Polar-Orbiting Operational Environmental Satellites:		 
Restructuring Is Under Way, but Challenges and Risks Remain	 
(07-JUN-07, GAO-07-910T).					 
                                                                 
The National Polar-orbiting Operational Environmental Satellite  
System (NPOESS) is a tri-agency acquisition--managed by the	 
Departments of Commerce and Defense and the National Aeronautics 
and Space Administration--which experienced escalating costs,	 
schedule delays, and technical difficulties. These factors led to
a June 2006 decision to restructure the program thereby 	 
decreasing its complexity, increasing its estimated cost to $12.5
billion, and delaying the first two satellites by 3 to 5 years.  
GAO was asked to summarize a report being released today that (1)
assesses progress in restructuring the acquisition, (2) evaluates
progress in establishing an effective management structure, and  
(3) identifies the status and key risks on the program's major	 
segments.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-910T					        
    ACCNO:   A70427						        
  TITLE:     Polar-Orbiting Operational Environmental Satellites:     
Restructuring Is Under Way, but Challenges and Risks Remain	 
     DATE:   06/07/2007 
  SUBJECT:   Contract modifications				 
	     Cost analysis					 
	     Cost control					 
	     Cost overruns					 
	     Earth resources satellites 			 
	     Federal procurement				 
	     Interagency relations				 
	     Procurement planning				 
	     Program evaluation 				 
	     Program management 				 
	     Risk assessment					 
	     Schedule slippages 				 
	     Strategic planning 				 
	     Weather						 
	     Weather forecasting				 
	     Work measurement					 
	     National Polar-Orbiting Operational		 
	     Environmental Satellite System			 
                                                                 

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GAO-07-910T

   

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                 United States Government Accountability Office

Testimony

GAO

 Before the Subcommittee on Energy and Environment, House Committee on Science
                                 and Technology

For Release on Delivery                      
Expected at 1 p.m. EDT                                                     
Thursday, June 7, 2007
                           
POLAR-ORBITING OPERATIONAL ENVIRONMENTAL SATELLITES                                         

                           Restructuring Is Under Way, but Challenges and     
                           Risks Remain                                       
\
                           Statement of David A. Powner, Director
									Information Technology Management Issues                       

GAO-07-910T

POLAR-ORBITING OPERATIONAL ENVIRONMENTAL SATELLITES

Restructuring Is Under Way, but Challenges and Risks Remain

  What GAO Found

The NPOESS program office has made progress in restructuring the
acquisition by establishing and implementing interim program plans guiding
contractors' work activities in 2006 and 2007; however, important tasks
remain to be done. Executive approvals of key acquisition documents are
about 9 months late--due in part to the complexity of navigating three
agencies' approval processes. Delays in finalizing these documents could
hinder plans to complete contract negotiations by July 2007 and could keep
the program from moving forward in fiscal year 2008 with a new program
baseline.

The program office has also made progress in establishing an effective
management structure by adopting a new organizational framework with
increased oversight from program executives and by instituting more
frequent and rigorous program reviews; however, plans to reassign the
recently appointed Program Executive Officer will likely increase the
program's risks. Additionally, the program lacks a process and plan for
identifying and filling staffing shortages, which has led to delays in key
activities such as cost estimating and contract revisions. As of June
2007, key positions remain to be filled.

Development and testing of major NPOESS segments--including key sensors
and ground systems--are under way, but significant risks remain. For
example, while work continues on key sensors, two of them--the
visible/infrared imager radiometer suite and the cross-track infrared
sounder--experienced significant problems and are considered high risk
(see table). Continued sensor problems could cause further cost increases
and schedule delays. Additionally, while progress has been made in
reducing delays in the data processing system, work remains in refining
the algorithms needed to translate sensor observations into usable weather
products. Given the tight time frames for completing this work, it will be
important for program officials and executives to continue to provide
close oversight of milestones and risks.

              Key NPOESS Components and Corresponding Risk Levels

    NPOESS component                                             Risk level 
    Visible/infrared imager radiometer suite                           High 
    Cross-track infrared sounder                                       High 
    Ozone mapper/profiler suite                                    Moderate 
    Advanced technology microwave sounder                               Low 
    Command, control, and communications system                         Low 
    Interface data processing system                               Moderate 

Source: GAO analysis of NPOESS Integrated Program Office data.

United States Government Accountability Office

Mr. Chairman and Members of the Subcommittee:

We appreciate the opportunity to participate in today's hearing to discuss
our work on the $12.5 billion dollar National Polar-orbiting Operational
Environmental Satellite System (NPOESS) program. NPOESS is expected to be
a state-of-the-art, environmentmonitoring satellite system that will
replace two existing polarorbiting environmental satellite systems.
Polar-orbiting satellites provide data and imagery that are used by
weather forecasters, climatologists, and the military to map and monitor
changes in weather, climate, the oceans, and the environment. The NPOESS
program is considered critical to the United States' ability to maintain
the continuity of data required for weather forecasting (including severe
weather events such as hurricanes) and global climate monitoring through
the year 2026.

Three agencies share responsibility for the NPOESS program: the Department
of Commerce's National Oceanic and Atmospheric Administration (NOAA), the
Department of Defense (DOD)/United States Air Force, and the National
Aeronautics and Space Administration (NASA). To manage the NPOESS program,
these agencies established a tri-agency integrated program office. In
recent years, the program has experienced escalating costs, schedule
delays, and technical difficulties, which led to a June 2006 decision to
restructure it. This decision decreased the complexity of the program by
reducing the number of satellites and sensors, increased the estimated
cost of the program to $12.5 billion, and delayed the launches of the
first two satellites by 3 and 5 years, respectively.

As requested, this statement summarizes a report being released today that
(1) assesses the NPOESS program office's progress in restructuring the
acquisition, (2) evaluates the program office's progress in establishing
an effective management structure, and

(3) identifies the status and key risks facing the program's major
segments.^1 The report includes recommendations to NOAA, NASA,
and DOD to facilitate the restructuring of the program and to reduce
program risks. In preparing 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.

^1GAO, Polar-Orbiting Operational Environmental Satellites: Restructuring Is
Under Way, but Technical Challenges and Risks Remain [3],GAO-07-498
(Washington, D.C.: Apr. 27, 2007).

  Results in Brief

The NPOESS program office has made progress in restructuring the
acquisition by establishing and implementing interim program plans guiding
contractors' work activities in 2006 and 2007; however, important tasks
remain to be done. Although the program office developed key acquisition
documents (including a memorandum of agreement on the roles and
responsibilities of the three agencies, a revised acquisition strategy,
and a system engineering plan) the responsible executives in the three
agencies have not yet approved these documents--even though they were due
by September 1, 2006. Delays in finalizing these documents could hinder
plans to complete contract negotiations by July 2007 and could keep the
program from moving forward in fiscal year 2008 with a new program
baseline.

The program office has also made progress in establishing an effective
management structure by adopting a new organizational framework with
increased oversight from program executives and by instituting more
frequent and rigorous program management reviews; however, planned changes
in executive management will likely increase program risk. Additionally,
the program lacks a process and plan for identifying and filling staffing
shortages, which has led to delays in key activities such as cost
estimating and contract revisions. As of June 2007, key positions remain
to be filled.

