide timely environmental data to 
meteorologists and their audiences on the earth's atmosphere, its 
surface, cloud cover, and the space environment. They also observe the 
development of hazardous weather, such as hurricanes and severe 
thunderstorms, and track their movement and intensity to reduce or 
avoid major losses of property and life. Furthermore, the satellites' 
ability to provide broad, continuously updated coverage of atmospheric 
conditions over land and oceans is important to NOAA's weather 
forecasting operations.



    To provide continuous satellite coverage, NOAA acquires several 
satellites at a time as part of a series and launches new satellites 
every few years (see Table 1).



    Three satellites--GOES-11, GOES-12, and GOES-13--are currently in 
orbit. Both GOES-11 and GOES-12 are operational satellites, while GOES-
13 is in an on-orbit storage mode. It is a backup for the other two 
satellites should they experience any degradation in service. The 
others in the series, GOES-O and GOES-P, are planned for launch over 
the next few years.\4\ NOAA is also planning a future generation of 
satellites, known as the GOES-R series, which are planned for launch 
beginning in 2012.
---------------------------------------------------------------------------
    \4\ Satellites in a series are identified by letters of the 
alphabet when they are on the ground and by numbers once they are in 
orbit.
---------------------------------------------------------------------------
    Each of the operational geostationary satellites continuously 
transmits raw environmental data to NOAA ground stations. The data are 
processed at these ground stations and transmitted back to the 
satellite for broadcast to primary weather services both in the United 
States and around the world, including the global research community. 
Raw and processed data are also distributed to users via ground 
stations through other communication channels, such as dedicated 
private communication lines and the Internet. Figure 2 depicts a 
generic data relay pattern from the geostationary satellites to the 
ground stations and commercial terminals.



GOES-R Program--An Overview

    NOAA is planning for the GOES-R program to improve on the 
technology of prior GOES series, in terms of both system and instrument 
improvements. The system improvements are expected to fulfill more 
demanding user requirements and to provide more rapid information 
updates. Table 2 highlights key system-related improvements GOES-R is 
expected to make to the geostationary satellite program.



    The instruments on the GOES-R series are expected to increase the 
clarity and precision of the observed environmental data. NOAA plans to 
acquire five different types of instruments. The program office 
considered two of the instruments--the Advanced Baseline Imager and the 
Hyperspectral Environmental Suite--to be most critical because they 
would provide data for key weather products.\5\ Table 3 summarizes the 
originally planned instruments and their expected capabilities.
---------------------------------------------------------------------------
    \5\ After our report was issued on September 6, 2006, NOAA 
officials told us that the agency has decided to cancel its plans for 
the development of the Hyperspectral Environmental Suite but expects to 
explore options that will ensure continuity of data provided by the 
current GOES series.



GOES-R Program Office Structure

    The program management structure for the GOES-R program differs 
from past GOES programs. Prior to the GOES-R series, NOAA was 
responsible for program funding, procurement of the ground elements, 
and on-orbit operation of the satellites, while NASA was responsible 
for the procurement of the spacecraft, instruments, and launch 
services. NOAA officials stated that this approach limited the agency's 
insight and management involvement in the procurement of major elements 
of the system.
    Alternatively, under the GOES-R management structure, NOAA has 
responsibility for the procurement and operation of the overall 
system--including spacecraft, instruments, and launch services. NASA is 
responsible for the procurement of the individual instruments until 
they are transferred to the overall GOES-R system contractor for 
completion and integration onto the spacecraft. Additionally, to take 
advantage of NASA's acquisition experience and technical expertise, 
NOAA located the GOES-R program office at NASA's Goddard Space Flight 
Center. It also designated key program management positions to be 
filled with NASA personnel. These positions include the deputy system 
program director role for advanced instrument and technology infusion, 
the project manager for the flight portion of the system, and the 
deputy project manager for the ground and operations portion of the 
system. NOAA officials explained that they changed the management 
structure for the GOES-R program in order to streamline oversight and 
fiduciary responsibilities, but that they still plan to rely on NASA's 
expertise in space system acquisitions.

Satellite Programs Often Experience Technical Problems, Cost Overruns, 
                    and Schedule Delays

    Satellite programs are often technically complex and risky 
undertakings, and as a result, they often experience technical 
problems, cost overruns, and schedule delays. We and others have 
reported on a historical pattern of repeated missteps in the 
procurement of major satellite systems, including the National Polar-
orbiting Operational Environmental Satellite System (NPOESS), the GOES 
I-M series, the Space Based Infrared System High Program (SBIRS-High), 
and the Advanced Extremely High Frequency Satellite System (AEHF).\6\ 
Table 4 lists key problems experienced with these programs.
---------------------------------------------------------------------------
    \6\ GAO, Defense Acquisitions: Space System Acquisition Risks and 
Keys to Addressing Them, GAO-06-776R (Washington, D.C.: June 1, 2006); 
Polar-orbiting Operational Environmental Satellites: Cost Increases 
Trigger Review and Place Program's Direction on Hold, GAO-06-573T 
(Washington, D.C.: Mar. 30, 2006); Polar-orbiting Operational 
Environmental Satellites: Technical Problems, Cost Increases, and 
Schedule Delays Trigger Need for Difficult Trade-off Decisions, GAO-06-
249T (Washington, D.C.: Nov. 16, 2005); Polar-orbiting Environmental 
Satellites: Information on Program Cost and Schedule Changes, GAO-04-
1054 (Washington, D.C.: Sept. 30, 2004); Defense Acquisitions: Despite 
Restructuring, SBIRS High Program Remains at Risk of Cost and Schedule 
Overruns, GAO-04-48 (Washington, D.C.: Oct. 31, 2003); Military Space 
Operations: Common Problems and Their Effects on Satellite and Related 
Acquisitions, GAO-03-825R (Washington, D.C.: June 2, 2003); Defense 
Acquisitions: Assessments of Major Weapon Programs, GAO-03-476 
(Washington, D.C.: May 15, 2003); Weather Satellites: Action Needed to 
Resolve Status of the U.S. Geostationary Satellite Program, GAO/NSIAD-
91-252 (Washington, D.C.: July 24, 1991). Defense Science Board/Air 
Force Scientific Advisory Board Joint Task Force, Report on the 
Acquisition of National Security Space Programs (May 2003).



GOES-R Procurement Activities Are Under Way, but System Requirements 
                    and Cost Estimates Are Changing

    At the time of our review, NOAA was nearing the end of the 
preliminary design phase on its GOES-R program and planned to award a 
contract for the system's development in August 2007. However, because 
of concerns with potential cost growth, NOAA's plans for the GOES-R 
procurement are changing. To date, NOAA has issued contracts for the 
preliminary design of the overall GOES-R system to three vendors and 
expects to award a contract to one of these vendors to develop the 
system. In addition, to reduce the risks associated with developing new 
instruments, NASA has issued contracts for the early development of two 
instruments and for the preliminary designs of three other 
instruments.\7\ The agency plans to award these contracts and then turn 
them over to the contractor responsible for the overall GOES-R program. 
However, this approach is under review and NOAA may wait until the 
instruments are fully developed before turning them over to the system 
contractor. Table 5 provides a summary of the status of contracts for 
the GOES-R program.
---------------------------------------------------------------------------
    \7\ The development contract for the Space Environmental In-Situ 
Suite instrument was issued after we completed our review.




    According to program documentation provided to the Office of 
Management and Budget in 2005, the official life cycle cost estimate 
for GOES-R was approximately $6.2 billion (see Table 6). However, 
program officials reported that this estimate was over two years old 
and under review.



    At the time of our review, NOAA was planning to launch the first 
GOES-R series satellite in September 2012.\8\ The development of the 
schedule for launching the satellites was driven by a requirement that 
the satellites be available to back up the last remaining GOES 
satellites (GOES-O and GOES-P) should anything go wrong during the 
planned launches of these satellites. Table 7 provides a summary of the 
planned launch schedule for the originally planned GOES-R series.
---------------------------------------------------------------------------
    \8\ After our report was issued on September 6, 2006, NOAA 
officials told us that the planned launch schedule was being delayed. 
The expected launch of the first GOES-R series satellite is now planned 
for December 2014.



    However, NOAA's plans for the GOES-R procurement are changing 
because of concerns with potential cost growth. Given its experiences 
with cost growth on the NPOESS acquisition, NOAA asked program 
officials to recalculate the total cost of the estimated $6.2 billion 
GOES-R program. In May 2006, program officials estimated that the life 
cycle cost could reach $11.4 billion. The agency then requested that 
the program identify options for reducing the scope of requirements for 
the satellite series. Program officials reported that there were over 
10 viable options under consideration, including options for removing 
one or more of the planned instruments. The program office also 
reevaluated its planned acquisition schedule based on the potential 
program options. Specifically, program officials stated that if there 
was a decision to make a major change in system requirements, they 
would likely extend the preliminary design phase, delay the decision to 
proceed into the development and production phase, and delay the 
contract award date. At the time of our review, NOAA officials 
estimated that a decision on the future scope and direction of the 
program could be made by the end of September 2006.

Recent NOAA Decision on the Direction and Scope of the GOES-R Program

    In mid-September 2006, NOAA officials reported that a decision on 
the future scope and direction of GOES-R had been made--and involved a 
reduction in the number of satellites and in planned program 
capabilities, a revised life cycle cost estimate, and the delay of key 
programmatic milestones. Specifically, NOAA reduced the minimum number 
of satellites to two. In addition, plans for developing the 
Hyperspectral Environmental Suite--which was once considered a critical 
instrument by the agency--were canceled. Instead, the program office is 
exploring options that will ensure continuity of sounding data 
currently provided by the current GOES series.\9\ NOAA officials 
reported that the cost of the restructured program is not known, but 
some anticipate it will be close to the original program estimate of 
$6.2 billion. The contract award for the GOES-R system has been pushed 
out to May 2008. Finally, the planned launch date of the first 
satellite in the GOES-R series has been delayed until December 2014.
---------------------------------------------------------------------------
    \9\ The Hyperspectral Environmental Suite was intended to be the 
successor to the sounder instrument on-board the current GOES series. 
The sounder measures radiated energy at different depths (altitudes) 
and also records surface and cloud-top temperatures and ozone 
distribution.
---------------------------------------------------------------------------

The GOES-R Program Office Has Taken Steps to Address Past Lessons 
                    Learned, But Significant Actions Remain

    NOAA has taken steps to apply lessons learned from problems 
encountered on other satellite programs to the GOES-R procurement. Key 
lessons include (1) establishing realistic cost and schedule estimates, 
(2) ensuring sufficient technical readiness of the system's components 
prior to key decisions, (3) providing sufficient management at 
government and contractor levels, and (4) performing adequate senior 
executive oversight to ensure mission success. NOAA has established 
plans designed to mitigate the problems faced in past acquisitions; 
however, many activities remain to fully address these lessons. Until 
it completes these activities, NOAA faces an increased risk that the 
GOES-R program will repeat the increased cost, schedule delays, and 
performance shortfalls that have plagued past procurements.

