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Restructuring and Address Affordability Risks' which was released on 
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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

June 2012: 

Joint Strike Fighter: 

DOD Actions Needed to Further Enhance Restructuring and Address 
Affordability Risks: 

GAO-12-437: 

GAO Highlights: 

Highlights of GAO-12-437, a report to congressional committees. 

Why GAO Did This Study: 

The F-35 Lightning II, also known as the Joint Strike Fighter (JSF), 
is the Department of Defense’s (DOD) most costly and ambitious 
aircraft acquisition, seeking to simultaneously develop and field 
three aircraft variants for the Air Force, Navy, Marine Corps, and 
eight international partners. The JSF is critical to DOD’s long-term 
recapitalization plans to replace hundreds of legacy aircraft. Total 
U.S. investment is now projected at nearly $400 billion to develop and 
acquire 2,457 aircraft through 2037 and will require a long-term, 
sustained funding commitment. The JSF has been extensively 
restructured over the last 2 years to address relatively poor cost, 
schedule, and performance outcomes. 

This report, prepared in response to the National Defense 
Authorization Act for Fiscal Year 2010, addresses (1) JSF program cost 
and schedule changes and affordability issues; (2) performance 
objectives, testing results, and technical risks; and (3) contract 
costs, concurrency impacts, and manufacturing. GAO’s work included 
analyses of a wide range of program documents and interviews with 
defense and contractor officials. 

What GAO Found: 

Joint Strike Fighter restructuring continued throughout 2011 and into 
2012, adding to cost and schedule. The new program baseline projects 
total acquisition costs of $395.7 billion, an increase of $117.2 
billion (42 percent) from the prior 2007 baseline. Full rate 
production is now planned for 2019, a delay of 6 years from the 2007 
baseline. Unit costs per aircraft have doubled since start of 
development in 2001. Critical dates for delivering warfighter 
requirements remain unsettled because of program uncertainties. While 
the total number of aircraft DOD plans to buy has not changed, it has 
for 3 straight years reduced near-term procurement quantities, 
deferring aircraft and costs to future years. Since 2002, the total 
quantity through 2017 has been reduced by three-fourths, from 1,591 to 
365. Affordability is a key challenge–annual acquisition funding needs 
average about $12.5 billion through 2037 and life-cycle operating and 
support costs are estimated at $1.1 trillion. DOD has not thoroughly 
analyzed program impacts should funding expectations be unmet. 

Overall performance in 2011 was mixed as the program achieved 6 of 11 
important objectives. Developmental flight testing gained momentum and 
is now about 21 percent complete with the most challenging tasks still 
ahead. Performance of the short takeoff and vertical landing variant 
improved this year and its “probation” period to fix deficiencies was 
ended after 1 year with several fixes temporary and untested. 
Developing and integrating the more than 24 million lines of software 
code continues to be of concern. Late software releases and concurrent 
work on multiple software blocks have delayed testing and training. 
Development of critical mission systems providing core combat 
capabilities remains behind schedule and risky. To date, only 4 
percent of the mission systems required for full capability have been 
verified. Deficiencies with the helmet mounted display, integral to 
mission systems functionality and concepts of operation, are most 
problematic. The autonomic logistics information system, integral 
technology for improving aircraft availability and lowering support 
costs, is not fully developed. 

Most of the instability in the program has been and continues to be 
the result of highly concurrent development, testing, and production 
activities. Cost overruns on the first four annual procurement 
contracts total more than $1 billion and aircraft deliveries are on 
average more than 1 year late. Program officials said the government’s 
share of the cost growth is $672 million; this adds about $11 million 
to the price of each of the 63 aircraft under those contracts. 
Effectively managing the expanding network of global suppliers will be 
key to improving program outcomes, increasing manufacturing 
throughput, and enabling higher production rates. In addition to 
contract overruns, concurrency costs of at least $373 million have 
been incurred on production aircraft to correct deficiencies found in 
testing. The manufacturing process is still absorbing higher than 
expected number of engineering changes resulting from flight testing, 
changes which are expected to persist at elevated levels into 2019, 
making it difficult to achieve efficient production rates. More design 
and manufacturing changes are expected as testing continues, bringing 
risks for more contract overruns and concurrency costs. Even with the 
substantial reductions in near-term production quantities, DOD still 
plans to procure 365 aircraft for $69 billion before developmental 
flight tests are completed. 

What GAO Recommends: 

GAO recommends that (1) DOD analyze cost and program impacts from 
potentially reduced future funding levels and (2) assess the 
capability and challenges facing the JSF’s global supply chain. DOD 
concurred with the second recommendation and agreed with the value of 
the first, but believed its annual budget efforts are sufficient. GAO 
maintains that more robust data is needed and could be useful to 
congressional deliberations. 

View [hyperlink, http://www.gao.gov/products/GAO-12-437]. For more 
information, contact Michael J. Sullivan at (202) 512-4841 or 
sullivanm@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Restructuring Reduces Near Term Risk, but Long Term Affordability is 
Challenging: 

Mixed Performance in 2011 Affected by Concurrency and Technical Risks: 

Contract Overruns and Concurrency Costs Indicate the Program Has Not 
Yet Stabilized Design and Manufacturing: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Defense: 

Appendix III: Prior GAO Reports and DOD Responses: 

Appendix IV: Budgeted Funding and Procurement Quantities, FY 2011-2017: 

Appendix V: Short Takeoff and Vertical Landing Aircraft Probation 
Period and Progress: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: JSF Program Cost and Quantity Estimates over Time: 

Table 2: JSF Program Results for 2011 Objectives: 

Table 3: Procurement Contract Costs as of January 2012: 

Table 4: JSF Procurement Investments and Flight Test Progress: 

Table 5: STOVL Technical Problems Identified for Probation Period: 

Figures: 

Figure 1: JSF Aircraft Development Contract Changes: 

Figure 2: Primary Engine Development Contract Changes: 

Figure 3: Changes in Procurement Plans over Time: 

Figure 4: JSF Budgeted Development and Procurement Costs: 

Figure 5: 2011 JSF Flight Test Points Progress: 

Figure 6: Software Growth: 

Figure 7: JSF Concurrency: 

Figure 8: JSF Design Changes Over Time: 

Figure 9: JSF Mean Times between Failure Demonstrated to Date: 

Abbreviations: 

ALIS: Autonomic Logistics Information System: 

CAPE: Cost Assessment and Program Evaluation: 

CTOL: conventional takeoff and landing: 

CV: carrier variant: 

DCMA: Defense Contract Management Agency: 

DOD: Department of Defense: 

DOT&E: Director, Operational Test and Evaluation: 

DT: development testing: 

JSF: Joint Strike Fighter: 

LRIP: low rate initial production: 

OSD: Office of the Secretary of Defense: 

SDD: system development and demonstration: 

STOVL: short takeoff and vertical landing: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

June 14, 2012: 

Congressional Committees: 

The F-35 Lightning II, also known as the Joint Strike Fighter (JSF), 
is the Department of Defense's (DOD) most costly and ambitious 
aircraft acquisition, seeking to simultaneously develop and field 
three aircraft variants for the Air Force, Navy, Marine Corps, and 
eight international partners. The JSF is critical to DOD's long-term 
recapitalization plans as it is intended to replace hundreds of legacy 
fighters and strike aircraft. Total U.S. investment in the JSF will be 
substantial--approaching $400 billion to develop and acquire 2,457 
aircraft over several decades--and will require a long-term sustained 
funding commitment. Over the last 2 years, the JSF program has been 
extensively restructured to address relatively poor cost, schedule, 
and performance outcomes. 

We have reported on JSF issues for a number of years.[Footnote 1] A 
recurring theme in our body of work since 2005 has been a concern 
about the substantial concurrency, or overlap, of JSF development, 
test, and production activities and the heightened risk it poses to 
achieving good program outcomes. The effects of concurrency became 
apparent in 2011 as the JSF program incurred an estimated $373 million 
in additional costs to retrofit already-procured aircraft to correct 
deficiencies discovered during testing. Our prior reports have also 
made numerous recommendations for reducing risks and improving chances 
for successful outcomes; DOD has taken actions on these 
recommendations to varying degrees. Appendix III summarizes our major 
prior reports, DOD's responses, and subsequent actions. In April 2011, 
we reported that the department's restructuring actions should lead to 
more achievable and predictable outcomes, albeit at higher costs and 
with extended times to test and deliver capabilities to the 
warfighter.[Footnote 2] The report also identified continuing issues 
concerning affordability risks (both for acquiring JSF aircraft and 
supporting them over the life-cycle), delays in software development, 
a continued high rate of design changes, and immature manufacturing 
processes. 

The National Defense Authorization Act for Fiscal Year 2010[Footnote 
3] requires GAO to review the JSF program annually for 6 years. In 
this report, we address (1) program cost and schedule changes and 
their implications on affordability; (2) performance testing results 
and technical risks; and (3) contract cost performance, concurrency 
impacts, and design and manufacturing maturity. This report also 
includes additional information on the "probation period" and 
performance of the short takeoff and vertical landing (STOVL) variant 
as requested by the Senate Armed Services Committee. To conduct this 
work, we evaluated DOD's restructuring actions and impacts on the 
program, tracked cost and schedule changes, and determined factors 
driving the changes. We reviewed program status reports, manufacturing 
data, test plans, and internal DOD analyses. We discussed results to 
date and future plans to complete JSF development and move further 
into procurement with DOD, JSF, and contractor officials. We toured 
aircraft and engine manufacturing plants, obtained production and 
supply performance indicators, and discussed improvements underway 
with contractors and DOD plant representatives. Appendix I contains a 
more detailed description of our scope and methodology. We conducted 
this performance audit from June 2011 to June 2012 in accordance with 
generally accepted government auditing standards. Those standards 
required that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings 
and conclusions based on our audit objectives. We believe that 
evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. 

Background: 

The JSF is a joint, multinational acquisition to develop and field an 
affordable, highly common family of next generation strike fighter 
aircraft for the United States Air Force, Navy, Marine Corps, and 
eight international partners.[Footnote 4] The JSF is a single-seat, 
single engine aircraft incorporating low-observable (stealth) 
technologies, defensive avionics, advanced sensor fusion,[Footnote 5] 
internal and external weapons, and advanced prognostic maintenance 
capability. There are three variants. The conventional takeoff and 
landing (CTOL) variant will be an air-to-ground replacement for the 
Air Force's F-16 Falcon and the A-10 Thunderbolt II aircraft, and will 
complement the F-22A Raptor. The STOVL variant will be a multi-role 
strike fighter to replace the Marine Corps' F/A-18C/D Hornet and AV-8B 
Harrier aircraft. The carrier-suitable variant (CV) will provide the 
Navy a multi-role, stealthy strike aircraft to complement the F/A-18 
E/F Super Hornet. 

DOD began the JSF program in October 2001 with a highly concurrent, 
aggressive acquisition strategy with substantial overlap between 
development, testing, and production. The program was replanned in 
2004 following weight and performance problems and rebaselined in 2007 
due to cost growth and schedule slips. In February 2010, the Secretary 
of Defense announced another comprehensive restructuring of the 
program due to poor outcomes and continuing problems. This 
restructuring followed an extensive Department-wide review which 
included three independent groups chartered to evaluate program 
execution and resources, manufacturing processes and plans, and engine 
costs and affordability initiatives. DOD provided additional resources 
for testing-funding, time, and flight test assets-and reduced near-
term procurement by 122 aircraft. As a result of the additional 
funding needed and recognition of higher unit procurement costs, in 
March 2010 the Department declared that the program experienced a Nunn-
McCurdy breach of the critical cost growth statutory threshold 
[Footnote 6] and subsequently certified to the Congress in June 2010 
that the JSF program should continue. The program's approval to enter 
system development was rescinded and efforts commenced to establish a 
new acquisition program baseline. The new JSF program executive 
officer subsequently led a comprehensive technical baseline review. In 
January 2011, the Secretary of Defense announced additional 
development cost increases, further delays, and cut another 124 
aircraft through fiscal year 2016. Restructuring continued throughout 
2011 and into 2012, adding to costs and extending the schedules for 
achieving key activities. The Department's restructuring actions have 
helped reduce near-term risks by lowering annual procurement 
quantities and allowing more time and resources for flight testing. 