Development and testing of major program segments--including key sensors
and the ground systems--are under way, but significant risks remain. For
example, work continues on key sensors, but two sensors--the
visible/infrared imager radiometer suite and the crosstrack infrared
sounder--have continued to experience significant difficulties.
Additionally, while significant progress has been made in reducing delays
in the NPOESS data processing system, much work remains in refining the
algorithms needed to translate sensor observations into usable weather
products. Continued sensor problems could cause further cost increases or
schedule delays. Given the tight time frames for completing key sensors,
integrating them with the demonstration spacecraft (called the NPOESS
Preparatory Project or NPP), and developing, testing, and deploying the
ground-based data processing systems, it will be important for the
Integrated Program Office, the Program Executive Office, and the Executive
Committee to continue to provide close oversight of milestones and risks.

In our report, we made recommendations to the Secretaries of Commerce and
Defense and to the Administrator of NASA to ensure that the appropriate
executives finalize key acquisition documents in order to allow the
restructuring of the program to proceed. We made recommendations to the
Secretary of Defense to direct the Air Force to delay reassigning the
recently appointed Program Executive Officer until key program risks are
resolved. We also made recommendations to the Secretary of Commerce to
ensure that NPOESS program authorities develop and implement a written
process for identifying and addressing human capital needs and that they
establish a plan to immediately fill needed positions. In written
comments, all three agencies agreed that it was important to finalize key
acquisition documents in a timely manner, and DOD proposed extending the
due dates for the documents to July 2, 2007. In addition, the Department
of Commerce concurred with our recommendation to identify and address
human capital needs and immediately fill open positions in the NPOESS
program office. Commerce noted that NOAA was taking actions in both areas.

However, DOD did not concur with our recommendation to delay reassigning
the Program Executive Officer, noting that the Program Director
responsible for the acquisition program would remain in place for 4 years.
While it is important that the System Program Director remain in place to
ensure continuity in executing the acquisition, this position does not
ensure continuity in the important oversight and coordination functions
provided by the current Program Executive Officer. We remain concerned
that reassigning the Program Executive at a time when NPOESS is still
facing critical
cost, schedule, and technical challenges will place the program at further
risk.

                                   Background

Since the 1960s, the United States has operated two separate operational
polar-orbiting meteorological satellite systems: the Polar-orbiting
Operational Environmental Satellite (POES) series-- managed by NOAA--and
the Defense Meteorological Satellite Program (DMSP)--managed by the Air
Force. These satellites obtain environmental data that are processed to
provide graphical weather images and specialized weather products. These
satellite data are also the predominant input to numerical weather
prediction models, which are a primary tool for forecasting weather 3 or
more days in advance--including forecasting the path and intensity of
hurricanes. The weather products and models are used to predict the
potential impact of severe weather so that communities and emergency
managers can help prevent and mitigate their effects. Polar satellites
also provide data used to monitor environmental phenomena, such as ozone
depletion and drought conditions, as well as data sets that are used by
researchers for a variety of studies such as climate monitoring.

                                NPOESS Overview

With the expectation that combining the POES and DMSP programs would
reduce duplication and result in sizable cost savings, a May 1994
Presidential Decision Directive required NOAA and DOD to converge the two
satellite programs into a single satellite program capable of satisfying
both civilian and military requirements.^2 The converged program, NPOESS,
is considered critical to the United States' ability to maintain the
continuity of data required for weather forecasting and global climate
monitoring through the year 2026. To manage this program, DOD, NOAA, and
NASA formed a tri-agency Integrated Program Office, located within NOAA.

^2Presidential Decision Directive NSTC-2 (May 5, 1994).

Within the program office, each agency has the lead on certain activities:
NOAA has overall program management responsibility for the converged
system and for satellite operations; DOD has the lead on the acquisition;
and NASA has primary responsibility for facilitating the development and
incorporation of new technologies into the converged system. NOAA and DOD
share the costs of funding NPOESS, while NASA funds specific technology
projects and studies. The NPOESS program office is overseen by an
Executive Committee, which is made up of the Administrators of NOAA and
NASA and the Under Secretary of the Air Force.

NPOESS is a major system acquisition that was originally estimated to cost
about $6.5 billion over the 24-year life of the program from its inception
in 1995 through 2018. The program is to provide satellite development,
satellite launch and operation, and groundbased satellite data processing.
These deliverables are grouped into four main categories: (1) the space
segment, which includes the satellites and sensors; (2) the integrated
data processing segment, which is the system for transforming raw data
into environmental data records (EDR) and is to be located at four data
processing centers; (3) the command, control, and communications segment,
which includes the equipment and services needed to support satellite
operations; and (4) the launch segment, which includes launch vehicle
services.

When the NPOESS engineering, manufacturing, and development contract was
awarded in August 2002, the cost estimate was adjusted to $7 billion.
Acquisition plans called for the procurement and launch of six satellites
over the life of the program, as well as the integration of 13
instruments--consisting of 10 environmental sensors and 3 subsystems.
Together, the sensors were to receive and transmit data on atmospheric,
cloud cover, environmental, climatic, oceanographic, and solar-geophysical
observations. The subsystems were to support nonenvironmental search and
rescue efforts, sensor survivability, and environmental data collection
activities. The program office considered 4 of the sensors to be critical
because they provide data for key weather products; these sensors are in
bold in table 1, which describes each of the expected NPOESS instruments.

Table 1: Expected NPOESS Instruments as of August 31, 2004 (critical sensors are
                                    in bold)

Instrument Description

Advanced technology microwave Measures microwave energy released and
scattered by the atmosphere and is to be sounder (ATMS) used with infrared
sounding data from NPOESS's cross-track infrared sounder to produce daily
global atmospheric temperature, humidity, and pressure profiles.

Aerosol polarimetry sensor Retrieves  specific measurements of clouds  and
aerosols (liquid droplets or solid particles suspended in the  atmosphere,
such as sea spray, smog, and smoke).

Conical-scanned microwave Collects microwave images and data needed to
measure rain rate, ocean surface wind imager/sounder (CMIS) speed and
direction, amount of water in the clouds, and soil moisture, as well as
temperature and humidity at different atmospheric levels.

Cross-track infrared sounder (CrIS)  Collects measurements of the  Earth's
radiation to determine the vertical distribution of temperature, moisture,
and pressure in the atmosphere.

Data collection system Collects  environmental data from platforms  around
the world and delivers them to users worldwide.

Earth radiation  budget sensor  Measures  solar short-wave  radiation  and
long-wave radiation released by the Earth  back into space on a  worldwide
scale to enhance long-term climate studies.

Ozone mapper/profiler suite  (OMPS) Collects  data needed  to measure  the
amount and distribution of ozone in the Earth's atmosphere.

Radar altimeter Measures variances in sea surface height/topography and
ocean surface roughness, which are used to determine sea surface height,
significant wave height, and ocean surface wind speed and to provide
critical inputs to ocean forecasting and climate prediction models.