Efforts to Improve Reliability of Cost and Schedule Estimates are Under 
                    Way, But Key Steps Remain in Reconciling Cost 
                    Estimates

    We and others have reported that space system acquisitions are 
strongly biased to produce unrealistically low cost and schedule 
estimates in the acquisition process.\10\ Our past work on military 
space acquisitions has indicated that during program formulation, the 
competition to win funding is intense and has led program sponsors to 
minimize their program cost estimates. NOAA programs face similar 
unrealistic estimates. For example, the total development cost of the 
GOES I-M acquisition was over three times greater than planned, 
escalating from $640 million to $2 billion. Additionally, the delivery 
of the first satellite was delayed by five years.
---------------------------------------------------------------------------
    \10\ GAO, Space Acquisitions: Stronger Development Practices and 
Investment Planning Needed to Address Continuing Problems, GAO-05-891T 
(Washington, D.C.: July 12, 2005). Defense Science Board/Air Force 
Scientific Advisory Board Joint Task Force, Report on the Acquisition 
of National Security Space Programs (May 2003).
---------------------------------------------------------------------------
    NOAA has several efforts under way to improve the reliability of 
its cost and schedule estimates for the GOES-R program. NOAA's Chief 
Financial Officer has contracted with a cost-estimating firm to 
complete an independent cost estimate, while the GOES-R program office 
has hired a support contractor to assist with its internal program cost 
estimating. The program office is re-assessing its estimates based on 
preliminary information from the three vendors contracted to develop 
preliminary designs for the overall GOES-R system. Once the program 
office and independent cost estimates are completed, program officials 
intend to compare them and to develop a revised programmatic cost 
estimate that will be used in its decision on whether to proceed into 
system development and production. In addition, NOAA has planned for an 
independent review team--consisting of former senior industry and 
government space acquisition experts--to provide an assessment of the 
program office and independent cost estimates for this decision 
milestone. To improve its schedule reliability, the program office is 
currently conducting a schedule risk analysis in order to estimate the 
amount of adequate reserve funds and schedule margin needed to deal 
with unexpected problems and setbacks. Finally, the NOAA Observing 
System Council\11\ submitted a prioritized list of GOES-R system 
requirements to the Commerce Under Secretary for approval. This list is 
expected to allow the program office to act quickly in deleting lower 
priority requirements in the event of severe technical challenges or 
shifting funding streams.
---------------------------------------------------------------------------
    \11\ NOAA's Observing System Council is the principal advisory 
council for NOAA's Earth observation and data management activities. It 
includes members from each NOAA line office, other relevant councils, 
and program offices. The Assistant Administrator for Satellite and 
Information Services and the Assistant Administrator for Weather 
Services serve as the co-chairs of the council.
---------------------------------------------------------------------------
    While NOAA acknowledges the need to establish realistic cost and 
schedule estimates, several hurdles remain. As discussed earlier, the 
agency was considering--during the time of our review--reducing the 
requirements for the GOES-R program to mitigate the increased cost 
estimates for the program. Prior to this decision, the agency's efforts 
to establish realistic cost estimates could not be fully effective in 
addressing this lesson. In addition, NOAA suspended the work being 
performed by its independent cost estimator. Now that the program scope 
and direction is being further defined, it will be important for the 
agency to restart this work. Further, the agency has not yet developed 
a process to evaluate and reconcile the independent and program office 
cost estimates once final program decisions are made. Without this 
process, the agency may lack the objectivity necessary to counter the 
optimism of program sponsors and is more likely to move forward with an 
unreliable estimate. Until it completes this activity, NOAA faces an 
increased risk that the GOES-R program will repeat the cost increases 
and schedule delays that have plagued past procurements.

Preliminary Studies Are Under Way, But Steps Remain in Determining 
                    Components' Technical Maturity

    Space programs often experience unforeseen technical problems in 
the development of critical components as a result of having 
insufficient knowledge of the components and their supporting 
technologies prior to key decision points. One key decision point is 
when an agency decides on whether the component is sufficiently ready 
to proceed from a preliminary study phase into a development phase; 
this decision point results in the award of the development contract. 
Another key decision point occurs during the development phase when an 
agency decides whether the component is ready to proceed from design 
into production (also called the critical design review). Without 
sufficient technical readiness at these milestones, agencies could 
proceed into development contracts on components that are not well 
understood and enter into the production phase of development with 
technologies that are not yet mature.
    In 1997, NOAA began preliminary studies on technologies that could 
be used on the GOES-R instruments. These studies target existing 
technologies and assessed how they could be expanded for GOES-R. The 
program office is also conducting detailed trade-off studies on the 
integrated system to improve its ability to make decisions that balance 
performance, affordability, risk, and schedule. For instance, the 
program office is analyzing the potential architectures for the GOES-R 
constellation of satellites--the quantity and configuration of 
satellites, including how the instruments will be distributed over 
these satellites. These studies are expected to allow for a more mature 
definition of the system specifications.
    NOAA has also developed plans to have an independent review team 
assess project status on an annual basis once the overall system 
contract has been awarded. In particular, this team will review 
technical, programmatic, and management areas; identify any outstanding 
risks; and recommend corrective actions. This measure is designed to 
ensure that sufficient technical readiness has been reached prior to 
the critical design review milestone. The program office's ongoing 
studies and plans are expected to provide greater insight into the 
technical requirements for key system components and to mitigate the 
risk of unforeseen problems in later acquisition phases.
    However, the progress currently being made on a key instrument 
currently under development--the Advanced Baseline Imager--has 
experienced technical problems and could be an indication of more 
problems to come in the future. These problems relate to, among other 
things, the design complexity of the instrument's detectors and 
electronics. As a result, the contractor is experiencing negative cost 
and schedule performance trends. As of May 2006, the contractor 
incurred a total cost overrun of almost $6 million with the 
instrument's development only 28 percent complete. In addition, from 
June 2005 to May 2006, it was unable to complete approximately $3.3 
million worth of work. Unless risk mitigation actions are aggressively 
pursued to reverse these trends, we project the cost overrun at 
completion to be about $23 million.
    While NOAA expects to make a decision on whether to move the 
instrument into production (a milestone called the critical design 
review) in January 2007, the contractor's current performance raises 
questions as to whether the instrument designs will be sufficiently 
mature by that time. Further, the agency does not have a process to 
validate the level of technical maturity achieved on this instrument or 
to determine whether the contractor has implemented sound management 
and process engineering to ensure that the appropriate level of 
technical readiness can be achieved prior to the decision milestone. 
Until it does so, NOAA risks making a poor decision based on inaccurate 
or insufficient information--which could lead to unforeseen technical 
problems in the development of this instrument.

Efforts to Strengthen Government and Contractor Management Are Under 
                    Way, But Significant Work on Program Controls 
                    Remain

    In the past, we have reported on poor performance in the management 
of satellite acquisitions.\12\ The key drivers of poor management 
included inadequate systems engineering and earned value management\13\ 
capabilities, unsuitable allocation of contract award fees, inadequate 
levels of management reserve, and inefficient decision-making and 
reporting structure within the program office.
---------------------------------------------------------------------------
    \12\ GAO-06-573T, GAO-06-249T, GAO/NSIAD-91-252, Defense 
Acquisitions: DOD Has Paid Billions in Award and Incentive Fees 
Regardless of Acquisition Outcomes, GAO-06-66 (Washington, D.C.: Dec. 
19, 2005), and Weather Satellites: Cost Growth and Development Delays 
Jeopardize U.S. Forecasting Ability, GAO/NSIAD-89-169 (Washington, 
D.C.: June 30, 1989).
    \13\ Earned value management is a method, used by DOD for several 
decades, to track a contractor's progress in meeting project 
deliverables. It compares the value of work accomplished during a given 
period with that of the work expected in that period. Differences from 
expectations are measured in both cost and schedule variances.
---------------------------------------------------------------------------
    NOAA has taken numerous steps to restructure its management 
approach on the GOES-R procurement in an effort to improve performance 
and to avoid past mistakes. These steps include:

          The program office revised its staffing profile to 
        provide for government staff to be located on-site at prime 
        contractor and key subcontractor locations.

          The program office plans to increase the number of 
        resident systems engineers from 31 to 54 to provide adequate 
        government oversight of the contractor's system engineering, 
        including verification and validation of engineering designs at 
        key decision points (such as the critical design review 
        milestone).

          The program office has better defined the role and 
        responsibilities of the program scientist, the individual who 
        is expected to maintain an independent voice with regard to 
        scientific matters and advise the program manager on related 
        technical issues and risks.

          The program office also intends to add three resident 
        specialists in earned value management to monitor contractor 
        cost and schedule performance.

          NOAA has work under way to develop the GOES-R 
        contract award fee structure and the award fee review board 
        that is consistent with our recent findings, the Commerce 
        Inspector General's findings, and other best practices, such as 
        designating a non-program executive as the fee-determining 
        official to ensure objectivity in the allocation of award fees.

          NOAA and NASA have implemented a more integrated 
        management approach that is designed to draw on NASA's 
        expertise in satellite acquisitions and increase NOAA's 
        involvement on all major components of the acquisition.

          The program office reported that it intended to 
        establish a management reserve of 25 percent consistent with 
        the recommendations of the Defense Science Board Report on 
        Acquisition of National Security Space Programs.\14\
---------------------------------------------------------------------------
    \14\ Defense Science Board/Air Force Scientific Advisory Board 
Joint Task Force, Report on the Acquisition of National Security Space 
Programs (May 2003).

