Lawmakers berate NOAA's satellite program

IG report on satellite program

Today, Reps. Bart Gordon (D-Tenn.) and David Wu (D-Ore.) called for the removal of two National Oceanic and Atmospheric Administration leaders.

The two House Science Committee members sought the removal of retired Vice Adm. Conrad Lautenbacher Jr. and retired Gen. John Kelly Jr., deputy undersecretary for oceans and atmosphere. This comes after a federal auditor testified last week that poor program oversight and excessive, inappropriate award fees have caused more than $3 billion in cost overruns and a 17-month delay in launching the National Polar-orbiting Operational Environmental Satellite System (NPOESS).

At a committee hearing last week, Commerce Department Inspector General Johnnie Frazier said top government officials were not involved enough in the project to foresee that problems with a crucial sensor would delay the launch of the first satellite.

"Inadequate management oversight, in effect, postponed critical evaluations and decisions needed to replan the program’s faltering elements and contain cost and schedule overruns,” Frazier testified. “Time and money were thus wasted as NPOESS problems continued unchecked.”

The NPOESS program is divided among Commerce's NOAA, the Defense Department and NASA. A committee comprised of senior officials at those agencies is charged with providing overall policy and guidance.

Early estimates for NPOESS put life cycle costs at $6.5 billion and set a deadline of March 2008 for the first satellite launch. From May 2003 through December 2005, the designated top officials met formally six times and did not meet at all from May to December 2003, even as monthly reports showed subcontract-induced delays with the sensor and dubbed it “our problem child.” In 2004, the group met twice. Despite monthly reports continuously warning of the sensor's schedule erosion and cost overruns, top officials did not meet again until late January 2005. On March 31, 2005, the contractor advised the program director that problems with the sensor would delay the first NPOESS launch.

Although the troubled program proceeded, the prime contractor received more than $123 million in award fees — 84 percent of the available fee pool for the first six award periods, according to Frazier's testimony.

"In light of the severe problems the NPOESS program is experiencing, the current award fee system is clearly not promoting excellent contractor performance," he said.

An audit report released to coincide with the hearing found that the award fee system does not focus heavily on critical, high-risk tasks. Also, the potential payout — up to 20 percent of the contract’s total estimated costs — appears excessive compared with other government award fee contracts.

"We question the practice of paying award fees for performance rated 'unsatisfactory' by officials," Frazier testified.

The audit report questions the role of the fee-determining official, who is also the program director. The official has authority to set award amounts.

"This individual's objectivity in assessing the contractor may well be compromised by his responsibility as program director for NPOESS' day-to-day management and his stake in the program's success," the report states.

The project's leaders received a bipartisan flogging during the hearing for not owning up to their failures.

"The NPOESS program is, to be colloquial, totally out of whack," said committee Chairman Sherwood Boehlert (R-NY).

In light of Hurricane Katrina and climate issues, lawmakers stressed the urgency of the situation.

"I am made uneasy by statements like the one on Page 3 of Adm. Lautenbacher's testimony that '[Top officials have] been actively and directly involved in the oversight and management of NPOESS' when the information provided by the IG and the actual performance of the program indicate otherwise,” Boehlert said. “I am made uneasy when the NOAA testimony never takes a position on the IG's conclusion that both the potential and earned contract award fees were excessive."

He said the committee will continue scrutinizing the program to ensure that the mistakes of NPOESS are not repeated in NOAA's next big satellite procurement, GOES-R. Another hearing will take place in June.

"Despite repeated assurances from Adm. Lautenbacher and other NOAA officials that problems were being addressed, this program is in complete disarray," said Gordon, the committee’s ranking member.

"What we have here today is a lack of leadership, candor, and accountability for taxpayer dollars,” said Wu, ranking member on the committee’s Environment, Technology and Standards Subcommittee. “Admiral Lautenbacher claims that he and the Executive Committee have been aggressively managing NPOESS — the biggest acquisition at his agency. However, looking at the facts, I question their competence."

In their response to a draft of the IG report, NOAA leaders argued that top agency officials have always been concerned about the direction of NPOESS, given its complexity and aggressive schedule.

NOAA criticized the draft report for failing to fully characterize the award fee structure and recognize that the contract was a DOD contract.

IG officials said that because half the program's funding comes from Commerce, NOAA and Commerce should be examining the distribution of award fees.