Search and rescue satellite aided  tracking Detects and locates  aviators,
mariners, and land-based users in distress. system

Space environmental sensor  suite Collects data  to identify, reduce,  and
predict the effects of space  weather on technological systems,  including
satellites and radio links.

 Survivability sensor Monitors for attacks on the satellite and notifies other
                       instruments in case of an attack.

  Total solar irradiance sensor Monitors and captures total and spectral solar
                                irradiance data.

Visible/infrared imager radiometer suite  Collects images and  radiometric
data  used  to  provide  information   on  the  Earth's  clouds,   (VIIRS)
atmosphere, ocean, and land surfaces.

Source: GAO, based on NPOESS program office data.

In addition, a demonstration satellite (called the NPOESS Preparatory
Project or NPP) was planned to be launched several years before the first
NPOESS satellite in order to reduce the risk associated with launching new
sensor technologies and to ensure continuity of climate data with NASA's
Earth Observing System satellites. NPP is to host three of the four
critical NPOESS sensors (VIIRS, CrIS, and ATMS), as well as one other
noncritical sensor (OMPS). NPP is to provide the program office and the
processing centers an early opportunity to work with the sensors, ground
control, and data processing systems.

When the NPOESS development contract was awarded, the schedule for
launching the satellites was driven by a requirement that the satellites
be available to back up the final POES and DMSP satellites should anything
go wrong during the planned launches of these satellites. Early program
milestones included (1) launching NPP by May 2006, (2) having the first
NPOESS satellite available to back up the final POES satellite launch in
March 2008, and
(3) having the second NPOESS satellite available to back up the final DMSP
satellite launch in October 2009. If the NPOESS satellites were not needed
to back up the final predecessor satellites, their anticipated launch
dates would have been April 2009 and June 2011, respectively.

    NPOESS Experienced Cost Increases, Schedule Delays, and Technical Problems
    over Several Years

Over the last few years, NPOESS has experienced continued cost increases
and schedule delays, requiring difficult decisions to be made about the
program's direction and capabilities. In 2003, we reported that changes in
the NPOESS funding stream led the program to develop a new program cost
and schedule baseline.^3 After this new baseline was completed in 2004, we
reported that the program office increased the NPOESS cost estimate from
about $7 billion to $8.1 billion; delayed key milestones, including the
planned launch of the first NPOESS satellite--which was delayed by 7
months; and extended the life of the program from 2018 to 2020.^4 At that
time, we also noted that other factors could further affect the revised
cost and schedule estimates. Specifically, the contractor was not meeting
expected cost and schedule targets on the new baseline because of
technical issues in the development of key sensors, including the critical
VIIRS sensor. Based on its performance through May 2004, we estimated that
the contractor would most likely overrun its contract at completion in
September 2011 by $500 million--thereby increasing the projected life
cycle cost to $8.6 billion. The program office's baseline cost estimate
was subsequently adjusted to $8.4 billion.

^3GAO, Polar-orbiting Environmental Satellites: Project Risks Could Affect
Weather Data Needed by Civilianand Military Users, [4]GAO-03-987T
(Washington, D.C.: July 15, 2003).

^4GAO, Polar-orbiting Environmental Satellites: Information on Program
Costand Schedule Changes, [5]GAO-04-1054 (Washington, D.C.: Sept. 30,
2004).

In mid-November 2005, we reported that NPOESS continued to experience
problems in the development of a key sensor, resulting in schedule delays
and anticipated cost increases.^5 At that time, we projected that the
program's cost estimate had grown to about $10 billion based on contractor
cost and schedule data. We reported that the program's issues were due, in
part, to problems at multiple levels of management--including
subcontractor, contractor, program office, and executive leadership.
Recognizing that the budget for the program was no longer executable, the
NPOESS Executive Committee planned to make a decision in December 2005 on
the future direction of the program--what would be delivered, at what
cost, and by when. This involved deciding among options involving
increased costs, delayed schedules, and reduced functionality. We noted
that continued oversight, strong leadership, and timely decision making
were more critical than ever, and we urged the committee to make a
decision quickly so that the program could proceed.

However, we subsequently reported that, in late November 2005, NPOESS cost
growth exceeded a legislatively mandated threshold that requires DOD to
certify the program to Congress.^6 This placed any decision about the
future direction of the program on hold until the certification took place
in June 2006. In the meantime, the program office implemented an interim
program plan for fiscal year 2006 to continue work on key sensors and
other program elements using fiscal year 2006 funding.

    Nunn-McCurdy Process Led to a Decision to Restructure the NPOESS Program

The Nunn-McCurdy law requires DOD to take specific actions when a major
defense acquisition program exceeds certain cost increase thresholds.^7
The law requires the Secretary of Defense to notify
Congress when a major defense acquisition is expected to overrun its
project baseline by 15 percent or more and to certify the program to
Congress when it is expected to overrun its baseline by 25 percent or
more.^8 In late November 2005, NPOESS exceeded the 25 percent threshold,
and DOD was required to certify the program. Certifying a program entailed
providing a determination that (1) the program is essential to national
security, (2) there are no alternatives to the program that will provide
equal or greater military capability at less cost, (3) the new estimates
of the program's cost are reasonable, and (4) the management structure for
the program is adequate to manage and control costs. DOD established
tri-agency teams--made up of DOD, NOAA, and NASA experts--to work on each
of the four elements of the certification process.

^5GAO, Polar-orbitingOperational EnvironmentalSatellites:
TechnicalProblems,Cost Increases,andScheduleDelays Trigger Needfor
DiicultTrade-oDecisions, [6]GAO-06- 249T (Washington, D.C.: Nov. 16,
2005).

^6GAO, Polar-orbitingOperational EnvironmentalSatellites:
CostIncreasesTriggerReview and Place Program'sDirection onHold,
[7]GAO-06-573T (Washington, D.C.: Mar. 30, 2006).

^710 U.S.C. S 2433 is commonly referred to as Nunn-McCurdy.

In June 2006, DOD (with the agreement of both of its partner agencies)
certified a restructured NPOESS program, estimated to cost $12.5 billion
through 2026.^9 This decision approved a cost increase of $4 billion over
the prior approved baseline cost and delayed the launch of NPP and the
first two satellites by roughly 3 to 5 years. The new program also
entailed establishing a stronger program management structure, reducing
the number of satellites to be produced and launched from 6 to 4, and
reducing the number of instruments on the satellites from 13 to
9--consisting of 7 environmental sensors and 2 subsystems. It also
entailed using NPOESS satellites in the early morning and afternoon orbits
and relying on European satellites for midmorning orbit data.^10 Table 2
summarizes the major program changes made under the Nunn-McCurdy
certification decision.

^810 U.S.C. S 2433 (e)(2) has recently been amended by Pub. L. No. 109-163,
S 802 (Jan. 6, 2006) and Pub. L. No. 109-364, S 213 (a) (Oct. 17, 2006).

