    Geostationary Operational Environmental Satellites: Progress Has
    Been Made, but Improvements Are Needed to Effectively Manage
    Risks (23-OCT-07, GAO-08-18).

    The Department of Commerce's National Oceanic and Atmospheric
    Administration (NOAA), with the aid of the National Aeronautics
    and Space Administration (NASA), plans to procure the next
    generation of geostationary operational environmental satellites,
    called the Geostationary Operational Environmental Satellites-R
    series (GOES-R). This 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 (1)
    assess the status and plans for GOES-R, and (2) evaluate whether
    NOAA is adequately mitigating key technical and programmatic
    risks. To do so, GAO analyzed contractor and program data and
    interviewed officials from NOAA and NASA.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-08-18
        ACCNO:   A77536
      TITLE:     Geostationary Operational Environmental Satellites:
    Progress Has Been Made, but Improvements Are Needed to
    Effectively Manage Risks
         DATE:   10/23/2007
      SUBJECT:   Cost analysis
    	     Cost control
    	     Cost overruns
    	     Earth sciences data systems
    	     Procurement
    	     Procurement planning
    	     Program evaluation
    	     Program management
    	     Risk assessment
    	     Risk management
    	     Satellites
    	     Schedule slippages
    	     Systems design
    	     Geostationary Operational Environmental
    	     Satellites-R series program

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    GAO-08-18

         * [1]Results in Brief
         * [2]Background

              * [3]A Brief History of Prior GOES Series

                   * [4]Original GOES Satellites
                   * [5]GOES I-M Series
                   * [6]GOES-N Series
                   * [7]Planned GOES-R Series

              * [8]GOES-R Program--An Overview
              * [9]GOES-R Program Office Structure
              * [10]Planned GOES-R Acquisition Strategy

         * [11]GOES-R Preliminary Design Studies Are Completed, but Key Pro

              * [12]Progress Has Been Made on GOES-R Procurement Activities
              * [13]NOAA Revised its Acquisition Strategy
              * [14]GOES-R Cost Estimates Are Likely to Grow and Schedule Estima

         * [15]NOAA is Taking Steps to Address Key Risks, but More Remains

              * [16]GOES-R Has a Risk Management Program and Is Taking Measures

                   * [17]GOES-R Program Office Identified and Is Working to
                     Mitigate
                   * [18]NASA Identified Flight Segment Risks and Is Working to
                     Mitig
                   * [19]NOAA Identified Risks in its Operations Segment and Is
                     Worki

              * [20]Multiple Watchlists Are Not Consistent, Making it Difficult
              * [21]Important GOES-R Management Risks Are Missing from the Progr

                   * [22]Key GOES-R Leadership Positions Need to be Filled
                   * [23]NOAA's Insight into NASA's Program Elements Is Limited
                   * [24]Recent Changes on a Key Instrument Have Reduced Program
                     Mana

         * [25]Conclusions
         * [26]Recommendations for Executive Action
         * [27]Agency Comments and Our Evaluation
         * [28]GAO Contact
         * [29]Staff Acknowledgments
         * [30]GAO's Mission
         * [31]Obtaining Copies of GAO Reports and Testimony

              * [32]Order by Mail or Phone

         * [33]To Report Fraud, Waste, and Abuse in Federal Programs
         * [34]Congressional Relations
         * [35]Public Affairs

    Report to Congressional Requesters

    United States Government Accountability Office

    GAO

    October 2007

    GEOSTATIONARY OPERATIONAL ENVIRONMENTAL SATELLITES

    Progress Has Been Made, but Improvements Are Needed to Effectively Manage
    Risks

    GAO-08-18

    Contents

    Letter 1

    Results in Brief 2
    Background 3
    GOES-R Preliminary Design Studies Are Completed, but Key Program Changes
    Have Been Made and Cost and Schedule Estimates Are Likely to Grow 13
    NOAA is Taking Steps to Address Key Risks, but More Remains to Be Done 17
    Conclusions 26
    Recommendations for Executive Action 27
    Agency Comments and Our Evaluation 27
    Appendix I Objectives, Scope, and Methodology 31
    Appendix II Comments from the Department of Commerce 32
    Appendix III GAO Contact and Staff Acknowledgments 37

    Tables

    Table 1: Summary of the Procurement History of GOES 6
    Table 2: Summary of Key GOES-R System Improvements 8
    Table 3: Originally Planned GOES-R Series Instruments, as of August 2006 8
    Table 4: Key Changes to the GOES-R Program 10
    Table 5: Status of GOES-R and Component Contracts, as of July 2007 14
    Table 6: GOES-R Program Launch Schedule, as of July 2007 17

    Figures

    Figure 1: Approximate GOES Geographic Coverage 4
    Figure 2: Generic GOES Data Relay Pattern 5
    Figure 3: GOES-R Program Office Structure and Staffing 12
    Figure 4: Top Program Risks as Identified by the GOES-R Program Office, as
    of July 2007 19
    Figure 5: Risks Identified by the GOES-R Flight Project Office, as of July
    2007 20
    Figure 6: Risks Identified by the GOES-R Operations Project Office, as of
    July 2007 21
    Figure 7: Examples of Inconsistencies among GOES-R Risk Watchlists, as of
    July 2007 23

    Abbreviations

    ABI Advanced Baseline Imager
    EXIS Extreme Ultraviolet and X-Ray Irradiance Suite
    GLM Geostationary Lightning Mapper
    GOES-R Geostationary Operational Environmental Satellites - R Series
    HES Hyperspectral Environmental Suite
    NASA National Aeronautics and Space Administration
    NESDIS National Environmental Satellite Data and Information Service
    NOAA National Oceanic and Atmospheric Administration
    SEISS Space Environmental In-Situ Suite
    SIS Solar Imaging Suite
    SUVI Solar Ultra Violet Imager

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. The published product may be reproduced
    and distributed in its entirety without further permission from GAO.
    However, because this work may contain copyrighted images or other
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    wish to reproduce this material separately.

    United States Government Accountability Office
    Washington, DC 20548

    October 23, 2007

    The Honorable Nick Lampson
    Chairman
    The Honorable Bob Inglis
    Ranking Member
    Subcommittee on Energy and Environment
    Committee on Science and Technology
    House of Representatives

    The Honorable Brad Miller
    Chairman
    The Honorable James F. Sensenbrenner, Jr.
    Ranking Member
    Subcommittee on Investigations and Oversight
    Committee on Science and Technology
    House of Representatives

    Operational geostationary environmental satellites play a critical role in
    our nation's weather forecasting. These satellites--which are managed by
    the National Oceanic and Atmospheric Administration (NOAA)--provide
    critical information on atmospheric, oceanic, climatic, and solar
    conditions that help meteorologists observe and predict global and local
    weather events. They also provide a means to identify severe storm
    conditions, such as hurricanes and tornadoes, and to track the movement
    and intensity of these storms once they develop. Operational geostationary
    environmental satellites play a critical role in our nation's weather
    forecasting. These satellites--which are managed by the National Oceanic
    and Atmospheric Administration (NOAA)--provide critical information on
    atmospheric, oceanic, climatic, and solar conditions that help
    meteorologists observe and predict global and local weather events. They
    also provide a means to identify severe storm conditions, such as
    hurricanes and tornadoes, and to track the movement and intensity of these
    storms once they develop.

    NOAA, with the aid of the National Aeronautics and Space Administration
    (NASA), is planning to procure the next generation of geostationary
    satellites, called the Geostationary Operational Environmental
    Satellites-R series (GOES-R). The GOES-R series is to replace the current
    series of satellites which will likely begin to reach the end of their
    useful lives in approximately 2014. This new series is expected to mark
    the first major technological advance in GOES instrumentation since 1994.
    It is also considered critical to the United States' ability to maintain
    the continuity of data required for weather forecasting through the year
    2028. NOAA, with the aid of the National Aeronautics and Space
    Administration (NASA), is planning to procure the next generation of
    geostationary satellites, called the Geostationary Operational
    Environmental Satellites-R series (GOES-R). The GOES-R series is to
    replace the current series of satellites which will likely begin to reach
    the end of their useful lives in approximately 2014. This new series is
    expected to mark the first major technological advance in GOES
    instrumentation since 1994. It is also considered critical to the United
    States' ability to maintain the continuity of data required for weather
    forecasting through the year 2028.

    This report responds to your request that we review NOAA's management of
    the GOES-R program. Specifically, we were asked to (1) assess the status
    and revised plans for the GOES-R procurement, and (2) evaluate whether
    NOAA is adequately mitigating key technical and programmatic risks facing
    the GOES-R program. This report responds to your request that we review
    NOAA's management of the GOES-R program. Specifically, we were asked to
    (1) assess the status and revised plans for the GOES-R procurement, and
    (2) evaluate whether NOAA is adequately mitigating key technical and
    programmatic risks facing the GOES-R program.

    To assess GOES-R status and revised plans, we reviewed program documents
    on the revised acquisition strategy, system requirements, and cost
    estimates, and interviewed officials from NOAA, NASA, and the contractor
    for a critical GOES-R instrument. To evaluate whether NOAA is adequately
    mitigating key technical and programmatic risks, we analyzed risk
    management plans and also met with internal technical experts to determine
    the key risks that could negatively affect the program's ability to
    acquire the GOES-R system. We also interviewed agency officials to
    evaluate the adequacy of NOAA's mitigation efforts.

