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

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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 [email protected]. 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 ï¿½ 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) ï¿½ 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) ï¿½ The SPD or Deputy SPD attends 
these meetings. 

3. NASA's GSFC PMC MSR ï¿½ The SPD is a member of the GSFC PMC for the
GOES-R portion of the meeting. 

4. NOAA's PMC ï¿½ 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 [email protected]: 

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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