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NPOESS Has More Than $1 Billion Added Cost Overrun; Pentagon Threatens Funds Freeze

By | June 23, 2008

      Cost Of NPOESS, Once Seen At $6.5 Billion, Now Is $13.6 Billion, Headed For $14 Billion

      The National Polar-Orbiting Operational Environmental Satellite System (NPOESS) that once was estimated to cost $6.5 billion, and more recently was pegged at $12.5 billion, now is priced at $13.6 billion, with a likelihood it soon will tip off at $14 billion or so.

      That news, presented by the Government Accountability Office (GAO) in a hearing of the House Science and Technology Committee energy and environment subcommittee, came after a high-ranking Department of Defense (DOD) official, procurement chief John Young, threatened to cut off funds for the program unless paperwork is moved along and signed.

      Too, the program has been buffeted by problems such as heads on screws shearing off on a sensor that must go on the satellite system, meaning more time may be lost disassembling the sensor, and removing and replacing screws.

      In the face of all this, lawmakers showered bipartisan comments of displeasure on the program.

      Rep. Nick Lampson (D-Texas), the subcommittee chairman, indicated clearly that he is tired of bad news about NPOESS, a weather, climate and environment monitoring satellite system that is behind schedule and far over budget.

      On the one hand, NPOESS could be a huge, and hugely needed, asset providing benefits to millions of Americans, he said.

      But then he reeled off problems besetting the program:

      Lampson noted with irritation that the GAO "once more has to report that instability continues to beset the program."

      And GAO recommended program managers complete documents setting forth NPOESS schedule deadlines, objectives and resources. That was last year. But now "it’s a year later and GAO still has to recommend [yet again] getting this basic task done," Lampson said.

      That’s why an exasperated Young — the under secretary of defense for acquisition, logistics and technology — "ordered these [documents] to be finished by the end of August or funding will be cut off," Lampson noted. Some observers have pointed to the fact that NPOESS is run by three separate agencies, instead of a single manager, as the reason for many of the costly delays and problems.

      Northrop Grumman Corp. [NOC] is the prime contractor for NPOESS; Raytheon Co. [RTN] is the largest subcontractor and principal teammate, responsible for developing the data processing and command and control segments. The tri-agency Integrated Program Office, composed of the Department of Commerce National Oceanic and Atmospheric Administration, Department of Defense and NASA, is managing development of NPOESS.

      Lampson also was unhappy that while Young’s memo was issued last month, the subcommittee didn’t learn of it until two weeks ago.

      But the leitmotiv throughout the hearing was the relentless rise in the NPOESS price tag, with costs more than doubling.

      Despite years of cost overruns, congressional rebukes, and promises to do better, "costs for the program are still not under control," Lampson observed. "Despite assurances that the program was adhering to its $12.5 billion life-cycle cost estimate, GAO believes that we can expect another increase of $1.1 billion."

      And what, Lampson asked, is the government getting for its money? Problems.

      "Technical problems still are not resolved," he said, such as the problems with screw heads coming off in one of the sensors to go on NPOESS. The Visible/Infrared Imager/Radiometer Suite (VIIRS) collects visible/infrared imagery and radiometric data.

      "Early indications are that the posts into which the screws are driven were improperly made," he noted. "In the worst case, the VIIRS unit will have to be completely disassembled to replace all of these so-called ‘jack posts.’"

      Fixing the glitch will add up to more delays, Lampson observed. "The history of VIIRS argues that the worst case is only half as bad as what will finally come to pass."

      With his patience running low, the chairman said, "This is not the situation we hoped to be in at this point in time." While Congress repeatedly has received assurances that the program will be righted, "I have grave concerns about this program … This committee wants to know how these problems are going to be resolved and when we can expect some good news."

      The mood was no happier on the Republican side of the dias.

      Rep. Bob Inglis of South Carolina, ranking Republican on the subcommittee, noted that the panel has heard before that everything will be fine, and the program will be fixed.

      Yet "we’re here again, and again we’re stressing the importance of oversight," where "’costly’ is a good word to describe the progress of the program over the past 12 months," Inglis said. He traced the history of NPOESS from a program price of $12.5 billion to $13.6 billion currently, and "there’s another increase looming on the horizon."

      Further, if documents aren’t processed and Young makes good on his vow to cut off funding, "the Department of Commerce would be forced to follow suit and remove funding as well," Inglis noted. "This loss of funding would mean a significant setback in the investment and progress of the NPOESS program."

      What the lawmakers didn’t indicate was any inclination to kill the NPOESS program as hopeless. Rather, what they want is results, a program that gets on track and on budget.

      As Inglis noted in considering the $13.6 billion cost, "that is a lot of taxpayer money."

      And it would go for a system that he and others on the panel still want to see launched and operational. "We need weather satellites that are launched on time and that provide data that informs everything from decisions about our military troop operations to forecasting the path of hurricanes," the top-ranked Republican said.

      But recent performance hasn’t been heartening. David A. Powner, director of information technology management issues with the GAO, provided the subcommittee with a table showing that out of 13 documents needed to manage the years-old program, almost half — six of them — aren’t complete.

      Powner noted that decisions are needed soon to ensure that there is no break in decades of data gathered on observations of the Earth by satellites.

      Attempts to curb costs, such as eliminating some of the sensors that were planned to go on the NPOESS satellites, haven’t prevented further cost increases.

      Dropping those sensors "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 three and five years, respectively," Powner noted.

      An eight-month delay in delivery of VIIRS in turn caused an eight-month delay in launching the NPOESS Preparatory Project satellite to June 2010, Powner observed, meaning that there will be much less time while that satellite is in orbit to learn lessons from its performance that could be used to improve other NPOESS satellites before they are launched.

      "Such delays could also lead to gaps in weather and climate data continuity if existing satellites begin to degrade or fail," Powner added. Then there are other risks in testing sensors and integrating them on the satellites, settling interagency disputes about system security, and revising outdated operations and cost estimates.

      "These issues could affect the program’s overall schedule and cost," he warned.

      He also said Young’s "threat to withhold funds [if documents aren’t completed] … is a big deal."

      Powner’s 30-page testimony, GAO-08-899T, and his 48-page report to Congress, GAO-08-518, can be read in full at on the Web.

      Retired Navy Vice Adm. Conrad Lautenbacher Jr., under secretary of commerce for oceans and atmosphere and also administrator of the National Oceanic and Atmospheric Administration in the Commerce Department, was grilled at length about the NPOESS problems.

      Lautenbacher conceded that "the government does not have a strong track record with regard to recent satellite acquisition development programs.

      "We are making significant strides in developing better processes for designing and acquiring our satellites," Lautenbacher said. "We currently have well functioning operational satellites with backup systems in place, and we are working on the next generation that will provide significant improvements in our ability to forecast the weather and monitor the climate."

      Overall, Lautenbacher asserted, "management of this program has been vastly improved." However, he added, "I continue to be concerned about contractor performance," especially a delay of eight months in delivery of VIIRS. "At this time, we do not anticipate a [further] delay in delivery of VIIRS, at this point."

      He didn’t quarrel, however, with the GAO findings.

      "It appears that an additional $1 billion [for NPOESS] apparently … will be required."

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