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entitled 'Polar-Orbiting Operational Environmental Satellites: 
Restructuring Is Under Way, but Technical Challenges and Risks Remain' 
which was released on June 8, 2007. 

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Report to Congressional Requesters: 

United States Government Accountability Office: 

GAO: 

April 2007: 

Polar-Orbiting Operational Environmental Satellites: 

Restructuring Is Under Way, but Technical Challenges and Risks Remain: 

GAO-07-498: 

GAO Highlights: 

Highlights of GAO-07-498, a report to congressional requesters 

Why GAO Did This Study: 

The National Polar-orbiting Operational Environmental Satellite System 
(NPOESS) is a tri-agency acquisition—managed by the Departments of 
Commerce and Defense and the National Aeronautics and Space 
Administration—which experienced escalating costs, schedule delays, and 
technical difficulties. These factors led to a June 2006 decision to 
restructure the program thereby decreasing the program’s complexity, 
increasing its estimated cost to $12.5 billion, and delaying the first 
two satellites by 3 to 5 years. GAO was asked to (1) assess progress in 
restructuring the acquisition, (2) evaluate progress in establishing an 
effective management structure, (3) assess the reliability of the cost 
and schedule estimate, and (4) identify the status and key risks facing 
the program’s major segments. To do so, GAO analyzed program and 
contractor data, attended program reviews, and interviewed program 
officials. 

What GAO Found: 

The NPOESS program office has made progress in restructuring the 
acquisition by establishing and implementing interim program plans 
guiding the contractors’ work activities in 2006 and 2007; however, 
important tasks leading up to finalizing contract changes remain to be 
completed. Executive approvals of key acquisition documents are about 6 
months late—due in part to the complexity of navigating three agencies’ 
approval processes. Delays in finalizing these documents could hinder 
plans to complete contract negotiations by July 2007 and could keep the 
program from moving forward in fiscal year 2008 with a new program 
baseline. 

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

The methodology supporting a June 2006 independent cost estimate with 
the expectation of initial satellite launch in January 2013 was 
reliable, but recent events could increase program costs and delay 
schedules. Specifically, the program continues to experience technical 
problems on key sensors and program costs will likely be adjusted 
during upcoming negotiations on contract changes. A new baseline cost 
and schedule reflecting these factors is expected by July 2007. 

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

Table: Key NPOESS Components and Corresponding Risk Levels: 

NPOESS component: Visible/infrared imager radiometer suite; Risk Level: 
High. 

NPOESS component: Cross-track infrared sounder; Risk Level: High. 

NPOESS component: Ozone mapper/profiler suite; Risk Level: Moderate. 

NPOESS component: Advanced technology microwave sounder; Risk Level: 
Low. 

NPOESS component: Command, control, and communications system; Risk 
Level: Low. 

NPOESS component: Interface data processing system; Risk Level: 
Moderate. 

Source: GAO analysis of NPOESS Integrated Program Office data. 

[End of table] 

What GAO Recommends: 

GAO recommends that the appropriate executives approve key acquisition 
documents, the Secretary of Defense delay reassigning the Program 
Executive, and the Secretary of Commerce ensure that program 
authorities identify and address staffing needs. Agency officials 
agreed with all of the recommendations except delaying the Program 
Executive’s reassignment. GAO believes that proceeding with this 
reassignment would increase program risks. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-498]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact David A. Powner, (202) 
512-9286, and pownerd@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

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

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

Methodology Supporting the June 2006 Cost and Schedule Estimate Was 
Reliable, but Recent Events Could Increase Program Costs: 

Major Program Segments Are Under Development, but Significant Risks 
Remain: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Overview of Satellite Data Processing Algorithms and the 
Calibration and Validation Process: 

Appendix III: Comments from the Department of Commerce: 

Appendix IV: Comments from the Department of Defense: 

Appendix V: Comments from the National Aeronautics and Space 
Administration: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Tables: 

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

Table 2: Summary of Changes to the NPOESS Program: 

Table 3: Key Program Milestones: 

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

Table 5: Planned Configuration of Sensors on NPP and NPOESS Satellites: 

Table 6: Elements of a Sound Cost Estimating Methodology: 

Table 7: Status of Selected Components of the Space Segment, as of 
April 2007: 

Table 8: Status of Ground Segment Components: 

Figures: 

Figure 1: Configuration of Operational Polar Satellites: 

Figure 2: A Generic Data Relay Pattern for Polar Meteorological 
Satellite Systems: 

Figure 3: Satellite Data Processing Steps: 

Figure 4: Analysis of Ozone Concentration from POES Satellite Data: 

Figure 5: POES Image of Hurricane Katrina in 2005: 

Figure 6: Organizations Coordinated by the NPOESS Integrated Program 
Office: 

Figure 7: Progress on Planned Milestones in Fiscal Year 2006, as of 
October 1, 2006: 

Figure 8: Progress on Planned Milestones in Fiscal Year 2007, as of 
January 20, 2007: 

Figure 9: Overview of New Management Structure: 

Figure 10: Cumulative Cost and Schedule Variance for the NPOESS Space 
Segment over a 13-Month Period: 

Figure 11: Cumulative Cost and Schedule Variance for the NPOESS IDPS 
Development over a 13-Month Period: 

Figure 12: Cumulative Cost and Schedule Variance for the NPOESS 
Command, Control, and Communications Segment over a 13-Month Period: 

Figure 13: Satellite Data Processing Algorithms: 

Figure 14: Describes the High-Level Calibration and Validation Process: 

Abbreviations: 

ATMS: advanced technology microwave sounder: 

CMIS: conical-scanned microwave imager/sounder: 

CrIS: cross-track infrared sounder: 

DMSP: Defense Meteorological Satellite Program: 

DOD: Department of Defense: 

EDR: environmental data record: 

IDPS: interface data processing system: 

NASA: National Aeronautics and Space Administration: 

NESDIS: National Environmental Satellite Data and Information Service: 

NOAA: National Oceanic and Atmospheric Administration: 

NPOESS: National Polar-orbiting Operational Environmental Satellite 
System: 

NPP: NPOESS Preparatory Project: 

POES: Polar-orbiting Operational Environmental Satellites: 

OMPS: ozone mapper/profiler suite: 

VIIRS: visible/infrared imager radiometer suite: 

United States Government Accountability Office: 
Washington, DC 20548: 

April 27, 2007: 

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

The Honorable David Wu: 
House of Representatives: 

The Honorable Vernon J. Ehlers: 
House of Representatives: 

The planned National Polar-orbiting Operational Environmental Satellite 
System (NPOESS) program is expected to be a state-of-the-art, 
environment-monitoring satellite system that will replace two existing 
polar-orbiting environmental satellite systems. Polar-orbiting 
satellites provide data and imagery that are used by weather 
forecasters, climatologists, and the military to map and monitor 
changes in weather, climate, the oceans, and the environment. The 
NPOESS program is considered critical to the United States' ability to 
maintain the continuity of data required for weather forecasting 
(including severe weather events such as hurricanes) and global climate 
monitoring through the year 2026. 

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

This report responds to your request that we (1) evaluate the NPOESS 
program office's progress in restructuring the acquisition, (2) 
evaluate the program office's progress in establishing an effective 
management structure, (3) assess the reliability of the life cycle cost 
estimate and proposed schedule, and (4) identify the status and key 
risks facing the program's major segments and evaluate the adequacy of 
the program's efforts to mitigate these risks. 

To evaluate the program office's progress in restructuring the 
acquisition, we assessed program documentation, attended management 
status briefings, and interviewed program officials. To determine 
progress in establishing a new management structure, we assessed the 
status of efforts to implement past recommendations regarding the 
management structure and staffing, attended senior-level management 
review meetings, reviewed program documents, and interviewed program 
officials. To assess the cost estimate, we evaluated the methodology 
and assumptions used to develop the estimate and interviewed program 
officials to identify any assumptions that may have changed. To 
determine the status, risk, and risk mitigation efforts for the 
program, we analyzed monthly program management documents and 
interviewed NOAA, NASA, and DOD officials to determine concerns with 
these mitigation efforts. In addition, this report builds on other work 
we have done on environmental satellite programs over the last several 
years.[Footnote 1] 

We conducted our work at the NPOESS Integrated Program Office 
headquarters and at DOD, NOAA, and NASA facilities in the Washington, 
D.C., metropolitan area. We performed our work from July 2006 to April 
2007 in accordance with generally accepted government auditing 
standards. Appendix I contains additional details on our objectives, 
scope, and methodology. 

Results in Brief: 

The NPOESS program office has made progress in restructuring the 
acquisition by establishing and implementing interim program plans 
guiding the contractors' work activities in 2006 and 2007; however, 
important tasks leading up to finalizing contract changes remain to be 
completed. While the program office developed key acquisition 
documents, including a memorandum of agreement on the roles and 
responsibilities of the three agencies, a revised acquisition strategy, 
and a system engineering plan, the responsible executives in the three 
agencies have not yet approved these documents--even though they were 
due by September 1, 2006. Finalizing these documents is essential to 
ensure interagency agreement and will allow the program office to move 
forward in completing other activities related to restructuring the 
program. These activities include conducting an integrated baseline 
review with the contractor to reach agreement on the schedule and work 
activities and finalizing changes to the NPOESS development and 
production contract--thereby allowing the program office to lock down a 
new acquisition baseline cost and schedule. Until the key acquisition 
documents are approved by the appropriate executives in each agency, 
the program faces increased risk that restructuring activities will not 
be completed in time to allow it to move forward in fiscal year 2008 
with a new program baseline in place. This places the NPOESS program at 
risk of continued delays and future cost increases. 

The program office has also made progress in establishing an effective 
management structure by adopting a new organizational framework with 
increased oversight from program executives and by instituting more 
frequent and rigorous program management reviews; however, planned 
changes in executive management will likely increase program risk, and 
the program lacks a process and plan for identifying and filling 
staffing shortages. As a result, the program experienced delays in 
beginning key activities such as cost estimating and contract 
revisions. Until this process is in place and working, the NPOESS 
program faces increased risk of further delays. 