Restructuring Reduces Near Term Risk, but Long Term Affordability is 
Challenging: 

In late March 2012, the Department established a new acquisition 
program baseline and approved the continuation of system development. 
These decisions, critical for program management and oversight, had 
been delayed several times and came 2 years after the Department 
alerted the Congress that the program experienced a breach of the Nunn-
McCurdy critical cost growth threshold and thus require a new 
milestone approval for system development and a new acquisition 
program baseline. The new JSF baseline projects a total acquisition 
cost of $395.7 billion, an increase of $117.2 billion (42 percent) 
from the prior 2007 baseline. Table 1 shows changes in cost, quantity, 
and schedule since the start of system development (2001), a major 
redesign (2004), a revised baseline following the program's Nunn-
McCurdy breach of the significant cost growth statutory threshold 
(2007), initial restructuring actions after the Nunn-McCurdy breach of 
the critical cost growth statutory threshold (2010), and the new 
acquisition program baseline (2012). 

Table 1: JSF Program Cost and Quantity Estimates over Time: 

Expected quantities: 

Development quantities; 
October 2001 (system development start): 14; 
December 2003 (2004 replan): 14; 
March 2007 (approved baseline): 15; 
June 2010 (Nunn-McCurdy): 14; 
March 2012 (approved baseline): 14. 

Procurement quantities (U.S. only); 
October 2001 (system development start): 2,852; 
December 2003 (2004 replan): 2,443; 
March 2007 (approved baseline): 2,443; 
June 2010 (Nunn-McCurdy): 2,443; 
March 2012 (approved baseline): 2,443. 

Total quantities; 
October 2001 (system development start): 2,866; 
December 2003 (2004 replan): 2,457; 
March 2007 (approved baseline): 2,458; 
June 2010 (Nunn-McCurdy): 2,457; 
March 2012 (approved baseline): 2,457. 

Cost estimates (then-year dollars in billions): 

Development; 
October 2001 (system development start): $34.4; 
December 2003 (2004 replan): $44.8; 
March 2007 (approved baseline): $44.8; 
June 2010 (Nunn-McCurdy): $51.8; 
March 2012 (approved baseline): $55.2. 

Procurement; 
October 2001 (system development start): $196.6; 
December 2003 (2004 replan): $199.8; 
March 2007 (approved baseline): $231.7; 
June 2010 (Nunn-McCurdy): $325.1; 
March 2012 (approved baseline): $335.7. 

Military construction; 
October 2001 (system development start): $2.0; 
December 2003 (2004 replan): $0.2; 
March 2007 (approved baseline): $2.0; 
June 2010 (Nunn-McCurdy): $5.6; 
March 2012 (approved baseline): $4.8. 

Total program acquisition; 
October 2001 (system development start): $233.0; 
December 2003 (2004 replan): $244.8; 
March 2007 (approved baseline): $278.5; 
June 2010 (Nunn-McCurdy): $382.5; 
March 2012 (approved baseline): $395.7. 

Unit cost estimates (then-year dollars in millions): 

Program acquisition; 
October 2001 (system development start): $81; 
December 2003 (2004 replan): $100; 
March 2007 (approved baseline): $113; 
June 2010 (Nunn-McCurdy): $156; 
March 2012 (approved baseline): $161. 

Average procurement; 
October 2001 (system development start): $69; 
December 2003 (2004 replan): $82; 
March 2007 (approved baseline): $95; 
June 2010 (Nunn-McCurdy): $133; 
March 2012 (approved baseline): $137. 

Estimated delivery and production dates: 

First production aircraft delivery; 
October 2001 (system development start): 2008; 
December 2003 (2004 replan): 2009; 
March 2007 (approved baseline): 2010; 
June 2010 (Nunn-McCurdy): 2010; 
March 2012 (approved baseline): 2011. 

Initial operational capability; 
October 2001 (system development start): 2010-2012; 
December 2003 (2004 replan): 2012-2013; 
March 2007 (approved baseline): 2012-2015; 
June 2010 (Nunn-McCurdy): TBD; 
March 2012 (approved baseline): TBD. 

Full-rate production; 
October 2001 (system development start): 2012; 
December 2003 (2004 replan): 2013; 
March 2007 (approved baseline): 2013; 
June 2010 (Nunn-McCurdy): 2016; 
March 2012 (approved baseline): 2019. 

Source: GAO analysis of DOD data. 

[End of table] 

Full rate production is now planned for 2019, a delay of 6 years from 
the 2007 baseline. Unit cost estimates continue to increase and have 
now doubled since the start of development. Initial operational 
capability dates for the Air Force, Navy and Marines--the critical 
dates when the warfighter expects the capability promised by the 
acquisition program to be available--have slipped over time and are 
now unsettled. 

The fiscal year 2013 defense budget request and five-year plan 
supports the new approved baseline. Compared to the fiscal year 2012 
budget plan for the same time period, the 2013 budget plan identifies 
$369 million more for JSF development and testing and $14.2 billion 
less in procurement funding for fiscal years 2012 through 2016. 
Procurement funding reflects the reduction of 179 aircraft in annual 
procurement quantities from fiscal year 2013 to fiscal year 2017. 
Appendix IV summarizes the new budget's development and procurement 
funding requests and aircraft quantities for each service. 

Taken as a whole, the Department's restructuring actions have helped 
reduce near term acquisition risks by lowering annual procurement 
quantities and allowing more time and resources for flight testing. 
However, continuing uncertainties about the program and frequently 
changing prognoses make it difficult for the United States and 
international partners to confidently commit to future budgets and 
procurement schedules, while finalizing related plans for basing JSF 
aircraft, developing a support infrastructure, and determining force 
and retirement schedules for legacy aircraft. Over the long haul, 
affordability is a key challenge. Projected annual acquisition funding 
needs average more than $12.5 billion through 2037 and life-cycle 
operating and support costs are estimated at $1.1 trillion. 

Development Cost and Schedule Changes: 

The new baseline increased cost and extended the schedule for 
completing system development. Development is now expected to cost 
$55.2 billion, an increase of $10.4 billion (23 percent) from the 2007 
baseline. About 80 percent of these funds have been appropriated 
through fiscal year 2011. System development funding is now required 
through fiscal year 2018, 5 more years than the 2007 baseline. Figures 
1 and 2 track cost increases and major events regarding the aircraft 
and engine development contracts, respectively.[Footnote 7] 

Figure 1: JSF Aircraft Development Contract Changes: 

[Refer to PDF for image: line graph] 

Date: October 2001; 
Contract award: $19 billion. 

Date: December 2003; 
Contract award: $19.7 billion. 

STOVL weight redesign. 

Date: December 2005; 
Contract award: $25.7 billion. 

Date: December 2007; 
Contract award: $25.9 billion. 

Aircraft development delays and flight text extension. 

Date: December 2009; 
Contract award: $27.5 billion. 

Post-Nunn-McCurdy restructure. 

Date: December 2011; 
Contract award: $31.8 billion. [Latest government estimate] 

Source: JSF Selected Acquisition Reports. 

[End of figure] 

Figure 2: Primary Engine Development Contract Changes: 

[Refer to PDF for image: line graph] 

Date: October 2001; 
Contract award: $4.8 billion. 

Date: December 2003; 
Contract award: $4.8 billion. 

Schedule extension due to STOVL redesign and revised thrust 
specification 

Date: December 2005; 
Contract award: $5.8 billion. 

Date: December 2007; 
Contract award: $5.9 billion. 

Development delays and engine blade issues. 

Date: December 2009; 
Contract award: $6.7 billion. 

Post-Nunn-McCurdy restructure. 

Date: December 2011; 
Contract award: $8.4 billion. [Latest government estimate] 

Source: JSF Selected Acquisition Reports. 

[End of figure] 

Procurement Cost and Quantity Changes: 

The new baseline includes $335.7 billion in procurement funding, an 
increase of $104 billion (45 percent) compared to the 2007 baseline. 
About 6 percent of this total funding requirement has been 
appropriated through fiscal year 2011. Concerned about concurrency 
risks, DOD, in the fiscal year 2013 budget request, reduced planned 
procurement quantities through fiscal year 2017 by 179 aircraft. This 
marked the third time in as many years that near-term procurement 
quantities had been reduced. Combined with other changes since the 
2007 revised baseline, total JSF procurement quantity has been reduced 
by 410 aircraft through fiscal year 2017. Since the department still 
plans to eventually acquire the full complement of U.S. aircraft--
2,443 production jets--the procurement costs, fielding schedules, and 
support requirements for the deferred aircraft will be incurred in 
future years beyond 2017. The new plan also stretches the period of 
planned procurement another two years to 2037. Figure 3 shows how 
planned quantities in the near-term have steadily declined over time. 

Figure 3: Changes in Procurement Plans over Time: 

[Refer to PDF for image: multiple line graph] 

Number of aircraft procured per year: 

Fiscal year: 2006; 
2002 plan: 10. 

Fiscal year: 2007; 
2002 plan: 22; 
2005 plan: 5; 
2008 plan: 2; 
2011 plan: 2; 
2012 plan: 2. 

Fiscal year: 2008; 
2002 plan: 49; 
2005 plan: 18; 
2008 plan: 12; 
2011 plan: 12; 
2012 plan: 12. 

Fiscal year: 2009; 
2002 plan: 82; 
2005 plan: 47; 
2008 plan: 16; 
2011 plan: 14; 
2012 plan: 14. 

Fiscal year: 2010; 
2002 plan: 108; 
2005 plan: 56; 
2008 plan: 30; 
2011 plan: 30; 
2012 plan: 30. 

Fiscal year: 2011; 
2002 plan: 156; 
2005 plan: 64; 
2008 plan: 43; 
2011 plan: 32; 
2012 plan: 32. 

Fiscal year: 2012; 
2002 plan: 194; 
2005 plan: 101; 
2008 plan: 82; 
2011 plan: 32; 
2012 plan: 31. 

Fiscal year: 2013; 
2002 plan: 194; 
2005 plan: 133; 
2008 plan: 90; 
2011 plan: 42; 
2012 plan: 29. 

Fiscal year: 2014; 
2002 plan: 194; 
2005 plan: 158; 
2008 plan: 110; 
2011 plan: 62; 
2012 plan: 29. 

Fiscal year: 2015; 
2002 plan: 194; 
2005 plan: 160; 
2008 plan: 130; 
2011 plan: 81; 
2012 plan: 44. 

Fiscal year: 2016; 
2002 plan: 194; 
2005 plan: 160; 
2008 plan: 130; 
2011 plan: 108; 
2012 plan: 66. 

Fiscal year: 2017; 
2002 plan: 194; 
2005 plan: 160; 
2008 plan: 130; 
2011 plan: 130; 
2012 plan: 76. 

Cumulative quantities: 
2002 plan: 1,591; 
2005 plan: 1,062; 
2008 plan: 775; 
2011 plan: 775; 
2012 plan: 365. 

Source: GAO analysis of DOD data. 

[End of figure] 

With the latest reduction, the program now plans to procure a total of 
365 aircraft through 2017, about one-fourth of the 1,591 aircraft 
expected in the 2002 plan. The ramp rate (annual increases in 
quantities) for the early production years has been significantly 
flattened over time. Reducing near-term procurement quantities lowers 
concurrency risks because fewer aircraft are produced that may later 
need to be modified to correct problems discovered during testing. 
However, it also means that the number of aircraft and associated 
capabilities that the program committed to provide the warfighter will 
be delivered years later than planned. 

Affordability Challenges: 

Overall program affordability--both in terms of the investment costs 
to acquire the JSF and the continuing costs to operate and maintain it 
over the life-cycle--remains a major challenge. As shown in figure 4, 
the annual funding requirements average more than $12.5 billion 
through 2037 and average more than $15 billion annually in the 10-year 
period from fiscal years 2019 through 2028. The Air Force alone needs 
to budget from about $6 to $11 billion per year from fiscal year 2016 
through 2037 for procurement of JSF aircraft. At the same time, the 
Air Force is committed to other big-dollar projects such as the KC-46 
tanker and a new bomber program. 

Figure 4: JSF Budgeted Development and Procurement Costs: 

[Refer to PDF for image: stacked vertical bar graph] 

Fiscal year: 2012; 
Air Force development: $1.388 billion; 
Air Force procurement: $3.668 billion; 
Navy development: $1.31 billion; 
Navy procurement: $2.87 billion. 

Fiscal year: 2013; 
Air Force development: $1.193 billion; 
Air Force procurement: $3.748 billion; 
Navy development: $1.472 billion; 
Navy procurement: $2.724 billion. 

Fiscal year: 2014; 
Air Force development: $0.985 billion; 
Air Force procurement: $3.713 billion; 
Navy development: $1.264 billion; 
Navy procurement: $3.008 billion. 

Fiscal year: 2015; 
Air Force development: $0.603 billion; 
Air Force procurement: $5.058 billion; 
Navy development: $1.023 billion; 
Navy procurement: $3.218 billion. 

Fiscal year: 2016; 
Air Force development: $0.358 billion; 
Air Force procurement: $6.524 billion; 
Navy development: $0.745 billion; 
Navy procurement: $3.971 billion. 