    We conducted our work at NOAA and NASA offices in the Washington, D.C.,
    metropolitan area and at ITT Corporation in Fort Wayne, Indiana. We
    performed our work from April 2007 to September 2007, in accordance with
    generally accepted government auditing standards. Appendix I contains
    further details on our objectives, scope, and methodology.

    Results in Brief

    NOAA has made progress on its GOES-R procurement--which is estimated to
    cost $7 billion and scheduled to have the first satellite ready for launch
    in 2014--but costs and schedules are likely to grow. Specifically, NOAA
    completed preliminary design studies of its GOES-R acquisition and planned
    to make a decision to proceed to development and production in September
    2007. In addition, the agency recently decided to separate the space and
    ground elements of the program into two separate contracts, to be managed
    by NASA and NOAA, respectively. However, this change in the GOES-R
    acquisition strategy has delayed the decision to proceed with the
    acquisition. Further, independent estimates are higher than the program's
    current cost estimate and convey a low level of confidence in the
    program's schedule. Independent studies show that the estimated program
    could cost about $2 billion more, and the first satellite launch could be
    delayed by 2 years. As NOAA works to reconcile the independent estimate
    with its own program office estimate, costs are likely to grow and
    schedules are likely to be delayed. In commenting on a draft of this
    report, NOAA officials stated that while their reconciliation process is
    still ongoing, the revised cost estimate will likely be $1 billion more
    than the current $7 billion and the first satellite launch will likely be
    delayed 1 year from 2014, rather than 2 years.

    To address cost, schedule, and technical risks, the GOES-R program has
    established a risk management program and has taken steps to identify and
    mitigate selected risks. For example, as of July 2007, the program office
    identified the lack of an integrated master schedule as its highest
    priority risk. It also identified other risks including technical
    challenges affecting the development of a critical instrument and the
    development of requirements between the space and ground segments. The
    program has also established plans for bringing these risks to closure.
    However, more remains to be done to fully address risks. Specifically, the
    program has multiple risk watchlists that are not always consistent.
    Further, key risks are missing from the risk lists, including risks
    associated with unfilled executive positions, limitations in NOAA's
    insight into NASA's deliverables, and insufficient funds for unexpected
    costs (called management reserve). As a result, the program is at risk
    that problems will not be identified or mitigated in a timely manner and
    could lead to program cost overruns and schedule delays.

    We are making recommendations to the Secretary of Commerce to direct the
    Undersecretary of Commerce for Oceans and Atmosphere to ensure that the
    GOES-R program office manages, mitigates, and reports on risks using a
    more comprehensive program-level risk list. In written comments on a draft
    of this report, the Secretary agreed with our recommendations to use a
    program level risk list and to add selected risks to its list, but
    disagreed that NOAA has insufficient insight into NASA's contracts. The
    Secretary cited an unparalleled transparency between the two agencies.
    However, NOAA has not demonstrated that it has validated NASA's contractor
    performance and we remain concerned that NOAA lacks the capability to
    oversee this important aspect of the program. Given the past problems NOAA
    had in obtaining insight into NASA's contracts and the importance of this
    interagency relationship to the success of the GOES-R program, we believe
    that this issue should be managed and monitored as a risk. The Department
    also suggested technical comments which we incorporated as appropriate.

    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.

    Figure 1: Approximate GOES Geographic Coverage:

    [See PDF for image]

    This figure is a world map depicting the geographical coverage of GOES-
    11 and GOES-12.

    Sources: NOAA (data), MapArt (map).

    [End of figure]

    To provide continuous satellite coverage, NOAA acquires several
    satellites at a time as part of a series and launches new satellites
    every few years. 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.[Footnote 1] NOAA is
    also planning the next generation of satellites, known as the GOES-R
    series, which are planned for launch beginning in 2014.

    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 and the global research community
    here in the United States and abroad. 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.

    Figure 2: Generic GOES Data Relay Pattern:

    [See PDF for image]

    This figure is a depiction of the generic GOES data relay pattern. The
    depiction indicates that data is relayed in the following manner:

    * GOES satellite: raw environmental data sent to ground station;
    * Ground station: processed environmental data sent back to GOES;
    * GOES satellite: processed environmental data broadcast to users.

    Also depicted is a communications link between the ground station and
    users.

    Source: GAO analysis of NOAA data.

    [End of figure]

    A Brief History of Prior GOES Series:

    To date, NOAA has procured three series of GOES satellites and is in
    the planning stages to acquire a fourth one (see table 1).

    Table 1: Summary of the Procurement History of GOES:

    Series name: Original GOES[B];
    Procurement duration[A]: 1970-1987;
    Satellites: 1, 2, 3, 4, 5, 6, 7.

    Series name: GOES I-M;
    Procurement duration[A]: 1985-2001;
    Satellites: 8, 9, 10, 11, 12.

    Series name: GOES-N;
    Procurement duration[A]: 1998-2011;
    Satellites: 13, O, P, Q[C].

    Series name: GOES-R;
    Procurement duration[A]: 2007-2016;
    Satellites: R, S.

    Source: GAO analysis of NOAA data.

    [A] Duration includes time from contract award to final satellite
    launch.

    [B] The procurement of these satellites consisted of four separate
    contracts for (1) two early prototype satellites and GOES-1, (2) GOES-
    2 and -3, (3) GOES-4 through -6, and (4) GOES-G (failed on launch) and
    GOES-7.

    [C] NOAA decided not to exercise the option for this satellite.

    [End of table]

    Original GOES Satellites:

    In 1970, NOAA initiated its original GOES program based on experimental
    geostationary satellites developed by NASA. While these satellites
    operated effectively for many years, they had technical limitations.
    For example, this series of satellites was "spin-stabilized," meaning
    that the satellites slowly spun while in orbit to maintain a stable
    position with respect to the earth. As a result, the satellite viewed
    the earth only about 5 percent of the time and had to collect data very
    slowly, capturing one narrow band of data each time its field of view
    swung past the earth. A complete set of sounding data[Footnote 2] for
    GOES-4 through GOES-7 took 2 to 3 hours to collect.

    GOES I-M Series:

    In 1985, NOAA and NASA began to procure a new generation of GOES,
    called the GOES I-M series, based on a set of requirements developed by
    NOAA's National Weather Service, NESDIS, and NASA, among others. GOES I-
    M consisted of five satellites, GOES-8 through GOES-12, and was a
    significant improvement in technology from the original satellites. For
    example, GOES I-M was "body-stabilized," meaning that the satellite
    held a fixed position in orbit relative to the earth, thereby allowing
    for continuous meteorological observations. Instead of maintaining
    stability by spinning, the satellite would preserve its fixed position
    by continuously making small adjustments in the rotation of internal
    momentum wheels or by firing small thrusters to compensate for drift.
    This and other enhancements meant that the GOES I-M satellites would be
    able to collect significantly better quality data more quickly than the
    older series of satellites.

    GOES-N Series:

    In 1998, NOAA began the procurement of satellites to follow GOES I-M,
    called the GOES-N series. This series used existing technologies for
    the instruments and added system upgrades, including an improved power
    subsystem and enhanced satellite pointing accuracy. Furthermore, these
    satellites were designed to operate longer than their predecessors.
    This series originally consisted of four satellites--GOES-N through
    GOES-Q. However, the option for the GOES-Q satellite was canceled based
    on NOAA's assessment that it would not need the final satellite to
    continue weather coverage. In particular, the agency found that the
    satellites already in operation were lasting longer than expected and
    that the first satellite in the next series could be available to back
    up the last of the GOES-N satellites. As noted earlier, the first GOES-
    N series satellite--GOES-13--was launched in May 2006. The GOES-O and
    GOES-P satellites are currently in production and are expected to be
    launched in July 2008 and July 2011, respectively.

    Planned GOES-R Series:

    NOAA is currently planning to procure the next series of GOES
    satellites--called the GOES-R series--which is intended to provide the
    first major technological advance in instrumentation since the launch
    of the first satellite of the GOES I-M series in 1994.[Footnote 3] The
    original plans for this series included four satellites--GOES-R through
    GOES-U. However, in September 2006, NOAA reduced the scope of the
    program to consist of a minimum of two satellites and removed a
    technically complex instrument because it was estimated that program
    costs could almost double the original cost estimate.

    GOES-R Program--An Overview:

    NOAA plans for the GOES-R program to improve on the technology of prior
    series, in terms of both system and instrument improvements. 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.

    Table 2: Summary of Key GOES-R System Improvements:

    Key feature: Total number of products;
    GOES-N (current): 41;
    GOES-R: ~68-120.

    Key feature: Downlink rate of raw data collected by instruments (from
    satellite to ground stations);
    GOES-N (current): 2.6 Mbps;
    GOES-R: 70 Mbps.

    Key feature: Broadcast rate of processed GOES data (from satellite to
    users);
    GOES-N (current): 2.1 Mbps;
    GOES-R: 40 Mbps.