The methodology supporting a June 2006 cost and schedule estimate was 
reliable, but recent events could lead to increased program costs and 
delay schedules. DOD's independent cost estimating group used an 
acceptable methodology in developing a June 2006 cost estimate of $11.5 
billion for the acquisition portion of the restructured program with 
the expectation of initial satellite launch in January 2013. Consistent 
with DOD direction, this estimate did not include roughly $1 billion in 
operations and support costs--bringing the total life cycle cost 
estimate to $12.5 billion. However, the program continues to experience 
technical problems on key sensors, and program costs will likely be 
adjusted during upcoming negotiations on contract changes. The NPOESS 
program office is developing its own cost estimate to further refine 
the one developed in June 2006 to help it negotiate contract changes. A 
new baseline cost and schedule will be established once the contract is 
finalized--an event that the Program Director expects to occur by July 
2007. 

Development and testing of major program segments--including key 
sensors and the ground systems--are under way, but significant risks 
remain. For example, work continues on key sensors, but two sensors-- 
the Visible/Infrared Imager Radiometer Suite and the Cross-track 
Infrared Sounder--continue to experience significant difficulties. 
Specifically, the former encountered three significant problems with 
image quality and reliability during environmental testing of the 
engineering unit, and the latter suffered a major structural failure 
during vibration testing. Additionally, while significant progress has 
been made in reducing delays in the NPOESS data processing system, much 
work remains in refining the algorithms needed to translate sensor 
observations into usable weather products. Given the tight time frames 
for completing key sensors, integrating them with the demonstration 
spacecraft (called the NPOESS Preparatory Project or NPP) and getting 
the ground-based data processing systems developed, tested, and 
deployed, it will be important for the Integrated Program Office, the 
Program Executive Office, and the Executive Committee to continue to 
provide close oversight of milestones and risks. 

We are making recommendations to the Secretaries of Commerce and 
Defense and to the Administrator of NASA to ensure that the appropriate 
executives finalize key acquisition documents by the end of April 2007 
in order to allow the restructuring of the program to proceed. We are 
also making recommendations to the Secretary of Defense to direct the 
Air Force to delay reassigning the recently appointed Program Executive 
Officer until key program risks are resolved. We are also making 
recommendations to the Secretary of Commerce to ensure that NPOESS 
program authorities develop and implement a written process for 
identifying and addressing human capital needs and that they establish 
a plan to immediately fill needed positions. 

The Department of Commerce, DOD, and NASA provided written comments on 
our draft report (see apps. III, IV, and V). All three agencies agreed 
that it was important to finalize key acquisition documents in a timely 
manner, and DOD proposed extending the due dates for the documents to 
July 2, 2007. In addition, the Department of Commerce concurred with 
our recommendation to identify and address human capital needs and 
immediately fill open positions in the NPOESS program office. Commerce 
noted that NOAA was taking actions in both areas. However, DOD did not 
concur with our recommendation to delay reassigning the Program 
Executive Officer, noting that the Program Director responsible for the 
acquisition program would remain in place for 4 years. While it is 
important that the System Program Director remain in place to ensure 
continuity in executing the acquisition, this position does not ensure 
continuity in the important oversight and coordination functions 
provided by the current Program Executive Officer. We remain concerned 
that reassigning the Program Executive at a time when NPOESS is still 
facing critical cost, schedule, and technical challenges will place the 
program at further risk. 

All three agencies also provided technical comments, which we have 
incorporated in this report as appropriate. 

Background: 

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

Unlike geostationary satellites, which maintain a fixed position 
relative to the earth, polar-orbiting satellites constantly circle the 
earth in an almost north-south orbit, providing global coverage of 
conditions that affect the weather and climate. Each satellite makes 
about 14 orbits a day. As the earth rotates beneath it, each satellite 
views the entire earth's surface twice a day. Currently, there are two 
operational POES satellites and two operational DMSP satellites that 
are positioned so that they can observe the earth in early morning, 
midmorning, and early afternoon polar orbits. Together, they ensure 
that, for any region of the earth, the data provided to users are 
generally no more than 6 hours old. Figure 1 illustrates the current 
operational polar satellite configuration. Besides the four operational 
satellites, six older satellites are in orbit that still collect some 
data and are available to provide limited backup to the operational 
satellites should they degrade or fail. In the future, both NOAA and 
the Air Force plan to continue to launch additional POES and DMSP 
satellites every few years, with final launches scheduled for 2009 and 
2012, respectively.[Footnote 2] 

Figure 1: Configuration of Operational Polar Satellites: 

[See PDF for image] 

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

[End of figure] 

Each of the polar satellites carries a suite of sensors designed to 
detect environmental data that are either reflected or emitted from the 
earth, the atmosphere, and space. The satellites broadcast a subset of 
these data in real time to properly equipped field terminals that are 
within a direct line of sight; these field terminals are located at 
universities, on battlefields, or on ships. Additionally, the polar 
satellites store the observed environmental data and then transmit them 
to NOAA and Air Force ground stations when the satellites pass 
overhead. The ground stations then relay the data via communications 
satellites to the appropriate meteorological centers for processing. 

Under a shared processing agreement among four satellite data 
processing centers--NOAA's National Environmental Satellite Data and 
Information Service (NESDIS), the Air Force Weather Agency, the Navy's 
Fleet Numerical Meteorology and Oceanography Center, and the Naval 
Oceanographic Office--different centers are responsible for producing 
and distributing, via a shared network, different environmental data 
sets, specialized weather and oceanographic products, and weather 
prediction model outputs. 

Each of the four processing centers is also responsible for 
distributing the data to its respective users. For the DOD centers, the 
users include regional meteorology and oceanography centers, as well as 
meteorology and oceanography staff on military bases, the Naval Fleet, 
and mobile field sites. NESDIS forwards the data to NOAA's National 
Weather Service for distribution and use by government and commercial 
forecasters. The processing centers also use the Internet to distribute 
data to the general public. NESDIS is responsible for the long-term 
archiving of data and derived products from POES and DMSP. Figure 2 
depicts a generic data relay pattern from the polar-orbiting satellites 
to the data processing centers and field terminals. 

Figure 2: A Generic Data Relay Pattern for Polar Meteorological 
Satellite Systems: 

[See PDF for image] 

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

[End of figure] 

Polar Satellite Data and Products: 

Polar satellites gather a broad range of data that are transformed into 
a variety of products. Satellite sensors observe different bands of 
radiation wavelengths, called channels, which are used for remotely 
determining information about the earth's atmosphere, land surface, 
oceans, and the space environment. When first received, satellite data 
are considered raw data. To make them usable, the processing centers 
format the data so that they are time-sequenced and include earth 
location and calibration information. After formatting, these data are 
called raw data records. The centers further process these raw data 
records into channel-specific data sets, called sensor data records and 
temperature data records. These data records are then used to derive 
weather and climate products called environmental data records (EDR). 
EDRs include a wide range of atmospheric products detailing cloud 
coverage, temperature, humidity, and ozone distribution; land surface 
products showing snow cover, vegetation, and land use; ocean products 
depicting sea surface temperatures, sea ice, and wave height; and 
characterizations of the space environment. Combinations of these data 
records (raw, sensor, temperature, and environmental data records) are 
also used to derive more sophisticated products, including outputs from 
numerical weather models and assessments of climate trends. Figure 3 is 
a simplified depiction of the various stages of satellite data 
processing, and figures 4 and 5 depict examples of EDR weather 
products. 

Figure 3: Satellite Data Processing Steps: 

[See PDF for image] 

Source: GAO analysis of NOAA information. 

[End of figure] 

Figure 4: Analysis of Ozone Concentration from POES Satellite Data: 

[See PDF for image] 

Source: NOAA's National Environmental Satellite Data and Information 
Service. 

[End of figure] 

Figure 5: POES Image of Hurricane Katrina in 2005: 

[See PDF for image] 

Source: NOAA's National Environmental Satellite Data and Information 
Service. 

[End of figure] 

NPOESS Overview: 

With the expectation that combining the POES and DMSP programs would 
reduce duplication and result in sizable cost savings, a May 1994 
Presidential Decision Directive required NOAA and DOD to converge the 
two satellite programs into a single satellite program capable of 
satisfying both civilian and military requirements.[Footnote 3] The 
converged program, NPOESS, is considered critical to the United States' 
ability to maintain the continuity of data required for weather 
forecasting and global climate monitoring through the year 2026. To 
manage this program, DOD, NOAA, and NASA formed the tri-agency 
Integrated Program Office, located within NOAA. 

Within the program office, each agency has the lead on certain 
activities: NOAA has overall program management responsibility for the 
converged system and for satellite operations; DOD has the lead on the 
acquisition; and NASA has primary responsibility for facilitating the 
development and incorporation of new technologies into the converged 
system. NOAA and DOD share the costs of funding NPOESS, while NASA 
funds specific technology projects and studies. Figure 6 depicts the 
organizations that make up the NPOESS program office and lists their 
responsibilities. 

Figure 6: Organizations Coordinated by the NPOESS Integrated Program 
Office: 

[See PDF for image] 

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

[End of figure] 

The NPOESS program office is overseen by an Executive Committee, which 
is made up of the Administrators of NOAA and NASA and the 
Undersecretary of the Air Force. 

NPOESS Acquisition Strategy: 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Instrument: Total solar irradiance sensor; 
Description: Monitors and captures total and spectral solar irradiance 
data. 

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

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

[End of table] 

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

When the NPOESS development contract was awarded, the schedule for 
launching the satellites was driven by a requirement that the 
satellites be available to back up the final POES and DMSP satellites 
should anything go wrong during the planned launches of these 
satellites. In general, satellite experts anticipate that roughly 1 out 
of every 10 satellites will fail either during launch or during early 
operations after launch. 

Early program milestones included (1) launching NPP by May 2006, (2) 
having the first NPOESS satellite available to back up the final POES 
satellite launch in March 2008, and (3) having the second NPOESS 
satellite available to back up the final DMSP satellite launch in 
October 2009. If the NPOESS satellites were not needed to back up the 
final predecessor satellites, their anticipated launch dates would have 
been April 2009 and June 2011, respectively. 