    While these steps should provide more robust government oversight 
and independent analysis capabilities, more work remains to be done to 
fully address this lesson. Specifically, the program office has not 
determined the appropriate level of resources it needs to adequately 
track and oversee the program and the planned addition of three earned 
value management specialists may not be enough as acquisition 
activities increase. By contrast, after its recent problems and in 
response to the independent review team findings, NPOESS program 
officials plan to add 10 program staff dedicated to earned value, cost, 
and schedule analysis. An insufficient level of established 
capabilities in earned value management places the GOES-R program 
office at risk of making poor decisions based on inaccurate and 
potentially misleading information. Finally, while NOAA officials 
believe that assuming sole responsibility for the acquisition of GOES-R 
will improve their ability to manage the program effectively, this 
change also elevates NOAA's risk for mission success. Specifically, 
NOAA is taking on its first major system acquisition and an increased 
risk due to its lack of experience. Until it fully addresses the lesson 
of ensuring an appropriate level of resources to oversee its 
contractor, NOAA faces an increased risk that the GOES-R program will 
repeat the management and contractor performance shortfalls that have 
plagued past procurements.

NOAA Has Established a Senior Executive Committee to Perform Oversight 
                    Role

    We and others have reported on NOAA's significant deficiencies in 
its senior executive oversight of NPOESS.\15\ The lack of timely 
decisions and regular involvement of senior executive management was a 
critical factor in the program's rapid cost and schedule growth.
---------------------------------------------------------------------------
    \15\ GAO-06-573T; Department of Commerce Office of Inspector 
General, Poor Management Oversight and Ineffective Incentives Leave 
NPOESS Program Well Over Budget and Behind Schedule, OIG-17794-6-0001 
(May 8, 2006).
---------------------------------------------------------------------------
    NOAA formed its program management council in response to the lack 
of adequate senior executive oversight on NPOESS. In particular, this 
council is expected to provide regular reviews and assessments of 
selected NOAA programs and projects--the first of which is the GOES-R 
program. The council is headed by the NOAA Deputy Undersecretary and 
includes senior officials from Commerce and NASA. The council is 
expected to hold meetings to discuss GOES-R program status on a monthly 
basis and to approve the program's entry into subsequent acquisition 
phases at key decision milestones--including contract award and 
critical design reviews, among others. Since its establishment in 
January 2006, the council has met regularly and has established a 
mechanism for tracking action items to closure.
    The establishment of the NOAA Program Management Council is a 
positive action that should support the agency's senior-level 
governance of the GOES-R program. In moving forward, it is important 
that this council continue to meet on a regular basis and exercise 
diligence in questioning the data presented to it and making difficult 
decisions. In particular, it will be essential that the results of all 
preliminary studies and independent assessments on technical maturity 
of the system and its components be reviewed by this council so that an 
informed decision can be made about the level of technical complexity 
it is taking on when proceeding past these key decision milestones. In 
light of the recent uncertainty regarding the future scope and cost of 
the GOES-R program, the council's governance will be critical in making 
those difficult decisions in a timely manner.

Implementation of GAO Recommendations Should Improve NOAA's Efforts to 
                    Implement Lessons Learned

    To improve NOAA's ability to effectively manage the GOES-R 
procurement, in our accompanying report,\16\ we recommended that the 
Secretary direct its NOAA Program Management Council to take the 
following three actions:
---------------------------------------------------------------------------
    \16\ GAO-06-993.

          Once the scope of the program has been finalized, 
        establish a process for objectively evaluating and reconciling 
---------------------------------------------------------------------------
        the government and independent life cycle cost estimates.

          Perform a comprehensive review of the Advanced 
        Baseline Imager, using system engineering experts, to determine 
        the level of technical maturity achieved on the instrument, to 
        assess whether the contractor has implemented sound management 
        and process engineering, and to assert that the technology is 
        sufficiently mature before moving the instrument into 
        production.

          Seek assistance from an independent review team to 
        determine the appropriate level of resources needed at the 
        program office to adequately track and oversee the contractor's 
        earned value management. Among other things, the program office 
        should be able to perform a comprehensive integrated baseline 
        review after system development contract award, provide 
        surveillance of contractor earned value management systems, and 
        perform project scheduling analyses and cost estimates.

    In written comments, Commerce agreed with our recommendations and 
provided information on its plans to implement our recommendations. In 
particular, Commerce intends to establish a process for evaluating and 
reconciling the various cost estimates and to analyze this process and 
the results with an independent review team comprised of recognized 
satellite acquisition experts. The agency is also planning to have this 
independent review team provide assessments of the Advanced Baseline 
Imager's technical maturity and the adequacy of the program 
management's staffing plans.
    In summary, the procurement of the next series of geostationary 
environmental satellites--called the GOES-R series--is at a critical 
juncture. Recent concerns about the potential for cost growth on the 
GOES-R procurement have led the agency to reduce the scope of 
requirements for the satellite series. According to NOAA officials, the 
current plans call for acquiring two satellites and moving away from a 
technically complex new instrument in favor of existing technologies. 
While reducing the technical complexity of the system prior to contract 
award and defining an affordable program are sound business practices, 
it will be important for NOAA to balance these actions with the 
agencies' long-term need for improving geostationary satellites over 
time.
    While NOAA is positioning itself to improve the acquisition of this 
system by incorporating the lessons learned from other satellite 
procurements including the need to establish realistic cost estimates, 
ensure sufficient government and contractor management, and obtain 
effective executive oversight, further steps remain to fully address 
selected lessons and thereby mitigate program risks. Specifically, NOAA 
has not yet developed a process to evaluate and reconcile the 
independent and government cost estimates. In addition, NOAA has not 
yet determined how it will ensure that a sufficient level of technical 
maturity will be achieved in time for an upcoming decision milestone or 
determined the appropriate level of resources it needs to adequately 
track and oversee the program using earned value management. Moreover, 
problems that are frequently experienced on major satellite 
acquisitions, including insufficient technical maturity, overly 
aggressive schedules, inadequate systems engineering capabilities, and 
insufficient management reserve will need to be closely monitored 
throughout this critical acquisition's life cycle. To NOAA's credit, it 
has begun to develop plans for implementing our recommendations. These 
plans include, among other things, establishing a process to evaluate 
and reconcile the various cost estimates and obtaining assessments from 
an independent review team on the technical maturity of a key 
instrument in development and the adequacy of the program management's 
staffing plans. However, until it addresses these lessons, NOAA faces 
an increased risk that the GOES-R program will repeat the increased 
cost, schedule delays, and performance shortfalls that have plagued 
past procurements.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions that you or Members of the Committee may have at 
this time.

                               Discussion

    Chairman Boehlert. Thank you. And as evidence of the high 
degree of professionalism we have come to expect from GAO, you 
finished exactly on the five-minute mark. And so I want to 
thank you for your testimony, and I want to thank you and your 
colleagues at the GAO for the outstanding work you do. Now we 
are going to recess. We have for the benefit of my colleagues 
three minutes and fifteen seconds to get over to the floor. We 
will get back as soon as we can. Thank you very much.
    [Recess.]

                    Estimated Cost of GOES-R Program

    Chairman Boehlert. We will resume. Admiral, right to you. 
Based on NOAA's scrub of program requirements, what is the 
estimated cost for the restructured GOES-R program? Are you 
trying to stay near the original $6.2 billion estimate, and, if 
so, are you sacrificing technical capability or advances to 
stay within this number?
    Admiral Lautenbacher. We are trying to look at a range of 
options so that we can provide enough information for the 
Secretary and for OMB, for the decision-makers with the 
Administration, as well as Congress in oversight role to insure 
that we have the best program that is technologically risk--
levels of risk that we can live with, that the cost is 
reasonable. We are trying to obviously look for options that 
are less than the full cost of the 11--roughly $11.2 or $0.4 
billion that----
    Chairman Boehlert. Is it closer to $6.2 billion or are you 
just giving us a broad range of $5 billion----
    Admiral Lautenbacher. I am, and we are at a point where it 
is hard to sit here and say that. If you ask me personally what 
I am trying to do, I am trying to keep it within about seven to 
nine. I would like to at least have a range in there for us to 
discuss as we go through the process as to what is reasonable 
based on what I know about the program now.
    Chairman Boehlert. Do you have some feel of the time table 
of when this analysis might be concluded?
    Admiral Lautenbacher. We have to conclude this analysis in 
the spring time because we expect to get the concept studies--
we have extended the contractors for three months so that we 
can get more information based on the fact--based on this cost 
information. Then we will do the independent cost estimates and 
set up a program base line. There is no program base line for 
this. And then go to the Secretary of Commerce for a decision 
this summer, June to July of 2007. So that is the time frame.

                  Congress' Continuing Oversight Role

    Chairman Boehlert. Let me ask Mr. Powner, what questions 
should this committee and Congress as a whole continue to ask 
about GOES-R as the program moves forward to insure it remains 
on track?
    Mr. Powner. Well, first of all, with that cost estimate, I 
think there is a fundamental question when we start throwing 
out numbers how many satellites we are considering. That is the 
first thing that I think we want to get clear in terms of 
whether it is four satellites, two satellites, are we at eleven 
or are we at six or are we at the seven to nine range, so that 
is quite unclear right now. Going forward, I think there are a 
couple of things that we need to make sure. We have a number of 
recommendations in our report that talks about reconciling 
different cost estimates. We need a real clear independent cost 
estimate that is real and that is realistic and not optimistic, 
so that is the first thing.
    The other thing we need going forward is to insure that we 
have adequate systems engineering on this program. This is a 
program that is going to compete with resources with the NPOESS 
program. The NPOESS program still doesn't have that management 
team build out, so that is going to be real key when we start 
holding contractors' fee to the fire from a technical 
perspective. One other thing to consider going forward is the 
arrangement with NASA. NASA right now is responsible for the 
sensors. In terms of what NASA's role is going forward that is 
still being negotiated, and given NOAA's lack of experience in 
acquiring these large satellite acquisitions, it would make 
sense for NASA to stay on board as long as possible and help 
NOAA in this endeavor.
    Chairman Boehlert. Admiral, what do you say in response to 
that?
    Admiral Lautenbacher. I agree with everything that has been 
said. I think that we should be able to do all the things that 
he has asked and----
    Chairman Boehlert. So the two of you are on the same wave 
length?
    Admiral Lautenbacher. I believe we are on the same wave 
length, and we appreciate the independent view, and we got 
another team of independent experts and we want the independent 
view so that we are doing the most logical thing that we can do 
to make this program come in.
    Chairman Boehlert. So you will continue to let the GAO 
report be a guide for you?
    Admiral Lautenbacher. Oh, absolutely. Absolutely.
    Chairman Boehlert. Any further recommendations, Mr. Powner, 
that were not contained in your recommendations?
    Mr. Powner. A couple other things to consider. If you look 
at what has happened with dropping the HES satellite, you know, 
historically DOD has gone to this approach where they are 
moving more to an incremental development with satellites. That 
is something that is very common in the technology world where 
you deploy lesser chunks of functionality more quickly. That 
hasn't been well accepted or associated with satellite 
acquisitions because typically the acquisition cycle is so 
long. But what we ought to consider is taking--we always talk 
about these leaps in technology. We ought to consider smaller 
steps advancing the technology, and maybe that would be more 
realistic going forward.
    One other thing, Mr. Chairman, I think that is important to 
consider is with NOAA not having much experience leading 
acquisitions in the satellite world there are critical design 
reviews throughout the process that are extremely important 
when we go from preliminary design to development or from 
development into production modes, and it would be very 
important that there is clear criteria that they follow at all 
those key meetings and if that is done with rigor, it ought to 
go on in a forward basis.
    Chairman Boehlert. Thank you very much. Mr. Gordon.

