Northrop Grumman Corp. and three U.S. government agencies have completed a restructuring of the National Polar-orbiting Operational Environmental Satellite System (NPOESS), the organizations announced July 30.

As part of the restructuring, Northrop Grumman Space Technology was awarded a contract modification valued at $4.2 billion. The July 30 award includes multiple incentives worth $2.4 billion for the NPOESS acquisition and operations contract. The latest version of the contract consists of two spacecraft, nine sensors and 15 ground sites plus the command, communication and control system, ground processing, and operations to run through 2016. The new schedule calls for the NPOESS Preparatory Project spacecraft, a satellite intended to demonstrate some of the program’s technologies, to be launched in 2009, and the first NPOESS satellite in 2013.

Northrop Grumman was awarded the original NPOESS contract in 2002, but cost overruns and technology problems forced the program to be restructured. The program is overseen by the U.S. Departments of Defense, Commerce and NASA, which make up the tri-agency NPOESS Integrated Program Office.

"We had to go back through and review the contract with upper management to confirm that there was a required need,” said NPOESS program contracting officer Jeffrey Dedrick.

That need having been re-established, “I think the program’s looking really good,” said Diane Murphy, a spokeswoman for Northrop Grumman Space Technology. “It’s been on schedule and cost for 22 months now. There were many lessons learned and some new management, but it’s on schedule and looking pretty good.”

First devised in 1994, NPOESS will combine separate weather satellite programs operated by the Department of Commerce and Department of Defense and will monitor global environmental conditions while collecting and disseminating data relating to weather, atmosphere, oceans, land and the near-space environment. A plan submitted to the U.S. Congress said NPOESS could eliminate the financial redundancy of acquiring and operating separate systems while still providing the required data.

Ironically, the NPOESS program has been plagued by cost overruns which have drawn the attention of lawmakers, the U.S. Department of Defense Inspector General and the U.S. Government Accountability Office. An original $4.5 billion contract awarded to TRW (now part of Northrop Grumman), was supposed to produce a constellation of six or more satellites. But program leaders, confronted with ballooning costs, responded by cutting the number of satellites and the sensors they carry.

The latest review was mandated by a congressional provision, known as a Nunn-McCurdy review, triggered in autumn 2005 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 June 2006 hearing.

The Nunn-McCurdy provision requires the Pentagon to notify Congress when cost growth on a major acquisition program reaches 15 percent. If the cost growth hits 25 percent, Nunn-McCurdy requires the Pentagon to justify continuing the program based on three main criteria: importance to U.S. national security, any lack of a viable alternative and evidence that the problems that led to the cost growth are under control.

In May 2006, Johnnie Frazier, the Commerce Department’s inspector general, testified that NPOESS had suffered from poor project oversight which allowed excessive and inappropriate performance award fees creating more than $3 billion in cost overruns plus a 17-month delay in launching the system.

The agencies originally expected cost of about $6.8 billion but had to revise estimates total about $11 billion. Meanwhile, since the original due date of 2009 has been delayed to 2013, there exists a potential gap in U.S. weather forecasting data.

Speaking in October at a media briefing in Washington, David Ryan, Northrop Grumman’s sector vice president and NPOESS program director, said the program could be completed for $11.5 billion. That total would include four satellites plus ground systems, infrastructure costs and launch vehicles.

For any sensor that might not be included in the first satellite, there may be space on later satellites if money becomes available in future years, Murphy said. “If Congress decides they want to put some of the sensors back on, the type of bus that it is can accommodate them,” she explained. “There’s no additional cost or risk to the spacecraft itself. They took two [sensors] off, but it’s an open architecture that they did on purpose. It’s a very new, high-tech system [that] even with the sensors taken off satisfies 14 of 26 [requirements] the United Nations came up with in their essential list of climate variables that we need to look at to monitor the Earth’s environment.”