Nunn-McCurdy findings on satellite program frustrate lawmakers

Commerce Department Inspector General’s report

A multiagency weather forecasting satellite program that is over budget and behind schedule will move forward with fewer satellites, fewer sensors and more money, according to the results of a federal review.

Lawmakers mandated the review, known as the Nunn-McCurdy review, last fall when the satellite program overran its multibillion-dollar budget by more than 25 percent. The House Science Committee heard the results of that review during a hearing last week.

NASA, the National Oceanic and Atmospheric Administration and the Defense Department jointly run the National Polar-orbiting Operational Environmental Satellite System (NPOESS) program.

Johnnie Frazier, the Commerce Department’s inspector general, testified last month that poor project oversight and excessive and inappropriate performance award fees caused more than $3 billion in cost overruns and a 17-month delay in launching the satellite system.

The agencies originally expected the program to cost $6.8 billion. According to the Nunn-McCurdy review, it will now cost at least an estimated $11 billion. The original due date was 2009. Now the system will not be ready until 2013, potentially causing a gap in U.S. weather forecasting data.

At the hearing, NOAA's administrator, retired Vice Adm. Conrad Lautenbacher, testified that DOD cost estimators have determined that the fiscal 2006 and 2007 budgets will adequately support the revised program.

The modified program consists of four NPOESS satellites operating in two orbits, supplemented by data from European weather satellites for the third orbit. The original NPOESS concept covered the same number of orbits, Lautenbacher said.

According to Frazier’s testimony, despite continuing reports about the project’s problems, the prime contractor, Northrop Grumman Space Technologies, received more than $123 million in performance award fees.

“We question the practice of paying award fees for performance rated ‘unsatisfactory’ by officials,” Frazier said.

At the hearing, Lautenbacher said the program will explore the option of procuring the final two satellites from the government rather than from Northrop Grumman.

“We have concerns with the past performance of the prime contractor and are exploring options to procure these two production satellites using the government as the integrator,” Lautenbacher said.

He testified that top officials at NOAA, NASA and DOD will meet quarterly with the prime contractor’s senior leaders to discuss the program.

Lautenbacher said the top agency officials overseeing NPOESS will assign responsibility for determining incentive fees to an independent program executive office. The IG had questioned the objectivity of the fee-determining official, who had also been the program director. The award fee-determining official and the NPOESS program director are now different people.

“The NPOESS contract will be renegotiated and a top priority will be to lower the award fee percentage, while also implementing the recommendations of the DOD IG,” Lautenbacher testified at the hearing.

“We will provide continuity of all current polar satellite data critical for our weather forecasting models while satisfying our requirements for future forecasting improvements,” he added. “I believe this is a well-constructed, achievable plan and will address all known deficiencies with the program. I am fully committed to making this program a success.”

House Science Committee Democrats have been following NPOESS' progress for the past six years and say a lack of information about the program has been a constant problem. The IG report led Reps. Bart Gordon (D-Tenn.) and David Wu (D-Ore.) to request the resignation of Lautenbacher and his deputy undersecretary, retired Gen. John Kelly.

None of the witnesses at last week's hearing were directly involved in the Nunn-McCurdy review.

This “hearing is premature,” Wu said. “Neither the members nor the staff has received sufficient, substantive materials on the Nunn-McCurdy decision that would allow us to exercise real oversight; to do our job and be accountable for taxpayer dollars. The result is that the witnesses before us today can pretty much tell us anything they want and we can't sort out the hard facts from the hopeful scenarios."