    Key feature: Raw data storage (the length of time that raw data will be
    stored at ground stations);
    GOES-N (current): 0 days;
    GOES-R: 3 days.

    Source: GAO analysis of NOAA data.

    [End of table]

    In addition to the system improvements, the instruments on the GOES-R
    series are expected to significantly increase the clarity and precision
    of the observed environmental data. NOAA originally planned to acquire
    six different types of instruments. Furthermore, two of these
    instruments--the Advanced Baseline Imager and the Hyperspectral
    Environmental Suite--were considered to be the most critical because
    they would provide data for key weather products. Table 3 summarizes
    the originally planned instruments and their expected capabilities.

    Table 3: Originally Planned GOES-R Series Instruments, as of August
    2006:

    Planned instrument: Advanced Baseline Imager (ABI);
    Description: Expected to provide variable area imagery and radiometric
    information of the earth's surface, atmosphere, and cloud cover. Key
    features include;
    * monitoring and tracking severe weather;
    * providing images of clouds to support forecasts, and;
    * providing higher resolution, faster coverage, and broader coverage
    simultaneously.

    Planned instrument: Hyperspectral Environmental Suite (HES)[A];
    Description: Expected to provide information about the earth's surface
    to aid in the prediction of weather and climate monitoring. Key
    features include;
    * providing atmospheric moisture and temperature profiles to support
    forecasts and climate monitoring;
    * monitoring coastal regions for ecosystem health, water quality,
    coastal erosion, and harmful algal blooms, and;
    * providing higher resolution and faster coverage.

    Planned instrument: Geostationary Lightning Mapper (GLM);
    Description: Expected to continuously monitor lightning activity over
    the United States and provide a more complete dataset than previously
    possible. Key features include;
    * detecting lightning strikes as an indicator of severe storms and;
    * providing a new capability to GOES that only previously existed on
    polar satellites.

    Planned instrument: Magnetometer;
    Description: Expected to provide information on the general level of
    geomagnetic activity, monitor current systems in space, and permit
    detection of magnetopause crossings, sudden storm commencements, and
    substorms.

    Planned instrument: Space Environmental In-Situ Suite (SEISS);
    Description: Expected to provide information on space weather to aid in
    the prediction of particle precipitation, which causes disturbance and
    disruption of radio communications and navigation systems. Key features
    include;
    * measuring magnetic fields and charged particles;
    * providing improved heavy ion detection, adding low energy electrons
    and protons, and;
    * enabling early warnings for satellite and power grid operation,
    telecom services, astronauts, and airlines.

    Planned instrument: Solar Imaging Suite (SIS)[B];
    Description: Expected to provide coverage of the entire dynamic range
    of solar X-ray features, from coronal holes to X-class flares, as well
    as estimate the measure of temperature and emissions. Key features
    include;
    * providing images of the sun and measuring solar output to monitor
    solar storms and;
    * providing improved imager capability.

    Source: GAO analysis of NOAA data.

    [A] HES was canceled in September 2006.

    [B] SIS development work was divided into two separate acquisitions,
    the Solar Ultra Violet Imager (SUVI) and the Extreme Ultraviolet and X-
    Ray Irradiance Suite (EXIS).

    [End of table]

    More recently, however, NOAA reduced the scope of the GOES-R program
    because of expectations of higher costs. In May 2006, the program
    office projected that total costs, which were originally estimated to
    be $6.2 billion, could reach $11.4 billion. We reported that this led
    NOAA to reduce the scope and technical complexity of the baseline
    program.[Footnote 4] Specifically, in September 2006, NOAA reduced the
    minimum number of satellites from four to two, canceled plans for
    developing the Hyperspectral Environmental Suite, and estimated the
    revised program would cost $7 billion. Table 4 provides a summary of
    the timeline and scope of these key changes.

    Table 4: Key Changes to the GOES-R Program:

    Number of satellites;
    Baseline program, as of August 2006: 4;
    Program with reduced scope, as of September 2006: 2.

    Planned instruments;
    Baseline program, as of August 2006: 2 critical instruments and 4
    noncritical instruments or instrument suites;
    * Critical instruments:
    - Advanced Baseline Imager;
    - Hyperspectral Environmental Suite;
    * Noncritical instruments/suites:
    - Geostationary Lightning Mapper;
    - Magnetometer;
    - Space Environmental In-Situ Suite;
    - Solar Imaging Suite;
    Program with reduced scope, as of September 2006:
    1 critical instrument and 4 noncritical instruments or instrument
    suites;
    * Critical instrument:
    - Advanced Baseline Imager;
    * Noncritical instruments/suites:
    - Geostationary Lightning Mapper;
    - Magnetometer;
    - Space Environmental In-Situ Suite;
    - Two components of the former Solar Imaging Suite (the Solar Ultra
    Violet Imager and Extreme Ultraviolet and X-Ray Irradiance Suite).

    Life-cycle cost estimate (in then year dollars);
    Baseline program, as of August 2006: $6.2 - 11.4 billion;
    Program with reduced scope, as of September 2006: $7 billion.

    End of operations and maintenance;
    Baseline program, as of August 2006: 2028;
    Program with reduced scope, as of September 2006: 2028[A].

    Source: GAO analysis of NOAA data.

    [A] All satellites are expected to have a 15-year lifespan (5 years in
    on-orbit storage plus 10 years in operation).

    [End of table]

    In our September 2006 report, we made a number of recommendations to
    improve the agency's ability to effectively manage GOES-R based on
    lessons learned from other satellite procurements. In particular, we
    recommended that NOAA establish a process for objectively evaluating
    and reconciling government and independent cost estimates once the
    scope of the program was finalized. We also recommended that the agency
    perform a comprehensive review of the Advanced Baseline Imager to
    determine the level of technical maturity achieved prior to 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.[Footnote 5] The agency agreed with our recommendations and has
    completed a comprehensive review of the Advanced Baseline Imager.
    Actions on other recommendations are under way. For example, NOAA has
    established a team to conduct a line-by-line reconciliation of the
    government and independent cost estimates. Additionally, NOAA plans to
    have four earned value specialists on staff by the end of 2007 and has
    requested that NASA determine the appropriate level of resources needed
    to perform its earned value management functions.

    GOES-R Program Office Structure:

    NOAA is solely responsible for GOES-R program funding and overall
    mission success. However, since it relies on NASA's acquisition
    experience and technical expertise to help ensure the success of its
    programs, NOAA implemented an integrated program management structure
    with NASA for the GOES-R program (see fig. 3). Within the program
    office, there are two project offices that manage key components of the
    GOES-R system. These are called the flight and operations project
    offices. The flight project office oversees the spacecraft,
    instruments, and launch services. The operations project office
    oversees the ground elements and on-orbit operations of the satellites.
    The project manager for the flight project office and the deputy
    project manager for operations project office are designated to be
    filled with NASA personnel. Additionally, NOAA has located the program
    office at NASA's Goddard Space Flight Center.

    Figure 3: GOES-R Program Office Structure and Staffing:

    [See PDF for image]

    This figure is an organizational chart depicting the GOES-R Program
    Office structure and staffing, with connecting lines indicating
    "reports to" and "communicates with" status.

    From bottom to top, the structure is depicted as follows:

    Flight Project: Project Manager: NASA; Deputy: NOAA;
    Reports to: GOES-R Program; System Program Director: NOAA; Deputy
    System Program Director: NOAA; Assistant System Program Director: NASA.

    Operations Project: Project Manager: NOAA; Deputy: NASA;
    Reports to: GOES-R Program; System Program Director: NOAA; Deputy
    System Program Director: NOAA; Assistant System Program Director: NASA.

    Program Mission Assurance: Lead: NASA;
    Reports to: GOES-R Program; System Program Director: NOAA; Deputy
    System Program Director: NOAA; Assistant System Program Director: NASA.

    Contracts: Lead: NOAA;
    Reports to: GOES-R Program; System Program Director: NOAA; Deputy
    System Program Director: NOAA; Assistant System Program Director: NASA.

    Program Control: Lead: NOAA;
    Reports to: GOES-R Program; System Program Director: NOAA; Deputy
    System Program Director: NOAA; Assistant System Program Director: NASA.

    Program Systems Engineering: Lead: NASA;
    Reports to: GOES-R Program; System Program Director: NOAA; Deputy
    System Program Director: NOAA; Assistant System Program Director: NASA.

    GOES-R Program; System Program Director: NOAA; Deputy System Program
    Director: NOAA; Assistant System Program Director: NASA;
    Reports to: NESDIS.

    GOES-R Program; System Program Director: NOAA; Deputy System Program
    Director: NOAA; Assistant System Program Director: NASA;
    Communicates with: Goddard Space Flight Center Management Council;

    GOES-R Program; System Program Director: NOAA; Deputy System Program
    Director: NOAA; Assistant System Program Director: NASA;
    Communicates with: Program Scientist: NOAA.

    Program Scientist: NOAA.
    Reports to: NESDIS.

    NESDIS:
    Reports to: NOAA.

    NESDIS:
    Communicates with: Goddard Space Flight Center Management Council;
    Communicates with: NOAA Program Management Council.

    NOAA:
    Reports to: Commerce.

    NOAA:
    Communicates with: NOAA Program Management Council.

