The $10.9 billion Geostationary Operational Environmental Satellite-R (GOES-R) program faces potential launch delays, cost increases and budget shortfalls.
The $10.9 billion Geostationary Operational Environmental Satellite-R (GOES-R) program faces potential launch delays, cost increases and budget shortfalls following schedule slips and concerns over testing activities, according to a Commerce Department Inspector General's audit.
The audit makes seven recommendations for the National Oceanic and Atmospheric Administration to ensure the program, scheduled to launch the first of four new geostationary satellites in October 2015, avoids issues that have plagued previous NOAA satellite projects.
"NOAA needs to develop a comprehensive plan to mitigate the risk of potential launch delays and communicate to users and other stakeholders changes that may be necessary to maintain the first GOES-R satellite's launch readiness date," the audit states.
However, NOAA disagreed with two of the recommendations. For one, it did not agree to modify spacecraft contract award-fee structures to reduce award fee percentages in accordance with Federal Acquisition Regulation, claiming its plans were already compliant through a grandfathered deal.
NOAA also disagreed with a recommendation to base future award fees on contractor performance "to incentivize the contractor to control costs." NOAA officials instead said their method of "assessing and scoring cost management and control is clear, effective, and have proven through use to incentivize the contractor."
Despite NOAA's disagreement, the IG stood by the recommendations. In the report, IG officials explained that NOAA evaluated contractors with little consideration given to cost overruns. One contractor advised NOAA it would have overruns totaling $86 million – a sizeable chunk of the program's $264 million in overruns thus far on a contract priced at $329 million – yet NOAA "scored the contractor higher than we believe is justifiable," the IG said.
The IG conducted the audit from February to November 2012. The audit also sheds light on a "ban" NOAA imposed on OIG and the Government Accountability Office officials at Program Management Council (PMC) meetings dating back to an e-mail sent on Nov. 30, 2012, from NOAA's deputy secretary for operations to OIG.
The audit describes PMC meetings as the "highest decision-level forum within NOAA for satellite programs," and a forum in which OIG and GAO officials previously attended to "gain valuable insight into NOAA leadership's direction and program execution" for its $24 billion GOES-R and Joint Polar Satellite System (JPSS) programs.
NOAA provided two reasons for the ban. The first was a recommendation in July 2012 by the National Environmental Satellite Data Information Service Independent Review Team to restrict satellite oversight activities, though the OIG audit states the IRT recommendations were directed toward NOAA executive offices and not oversight officials.
NOAA cited another reason in December 2012, stating NOAA program managers were not "free to bring their challenges to NOAA management without concern that pre-decisional actions or preliminary reports will be incorporated into external reviews before NOAA has had an opportunity to address them."
OIG's response, contained within the audit, states that OIG does not release pre-decision materials and that any hindrance to review NOAA's decision-making progress reduces oversight capabilities.
The audit states that OIG directed staff to attend the 2013 PMC following two congressional committee requests to the Department of Commerce and NOAA to allow OIG to attend, though NOAA officials indicated the agency was "still working to address the Congressional requests."
"As of the date of this report, OIG attendance at PMC meeting (as well as other NESDIS satellite oversight and technical meetings) is still restricted," the audit states. "Over the past 3 months, while OIG has been banned from PMC meetings and waiting for NOAA to resolve this issue, NOAA has spent approximately $429 million on its GOES-R and JPSS programs. Restricting OIG attendance hampers our oversight of these high-cost, challenging, primary mission-essential programs and our ability to effectively provide independent assessments to Congress and our other stakeholders."
A NOAA official explained the agency's position: "NOAA's goal is to ensure that the IG has all the information they need to review our programs and determine whether they are operating effectively. The IG has valid needs for information that they are attempting to address by way of attending the monthly PMC meetings. NOAA has equally valid management needs that we are attempting to address by having closed PMC meetings. We are in the process of reconciling this with the Department of Commerce and we hope to determine a path forward in the near future."
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