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Contractor Sees No More Overruns In NPOESS $11.5 Billion Price

By | October 30, 2006

      The National Polar-orbiting Observational Environmental Satellite System (NPOESS) won’t see further cost overruns and can be completed for $11.5 billion as the total price including launch vehicles and many other items, a Northrop Grumman Corp. [NOC] official said.

      “We can do this system within that total cost,” according to David L. Ryan, sector vice president and NPOESS program director with Northrop Grumman. “The total price that the government laid out in the Nunn-McCurdy process we believe is adequate to do this mission,” he said.

      Nunn-McCurdy refers to a law that requires Congress to be informed when the price of a system procurement program runs 15 percent over an earlier estimate. When the cost runs 25 percent or more over the estimate, the program may be canceled unless certain certifications are made.

      What still is being negotiated with government officials is just how much of that $11.5 billion total NPOESS outlay would be provided in each fiscal year, Ryan told reporters at a media briefing in Washington.

      “We’re working very closely with the government to figure out what the constraints would be on a fiscal year by fiscal year basis,” Ryan said. “We’re still in work on that,” meaning that negotiations are continuing.

      With Ryan at the media dinner was Gerard D. Wittman, Raytheon Co. [RTN] program manager for NPOESS. Northrop is the prime contractor, responsible for overall system design and development, system engineering and integration, instrument acquisition and spacecraft assembly and test. Raytheon provides the ground functions — command, control and communications, and mission data processing — and system engineering support

      Ryan was responding to a question from Space & Missile Defense Report as to whether the large cost overruns in the NPOESS program (more than 30 percent to more than 100 percent over estimates, depending on whose figures are used) would be followed by price stability, where the contractors would provide NPOESS for the $11.5 billion amount.

      “I think the answer is, ‘yes,'” Ryan said.

      That $11.5 billion in total outlays would include four satellites, ground systems, “the whole network,” infrastructure costs and launch vehicles, Ryan said.

      Stabilizing costs for the weather observing satellite system would be a major step forward from the soaring sticker price seen in recent years.

      The House Science Committee in May looked askance at the cost overruns, criticizing the way the program had been run.

      Lawmakers also criticized schedules missed and performance fees paid to the contractor when some performance goals weren’t met.

      As originally envisioned, NPOESS was to be a constellation of six or more satellites providing an environmental and climate monitoring system. But program leaders, confronted with cost overruns, responded by considering cuts in the number of satellites and sensors they carry.

      However, for any sensor that might not be included in the first satellite, there is sufficient space in the birds that sensors could be added back to later satellites launched, if money becomes available in future years, a knowledgeable source said. There would be a spiral development, where satellites launched later in the program could carry more sensors, if funding becomes available, the source said.

      That original $4.5 billion contract was awarded in 2002 to TRW Inc. (now part of Northrop Grumman), heading a team that includes Raytheon. NPOESS is to be a joint NASA, NOAA and Department of Defense program, providing swift data dissemination on meteorological conditions to military, civilian and scientific users.

      A Government Accountability Office report predicted that price tag may swell to an eventual $9.7 billion. Other estimates see the price rising to as much as $11.5 billion.

      Since reestimates of the total price, however, NPOESS “has stayed on budget and on plan,” or schedule, Ryan said.

      Contractors are aiming to launch an NPOESS satellite in 2009 on a Delta II rocket, he said. Program leaders are formulating a plan for the program running out to 2016.

      To recognize past cost increases and to reestablish goals for the program, a baseline review is to be performed in April, aiming for a definitized contract next summer.

      Ultimately, NPOESS stands to provide significant gains for both military and civilian users, according to sources.

      For example, it will provide far more timely data. Also, it will be able to peer inside clouds to assess their composition. And it will be able to examine the level of moisture in the soil of any given terrain.

      For combatant commanders, for example, that would mean they could know before advancing on a mission whether they would traverse solid ground, or whether an intense rainstorm is turning dirt into mud that would bog down trucks and marching personnel

      Or NPOESS also could tell a commander whether forces would face searing heat many miles ahead, or whether rain is beginning to freeze into ice near enemy formations.

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