Fiscal year: 2017; 
Air Force development: $0.156 billion; 
Air Force procurement: $6.466 billion; 
Navy development: $0.46 billion; 
Navy procurement: $5.326 billion. 

Fiscal year: 2018; 
Air Force development: $0.078 billion; 
Air Force procurement: $6.607 billion; 
Navy development: $0.077 billion; 
Navy procurement: $7.303 billion. 

Fiscal year: 2019; 
Air Force procurement: $6.32 billion; 
Navy procurement: $6.992 billion. 

Fiscal year: 2020; 
Air Force procurement: $6.848 billion; 
Navy procurement: $7.128 billion. 

Fiscal year: 2021; 
Air Force procurement: $8.619 billion; 
Navy procurement: $7.449 billion. 

Fiscal year: 2022; 
Air Force procurement: $8.801 billion; 
Navy procurement: $7.021 billion. 

Fiscal year: 2023; 
Air Force procurement: $8.798 billion; 
Navy procurement: $7.043 billion. 

Fiscal year: 2024; 
Air Force procurement: $9.068 billion; 
Navy procurement: $7.074 billion. 

Fiscal year: 2025; 
Air Force procurement: $9.098 billion; 
Navy procurement: $7.282 billion. 

Fiscal year: 2026; 
Air Force procurement: $9.35 billion; 
Navy procurement: $7.255 billion. 

Fiscal year: 2027; 
Air Force procurement: $9.556 billion; 
Navy procurement: $6.669 billion. 

Fiscal year: 2028; 
Air Force procurement: $9.657 billion; 
Navy procurement: $4.519 billion. 

Fiscal year: 2029; 
Air Force procurement: $10.096 billion; 
Navy procurement: $1.35 billion. 

Fiscal year: 2030; 
Air Force procurement: $10.482 billion. 

Fiscal year: 2031; 
Air Force procurement: $10.823 billion. 

Fiscal year: 2032; 
Air Force procurement: $10.691 billion. 

Fiscal year: 2033; 
Air Force procurement: $10.799 billion. 

Fiscal year: 2034; 
Air Force procurement: $10.904 billion. 

Fiscal year: 2035; 
Air Force procurement: $11.07 billion. 

Fiscal year: 2036; 
Air Force procurement: $10.66 billion. 

Fiscal year: 2037; 
Air Force procurement: $8.555 billion. 

Source: GAO analysis; JSF Selected Acquisition Report (December 2011). 

[End of figure] 

The long-stated intent that the JSF program would deliver an 
affordable, highly common fifth generation aircraft that could be 
acquired in large numbers is at risk. Continued increases in aircraft 
prices erode buying power and may make it difficult for the U.S. and 
international partners to buy as many aircraft as planned and to do so 
within the intended timeframe. As the JSF program moves forward, 
unprecedented levels of funding will be required during a period of 
more constrained defense funding expectations overall. If future 
funding is not available at these projected levels, the impacts on 
unit costs and program viability are unclear. Program officials have 
not reported on potential impacts from lowered levels of funding. 

In addition to the costs for acquiring aircraft, significant concerns 
and questions persist regarding the costs to operate and sustain JSF 
fleets over the coming decades. The most recent estimate projects 
total United States operating and support costs of $1.1 trillion for 
all three variants based on a 30-year service life and predicted usage 
and attrition rates. Defense leadership stated in 2011 that 
sustainment cost estimates at this time were unaffordable and simply 
unacceptable in the current fiscal environment. In March 2012, the 
Department established affordability targets for sustainment as well 
as production. The sustainment affordability target for the Air 
Force's CTOL ($35,200 per flight hour) is much higher than the current 
cost for the F-16 it will replace ($22,500 per flight hour, both 
expressed in fiscal year 2012 dollars). Comparative data for the 
Navy's CV and Marine Corps' STOVL with the legacy aircraft to be 
replaced was not available. Program officials noted that there are 
substantive differences between legacy and F-35 operating and funding 
assumptions which complicate direct cost comparisons. The program has 
undertaken efforts to address this life-cycle affordability concern. 
However, until DOD can demonstrate that the program can perform 
against its cost projections, it will continue to be difficult for the 
United States and international partners to accurately set priorities, 
establish affordable procurement rates, retire aged aircraft, and 
establish supporting infrastructure. 

Mixed Performance in 2011 Affected by Concurrency and Technical Risks: 

Much of the instability in the JSF program has been and continues to 
be the result of highly concurrent development, testing, and 
production activities. During 2011, overall performance was mixed as 
the program achieved 6 of 11 primary objectives for the year. 
Developmental flight testing gained momentum and had tangible success, 
but it has a long road ahead with testing of the most complex software 
and advanced capabilities still in the future. JSF software 
development is one of the largest and most complex projects in DOD 
history, providing essential capability, but software has grown in 
size and complexity, and is taking longer to complete than expected. 
Developing, testing, and integrating software, mission systems, and 
logistics systems are critical for demonstrating the operational 
effectiveness and suitability of a fully integrated, capable aircraft 
and pose significant technical risks moving forward. Until a fully 
integrated, capable aircraft is flight tested-planned to start in 2015-
the program is still very susceptible to discovering costly design and 
technical problems after many aircraft have been fielded. 

Program Performance Against 2011 Stated Objectives Was Mixed: 

The JSF program achieved 6 of 11 primary objectives it established for 
2011. Five of the objectives were specific test and training actions 
tied to contractual expectations and award fees, according to program 
officials. The other 6 objectives were associated with cost, schedule, 
contract negotiations, and sustainment. The program successfully met 2 
important test objectives: the Marine Corps' short takeoff and 
vertical landing (STOVL) variant accomplished sea trials and the 
Navy's carrier variant (CV) completed static structural testing. Two 
other test objectives were not met: software was not released to 
flight test in time and the carrier variant did not demonstrate 
shipboard suitability because of problems with the tail hook 
arrestment system. The program also successfully completed objectives 
related to sustainment design reviews, schedule data, manufacturing 
processes, and cost control, but did not meet a training deadline or 
complete contract negotiations. Table 2 summarizes the 2011 objectives 
and accomplishments. 

Table 2: JSF Program Results for 2011 Objectives: 

2011 JSF Program Objectives: (shaded objectives are contractual 
objectives): 

Test: [Shaded] Complete carrier variant static structural testing; 
Objective met? Yes; 
Accomplishments: Executed planned test conditions for CV (CG-1) 
variant. 

Test: [Shaded] Complete first carrier variant ship suitability events; 
Objective met? No; 
Accomplishments: Suitability testing was not completed; 
tail hook did not successfully engage the cable during ground testing. 

Test: [Shaded] Release initial Block 2A software to flight test; 
Objective met? No; 
Accomplishments: Did not complete timely Block 2 software release. 
Block 2A is flying on surrogate aircraft, with initial Block 2A F-35 
flights in January 2012 pending a successful Air System Test Readiness 
Review. 

Test: [Shaded] Execute short take-off and landing variant sea trials 
on amphibious assault ship; 
Objective met? Yes; 
Accomplishments: Executed F-35B sea trials focused on flying qualities 
and performance tests, vertical landing to designated locations, and 
external environment effects on the ship. 

Training/sustainment: [Shaded] Deliver Block 1 training update to 
Eglin (capability, envelope, trainers, autonomic logistics information 
system); 
Objective met? No; 
Accomplishments: Did not complete Block 1 training update to Eglin Air 
Force Base. Operations to practice and validate training profiles, 
maintenance procedures, and build maturity are expected to begin in 
early 2012, with a software Block 1A operational utility evaluation 
and declaration of training readiness to follow. Block 1B training 
will follow Block 1A readiness. 

Training/sustainment: Complete sustainment design reviews, cost and 
strategy bottoms up; 
Objective met? Yes; 
Accomplishments: Completed design review of the supply chain 
management concept for F-35, third war game effort, and business case 
analysis phase 1 for sustainment strategy; further developed 
sustainment baseline; and completed a review of ground rules and 
assumptions to support a revised operations and support cost estimate. 

Contract: Complete over target baseline negotiations; 
Objective met? No; 
Accomplishments: Program did not gain agreement on new prime and 
engine contractor program management baselines to complete system 
development and demonstration or negotiate contract modifications to 
update cost and schedule positions. The program is finalizing details 
to begin negotiations in early 2012. 

Contract: Negotiate Low Rate Initial Production (LRIP) 5 production 
contract; 
Objective met? No; 
Accomplishments: Program did not complete negotiations and sign a 
definitized LRIP 5 production contract. The program executed an 
undefinitized[A] LRIP 5 contract action, which included completed 
negotiations on contract terms and conditions concerning concurrency 
cost sharing. 

Cost/Schedule: Observe LRIP 4 cost control; 
Objective met? Yes[B]; 
Accomplishments: Program observed cost control with LRIP 4 production 
activities. Projected average percent overrun for LRIP 4 aircraft is 
lower than the previous LRIP buys. 

Cost/Schedule: Populate prime contractor EVMS data with new re-planned 
schedule; 
Objective met? Yes; 
Accomplishments: Program office and prime contractor agreed on a new 
prime contractor system development and demonstration program 
performance measurement baseline, loaded the cost/schedule position, 
and began reporting against the baseline. 

Cost/Schedule: Observe prime contractor delivering assembled wings and 
forward fuselage to mate station on time at reduced cost; 
Objective met? Yes; 
Accomplishments: Prime contractor agreed to delivery dates for LRIP 4 
wing and forward fuselage; kept LRIP 4 average aircraft cost lower 
than LRIPs 2/3; reduced number of quality assurance reports, improved 
quality, and minimized rework; reduced span times without increasing 
of out-of-station work; and achieved contract target cost. 

Source: JSF Program Office Data. 

[A] An undefinitized contract action means any contract action for 
which the contract terms, specifications, or price are not agreed upon 
before performance is begun under the action. Defense Federal 
Acquisition Regulation Supplement section 217.7401(d). 

[B] Program officials consider this objective met for the reason 
stated above. We note that the current size of the overrun is 
considerable and that it could very well change for better or worse as 
this lot is still early in the production process. 

[End of table] 

Development Flight Testing Gained Momentum: 

Development flight testing gained momentum and met or exceeded most 
objectives in its modified test plan for 2011. The program 
accomplished 972 test flights in 2011, more than double the flights in 
2010. Final deliveries of the remaining test aircraft were made in 
2011 (with the exception of one carrier variant added in restructuring 
and expected in 2012) and five production aircraft have been made 
available to the test program. Flight test points[Footnote 8] 
accomplished in 2011 exceeded the plan overall, as shown in figure 5. 
CTOL flight test points achieved fell short of the plan, due to 
operating limitations and aircraft reliability. 

Figure 5: 2011 JSF Flight Test Points Progress: 

[Refer to PDF for image: horizontal bar graph] 

CTOL flight sciences; 
Planned for 2011: 2,052; 
Accomplished in 2011: 1,864. 

STOVL flight sciences; 
Planned for 2011: 2,272; 
Accomplished in 2011: 2,322. 

CV flight sciences; 
Planned for 2011: 1,109; 
Accomplished in 2011: 1,426. 

Mission systems; 
Planned for 2011: 823; 
Accomplished in 2011: 1,052. 

Source: GAO analysis of DOD data. 

[End of figure] 

Flight testing during 2011 included the following results: 

* Navy's Carrier Variant: The program successfully accomplished 65 
catapult launches, but problems with the arresting hook prevented 
successful engagement with the cable during ground testing. Analysis 
of test results discovered tail hook design issues that have major 
consequences, according to DOD officials. The tail hook point is being 
redesigned and other aircraft structural modifications may also be 
required. The program must have fixes in place and deficiencies 
resolved in order to accomplish CV ship trials in late 2013. Since the 
carrier variant has just started initial carrier suitability tests, 
the proposed design changes will not be demonstrated until much later 
in developmental testing and could require significant structural 
changes to already-delivered aircraft. According to officials from the 
office of the Director, Operational Test and Evaluation (DOT&E), the 
program is also working to correct a number of other carrier variant 
performance problems such as excessive nose gear oscillations during 
taxi operations, excessive landing gear retraction times, and 
overheating of the electro-hydrostatic actuator systems that power 
flight controls. The program has not yet determined if production 
aircraft will need to be modified to address these issues. 

* Air Force's Conventional Takeoff and Landing Variant: The JSF test 
team flew the planned number of CTOL flights in 2011 but achieved 
about 10 percent fewer flight sciences test points than planned. 
Aircraft operating limitations and inadequate instrumentation impacted 
the ability to complete the planned number of test points. 
Contributing factors included deficiencies in the air vehicle's air 
data system as well as in-flight data indicating different structural 
loads than predicted. Aircraft reliability and parts shortages also 
affected the number of CTOL flight tests. 