    Goddard Space Flight Center Management Council:
    Reports to: NASA.

    The top level of the organization chart includes both Commerce and
    NASA.

    Source: NOAA.

    [End of figure]

    Planned GOES-R Acquisition Strategy:

    NOAA's acquisition strategy was to award contracts for the preliminary
    design of the GOES-R system to several vendors who would subsequently
    compete for the contract to be the single prime contractor responsible
    for overall system development and production. As such, in October
    2005, NOAA awarded contracts for the preliminary design of the overall
    GOES-R system to three vendors.[Footnote 6]

    In addition, to reduce the risks associated with developing technically
    advanced instruments, NASA awarded contracts for the preliminary
    designs for five of the originally planned instruments. NASA expected
    to subsequently award development contracts for these instruments and
    to eventually turn them over to the prime contractor responsible for
    the overall GOES-R program.

    GOES-R Preliminary Design Studies Are Completed, but Key Program
    Changes Have Been Made and Cost and Schedule Estimates Are Likely to
    Grow:

    NOAA has completed preliminary design studies of its GOES-R
    procurement. In addition, the agency recently decided to separate the
    space and ground elements of the program into two separate contracts to
    be managed by NASA and NOAA, respectively. However, this change has
    delayed a key decision to proceed with the acquisition, which was
    planned for September 2007. Further, independent estimates are higher
    than the program's current $7 billion cost estimate and convey a low
    level of confidence in the program's schedule for launching the first
    satellite by 2014. As NOAA works to reconcile the independent estimate
    with its own program office estimate, costs are likely to grow and
    schedules are likely to be delayed.

    Progress Has Been Made on GOES-R Procurement Activities:

    NOAA and NASA have made progress on GOES-R. The program office has
    completed preliminary design studies of the overall GOES-R system and
    has initiated development work on most of the planned instruments.
    Specifically, the NOAA-issued contracts for the preliminary design of
    the overall GOES-R system to three vendors have ended, and the designs
    have been completed.

    In addition, after completing preliminary designs on five of the
    originally planned instruments, NASA awarded development contracts for
    three of them.[Footnote 7] Further, the most critical of these
    instruments--the Advanced Baseline Imager--has completed a major
    development milestone. In February 2007, it passed a critical design
    review gate and NASA approved the contractor to begin production of a
    prototype model. See table 5 for the summary of the contracts on GOES-
    R and its component instruments.

    Table 5: Status of GOES-R and Component Contracts, as of July 2007:

    GOES-R component: Overall program;
    Contract scope: preliminary design;
    Contractor: Boeing, Lockheed Martin, Northrop Grumman;
    Status: completed.

    GOES-R component: Overall program;
    Contract scope: development and production;
    Contractor: to be determined;
    Status: contract award is pending.

    GOES-R component: ABI instrument;
    Contract scope: preliminary design;
    Contractor: Ball, ITT Corp., Raytheon;
    Status: completed.

    GOES-R component: ABI instrument;
    Contract scope: development and production;
    Contractor: ITT Corp.;
    Status: under way.

    GOES-R component: HES instrument;
    Contract scope: preliminary design;
    Contractor: BAE Systems, Ball, ITT Corp.;
    Status: completed.

    GOES-R component: HES instrument;
    Contract scope: development and production;
    Contractor: [Empty];
    Status: canceled.

    GOES-R component: SEISS instrument;
    Contract scope: preliminary design;
    Contractor: Assurance Technology Corp., Lockheed Martin;
    Status: completed.

    GOES-R component: SEISS instrument;
    Contract scope: development and production;
    Contractor: Assurance Technology Corp.;
    Status: under way.

    GOES-R component: SIS instruments (consisting of SUVI and EXIS);
    Contract scope: preliminary design;
    Contractor: Lockheed Martin;
    Status: completed.

    GOES-R component: SIS instruments (consisting of SUVI and EXIS);
    Contract scope: development and production;
    Contractor: SUVI: Lockheed Martin; EXIS: Laboratory for Atmospheric and
    Space Physics;
    Status: under way.

    GOES-R component: GLM instrument;
    Contract scope: preliminary design;
    Contractor: Ball, ITT Corp., Lockheed Martin;
    Status: completed.

    GOES-R component: GLM instrument;
    Contract scope: development and production;
    Contractor: to be determined;
    Status: contract award is pending.

    Source: GAO analysis of NOAA and NASA data.

    [End of table]

    NOAA Revised its Acquisition Strategy:

    NOAA recently made a number of key changes in how it plans to acquire
    the GOES-R system. Originally, NOAA planned to award and manage a
    single prime contract for the acquisition and operation of the
    integrated system. However, an independent review team assessed the
    program and found that this approach was risky.[Footnote 8] It
    recommended that NOAA split the acquisition effort into two separate
    contracts for the space and ground segments and have NASA manage the
    space segment. The independent review team concluded that there was
    less risk in continuing with this approach than there would be if NOAA
    took on a new and expanded role.

    In March 2007, Commerce approved NOAA's decision to implement these
    recommendations. The agency revised its acquisition strategy to include
    two separate contracts--the space segment and the ground segment. The
    two contracts are expected to be awarded in May 2008 and August 2008,
    respectively. The space segment is to be managed by a NASA-led flight
    project office. As such, NASA is to be responsible for awarding and
    managing the space segment contract, delivering the flight-ready
    instruments to the space segment contractor for integration onto the
    satellites, and overseeing the systems engineering and integration.
    NOAA is to be responsible for the ground segment contract, which is to
    be managed by the NOAA-led operations project office.

    The revised acquisition strategy has delayed NOAA's plans to complete a
    key decision milestone on whether to proceed with GOES-R development
    and production in September 2007. Once this decision is made, the final
    requests for proposals on the system segments are to be released. The
    agency could not provide a timeframe for when this key decision
    milestone would take place.

    GOES-R Cost Estimates Are Likely to Grow and Schedule Estimates Are
    Likely to Slip:

    NOAA's current estimate that the life cycle cost of the GOES-R program
    would be $7 billion is likely to grow, and its estimate that the first
    satellite would be launched in December 2014 is likely to slip.
    Consistent with best practices in cost estimating, in May 2007, NOAA
    had two different cost estimates completed for the current GOES-R
    program--one by its program office and one by an independent cost
    estimating firm. The program office estimated with 80 percent
    confidence that the program would cost $6.9 billion. The independent
    estimating firm estimated with 80 percent confidence that the program
    would cost $9.3 billion.

    A comparison of the two cost models shows that the independent
    estimator has about a 20 percent level of confidence that the program
    can be completed for $6.9 billion. Further, the independent estimator
    concluded that the program office estimate significantly understated
    the risk of cost overruns. Other major differences between the two
    estimates are contained in government costs and in the space and ground
    segments. In commenting on a draft of this report, NOAA officials noted
    that one of the differences between the estimates is the inflation
    rate. The independent estimator assumed a higher inflation rate than
    the rate that NOAA and NASA typically use. NOAA officials noted that if
    the independent estimate was adjusted to NOAA's inflation rate, the
    program's cost estimate with 80 percent confidence would be $8.7
    billion. However, we believe that the value of an independent estimate
    is that it does not necessarily use the same assumptions as the program
    office. By offering alternative assumptions, the independent estimate
    provides valuable information for government officials to consider when
    revising program cost estimates.

    Program officials are reconciling the two different cost estimates and
    plan to establish a new program cost estimate to be released in
    conjunction with the President's fiscal year 2009 budget in February
    2008. Program officials were unable to provide us information on the
    reconciled estimate until it is released. Nonetheless, the revised cost
    estimate will likely be $1 billion more than the current $7 billion.

    Regarding schedule, NOAA's current plan to launch the first GOES-R
    series satellite in December 2014 could be delayed. This schedule was
    driven by a requirement that the satellites be available to back up the
    last remaining GOES satellites (GOES-O and GOES-P) should anything go
    wrong during the planned launches of these satellites (see table 6).
    However, as part of its cost estimate, the independent estimator
    performed a schedule risk analysis. The independent estimator
    determined that there was less than a 50 percent chance that the first
    satellite would be ready for launch by December 2014 and that a later
    date would be more realistic. The estimator determined that it had 50
    percent confidence that the first satellite would launch by October
    2015 and 80 percent confidence that the satellite would launch by March
    2017. A delay of this magnitude could affect the continuity of GOES
    data should the agency experience problems with the predecessor
    satellites.

    Table 6: GOES-R Program Launch Schedule, as of July 2007:

    Milestone: GOES-O launch[A];
    Planned date: April 2008.

    Milestone: GOES-P launch[A];
    Planned date: April 2009.

    Milestone: GOES-R satellite available for launch;
    Planned date: Dec. 2014.

    Milestone: GOES-S satellite available for launch;
    Planned date: April 2016.

    Source: NOAA.

    [A] GOES-O and GOES-P are not part of the GOES-R series program. Their
    launch dates are provided because of their relevance to the GOES-R
    series satellite schedules.