^9DOD estimated that the acquisition portion of the certified program would
cost $11.5 billion. The acquisition portion includes satellite
development, production, and launch, but not operations and support costs
after launch. When combined with an estimated $1 billion for operations
and support after launch, this brings the program life cycle cost to $12.5
billion.

^10The European Organization for the Exploitation of Meteorological
Satellite's MetOp program is a series of three polar-orbiting satellites
dedicated to operational meteorology. MetOp satellites are planned to be
launched sequentially over 14 years.

Table 2: Summary of Changes to the NPOESS Program
Key area        Program before the             Program after the           
                   Nunn-McCurdy decision          Nunn-McCurdy decision       
Life cycle      1995-2020                      1995-2026                   
range                                                                      
Estimated life  $8.4 billion                   $12.5 billion               
cycle cost                                                                 
Launch schedule    NPP by October 2006         NPP by January 2010         
                      First NPOESS by November    First NPOESS by January     
                      2009                        2013                        
                      Second NPOESS by June 2011  Second NPOESS by January    
                                                  2016                        
Management         System Program Director     System Program Director is  
                      reports to a tri-agency     responsible for day-to-day  
                      steering committee and the  program management and      
structure          tri-agency Executive        reports to the Program      
                                                  Executive                   
                      Committee.                  Officer.                    
                      Independent program reviews Program Executive Officer   
                      noted insufficient          oversees program and        
                                                  reports to                  
                      system engineering and cost the tri-agency Executive    
                      analysis staff.             Committee.                  
Number of          6 (in addition to NPP)      4 (in addition to NPP)      
satellites                                                                 
                    3 (early morning, midmorning, 2 (early morning and        
Number of orbits and afternoon)                afternoon; will rely on     
                                                  European                    
                                                  satellites for midmorning   
                                                  orbit data)                 
Number and     13 instruments (10 sensors and  9 instruments (7 sensors    
                  3 subsystems)                   and 2 subsystems); 4 of the 
complement of                                  sensors are to provide      
                                                  fewer capabilities          
instruments                                                                
Number of EDRs     55                          39 (6 are to be degraded    
                                                  products)                   

Source: GAO analysis of NPOESS Integrated Program Office data.

The Nunn-McCurdy certification decision established new milestones for the
delivery of key program elements, including launching NPP by January
2010,^11 launching the first NPOESS satellite (called C1) by January 2013,
and launching the second NPOESS satellite (called C2) by January 2016.
These revised milestones deviated from prior plans to have the first
NPOESS satellite available to back up the final POES satellite should
anything go wrong during that launch.

Delaying the launch of the first NPOESS satellite means that if the final
POES satellite fails on launch, satellite data users would need to rely on
the existing constellation of environmental satellites until NPP data
become available--almost 2 years later. Although NPP was not intended to
be an operational asset, NASA agreed to move NPP to a different orbit so
that its data would be available in the
event of a premature failure of the final POES satellite. However, NPP
will not provide all of the operational capability planned for the NPOESS
spacecraft. If the health of the existing constellation of satellites
diminishes--or if NPP data are not available, timely, and reliable--then
there could be a gap in environmental satellite data. Table 3 summarizes
changes in key program milestones over time.

^11According to program officials, although the Nunn-McCurdy certification
decision specifies that NPP is to launch by January 2010, NASA plans to
launch it by September 2009 to reduce the possibility of a climate data
continuity gap.

Table 3: Key Program Milestones
                               As of the February
                As of the August 2004           As of the June Change from    
                                 rebaselined         2006      2004           
Milestones               2002                certification     rebaselined 
                        contract program        decision              program 
                           award                                              
Final POES        March 2008  March 2008     February 2009  Not applicable 
launcha                                                                    
NPP launch        May 2006    October 2006   January 2010b  44-month delay 
First NPOESS      April 2009  November 2009  January 2013   38-month delay 
satellite                                                                  
planned for launch (C1)                                                    
Final DMSP launcha October    May 2010       April 2012     Not applicable 
                      2009                                                    
Second NPOESS      June 2011  June 2011      January 2016   55-month delay 
satellite                                                                  
planned for launch (C2)                                                    

Source: GAO analysis, based on NPOESS Integrated Program Office data.

aPOES and DMSP are not part of the NPOESS program. Their launch dates are
provided to indicate the increased risk of satellite data gaps between
when these systems launch and when the NPOESS satellites launch. b [A

bAlthough the certification decision specified that NPP is to launch by
January 2010, NASA plans to launch it by September 2009 to reduce the
possibility of a gap in climate data continuity.

In order to reduce program complexity, the Nunn-McCurdy certification
decision decreased the number of NPOESS sensors from 13 to 9 and reduced
the functionality of 4 sensors. Specifically, of the 13 original sensors,
5 sensors remain unchanged, 3 were replaced with less capable sensors, 1
was modified to provide less functionality, and 4 were cancelled. Table 4
shows the changes to NPOESS sensors, including the 4 identified in bold as
critical sensors.

     Table 4: Changes to NPOESS Instruments (critical sensors are in bold)

Status of instrument after the Nunn-Instrument McCurdy decision Change
description

ATMS Unchanged Sensor is to be included on NPP and on the first and third NPOESS
                                  satellites.

Aerosol polarimetry sensor  Cancelled Sensor was  cancelled, but could  be
reintegrated on future  NPOESS satellites should  another party choose  to
fund it.^a

CMIS Replaced CMIS sensor was cancelled, and the program office is to
procure a less complex Microwave imager/sounder for inclusion on the
second, third, and fourth NPOESS satellites.

CrIS Unchanged Sensor is to be included on NPP and on the first and third NPOESS
                                  satellites.

Data collection system Unchanged Subsystem is to be included on all four NPOESS
                                  satellites.

Earth radiation budget Replaced Sensor was cancelled, and is to be
replaced on the first NPOESS satellite (and sensor no others) by an
existing sensor with fewer capabilities called the Clouds and the Earth's
Radiant Energy System.

OMPS Modified  One part  of the  sensor,  called OMPS  (nadir), is  to  be
included on  NPP  and  on  the first  and  third  NPOESS  satellites;  the
remaining  part,  called  OMPS  (limb),   was  cancelled  on  the   NPOESS
satellites, but will be included on NPP.^a

Radar altimeter Cancelled Sensor was cancelled, but could be  reintegrated
on future NPOESS satellites should another party choose to fund it.

Search and rescue satellite Unchanged Subsystem  is to be included on  all
four NPOESS satellites. aided tracking system

Space environmental Replaced Sensor is to  be replaced by a less  capable,
less expensive, legacy  sensor called sensor  suite the Space  Environment
Monitor on the first and third NPOESS satellites.

Survivability sensor Cancelled Subsystem contract was cancelled, but could
be reintegrated on future NPOESS satellites should another party choose to
fund it.

Total solar irradiance sensor Cancelled Sensor contract was cancelled, but
could be reintegrated  on future  NPOESS satellites  should another  party
choose to fund it.

     VIIRS Unchanged Sensor is to be included on NPP and on all four NPOESS
                                  satellites.