* Marine Corps's Short Take Off and Vertical Landing Variant: The 
STOVL variant performed better than expected in flight tests during 
2011. It increased flight test rates and STOVL-specific mode testing, 
surpassing planned test point progress for the year. Following 
reliability problems and performance issues, the Secretary of Defense 
in January 2011 had placed the STOVL on "probation" for up to two 
years, citing technical issues unique to the variant that would add to 
the aircraft's cost and weight. In January 2012, the Secretary of 
Defense lifted the STOVL probation after one year, citing improved 
performance and completion of the initial sea trials as a basis for 
the decision. The Department concluded that STOVL development, test, 
and production maturity is now comparable to the other two variants. 
While several technical issues have been addressed and some potential 
solutions engineered, assessing whether the deficiencies are resolved 
is ongoing and, in some cases, will not be known for years. According 
to the program office, two of the five specific problems cited are 
considered to be fixed while the other three have temporary fixes in 
place. (See Appendix V which provides a more detailed examination of 
the STOVL probation, deficiencies addressed, and plans for correcting 
deficiencies.) DOT&E officials reported that significant work remains 
to verify and incorporate modifications to correct known STOVL 
deficiencies and prepare the system for operational use. Until the 
proposed technical solutions have been fully tested and demonstrated, 
it cannot be determined if the technical problems have been resolved. 

Even with the progress in 2011, most development flight testing, 
including the most challenging, still lies ahead. Through 2011, the 
flight test program had completed 21 percent of the nearly 60,000 
planned flight test points estimated for the entire program.[Footnote 
9] Program officials reported that flight tests to date have largely 
demonstrated air worthiness, flying qualities, and initial speed, 
altitude, and maneuvering performance requirements. According to JSF 
test officials, the more complex testing such as low altitude flight 
operations, weapons and mission systems integration, and high angle of 
attack has yet to be done for any variant and may result in new 
discoveries of aircraft deficiencies. Initial development flight tests 
of a fully integrated, capable JSF aircraft to demonstrate full 
mission systems capabilities, weapons delivery, and autonomic 
logistics is not expected until 2015 at the earliest. This will be 
critical for verifying that the JSF aircraft will work as intended and 
for demonstrating that the design is not likely to need costly 
changes. Development flight testing in a production-representative 
test aircraft and in the operational flight environment planned for 
the JSF is important to reducing risk. This actual environment differs 
from what can be demonstrated in the laboratory and has historically 
identified unexpected problems. For example, the F-22A fighter 
software worked as expected in the laboratory, but significant 
problems were identified in flight tests. These problems delayed 
testing and the delivery of a proven capability to the warfighter. 
Like other major weapon systems acquisitions, the JSF will be 
susceptible to discovering costly problems later in development when 
the more complex software and advanced capabilities are integrated and 
flight tested. With most development flight testing still to go, the 
program can expect more changes to aircraft design and continued 
alterations of manufacturing processes. 

Initial dedicated operational testing of a fully integrated and 
capable JSF is scheduled to begin in 2017. Initial operational testing 
is important for evaluating the effectiveness and suitability of the 
JSF in an operationally realistic environment. It is a prerequisite 
for JSF full-rate production decision in 2019. The JSF operational 
test team[Footnote 10] assessed system readiness for initial 
operational testing and identified several outstanding risk items. The 
test team's operational assessment concluded that the JSF is not on 
track to meet operational effectiveness or operational suitability 
requirements. The test team's October 2011 report identified 
deficiencies in the helmet mounted display, night vision capability, 
aircraft handling characteristics, and shortfalls in maneuvering 
performance. Test officials also reported an inadequate logistics 
system for deployments, excessive time for low observable repair and 
restoration, low reliability, and poor maintainability performance. 
The team's report noted that many of the concerns that drive the 
program's readiness for operational test and evaluation are also 
critical path items to meet effectiveness and suitability requirements. 

In its 2011 annual report, DOT&E reported many challenges for the JSF 
program due to the high level of concurrency of production, 
development, and test activities. Flight training efforts were delayed 
because of immature aircraft. Durability testing identified structural 
modifications needed for production aircraft to meet service life and 
operational requirements. Analysis of the bulkhead crack problem 
revealed numerous other life-limited parts on all three variants. 
According to DOT&E's report, the most significant of these 
deficiencies in terms of complexity, aircraft downtime, and difficulty 
in modification required for existing aircraft is the forward wing 
root rib which experienced cracking during CTOL durability testing. 
STOVL variant aircraft are also affected. Production aircraft in the 
first four lots (63 aircraft) will need the modification before these 
aircraft reach their forward root rib operating limits, which program 
officials identified as 574 flight hours for the CTOL and 750 hours 
for the STOVL. DOT&E also found that, although it is early in the 
program, current reliability and maintainability data indicate that 
more attention is needed in these areas to achieve an operationally 
suitable system. Its report also highlighted several discoveries which 
included deficiencies in the helmet mounted display, STOVL door and 
propulsion problems, limited progress in demonstrating mission systems 
capabilities, and challenges in managing weight growth. 

Software Development and Integration Represent Significant Risks: 

Software providing essential JSF capability has grown in size and 
complexity, and is taking longer to complete than expected. Late 
releases of software have delayed testing and training and added 
costs. Some capabilities have been deferred until later in development 
in order to maintain schedule. 

The lines of code necessary for the JSF's capabilities have now grown 
to over 24 million--9.5 million on-board the aircraft. (By comparison, 
JSF has about 3 times more on-board software lines of code than the F-
22A Raptor and 6 times more than the F/A-18 E/F Super Hornet.) This 
has added work and increased the overall complexity of the effort. The 
software on-board the aircraft and needed for operations has grown 37 
percent since the critical design review in 2005. While software 
growth appears to be stabilizing, contractor officials report that 
almost half of the on-board software has yet to complete integration 
and test--typically the most challenging phase of software 
development. JSF software growth is not much different than other 
recent defense acquisitions, which have experienced from 30 to 100 
percent growth in software code over time. However, the sheer number 
of lines of code for the JSF makes the growth a notable cost and 
schedule challenge. Figure 6 shows increased lines of code for both 
airborne and ground systems. 

Figure 6: Software Growth: 

[Refer to PDF for image: vertical bar graph] 

Estimated software lines of code: 

Preliminary design review: 2003: 
Ground: 3.4 million; 
Airborne: 4.9 million; 
Total: 8.3 million. 

Critical design review: 2005: 
Ground: 5.1 million; 
Airborne: 5.3 million; 
Total: 10.4 million. 

Technical baseline review: May 2011: 
Ground: 4.8 million; 
Airborne: 7.3 million; 
Total: 12.1 million. 

December 2011: 
Ground: 4.8 million; 
Airborne: 6.9 million; 
Total: 11.7 million. 
 
Source: GAO analysis of DOD data. 

[End of figure] 

JSF software capabilities are developed, integrated, tested, and 
delivered to aircraft in 5 increments or blocks. Software defects, low 
productivity, and concurrent development of successive blocks have 
created inefficiencies, taking longer to fix defects and delaying the 
demonstration of critical capabilities. Delays in developing, 
integrating, and releasing software to the test program have cascading 
effects hampering flight tests, training, and test lab accreditation. 
While progress has been made, a substantial amount of software work 
remains before the program can demonstrate full warfighting 
capability. Block 0.1, providing flight science capabilities for test 
aircraft, was released about six months late and block 0.5, providing 
basic flight systems, was almost two years late, due largely to 
integration problems. Status of the other 3 blocks follows: 

* Block 1.0 provides initial training capability and was released to 
flight test three years late when compared to the 2006 plan. More 
recently, it began flight test three months late based on the new 
plan, and was delayed by defects, workload bottlenecks, and security 
approvals. Late delivery of block 1.0 to training resulted in the 
program missing one of its key goals for 2011. Block 1.0 was planned 
to complete testing and be delivered to training in 2011. Full block 
1.0 flight testing was only 25 percent complete at that time and fewer 
than half of the final block 1.0 capabilities (12 of 35) had met full 
contract verification requirements for aircraft delivery, according to 
officials. 

* Block 2.0 provides initial warfighting capability, including weapons 
employment, electronic attack, and interoperability. Its full release 
to testing is now expected in late 2013, over three years later than 
planned in 2006. Development has fallen behind due to integration 
challenges and the reallocation of resources to fix block 1.0. As of 
December 2011, block 2.0 has completed only half of the planned 
schedule, leaving approximately 70 percent of integration work to 
complete. 

* Block 3.0 provides the full capability required by the warfighter, 
including full sensor fusion and additional weapons. In its early 
stage, development and integration is slightly behind schedule with 30 
percent of initial block 3.0 having completed the development phase. 
These challenges will continue as the program develops, integrates, 
and tests the increasingly complex mission systems software work that 
lies ahead. 

To maintain schedule, the program has deferred some capabilities to 
later blocks. For example, initial air to ground capabilities were 
deferred from block 1.0 to 2.0, and several data fusion elements moved 
from block 2.0 to 3.0. Deferring tasks to later phases of the 
development program adds more pressure and costs to future software 
management efforts. It also likely increases the probability of 
defects being realized later in the program when the more complex 
capabilities in these later blocks are already expected to be a 
substantial technical challenge. Recently, some weapons were moved 
earlier in the plan, from block 3.0 to 2.0, to provide more combat 
capability in earlier production aircraft. 

Because software is critical to the delivery of war fighter 
capabilities and presents complex cost, schedule and performance 
challenges, we recommended in our April 2011 report that an 
independent review of software development, integration, and testing-
similar to the review of manufacturing processes-be undertaken. An 
initial contractor study was recently completed that focused on 
mission systems' staffing, development, defects, and rework. Program 
officials are currently implementing several improvement initiatives 
and plan to broaden the assessment to off-board software development 
efforts including logistics and training. 

Mission Systems and Logistics Systems Maturity Will Be Key for 
Demonstrating JSF Operational Effectiveness and Suitability: 

JSF's mission systems[Footnote 11] and logistics systems are critical 
to realizing the operational and support capabilities expected by the 
warfighter, but the hardware and software for these systems are 
immature and unproven at this time. For example, only 4 percent of 
mission systems requirements planned in system development and 
demonstration have been verified. Significant learning and development 
remains before the program can demonstrate mature mission systems 
software and hardware, not expected until block 3.0 is delivered in 
2015. The program has experienced significant challenges developing 
and integrating mission systems software. Mission systems hardware has 
also experienced several technical challenges, including problems with 
the radar, integrated processor, communication and navigation 
equipment, and electronic warfare capabilities. 

The helmet mounted display in particular continues to have significant 
technical deficiencies that make it less functional than legacy 
equipment. The display is integral to the mission systems 
architecture, reducing pilot workload, and the overall JSF concept of 
operations--displaying key aircraft performance information as well as 
tactical situational awareness and weapons employment information on 
the pilot's helmet visor, replacing conventional heads-up display 
systems. Helmet problems include integration of the night vision 
capability, display jitter, and latency (or delay) in transmitting 
sensor data.[Footnote 12] These shortfalls may lead to a helmet unable 
to fully meet warfighter requirements--unsuitable for flight tasks and 
weapon delivery, as well as creating an unmanageable pilot workload, 
and may place limitations on the JSF's operational environment, 
according to program officials. The program office is pursuing a dual 
path to compensate for the technical issues by developing a second, 
less capable helmet while trying to fix the first helmet design; this 
development effort will cost more than $80 million. The selected 
helmet will not be integrated into the baseline aircraft until 2014 or 
later, increasing the risks of a major system redesign, retrofits of 
already built aircraft, or changes in concepts of operation. 

The Autonomic Logistics Information System (ALIS) is an integral part 
of the JSF system and serves as an information portal to JSF-unique 
and external systems, implements and automates logistics processes, 
and provides decision aids to reduce support resources such as 
manpower and spares. The ALIS is key technology aimed at improving and 
streamlining logistics and maintenance functions in order to reduce 
life cycle costs. It is designed to be proactive-recognize problems 
and initiate correct responses automatically. The JSF test team 
operational assessment report concluded that an early release model of 
ALIS was not mature, did not meet operational suitability 
requirements, and would require substantial improvements to achieve 
sortie generation rates and life cycle cost requirements. In 
particular, the current configuration was not adequate for deployed 
operations-its current weight, environmental support, connectivity, 
and security requirements make it difficult to support detachments, 
operational testing, and forward operations, especially vital to the 
Marine Corps plans. The report noted that there is no approved concept 
or design for this capability, no funding identified, and stated a 
concern that there may be no formal solution prior to Marine Corps 
declaring an initial operating capability. Operational testers also 
identified concerns about data and interoperability with service 
maintenance systems. Program officials have identified deployable ALIS 
as a development-funded effort structured to address the difficulties 
surrounding the deployment of the current ALIS suite of equipment. The 
formal solution is expected to be ready for fielding in 2015. 