            Risk of NOAA's Sole Procurement Responsibilities

    Mr. Gordon. Mr. Powner, you and your colleagues serve a 
great function for our country and Congress, and I want to 
thank you. You have talked, I guess, generally about this but 
just specifically what do you believe are the greatest risks 
associated with NOAA's decision to take on sole procurement 
responsibilities and what information should Congress and the 
public have to insure that GOES program remains on track?
    Mr. Powner. A couple of key risks going forward. One, I 
think it starts with executive level involvement. We have a 
good structure in place right now. It will get more difficult 
going forward because as the bad news goes up the chain 
typically that bad news isn't escalated well. So that executive 
level involvement will need to be in place and we will need to 
hold both government and contractor personnel accountable, so 
that is one of the key risks is maintaining that involvement 
throughout.
    Another key area is continuing to keep the technical 
complexity within the bounds that are doable. I think we have 
seen that on the HES sensor but there would also be other 
technical issues coming up with the other sensors. In terms of 
what the public needs, what the Congress and the public needs 
going forward, I think information coming out of these monthly 
executive meetings, we can start with that. We have looked at 
some of that information. There is clear identification of 
risks, what is being done to mitigate those risks.
    Mr. Gordon. Excuse me. Are you copied on those? Do you get 
pretty much those minutes of those reviews?
    Mr. Powner. Yes, we get those and as part of our reviews we 
request those and get those key minutes.
    Mr. Gordon. Is it pretty much the same time or is it--how 
much lag time?
    Mr. Powner. Usually there is some lag time but it differs. 
I mean if we look at the NPOESS program, we actually get 
invited now to those executive meetings where we are in 
attendance and that is a step in the right direction where we 
get timely information that we share with your staff.

                            Price Estimates

    Mr. Gordon. And we talked a little bit earlier about NPOESS 
and since you got an understanding in this area, I am a little 
skeptical of the estimate of the $11.4 billion. What is your 
feeling on that number now?
    Mr. Powner. We have very little details behind the 11.4. I 
think these numbers that are being thrown out, the 6.2, the 
11.4, the seven to nine, I mean there are rough order of 
magnitudes right now, and we don't have detailed information 
behind those so we don't have great confidence in those 
numbers.
    Mr. Gordon. Again, thank you for your service.
    Chairman Boehlert. Mr. Gutknecht.
    Mr. Gutknecht. Thank you, Mr. Chairman. I also serve on the 
Government Reform Committee, and yesterday we had what amounted 
to our seventh hearing on some of the waste and mismanagement 
in terms of the contracting relative to reconstruction efforts 
in Iraq. And so compared to those hearings this is like a walk 
in the park, but nonetheless it seems to me that this committee 
has a special obligation to see that America's taxpayers are 
well served and we get fair value for the amount of money that 
we pay for these things. Admiral Lautenbacher, let me ask you a 
fairly simple question but I hope you can give us a fairly 
sophisticated answer.

                    Improvements Over NPOESS Program

    What assurances do we have that senior executive reviews of 
the GOES-R will be better than we experienced with the NPOESS 
project?
    Admiral Lautenbacher. I think that we have put in place 
much more auditable processes, and that we have a flow of 
information which is, first of all, there are duplicate 
channels of information coming up. The flow is much faster. And 
we have minutes, and we are having reportable types of events 
so it is not trust me that we are doing this. So these will be 
there for people to see. We will continue to work with the GAO, 
the IG in the Department of Commerce, and to make sure that 
what we have is open and available and it can be part of a 
dialogue to insure that everybody is comfortable with doing the 
best we can.
    Mr. Gutknecht. Mr. Powner, let me come back to something, 
and I think this is really about overall management. 
Essentially what GAO says is that the performance of the senior 
executive council was really not up to par, and maybe I am 
being a little harsh on that. What assurances can you give us 
that they will now figure out how to better manage this project 
and the money that they are given?
    Mr. Powner. Well, we clearly had those findings related to 
the NPOESS acquisition. Concerning the GOES acquisition, we are 
early in the acquisition cycle, and what we have seen on GOES 
is there is a program management council made up of key 
executives, and they report to the Admiral. The frequency of 
those meetings and the makeup of that team, we have actually 
been complimentary to date of the structure. I think there are 
many lessons learned from the NPOESS experience so we are 
actually--we have not been critical of the executive level 
oversight on GOES to date.
    Mr. Gutknecht. Thank you.
    Mr. Schwarz. [Presiding] The gentleman from Oregon, Mr. Wu.
    Mr. Wu. Thank you, Mr. Chairman. I would like to enter my 
original opening statement into the record.
    Mr. Schwarz. Without objection.

            Concerns About GOES-R and Similarities to NPOESS

    Mr. Wu. And I would like to just make a few comments based 
on what I have read about GOES-R, what I have been briefed on 
about GOES-R, and our prior experiences with NPOESS. And the 
chairman, Ranking Member Gordon, Vern Ehlers, and I, have 
worked very, very hard to try to understand what happened with 
NPOESS, not so much with the rear view mirror perspective of 
who to blame but primarily looking out the windshield to try to 
find what we are to learn from the NPOESS experience and how to 
apply that to future acquisition programs. And from that 
perspective, I remain concerned. I remain very, very concerned. 
The GAO report and other materials seem to indicate that some 
of the problems which occurred with NPOESS continue to plague 
GOES-R.
    Some of those very, very important ones are that the level 
of risk in some of the primary instruments, to mention ABI for 
one, is very, very high, that some of the instrument 
development and the contracts are being let before a prime 
contractor is selected, and that puts the prime contractor 
sometimes in a position of accepting what people assure them 
will happen with the instruments and their compatibility and 
their interference with each other, and that was a problem with 
NPOESS and that seems to be repeated here with GOES-R. The 
primary instrument is already demonstrating cost overruns as is 
the overall program, and I have yet to see a layout of what the 
probability of success is, whether we are facing an S-shaped 
curve, a flat curve or a very steep linear curve and whether 
these cost estimates, which have already moved on us, whether 
they are at the 50 percent point, at the 20 percent point or 
the 80 percent point, and the determination of the shape of 
that curve should guide us as to whether some of these 
contracts should be fixed cost contracts or whether they should 
be cost plus contracts.
    And I for one have not been privy to any of that 
information. To the extent that this committee has not been 
briefed in to that information, I would very much like to see 
that and I would like to turn it over to Mr. Powner and 
Administrator Lautenbacher for your comment and answer.
    Admiral Lautenbacher. You touched on a lot of subjects, and 
remind me, I probably will not remember all that you brought 
up, but let us talk about the GFE versus CFE. What we learned 
on NPOESS, first of all, we did try to start the contracts on 
the instruments in NPOESS early enough. It turns out it wasn't 
early enough to meet the schedule given the technological 
underestimation that was made at the time when people thought 
they could build these instruments, so we have started the 
instruments. Actually there is more time for the GOES-R 
instruments to be developed based on NPOESS. Now the issue of 
the prime contractor being able to manage this subcontractor is 
a huge one, and it is a huge problem we had with NPOESS.
    The concept at this point, and I won't say--it could change 
because we are still in the preliminary design phase, is that 
these instruments will be GFE. They will be managed by the 
technical experts in NASA and they will have government 
oversight clearly on them and we will not be reliant on 
contractors to do all of that work which has not turned out 
well in the case of NPOESS. So the concept is to go in that 
direction. As far as the cost goes, these are preliminary 
estimates. We are still--there is no cost overrun in the sense 
there is no baseline yet and nobody is committed to spending 
money that is overrunning. So we can decide that now. We are in 
that debate. We are in that formative phase and we want to work 
with you and provide you as much information as we can so we 
can have your thoughts on that.
    Mr. Wu. Well, thank you very much, and I will take as many 
of your responses as you can in writing. The red light is on 
already. But I am deeply concerned about this because you all 
are going to try to do this on your own, and, you know, when I 
stepped into medical school the dean in the medical school 
said, you know, the only true reward for hard work and success 
is a harder job. What he didn't say is if you screw up one 
patient or damage one patient, you get to work on the President 
of the United States next. Now your track record with NPOESS 
has been less than dramatically successful, and you are asking 
us to trust you with a larger project in essence.
    I, for one, have my deep concerns at this point in time, 
but I look forward to staying closely in the loop, as I am sure 
you do, to closely manage this project and this committee to 
exert the proper oversight.
    Admiral Lautenbacher. I agree with you, and this is a big 
project, and we will do everything we can to make it 
successful. Thank you.
    Mr. Wu. Thank you.
    Mr. Schwarz. The gentleman's recollection of medical school 
is a little different than my own. I spent four years trying 
assiduously to avoid the dean. The gentleman from Texas, Mr. 
Neugebauer.