    [End of table]

    NOAA is Taking Steps to Address Key Risks, but More Remains to Be Done:

    To address cost, schedule, and technical risks, the GOES-R program
    established a risk management program and has taken steps to identify
    and mitigate selected risks. However, more remains to be done to fully
    address a comprehensive set of risks. Specifically, the program has
    multiple risk watchlists and they are not always consistent. Further,
    key risks are missing from the risk lists, including risks associated
    with unfilled executive positions, limitations in NOAA's insight into
    NASA's deliverables, and insufficient funding for unexpected costs
    (called management reserve) on a critical sensor. As a result, the GOES-
    R program is at increased risk that problems will not be identified or
    mitigated in a timely manner and that they could lead to program cost
    overruns and schedule delays.

    GOES-R Has a Risk Management Program and Is Taking Measures to Address
    Selected Risks:

    The GOES-R program office established a risk management program and is
    tracking and mitigating selected risks. Risk management is a leading
    management practice that is widely recognized as a key component of a
    sound system development approach. An effective risk management
    approach typically includes identifying, prioritizing, and mitigating
    risks, and escalating key risks to the attention of senior management.

    In accordance with leading management practices, the GOES-R program
    identifies risks, assigns a severity rating to risks, tracks these
    risks in a database, plans response strategies for each risk in the
    database, and reviews and evaluates these risks during monthly program
    risk management board meetings. Programwide and project-specific risks
    are managed by different offices. The program office identifies and
    tracks programwide risks--those that affect the overall GOES-R program.

    NASA's flight project office and NOAA's operations project office
    manage risks affecting their respective aspects of the
    program.[Footnote 9] Further, the program office briefs senior
    executives on top program and project risks on a monthly basis.

    GOES-R Program Office Identified and Is Working to Mitigate Programwide
    Risks:

    As of July 2007, the program office identified three program risks
    affecting the overall GOES-R program (see fig. 4). These risks include
    the development of the integrated master schedule, the ability to
    secure authorization to use a key frequency band to meet the space-to-
    ground communication data link requirements for the GOES-R system, and
    the final approval of the GOES-R mission requirements from the NOAA
    Deputy Undersecretary.

    Figure 4: Top Program Risks as Identified by the GOES-R Program Office,
    as of July 2007:

    [See PDF for image]

    This figure is an illustration of risk on a matrix. The vertical axis
    of the matrix represents probability of occurrence from low to high.
    The horizontal axis of the matrix represents potential severity of
    consequence from low to high. The matrix is five blocks high and five
    blocks wide. The following data is depicted on the matrix:

    Integrated program master schedule:
    medium risk (fourth block for potential severity of consequence; second
    block for probability of occurrence).

    X-band allocation and license:
    low risk (fourth block for potential severity of consequence; first
    block for probability of occurrence).

    GOES-R level 1 requirements:
    low risk (fourth block for potential severity of consequence; first
    block for probability of occurrence).

    Source: NOAA.

    [End of figure]

    NOAA is working to mitigate and close program risks that it is
    tracking. For example, the program office recently closed the risk
    associated with GOES-R requirements because it had sufficiently defined
    and obtained approval of these requirements. As another example, the
    program office considers the lack of an integrated master schedule to
    be its highest priority risk. Program officials reported that
    completion of the integrated master schedule is driven by the
    completion of the intermediate schedules for the ground segment and the
    space-to-ground interdependencies. Key program staff members, including
    a resident scheduler, meet on a weekly basis to resolve outstanding
    design issues and hone these schedules. Program officials reported that
    the intermediate schedules are near completion and that they plan to
    have the integrated master schedule completed in Fall 2007. They expect
    to remove this issue from the risk watchlist at that time.

    NASA Identified Flight Segment Risks and Is Working to Mitigate Them:

    As of July 2007, the NASA flight project office identified four risks
    affecting instrument development, all of which are classified as medium
    risk (see fig. 5). The top three risks pertain to the advanced imaging
    instrument, ABI--including issues on timely and quality subcontractor
    delivery of a critical part, stray light negatively impacting the
    performance of the optical system, and meeting specified performance
    requirements on image navigation and registration. The fourth priority
    risk pertains to the improvement of subcontractor quality assurance on
    a key sensor for the Space Environmental In-Situ Suite.

    Figure 5: Risks Identified by the GOES-R Flight Project Office, as of
    July 2007:

    [See PDF for image]

    This figure is an illustration of risk on a matrix. The vertical axis
    of the matrix represents probability of occurrence from low to high.
    The horizontal axis of the matrix represents potential severity of
    consequence from low to high. The matrix is five blocks high and five
    blocks wide. The following data is depicted on the matrix:

    Manufacture of visible-near infrared module (for ABI):
    medium risk (fourth block for potential severity of consequence; second
    block for probability of occurrence).

    ABI stray light:
    medium risk (fourth block for potential severity of consequence; second
    block for probability of occurrence).

    ABI image navigation and registration performance:
    medium risk (fourth block for potential severity of consequence; second
    block for probability of occurrence).

    Quality assurance for the Space Environmental In-Situ Suite:
    medium risk (second block for potential severity of consequence; third
    block for probability of occurrence).

    Source: NOAA.

    [End of figure]

    NASA is working to mitigate the flight segment risks that it is
    tracking. For example, the ABI contractor, among other things, plans to
    complete a key simulation review before the end of the year (called the
    structural thermal optical performance analysis) to evaluate whether
    the instrument can meet its expected performance parameters for image
    navigation and registration. NASA also recently conducted a vendor
    facility assessment of the SEISS subcontractor to determine whether
    adequate quality assurance improvements had been made to be compliant
    with contract requirements. These actions are expected to help mitigate
    the risk.

    NOAA Identified Risks in its Operations Segment and Is Working to
    Mitigate Them:

    As of July 2007, the NOAA operations project office identified five
    risks impacting the management and development of the ground system and
    operations, including one that is identified as a medium risk (see fig.
    6). These risks include, among other things, inadequate definition of
    flight and operations project interdependencies, algorithm development
    responsibilities, and the adequate definition of coordination
    requirements between the space and ground segments to ensure that the
    two requests for proposals are consistent.

    Figure 6: Risks Identified by the GOES-R Operations Project Office, as
    of July 2007:

    [See PDF for image]

    This figure is an illustration of risk on a matrix. The vertical axis
    of the matrix represents probability of occurrence from low to high.
    The horizontal axis of the matrix represents potential severity of
    consequence from low to high. The matrix is five blocks high and five
    blocks wide. The following data is depicted on the matrix:

    Flight-ops project acquisition and operations schedule
    interdependencies:
    medium risk (fourth block for potential severity of consequence; third
    block for probability of occurrence).

    Frequency interference (L-Band and X-Band):
    medium risk (fourth block for potential severity of consequence; first
    block for probability of occurrence).

    Algorithm development responsibilities:
    medium risk (fourth block for potential severity of consequence; first
    block for probability of occurrence).

    GOES-R rebroadcast L-Band dual pole space to ground link:
    medium risk (fourth block for potential severity of consequence; first
    block for probability of occurrence).

    Space to ground coordination:
    medium risk (fourth block for potential severity of consequence; first
    block for probability of occurrence).

    Source: NOAA.

    [End of figure]

    NOAA is working to mitigate the ground system and operations risks that
    it is tracking. For example, for the highest priority risk regarding
    schedule interdependencies, key staff from both the flight and
    operations projects meet weekly in order to identify and synchronize
    project schedules. The project office expects to close this risk in
    Fall 2007.

    Multiple Watchlists Are Not Consistent, Making it Difficult to
    Prioritize and Manage Risks:

    While GOES-R has implemented a risk management process, its multiple
    risk watchlists are not consistent in areas where there are
    interdependencies between the lists, which makes it difficult to
    effectively prioritize and manage risks at the appropriate
    organizational levels. Sound risk management practices call for having
    a consistent prioritization approach and for significant problems to be
    elevated from the component level to the program level. This is because
    an issue affecting a critical component could have severe programmatic
    implications and should be identified, tracked, and overseen at the
    program level. In addition, program executives should be briefed
    regularly on the status of key risks.

    However, on the GOES-R program, the risks identified on the multiple
    risk lists are inconsistent in areas where there are interdependencies
    between the lists. These interdependencies include situations where a
    risk is raised by one project office and affects the other project
    office, but is not identified by the other project office or elevated
    to the program level risk list. They also include situations where a
    risk identified by a project office has programwide implications, but
    is not elevated to the program level risk list. For example, the
    operations project office identified schedule interdependencies between
    the flight and operations project offices as a medium criticality risk,
    but neither the flight project office nor the program identified this
    risk even though it is relevant to both. As another example, the
    operations project office identified the ground procurement schedule as
    a major issue in its briefing to senior management, but this risk was
    not identified on its own or on the programwide risk lists.

    In addition, while the three offices brief senior management about
    their key risks on a monthly basis, selected risks may not be
    accurately depicted in these briefings because of the inconsistencies
    among the risk watchlists. For example, both the flight and operations
    project offices identified technical development issues as minor to
    moderate risk areas, but the program office did not identify this item
    as a risk and, when it briefed senior management, it noted that
    technical development was in good shape. Figure 7 depicts examples of
    inconsistencies among risk lists and briefings to senior management.