Contract Overruns and Concurrency Costs Indicate the Program Has Not 
Yet Stabilized Design and Manufacturing: 

The program has not yet demonstrated a stable design and manufacturing 
process capable of efficient production. Engineering changes are 
persisting at relatively high rates and additional changes will be 
needed as testing continues. Manufacturing processes and performance 
indicators show some progress, but performance on the first four low-
rate initial production contracts has not been good. All four have 
experienced cost overruns and late aircraft deliveries. In addition, 
the government is also incurring substantial additional costs to 
retrofit produced aircraft to correct deficiencies discovered in 
testing. Until manufacturing processes are in control and engineering 
design changes resulting from information gained during developmental 
testing are reduced, there is risk of further cost growth. Actions the 
Department has taken to restructure the program have helped, but 
remaining concurrency between flight testing and production continues 
to put cost and schedule at risk (see figure 7). Even with the 
substantial reductions in near-term procurement quantities, DOD is 
still investing billions of dollars on hundreds of aircraft while 
flight testing has years to go. 

Figure 7: JSF Concurrency: 

[Refer to PDF for image: illustrated timeline] 

SDD: System development and demonstration: 
Previous to calendar year 2006 through 2018. 

STOVL first flight: 2008; 
CTOL first flight: 2009; 
CV first flight: 2010; 
Full block 2 flight release: 2015; 
Full block 3 flight release: 2017. 

Start of DT phase (development test): 2008; 
End of DT phase (development test): 2016. 

Low rate production: 
Calendar year 2006 through 2018 and beyond; 
First LRIP delivery: 2011; 
2018: 365 total planned aircraft procures by this point. 

Source: GAO analysis of DOD data. 

[End of figure] 

Cost Overruns and Delivery Delays Indicate Need to Further Mature the 
Manufacturing Process: 

As was the experience with building the development test aircraft, 
manufacturing the production aircraft is costing more and taking 
longer than planned. Cost overruns and delivery slips indicate that 
manufacturing processes, worker learning, quality control, and 
supplier performance are not yet sufficiently mature to handle the 
volume of work scheduled. Cost overruns on each of the first four 
annual procurement contracts are currently projected to total about $1 
billion (see table 3). 

Table 3: Procurement Contract Costs as of January 2012: 

Dollars in millions: 

Contract: LRIP 1; 
Number of aircraft: 2; 
Contract cost at award: $511.7 million; 
Current contract cost estimate: $561.5 million; 
Cost increase: $49.8 million; 
Percent increase: 9.7%. 

Contract: LRIP 2; 
Number of aircraft: 12; 
Contract cost at award: $2.278.5 billion; 
Current contract cost estimate: $2.6077 billion; 
Cost increase: $329.2 million; 
Percent increase: 14.4%. 

Contract: LRIP 3; 
Number of aircraft: 17; 
Contract cost at award: $3.1542 billion; 
Current contract cost estimate: $3.5695 billion; 
Cost increase: $415.3 million; 
Percent increase: 13.2%. 

Contract: LRIP 4; 
Number of aircraft: 32; 
Contract cost at award: $3.4583 billion; 
Current contract cost estimate: $3.7033 billion; 
Cost increase: $245.0 million; 
Percent increase: 7.1%. 

Contract: Total; 
Number of aircraft: 63; 
Contract cost at award: $9.4027 billion; 
Current contract cost estimate: $10.442 billion; 
Cost increase: $1,039.3 million; 
Percent increase: 11.1%. 

Source: GAO analysis of DOD data. 

Note: LRIP is low rate initial production. 

[End of table] 

According to program documentation, through the cost sharing 
provisions in these contracts, the government's share of the total 
overrun is about $672 million. On average, the government is paying an 
additional $11 million for each of the 63 aircraft under contract (58 
are U.S. aircraft and 5 are for international partners). There is risk 
of additional cost overruns because all work is not completed. Defense 
officials reduced the buy quantity in the fifth annual procurement 
contract to help fund these cost overruns and additional retrofit 
costs to fix deficiencies discovered in testing. 

While Lockheed Martin, the prime contractor, is demonstrating somewhat 
better throughput capacity and showing improved performance 
indicators, the lingering effects of critical parts shortages, out of 
station work[Footnote 13], and quality issues continue to be key cost 
and schedule drivers on the first four production lots. Design 
modifications to address deficiencies discovered in testing, 
incorporation of bulkhead and wing process improvements, and 
reintroduction of the carrier variant into the manufacturing line 
further impacted production during 2011. Lockheed had expected to 
deliver 31 procurement aircraft by the end of 2011 but delivered only 
nine aircraft. Each was delivered more than 1 year late. 

The manufacturing effort has a long way to go with thousands of 
aircraft planned for production over the next 25 years. Through fiscal 
year 2011, only 6 percent of the total procurement funding needed to 
complete the JSF program had been appropriated. As the rate of 
production is expected to increase substantially starting in 2015, it 
is vital that the contractor achieve an efficient manufacturing 
process. Several positive accomplishments may spur improved future 
performance. Lockheed implemented an improved and comprehensive 
integrated master schedule, loaded the new program data from 
restructuring, and completed a schedule risk assessment, as we 
recommended several years ago.[Footnote 14] Also, Defense Contract 
Management Agency (DCMA) and JSF program officials believe that 
Lockheed Martin has made a concerted effort to improve its earned 
value management system (EVMS)[Footnote 15] in order to comply with 
federal standards. Initial reviews of the new procedures, tools, and 
training indicate that the company is on track to have its revised 
processes approved by DCMA this year. 

Pratt & Whitney, the engine manufacturer, has delivered 54 production 
engines and 21 lift fans as of early May 2012.[Footnote 16] Like the 
aircraft system, the propulsion system is still under development and 
the program is working to complete testing and fix deficiencies while 
concurrently delivering engines under the initial procurement 
contracts. The program office's estimated cost for the system 
development and demonstration of the engine has increased by 73 
percent, from $4.8 billion to about $8.4 billion, since the start of 
development. Engine deliveries continue to miss expected contract due 
dates but still met aircraft need dates. Supplier performance problems 
and design changes are driving late engine deliveries. Lift fan system 
components and processes are driving cost and schedule problems. 

Going forward, effectively managing the expanding global supplier 
network - which consists of hundreds of suppliers around the world-is 
fundamental to meeting production rate and throughput expectations. 
DOD's Independent Manufacturing Review Team 2009 report identified 
global supply chain management as the most critical challenge for 
meeting production expectations. The cooperative aspect of the supply 
chain provides both benefits and challenges. The international program 
structure is based on a complex set of relationships involving both 
government and industry from the United States and eight other 
countries. Overseas suppliers are playing a major and increasing role 
in JSF manufacturing and logistics. For example, center fuselage and 
wings will be manufactured by Turkish and Italian suppliers, 
respectively, as second sources. In addition to ongoing supplier 
challenges-parts shortages, failed parts, and late deliveries-
incorporating international suppliers presents other challenges. The 
program must deal with exchange rate fluctuations, disagreements over 
work shares, and technology transfer concerns. To date, the mostly 
U.S.-based suppliers have sometimes struggled to develop critical and 
complex parts while others have had problems with limited production 
capacity. Lockheed Martin has implemented a stricter supplier 
assessment program to help manage supplier performance. 

Testing and Production Overlap Increases Engineering Changes and 
Concurrency Costs: 

We and some defense offices cautioned the Department years ago about 
the risks posed by the extremely high degree of concurrency, or 
overlap, among the JSF development, testing, and production 
activities.[Footnote 17] In the first four production lots, the U. S. 
government will incur an estimated $373 million in retrofit costs on 
already-built aircraft to correct deficiencies discovered in 
development testing. This is in addition to the $672 million for the 
government's share of contract cost overruns. The program office 
projects additional retrofit costs due to concurrency through the 10th 
low rate initial production contract, but at decreasing amounts. 
Questions about who will pay for additional retrofit costs under the 
fixed price contract-the contractor or the government-and how much, 
delayed contract negotiations on the fifth lot. While the contract is 
not yet definitized, a December 2011 undefinitized contract action 
established that the Government and contractor would share equally in 
known concurrency costs and that any newly discovered concurrency 
changes will be added to the contract and will cause a renegotiation 
of the target cost, but with no profit, according to program officials. 

Defense officials have long acknowledged the substantial concurrency 
built into the JSF acquisition strategy, but until recently stated 
that risks were manageable. However, a recent high-level departmental 
review of JSF concurrency determined that the program is continuing to 
find problems at a rate more typical of early design experience on 
previous aircraft development programs, questioning the assumed design 
maturity that supported the highly concurrent acquisition strategy. 
[Footnote 18] DOD's November 2011 report concluded that the "team 
assesses the current confidence in the design maturity of the F-35 to 
be lower than one would expect given the quantity of LRIP aircraft 
procurements planned and the potential cost of reworking these 
aircraft as new test discoveries are made. This lack of confidence, in 
conjunction with the concurrency driven consequences of the required 
fixes, supports serious reconsideration of procurement and production 
planning." The review identified substantial risk of needed 
modifications to already produced aircraft as the flight testing 
enters into more strenuous test activities. 

Already, as a result of problems found in less strenuous basic 
airworthiness testing, critical design modifications are being fed 
back through the production line. For example, the program will be 
cutting in aircraft modifications to address bulkhead cracks 
discovered during airframe ground testing and STOVL auxiliary inlet 
door durability issues. More critical test discoveries are likely as 
the program moves into the more demanding phases of testing. We note 
also that concurrency risks are not just limited to incurring extra 
production costs, but ripple throughout the JSF program slowing 
aircraft deliveries, decreasing availability of aircraft, delaying 
pilot and maintainer training, and hindering the stand-up of base 
maintenance and supply activities, among other impacts. 

Producing aircraft before testing sufficiently demonstrates the design 
is mature increases the likelihood that more aircraft will be exposed 
to the need for the retrofit of future design changes, which drives 
cost growth, schedule delays, and manufacturing inefficiencies. Design 
changes needed in one JSF variant could also impact the other two 
variants, reducing efficiencies necessary to lower production and 
operational costs with common parts and manufacturing processes for 
the three variants. While the JSF program's engineering change traffic-
the monthly volume of changes made to engineering drawings-is 
declining, it is still higher than expected for a program entering its 
sixth year of production. The total number of engineering drawings 
continues to grow due to design changes, discoveries during ground and 
flight testing, and other revisions to drawings. Some level of design 
change is expected during the production cycle of any new and highly 
technical product, but excessive changes raise questions about the 
stability of the JSF's design and its readiness for higher levels of 
production. Figure 8 tracks design changes over time and shows that 
changes are expected to persist at an elevated pace through 2019. 

Figure 8: JSF Design Changes Over Time: 

[Refer to PDF for image: combined vertical bar and line graph] 

Number of design changes: 

January 2006: 
2007 plan: 264; 
Design changes (actual through September 2011): 251. 

January 2007: 
2007 plan: 653; 
Design changes (actual through September 2011): 620. 

January 2008: 
2007 plan: 853; 
Design changes (actual through September 2011): 606. 

January 2009: 
2007 plan: 389; 
Design changes (actual through September 2011): 573. 

January 2010: 
2007 plan: 260; 
Design changes (actual through September 2011): 342. 

January 2011: 
2007 plan: 202; 
Design changes (actual through September 2011): 276. 

January 2012: 
2007 plan: 144; 
Projected future changes (as of October 2011): 255. 

January 2013: 
2007 plan: 72; 
Projected future changes (as of October 2011): 243. 

October 2013: 
2007 plan: 30; 
Projected future changes (as of October 2011): 273. 

January 2014; 
Projected future changes (as of October 2011): 281. 

January 2015; 
Projected future changes (as of October 2011): 168. 

January 2016; 
Projected future changes (as of October 2011): 112. 

January 2017; 
Projected future changes (as of October 2011): 185. 

January 2018; 
Projected future changes (as of October 2011): 248. 

January 2019; 
Projected future changes (as of October 2011): 256. 

January 2020; 
Projected future changes (as of October 2011): 31. 

Source: GAO analysis of DOD data. 

[End of figure] 

A weapon system's reliability growth rate is a good indicator of 
design maturity. Reliability is a function of specific design 
characteristics. A weapon system is considered reliable when it can 
perform over a specified period of time without failure, degradation, 
or need of repair. During system acquisition, reliability growth 
improvements should occur over time through a process of testing, 
analyzing, and fixing deficiencies through design changes or 
manufacturing process improvements. Once fielded, there are limited 
opportunities to improve a system's reliability without costly 
redesign and retrofit. A system's reliability rate directly affects 
its life cycle operating and support costs. We have reported in the 
past that it is important to demonstrate that the system reliability 
is on track to meet goals before production begins as changes after 
production commences can be inefficient and costly.[Footnote 19] 

According to program office data, the CTOL and STOVL variants are 
behind expected reliability growth plans at this point in the program. 
Figure 9 depicts progress of each variant in demonstrating mean flying 
hours between failures as reported by the program office in October 
2011 and compares them to 2010 rates, the expectation at this point in 
time, and the ultimate goal at maturity. 