                 New Technologies and Increasing Costs

    Mr. Neugebauer. Thank you, Mr. Chairman. I want to back up 
to Mr. Wu's testimony--the thing that I think concerns me is I 
have looked back over the track record and history here is the 
number of satellites keeps going down and the number--the cost 
keeps going up. What kind of benchmarks, number one, are you 
putting in place, and, secondly, are we trying to make this a 
Cadillac when a Chevrolet will do? In other words, how much 
incremental benefit are we getting of striving for these new 
technologies over what the current technologies are?
    Admiral Lautenbacher. We are absolutely not trying to make 
it a Cadillac, and that is why we have taken a decision to 
defer one of these instruments that we know now. I mean we 
have--at least I am convinced that it is just too much of a 
step forward without the proper development being done so we 
need to go back and do more development. I am going to work 
with NASA on trying to get more development. In terms of the 
number of satellites, the concept is service on orbit so the 
contractor can give us options as to having more satellites 
that have less reliability or fewer satellites that have 
greater reliability and coverage. And part of that is what we 
are trying to figure out now. That is what these three teams of 
contractors are doing. They are coming in with ideas on what 
should the number of satellites be. Our concept is for a 
coverage of a certain number of years.
    We want to maintain coverage, full coverage, of the United 
States for severe weather and our weather models for a certain 
period of time. And so some contractors say, well, we can make 
our satellites last longer and it is cheaper to us. We need to 
examine that when they come in there with their proposals, so 
we are not trying to predetermine the number of satellites. We 
are trying to predetermine the level of service to the United 
States.

                 Contractors Role in the GOES-R Project

    Mr. Neugebauer. Well, and it does nothing--I guess the 
question is as you look at the different models maybe a smaller 
number, better coverage, at what point in time will there be 
one contractor that will then provide all of those satellites 
or are you looking at saying here are some long-term solutions, 
here are short-term solutions, where are you headed?
    Admiral Lautenbacher. The way this usually operates, and I 
am not saying it can't be changed or shouldn't be changed 
necessarily but we have a series of contractors that compete at 
a preliminary design stage to come in with the best concept, 
the best idea, and then we take that information, put our 
independent review teams on it, cost teams, technical experts, 
and come up with an RFP to come in for people to--and they will 
then compete for one contract. That has been the model in 
satellites that has worked most efficiently rather than having 
saying two manufacturers that are producing satellites. The 
business isn't big enough to do that so we end up necking down 
to one contractor for a series which may last for 16 to 20 
years of coverage and then you go on to the next one.
    Mr. Neugebauer. And in that process, what kind of criteria 
are you looking for, in other words, one, ability to develop 
the product that you ordered but secondly the track record of 
that company's ability to deliver that. Particularly you 
deliver it within the budget constraints or the price. And I 
think the question, and I didn't hear you answer that, whether 
that was going to be a fixed price or if that was going to be a 
cost plus.
    Admiral Lautenbacher. In terms of the contract for the RFP 
that we will put out have not been set yet so our contracting 
experts or acquisition experts will sit down and look at it. 
Previous contracts have been cost plus because of the 
technological increases in this. We have had a fixed price 
contract for the current series that is up there now that goes 
in which we are just starting to launch. Unfortunately, the 
contractor lost money on that and there was some long 
discussion about how to deal with that. So we have--all of the 
concepts are in play for either fixed price. A contractor won't 
take on huge leaps in technology obviously for a fixed price. 
My opinion again. We are still in the early part of it, but 
most of the time these have been cost plus types of contracts.
    Mr. Neugebauer. Mr. Powner, is that right, I'm sorry, what 
is the GAO's experience in that arena of your recommendation 
fixed price versus cost plus?
    Mr. Powner. Well, I think it depends on the circumstances. 
Whenever you can push for a fixed price, you clearly want to do 
that. And there is a question here in terms of how well defined 
the technical complexity is going forward on these sensors in 
the program, whether it allows for a fixed price, or whether 
there is some unknowns that the contractors aren't going to be 
real receptive to accepting a fixed price consistent with what 
the Admiral mentioned.
    Mr. Neugebauer. Thank you.
    Mr. Schwarz. The gentleman from Texas, Mr. Green.
    Mr. Green. Thank you. And I thank the Ranking Member and 
the Chairman. And, if I may, I would like to make a special 
presentation on behalf of the Members on my side of the aisle 
who are here today, and with the consent of my Ranking Member. 
It has been a preeminent privilege for me to serve on this 
committee under the leadership of Chairman Boehlert, and I 
would like to as a small expression of appreciation present to 
him this certificate and it has a flag with it, and I shall 
read what the certificate bears.
    It reads, ``This flag was flown over the United States 
Capitol and presented to the Honorable Sherwood Boehlert, 
Chairman of the U.S. House of Representatives Committee on 
Science in recognition of his outstanding service to his 
country and his leadership in the advancement of science and 
technology.'' We do this for several reasons. One, of course, 
is that he has served us well. Yesterday was his birthday, as I 
understand it, his 30th for the second or third time, but also 
because he is leaving us. And he has been a real uniter. I have 
admired the way he and my Ranking Member, soon to be Chairman, 
how they have worked well together. And I am just so honored to 
be here and to do this, and so I would like to present this to 
his staff member at this time in his absence. And I trust that 
wherever you are, sir, you will remember that there are those 
of us who will be here, and we will try to as best we can carry 
on your good work, and I thank you very much. I yield back the 
balance of my time.

                            Data Continuity

    Mr. Schwarz. Mr. Green yields back. Thank you, Mr. Green. 
That is a very kind gesture on your part. My understanding is 
that neither Mr. Inglis nor Mr. Diaz-Balart have any questions. 
For the record, I don't want to imply by asking these questions 
that I have any extraordinarily sophisticated knowledge of this 
topic. I am on the learning curve. But for the record, I have a 
couple of questions, Admiral Lautenbacher, if you don't mind. 
First, what options are being explored to insure data 
continuity for the cancelled sensor? Are you considering still 
providing improvements over current capabilities, just maybe 
not as much of an improvement as you had hoped for?
    Admiral Lautenbacher. And the answer to that is yes. We 
want as an absolute minimum continuation of the current 
capability and data. We have begun a study of alternatives to 
look to see what is possible for improvements that will be 
within the ability of the technical community to deliver at a 
cost and schedule. So we are doing a complex study or complete 
study analysis of alternatives so we can get somewhere in 
between hopefully.
    Mr. Schwarz. And the next question has to do with the users 
of the data that is produced. How will you involve the user 
group in the analysis of alternatives for the new GOES-R 
program scope? Please be specific about the process you will 
use to get input from all users of geostationary satellite 
data.
    Admiral Lautenbacher. We have a users group which includes 
all the users of geostationary satellite data. It has a leader 
and a chairman, co-chairman, and a process to collect the 
information. The information is reported to my deputy who then 
brings it into the program office and with our program 
management council. The requirements will be then bounced 
against the studies that come in from the contractors, and we 
will look at the best arrangement of requirements versus cost 
and schedule and performance in that arena.
    Mr. Schwarz. Thank you. Mr. Gordon, any further comments? 
Before we bring the hearing to a close, I want to thank our 
panelists, Admiral Lautenbacher, Mr. Powner, for testifying 
before the committee today in the stead of Chairman Boehlert. 
If there is no objection, the record will remain open for 
additional statements from the Members and for answers to any 
follow-up questions the Subcommittee may ask of the panelists. 
Without objection, so ordered. The hearing is now adjourned.
    [Whereupon, at 11:30 a.m., the Committee was adjourned.]


                               Appendix:

                              ----------                              


                   Answers to Post-Hearing Questions

Responses by Vice Admiral Conrad C. Lautenbacher, Jr. (Ret.), Under 
        Secretary of Commerce for Oceans and Atmosphere, National 
        Oceanic and Atmospheric Administration

Questions submitted by Chairman Sherwood L. Boehlert

Q1.  In past Geostationary Operational Environmental Satellite (GOES) 
procurements, the National Aeronautics and Space Administration (NASA) 
has managed the procurement on the National Oceanic and Atmospheric 
Administration's (NOAA) behalf. In the past, for GOES-R you have stated 
that NOAA will manage the procurement, but your testimony for this 
hearing states that NOAA is still discussing the procurement model with 
NASA.

Q1a.  Does this mean you are considering returning to having NASA 
manage the entire procurement?

A1a. No. Previous GOES acquisition and operations programs included 
both NOAA and NASA contracts for the end-to-end space and ground 
systems. For the GOES-R program, NOAA and NASA agree that we must 
leverage the unique expertise of each organization. We are also in 
general agreement that the chosen management approach must include a 
stronger NOAA system program management role than in prior GOES 
procurements. However, as part of managing program risks, the 
acquisition strategy is one of the things being discussed with NASA and 
reviewed by our Independent Review Team.

Q1b.  What options are you reviewing concerning the assignment of 
specific tasks to NOAA and NASA?

A1b. NOAA and NASA have agreed in principle on a framework in which 
NOAA retains overall program management authority. As noted in our 
testimony, the spacecraft instruments will now be treated as Government 
Furnished Equipment (GFE) and NASA will continue to manage those 
procurements. The options under consideration with NASA and the 
Independent Review Team involve management structure and acquisition 
strategy. Any recommendations resulting from this process will need to 
be reviewed by NOAA senior management, the Department, and NASA policy 
officials before any decisions are made.

Q1c.  When do you expect the Memorandum of Understanding (MOU) between 
the agencies to be completed and signed?

A1c. We are working to get the Interagency Agreement in place as soon 
as possible.

Q1d.  If the details of the MOU are already generally in place, please 
clarify the relationship between NOAA and NASA with regard to the GOES-
R procurement by specifically explaining each agency's responsibility 
for each component of the program, including the overall procurement, 
and provide specific details regarding the proposed MOU between the 
agencies that will govern the relationship.

A1d. The proposed MOU will be signed by the NOAA Deputy Under Secretary 
and the NASA Deputy Administrator and will govern all managerial and 
acquisition aspects of the NOAA/NASA GOES-R relationship. Its content 
is very similar in scope to NOAA/NASA MOUs governing the current NOAA/
NASA relationship for existing operational environmental satellite 
programs.
    Specific roles and responsibilities of NOAA and NASA will be 
delineated and formally documented. While specific details are being 
negotiated, it is agreed that NOAA will provide the overall System 
Program Director (SPD), who will be responsible for overall program 
management. NASA will provide key project leads supporting the SPD. The 
MOU outlines funding responsibilities, agreement on payment of NASA 
administrative fees, and in-kind provisions such as sufficient office 
space at the Goddard Spaceflight Center for the GOES-R program office.
    In addition to the MOU, NOAA and NASA will complete lower-level 
management plans that will implement the MOU.