Source: GAO analysis of NPOESS Integrated Program Office data.

a Although direct program funding for these instruments was eliminated, the
instruments could be reintegrated on NPOESS satellites should other
parties choose to fund them. The Nunn-McCurdy decision requires the
program office to allow sufficient space on the spacecraft for these
instruments and to provide the funding needed to integrate them.

The changes in NPOESS sensors affected the number and quality of the
resulting weather and environmental products, called environmental data
records or EDRs. In selecting sensors for the restructured program, the
agencies placed the highest priority on continuing current operational
weather capabilities and a lower priority on obtaining selected
environmental and climate measuring capabilities. As a result, the revised
NPOESS system has significantly less capability for providing global
climate measures than was originally planned. Specifically, the number of
EDRs was decreased from 55 to 39, of which 6 are of a reduced quality. The
39 EDRs that remain include cloud base height, land surface temperature,
precipitation type and rate, and sea surface winds. The 16 EDRs that were
removed include cloud particle size and distribution, sea surface height,
net solar radiation at the top of the atmosphere, and products to depict
the electric fields in the space environment. The 6 EDRs that are of a
reduced quality include ozone profile, soil moisture, and multiple
products depicting energy in the space environment.

  NPOESS Acquisition Restructuring Is Well Under Way, but Key Steps Remain to Be
  Completed

Since the June 2006 decision to revise the scope, cost, and schedule of
the NPOESS program, the program office has made progress in restructuring
the satellite acquisition; however, important tasks remain to be done.
Restructuring a major acquisition program like NPOESS is a process that
involves identifying time-critical and highpriority work and keeping this
work moving forward, while reassessing development priorities,
interdependencies, deliverables, risks, and costs. It also involves
revising important acquisition documents including the memorandum of
agreement on the roles and responsibilities of the three agencies, the
acquisition strategy, the system engineering plan, the test and evaluation
master plan, the integrated master schedule defining what needs to happen
by when, and the acquisition program baseline. Specifically, the
Nunn-McCurdy certification decision required the Secretaries of Defense
and Commerce and the Administrator of NASA to sign a revised memorandum of
agreement by August 6, 2006. It also required that the program office,
Program Executive Officer, and the Executive Committee revise and approve
key acquisition documents including the acquisition strategy and system
engineering plan by September 1, 2006, in order to proceed with the
restructuring. Once these are completed, the program office can proceed to
negotiate with its prime contractor on a new program baseline defining
what will be delivered, by when, and at what cost.

The NPOESS program office has made progress in restructuring the
acquisition. Specifically, the program office has established interim
program plans guiding the contractor's work activities in 2006 and 2007
and has made progress in implementing these plans. The program office and
contractor also developed an integrated master schedule for the remainder
of the program--beyond fiscal year 2007. This integrated master schedule
details the steps leading up to launching NPP by September 2009, launching
the first NPOESS satellite in January 2013, and launching the second
NPOESS satellite in January 2016. Near-term steps include completing and
testing the VIIRS, CrIS, and OMPS sensors; integrating these sensors with
the NPP spacecraft and completing integration testing; completing the data
processing system and integrating it with the command, control, and
communications segment; and performing advanced acceptance testing of the
overall system of systems for NPP.

However, key steps remain for the acquisition restructuring to be
completed. Although the program office made progress in revising key
acquisition documents, including the system engineering plan, the test and
evaluation master plan, and the acquisition strategy plan, it has not yet
obtained the approval of the Secretaries of Commerce and Defense and the
Administrator of NASA on the memorandum of agreement among the three
agencies, nor has it obtained the approval of the NPOESS Executive
Committee on the other key acquisition documents. As of June 2007, these
approvals are over 9 months past due. Agency officials noted that the
September 1, 2006, due date for the key acquisition documents was not
realistic given the complexity of coordinating documents among three
different agencies.

Finalizing these documents is critical to ensuring interagency agreement
and will allow the program office to move forward in completing other
activities related to restructuring the program. These other activities
include completing an integrated baseline review with the contractor to
reach agreement on the schedule and work activities, and finalizing
changes to the NPOESS development and production contract. Program costs
are also likely to be adjusted during upcoming negotiations on contract
changes--an event that the Program Director expects to occur by July 2007.
Completion of these activities will allow the program office to lock down
a new acquisition baseline cost and schedule. Until key acquisition
documents are finalized and approved, the program faces increased risk
that it will not be able to complete important restructuring activities in
time to move forward in fiscal year 2008 with a new program baseline in
place. This places the NPOESS program at risk of continued delays and
future cost increases.

  Progress Has Been Made in Establishing an Effective NPOESS Management
  Structure, but Executive Turnover Increases Risks and Staffing Problems Remain

The NPOESS program has made progress in establishing an effective
management structure, but--almost a year after this structure was endorsed
during the Nunn-McCurdy certification process--the Integrated Program
Office still faces staffing problems. Over the past few years, we and
others have raised concerns about management problems at all levels of the
NPOESS program, including subcontractor and contractor management, program
office management, and executive-level management.^12 Two independent
review teams also noted a shortage of skilled program staff, including
budget analysts and system engineers. Since that time, the NPOESS program
has made progress in establishing an effective management
structure--including establishing a new organizational framework with
increased oversight by program executives, instituting more frequent
subcontractor, contractor, and program reviews, and effectively managing
risks and performance. However, DOD's plans for reassigning the Program
Executive Officer in the summer of 2007 increase the program's risks.
Additionally, the program lacks a staffing process that clearly identifies
staffing needs, gaps, and plans for filling those gaps. As a result, the
program office has experienced delays in getting core
management activities under way  and lacks the staff  it needs to  execute
day-to-day management activities.

^12 [8]GAO-06-249T; U .S. Department of Commerce, Office of the Inspector
General, Poor ManagementOversightand Ineective IncentivesLeaveNPOESS
ProgramWeOver Budget and BehindSchedule, OIG-17794-6-0001/2006
(Washington, D.C.: May 2006). In addition, two independent teams reviewed
the NPOESS program in 2005: A NASA-led Independent Review Team
investigated problems with the VIIRS sensor and the impact on NPP, and a
DOD-led Independent Program Assessment Team assessed the broader NPOESS
program. The teams briefed the NPOESS Executive Committee on their
findings in August 2005 and November 2005, respectively.

    NPOESS Program Has Made Progress in Establishing an Effective Management
    Structure and Increasing Oversight Activities, but Executive Turnover Will
    Increase Program Risks

The NPOESS program has made progress in establishing an effective
management structure and increasing the frequency and intensity of its
oversight activities. Over the past few years, we and others have raised
concerns about management problems at all levels of management on the
NPOESS program, including subcontractor and contractor management, program
office management, and executive-level management. In response to
recommendations made by two different independent review teams, the
program office began exploring options in late 2005 and early 2006 for
revising its management structure.