Figure 9: JSF Mean Times between Failure Demonstrated to Date: 

[Refer to PDF for image: vertical bar graph] 

Mean flying hours between failures: 

JSF variant: CTOL; 
Demonstrated (as of September 2010): 1.8; 
Demonstrated (as of October 2011): 2.6; 
Planned by October 2011: 3.7; 
Goal at maturity: 6. 

JSF variant: STOVL; 
Demonstrated (as of September 2010): 0.4; 
Demonstrated (as of October 2011): 0.5; 
Planned by October 2011: 2.2; 
Goal at maturity: 4. 

JSF variant: CV; 
Demonstrated (as of September 2010): not applicable; 
Demonstrated (as of October 2011): 2.1; 
Planned by October 2011: 1.9; 
Goal at maturity: 4. 

Source:: GAO analysis of DOD data. 

[End of figure] 

As of October 2011, reliability growth plans called for the STOVL to 
have achieved at least 2.2 flying hours between failures and the CTOL 
at least 3.7 hours by this point in the program. The STOVL is 
significantly behind plans, achieving about 0.5 hours between 
failures, or less than 25 percent of the plan. CTOL variant has 
demonstrated 2.6 hours between failures, about 70 percent of the rate 
expected at this point in time. The carrier variant is slightly ahead 
of its plan; however, it has flown many fewer flights and hours than 
the other variants. 

JSF officials said that reliability rates are tracking below 
expectations primarily because identified fixes to correct 
deficiencies are not being implemented and tested in a timely manner. 
Officials also said the growth rate is difficult to track and to 
confidently project expected performance at maturity because of 
insufficient data from the relatively small number of flight hours 
flown. Based on the initial low reliability demonstrated thus far, the 
Director of Operational Test and Evaluation reported that the JSF has 
a significant challenge ahead to provide sufficient reliability growth 
to meet the operational requirement. 

Restructuring actions by the Department since early 2010 have provided 
the JSF program with more achievable development and production goals, 
and has reduced, but not eliminated, risks of additional retrofit 
costs due to concurrency in current and future lots. The Department 
has progressively lowered the production ramp-up rate and cut near 
term procurement quantities; fewer aircraft procured while testing is 
still ongoing lowers the risk of having to modify already produced 
aircraft. However, even with the most recent reductions in quantities, 
the program will still procure a large number of aircraft before 
system development is complete and flight testing confirms that the 
aircraft design and performance meets warfighter requirements. Table 4 
shows the current plan that will procure 365 aircraft for $69 billion 
before the end of planned developmental flight tests. 

Table 4: JSF Procurement Investments and Flight Test Progress: 

Fiscal years: Cumulative procurement; 
2007: $0.8 billion; 
2008: $3.5 billion; 
2009: $7.1 billion; 
2010: $14.3 billion; 
2011: $21.3 billion; 
2012: $27.6 billion; 
2013: $33.8 billion; 
2014: $40.1 billion; 
2015: $47.9 billion; 
2016: $57.8 billion; 
2017: $69.0 billion. 

Fiscal years: Cumulative aircraft procured; 
2007: 2; 
2008: 14; 
2009: 28; 
2010: 58; 
2011: 90; 
2012: 121; 
2013: 150; 
2014: 179; 
2015: 223; 
2016: 289; 
2017: 365. 

Fiscal years: Percentage of total planned development flight tests 
completed (est.); 
2007: less than 1%; 
2008: less than 1%; 
2009: less than 1%; 
2010: 1%; 
2011: 5%; 
2012: 17%; 
2013: 32%; 
2014: 52%; 
2015: 72%; 
2016: 91%; 
2017: 100%. 

Source: GAO analysis of DOD budget and test plan data. 

Note: Advanced procurement funding from 2006 was incorporated into 
fiscal year 2007 total funding, as 2007 was the first year of aircraft 
procurement. Flight testing data reflect the percentage of the total 
flight test completed at the time of the planned investment decision, 
which is the beginning of the fiscal year. 

[End of table] 

Conclusions: 

The JSF remains the critical centerpiece of DOD's long-term tactical 
aircraft portfolio. System development of the aircraft and engine, 
ongoing for over a decade, continues to experience significant 
challenges. The program's strategic framework - laden with concurrency 
- has proved to be problematic and, ultimately, a very costly 
approach. DOD has lately acknowledged the undue risks from concurrency 
and accordingly reduced near-term procurement and devoted more time 
and resources to development and testing. These prudent actions have 
reduced, but not eliminated, concurrency risks of future cost growth 
from test discoveries driving changes to design and manufacturing 
processes. Substantial concurrency costs are expected to continue for 
several more years. Concurrency risks are not just limited to 
incurring extra modification costs, but ripple throughout the JSF 
program slowing aircraft deliveries, delaying release of software to 
testing, delaying pilot and maintainer training, and hindering the 
stand-up of base maintenance and supply activities, among other 
impacts. 

Extensive restructuring actions over the last 2-plus years have placed 
the JSF program on a more achievable course, albeit a lengthier and 
more expensive one. At the same time, the near-constant churn, or 
change, in cost, schedule, and performance expectations has hampered 
oversight and insight into the program, in particular the ability to 
firmly assess progress and prospects for future success. The JSF 
program now needs to demonstrate that it can effectively perform 
against cost and schedule targets in the new baseline and deliver on 
its promises so that the warfighter can confidently establish basing 
plans, retire aging legacy aircraft, and acquire a support 
infrastructure. Addressing affordability risks will be critical in 
determining how many aircraft the U.S. and international partners can 
ultimately acquire and sustain over the life cycle. As currently 
structured, the program will require unprecedented levels of 
procurement funding during a period of more constrained defense budget 
expectations. Aircraft deferrals, risky funding assumptions, and 
future budget constraints make it prudent to evaluate potential 
impacts from reduced levels of funding. If funding demands cannot be 
fully met, it would be important for congressional and defense 
decisionmakers to understand the programmatic and cost impacts from 
lower levels of funding; however, DOD officials have not thoroughly 
analyzed JSF impacts should funding expectations be unmet. Going 
forward, it will be imperative to bring stability to the program and 
provide a firm understanding of near-and far-term financial 
requirements so that all parties--the Congress, Defense Department, 
and international partners--can reasonably project future budgets, set 
priorities, and make informed business-based decisions amid a tough 
fiscal environment. 

Substantial cost overruns and delivery delays on the first four low 
rate initial production contracts indicate a need to improve 
inefficient manufacturing and supply processes before ramping up 
production to the rates expected. While some manufacturing and supply 
performance indicators are showing some improvements, parts shortages, 
supplier quality and performance problems, and manufacturing 
workarounds still need to be addressed. DOD's Independent 
Manufacturing Review Team identified global supply chain management as 
the most critical challenge for meeting production expectations. 
Effectively managing the expanding network of global suppliers and 
improving the supply chain will be key to improving cost and schedule 
outcomes, increasing manufacturing throughput, and enabling higher 
production rates. 

Recommendations for Executive Action: 

Substantial quantities of JSF aircraft have been deferred to future 
years and funding requirements now average $12.5 billion through 2037. 
Aircraft deferrals, risky funding assumptions, and future budget 
constraints make it prudent to evaluate potential impacts from reduced 
levels of funding. Therefore, we recommend that the Secretary of 
Defense direct the Director of Cost Assessment and Program Evaluation 
perform an independent analysis of the impact lower annual funding 
levels would have on the program's cost and schedule. This sensitivity 
analysis should determine the impact of funding on aircraft 
deliveries, unit costs, and total tactical air force structure 
resulting from at least three different assumed annual funding 
profiles, all lower than the current funding projection. 

Finally, because of the complexity and criticality of the global 
supply chain that has already experienced some problems, we recommend 
the Under Secretary of Defense for Acquisition, Technology and 
Logistics direct the JSF program office to conduct a comprehensive 
assessment of the supply chain and transportation network to ensure it 
is organized, secure, and capable of producing and delivering parts in 
the quantities and times needed to effectively and efficiently build 
and sustain over 3,000 aircraft for the U.S. and international 
partners. This assessment should summarize opportunities as well as 
challenges, augmenting and building upon the earlier efforts of the 
Independent Manufacturing Review Team and the recent sustainment study. 

Agency Comments and our Evaluation: 

DOD provided us written comments on a draft of this report, which are 
reprinted in appendix II. DOD partially concurred with our first 
recommendation and fully concurred with our second. Officials also 
provided technical comments that we incorporated in the final report 
as appropriate. 

DOD partially concurred with our recommendation to perform a 
sensitivity analysis of the impact lower annual funding levels would 
have on JSF cost and schedule and the total tactical air force 
structure. The Department stated that the Director of Cost Assessment 
and Program Evaluation regularly performs this kind of analysis as 
part of the annual budget review process. However, the Department's 
response emphasized that such analysis is pre-decisional and did not 
believe that sensitivity analyses based on notional funding levels 
should be published. We agree that this budget analysis has value and 
that it need not be published publicly; however, we believe its 
usefulness extends beyond the current budget period. Increasingly 
tough budget decisions amid a likely declining top-line defense budget 
are in the forecast, and this kind of sensitivity analysis of the 
impact of potential lower funding levels could better inform defense 
leadership and the Congress on the longer-term impacts on JSF program 
outcomes and force structure implications. 

DOD concurred with our recommendation to comprehensively assess the 
global supply chain and transportation network. The written response 
indicated that annual production readiness reviews undertaken by the 
contractor and JSF program office were sufficient and better 
structured to manage issues over several years than a one time, large 
scale study. We agree that annual targeted reviews are important and 
conducive to good near-term management, but continue to believe that 
these should be supplemented by a longer-term and more forward-looking 
study as we have recommended along the lines of the Independent 
Manufacturing Review Team. 

We are sending copies of this report to the Secretary of Defense; the 
Secretaries of the Air Force, Army, and Navy; and the Director of the 
Office of Management and Budget. The report also is available at no 
charge on the GAO Web site at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions concerning this report, please 
contact me at (202) 512-4841 or sullivanm@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. Staff members making key 
contributions to this report are listed in Appendix VI. 

Signed by: 

Michael J. Sullivan: 
Director: 
Acquisition and Sourcing Management: 

List of Committees: 

The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate: 

The Honorable Daniel K. Inouye:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate: 

The Honorable Howard P. McKeon:
Chairman:
The Honorable Adam Smith:
Ranking Member:
Committee on Armed Services:
House of Representatives: 

The Honorable C.W. Bill Young:
Chairman:
The Honorable Norman D. Dicks:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine the Joint Strike Fighter (JSF) program's progress in 
meeting cost, schedule, and performance goals, we received briefings 
by program and contractor officials and reviewed financial management 
reports, budget documents, annual Selected Acquisition Reports, 
monthly status reports, performance indicators, and other data. We 
identified changes in cost and schedule, and obtained officials' 
reasons for these changes. We interviewed officials from the JSF 
program, contractors, and the Department of Defense (DOD) to obtain 
their views on progress, ongoing concerns and actions taken to address 
them, and future plans to complete JSF development and accelerate 
procurement. At the time of our review, the most recent Selected 
Acquisition Report available was dated December 31, 2011. Throughout 
most of our review, DOD was in the process of preparing the new 
acquisition program baseline, issued in March 2012, which reflected 
updated cost and schedule projections. 

In assessing program cost estimates, we evaluated program cost 
estimates in the Selected Acquisition Reports since the program's 
inception, reviewed the recent independent cost estimate completed by 
DOD's Cost Analysis and Program Evaluation (CAPE), and analyzed fiscal 
year President's Budget data. We interviewed JSF program office 
officials, members of CAPE, prime and engine contractors, and Defense 
Contract Management Agency officials to understand methodology, data, 
and approach in developing cost estimates and monitoring cost 
performance. 

To assess plans, progress, and risks in test activities, we examined 
program documents and interviewed DOD, program office, and contractor 
officials about current test plans and progress. To assess progress 
toward test plans, we compared the number of test points accomplished 
as of December 2011 to the program's 2011 plan for test point 
progress. We also discussed related software development, test, and 
integration with Defense Contract Management Agency (DCMA) and 
Director, Operational Test, and Evaluation (DOT&E) officials and 
reviewed DOT&E annual assessments of the JSF program, the Joint Strike 
Fighter Operational Test Team Report, and the F-35 Joint Strike 
Fighter Concurrency Quick Look Review. 