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

Over the last few years, NPOESS has experienced continued cost 
increases and schedule delays, requiring difficult decisions to be made 
about the program's direction and capabilities. In 2003, we reported 
that changes in the NPOESS funding stream caused a delay in the 
program's schedule.[Footnote 4] Specifically, in late 2002, DOD shifted 
the expected launch date for its final DMSP satellite from 2009 to 
2010. As a result, the department reduced funding for NPOESS by about 
$65 million between fiscal years 2004 and 2007. According to program 
officials, because NOAA was required to provide the same level of 
funding that DOD provides, this change triggered a corresponding 
reduction in funding by NOAA for those years. As a result of the 
reduced funding, program officials were forced to make difficult 
decisions about what to focus on first. The program office decided to 
keep NPP as close to its original schedule as possible because of its 
importance to the eventual NPOESS development and to shift some of the 
program's deliverables to later years. This shift affected the NPOESS 
deployment schedule. To plan for this shift, the program office 
developed a new program cost and schedule baseline. 

After this new baseline was completed in 2004, we reported that the 
program office increased the NPOESS cost estimate from about $7 billion 
to $8.1 billion; delayed key milestones, including the planned launch 
of the first NPOESS satellite--which was delayed by 7 months; and 
extended the life of the program from 2018 to 2020.[Footnote 5] The 
cost increases reflected changes to the NPOESS contract, as well as 
increased program management funds. According to the program office, 
contract changes included extension of the development schedule, 
increased sensor costs, and additional funds needed for mitigating 
risks. Increased program management funds were added for noncontract 
costs and management reserves. 

At that time, we also noted that other factors could further affect the 
revised cost and schedule estimates. Specifically, the contractor was 
not meeting expected cost and schedule targets on the new baseline 
because of technical issues in the development of key sensors, 
including the critical VIIRS sensor. Based on its performance through 
May 2004, we estimated that the contractor would most likely overrun 
its contract at completion in September 2011 by $500 million--thereby 
increasing the projected life cycle cost to $8.6 billion. In addition, 
we reported that risks associated with the development of the critical 
sensors, integrated data processing system, and algorithms, among other 
things, could contribute to further cost increases and schedule slips-
-and we noted that continued oversight was critical. The program 
office's baseline cost estimate was subsequently adjusted to $8.4 
billion. 

In mid-November 2005, we reported that NPOESS continued to experience 
problems in the development of a key sensor, resulting in schedule 
delays and anticipated cost increases.[Footnote 6] At that time, we 
projected that the program's cost estimate had grown to about $10 
billion based on contractor cost and schedule data. We reported that 
the program's issues were due, in part, to problems at multiple levels 
of management--including subcontractor, contractor, program office, and 
executive leadership. Recognizing that the budget for the program was 
no longer executable, the NPOESS Executive Committee planned to make a 
decision in December 2005 on the future direction of the program--what 
would be delivered, at what cost, and by when. This involved deciding 
among options involving increased costs, delayed schedules, and reduced 
functionality. We noted that continued oversight, strong leadership, 
and timely decision making were more critical than ever and we urged 
the committee to make a decision quickly so that the program could 
proceed. 

However, we subsequently reported that, in late November 2005, NPOESS 
cost growth exceeded a legislatively mandated threshold that requires 
DOD to certify the program to Congress.[Footnote 7] This placed any 
decision about the future direction of the program on hold until the 
certification took place in June 2006. In the meantime, the program 
office implemented an interim program plan for fiscal year 2006 to 
continue work on key sensors and other program elements using fiscal 
year 2006 funding. 

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

The Nunn-McCurdy law[Footnote 8] requires DOD to take specific actions 
when a major defense acquisition program exceeds certain cost 
thresholds. In November 2005, key provisions of the act required the 
Secretary of Defense to notify Congress when a major defense 
acquisition was expected to overrun its project baseline by 15 percent 
or more and to certify the program to Congress when it was expected to 
overrun its baseline by 25 percent or more.[Footnote 9] At that time, 
NPOESS exceeded the 25 percent threshold, and DOD was required to 
certify the program. Certifying a program entailed providing a 
determination that (1) the program is essential to national security, 
(2) there are no alternatives to the program that will provide equal or 
greater military capability at less cost, (3) the new estimates of the 
program's cost are reasonable, and (4) the management structure for the 
program is adequate to manage and control costs. DOD established tri- 
agency teams--made up of DOD, NOAA, and NASA experts--to work on each 
of the four elements of the certification process. 

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

Table 2: Summary of Changes to the NPOESS Program: 

Key area: Life cycle range; 
Program before the Nunn-McCurdy decision: 1995-2020; 
Program after the Nunn-McCurdy decision: 1995-2026. 

Key area: Estimated life cycle cost; 
Program before the Nunn-McCurdy decision: $8.4 billion; 
Program after the Nunn-McCurdy decision: $12.5 billion. 

Key area: Launch schedule; 
Program before the Nunn-McCurdy decision: NPP by October 2006; First 
NPOESS by November 2009; Second NPOESS by June 2011; 
Program after the Nunn-McCurdy decision: NPP by January 2010; First 
NPOESS by January 2013; Second NPOESS by January 2016. 

Key area: Management structure; 
Program before the Nunn-McCurdy decision: System Program Director 
reports to a tri-agency steering committee and the tri-agency Executive 
Committee; Independent program reviews noted insufficient system 
engineering and cost analysis staff; 
Program after the Nunn-McCurdy decision: System Program Director is 
responsible for day-to-day program management and reports to the 
Program Executive Officer; Program Executive Officer oversees program 
and reports to the tri-agency Executive Committee. 

Key area: Number of satellites; 
Program before the Nunn-McCurdy decision: 6 (in addition to NPP); 
Program after the Nunn-McCurdy decision: 4 (in addition to NPP). 

Key area: Number of orbits; 
Program before the Nunn-McCurdy decision: 3 (early morning, midmorning, 
and afternoon); 
Program after the Nunn- McCurdy decision: 2 (early morning and 
afternoon; will rely on European satellites for midmorning orbit data). 

Key area: Number and complement of instruments; 
Program before the Nunn-McCurdy decision: 13 instruments (10 sensors 
and 3 subsystems); 
Program after the Nunn-McCurdy decision: 9 instruments (7 sensors and 2 
subsystems); 4 of the sensors are to provide fewer capabilities. 

Key area: Number of EDRs; 
Program before the Nunn-McCurdy decision: 55; 
Program after the Nunn-McCurdy decision: 39 (6 are to be degraded 
products). 

Source: GAO analysis of NPOESS Integrated Program Office data. 

[End of table] 

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

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

Table 3: Key Program Milestones: 

Milestones: Final POES launch[A]; 
As of the August 2002 contract award: March 2008; 
As of the February 2004 rebaselined program: March 2008; 
As of the June 2006 certification decision: February 2009; 
Change from 2004 rebaselined program: Not applicable. 

Milestones: NPP launch; 
As of the August 2002 contract award: May 2006; 
As of the February 2004 rebaselined program: October 2006; 
As of the June 2006 certification decision: January 2010[B]; 
Change from 2004 rebaselined program: 44-month delay. 

Milestones: First NPOESS satellite planned for launch (C1); 
As of the August 2002 contract award: April 2009; 
As of the February 2004 rebaselined program: November 2009; 
As of the June 2006 certification decision: January 2013; 
Change from 2004 rebaselined program: 38-month delay. 

Milestones: Final DMSP launch[A]; 
As of the August 2002 contract award: October 2009; 
As of the February 2004 rebaselined program: May 2010; 
As of the June 2006 certification decision: April 2012; 
Change from 2004 rebaselined program: Not applicable. 

Milestones: Second NPOESS satellite planned for launch (C2); 
As of the August 2002 contract award: June 2011; 
As of the February 2004 rebaselined program: June 2011; 
As of the June 2006 certification decision: January 2016; 
Change from 2004 rebaselined program: 55-month delay. 

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

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

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

[End of table] 

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

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

Instrument: ATMS; 
Status of instrument after the Nunn-McCurdy decision: Unchanged; 
Change description: Sensor is to be included on NPP and on the first 
and third NPOESS satellites. 

Instrument: Aerosol polarimetry sensor; 
Status of instrument after the Nunn-McCurdy decision: Cancelled; 
Change description: Sensor was cancelled, but could be reintegrated on 
future NPOESS satellites should another party choose to fund it[A]. 

Instrument: CMIS; 
Status of instrument after the Nunn-McCurdy decision: Replaced; 
Change description: CMIS sensor was cancelled, and the program office 
is to procure a less complex Microwave imager/sounder for inclusion on 
the second, third, and fourth NPOESS satellites. 

Instrument: CrIS; 
Status of instrument after the Nunn-McCurdy decision: Unchanged; 
Change description: Sensor is to be included on NPP and on the first 
and third NPOESS satellites. 

Instrument: Data collection system; 
Status of instrument after the Nunn-McCurdy decision: Unchanged; 
Change description: Subsystem is to be included on all four NPOESS 
satellites. 

Instrument: Earth radiation budget sensor; 
Status of instrument after the Nunn-McCurdy decision: Replaced; 
Change description: Sensor was cancelled, and is to be replaced on the 
first NPOESS satellite (and no others) by an existing sensor with fewer 
capabilities called the Cloud's and Earth's Radiant Energy System. 

Instrument: OMPS; 
Status of instrument after the Nunn-McCurdy decision: Modified; 
Change description: One part of the sensor, called OMPS (nadir), is to 
be included on NPP and on the first and third NPOESS satellites; the 
remaining part, called OMPS (limb), was cancelled on the NPOESS 
satellites, but will be included on NPP[A]. 

Instrument: Radar altimeter; 
Status of instrument after the Nunn- McCurdy decision: Cancelled; 
Change description: Sensor was cancelled, but could be reintegrated on 
future NPOESS satellites should another party choose to fund it. 

Instrument: Search and rescue satellite aided tracking system; 
Status of instrument after the Nunn-McCurdy decision: Unchanged; 
Change description: Subsystem is to be included on all four NPOESS 
satellites. 

Instrument: Space environmental sensor suite; 
Status of instrument after the Nunn-McCurdy decision: Replaced; 
Change description: Sensor is to be replaced by a less capable, less 
expensive, legacy sensor called the Space Environment Monitor on the 
first and third NPOESS satellites. 

Instrument: Survivability sensor; 
Status of instrument after the Nunn- McCurdy decision: Cancelled; 
Change description: Subsystem contract was cancelled, but could be 
reintegrated on future NPOESS satellites should another party choose to 
fund it. 