Q2.  Did you ask for feedback from users or contractors prior to making 
the decision not to let the contract for the Hyperspectral 
Environmental Suite (HES)? If so, what was the process and timeline for 
soliciting feedback from users or contractors? What specific reaction 
to the decision, if any, did you receive from the users and 
contractors?

A2. The process we used to address the GOES-R affordability issue this 
spring and summer included user representation at every step. 
Government users were represented on the NOAA/NASA Team that developed 
and analyzed the baseline program and possible alternatives. The review 
process for the results of the Team effort included the GOES-R 
Operational Requirements Working Group (GORWG) and NOAA Observing 
Systems Council (NOSC). Contractor data regarding the technical risks 
and costs of HES and reduced capability alternatives, such as the 
removal of the coastal waters requirements, was utilized in the 
assessment of the costs and benefits of the GOES-R alternatives.
    The users strongly endorsed having advanced sounding capabilities 
like HES but also endorsed the decisions regarding HES in the context 
of the GOES-R requirements priorities, resources available, associated 
risks, and the programmatic alternatives available. The contractors 
were disappointed with the decision and have expressed interest in 
supporting efforts to continue advanced sounding efforts.

Q3.  Did you consider making minor changes to the HES requirements 
instead of outright cancellation? If so, why didn't those minor changes 
work to reduce the risk and expense?

A3. During the on-going HES Program Definition and Risk Reduction 
(PDRR) phase a number of studies were conducted looking at ways to 
reduce the cost of HES including changes and/or reductions. However, 
the core requirements for the sounding and coastal waters capabilities 
results in an instrument architecture with a certain size and technical 
complexity. This instrument complexity along with the spacecraft 
accommodations and ground processing to produce the associated products 
resulted in a risk that was inconsistent with NOAA's operational 
requirements.

Q4.  One of the GOES-R independent review teams has been looking at HES 
and is due to report to about it this fall. Also, the contractors 
competing to build HES have until December 2006 to complete their 
preliminary design concepts for the instrument. You made the decision 
to cancel this sensor before the independent review team gave you their 
final report and before the contractors completed their preliminary 
design concepts for the instrument.

Q4a.  When you made the decision to cancel HES, what information did 
you consider with respect to cost, schedule and technical issues and 
minimum user requirements?

A4a. We assessed the technical, cost and schedule risks associated with 
the entire HES system, which included the instrument, spacecraft 
integration and ground data processing risks. Assessment participants 
included the full range of GOES-R program participants: NOAA and NASA 
government personnel, the Program Definition and Risk Reduction (PDRR) 
contractor teams, and in-house support contractors. We considered the 
schedule for HES, which did not support the first GOES-R launch date. 
Our conclusion was that the technical maturity of the HES design was 
not sufficient enough to be flown on an operational spacecraft. We 
retained the requirement to maintain sounding capability equivalent to 
that of the present GOES spacecraft. Together with our users, we are 
presently assessing alternative technical solutions to meet these 
requirements. This assessment is on-going and is in the initial stages. 
When completed in February 2007, it will allow NOAA to determine what 
alternatives might go forward for further study. Mechanisms for 
external agencies to provide input is through the GOES-R Operational 
Requirements Working Group (GORWG), the NOAA Observing Systems Council 
(NOSC), various NOAA Goal Teams, as well as the NOAA Cooperative 
Institutes at the University of Wisconsin, Colorado State University, 
and Oregon State University.

Q4b.  Why didn't you wait until the independent review and the final 
designs were available to make your decision about HES?

A4b. Concerns about HES technical, cost, and schedule risks became 
apparent following the PDRR System Requirement Reviews (SRRs) which 
occurred in the spring of 2006. Each of the three contractor teams 
expressed concerns about the HES and recommended that the GOES-R 
program office make a decision about HES as soon as possible. The 
Independent Review Team had also begun its work at that time and had 
also raised concerns about the HES risks. Subsequent work in-house and 
with the contractors refined those initial concerns. We used this 
information to make the decision to remove HES from GOES-R.
    By making the decision in the late summer, we minimized impacts on 
the PDRR contracts and were able to provide direction to the 
contractors to modify their concepts to reflect the re-scoping 
decisions. The timing of our decision took into account detailed 
technical analysis that confirmed earlier concerns, minimized impacts 
to the PDRR contracts and overall program schedule.

Q4c.  Did you seek the input of this independent review team and/or the 
contractors in making that decision?

A4c. Following the first two Independent Review Team reviews of the 
GOES-R program, the IRT expressed concern about the HES risks and 
suggested that development risks for HES exceeded those of an 
operational satellite system. Concurrently, our program definition and 
risk reduction (PDRR) prime contractor competitive teams had each 
expressed concern about HES development risk. Both of these inputs 
weighed heavily in our decision.

Q5.  In your testimony you mentioned that one of the reasons for not 
building HES is that it will affect the ground system. Please provide 
specific examples of how HES would affect the GOES-R ground system and 
why this led to your decision to not build the sensor.

A5. The magnitude and complexity of the additional software and 
hardware required to produce the HES sounder and coastal waters 
products was one of several factors influencing our decision to 
eliminate the HES. By taking an overall systems approach to the HES 
decision, we were able to make a system-level determination of HES 
risks. GOES-R ground system experts determined that eliminating HES-
related algorithms and supporting computer hardware and software 
accounted for an approximate 40 percent decrease in ground system 
complexity. In addition to non-recurring development costs, recurring 
costs which required periodic upgrade and maintenance of the ground 
system were proportionally reduced.

Q6.  In your testimony you stated that the GOES-R User Group meets 
regularly to review the program.

Q6a.  Please supply a list of members of the User Group.

A6a. The primary User Group is the GOES Operational Requirements 
Working Group (GORWG); membership consists of:

          Senior Representative from primary user National 
        Weather Service (Chair)

          GOES-R Senior Scientist

          Senior representatives from the four Major NOAA Goal 
        Teams:

                  Weather and Water

                  Climate

                  Commerce and Transportation

                  Ecosystems

          Senior representatives from NOAA HQ staff elements 
        and Operating Branches:

                  Program Planning and Integration

                  Programs, Analysis, and Evaluation

    The GORWG reports to the NOAA Observing Systems Council (NOSC). The 
NOSC consists of:

          Assistant Administrator (AA) for Weather Services 
        (Co-Chair)

          Assistant Administrator for Satellite and Information 
        Services (Co-Chair) and senior staff members

          Senior Representatives from NOAA Line Offices and 
        staffs:

                  Chief Information Officer

                  Office of Marine and Aviation Operations

                  National Marine Fisheries Service

                  National Ocean Service

                  National Weather Service

                  Office of Oceanic and Atmospheric Research

                  Programs, Analysis, and Evaluation

                  Plans, Programs, and Integration

Q6b.  How often does the User Group meet?

A6b. Currently the GORWG meets every two weeks. The NOSC meets monthly 
or as necessary.

Q6c.  What type of information does the User Group review?

A6c. The GORWG reviews information at all phases of the GOES-R program.

          Requirements Identification Phase: Reviews higher-
        level user observational requirements for possible allocation 
        to geostationary satellite systems such as GOES-R.

          Program Definition and Design Risk Reduction (PDRR) 
        Phase: Reviews system alternatives proposed by the GOES Program 
        Office (GPO) to assure requirements are satisfied.

          Acquisition and Operations (A&O) Phase: Will monitor 
        and assess the program during manufacturing and test to assess 
        the ability of the program to meet requirements.

Q6d.  Is there a standard procedure in place for the GOES-R program 
office to seek the input of the User Group regarding possible 
modifications to user requirements if the GOES-R program encounters 
cost, schedule or technical problems going forward?

A6d. Yes. The primary senior management decision-making body for GOES-R 
is the NOAA Program Management Council (PMC). Many of the same 
organizations who have members on the NOSC, also have members on the 
PMC. The NOAA Deputy Under Secretary (DUS) is the PMC chair.
    GOES-R issues surfacing at the PMC meetings requiring user input 
are assigned as action items to the NOSC, which evaluates all user-
specific concerns and makes a recommendation to the DUS. The DUS brings 
the recommendation to the PMC for a decision. Similarly, issues arising 
through the NOSC affecting GOES-R are sent to the PMC for resolution.

Q6e.  Is there a process for the User Group to submit grievances about 
GOES-R program decisions? If so, what is this procedure? If not, do you 
think such a procedure would benefit the program?

A6e. Yes, a process exists. Users can independently raise issues about 
GOES-R decisions through the GORWG and NOSC if consensus cannot be 
reached at the working level. The decision authority is the NOAA 
Administrator (Under Secretary of Commerce for Oceans and Atmosphere).

Q6f.  Does the User Group operate under the Federal Advisory Committee 
Act?

A6f. No. The NOSC and GORWG were organized by direction and authority 
of the NOAA Administrator. These groups are not required to be 
established under FACA since their members are all federal employees.

Q7.  What has NOAA done to identify a minimum set of requirements for 
Advanced Baseline Imager (ABI) and other critical sensors on GOES-R? If 
you run into serious technical problems with ABI, will you consider 
scaling back the requirements for the sensor? If so, do you have a 
strategy choosing which requirements will be reduced or eliminated?

A7. NOAA has identified GOES-R top-level system requirements in the 
GOES-R Level 1 requirements document which is presently in draft form. 
Following completion of the PDRR phase of the GOES-R acquisition 
program, the Deputy Under Secretary (DUS) will approve the Level 1 
requirements document in its final form after NOSC formal review and 
concurrence. If we consider reducing ABI requirements in the future, we 
would follow the same procedures as we did for the HES, which would 
result in a coordinated approach presented to the DUS for approval.

Q8.  In your testimony you explained that a group of senior NOAA 
officials, the NOAA Program Management Council, meets monthly to review 
GOES-R.

Q8a.  What kind of information does the Council review?