To assess the program's plans and risk in manufacturing and its 
capacity to accelerate production, we analyzed manufacturing cost and 
work performance data to assess progress against plans. We reviewed 
data and briefings provided by the program and DCMA to assess supplier 
performance and ability to support accelerated production in the near 
term. We also determined reasons for manufacturing delays, discussed 
program and contractor plans to improve, and projected the impact on 
development and operational tests. We interviewed contractor and DCMA 
officials to discuss the Earned Value Management System but did not 
conduct any analysis since the system has not yet been re-validated by 
DCMA. 

In performing our work, we obtained information and interviewed 
officials from the JSF Joint Program Office, Arlington, Virginia; 
Defense Contract Management Agency, Fort Worth, Texas; Lockheed Martin 
Aeronautics, Fort Worth, Texas; Defense Contract Management Agency, 
East Hartford, Connecticut; and Pratt & Whitney, Middletown, 
Connecticut. We also met with and obtained data from the following 
offices from the Secretary of Defense in Washington, D.C.: Director, 
Operational Test and Evaluation; Cost Assessment and Program 
Evaluation; and Systems Engineering. 

To assess the reliability of DOD and contractor data we reviewed the 
sources and uses of the data, evaluated existing information about the 
data, and interviewed agency officials knowledgeable about the data. 
We determined that the data were sufficiently reliable for the 
purposes of this report. We conducted this performance audit from June 
2011 to June 2012 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

[End of section] 

Appendix II: Comments from the Department of Defense: 

Office of The Under Secretary Of Defense: 
Acquisition, Technology and Logistics: 
3000 Defense Pentagon: 
Washington, DC 20301-3000: 

June 11, 2012: 

Mr. Michael Sullivan: 
Director, Acquisition and Sourcing Management: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Mr. Sullivan: 

This is the Department of Defense (DoD) response to the GAO draft 
report, GAO-12437, "Joint Strike Fighter: DoD Actions Needed to 
Further Enhance Restructuring and Address Affordability Risks," dated 
May 1, 2012 (GAO Code 120995). Detailed comments on the report 
recommendations are enclosed. 

The DoD partially concurs with the first recommendation and concurs 
with the second recommendation. The rationale and actions taken by the 
DoD are included in the enclosure. 

We appreciate the opportunity to comment on the draft report. My point 
of contact for this effort is Lt Col Amy McCain, 703-697-2573, 
Amy.McCain@osd.mil. 

Sincerely, 

Signed by: 

David G. Ahern: 
Deputy Assistant Secretary of Defense: 
Strategic and Tactical Systems: 

Enclosure: As stated: 

[End of letter] 

GAO Draft Report Dated May 1, 2012: 
GAO-12-437 (GAO Code 120995): 

"Joint Strike Fighter: DOD Actions Needed To Further Enhance 
Restructuring And Address Affordability Risks" 

The Department remains committed to the F-35 Joint Strike Fighter 
(JSF) program as the backbone of the future tactical aircraft 
inventory for the Air Force, Navy, Marine Corps, as well as our 
International Partners. The Fiscal Year (FY) 2013 President's Budget 
(PB) demonstrates this commitment to the F-35 with $9.3 billion for 
continued system development, test and procurement. 

The F-35 development program has been replanned and is now resourced 
with realistic planning factors to complete the required Block 3 
capability testing by the end of 2016. In March 2012, the program 
completed the Milestone B recertification and established the new 
acquisition program baseline. Production rates were held to 29 per 
year through 2014 to reduce concurrency risk and permit additional 
progress on the test program before increasing production. The 
Department is committed to delivering F-35 aircraft that meet the 
Services' requirements, in addition to controlling and reducing costs 
wherever and whenever possible, to provide the Services an affordable 
tactical aviation capability. 

Department Of Defense Comments To The GAO Recommendations: 

Recommendation 1: The GAO recommends that the Secretary of Defense 
direct the Director of Cost Assessment and Program Evaluation (CAPE) 
perform an independent analysis of the impact lower annual funding 
levels would have on the program's cost and schedule. This sensitivity 
analysis should determine the impact of funding on aircraft 
deliveries, unit costs, and total tactical air force structure 
resulting from at least 3 different assumed annual funding profiles, 
all lower than the current funding projection. 

DoD Response: Partially Concur. The Department agrees that there is 
value in examining the sensitivity of the costs of JSF procurement 
against varying levels of procurement funding. In fact, CAPE regularly 
performs this type of analysis as a part of the deliberative, pre-
decisional, program/budget review process that culminates in the 
submission of the annual President's Budget request for DoD.
For example, during the Department's preparation of the budget 
submission for Fiscal Year (FY) 2013, CAPE developed analyses 
involving several alternative F-35 procurement profiles for 
consideration by the senior Department leadership. The analysis 
included different U.S. and international partner annual F-35 
procurement quantities during FY 2013-17. 

Given the interrelationships of F-35 programmatic costs, this type of 
analysis should not be done in isolation. It is important that the 
analysis consider a broader context, including the effect of the 
procurement profiles on the industrial base, legacy fleet operations, 
and international partner participation. The Department does not 
believe there is value in publishing sensitivity analyses for F-35 
based on notionally-defined funding levels. As has always been the 
case, CAPE will continue to conduct analyses of alternative annual 
procurement profiles to support pre-decisional deliberations within 
the Department. 

Recommendation 2: The GAO recommends that the Under Secretary of 
Defense for Acquisition, Technology and Logistics direct the JSF 
program office to conduct a comprehensive assessment of the supply 
chain and transportation network to ensure it is organized, secure, 
and capable of producing and delivering parts in the quantities and 
times needed to effectively and efficiently build and sustain over 
3,000 aircraft for the U.S. and international partners. This 
assessment should summarize opportunities as well as challenges, 
augmenting and building upon the earlier efforts of the Independent 
Manufacturing Review Team and the recent sustainment study. 

DoD Response: Concur. The Department agrees that there is value in a
comprehensive assessment to identify opportunities and challenges of 
the supply chain and transportation network. However, the Department 
does not agree with directing the program office to begin a separate 
and additional effort. Currently, Lockheed Martin and the Joint 
Program Office conduct annual Production Readiness Reviews (PRR) that 
assess the capabilities and risks in the supply chain to support the 
production ramp and sustain the fleet. The Department believes that 
the annual review is more flexible and more applicable to the overall 
management of the program, and is better structured to maintain long-
term visibility to manage issues over several years, than a one time, 
large scale study. 

[End of section] 

Appendix III: Prior GAO Reports and DOD Responses: 

GAO report: 2001; [hyperlink, http://www.gao.gov/products/GAO-02-39]; 
Est. dev. costs; dev. length; aircraft unit cost: $34.4 Billion; 
10 years; $69 Million; 
Key program event: Start of system development and demonstration 
approved; 
Primary GAO message: Critical technologies needed for key aircraft 
performance elements not mature. Program should delay start of system 
development until critical technologies mature to acceptable levels; 
DOD response and actions: DOD did not delay start of system 
development and demonstration stating technologies were at acceptable 
maturity levels and will manage risks in development. 

GAO report: 2005; [hyperlink, http://www.gao.gov/products/GAO-05-271]; 
Est. dev. costs; dev. length; aircraft unit cost: $44.8 Billion; 
12 years; $82 Million; 
Key program event: The program undergoes re-plan to address higher 
than expected design weight, which added $7 billion and 18 months to 
development schedule; 
Primary GAO message: We recommended that the program reduce risks and 
establish executable business case that is knowledge-based with an 
evolutionary acquisition strategy; 
DOD response and actions: DOD partially concurred but did not adjust 
strategy, believing that its approach is balanced between cost, 
schedule and technical risk. 

GAO report: 2006; [hyperlink, http://www.gao.gov/products/GAO-06-356]; 
Est. dev. costs; dev. length; aircraft unit cost: $45.7 Billion; 
12 years; $86 Million; 
Key program event: Program sets in motion plan to enter production in 
2007 shortly after first flight of the non-production representative 
aircraft; 
Primary GAO message: The program plans to enter production with less 
than 1 percent of testing complete. We recommended program delay 
investing in production until flight testing shows that JSF performs 
as expected; 
DOD response and actions: DOD partially concurred but did not delay 
start of production because it believed the risk level was appropriate. 

GAO report: 2007; [hyperlink, http://www.gao.gov/products/GAO-07-360]; 
Est. dev. costs; dev. length; aircraft unit cost: $44.5 Billion; 
12 years; $104 Million; 
Key program event: Congress reduced funding for first two low-rate 
production buys thereby slowing the ramp up of production; 
Primary GAO message: Progress was being made but concerns remained 
about undue overlap in testing and production. We recommended limits 
to annual production quantities to 24 a year until flying quantities 
are demonstrated; 
DOD response and actions: DOD non-concurred and felt that the program 
had an acceptable level of concurrency and an appropriate acquisition 
strategy. 

GAO report: 2008; [hyperlink, http://www.gao.gov/products/GAO-08-388]; 
Est. dev. costs; dev. length; aircraft unit cost: $44.2 Billion; 
12 years; $104 Million; 
Key program event: DOD implemented a Mid-Course Risk Reduction Plan to 
replenish management reserves from about $400 million to about $1 
billion by reducing test resources; 
Primary GAO message: We believed new plan actually increased risks and 
recommended that DOD revise the plan to address concerns about 
testing, use of management reserves, and manufacturing. We determined 
that the cost estimate was not reliable and that a new cost estimate 
and schedule risk assessment is needed; 
DOD response and actions: DOD did not revise risk plan or restore 
testing resources, stating that it will monitor the new plan and 
adjust it if necessary. Consistent with a report recommendation, a new 
cost estimate was eventually prepared, but DOD refused to do a risk 
and uncertainty analysis that we felt was important to provide a range 
estimate of potential outcomes. 

GAO report: 2009; [hyperlink, http://www.gao.gov/products/GAO-09-303]; 
Est. dev. costs; dev. length; aircraft unit cost: $44.4 Billion; 
13 years; $104 Million; 
Key program event: The program increased the cost estimate and adds a 
year to development but accelerated the production ramp up. 
Independent DOD cost estimate (JET I) projects even higher costs and 
further delays; 
Primary GAO message: Because of development problems, we stated that 
moving forward with an accelerated procurement plan and use of cost 
reimbursement contracts is very risky. We recommended the program 
report on the risks and mitigation strategy for this approach; 
DOD response and actions: DOD agreed to report its contracting 
strategy and plans to Congress. In response to our report 
recommendation, DOD subsequently agreed to do a schedule risk 
analysis. The program reported completing the first schedule risk 
assessment in summer 2011 with plans to update about every 6 months. 
In February 2010, the Department announced a major restructuring of 
the JSF program, including reduced procurement and a planned move to 
fixed-price contracts. 

GAO report: 2010; [hyperlink, http://www.gao.gov/products/GAO-10-382]; 
Est. dev. costs; dev. length; aircraft unit cost: $49.3 Billion; 
15 years; $112 Million; 
Key program event: The program was restructured to reflect findings of 
recent independent cost team (JET II) and independent manufacturing 
review team. As a result, development funds increased, test aircraft 
were added, the schedule was extended, and the early production rate 
decreased; 
Primary GAO message: Because of additional costs and schedule delays, 
the program's ability to meet warfighter requirements on time is at 
risk. We recommend the program complete a full comprehensive cost 
estimate and assess warfighter and IOC requirements. We suggest that 
Congress require DOD to prepare a "system maturity matrix"-a tool for 
tying annual procurement requests to demonstrated progress; 
DOD response and actions: DOD continued restructuring actions and 
announced plans to increase test resources and lower the production 
rate. Independent review teams evaluated aircraft and engine 
manufacturing processes. As we projected in this report, cost 
increases later resulted in a Nunn-McCurdy breach. Military services 
are currently reviewing capability requirements as we recommended. 

GAO report: 2011; [hyperlink, http://www.gao.gov/products/GAO-11-325]; 
Est. dev. costs; dev. length;: aircraft unit cost: $51.8 Billion; 
16 years; $133 Million; 
Key program event: Restructuring continued following the Nunn-McCurdy 
certification with additional development cost increases; schedule 
growth; further reduction in near-term procurement quantities; 
and decreased the rate of increase for future production. The 
Secretary of Defense placed the STOVL variant on a 2 year probation; 
decoupled STOVL from the other variants in the testing program because 
of lingering technical issues; and reduced STOVL production plans for 
fiscal years 2011 to 2013; 
Primary GAO message: The restructuring actions are positive and if 
implemented properly, should lead to more achievable and predictable 
outcomes. Concurrency of development, test, and production is 
substantial and provides risk to the program. We recommended the 
program maintain funding levels as budgeted in the FY 2012-2016 future 
years' defense plan; establish criteria for STOVL probation; and 
conduct an independent review of software development, integration, 
and test processes; 
DOD response and actions: DOD concurred with all three of the 
recommendations. In January 2012, the Secretary of Defense lifted 
STOVL probation, citing improved performance. Subsequently, the 
Secretary further reduced procurement quantities, decreasing funding 
requirements through 2016. The initial independent software assessment 
began in September 2011, and ongoing reviews are planned through 2012. 