Instrument: Total solar irradiance sensor; 
Status of instrument after the Nunn-McCurdy decision: Cancelled; 
Change description: Sensor contract was cancelled but could be 
reintegrated on future NPOESS satellites should another party choose to 
fund it. 

Instrument: VIIRS; 
Status of instrument after the Nunn-McCurdy decision: Unchanged; 
Change description: Sensor is to be included on NPP and on all four 
NPOESS satellites. 

Source: GAO analysis of NPOESS Integrated Program Office data. 

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

[End of table] 

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

Given the changes in planned sensors, program officials established a 
planned configuration for NPP and the four satellites of the NPOESS 
program, called C1, C2, C3, and C4 (see table 5). Program officials 
acknowledged that this configuration could change if other parties 
decided to develop the sensors that were cancelled. However, they noted 
that the planned configuration of the first satellite cannot change 
without increasing the risk that the launch will be delayed. 

Table 5: Planned Configuration of Sensors on NPP and NPOESS Satellites: 

Sensor: VIIRS; 
NPP: X; 
NPOESS C1: X; 
NPOESS C2: X; 
NPOESS C3: X; 
NPOESS C4: X. 

Sensor: Microwave imager/sounder (replacing CMIS); 
NPP: [Empty]; 
NPOESS C1: [Empty]; 
NPOESS C2: X; 
NPOESS C3: X; 
NPOESS C4: X. 

Sensor: CrIS; 
NPP: X; 
NPOESS C1: X; 
NPOESS C2: [Empty]; 
NPOESS C3: X; 
NPOESS C4: [Empty]. 

Sensor: ATMS; 
NPP: X; 
NPOESS C1: X; 
NPOESS C2: [Empty]; 
NPOESS C3: X; 
NPOESS C4: [Empty]. 

Sensor: Space environment monitor (replacing the space environmental 
sensor suite); 
NPP: [Empty]; 
NPOESS C1: X; 
NPOESS C2: [Empty]; 
NPOESS C3: X; 
NPOESS C4: [Empty]. 

Sensor: OMPS; 
NPP: X; 
NPOESS C1: X; 
NPOESS C2: [Empty]; 
NPOESS C3: X; 
NPOESS C4: [Empty]. 

Sensor: Data collection system; 
NPP: [Empty]; 
NPOESS C1: X; 
NPOESS C2: X; 
NPOESS C3: X; 
NPOESS C4: X. 

Sensor: Search and rescue satellite aided tracking system; 
NPP: [Empty]; 
NPOESS C1: X; 
NPOESS C2: X; 
NPOESS C3: X; 
NPOESS C4: X. 

Sensor: Cloud's and earth's radiant energy system (replacing the earth 
radiation budget sensor); 
NPP: [Empty]; 
NPOESS C1: X; 
NPOESS C2: [Empty]; 
NPOESS C3: [Empty]; 
NPOESS C4: [Empty]. 

Source: GAO analysis of NPOESS Integrated Program Office data. 

[End of table] 

Earned Value Management Techniques Provide Insight on Program Cost and 
Schedule: 

To be effective, project managers need current information on a 
contractor's progress in meeting contract deliverables. One method that 
can help project managers track this progress is earned value 
management. This method, used by DOD for several decades, compares the 
value of work accomplished during a given period with that of the work 
expected in that period. 

Differences from expectations are measured in both cost and schedule 
variances. Cost variances compare the earned value of the completed 
work with the actual cost of the work performed. For example, if a 
contractor completed $5 million worth of work and the work actually 
cost $6.7 million, there would be a -$1.7 million cost variance. 
Schedule variances are also measured in dollars, but they compare the 
earned value of the work completed with the value of work that was 
expected to be completed. For example, if a contractor completed $5 
million worth of work at the end of the month but was budgeted to 
complete $10 million worth of work, there would be a -$5 million 
schedule variance. Positive variances indicate that activities are 
costing less or are completed ahead of schedule. Negative variances 
indicate activities are costing more or are falling behind schedule. 
These cost and schedule variances can then be used in estimating the 
cost and time needed to complete the program. 

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

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

The NPOESS program office has made progress in restructuring the 
acquisition. Specifically, the program office has established interim 
program plans guiding the contractor's work activities in 2006 and 2007 
and has made progress in implementing these plans. Specifically, the 
program office reported that it had completed 156 of 166 key 
milestones[Footnote 12] during fiscal year 2006--including completing 
ambient and thermal vacuum testing of the VIIRS engineering unit. Of 
the 10 remaining milestones resulting from unanticipated problems in 
the development of VIIRS and CrIS, 5 have since been completed, and 5 
are still pending. The program office plans to complete 222 milestones 
in fiscal year 2007--including completing performance tests on the OMPS 
(nadir) sensor--and notes that they are slightly ahead of plans in that 
they have completed 62 milestones through January 20, 2007, which is 2 
more than had been planned. Figures 7 and 8 depict the program office's 
progress against key milestones in fiscal year 2006 and to date in 
fiscal year 2007. 

Figure 7: Progress on Planned Milestones in Fiscal Year 2006, as of 
October 1, 2006: 

[See PDF for image] 

Source: GAO analysis of NPOESS Integrated Program office data. 

[End of figure] 

Figure 8: Progress on Planned Milestones in Fiscal Year 2007, as of 
January 20, 2007: 

[See PDF for image] 

Source: GAO analysis of NPOESS Integrated Program Office data. 

[End of figure] 

The program office has also made progress in revising key acquisition 
documents. It revised the system engineering plan, the test and 
evaluation master plan, and the acquisition strategy plan, and obtained 
approval of these documents by the Program Executive Officer. The 
program office and contractor also developed an integrated master 
schedule for the remainder of the program--beyond fiscal year 2007. 
This integrated master schedule details the steps leading up to 
launching NPP by September 2009, launching the first NPOESS satellite 
in January 2013, and launching the second NPOESS satellite in January 
2016. Near-term steps include completing and testing the VIIRS, CrIS, 
and OMPS sensors; integrating these sensors with the NPP spacecraft and 
completing integration testing; completing the data processing system 
and integrating it with the command, control, and communications 
segment; and performing advanced acceptance testing of the overall 
system of systems for NPP. 

However, key steps remain for the acquisition restructuring to be 
completed. These steps include obtaining the approval of the 
Secretaries of Commerce and Defense and the Administrator of NASA on 
the memorandum of agreement among the three agencies, and obtaining the 
approval of the NPOESS Executive Committee on key acquisition 
documents, including the system engineering plan, the test and 
evaluation master plan, and the acquisition strategy. These approvals 
are currently over 6 months past due. Agency officials noted that the 
September 1, 2006, due date for the key acquisition documents was not 
realistic given the complexity of coordinating documents among three 
different agencies, but did not provide a new estimate for when these 
documents would be approved. 

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

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

The NPOESS program has made progress in establishing an effective 
management structure, but--almost a year after this structure was 
endorsed during the Nunn-McCurdy certification process--the Integrated 
Program Office still faces staffing problems. Over the past few years, 
we and others have raised concerns about management problems at all 
levels of the NPOESS program, including subcontractor and contractor 
management, program office management, and executive-level 
management.[Footnote 13] Two independent review teams also noted a 
shortage of skilled program staff, including budget analysts and system 
engineers. Since that time, the NPOESS program has made progress in 
establishing an effective management structure--including establishing 
a new organizational framework with increased oversight by program 
executives, instituting more frequent subcontractor, contractor, and 
program reviews, and effectively managing risks and performance. 
However, DOD's plans for reassigning the Program Executive Officer in 
Summer 2007 increase the program's risks. Additionally, the program 
lacks a staffing process that clearly identifies staffing needs, gaps, 
and plans for filling those gaps. As a result, the program office has 
experienced delays in getting core management activities under way and 
lacks the staff it needs to execute day-to-day management activities. 

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

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

In November 2005, the Executive Committee established and filled a 
Program Executive Officer position, senior to the NPOESS Program 
Director, to streamline decision making and to provide oversight to the 
program. This Program Executive Officer reports directly to the 
Executive Committee. Subsequently, the Program Executive Officer and 
the Program Director proposed a revised organizational framework that 
realigned division managers within the Integrated Program Office 
responsible for overseeing key elements of the acquisition and 
increased staffing in key areas. In June 2006, the Nunn-McCurdy 
certification decision approved this new management structure and the 
Integrated Program Office implemented it. Figure 9 provides an overview 
of the relationships among the Integrated Program Office, the Program 
Executive Office, and the Executive Committee, as well as key divisions 
within the program office. 

Figure 9: Overview of New Management Structure: 

[See PDF for image] 

Source: NOAA. 

[End of figure] 

Operating under this new management structure, the program office 
implemented more rigorous and frequent subcontractor, contractor, and 
program reviews, improved visibility into risk management and 
mitigation activities, and institutionalized the use of earned value 
management techniques to monitor contractor performance. Specifically, 
program officials and the prime contractor now review the 
subcontractors' cost and schedule performance on a weekly basis. The 
information from these meetings feeds into monthly government meetings 
with the prime contractor to review progress against milestones, 
issues, and risks. Further, the Program Director conducts monthly 
reviews with each technical division lead to review the divisions' 
achievements, risks, and plans. Program officials note that these 
frequent reviews allow information on risks to be quickly escalated 
from subcontractors to contractors, to the program component level, and 
to the Program Director--and they allow program officials to better 
manage efforts to reduce risks. The program office also reported that 
all division leads were trained in earned value management techniques 
and were effectively using these techniques both to monitor 
subcontractor and contractor performance on a weekly basis and to 
identify potential problems as soon as possible. 

