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

Since the June 2006 decision to revise the scope, cost, and schedule  of the NPOESS program, the program office has made progress in  restructuring the satellite acquisition; however, important tasks  remain to be done. 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. As of June 2007, these approvals  are over 9 months past due. 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. 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. In March 2007, NPOESS program officials stated that DOD  is planning to reassign the recently appointed Program Executive  Officer in the summer 2007 as part of this executive’s natural career  progression. Major Program Segments Are Under Development, but Significant Risks Remain

Major segments of the NPOESS program—the space segment and  ground systems segment—are under development; however,  significant problems have occurred and risks remain. Given the tight time frames for completing key sensors,  integrating them on the NPP spacecraft, and developing, testing, and  deploying the ground-based data processing systems, it will be  important for the NPOESS Integrated Program Office, the Program  Executive Office, and the Executive Committee to continue to  provide close oversight of milestones and risks. Additionally, continued sensor  problems could lead to higher final program costs. We also made two additional recommendations to the  Secretary of Commerce to (1) develop and implement a written  process for identifying and addressing human capital needs and for  streamlining how the program handles the three different agencies’  administrative procedures and (2) establish a plan for immediately  filling needed positions. In summary, NPOESS restructuring is well under way, and the  program has made progress in establishing an effective management  structure. Additionally, the program office continues to have  difficulty filling key positions and lacks a programwide staffing  process. 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.
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 its complexity, increasing its estimated cost to $12.5 billion, and delaying the first two satellites by 3 to 5 years. GAO was asked to summarize a report being released today that (1) assesses progress in restructuring the acquisition, (2) evaluates progress in establishing an effective management structure, and (3) identifies the status and key risks on the program's major segments.

What GAO Found

The NPOESS program office has made progress in restructuring the acquisition by establishing and implementing interim program plans guiding contractors' work activities in 2006 and 2007; however, important tasks remain to be done. Executive approvals of key acquisition documents are about 9 months late--due in part to the complexity of navigating three agencies' approval processes. Delays in finalizing these documents could hinder plans to complete contract negotiations by July 2007 and could keep the program from moving forward in fiscal year 2008 with a new program baseline. The program office has also made progress in establishing an effective management structure by adopting a new organizational framework with increased oversight from program executives and by instituting more frequent and rigorous program reviews; however, plans to reassign the recently appointed Program Executive Officer will likely increase the program's risks. Additionally, the program lacks a process and plan for identifying and filling staffing shortages, which has led to delays in key activities such as cost estimating and contract revisions. As of June 2007, key positions remain to be filled. Development and testing of major NPOESS segments--including key sensors and ground systems--are under way, but significant risks remain. For example, while work continues on key sensors, two of them--the visible/infrared imager radiometer suite and the cross-track infrared sounder--experienced significant problems and are considered high risk. Continued sensor problems could cause further cost increases and schedule delays. Additionally, while progress has been made in reducing delays in the data processing system, work remains in refining the algorithms needed to translate sensor observations into usable weather products. Given the tight time frames for completing this work, it will be important for program officials and executives to continue to provide close oversight of milestones and risks.