From: House Committee on Science, Space, and Technology
Posted: Wednesday, June 7, 2006
June 8, 2006
2:30 p.m. to 4:30 p.m.
2318 Rayburn House Office Building
The key program to build new weather satellites for both military and civilian forecasting has just undergone a statutorily required review because the program was more than 25 percent over budget. The program, the National Polar-orbiting Operational Environmental Satellite System (NPOESS), is jointly run by the Department of Defense (DOD), the National Oceanic and Atmospheric Administration (NOAA) and the National Aeronautics and Space Administration (NASA), with DOD and NOAA evenly splitting the costs, except for the costs of providing one preliminary satellite, which are being borne by NASA.
The program has a troubled history of cost increases and schedule delays and it has been the subject of several previous Science Committee hearings, most recently a hearing on May 11 on a report by the Department of Commerce Inspector General (IG), which raised concerns about NOAA's program management and award fees paid to the prime contractor, Northrop Grumman.
The June 8 hearing will focus on the results of the statutorily required review, known as a Nunn- McCurdy review. Under the law, any DOD-funded program that is more than 25 percent over budget must be reviewed to see if it should be continued and if so, in what manner.
The review, which was carried out under the auspices of DOD by all three NPOESS agencies, determined that the program should be continued, but the number of satellites and their capabilities will be scaled back. The NPOESS agencies argue that the scaled back program will be able to capture all weather data collected by current satellites and will minimize the chance of having gap periods when a full complement of satellites is not flying.
The revamped program is estimated to have acquisition (as opposed to operational) costs of $11.1 billion ($11.5 billion if launch costs are included). That is an increase of about 50 percent, or $3.7 billion over the most recent official baseline of $7.4 billion issued in 2004. The original cost estimate for the program as configured before the Nunn-McCurdy review, which was issued in 2000, was $6.5 billion. No additional funds beyond those already projected will be needed until fiscal year (FY) 2010, according to the three NPOESS agencies. The first NPOESS satellite would be launched in 2013. The 2004 estimate assumed a first launch in 2010; the 2000 estimate assumed a launch in 2008. The Committee is seeking background materials to better evaluate and understand these estimates.
The hearing will address these overarching questions:
Basic background on NPOESS can be found in the Committee's charters from November 16, 2005 and May 11, 2006, available at: http://www.house.gov/science/hearings/index.htm .
The NPOESS contract follows DOD acquisition procedures. As a result, it is subject to the Nunn-McCurdy provisions of the DOD acquisition law (10 U.S.C 2433). Under the Nunn- McCurdy law, if a program's costs increase more than 25 percent, the Secretary of Defense (or the Secretary of the appropriate branch of the military) must certify the program in a period of time specified under the law or no additional funds can be obligated for the program. Certification requires a written justification that:
On January 11, 2006, the Secretary of the Air Force notified Congress that the NPOESS program would exceed the 25 percent Nunn-McCurdy notification threshold (meaning that acquisition costs would increase by at least $1.85 billion over the program's most recent cost estimate of $7.4 billion). This triggered a formal certification process that effectively superseded any previous independent reviews as well as pending program direction decisions about mitigating cost overruns and schedule delays.
To address each of the four criteria for the NPOESS program, DOD established four Independent Program Teams, each assigned to look at one of the criteria. These teams consisted of representatives of each of the agencies involved in NPOESS (DOD, NOAA, and NASA) and other experts on both satellite acquisition and on the technical capabilities of satellites. The Nunn-McCurdy certification process for NPOESS represents the first time an interagency program has undergone a Nunn-McCurdy review. For FY2006, the NPOESS program put an interim plan in place to continue building key components of the program pending a Nunn- McCurdy decision. Thus far under the new plan, the program is mostly on schedule and within cost estimates.
On June 5, 2006, the Undersecretary of Defense for Acquisition, Technology and Logistics notified Congress that he is certifying NPOESS with the following major changes:
The witnesses were asked to address the following questions in their testimony.
Dr. Ronald Sega, Undersecretary of the Air Force
Please describe the results of the Nunn-McCurdy review of the National Polar-orbiting Operational Environmental Satellite System (NPOESS) and its implications for the United States Air Force, including information that addresses the following questions:
Vice Admiral Conrad C. Lautenbacher (ret.), Administrator, National Oceanic and Atmospheric Administration
Please describe the results of the Nunn-McCurdy review of the National Polar-orbiting Operational Environmental Satellite System (NPOESS) and its implications for the National Oceanic and Atmospheric Administration (NOAA), including information that addresses the following questions:
Dr. Michael Griffin, Administrator, National Aeronautics and Space Administration
Please describe the results of the Nunn-McCurdy review of the National Polar-orbiting Operational Environmental Satellite System (NPOESS) and its implications for the National Aeronautics and Space Administration (NASA), including information that addresses the following questions:
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