In addition to these program office activities, the Program Executive 
Officer implemented monthly program reviews and increased the frequency 
of contacts with the Executive Committee. Specifically, the Program 
Executive Officer holds monthly program management reviews where the 
Program Director and program division leads (for example, those in 
charge of systems engineering or ground systems) provide briefings on 
the program's earned value, progress, risks, and concerns. We observed 
that these briefings allow the Program Executive Officer to have direct 
insight into the challenges and workings of the Integrated Program 
Office and allow risks to be appropriately escalated and addressed. 
These meetings also provide an open forum for managers to raise 
concerns and ask questions about operational challenges. For example, 
when NASA officials expressed concerns that vibration levels used 
during testing were higher than necessary and were causing damage to 
key sensor components, the Program Director and Program Executive 
Officer immediately established a forum to discuss and mitigate this 
issue. The Program Executive Officer briefs the Executive Committee in 
monthly letters, apprising committee members of the program's status, 
progress, risks, and earned value and the Executive Committee now meets 
on a quarterly basis--whereas in the recent past, we reported that the 
Executive Committee had met only five times in 2 years.[Footnote 14] 

While the NPOESS program has made progress in establishing an effective 
management structure, this progress is currently at risk. We recently 
reported that DOD space acquisitions are at increased risk due in part 
to frequent turnover in leadership positions, and we suggested that 
addressing this will require DOD to consider matching officials' tenure 
with the development or delivery of a product.[Footnote 15] In March 
2007, NPOESS program officials stated that DOD is planning to reassign 
the recently appointed Program Executive Officer in Summer 2007 as part 
of this executive's natural career progression. As of March 2007, the 
Program Executive Officer has held this position for 16 months. Given 
that the program is currently still being restructured, and that there 
are significant challenges in being able to meet critical deadlines to 
ensure satellite data continuity, such a move adds unnecessary risk to 
an already risky program. 

NPOESS Program Has Filled Key Vacancies but Lacks A Programwide 
Staffing Process: 

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

Since the June 2006 decision to revise NPOESS management structure, the 
program office has filled multiple critical positions, including a 
budget officer, a chief system engineer, an algorithm division chief, 
and a contracts director. In addition, on an ad hoc basis, individual 
division managers have assessed their needs and initiated plans to hire 
individuals for key positions. However, almost a year after the 
certification, the program office still lacks a programwide process for 
identifying and filling all needed positions. As a result, division 
managers often wait months for critical positions to be filled. For 
example, in February 2006, the NPOESS program estimated that it needed 
to hire up to 10 new budget analysts. As of September 2006, none of 
these positions had been filled. Today, program officials estimate that 
they only needed to fill 7 budget analyst positions, of which 2 
positions have been filled, and 5 remain vacant. Additionally, even 
though the certification decision directed immediate action to fill 
critical vacancies, the program still has vacancies in 5 systems 
engineering positions and 10 technical manager positions. The majority 
of the vacancies--4 of the 5 budget positions, 4 of the 5 systems 
engineering positions, and 8 of the 10 technical manager positions--are 
to be provided by NOAA. NOAA officials noted that each of these 
positions is in some stage of being filled--that is, recruitment 
packages are being developed or reviewed, vacancies are being 
advertised, or candidates are being interviewed, selected, and 
approved. 

The program office attributes its staffing delays to not having the 
right personnel in place to facilitate this process--and did not even 
begin to develop a staffing process--until November 2006. Program 
officials noted that the tri-agency nature of the program adds unusual 
layers of complexity to the hiring and administrative functions because 
each agency has its own hiring and performance management rules. In 
November 2006, the program office brought in an administrative officer 
who took the lead in pulling together the division managers' individual 
assessments of needed staff--currently estimated to be 25 vacant 
positions--and has been working with the division managers to refine 
this list. This new administrative officer plans to train division 
managers in how to assess their needs and to hire needed staff and to 
develop a process by which evolving needs are identified and positions 
are filled. However, there is as yet no date set for establishing this 
basic programwide staffing process. 

As a result of the lack of a programwide staffing process, there has 
been an extended delay in determining what staff are needed and in 
bringing those staff on board--which has resulted in delays in 
performing core management activities such as establishing the program 
office's cost estimate and bringing in needed contracting expertise. 
Additionally, until a programwide staffing process is in place, the 
program office risks not having the staff it needs to execute day-to- 
day management activities. 

Methodology Supporting the June 2006 Cost and Schedule Estimate Was 
Reliable, but Recent Events Could Increase Program Costs: 

In June 2006, DOD certified a restructured NPOESS program that was 
estimated to cost $11.5 billion for the acquisition portion of the 
program[Footnote 16] and scheduled to launch the first satellite in 
2013. The Office of the Secretary of Defense's Cost Analysis 
Improvement Group (cost analysis group)--the independent cost 
estimators charged with developing the estimate for the acquisition 
portion of the program--used an acceptable methodology to develop this 
estimate. When combined with an estimated $1 billion for operations and 
support after launch, this brings the program life cycle cost to $12.5 
billion. Recent events, however, could further increase program costs 
or delay schedules. Specifically, the program continues to experience 
technical problems on key sensors, and costs and schedules will be 
adjusted during negotiations on contract changes. The NPOESS program 
office is developing its own cost estimate to refine the one developed 
in June 2006 that it will use to negotiate contract changes. A new 
baseline cost will be established once the contract is finalized. 

Certified Program Estimates Were Developed Using an Acceptable 
Methodology: 

The cost and schedule estimate for the restructured NPOESS program was 
developed by DOD's cost analysis group using an acceptable methodology. 
Cost-estimating organizations throughout the federal government and 
industry use certain key practices--related to planning, conducting, 
and reporting the estimate--to ensure a sound estimate. Table 6 lists 
the elements of a sound cost estimating methodology. In addition, to 
ensure the validity of the data assumptions that go into the estimate, 
leading organizations use actual historical costs and seek an 
independent validation of critical cost drivers. 

Table 6: Elements of a Sound Cost Estimating Methodology: 

Activity area: Planning the estimate; 
Key practices: Define the estimate's purpose;  
Define the program or system characteristics; 
Identify ground rules and assumptions; 
Determine the estimating approach; 
Develop the estimating plan. 

Activity area: Conducting the estimate; 
Key practices: Obtain the data;  
Perform the estimate; 
Conduct a risk and uncertainty analysis; 
Conduct a sensitivity analysis. 

Activity area: Reporting the estimate; 
Key practices: Document the estimate; 
Review and provide results; 
Update the estimate with actual cost data and document lessons learned. 

Source: GAO analysis of leading practices. 

[End of table] 

DOD's cost analysis group used an acceptable methodology in developing 
the NPOESS cost estimate in that they planned, conducted, and reported 
the estimate consistent with leading practices. The cost analysis 
group's cost estimating approach was largely driven by the program's 
principal "ground rule" to maintain the continuity of weather data 
without a gap. Specifically, the cost analysis group assessed two 
risks: (1) the uncertainty of the health of the current polar-satellite 
constellation and (2) the uncertainty of when the new satellite system 
could be delivered (including the time needed to evaluate new 
satellites once in orbit). The resulting analysis showed that the 
restructured NPOESS system could be delivered and the first satellite 
launched by 2013 with a high level of confidence in maintaining 
satellite data continuity.[Footnote 17] 

To determine specific costs, the group used the existing work breakdown 
structure employed by the program office as the basis for performing 
its work. This work breakdown structure consists of seven major 
elements, including ground systems; spacecraft; sensors; assembly, 
integration and test; system engineering/contractor program management; 
government program management; and launch. 

The cost analysis group also took steps to ensure the validity of the 
data that went into the estimate. For each element, the cost analysis 
group visited all major contractor sites to collect program data 
including: 

* schedule (including the original, rebaselined, and current schedules, 
and risks affecting the current schedule); 

* current staffing profile by month; 

* the history of staffing used; 

* the qualifications of people charging the program; 

* the program's technical approaches; 

* system diagrams; 

* bills of materials; 

* funding profile; and: 

* the contractor's program legacy (a justification that the contractor 
has worked on similar projects in the past and that the contractor 
should be able to adapt that knowledge to the current work). 

The cost analysis group also compared this data with contractor labor 
rates from the Defense Contract Management Agency and obtained NASA's 
validation of the costs associated with the most significant cost 
driver, the VIIRS sensor. 

Since schedule was the primary uncertainty factor in the cost analysis, 
it also was the driver of overall costs. Specifically, the cost 
analysis group took its risk-adjusted schedule durations for the major 
cost elements and adjusted the contractor-submitted manning profiles 
accordingly. They then used NPOESS historical data on labor rates and 
materials to calculate the cost of these elements. 

Consistent with DOD practice, the cost analysis group established its 
cost estimate at a 50 percent confidence level.[Footnote 18] However, 
cost analysts could not provide an upper limit for potential cost 
growth, explaining that the program contains "failsafe" measures to use 
alternative technologies (such as using legacy systems) if schedules 
are delayed and costs increase. As a result, cost analysts reported 
that they have a high level of confidence that acquisition costs will 
not exceed $11.5 billion--but a lower level of confidence that the 
configuration of sensors will remain unchanged. 

Recent Events Could Lead to Increased Program Costs or Delayed 
Schedules: 

While the June 2006 cost estimate for the acquisition portion of the 
program was reasonable at the time it was made, several recent events 
could cause program life cycle costs to grow or schedules to be 
delayed. Specifically, the program continues to experience technical 
problems on key sensors. The CrIS sensor being developed for the NPP 
satellite suffered a major structural failure in October 2006. A 
failure review board is currently working to resolve the root causes of 
the failure. While program officials note that they should be able to 
cover costs related to investigating the problem, the full cost and 
schedule to fix the sensor is not yet known. Also, VIIRS development, 
which has been the program's primary cost driver, is not yet complete 
and continues to be a high-risk development. This too, could lead to 
higher final program costs or delayed schedules. 

Program costs are also likely to be adjusted during upcoming 
negotiations on contract changes. The NPOESS program office is 
developing its own cost estimate to refine the one developed in June 
2006. Program officials plan to use this revised cost estimate to 
negotiate contract changes. A new baseline cost will be established 
once the contract is finalized--an event that the Program Director 
expects to occur by July 2007. 

Major Program Segments Are Under Development, but Significant Risks 
Remain: 

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

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

The space segment includes the sensors and the spacecraft. Four sensors 
are of critical importance--VIIRS, CrIS, OMPS, and ATMS--because they 
are to be launched on the NPP satellite. Initiating work on another 
sensor, the Microwave imager/sounder, is also important because this 
new sensor--replacing the cancelled CMIS sensor--will need to be 
developed in time for the second NPOESS satellite launch. Over the past 
year, the program made progress on each of the sensors and the 
spacecraft. However, two sensors, VIIRS and CrIS, have experienced 
major problems. The status of each of the components of the space 
segment is described in table 7. 

