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. 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. These approvals are currently  over 6 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. Additionally, the program lacks  a staffing process that clearly identifies staffing needs, gaps, and plans for  filling those gaps. 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. 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  and scheduled to launch the first satellite in 2013. Specifically, the program  continues to experience technical problems on key sensors, and costs and  schedules will be adjusted during negotiations on contract changes. A new baseline cost will be established once the contract is finalized. Program officials  plan to use this revised cost estimate to negotiate contract changes. 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. 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. 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.
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. 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.