In November 2005, the Executive Committee established and filled a Program
Executive Officer position, senior to the NPOESS Program Director, to
streamline decision making and to provide oversight to the program. This
Program Executive Officer reports directly to the Executive Committee.
Subsequently, the Program Executive Officer and the Program Director
proposed a revised organizational framework that realigned division
managers within the Integrated Program Office responsible for overseeing
key elements of the acquisition and increased staffing in key areas. In
June 2006, the Nunn-McCurdy certification decision approved this new
management structure and the Integrated Program Office implemented it.
Figure 1 provides an overview of the relationships among the Integrated
Program Office, the Program Executive Office, and the Executive Committee,
as well as key divisions within the program office.

Figure 1: Overview of New NPOESS Management Structure

Operating under this new management structure, the program office
implemented more rigorous and frequent subcontractor, contractor, and
program reviews, improved visibility into risk management and mitigation
activities, and institutionalized the use of earned value management
techniques to monitor contractor performance. In addition to these program
office activities, the Program Executive Officer implemented monthly
program reviews and increased the frequency of contacts with the Executive
Committee. The Program Executive Officer briefs the Executive Committee in
monthly letters, apprising committee members of the program's status,
progress, risks, and earned value, and the Executive Committee now meets
on a quarterly basis--whereas in the recent past, we reported that the
Executive Committee had met only five times in 2 years.^13

Although the NPOESS program has made progress in establishing an effective
management structure, this progress is currently at risk. We recently
reported that DOD space acquisitions are at increased risk due in part to
frequent turnover in leadership positions, and we suggested that
addressing this will require DOD to consider matching officials' tenure
with the development or delivery of a product.^14 In March 2007, NPOESS
program officials stated that DOD is planning to reassign the recently
appointed Program Executive Officer in the summer 2007 as part of this
executive's natural career progression. As of June 2007, the Program
Executive Officer has held this position for 19 months. Given that the
program is currently still being restructured, and that there are
significant challenges in being able to meet critical deadlines to ensure
satellite data continuity, such a move adds unnecessary risk to an already
risky program.

    NPOESS Program Has Filled Key Vacancies but Lacks a Programwide Staffing
    Process

The NPOESS program office has filled key vacancies but lacks a staffing
process that identifies programwide staffing requirements and plans for
filling those needed positions. Sound human capital management calls for
establishing a process or plan for determining staffing requirements,
identifying any gaps in staffing, and planning to fill critical staffing
gaps. Program office staffing is especially important for NPOESS, given
the acknowledgment by multiple independent review teams that staffing
shortfalls contributed to past problems. Specifically, these review teams
noted shortages in the number of system engineers needed to provide
adequate oversight of subcontractor and contractor engineering activities
and in the number of budget and cost analysts needed to assess contractor
cost and earned value reports. To rectify this situation, the June 2006
certification decision directed the Program Director to take
immediate actions to fill vacant positions at the program office with the
approval of the Program Executive Officer.

^13 [9]GAO-06-249T.

^14GAO, Space Acquisitions: Improvements Needed inSpace Acquisitions and Keys
to Achieving Them, [10]GAO-06-626T (Washington, D.C.: Apr. 6, 2006).

Since the June 2006 decision to revise NPOESS management structure, the
program office has filled multiple critical positions, including a budget
officer, a chief system engineer, an algorithm division chief, and a
contracts director. In addition, on an ad hoc basis, individual division
managers have assessed their needs and initiated plans to hire staff for
key positions. However, the program office lacks a programwide process for
identifying and filling all needed positions. As a result, division
managers often wait months for critical positions to be filled. For
example, in February 2006, the NPOESS program estimated that it needed to
hire up to 10 new budget analysts. As of September 2006, none of these
positions had been filled. As of April 2007, program officials estimated
that they still needed to fill 5 budget analyst positions, 5 systems
engineering positions, and 10 technical manager positions. The majority of
the vacancies--4 of the 5 budget positions, 4 of the 5 systems engineering
positions, and 8 of the 10 technical manager positions-- are to be
provided by NOAA. NOAA officials noted that each of these positions is in
some stage of being filled--that is, recruitment packages are being
developed or reviewed, vacancies are being advertised, or candidates are
being interviewed, selected, and approved.

The program office attributes its staffing delays to not having the right
personnel in place to facilitate this process, and it did not even begin
to develop a staffing process until November 2006. Program officials noted
that the tri-agency nature of the program adds unusual layers of
complexity to the hiring and administrative functions because each agency
has its own hiring and performance management rules. In November 2006, the
program office brought in an administrative officer who took the lead in
pulling together the division managers' individual assessments of needed
staff and has been working with the division managers to refine this list.
This new administrative officer plans to train division managers in how to
assess their needs and to hire needed staff, and to develop a process by
which evolving needs are identified and positions are filled. However,
there is as yet no date set for establishing this basic programwide
staffing process. As a result of the lack of a programwide staffing
process, there has been an extended delay in determining what staff is
needed and in bringing those staff on board; this has resulted in delays
in performing core activities, such as establishing the program office's
cost estimate and bringing in needed contracting expertise. Additionally,
until a programwide staffing process is in place, the program office risks
not having the staff it needs to execute day-to-day management activities.

In commenting on a draft of our report, Commerce stated that NOAA
implemented an accelerated hiring model. More recently, the NPOESS program
office reported that several critical positions were filled in April and
May 2007. However, we have not yet evaluated NOAA's accelerated hiring
model and, as of June 2007, over 10 key positions remain to be filled.

  Major Program Segments Are Under Development, but Significant Risks Remain

Major segments of the NPOESS program--the space segment and ground systems
segment--are under development; however, significant problems have
occurred and risks remain. The program office is aware of these risks and
is working to mitigate them, but continued problems could affect the
program's overall cost and schedule. Given the tight time frames for
completing key sensors, integrating them on the NPP spacecraft, and
developing, testing, and deploying the ground-based data processing
systems, it will be important for the NPOESS Integrated Program Office,
the Program Executive Office, and the Executive Committee to continue to
provide close oversight of milestones and risks.

    Space Segment--Progress Made, but Key Sensors Continue to Face Major Risks

The space segment includes the sensors and the spacecraft. Four sensors
are of critical importance--VIIRS, CrIS, OMPS, and ATMS-- because they are
to be launched on the NPP satellite in September 2009. Initiating work on
another sensor, the Microwave imager/sounder, is also important because
this new sensor-- replacing the cancelled CMIS sensor--will need to be
developed in time for the second NPOESS satellite launch. Over the past
year, the program made progress on each of the sensors and the spacecraft.
However, two sensors, VIIRS and CrIS, have experienced major problems. The
status of each of the components of the space segment is described in
table 5.

 Table 5: Status of Selected Components of the Space Segment, as of April 2007

Space segment component Risk level Status

VIIRS High VIIRS development has continued in 2006 and in early 2007. In
December 2006, the contractor completed environmental tests of VIIRS's
engineering design unit (a prototype) and identified three problems.^a
While these problems were being studied, the program office approved the
delivery of the engineering unit to the subcontractor responsible for
integration and testing on NPP. In late February 2007, program officials
determined that the contractor was able to mitigate all but one of the
problems, and they approved the flight unit to proceed to system level
integration with a goal of resolving the final problem before a technical
readiness review milestone. VIIRS flight unit is scheduled to be delivered
to NPP by July 2008.