Table 7: Status of Selected Components of the Space Segment, as of 
April 2007: 

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

Space segment component: CrIS; 
Risk level: High; 
Status: Development of CrIS was put on hold in October 2006 when the 
flight unit designated to go on NPP experienced a major structural 
failure during its vibration testing. As of March 2007, a failure 
review board established by the contractors and the NPOESS program 
office identified causes for failure and has planned an approach to 
completing flight unit development and delivery for NPP. The review 
board has also initiated inspections of all sensor modules and 
subsystems for damage. The program office expects to restart acceptance 
testing in July 2007, and the CrIS flight unit is expected to be 
delivered to NPP by February 2008. 

Space segment component: OMPS; 
Risk level: Moderate; 
Status: As part of the Nunn-McCurdy certification in June 2006, one 
element of the OMPS sensor, called OMPS (limb), was removed from the 
program. In February 2007, program officials agreed to reintegrate OMPS 
(limb) on NPP if NOAA and NASA would fund it. This funding was approved 
in early April 2007. OMPS is currently on schedule for delivery to NPP 
by May 2008; however, there are concerns that the OMPS flight unit 
delivery will be so late in the integration testing process that there 
could be an insufficient schedule margin, should a problem arise. 

Space segment component: ATMS; 
Risk level: Low; 
Status: The ATMS flight unit for NPP was developed by a NASA contractor 
and delivered to the program in October 2005. NASA integrated the 
flight unit on the spacecraft and is awaiting delivery of the other 
sensors in order to complete integration testing. 

Space segment component: Microwave imager/ sounder; 
Risk level: Not yet rated; 
Status: A new microwave imager/sounder sensor is being planned to 
replace the cancelled CMIS sensor. It is planned to be ready for launch 
on the second NPOESS satellite. In October 2006, the program office 
issued a request for information seeking industry ideas for the design 
of the new sensor, and responses were due by the end of December 2006. 
The program office anticipates awarding a contract to develop the 
sensor by October 2008. 

Space segment component: Spacecraft; 
Risk level: Low; 
Status: The development of the spacecrafts for NPP and NPOESS are on 
track. The NPP spacecraft was completed in June 2005. Integration 
testing will be conducted once the NPP sensors are delivered; Early 
issues with the NPOESS spacecraft (including issues with antennas and a 
data storage unit) have been resolved; however, risks remain that could 
delay the completion of the spacecraft. A key risk involves delays in 
the delivery of the solar array, which may arrive too late to be 
included in some key testing. Other risks associated with the 
electrical power subsystem are taking longer than anticipated to 
resolve. 

Source: GAO analysis of NPOESS Integrated Program Office data. 

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

[End of table] 

Earned Value Data Show Problems on the Space Segment: 

Earned value management tools are used to compare the value of work 
accomplished with the work expected during a given time period, and any 
differences are measured in cost and schedule variances. The NPOESS 
space segment experienced negative cost and schedule variances between 
January 2006 and January 2007 (see fig. 10). 

Figure 10: Cumulative Cost and Schedule Variance for the NPOESS Space 
Segment over a 13-Month Period: 

[See PDF for image] 

Source: GAO analysis based on contractor data. 

[End of figure] 

From January 2006 to January 2007, the contractor exceeded cost targets 
for the space segment by $17 million--which is 4 percent of the space 
segment budget for that time period. Similarly, the contractor was 
unable to complete $14.6 million worth of work in the space segment. 
The main factors in the cost and schedule variances were due to 
underestimation of the scope of work, pulling resources from lower 
priority tasks to higher priority items, and unforeseen design issues 
on key sensors. For example, VIIRS continued to experience negative 
cost variance trends due to unplanned efforts, which included 
refurbishing and recertifying the VIIRS calibration chamber, completing 
the testing of the engineering design unit, and resolving a problem 
with the testing equipment needed to adjust VIIRS' temperature during a 
key test. 

Unplanned efforts for CrIS that attributed to the negative cost and 
schedule variances included additional time required for testing and 
material management. The schedule variances for VIIRS and CrIS were 
mainly due to resources being pulled from other areas to support higher 
priority tasks, extended testing and testing delays, management 
changes, and improper material handling. Further, there is a high 
likelihood that CrIS will continue to experience cost and schedule 
variances against the fiscal year 2007 interim program plan until the 
issues that caused its structural failure are addressed. 

Program Office Is Monitoring Sensor Risks and Evaluating Options: 

Program officials regularly track risks associated with various NPOESS 
components and work to mitigate them. Having identified both VIIRS and 
CrIS as high risk, OMPS as a moderate risk, and the other components as 
low risk, the program office is working closely with the contractors 
and subcontractors to resolve sensor problems. 

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

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

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

Development of the ground segment--which includes the interface data 
processing system, the ground stations that are to receive satellite 
data, and the ground-based command, control, and communications system-
-is under way and on track. However, important work pertaining to 
developing the algorithms that translate satellite data into weather 
products within the integrated data processing segment remains to be 
completed. Table 8 describes each of the components of the ground 
segment and identifies the status of each. Additionally, appendix II 
provides an overview of satellite data processing algorithms. 

Table 8: Status of Ground Segment Components: 

Ground segment component/description: Interface Data Processing System 
(IDPS); A ground-based system that is to process the sensors' data so 
that they are usable by the data processing centers and the broader 
community of environmental data users. IDPS will be deployed at the 
four weather data processing centers; 
Risk level: Moderate; 
Status: IDPS is being developed in a series of builds. Currently, IDPS 
build 1.4 has been delivered for testing and recently passed two key 
data transfer tests. Contractors are currently working to develop IDPS 
build 1.5, which is expected to be the build that will be used with 
NPP. However, work remains in three areas: system latency, algorithm 
performance, and calibration and validation planning; 
* Latency--IDPS must process volumes of data within 65 minutes to meet 
NPP requirements. The contractor has made progress in reducing the 
latency of the system's data handling from 93 minutes to 73 minutes and 
is working to reduce it by 8 minutes more by resolving data management 
issues, increasing the number of processors, and increasing algorithm 
efficiency; 
* Algorithm performance--IDPS algorithms are the mathematical functions 
coded into the system software that transform raw data into data 
products including sensor data records and environmental data records. 
IDPS build 1.4 contains provisional algorithms, which are being refined 
as the sensors complete various stages of testing. Because some sensors 
are delayed, full characterization of those sensors in order to refine 
the algorithms has also been delayed and may not be completed in time 
for the delivery of IDPS build 1.5 in early 2009. If this occurs, 
agency officials plan to improve the algorithms in build 1.5 during a 
planned maintenance upgrade prior to NPP launch; 
* Calibration/validation--Calibration/ validation is the process for 
tweaking algorithms to provide more accurate observations. The 
contractor has documented a detailed schedule for calibration and 
validation during IDPS development and is developing a postlaunch task 
list to drive prelaunch preparation efforts. However, much work and 
uncertainty continue to exist in the calibration and validation area. A 
program official noted that, while teams can do a lot of preparation 
work, including building the infrastructure to allow sensor testing and 
having a good understanding of the satellite, sensors, and available 
data for calibration, many issues need to take place after launch. 

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

Ground segment component/description: Command, control, and 
communications segment; Performs the day-to-day monitoring and command 
of the spacecraft and sensors; 
Risk level: Low; 
Status: NOAA recently completed moving its satellite command, control, 
and communications capabilities to a new office building. In addition, 
the command, control, and communications segment acceptance testing for 
NPP has been completed. The segment is expected to begin operation in 
2008. 

Source: GAO analysis of NPOESS Integrated Program Office data. 

[End of table] 

Ground Segment Cost and Schedule Are on Track; Work and Risks Remain: 

Using contractor-provided data, our analysis indicates cost and 
schedule performance on key elements of the NPOESS ground segment were 
generally on track or positive against the fiscal year 2006 and 2007 
interim program plans. For the IDPS component, the contractor completed 
slightly less work than planned and finished slightly under budget. 
This caused cost and schedule variances of less than 1 percent off of 
expectations. (see fig. 11). For the command, control, and 
communications component, the contractor was able to outperform its 
planned targets by finishing under budget by $3 million (6.2 percent of 
the budget for this time period) and by completing $31,000 (less than 1 
percent) worth of work beyond what was planned (see fig. 12). 

Figure 11: Cumulative Cost and Schedule Variance for the NPOESS IDPS 
Development over a 13-Month Period: 

[See PDF for image] 

Source: GAO analysis based on contractor data. 

[End of figure] 

Figure 12: Cumulative Cost and Schedule Variance for the NPOESS 
Command, Control, and Communications Segment over a 13-Month Period: 

[See PDF for image] 

Source: GAO analysis based on contractor data. 

[End of figure] 

Program Office Has Plans to Address IDPS Risks: 

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

Launch Segment--NPP Launch Preparation Has Begun, while NPOESS Launch 
Planning Remains a Future Event: 

Different agencies are responsible for launching NPP and NPOESS. NASA 
is responsible for the NPP launch and began procuring the launch 
vehicle for NPP in August 2006. Program officials expect to have it 
delivered by July 2009, less than 2 months before the scheduled NPP 
launch in September 2009. 

The NPOESS Integrated Program Office is responsible for launching the 
NPOESS satellites. According to program officials, the Air Force is to 
procure launch services for the program through DOD's Evolved 
Expendable Launch Vehicle contract. These services are to be procured 
by January 2011, 2 years before the first scheduled launch. 

Conclusions: 

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

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

Recommendations for Executive Action: 

Because of the importance of effectively managing the NPOESS program to 
ensure that there are no gaps in the continuity of critical weather and 
environmental observations, we are making recommendations to the 
Secretaries of Defense and Commerce and to the Administrator of NASA to 
ensure that the responsible executives within their respective 
organizations approve key acquisition documents, including the 
memorandum of agreement among the three agencies, the system 
engineering plan, the test and evaluation master plan, and the 
acquisition strategy, as quickly as possible but no later than April 
30, 2007. 

We are also recommending that the Secretary of Defense direct the Air 
Force to delay reassigning the recently appointed Program Executive 
Officer until all sensors have been delivered to the NPOESS Preparatory 
Program; these deliveries are currently scheduled to occur by July 
2008. 