    The lack of consistency in managing risks in areas where there are
    interdependencies makes it difficult to ensure that all identified
    risks are appropriately prioritized and managed. This situation hampers
    the program office's ability to identify and mitigate risks early on
    and to anticipate and manage the impact of risks on other areas of the
    program.

    Figure 7: Examples of Inconsistencies among GOES-R Risk Watchlists, as
    of July 2007:

    [See PDF for image]

    Program Office's risk list:
    Risk: Schedule interdependencies between the flight and operations
    segments: not identified as a risk;
    Risk: Ground procurement schedule: not identified as a risk;
    Risk: Technical development issues: not identified as a risk.

    Flight Project Office's risk list:
    Risk: Schedule interdependencies between the flight and operations
    segments: not identified as a risk;
    Risk: Ground procurement schedule: not applicable-is an operations
    project office issue;
    Risk: Technical development issues: 3 technical risks listed as medium
    criticality.

    Operations Project Office's risk list:
    Risk: Schedule interdependencies between the flight and operations
    segments: listed as medium criticality;
    Risk: Ground procurement schedule: not identified as a risk;
    Risk: Technical development issues: 1 technical risk listed as medium
    criticality.

    Briefing to senior executive council:
    Risk: Schedule interdependencies between the flight and operations
    segments: not identified as a risk;
    Risk: Ground procurement schedule: identified as having major issues
    (high risk);
    Risk: Technical development issues: Program Office identified risk area
    as in good shape (low risk);
    * Flight Project identified risk area as having moderate issues (medium
    risk);
    * Operations Project identified risk area as having minor issues
    (medium risk).

    Source: GAO analysis of NASA and NOAA data.

    [End of figure]

    Important GOES-R Management Risks Are Missing from the Program
    Watchlist:

    To be effective, a risk management program should have a comprehensive
    list of risks. However, several key risks that impact the GOES-R
    procurement and merit agency attention are not identified in the
    program's risk lists. These risks include (1) key leadership positions
    that need to be filled, (2) NOAA's limited insight into NASA's
    deliverables, and (3) insufficient management reserves (held by the
    program and a key instrument contractor). At the conclusion of our
    review, program officials stated that they are aware of these issues
    and working to monitor them or address them, as warranted.
    Nevertheless, until these and other programwide risks are identified
    and addressed as part of a comprehensive risk management program, there
    is increased likelihood that issues will be overlooked that could
    affect the acquisition of the GOES-R system.

    Key GOES-R Leadership Positions Need to be Filled:

    The two senior GOES-R program positions--the system program director
    and deputy system program director--are currently filled by NASA and
    NOAA personnel in an acting capacity until they can be permanently
    filled by NOAA. In addition, the acting system program director is not
    able to work full time in this role because she is also on a special
    assignment as the NESDIS Deputy Assistant Administrator for Systems.
    NOAA reported that it plans to fill the deputy system program director
    role in the near future, but noted that it could take more than 6
    months to fill the system program director role. Given the approach of
    the development phase of the GOES-R acquisition and the competing
    priorities of the acting system program director, it is especially
    important that these key leadership positions be filled quickly. At the
    conclusion of our review, agency officials stated that they are aware
    of this issue and working to fill the positions, but they did not
    believe the issue warranted inclusion on the program level risk watch
    list. However, without the senior level attention inherent in a sound
    risk management program, it is not clear that NOAA is sufficiently
    focused on the importance of establishing knowledgeable and committed
    program executives, or in moving quickly to fill these critical
    positions.

    NOAA's Insight into NASA's Program Elements Is Limited:

    NOAA's March 2007 decision to adopt an acquisition management approach
    similar to prior GOES procurements could make the agency vulnerable to
    repeating some of the problems experienced in the past. In particular,
    our work on the GOES I-M series found that NOAA did not have the
    ability to make quick decisions on problems because portions of the
    procurement were managed by NASA.[Footnote 10] In fact, NOAA officials
    originally intended to depart from this approach as a lesson they
    learned from the GOES I-M acquisition, because it limited the agency's
    insight and management involvement in the procurement of major elements
    of the system.

    The established NOAA/NASA interagency agreements require NASA to submit
    monthly contractor cost performance reports to NOAA and to alert NOAA
    should cost and schedule performance drop below certain thresholds.
    NASA is currently submitting the required reports and has alerted NOAA
    on major cost and schedule changes. However, these interagency
    agreements do not contain provisions that enable NOAA to ensure that
    the data and reports are reliable and that they accurately depict
    contractor performance. To do so would entail NOAA having the ability
    and means to question and validate data, such as by having direct
    access to the contractor.

    NASA and NOAA officials reported that the two agencies are working
    together with an unparalleled level of transparency and noted that NOAA
    program staff have access to contractor data and can bring any
    questions with the data to the relevant NASA staff. However, they
    acknowledged that this process is not documented and were not able to
    demonstrate that NOAA staff had questioned contract data and that NASA
    had facilitated obtaining answers to the questions. By not identifying
    and mitigating this risk on its program risk list, NOAA increases the
    likelihood that the GOES-R program will repeat the management and
    contractor shortfalls that plagued past GOES procurements.

    Recent Changes on a Key Instrument Have Reduced Program Management
    Reserve Funds and Limited Contractor Reserve Funds Leave GOES-R
    Vulnerable to Future Cost Increases:

    A recent modification to the critical ABI instrument contract increased
    its cost, thereby reducing the amount of management reserve funds held
    by the program office for unexpected expenses. In September 2006, we
    reported that ABI was experiencing technical challenges, resulting in
    cost and schedule overruns. Since then, the contractor continued
    missing cost and schedule targets--a trend that continued until
    February 2007. At that time, NASA modified the contract to implement a
    revised baseline cost and schedule. The added cost of this modification
    was funded using management reserve funds held by the GOES-R program
    office.[Footnote 11] As a result, the amount of reserve held by the
    program office dropped below 25 percent--a level that NOAA reported it
    intended to establish as a lesson learned from other satellite
    acquisitions. As of July 2007, the program's reserve level was at about
    15 percent. Program officials stated that their revised goal is to
    maintain between 10 and 15 percent in reserve at the program level.
    While maintaining a 10 to 15 percent management reserve is on par with
    other major satellite acquisitions, the depletion of management
    reserves this early in the GOES-R acquisition raises concerns that
    there will be insufficient reserves during the challenging development,
    integration, and testing phases to come.

    In addition, the contractor for the ABI instrument has a very low level
    of reserve funding for unexpected costs, which means that any
    unexpected problems will likely lead to cost growth on the overall GOES-
    R program. As of May 2007, the contractor was holding less than 1
    percent of funding in reserve to cover unexpected costs associated with
    the 40 percent of work left to be completed. As such, there is a risk
    that the new baseline could fail due to inadequate reserves to finish
    the program. This would likely have a diminishing effect on the reserve
    held by the GOES-R flight project and the program office to cover the
    costs of a second revised baseline plan. Our prior work on system
    acquisitions has shown inadequate reserves to be an indicator of poor
    management performance that could lead to cost overruns.[Footnote 12]
    Considering that GOES-R has not yet entered the development and
    production phase, it will be critical for NOAA's senior executive
    management to aggressively manage this risk. By not identifying,
    mitigating, and tracking this risk in a programwide risk list, the GOES-
    R program runs an increased risk that unanticipated issues on the ABI
    instrument will lead to programwide cost overruns and schedule delays.

    Conclusions:

    Over the last year, NOAA has completed preliminary design studies of
    its GOES-R system and has made a number of key changes to the program.
    Current program plans call for a two-satellite program--estimated to
    cost about $7 billion--with launch of the first satellite in December
    2014. However, independent studies show that the program's cost could
    increase by about $2 billion more and the first launch could be delayed
    by at least 2 years.

    NOAA has taken steps to identify and address key risks but more could
    be done to effectively manage risks from a programwide perspective. In
    particular, the program has multiple risk watchlists that are not
    consistent in areas where there are interdependencies and key risks
    have not been elevated for programwide attention. Also, several risks
    that warrant NOAA's attention have not been placed on any watchlist.
    Specifically, the top two leadership positions are only temporarily
    filled; NOAA does not have the ability and means to obtain insight into
    NASA contracts in order to validate contractor performance data; and
    insufficient management reserves to handle unexpected problems on a
    critical instrument and at the program level are likely to affect
    overall program costs when any unexpected problems arise. Until NOAA
    manages and addresses a comprehensive set of program risks, the
    agency's ability to effectively manage the GOES-R acquisition will be
    significantly weakened and could lead to substantial program overruns
    and delays.

    Recommendations for Executive Action:

    To improve NOAA's ability to effectively manage the procurement of the
    GOES-R system, we recommend that the Secretary of Commerce direct the
    Undersecretary of Commerce for Oceans and Atmosphere to take the
    following two actions:

    * Ensure that the GOES-R program office manages, mitigates, and reports
    on risks using a program-level risk list that is reconciled with and
    includes risks from its flight and operations project offices that
    could impact the overall program.

    * Include the following risks on the programwide risk list, develop
    plans to mitigate them, and report to senior executives on progress in
    mitigating them:

    - unfilled or temporary GOES-R program leadership positions;

    - insufficient program insight on NASA contract performance, and;

    - insufficient management reserve on the critical Advanced Baseline
    Imager instrument and at the GOES-R program level.