CrIS OMPS   High Moderate Development of CrIS was put on hold in October   
ATMS        Low           2006 when the flight unit designated to go on    
                             NPP experienced a major structural failure       
                             during its vibration testing. As of March 2007,  
                             a failure review board established by the        
                             contractors and the NPOESS program office        
                             identified causes for failure and has planned an 
                             approach to completing flight unit development   
                             and delivery for NPP. The review board has also  
                             initiated inspections of all sensor modules and  
                             subsystems for damage. The program office        
                             expects to restart acceptance testing in July    
                             2007, and the CrIS flight unit is expected to be 
                             delivered to NPP by February 2008. As part of    
                             the Nunn-McCurdy certification in June 2006, one 
                             element of the OMPS sensor, called OMPS (limb),  
                             was removed from the program. In February 2007,  
                             program officials agreed to reintegrate OMPS     
                             (limb) on NPP if NOAA and NASA would fund it.    
                             This funding was approved in early April 2007.   
                             OMPS is currently on schedule for delivery to    
                             NPP by May 2008; however, there are concerns     
                             that the OMPS flight unit delivery will be so    
                             late in the integration testing process that     
                             there could be an insufficient schedule margin   
                             should a problem arise. The ATMS flight unit for 
                             NPP was developed by a NASA contractor and       
                             delivered to the program in October 2005. NASA   
                             integrated the flight unit on the spacecraft and 
                             is awaiting delivery of the other sensors in     
                             order to complete integration testing.           
Microwave   Not yet rated A new microwave imager/sounder sensor is being   
imager/     Low           planned to replace the cancelled CMIS sensor. It 
sounder                   is planned to be ready for the launch on the     
Spacecraft                second NPOESS satellite. In October 2006, the    
                             program office issued a request for information  
                             seeking industry ideas for the design of the new 
                             sensor. The program office anticipates awarding  
                             a contract to develop the sensor by October      
                             2008. The development of the spacecrafts for NPP 
                             and NPOESS are on track. The NPP spacecraft was  
                             completed in June 2005. Integration testing will 
                             be conducted once the NPP sensors are delivered. 
                             Early issues with the NPOESS spacecraft          
                             (including issues with antennas and a data       
                             storage unit) have been resolved; however, risks 
                             remain that could delay the completion of the    
                             spacecraft. A key risk involves delays in the    
                             delivery of the solar array, which may arrive    
                             too late to be included in some key testing.     
                             Other risks associated with the electrical power 
                             subsystem are taking longer than anticipated to  
                             resolve.                                         

Source: GAO analysis of NPOESS Integrated Program Office data.

aThe three problems are (1) band-to-band co-registration, an issue in which
band registration shifts with different temperatures; (2) cross-talk,
which involves information from sensor cells leaking into other cells; and
(3) line-spread function issues, in which the instrument's focus changes
with changes in temperature.

Program officials regularly track risks associated with various NPOESS
components and work to mitigate them. Having identified both VIIRS and
CrIS as high risk, OMPS as moderate risk, and the other components as low
risk, the program office is working closely with the contractors and
subcontractors to resolve sensor problems. Program officials have
identified work-arounds that will allow them to move forward in testing
the VIIRS engineering unit and have approved the flight unit to proceed to
a technical readiness review milestone. Regarding CrIS, as of March 2007,
a failure review board identified root causes of its structural failure,
identified plans for resolving them, and initiated inspections of sensor
modules and subsystems for damage. An agency official reported that there
is sufficient funding in the fiscal year 2007 program office's and
contractor's management reserve funds to allow for troubleshooting both
VIIRS and CrIS problems. However, until the CrIS failure review board
fully determines the amount of rework that is necessary to fix the
problems, it is unknown if additional funds will be needed or if the time
frame for CrIS's delivery will be delayed. According to agency officials,
CrIS is not on the program schedule's critical path, and there is
sufficient schedule margin to absorb the time it will take to conduct a
thorough failure review process.

Managing the risks associated with the development of VIIRS and CrIS is of
particular importance because these components are to be demonstrated on
the NPP satellite, currently scheduled for launch in September 2009. Any
delay in the NPP launch date could affect the overall NPOESS program,
because the success of the program depends on the lessons learned in data
processing and system integration from the NPP satellite. Additionally,
continued sensor problems could lead to higher final program costs.

    Ground Segment--Progress Has Been Made, but Work Remains

Development of the ground segment--which includes the interface data
processing system, the ground stations that are to receive satellite data,
and the ground-based command, control, and communications system--is under
way and on track. However, important work pertaining to developing the
algorithms that translate satellite data into weather products within the
integrated data processing segment remains to be completed. Table 6
describes each of the components of the ground segment and identifies the
status of each.

                  Table 6: Status of Ground Segment Components

Ground segment component/description Risk level Status

Interface Data Processing Moderate IDPS is being developed in a series of
builds. Currently, IDPS build 1.4 has been System (IDPS): delivered for
testing and recently passed two key data transfer tests. Contractors are A
ground-based system that currently working to develop IDPS build 1.5,
which is expected to be the build that will be is to process the sensors'
used with NPP. However, work remains in three areas: system latency,
algorithm data so that they are usable performance, and calibration and
validation planning. by the data processing Latency--IDPS must process
volumes of data within 65 minutes to meet NPP centers and the broader
requirements. The contractor has made progress in reducing the latency of
the system's community of environmental data handling from 93 minutes to
73 minutes and is working to reduce it by 8 minutes data users. IDPS will
be more by resolving data management issues, increasing the number of
processors, and deployed at the four weather increasing algorithm
efficiency. data processing centers. Algorithm performance--IDPS
algorithms are the mathematical functions coded into the

system software that transform raw data into data products, including
sensor data records

and environmental data records. IDPS build 1.4 contains provisional
algorithms, which are

being refined as the sensors complete various stages of testing. Because
some sensors

are delayed, full characterization of those sensors in order to refine the
algorithms has

also been delayed and may not be completed in time for the delivery of
IDPS build 1.5 in

early 2009. If this occurs, agency officials plan to improve the
algorithms in build 1.5

during a planned maintenance upgrade prior to NPP launch.

Calibration/validation--Calibration/validation is the process for tweaking
algorithms to

provide more accurate observations. The contractor has documented a
detailed schedule

for calibration and validation during IDPS development and is developing a
postlaunch

task list to drive prelaunch preparation efforts. However, much work and
uncertainty

continue to exist in the calibration and validation area. A program
official noted that, while

teams can do a lot of preparation work, including building the
infrastructure to allow

sensor testing and having a good understanding of the satellite, sensors,
and available

data for calibration, many issues need to take place after launch.

Ground stations for receiving Low NOAA is working with domestic and
foreign authorities to gain approval to operate ground satellite data:
stations to receive satellite data. According to agency officials, the
full complement of 15 unmanned ground stations ground stations will not be
in place in time for the C1 launch: however, the ground stations around
the world (called will be phased in by the launch of C2. To date, the
program office has reached agreement SafetyNet(TM)) are to receive with 4
of 15 ground station sites. satellite data and send these to the four data
processing centers.