We are also making two additional recommendations to the Secretary of 
Commerce. We recommend that the Secretary direct the Undersecretary of 
Commerce for Oceans and Atmosphere to ensure that NPOESS program 
authorities develop and implement a written process for identifying and 
addressing human capital needs and for streamlining how the program 
handles the three different agencies' administrative procedures, and 
establish a plan for immediately filling needed positions. 

Agency Comments and Our Evaluation: 

We received written comments on a draft of this report from the Deputy 
Secretary of the Department of Commerce (see app. III), the Deputy 
Assistant Secretary for Networks and Information Integration of the 
Department of Defense (see app. IV), and the Deputy Administrator of 
the National Aeronautics and Space Administration (see app. V). All 
three agencies agreed that it was important to finalize key acquisition 
documents in a timely manner, and DOD proposed extending the due dates 
for the documents to July 2, 2007. Because the NPOESS program office 
intends to complete contract negotiations by July 4, 2007, we remain 
concerned that any further delays in approving the documents could 
delay contract negotiations and thus increase the risk to the program. 

In addition, the Department of Commerce agreed with our recommendation 
to develop and implement a written process for identifying and 
addressing human capital needs and to streamline how the program 
handles the three different agencies' administrative procedures. The 
department also agreed with our recommendation to plan to immediately 
fill open positions at the NPOESS program office. Commerce noted that 
NOAA identified the skill sets needed for the program and has 
implemented an accelerated hiring model and schedule to fill all NOAA 
positions in the NPOESS program. The department also stated that the 
Program Director will begin presenting the detailed staffing 
information at monthly program management reviews, including 
identifying any barriers and recommended corrective actions. Commerce 
also noted that NOAA has made NPOESS hiring a high priority and has 
documented a strategy--including milestones--to ensure that all 20 
needed positions are filled by June 2007. 

DOD did not concur with our recommendation to delay reassigning the 
Program Executive Officer, noting that the NPOESS System Program 
Director responsible for executing the acquisition program would remain 
in place for 4 years. The Department of Commerce also noted that the 
Program Executive Officer position is planned to rotate between the Air 
Force and NOAA. Commerce also stated that a selection would be made 
prior to the departure of the current Program Executive Officer to 
provide an overlap period to allow for knowledge transfer and ensure 
continuity. 

However, over the last few years, we and others (including an 
independent review team and the Commerce Inspector General) have 
reported that ineffective executive-level oversight helped foster the 
NPOESS program's cost and schedule overruns. We remain concerned that 
reassigning the Program Executive at a time when NPOESS is still facing 
critical cost, schedule, and technical challenges will place the 
program at further risk. 

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

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

All three agencies also provided technical comments, which we have 
incorporated in this report as appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to interested congressional committees, the Secretary of Commerce, the 
Secretary of Defense, 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 
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 VI. 

Signed by: 

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

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our objectives were to (1) evaluate the National Polar-orbiting 
Operational Environmental Satellite System (NPOESS) program office's 
progress in restructuring the acquisition; (2) evaluate the program 
office's progress in establishing an effective management structure; 
(3) assess the reliability of the new life cycle cost estimate and 
proposed schedule; and (4) identify the status and key risks facing the 
program's major segments (the launch, space, data processing, and 
ground control segments) and evaluate the adequacy of the program's 
efforts to mitigate these risks. 

To evaluate the NPOESS program office's progress in restructuring the 
acquisition program, we reviewed the program's Nunn-McCurdy 
certification decision memo and program documentation including status 
briefings and milestone progress reports. We also interviewed program 
office officials and attended conferences and senior-level management 
program review meetings to obtain information on the program's 
acquisition restructuring. 

To evaluate the program office's progress in establishing an effective 
management structure, we reviewed the Nunn-McCurdy decision memo for 
the program, as well as program documentation and briefings. We 
assessed the status of efforts to implement recommendations regarding 
the program's management structure, including the work of the team 
responsible for reviewing the management structure under the Nunn- 
McCurdy review. We also analyzed the program office's organizational 
charts and position vacancies. Finally, we interviewed officials 
responsible for reviewing the management structure of the program under 
Nunn-McCurdy, attended senior-level management review meetings to 
obtain information related to the program's progress in establishing 
and staffing the new management structure, and interviewed program 
office officials responsible for human capital issues to obtain 
clarification on plans and goals for the new management structure. 

To assess the reliability of the new life cycle cost estimate and 
proposed schedule, we analyzed the Office of the Secretary of Defense's 
Cost Analysis Improvement Group's (cost analysis group) cost estimating 
methodology and the assumptions used to develop its independent cost 
estimate. Specifically, we assessed the cost estimating group's 
methodology against 12 best practices recognized by cost-estimating 
organizations within the federal government and industry for the 
development of reliable cost estimates. These best practices are also 
contained in a draft version of our cost guide, which is currently 
being developed by GAO cost experts. We also assessed cost-and schedule-
related data, including the work breakdown structure and detailed 
schedule risk analyses to determine the reasonableness of the cost 
analysis group's assumptions. We also interviewed cost analysis group 
officials to obtain clarification on cost and schedule estimates and 
their underlying assumptions. Further, we interviewed program officials 
to identify any assumptions that may have changed. 

To identify the status and key risks facing the program's major 
segments (the launch, space, data processing, and ground control 
segments) and to evaluate the adequacy of the program's efforts to 
mitigate these risks, we reviewed the program's Nunn-McCurdy 
certification decision memo and other program documentation. We 
analyzed briefings and monthly program management documents to 
determine the status and risks of the key program segments. We also 
analyzed earned value management data obtained from the contractor to 
assess the contractor's performance to cost and schedule. We reviewed 
cost reports and program risk management documents and interviewed 
program officials to determine the program segments' risks that could 
negatively affect the program's ability to maintain the current 
schedule and cost estimates. We also interviewed agency officials from 
the National Aeronautics and Space Administration (NASA), the National 
Oceanic and Atmospheric Administration (NOAA), the Department of 
Defense (DOD), and the NPOESS program office to determine the status 
and risks of the key program segments. Finally, we observed senior- 
level management review meetings and attended conferences to obtain 
information on the status of the NPOESS program. 

We performed our work at the NPOESS Integrated Program Office and at 
DOD, NASA, and NOAA offices in the Washington, D.C., metropolitan area 
between July 2006 and April 2007 in accordance with generally accepted 
government auditing standards. 

[End of section] 

Appendix II: Overview of Satellite Data Processing Algorithms and the 
Calibration and Validation Process: 

Algorithms are sets of instructions, expressed mathematically, that 
translate satellite sensor measurements into usable information. In the 
NPOESS program, government contractors are responsible for algorithm 
development; the program office is responsible for independently 
validating the algorithms. Scientists develop these algorithms, which 
are then written as computer code to be incorporated into the interface 
data processing system (IDPS) operational system. The NPOESS ground 
system uses three primary types of algorithms: 

* Algorithms to develop raw data records "unpack" the digital packets 
received by the antennas/IDPS (the ones and zeros) and sent from the 
satellite, associate the data with the information about the 
satellite's location and, finally, translate it back into the data it 
was when it started at the sensor. 

* Algorithms used to develop sensor and temperature data records allow 
the on-ground users to understand what the sensor saw. It translates 
the information from the sensor into a measure of the various forms of 
energy (e.g., brightness, temperature, radiance). 

* Algorithms used to produce the weather products called environmental 
data records (EDR) are crosscutting. They combine various data records, 
as well as other data, in order to produce measures useful to 
scientists. Additionally, EDRs can be "chained"--that is, the output of 
one EDR algorithm will become an input into the next EDR algorithm. To 
illustrate, cloud detection/mask is an important "base" EDR because 
many EDRs, like sea surface temperature, are only calculated when 
clouds are not present. Figure 13 shows the flow of the data and 
algorithms. 

Figure 13: Satellite Data Processing Algorithms: 

[See PDF for image] 

Source: GAO (analysis), NASA (images). 

[End of figure] 

A corollary to algorithm development is the calibration and validation 
process. According to a senior algorithm scientist, in this process, 
once the satellite has been launched, scientists verify that the 
sensors accurately report what ground conditions are. For example, one 
EDR from the visible/infrared imager radiometer suite (VIIRS) is "ocean 
color." Once the sensor is in orbit, scientists can compare the results 
that the VIIRS sensor reports on ocean color with the known results 
from sensors on ocean buoys that also measure ocean color in select 
locations. Then, if the sensors do not accurately report the ground 
conditions, scientists can calibrate, or "tweak," the algorithms used 
to develop sensor, temperature, and environmental data records to 
report on ground conditions more accurately. 

According to an agency official, fully calibrating a simple sensor once 
it has been launched can take approximately a year. A more complicated 
sensor can take 18 months to 2 years (see fig. 14). 

Figure 14: Describes the High-Level Calibration and Validation Process: 

[See PDF for image] 

Sources: GAO and Map Resources. 

[End of figure] 

[End of section] 

Appendix III: Comments from the Department of Commerce: 

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

April 9, 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 Polar-orbiting 
Operational Environmental Satellites: Restructuring Is Under Way, but 
Technical Challenges and Risks Remain (GAO-07-498). I enclose the 
Department of Commerce's comments to the draft report. 

Sincerely, 

Signed by: 

David A. Sampson: 

Enclosure: 

Department of Commerce National Oceanic and Atmospheric Administration 
Comments on the Draft GAO Report Entitled "Polar-orbiting Operational 
Environmental Satellites: Restructuring Is Under Way, but Technical 
Challenges and Risks Remain" (GAO-07-498/April 2007): 

General Comments: 

The Department of Commerce's National Oceanic and Atmospheric 
Administration (NOAA) appreciates the opportunity to review this draft 
report. The report acknowledges that the National Polar-orbiting 
Operational Environmental Satellite System (NPOESS) program office has 
made progress in restructuring the satellite acquisition, but cautions 
that significant risks remain. 

NOAA Response to GAO Recommendations: 

Recommendation 1: The GAO report states, "We are making recommendations 
to the Secretaries of Defense and Commerce and the Administrator of 
NASA to ensure that the responsible executives within their respective 
organizations approve key acquisition documents, including the 
memorandum of agreement among the three agencies, the system 
engineering plan, the test and evaluation master plan, and the 
acquisition strategy, as quickly as possible, but no later than April 
30, 2007." 