    Agency Comments and Our Evaluation:

    The Department of Commerce provided written comments on a draft of this
    report (see app. II). In the department's response, the Secretary of
    Commerce agreed with our recommendations to use a program level risk
    list and to add selected risks to its list. The department reported
    that NOAA has established a consolidated programwide risk list that is
    to be used to evaluate risks during monthly internal and external
    reviews. Further, NOAA acknowledges the risks associated with unfilled
    leadership positions and insufficient management reserves and is
    working to mitigate these risks. However, the department disagreed with
    our recommendation to manage and mitigate the risk that NOAA has
    insufficient insight into NASA's contracts. The department cited an
    unparalleled level of transparency between the two agencies and listed
    multiple regular meetings that the two agencies hold to ensure close
    coordination. While an improved working relationship between the two
    agencies is critical, NOAA has not provided any evidence that it has
    been able to effectively question and validate data on NASA's
    contractor performance. Given the past problems that NOAA experienced
    in obtaining insight into NASA's contracts and the importance of this
    interagency relationship to the success of the GOES-R program, we
    believe that this issue should be managed and monitored as a risk.

    NOAA also requested that we acknowledge its effort to reconcile its
    program estimate with the independent estimate and reflect a 20 percent
    possibility that the program could cost $1 billion more than the
    current estimate of $7 billion, rather than $2 billion more. We
    acknowledge this in our report, however, the reconciliation effort is
    not complete and NOAA did not provide us with a reconciled estimate.

    In addition, NOAA provided detailed comments on its cost estimates,
    which are bulleted below and include our response.

    * NOAA asserts that the independent cost estimate of $9.3 billion at
    the 80 percent level could only be realized in an extreme situation;
    and that based on its own cost model, there is a 20 percent probability
    this extreme situation will occur. The independent estimator's $9.3
    billion figure is not an extreme situation. Rather, it is at the 80
    percent level, meaning that there is a 20 percent chance that the cost
    could be even higher.

    * NOAA expressed concern with our use of preliminary independent cost
    estimates and schedule projections that are more conservative than the
    current independent analyses indicate. However, NOAA did not provide us
    its current independent analyses. Further, these current independent
    analyses were developed through NOAA's negotiations with the
    independent estimator to modify selected assumptions. We believe that
    such negotiations could reduce the independence of the estimate and, in
    turn, diminish its value as a conservative view by experts outside the
    program office.

    * NOAA commented that its reconciled cost estimate is within 4 percent
    of the independent estimate's mean (50 percent) value, and that this
    difference is well within a standard margin of error for cost estimates
    at this phase of the program. While we are not prescribing a specific
    level of risk that NOAA should assume, it should be noted that at the
    50 percent confidence level, there is a 50 percent chance of being
    under or over budget. Throughout our report, we have chosen to report
    the independent estimate at the 80 percent confidence level.

    * NOAA also commented that the schedule difference between the
    independent estimate and the program estimate is currently 11 months
    and that the program estimate is considered reasonable by the
    independent estimator. However, the agency compared its projected
    launch date (December 2014) to the independent estimator's projected
    launch at 50 percent confidence (October 2015), instead of at its 80
    percent confidence (March 2017). As such, our report accurately depicts
    the results of this analysis at the 80 percent confidence level.

    In the department's comments, NOAA also disagreed that the ABI
    instrument contractor's low level of management reserve would likely
    lead to cost growth on the overall GOES-R program. In particular, it
    noted that the flight project office is expected to maintain a reserve
    of 20 percent of the "cost to go" (the remaining funds) of the overall
    space segment, which includes ABI. NOAA stated that, as of August 2007,
    this reserve was at 20 percent. However, with the contractor's
    management reserve at 1 percent and 40 percent of work remaining, we
    continue to believe that ABI's situation will likely result in the
    early depletion of reserves for the overall program. Furthermore, since
    ABI is the first major initiative in this program and much remains to
    be done, it is important to ensure that sufficient management reserve
    is conserved for other key components as the program enters the
    development phase.

    The Department also suggested technical comments which we incorporated
    as appropriate.

    We will be sending copies of this report to interested congressional
    committees, the Secretary of Commerce, the Administrator of NASA, the
    Director of the Office of Management and Budget, and other interested
    parties. In addition, this report will be available at no charge on our
    Web site at [hyperlink, http://www.gao.gov].

    If you have any questions on matters discussed in this report, please
    contact me at (202) 512-9286 or by e-mail at pownerd@gao.gov. Contact
    points for our Offices of Congressional Relations and Public Affairs
    may be found on the last page of this report. GAO staff who made major
    contributions to this report are listed in appendix III.

    Signed by:

    David A. Powner:
    Director:
    Information Technology Management Issues:

    [End of section]

    Appendix I: Objectives, Scope, and Methodology:

    Our objectives were to assess the status and revised plans for the
    Geostationary Operational Environmental Satellites-R series (GOES-R)
    procurement and to evaluate whether the National Oceanic and
    Atmospheric Administration (NOAA) is adequately mitigating key
    technical and programmatic risks facing the GOES-R program.

    To assess the status and the revised plans for the GOES-R procurement,
    we evaluated various programmatic and technical plans, management
    reports, and other program documentation. We reviewed the acquisition
    strategy, cost estimates performed by the program office and an
    independent estimator, planned system requirements, and monthly
    executive-level management briefings. We also analyzed earned value
    management data obtained from a key instrument contractor to assess
    performance against cost and schedule targets. Furthermore, we
    interviewed agency officials from NOAA, the National Aeronautics and
    Space Administration (NASA), and ITT Corporation to determine key dates
    for future GOES-R acquisition efforts and milestones and progress made
    on current instrument development efforts.

    To evaluate whether NOAA is adequately mitigating key technical and
    programmatic risks facing the GOES-R program, we analyzed relevant cost
    reports and risk management plans to identify key risks that could
    negatively affect the program's ability to acquire the GOES-R system
    and the mitigation plans for these risks. We also met with technical
    experts in system acquisitions and relied on our past body of work on
    other major satellite acquisitions (such as the previous GOES series
    and the National Polar-orbiting Operational Environmental Satellite
    System programs) to identify other key risks. We applied lessons
    learned and also interviewed agency officials to evaluate the adequacy
    of NOAA's mitigation efforts.

    We conducted our work at NOAA and NASA offices in the Washington, D.C.,
    metropolitan area and at ITT Corporation (the contractor for the most
    critical GOES-R instrument) in Fort Wayne, Indiana. We performed our
    work from April 2007 to September 2007, in accordance with generally
    accepted government auditing standards.

    [End of section]

    Appendix II: Comments from the Department of Commerce:

    The Secretary Of Commerce:
    Washington, D.C. 20230:

    October 4, 2007:

    Mr. David A. Powner:
    Director:
    Information Technology Management Issues:
    U.S. Government Accountability Office:
    441 G Street, NW:
    Washington, D.C. 20548:

    Dear Mr. Powner:

    Thank you for the opportunity to review and comment on the Government
    Accountability Office's draft report entitled Geostationary Operational
    Environmental Satellites: Progress Has Been Made, but Improvements Are
    Needed to Effectively Manage Risks (GAO-08-18). On behalf of the
    Department of Commerce, I enclose the National Oceanic and Atmospheric
    Administration's comments to the draft report.

    Signed by:

    Carlos M. Gutierrez:

    Enclosure

    [End of letter]

    Enclosure:

    Department of Commerce:
    National Oceanic and Atmospheric Administration:
    Comments on the Draft GAO Report Entitled "Geostationary Operational
    Environmental Satellites: Progress Has Been Made, but Improvements Are
    Needed to Effectively Manage Risks"
    (GAO-08-18/October 2007):

    General Comments:

    The Department of Commerce's National Oceanic and Atmospheric
    Administration (NOAA) appreciates the opportunity to review this report
    on Geostationary Operational Environmental Satellites, specifically the
    R-series (GOES-R). The report does a thorough job assessing the overall
    status of the GOES-R program. However, NOAA is concerned with GAO's use
    of preliminary independent cost estimates and schedule projections that
    are more conservative than the current independent analyses indicate.
    NOAA has been actively reconciling its Program Office Estimate (POE)
    with the Independent Cost Estimate (ICE) to ensure both are using
    similar assumptions in their projections. One significant assumption
    involves estimated future inflation rates. By using standard NASA and
    DoD inflation indices, the ICE reduces to $600 million but still
    regards higher inflation as a potential risk. In addition, the GOES-R
    Program Office has added management reserve to its POE for space
    segment and operations activities. As a result, the independent cost
    estimator has noted (1) the reconciled program office estimate is
    within 4 percent of the independent estimate's mean value, which is the
    expected value of the cost projection and (2) this difference is well
    within a standard margin of error for cost estimates at this phase of
    the program.

    The most conservative estimates at the 80 percent confidence intervals
    bring the POE within 12 percent of the ICE, or $1.032 billion below the
    ICE. In addition, the schedule delta between the ICE and the POE is
    currently 11 months and considered by the independent estimator to be
    reasonable and within the ability of schedule models to predict.
    Therefore, NOAA requests that the GAO acknowledge NOAA's reconciliation
    efforts and revise its cost and schedule statements in the report to
    reflect the 20 percent possibility that in the extremes, the program
    could cost $1 billion more rather than $2 billion, and that the first
    satellite launch could be delayed by one year rather than two.