A8a. The NOAA Program Management Council (PMC) provides the forum for 
regular review and assessment of selected NOAA programs and projects. 
The PMC is a decision-making body which is chaired by the Deputy Under 
Secretary.
    The PMC is briefed on monthly assessments of performance versus 
plan in the following areas:

          Technical Performance--actual versus planned 
        performance, risk identification and mitigation strategies

          Budget Performance--actual versus planned costs 
        (Earned value), status of funds, budget threats, budget 
        reserves posture

          Schedule Performance--critical path analysis, changes 
        since last month, schedule threats, schedule reserves posture

    Additional responsibilities include:

          Reviewing proposed new activities and/or scope to 
        ensure risk, schedule, integration and budget impacts to 
        existing programs are understood and realistic

          Commissioning independent assessments as needed, and 
        reviewing both the results of the independent assessment and 
        reviewing and approving the program/project's proposed response 
        plan

          Recommending alternative actions, including 
        termination of programs/projects or activities within programs/
        projects, when appropriate.

Q8b.  The Government Accountability Office (GAO) recommends this group 
review the results of all preliminary studies and independent 
assessments on technical maturity of the satellite instruments. Will 
the Council review those studies and assessments? If not, why not?

A8b. NOAA agreed with the GAO recommendation and noted that the PMC has 
already addressed GOES-R schedule, technical and cost issues. 
Instrument design and acquisition status is reviewed at every PMC.

Q9.  In your testimony you say that you meet regularly with your Deputy 
to discuss GOES-R. How often do these meetings occur? What materials do 
you review at these meetings? For example, do you review the 
independent review team reports and cost estimates, or do you review 
summaries of the reports and cost estimates?

A9. The NOAA Deputy Under Secretary (DUS) is in charge of the Program 
Management Council (PMC), which oversees management of the GOES-R 
Program at its monthly meetings. The DUS and Under Secretary of 
Commerce for Oceans and Atmosphere meet weekly to discuss a range of 
issues, including GOES-R. In these meetings, they discuss information 
from the PMC, as well as available updated information. The Under 
Secretary also holds meetings on key GOES-R related topics--such as on 
information from the independent review team or regarding the 
restructure of the GOES-R program--as often as necessary. The Under 
Secretary has had discussions directly with Tom Young, the Chair of the 
Independent Review Team, twice. Monthly satellite-related meetings are 
being formalized where the Assistant Administrator for Satellite and 
Information Services can brief the Under Secretary and the DUS on 
current issues pertaining to NOAA's satellite programs.

Q10.  In the National Polar-orbiting Operational Environmental 
Satellite System (NPOESS) program, the critical design review (CDR) for 
the Visible Infrared Imager Radiometer Suite was conducted without 
building a full engineering design unit. Now GAO has expressed concern 
about inadequate plans for technical review of the key GOES-R sensor, 
the ABI, especially at important decision points. Will a full 
engineering design unit be built prior to CDR's of the GOES-R sensors, 
in particular of ABI? If not, why not and in that case what specific 
steps will be taken to ensure that the CDR's are sufficiently rigorous?

A10. Yes, for GOES-R, more rigorous design reviews are already 
incorporated.
    Additionally, we are applying NASA Goddard Space Flight Center 
(GSFC) Office of Systems Safety and Mission Assurance Systems Review 
Office guidelines, and have adopted all NASA and NASA GSFC technical, 
management, safety, and mission assurance processes into the GOES-R 
program management structure and processes.
    The decision to build an engineering development unit (EDU) is tied 
to the instrument's complexity and cost. The Advanced Baseline Imager 
(ABI) development contract includes a requirement for an EDU, as well 
as additional engineering models of critical components. EDUs will also 
be developed for each instrument in the Solar Imaging Suite (SIS) and 
the Space Environment In-Situ Suite (SEISS).
    Because the final instrument, the Geostationary Lightning Mapper 
(GLM), is still in the formulation phase, we have not yet determined if 
complexity, cost and technical risk requires an EDU.

Q11.  In your testimony you say you have hired a team of independent 
satellite experts to provide periodic reviews of GOES-R.

Q11a.  How often will the independent team review the program? On a 
regular basis or just at key decision points?

A11a. NOAA has established a GOES-R Independent Review Team (IRT) 
comprised of senior industry and government space acquisition experts. 
This group will support four review tasks:

        1)  adequacy of current activities to support GOES-R 
        objectives,

        2)  readiness of program to proceed into development phase,

        3)  annual progress reviews during development phase, and

        4)  review of major development milestones.

    The IRT will meet and provide advice to support all major program 
decisions. Additionally, the IRT Chairman has held one-on-one meetings 
with senior Department of Commerce officials, and the Under Secretary 
of Commerce for Oceans and Atmosphere and the Deputy Under Secretary.

Q11b.  What aspects of GOES-R will the independent team review--i.e., 
the entire program, specific issues or sensors?

A11b. The independent reviews will address the entire GOES-R program 
and consider, as appropriate, technical, programmatic, and management 
areas to highlight risks and recommend actions.

Q11c.  What type of products will the independent team provide to NOAA?

A11c. The IRT will produce recommendations that will be presented to 
NOAA and NASA management through their respective Program Management 
Councils.

Q12.  In May 2006 you testified to this committee about an Inspector 
General report on NPOESS. As part of that report, NOAA is required to 
develop a Corrective Action Plan about how it will implement the IG 
recommendations. That plan, required by July 11, is still not complete. 
When do you expect to finish the Corrective Action Plan for NPOESS and 
why has it been delayed?

A12. The original action plan was transmitted from the NOAA 
Administrator to the Department of Commerce Inspector General on July 
7, 2006. The plan was modified and resubmitted for IG approval on 
September 29, 2006. The revision was necessary to clarify details in 
the action plan.

Q13.  GOES-R was originally estimated to cost $6.2 billion. During the 
hearing, you attributed the cost estimate growing to roughly $11 
billion to (1) a $2.6 billion inflation cost, (2) $800,000 for 
management reserve, and (3) $1.58 billion more for sensor development. 
Also, you said that now NOAA is restructuring the program and that you 
expect costs of the restructured program to be between $7-$9 billion. 
Since the three growth factors (inflation, management reserves, and 
complex sensor development) are likely to still be factors under the 
restructured program, what, if any, cost reduction on these factors do 
you expect by restructuring the program?

A13. The restructured program resulted in the elimination of the HES 
and a reduction in the number of spacecraft. The reduction in 
satellites, and instruments, impacted costs for ground operations and 
life cycle support costs. The $11 billion figure was a preliminary 
estimate for one potential system configuration. The restructuring 
addresses not only configuration changes, but also the assumptions used 
in the preliminary cost estimate. While inflation and management 
reserve costs are likely to still be growth factors under the 
restructured program, improvements in the cost assumptions could result 
in reductions from the preliminary estimate.

Q14.  NOAA's restructured program reduces the numbers of satellites 
purchased from four to two. Since the Nation will still need those 
later two satellites, isn't this exercise simply deferring the costs in 
order to come up with an acceptably low cost estimate? What are the 
benefits of purchasing two instead of four satellites, other than 
reducing the program's overall cost?

A14. No. Given the longer on-orbit design life planned for the GOES-R 
series satellites, the two satellites are designed to provide 
continuous GOES operational coverage for a period comparable to that 
expected of the GOES-N series with three satellites. Two is considered 
a minimum number of satellites for the initial buy. The second 
satellite must be in production and available in case there is a 
problem with the launch of the first satellite. This approach supports 
our initial acquisition needs and provides an opportunity for 
performance based decisions associated with the procurement of 
additional satellites.

Questions submitted by Representative Bart Gordon

Q1.  NOAA had an option with the current GOES series contractor to 
purchase an additional satellite--Q--in the current series.

Q1a.  Why did NOAA choose not to exercise the option to build this 
satellite?

A1a. The following considerations influenced NOAA's decision to not 
exercise the option on the GOES-N series contract for a GOES Q 
satellite:

          The GOES I-M series of satellites were lasting longer 
        than originally planned. NOAA wanted to delay launching the 
        GOES N series satellites, but given the fixed price contract 
        for these satellites, delaying launches would have required 
        renegotiating the contract with Boeing and would have increased 
        the costs of the satellites.

          During this same timeframe, Boeing approached the 
        government with an offer to upgrade the GOES N series launch 
        vehicles from Delta III's to the newer Delta IV's in exchange 
        for not exercising the GOES Q option. The switch to the larger 
        launch vehicle was attractive to the government--the larger 
        launch vehicle was able to accommodate a heavier satellite with 
        more fuel. The additional fuel would allow us to extend the on-
        orbit life of each of the GOES N, O and P satellites by three 
        to four years. This would have allowed us to launch each 
        satellite as contracted for, but to store them longer and put 
        them in to operation only when they were needed--when the GOES 
        I series satellites were failing. Moving to the Delta IV, 
        although more expensive, was overall more advantageous to the 
        GOES program, and the on-orbit life of the satellites.
    Given these considerations, NOAA decided to accept the offer to 
move the GOES-N series to the larger launch vehicle in exchange for not 
exercising the Q option.

Q1b.  What was the incremental cost for the additional satellite?

A1b. The cost to exercise the GOES Q option in the GOES-N series 
contract was $185 million. This option is no longer available to be 
exercised.

Q1c.  How many more years would the current GOES series have extended 
had NOAA bought GOES-Q? Given the large initial cost for any new 
satellite series, why shouldn't we purchase more satellites in a series 
to achieve some economy of scale?

A1c. Based on a detailed technical and parametric analysis of actual 
and projected spacecraft lifetime, the final spacecraft in the GOES-N 
series (GOES-P) was predicted to reach its end of life in approximately 
the spring of 2019. The option to purchase and launch an additional 
GOES-N class spacecraft would provide an additional five years of 
design life, but since there are two operational spacecraft at a time 
it would extend the projected end of the GOES-N class constellation 
lifetime only slightly more than two years, requiring a GOES-R launch 
readiness date of April 2016. In addition, extending the GOES-N series 
by exercising the option on GOES Q would have delayed the opportunity 
to introduce new technology in the next series, such as the improved 
imaging capability of the ABI.

Q2.  Weather forecasting can be improved with improved observations and 
data collection--essentially by building more advanced satellite 
systems--but we can also improve weather forecasting by using the data 
we already collect in new ways through improvement of our forecast 
models.

Q2a.  How do these different investments compare in terms of their cost 
effectiveness?

A2a. Investments in geostationary satellite observations have shown 
value in both numerical weather prediction and nowcasting (forecasting 
based on satellite analysis and interpretation). In order to continue 
with this level of improvement, new satellites with increased 
capabilities are needed to meet requirements of the user community.
    Unfortunately, we are not aware of any study conducted to quantify 
the percentage of improvements in weather forecasting expected from the 
improved data (resolution, quality and speed of transmission) as 
satellite technology has advanced (e.g., as we transition from the 
GOES-I series to the GOES-N series).