NOAA Response: NOAA agrees the four documents identified by the GAO are 
the key Acquisition Decision Memorandum (ADM) documents. NOAA has 
completed its initial review of these documents, concurred with them, 
and is prepared to sign-off on the documents, pending final review by 
the Air Force and NASA. NOAA will review any additional changes 
proposed by the Air Force or NASA before EXCOM coordination. Following 
completion of tri-agency coordination, the Program Executive Officer 
(PEO) will submit the final documents to the EXCOM and then to the 
Under Secretary of Defense (Acquisition, Technology and Logistics) 
after final Air Force and NASA clearance. Based on consultation with 
the Air Force, NOAA anticipates these documents being fully executed by 
July 2007. While later than GAO's recommended date of April 30, 2007, 
approval of these documents by July 2007 will not adversely impact 
program execution. The reason why these documents cannot be approved by 
April 30, 2007, is the length of the Department of Defense process for 
staffing such documents prior to submitting them for signature. 

Recommendation 2: The GAO report states, "We are also recommending that 
the Secretary of Defense direct the Air Force to delay reassigning the 
recently appointed Program Executive Officer until all sensors have 
been delivered to the NPOESS Preparatory Program; these deliveries are 
currently scheduled to occur by July 2008." 

NOAA Response: The NPOESS Program Executive Officer (PEO) position is 
planned to rotate between the Air Force and NOAA. As part of this 
planned rotation, the next NPOESS PEO will be a NOAA employee. A 
selection will be made prior to the departure of the current PEO. The 
selection of the new PEO is being timed to provide an overlap period 
that will facilitate knowledge transfer and ensure continuity. 

Recommendation 3: The GAO report states, "We recommend that the 
Secretary [of Commerce] direct the Undersecretary of Commerce for 
Oceans and Atmosphere to ensure that NPOESS program authorities develop 
and implement a written process for identifying and addressing human 
capital needs and for streamlining how the program handles the three 
different agencies' administrative procedures." 

NOAA Response: We agree. NOAA has identified the skill sets needed for 
the NOAA positions and has implemented an accelerated hiring model and 
corresponding schedule to fill all NOAA positions. To improve tri- 
agency coordination, the NPOESS System Program Director (SPD) will 
develop an Integrated Program Office Human Capital Plan that documents 
the positions to be filled, the hiring strategy, and addresses other 
program human capital needs. 

Progress on filling the complete set of vacancies will be presented by 
the SPD in an integrated monthly report at the Program Executive 
Officer's monthly Program Management Reviews. As a part of the monthly 
report, the SPD will identify barriers to accomplishing the plan and 
recommend actions to be tasked to the appropriate individual/agency for 
resolution. Actions agreed upon will be documented in the Program 
Executive Office's Program Management Review action list and tracked 
weekly until resolved. The SPD will report results of outstanding 
actions at each monthly program review. 

Recommendation 4: The GAO draft states, "We recommend that the 
Secretary [of Commerce] direct the Undersecretary of Commerce for 
Oceans and Atmosphere to ensure that NPOESS program authorities 
establish a plan for immediately filling needed positions." 

NOAA Response: We agree. We have established a documented strategy with 
milestones to ensure that all 20 needed positions are filled by June 
2007. Through April 9, 2007, six positions have been filled; one offer 
is pending; four positions are in the interview phase; four positions 
are posted on USAJOBS; three positions are to be announced within the 
next two weeks; one position is in final clearance prior to 
announcement; and one position is in development. NOAA reorganized the 
Workforce Management Office (WFMO) internal priorities and resources to 
focus on NPOESS staffing needs ahead of others within NOAA. NOAA's 
National Environmental Satellite, Data, and Information Service 
(NESDIS) and WFMO are meeting on a weekly basis to ensure obstacles to 
the hiring process are addressed immediately. 

[End of section] 

Appendix IV: Comments from the Department of Defense: 

Office Of The Assistant Secretary Of Defense: 
6000 Defense Pentagon:
Washington, DC 20301-6000: 
Networks And Information Integration: 

Apr 05 2007: 

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

Dear Mr. Powner, 

This is the Department of Defense (DoD) response to the GAO Draft 
Report, GAO-07-498, 'Polar-Orbiting Operational Environmental 
Satellites: Restructuring is Under Way, but Technical Challenges and 
Risks Remain,' dated March 12, 2007 (GAO Code 310821). The DoD 
acknowledges receipt of this draft report but does not concur with all 
of the GAO recommendations. Our formal comments are attached. 

Signed by: 

Dr. Ronald C. Jost: 
DASD (C3, Space and Spectrum): 

Enclosure: 
As stated: 

GAO Draft Report Dated March 12, 2007 GAO-07-498 (GAO Code 310821): 

"Polar-Orbiting Operational Environmental Satellites: Restructuring Is 
Under Way, But Technical Challenges And Risks Remain" 

Department Of Defense Comments To The GAO Recommendations: 

General Comments: The report recognizes the positive effects of the 
restructured management for the program and also recognizes the 
significant work ahead on the program. The draft GAO findings are 
technically and programmatically consistent with the current NPOESS 
program. 

Recommendation 1: The GAO recommended that the Secretary of Defense 
ensure that the responsible executives approve key acquisition 
documents, including the memorandum of agreement among the three 
agencies (Departments of Defense, Commerce, and Administration of the 
National Aeronautics and Space Administration), the system engineering 
plan, the test and evaluation master plan, and the acquisition strategy 
to ensure that there are no gaps in the continuity of critical weather 
and environmental observations. (p. 48/GAO Draft Report): 

DOD Response: The DoD agrees with this recommendation to get key 
acquisition documents complete as quickly as possible, however, based 
on inputs from NOAA and NASA, the DoD is proposing that due dates for 
the documents listed be changed to 2 July 2007. The three agencies have 
been working closely to review, coordinate and approve the documents. 
The primary driver for the delays is the extensive DoD coordination 
required for the Tri-agency Memorandum of Agreement. 

Recommendation 2: The GAO recommended that the Secretary of Defense 
direct the Air Force to delay reassigning the recently appointed 
Program Executive Officer until all sensors have been delivered to the 
National Polar-orbiting Operational Environmental Satellite System 
(NPOESS) Preparatory Program. (p. 48/GAO Draft Report): 

DOD Response: The DoD non-concurs with this recommendation. The NPOESS 
System Program Director (SPD) is responsible for NPOESS Preparatory 
Project sensor deliveries. The SPD is currently on a four year 
assignment that encompasses the desired period. 

[End of section] 

Appendix V: Comments from the National Aeronautics and Space 
Administration: 

National Aeronautics and Space Administration: 
Office of the Administrator: 
Washington, DC 20546-0001: 

March 30, 2007: 

Mr. David A. Powner: 
Director, Information Technology Management Issues:
United States Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Powner: 

NASA appreciates the opportunity to comment on your draft Government 
Accountability Office (GAO) report, GAO-07-498, entitled "Polar- 
orbiting Operational Environmental Satellites, Restructuring is Under 
Way, but Technical Challenges and Risks Remain" which pertains to the 
National Polar-Orbiting Operational Environmental Satellite System. 

In the draft report, GAO recommends that the Secretaries of Defense and 
Commerce and the NASA Administrator take the following action. 

Recommendation: Ensure that the responsible executives within their 
respective organizations approve key acquisition documents, including 
the memorandum of agreement among the three agencies, the system 
engineering plan, the test and evaluation master plan, and the 
acquisition strategy, as quickly as possible but no later than April 
30, 2007. 

Response: NASA concurs with this recommendation. The draft report noted 
that the delay in signing these key acquisition documents was due to 
the complexities of coordinating the documents among the three 
agencies. These documents are now in final review prior to coordination 
for signature by the Administrator. 

Thank you for the opportunity to review this draft report. If you have 
any questions or require additional information, please contact Andrew 
Carson at (202) 358-1702. 

Sincerely, 

Signed by: 

Shana Dale: 
Deputy Administrator: 

[End of section] 

Appendix VI: 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; Kathleen S. Lovett; 
Karen Richey; and Teresa Smith made key contributions to this report. 

FOOTNOTES 

[1] GAO, Polar-orbiting Operational Environmental Satellites: Cost 
Increases Trigger Review and Place Program's Direction on Hold, GAO-06-
573T (Washington, D.C.: Mar. 30, 2006); GAO, Polar-orbiting Operational 
Environmental Satellites: Technical Problems, Cost Increases, and 
Schedule Delays Trigger Need for Difficult Trade-off Decisions, GAO-06-
249T (Washington, D.C.: Nov. 16, 2005); GAO, Polar- orbiting 
Environmental Satellites: Information on Program Cost and Schedule 
Changes, GAO-04-1054 (Washington, D.C.: Sept. 30, 2004); GAO, Polar-
orbiting Environmental Satellites: Project Risks Could Affect Weather 
Data Needed by Civilian and Military Users, GAO-03-987T (Washington, 
D.C.: July 15, 2003); and GAO, Polar-orbiting Environmental Satellites: 
Status, Plans, and Future Data Management Challenges, GAO-02-684T 
(Washington, D.C.: July 24, 2002). 

[2] Three DMSP satellites and one POES satellite remain to be launched. 

[3] Presidential Decision Directive NSTC-2, May 5, 1994. 

[4] GAO-03-987T. 

[5] GAO-04-1054. 

[6] GAO-06-249T. 

[7] GAO-06-573T. 

[8] 10 U.S.C. § 2433 is commonly referred to as Nunn-McCurdy. 

[9] 10 U.S.C. § 2433 (e)(2) has recently been amended by Pub. L. No. 
109-163, § 802 (Jan. 6, 2006) and Pub. L. No. 109-364, § 213 (a) (Oct. 
17, 2006). 

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

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

[12] The NPOESS program office selected key milestones from a much 
larger set of ongoing and planned milestones in order to track 
progress. 

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

[14] GAO-06-249T. 

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

[16] The acquisition portion of the program includes satellite 
development, production, and launch. It does not include operations and 
support costs after launch. 

[17] The cost analysis group determined that there was a 90 percent 
confidence level that there would be no weather coverage gap. 

[18] A 50 percent level of confidence indicates that NPOESS has a 50 
percent chance that the restructured program (as defined in the Nunn- 
McCurdy certification decision) will be delivered as planned at the 
acquisition cost of $11.5 billion. 

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