    NOAA Response to GAO Recommendations

    The draft GAO report states, "To improve NOAA's ability to effectively
    manage the procurement of the GOES-R system, we recommend that the
    Secretary of Commerce direct the Under Secretary of Commerce for Oceans
    and Atmosphere to take the following two actions."

    Recommendation 1: "Ensure that the GOES-R program office manages,
    mitigates, and reports on risks using a program-level risk list that is
    reconciled with and includes risks from its flight and operational
    project offices that could impact the overall program."

    NOAA Response: NOAA agrees with this recommendation. In order to
    manage, mitigate and report on risks, the GOES-R Program Office will
    maintain a consolidated program-wide risk list and will use this list
    in internal and external reviews of the program.

    NOAA has taken the following steps to address this recommendation:
    * The System Engineering and Integration Division of the GOES-R Program
    Office maintains the program-wide risk list.

    * The GOES-R System Program Director (SPD) reviews all risks during
    monthly reviews of the flight and ground projects.

    * The GOES-R SPD briefs the NOAA Program Management Council (PMC)
    monthly on risks that warrant senior level review and guidance.

    Recommendation 2: "Include the following risks on the programwide risk
    list, develop plans to mitigate them, and report to the senior
    executives on progress in mitigating them:

    * unfilled or temporary GOES-R program leadership positions;
    * insufficient program insight on National Aeronautics and Space
    Administration (NASA) contract performance, and;
    * insufficient management reserve on the critical Advanced Baseline
    Imager instrument and at the GOES-R program level."

    NOAA Response: NOAA partially agrees with this recommendation. We agree
    that the unfilled leadership positions and the insufficiency of
    management reserves are significant risks. However, NOAA does not
    concur that it has insufficient program oversight on NASA's contract
    performance.

    First, NOAA is aggressively seeking to fill the three top GOES-R
    leadership positions.

    * The former GOES-R SPD announced on July 6, 2007, that he would be
    retiring. NOAA's National Environmental Satellite, Data, and
    Information Service immediately appointed the Deputy Assistant
    Administrator for Systems, an individual with extensive GOES-R
    experience, as Acting SPD and began the recruitment process for a new
    SPD. NOAA advertised this position beginning on August 1, 2007, with
    closure on September 17, 2007, and plans to select the new SPD within
    weeks.

    * The Deputy SPD position became vacant in April 2007. NOAA immediately
    appointed a senior headquarters staff advisor, with extensive GOES-R
    experience, as Acting Deputy SPD. NOAA advertised the position in May
    and June 2007. No selection was made; therefore, the position has been
    re-advertised.

    * The Assistant SPD position became vacant in May 2007. Following a
    competitive selection process, the new Assistant SPD reported on
    September 4, 2007.

    The tracking and reporting of all GOES-R personnel actions is a major
    focus area during the monthly program reviews by the NOAA Program
    Management Council. The GOES-R program tracks personnel actions through
    all steps of the recruitment process: initiation of the recruitment
    package through the vacancy posting, certificate issuance, job
    interviews, and the employee reporting on-board.

    Second, NOAA agrees that management reserves should be a watch item on
    the program-wide risk list. The GOES-R program has adopted the strategy
    below for managing its reserves. This strategy has been successful for
    other programs.

    * In accordance with standard NASA practice, the GOES-R program
    maintains reserves at the program and project levels � not at the
    individual instrument level. Each project has its own reserve funds and
    the SPD hold additional reserves. There is no management reserve
    funding specifically assigned to the Advanced Baseline Imager (ABI).
    The government-held ABI management reserve is contained within the
    overall Flight Project and GOES-R program reserves.

    * The GOES-R Flight Project Manager's strategy for instrument
    development is to aggressively manage instrument costs and minimize the
    allocation of reserves to the instrument contractors until the need
    arises. This philosophy calls for tight management and oversight by the
    Flight Project Manager with re-baselining as necessary to allocate
    management reserves to the contracts. This process ensures the project
    is actively involved in cost oversight and contractors do not expend
    management reserves without the necessary government oversight. When
    the instrument contractors experience problems causing their costs to
    exceed their contract values, the GOES-R program has budgeted adequate
    reserves to meet the development challenges.

    Given this management approach, NOAA disagrees with GAO's finding that
    "the contractor for the ABI instrument has a very low level of reserve
    funding for unexpected costs, which means that any unexpected problems
    will likely lead to cost growth on the overall GOES-R program." The
    reserve posture of ABI has to be evaluated in its larger context: the
    Flight Project is expected to maintain a 20 percent reserve on the
    "cost to go" of the overall GOES-R space segment, which includes ABI,
    and to report variances against that reserve. As of August 2007, the
    project reserve was at 20 percent.

    Third, NOAA does not agree with the statement that "insufficient
    program insight on NASA contract performance" exists.

    * For previous GOES programs, NOAA maintained a small liaison office,
    but did not engage in the day-to-day oversight of NASA contract
    management. NOAA learned some useful lessons from not having sufficient
    insight into the performance of NASA's contractors. Unlike those
    earlier management arrangements, the GOES-R program is now managed by a
    joint NOAA-NASA Program Office with NOAA and NASA personnel working
    side-by-side at all levels of the organization, giving NOAA
    unprecedented insight into NASA's contracts.

    * The NASA-led Flight Project, which is responsible for the spacecraft
    and instrument contracts, undergoes four formal reviews each month, all
    of which address contractor performance:

    1. NOAA's Program Status Review (PSR) � The SPD conducts an in-depth
    PSR, which is open to all GOES-R program and project staff. The PSR
    objectives include a review of all spacecraft and instrument risks,
    issues, status, resources, and mission assurance items.

    2. NASA's Goddard Space Flight Center (GSFC) Program and Projects
    Directorate Monthly Status Review (MSR) � The SPD or Deputy SPD attends
    these meetings.

    3. NASA's GSFC PMC MSR � The SPD is a member of the GSFC PMC for the
    GOES-R portion of the meeting.

    4. NOAA's PMC � The SPD, the Flight Project Manager, and the Ground
    Project Manager each present information to NOAA leadership on all GOES-
    R program contracts, their financial performance, risks and issues.
    Senior NASA officials participate in the NOAA PMC to provide immediate
    responses to any concerns raised by the NOAA leadership.

    * In addition to the formal reviews, there are regular and frequent
    interactions between the co-located NOAA-led Program Office and the
    NASA-led Flight Project, including weekly senior management team
    meetings and weekly risk meetings. The GOES-R Budget Officer, a NOAA
    official, and his staff provide regular oversight of Earned Value
    Management on the NASA acquisition and operation contracts. Ad hoc
    meetings on numerous topics are facilitated by the two staffs being co-
    located in the same suite of offices at GSFC.

    There is unprecedented transparency between NOAA and NASA for GOES-R,
    as documented in the NOAA-NASA Memorandum of Understanding dated June
    15, 2007. Daily interactions between the NOAA and NASA staffs occur
    with a free exchange of information enabling the NOAA-led Program
    Office to carry out its management and oversight responsibilities.

    [End of section]

    Appendix III: GAO Contact and Staff Acknowledgments:

    GAO Contact:

    David A. Powner, (202) 512-9286 or pownerd@gao.gov:

    Staff Acknowledgments:

    In addition to the contact named above, Colleen Phillips (Assistant
    Director), Carol Cha, Neil Doherty, Nancy Glover, Mustafa Hassan, Karen
    Richey, and Teresa Smith made key contributions to this report.

    (310840):

    [End of section]

    Footnotes:

    [1] 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.

    [2] Sounding data is information on the vertical structure of
    temperature and water vapor.

    [3] The instruments were based on 1980s technology.

    [4] GAO, Geostationary Operational Environmental Satellites: Additional
    Action Needed to Incorporate Lessons Learned from Other Satellite
    Programs, GAO-06-1129T (Washington, D.C.: Sept. 29, 2006) and
    Geostationary Operational Environmental Satellites: Steps Remain in
    Incorporating Lessons Learned from Other Satellite Programs, GAO-06-993
    (Washington, D.C.: Sept. 6, 2006).

    [5] 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.

    [6] These were called Program Definition and Risk Reduction contracts.

    [7] NASA has not yet issued a development contract for the
    Geostationary Lightning Mapper. This contract is expected to be awarded
    at the end of October 2007.

    [8] This independent review team, comprised of former senior industry
    and government space acquisition experts, was hired by NOAA to assess
    the adequacy of the GOES-R program's management approach, acquisition
    strategy, and resource availability, among other things.

    [9] NASA's GOES-R flight project office is responsible for the
    spacecraft, instruments, and launch services. NOAA's GOES-R operations
    project office is responsible for the ground elements and on-orbit
    operations of the satellites.

    [10] GAO-06-993.

    [11] This reserve is intended to cover expected costs above those
    projected by the contractor and unexpected costs in solving problems
    during a system development program.

    [12] GAO-06-993.

    [End of section]

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