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. To plan for this shift, the  program office developed a new program cost and schedule baseline. NPOESS Costs Have Increased, and Schedules Have Been Delayed

The program office has increased the NPOESS life cycle cost estimate by  $1.2 billion, from $6.9 to $8.1 billion, and delayed key milestones— including the expected availability of the first NPOESS satellite, which was  delayed by 20 months. The cost increases reflect changes to the NPOESS  contract as well as increased program management funds. The contract  changes include extension of the development schedule, increased sensor  costs, and additional funds needed for mitigating risks. Increased program  management funds were added for non-contract costs and management  reserves. The schedule delays were the result of stretching out the  development schedule to accommodate the change in the NPOESS funding  stream. The  program office attributed the $638 million cost increase to extending the  development schedule to accommodate the changing funding stream,  increased sensor costs, and additional funds needed for mitigating risks. Managing the risks associated with the development of VIIRS and CrIS, the  integrated data processing system, and algorithm performance is of  particular importance because these are to be demonstrated on the NPP  satellite currently scheduled for launch in October 2006. Other factors could further affect the revised cost and schedule estimates. Specifically, the current shortfalls in performance targets indicate that the  NPOESS contract will most likely be overrun by $500 million at completion  in September 2011 and program risks could contribute to additional cost  and schedule slips. The  departments generally agreed with the report and provided written and oral  technical corrections, which have been incorporated as appropriate. Objectives, Scope, and Methodology

Our objectives were to (1) identify any cost or schedule changes as a result  of the revised baseline and determine what contributed to these changes  and (2) identify factors that could affect the program baseline in the future. We obtained comments on a draft of this report from officials at the  Department of Defense (DOD), NOAA, and NASA, and incorporated these  comments as appropriate.
Why GAO Did This Study

Our nation's current operational polar-orbiting environmental satellite program is a complex infrastructure that includes two satellite systems, supporting ground stations, and four central data processing centers. In the future, the National Polar-orbiting Operational Environmental Satellite System (NPOESS) is to combine the two current satellite systems into a single state-of-the-art environment monitoring satellite system. This new satellite system 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 2020. Because of changes in funding levels after the contract was awarded, the program office recently developed a new cost and schedule baseline for NPOESS. GAO was asked to provide an interim update to (1) identify any cost or schedule changes as a result of the revised baseline and determine what contributed to these changes and (2) identify factors that could affect the program baseline in the future. In commenting on a draft of this report, DOD, NOAA, and NASA officials generally agreed with the report and offered technical corrections, which we incorporated where appropriate.

What GAO Found

The program office has increased the NPOESS cost estimate by $1.2 billion, from $6.9 to $8.1 billion, and delayed key milestones, including the availability of the first NPOESS satellite--which was delayed by 20 months. The cost increases reflect changes to the NPOESS contract as well as increased program management costs. The contract changes include extension of the development schedule to accommodate changes in the NPOESS funding stream, increased sensor costs, and additional funds needed for mitigating risks. Increased program management funds were added for non-contract costs and management reserves. The schedule delays were the result of stretching out the development schedule to accommodate a change in the NPOESS funding stream. Other factors could further affect the revised cost and schedule estimates. First, the contractor is not meeting expected cost and schedule targets of the new baseline because of technical issues in the development of key sensors. Based on its performance to date, GAO estimates that the contractor will most likely overrun its contract at completion in September 2011 by at least $500 million. Second, the risks associated with the development of the critical sensors, integrated data processing system, and algorithms could also contribute to increased cost and schedule slips.