Q2b.  How much improvement in forecasting could we achieve with more 
investment in data analysis and forecast modeling?

A2b. Targeted investments, as we have made over the years, have 
improved forecast accuracy as reflected in our improving performance 
measures. These are published annually by the Department in NOAA's 
annual performance plan that is integrated with the President's Budget 
submission. Much of the improvement has come from investments in human 
resources to support data analysis and modeling as well as investments 
in better observation systems.

Q2c.  What is NOAA's estimate of improvements in weather forecasting 
from the technological advancements incorporated into GOES-R?

A2c. GOES-R will provide increased and more rapid area coverage with 
improved resolution and additional spectral coverage using Advanced 
Baseline Imager (ABI) and provide lightning data from the GOES 
Lightning Mapper (GLM). These improved capabilities provide more 
frequent, accurate and timely products supporting:

          two to ten percent improvement in hurricane track 
        forecast

          Ability to track severe storms while simultaneously 
        maintaining coverage of the entire hemisphere

Q2d.  How much has NOAA invested in research on model improvement 
during the past decade?

A2d. During the period 1997 to 2006, NOAA invested the following in 
operational weather model improvements:



    In the FY 2007 President's Budget, NOAA investment in operational 
weather model improvements is as follows:



Q3.  The development and incorporation of new sensors into an 
operational system assumes some demonstration of their feasibility 
through research and development programs. What is the state of these 
research and development programs? Exactly how much does heritage 
design inform the development of each new sensor for GOES-R?

A3. The Advanced Baseline Imager (ABI) provides significantly improved 
and new capabilities and contains the majority of the GOES-R technical 
risk. The technical risk for ABI derives from the specific engineering 
applications of the proven space-qualified components that have flown 
before. For example, the technology for critical ABI elements such as 
detectors and high data rate interfaces, have been used before in space 
instruments.
    The Solar Environmental in Situ Suite (SEISS) and Solar Imaging 
Suite (SIS) represent evolutionary extensions of prior SEISS and SIS 
instruments with modest enhancements.
    The GOES Lightning Mapper (GLM) is based on instruments that have 
flown previously in polar-orbits. We will not be able to determine the 
extent to which heritage design can be used until the completion of the 
GLM formulation phase in 2007.

Q4.  How are changing priorities in earth science programs at NASA 
affecting NOAA's ability to improve sensor design, given NOAA's 
reliance on NASA's technical support in GOES satellite development, and 
the use of NASA missions to test prototype sensor performance?

A4. One benefit GOES-R received from previous NASA Earth science 
missions is data from those missions incorporated into algorithms and 
computer simulations in order to predict performance of GOES-R 
instruments and to assess design options. In addition, NOAA and NASA 
have been working together to develop a Geosynchronous Imaging Fourier 
Transform Spectrometer (GIFTS) Engineering Development Unit (EDU) to 
validate key technologies and algorithms for potential use in advanced 
weather observing systems, including GOES-R; this GIFTS EDU activity 
was intended, in part, to provide risk reduction for the GOES-R 
Hyperspectral Environmental Suite (HES) acquisition. While originally 
designed as a full flight mission, the project had to be rescoped 
following the withdrawal from the program of the U.S. Navy. A NOAA-
NASA/Langley Research Center Interagency Agreement to build and test 
the GIFTS EDU was signed in late 2004. All activities associated with 
the GIFTS EDU should be completed by the end of December 2006. The 
first-ever Decadal Survey in Earth Science by the National Research 
Council is nearing completion. When released, this decadal survey will 
provide the U.S. Earth science community's priorities for the next 
decade. Any impact of those priorities on the development of sensors 
for geostationary operational satellites will not be known until after 
the Decadal Survey is released and the resulting missions are fully 
understood and integrated into NASA's long-range planning.

Q5.  Your testimony stated that NOAA has decided to provide individual 
sensors to the prime contractor as Government Furnished Equipment 
(GFE). What are the benefits of this type of arrangement? What are the 
risks associated with this type of arrangement?

A5. GOES-R instruments are being delivered to the future prime 
contractor as government-furnished equipment. The dominant major 
benefit is direct government visibility of instrument design status and 
technical issues that would not be readily available if the prime 
contractor was delivering instruments through subcontracts.
    The resulting risk to the GFE approach is that the government must 
possess the necessary level of expertise to perform technical 
oversight. The capabilities and existing resources of the NASA Goddard 
Space Flight Center to perform this function mitigate this risk.
                   Answers to Post-Hearing Questions
Responses by David A. Powner, Director, Information Technology 
        Management Issues, Government Accountability Office

Questions submitted by Representative Bart Gordon

Q1.  Admiral Lautenbacher's testimony indicated that NOAA has decided 
to provide individual sensors to the prime contractor as Government 
Furnished Equipment What are the benefits of this type of arrangement? 
What are the risks of this type of arrangement?

A1. An arrangement in which critical components are provided to the 
prime contractor as Government Furnished Equipment (GFE) is designed to 
provide the government with a better view into the development of those 
components. If executed properly, this arrangement could be an 
effective and efficient approach for NOAA to take and could help the 
agency avoid several of the key management problems experienced on the 
National Polar-orbiting Operational Environmental Satellite System 
(NPOESS). Specifically, on the NPOESS program, the prime contractor had 
the lead responsibility for overseeing subcontractors' development of 
critical sensors and the government had limited insight into important 
acquisition management and program control functions, including the 
execution of the master schedule, earned value management system, and 
independent cost estimating. A GFE arrangement could improve NOAA's 
role in the timely identification and resolution of emerging technical 
and schedule problems, management of reserve funds, and decision making 
processes.
    While the potential benefits of a GFE arrangement are significant, 
there are also risks associated with this approach if the government 
does not have sufficient technical capacity and skills. In particular, 
NOAA needs to have adequate and effective program control capabilities 
in the areas of systems engineering and earned value management in 
order to effectively oversee contractor performance in the development 
of the sensors.

Q2.  NOAA is proposing to reduce the number of satellites in the GOES-R 
series and simplify them. However, the current unofficial estimate 
appears to be in the range of the original estimate for four satellites 
with more advanced sensors (over $6 billion). This estimate appears to 
be high for two satellites. What factors do you believe are driving the 
costs of these systems up to these levels?

A2. Senior NOAA officials stated that they are unable to provide a 
current unofficial estimate of the restructured GOES-R program, noting 
that they need more analysis to determine this cost. Thus, the factors 
that affect the cost of the system are still being determined. However, 
based on discussions with the agency, we believe the original estimate 
of $6.2 billion (for four satellites) was low because of optimistic 
assumptions made on the technical complexity of the system's 
components, including key sensors.

Q3.  Your testimony included several things that NOAA still needs to do 
to implement the lessons learned from other satellite programs. One of 
these is that NOAA needs to determine how to ensure that a sufficient 
level of technical maturity will be achieved in time for a decision 
milestone. Are there particular methods, processes or other steps NOAA 
should take to address this issue?

A3. Our work on lessons learned from other satellite acquisitions noted 
the importance of fully understanding the technology before awarding a 
contract to develop that technology, and ensuring that there has been 
sufficient design work and technical maturity prior to deciding to move 
the technology into production. The processes that should be taken to 
ensure a sufficient amount of technical readiness\1\ include the review 
of engineering hardware design, development approach, and test results 
for the development phase, and the subsequent assessment of technical 
maturity that has been achieved for the production phase. In moving 
forward, it will be important for NOAA to ensure that the exit criteria 
for key decision milestones--called the preliminary and critical design 
reviews, respectively--include these processes and are clearly defined 
and measurable. NOAA has taken positive steps to address this lesson by 
obtaining the services of an independent review team to verify and 
validate program office decisions on technical maturity. However, NOAA 
should also ensure that there is effective executive oversight of what 
is accomplished at key decision points. In particular, it is important 
that the executive leadership exercise diligence in questioning program 
office data associated with these areas.
---------------------------------------------------------------------------
    \1\ The GOES-R program office uses a tool known as Technology 
Readiness Levels (TRL) to measure the level of technical maturity of 
technologies that reside in key satellite components. The levels of 
maturity range from 1 to 9 based on the demonstrated performance of 
these technologies-from paper studies to proven performance on the 
intended product.

Q4.  One of the problems within the NPOESS program was resistance to 
reducing requirements even in the face of escalating costs, schedule 
slips, and serious technical problems with sensor development. Has NOAA 
---------------------------------------------------------------------------
set up a better decision process for addressing his type of issue?

A4. In our testimony statement, we credited NOAA with its decision to 
review requirements and to restructure the scope of the program as the 
GOES-R system's technical complexity became better understood. However, 
we did not assess NOAA's decision process--including what analysis has 
been done, which users are involved, or what alternatives were 
considered leading to its decision to reduce the scope of the program--
because it was outside the scope of our review. Until this information 
is available and a baselined set of validated requirements is 
developed, it remains to be seen whether this is an improved decision 
process.

Q5.  How can we ensure that the process of reconciling the different 
cost estimates for this program will be objective and result in a 
realistic cost estimate for GOES-R? How confident should we be that the 
cost models employed, both by the program office and by the independent 
estimator, provide accurate and complete estimates given the recurring 
problems with cost estimation in NOAA's previous programs?

A5. In our statement, we recommended that NOAA establish a process for 
objectively evaluating and reconciling the government and independent 
life cycle cost estimates once the scope of the GOES-R program has been 
finalized. To ensure this process will be objective, it is important 
that this process be transparent to all affected entities--from the 
program office up to all oversight organizations. In addition, NOAA 
should use realistic assumptions, a high confidence factor, and that 
same confidence factor across all cost estimates for an even 
comparison.
    Given that the GOES-R system is still in the preliminary design 
phase and requirements are still being finalized, the cost estimates 
for this program will be somewhat imprecise. The accuracy of the cost 
estimates are contingent on the cost models and the comprehensiveness 
of the independent cost estimator's analysis. We plan to further 
evaluate the completed cost estimates by the independent estimator and 
program office in a follow-on review.

    In responding to these questions, we relied on previously reported 
information on GOES-R and other satellite programs, as well as agency 
documentation describing GOES-R management responsibilities. We 
performed our work in accordance with generally accepted government 
auditing standards during October 2006.

                                   
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