Source: GAO analysis of NPOESS Integrated Program Office data.

The NPOESS program office plans to continue to address risks facing IDPS
development. Specifically, the IDPS team is working to reduce data
processing delays by seeking to limit the number of data calls, improve
the efficiency of the data management system, increase the efficiency of
the algorithms, and increase the number of processors. The program office
also developed a resource center consisting of a logical technical
library, a data archive, and a set of analytical tools to coordinate,
communicate, and facilitate the work of algorithm subject matter experts
on algorithm development and calibration/validation preparations. Managing
the risks associated with the development of the IDPS system is of
particular importance because this system will be needed to process NPP
data.

  Implementation of GAO Recommendations Should Reduce Program Risks

Because of the importance of effectively managing the NPOESS program to
ensure that there are no gaps in the continuity of critical weather and
environmental observations, in our accompanying report^15 we made
recommendations to the Secretaries of Defense and Commerce and to the
Administrator of NASA to ensure that the responsible executives within
their respective organizations approve key acquisition documents,
including the memorandum of agreement among the three agencies, the system
engineering plan, the test and evaluation master plan, and the acquisition
strategy, as quickly as possible but no later than April 30, 2007. We also
recommended that the Secretary of Defense direct the Air Force to delay
reassigning the recently appointed Program Executive Officer until all
sensors have been delivered to the NPOESS Preparatory Program; these
deliveries are currently scheduled to occur by July 2008. We also made two
additional recommendations to the Secretary of Commerce to (1) develop and
implement a written process for identifying and addressing human capital
needs and for streamlining how the program handles the three different
agencies' administrative procedures and (2) establish a plan for
immediately filling needed positions.

In written comments, all three agencies agreed that it was important to
finalize key acquisition documents in a timely manner, and DOD proposed
extending the due dates for the documents to July 2, 2007. Because the
NPOESS program office intends to complete contract
negotiations by July 4, 2007, we remain concerned that any further delays
in approving the documents could delay contract negotiations and thus
increase the risk to the program.

^15 [11]GAO-07-498.

In addition, the Department of Commerce agreed with our recommendation to
develop and implement a written process for identifying and addressing
human capital needs and to streamline how the program handles the three
different agencies' administrative procedures. The department also agreed
with our recommendation to plan to immediately fill open positions at the
NPOESS program office. Commerce noted that NOAA identified the skill sets
needed for the program and has implemented an accelerated hiring model and
schedule to fill all NOAA positions in the NPOESS program. Commerce also
noted that NOAA has made NPOESS hiring a high priority and has documented
a strategy-- including milestones--to ensure that all NOAA positions are
filled by June 2007.

DOD did not concur with our recommendation to delay reassigning the
Program Executive Officer, noting that the NPOESS System Program Director
responsible for executing the acquisition program would remain in place
for 4 years. The Department of Commerce also noted that the Program
Executive Officer position is planned to rotate between the Air Force and
NOAA. Commerce also stated that a selection would be made before the
departure of the current Program Executive Officer to provide an overlap
period to allow for knowledge transfer and ensure continuity. However,
over the last few years, we and others (including an independent review
team and the Commerce Inspector General) have reported that ineffective
executive-level oversight helped foster the NPOESS program's cost and
schedule overruns. We remain concerned that reassigning the Program
Executive at a time when NPOESS is still facing critical cost, schedule,
and technical challenges will place the program at further risk.

In addition, while it is important that the System Program Director remain
in place to ensure continuity in executing the acquisition, this position
does not ensure continuity in the functions of the Program Executive
Officer. The current Program Executive Officer is experienced in providing
oversight of the progress, issues, and challenges facing NPOESS and
coordinating with Executive Committee members as well as the Defense
acquisition authorities. Additionally, while the Program Executive Officer
position is planned to rotate between agencies, the memorandum of
agreement documenting this arrangement is still in draft and should be
flexible enough to allow the current Program Executive Officer to remain
until critical risks have been addressed.

Further, while Commerce plans to allow a period of overlap between the
selection of a new Program Executive Officer and the departure of the
current one, time is running out. The current Program Executive Officer is
expected to depart in early July 2007, and as of early June 2007, a
successor has not yet been named. NPOESS is an extremely complex
acquisition, involving three agencies, multiple contractors, and advanced
technologies. There is not sufficient time to transfer knowledge and
develop the sound professional working relationships that the new Program
Executive Officer will need to succeed in that role. Thus, we remain
convinced that given NPOESS current challenges, reassigning the current
Program Executive Officer at this time would not be appropriate.

In summary, NPOESS restructuring is well under way, and the program has
made progress in establishing an effective management structure. However,
key steps remain in restructuring the acquisition, including completing
important acquisition documents such as the system engineering plan, the
acquisition program baseline, and the memorandum of agreement documenting
the three agencies' roles and responsibilities. Until these key documents
are finalized, the program is unable to finalize plans for restructuring
the program. Additionally, the program office continues to have difficulty
filling key positions and lacks a programwide staffing process. Until the
program establishes an effective and repeatable staffing process, it will
have difficulties in identifying and filling its staffing needs in a
timely manner. Having insufficient staff in key positions impedes the
program office's ability to conduct important management and oversight
activities, including revising cost and schedule estimates, monitoring
progress, and managing technical risks. The program faces even further
challenges if DOD proceeds with plans to reassign the Program Executive
Officer this summer. Such a move would add unnecessary risk to an already
risky program.

In addition, the likelihood exists that there will be further cost
increases and schedule delays because of technical problems on key sensors
and pending contract negotiations. Major program segments--including the
space and ground segments--are making progress in their development and
testing. However, two critical sensors have experienced problems and are
considered high risk, and risks remain in developing and implementing the
ground-based data processing system. Given the tight time frames for
completing key sensors, integrating them, and getting the ground-based
data processing systems developed, tested, and deployed, continued close
oversight of milestones and risks is essential to minimize potential cost
increases and schedule delays.

Mr. Chairmen, this concludes my statement. I would be happy to answer any
questions that you or members of the committee may have at this time.

If you have any questions on matters discussed in this testimony, please
contact me at (202) 512-9286 or by e-mail at [12][email protected] . Other
key contributors to this testimony include Colleen Phillips (Assistant
Director), Carol Cha, and Teresa Smith.

(310852)

References

Visible links
3. http://www.gao.gov/cgi-bin/getrpt?GAO-07-498
4. http://www.gao.gov/cgi-bin/getrpt?GAO-03-398T
5. http://www.gao.gov/cgi-bin/getrpt?GAO-04-1054
6. http://www.gao.gov/cgi-bin/getrpt?GAO-06-249T
7. http://www.gao.gov/cgi-bin/getrpt?GAO-06-573T
8. http://www.gao.gov/cgi-bin/getrpt?GAO-06-249T
9. http://www.gao.gov/cgi-bin/getrpt?GAO-06-249T
  10. http://www.gao.gov/cgi-bin/getrpt?GAO-06-626T
  11. http://www.gao.gov/cgi-bin/getrpt?GAO-07-498
  12. mailto:[email protected]
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