Source: DOD data and GAO analysis in prior reports cited above. 

[End of table] 

[End of section] 

Appendix IV: Budgeted Funding and Procurement Quantities, FY 2011-2017: 

Dollars in millions: 

Development funding: 

Air Force (CTOL); 
2011: $932; 
2012: $1,398; 
2013: $1,218; 
2014: $1,069; 
2015: $741; 
2016: $520; 
2017: $386; 
Total: $6,263. 

Navy (CV); 
2011: $654; 
2012: $659; 
2013: $744; 
2014: $702; 
2015: $584; 
2016: $458; 
2017: $350; 
Total: $4,151. 

Marine Corps (STOVL); 
2011: $602; 
2012: $652; 
2013: $737; 
2014: $693; 
2015: $575; 
2016: $448; 
2017: $340; 
Total: $4,048. 

Development funding: U.S. total; 
2011: $2,188; 
2012: $2,708; 
2013: $2,699; 
2014: $2,465; 
2015: $1,900; 
2016: $1,427; 
2017: $1,075; 
Total: $14,462. 

Procurement funding: 

Air Force (CTOL); 
2011: $4,302; 
2012: $3,519; 
2013: $3,566; 
2014: $3,515; 
2015: $4,793; 
2016: $6,250; 
2017: $6,202; 
Total: $32,146. 

Navy (CV); 
2011: $1,853; 
2012: $1,557; 
2013: $1,073; 
2014: $1,274; 
2015: $1,432; 
2016: $1,724; 
2017: $2,430; 
Total: $11,343. 

Marine Corps (STOVL); 
2011: $838; 
2012: $1,259; 
2013: $1,511; 
2014: $1,521; 
2015: $1,562; 
2016: $1,953; 
2017: $2,577; 
Total: $11,221. 

Procurement funding: U.S. total; 
2011: $6,993; 
2012: $6,335; 
2013: $6,149; 
2014: $6,311; 
2015: $7,787; 
2016: $9,927; 
2017: $11,208; 
Total: $54,710. 

Quantity: 

Air Force (CTOL); 
2011: 22; 
2012: 18; 
2013: 19; 
2014: 19; 
2015: 32; 
2016: 48; 
2017: 48; 
Total: 206. 

Navy (CV); 
2011: 7; 
2012: 7; 
2013: 4; 
2014: 4; 
2015: 6; 
2016: 9; 
2017: 14; 
Total: 51. 

Marine Corps (STOVL); 
2011: 3; 
2012: 6; 
2013: 6; 
2014: 6; 
2015: 6; 
2016: 9; 
2017: 14; 
Total: 50. 

Quantity: U.S. total; 
2011: 32; 
2012: 31; 
2013: 29; 
2014: 29; 
2015: 44; 
2016: 66; 
2017: 76; 
Total: 307. 

Source: GAO analysis of Fiscal Year 2013 President's Budget materials 
and JSF program office data. 

Note: Numbers may not add due to rounding. 

[End of table] 

[End of section] 

Appendix V: Short Takeoff and Vertical Landing Aircraft Probation 
Period and Progress: 

In January 2011, the Secretary of Defense placed the short takeoff and 
vertical landing (STOVL) aircraft on "probation" for 2 years, citing 
technical issues unique to the variant that would add to the 
aircraft's cost and weight. The probation limited the U.S. STOVL 
procurement to three aircraft in fiscal year 2011 and six aircraft in 
fiscal year 2012 and decoupled STOVL testing from CV and CTOL testing 
so as not to delay those variants. The 2 year probation was expected 
to provide enough time to address STOVL-specific technical issues, 
engineer solutions, and assess their impact. It was presumed that at 
the end of probation, an informed decision could be made about whether 
and how to proceed with STOVL, but no specific exit criteria were 
established. In our 2011 report[Footnote 20], we recommended that the 
program establish criteria for the STOVL probation period and take 
additional steps to sustain individual attention on STOVL-specific 
issues to ensure cost and schedule milestones were achieved in order 
to deliver required warfighter capabilities. 

In January 2012, the new Secretary of Defense lifted the STOVL 
probation after 1 year, citing improved performance and completion of 
the initial sea trials aboard the U.S.S. Wasp as a basis for the 
decision. In its report to Congress[Footnote 21], the Department 
explained that STOVL progress was continually monitored throughout the 
probation period with a holistic view of the weapon system, and 
reiterated that the STOVL was not placed on probation with specific 
exit criteria. The report stated that the Commandant of the Marine 
Corps completed monthly reviews of STOVL progress in addition to the 
monthly Service Acquisition Executive reviews of the JSF program, and 
that this provided the individual focus required to balance cost, 
schedule, and development progress against warfighter utility. These 
reviews assessed categories of STOVL weight and vertical lift 
propulsion performance, availability, and ship suitability in fleet 
operation, as well as the costs to modify, operate and procure the 
aircraft. Throughout 2011, the STOVL variant increased test flight 
rates and STOVL-specific mode testing, surpassing planned test point 
progress for the year. In ending probation, the Department concluded 
that sufficient progress in STOVL development, test, and production 
had been made such that no uniquely distinguishing issues required 
that it receive more scrutiny than the other two variants. According 
to the department, interim solutions are in place to mitigate the 
lingering technical issues with the STOVL and permanent solutions are 
in varying stages of development or implementation. 

While the probation period did not include specific criteria, the 
reasons given for probation were to address technical issues, engineer 
solutions, and assess impact, and it was expected to take 2 years to 
do so. Although we note that several technical issues have been 
addressed and some potential solutions engineered, assessing whether 
the deficiencies are resolved is ongoing and, in some cases, will not 
be known for years. Table 5 provides details on the STOVL technical 
problems identified at the onset of probation, the efforts to resolve 
the problems, and timeframes for implementing fixes. According to the 
program, of the five specific problems cited, two are considered to be 
fixed (bulkhead cracks and air inlet door loads) while the other three 
have temporary fixes in place. The Director, Operational Test and 
Evaluation (DOT&E) officials reported that significant work remains to 
verify and incorporate modifications to correct known STOVL 
deficiencies and prepare the system for operational use. Until the 
proposed technical solutions have been fully tested and demonstrated, 
it cannot be determined if the technical problems have been resolved. 

Table 5: STOVL Technical Problems Identified for Probation Period: 

Technical Problem: Bulkhead cracks developed before 2,000 hours of 
fatigue/durability testing. Requirement is 8,000 hours; 
Design Fix: Bulkhead redesign for production, with fixes identified 
for retrofit as needed; 
Reported Status: Redesign has been completed and fatigue/durability 
test resumed in January 2012; 
Production Cut-in: [Empty]. 

Technical Problem: Excessive loads on the auxiliary air inlet doors, 
causing higher than expected wear and fatigue; 
Design Fix: Door redesign; 
Reported Status: Flight testing began in December 2011 on redesigned 
door installed on BF-1. According to the program office, analyses of 
the results from early test flights are promising; 
Production Cut-in: BF-38; LRIP 6. 

Technical Problem: Higher-than-expected heating of the lift fan clutch 
during conventional flight; 
Design Fix: An interim solution is a temperature sensor that alerts 
the pilot to take corrective action if the clutch exceeds acceptable 
temperatures. A final solution for the heat problem has yet to be 
determined; 
Reported Status: The temperature sensor has been added to aircraft as 
the interim measure. A detailed root cause investigation for a 
permanent fix to eliminate lift fan clutch heating is underway; 
Production Cut-in: BF-44; LRIP 7. 

Technical Problem: Thermal growth of the airframe and engine exceed 
the current lift fan drive shaft stretch/compression capability; 
Design Fix: Interim solution is to add spacers to the lift fan 
driveshaft to accommodate unanticipated thermal expansion and 
contraction. This eliminates airworthiness concerns. Final solution is 
to redesign the driveshaft; 
Reported Status: Spacers have been added to ensure airworthiness for 
the interim solution. A new driveshaft that can meet actual aircraft 
environmental requirements is in the early phases of the design 
process; 
Production Cut-in: BF-44; LRIP 7. 

Technical Problem: Roll post nozzle bay temperatures exceed current 
actuator capability; 
Design Fix: Interim solution is to insulate the actuator with a 
thermal blanket. Final fix expected to be a redesigned actuator; 
Reported Status: Airworthiness risk mitigated by thermal blanket. The 
critical design review for a new actuator design that will eliminate 
the need for a thermal blanket was conducted January 2012; 
Production Cut-in: TBD. 

Source: GAO analysis of DOD data. 

[End of table] 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Michael Sullivan (202) 512-4841 or sullivanm@gao.gov: 

Acknowledgments: 

In addition to the contact name above, the following staff members 
made key contributions to this report: Bruce Fairbairn, Assistant 
Director; Charlie Shivers; Sean Merrill; LeAnna Parkey; Dr. W. Kendal 
Roberts; Laura Greifner; and Matt Lea. 

[End of section] 

Related GAO Products: 

Defense Acquisitions: Assessments of Selected Weapon Programs. 
[hyperlink, http://www.gao.gov/products/GAO-12-400SP]. Washington, 
D.C.: March 29, 2012. 

Joint Strike Fighter: Restructuring Added Resources and Reduced Risk, 
but Concurrency Is Still a Major Concern. [hyperlink, 
http://www.gao.gov/products/GAO-12-525T]. Washington, D.C.: March 20, 
2012. 

Joint Strike Fighter: Implications of Program Restructuring and Other 
Recent Developments on Key Aspects of DOD's Prior Alternate Engine 
Analyses. [hyperlink, http://www.gao.gov/products/GAO-11-903R]. 
Washington, D.C.: September 14, 2011. 

Joint Strike Fighter: Restructuring Places Program on Firmer Footing, 
but Progress Is Still Lagging. [hyperlink, 
http://www.gao.gov/products/GAO-11-677T]. Washington, D.C.: May 19, 
2011. 

Joint Strike Fighter: Restructuring Places Program on Firmer Footing, 
but Progress Still Lags. [hyperlink, 
http://www.gao.gov/products/GAO-11-325]. Washington, D.C.: April 7, 
2011. 

Joint Strike Fighter: Restructuring Should Improve Outcomes, but 
Progress Is Still Lagging Overall. [hyperlink, 
http://www.gao.gov/products/GAO-11-450T]. Washington, D.C.: March 15, 
2011. 

Tactical Aircraft: Air Force Fighter Force Structure Reports Generally 
Addressed Congressional Mandates, but Reflected Dated Plans and 
Guidance, and Limited Analyses. [hyperlink, 
http://www.gao.gov/products/GAO-11-323R]. Washington, D.C.: February 
24, 2011. 

Defense Management: DOD Needs to Monitor and Assess Corrective Actions 
Resulting from Its Corrosion Study of the F-35 Joint Strike Fighter. 
[hyperlink, http://www.gao.gov/products/GAO-11-171R]. Washington D.C.: 
December 16, 2010. 

Joint Strike Fighter: Assessment of DOD's Funding Projection for the 
F136 Alternate Engine. [hyperlink, 
http://www.gao.gov/products/GAO-10-1020R]. Washington, D.C.: September 
15, 2010. 

Tactical Aircraft: DOD's Ability to Meet Future Requirements is 
Uncertain, with Key Analyses Needed to Inform Upcoming Investment 
Decisions. [hyperlink, http://www.gao.gov/products/GAO-10-789]. 
Washington, D.C.: July 29, 2010. 

Defense Acquisitions: Assessments of Selected Weapon Programs. 
[hyperlink, http://www.gao.gov/products/GAO-10-388SP]. Washington, 
D.C.: March 30, 2010. 

Joint Strike Fighter: Significant Challenges and Decisions Ahead. 
[hyperlink, http://www.gao.gov/products/GAO-10-478T]. Washington, 
D.C.: March 24, 2010. 

Joint Strike Fighter: Additional Costs and Delays Risk Not Meeting 
Warfighter Requirements on Time. [hyperlink, 
http://www.gao.gov/products/GAO-10-382]. Washington, D.C.: March 19, 
2010. 

Joint Strike Fighter: Significant Challenges Remain as DOD 
Restructures Program. [hyperlink, 
http://www.gao.gov/products/GAO-10-520T]. Washington, D.C.: March 11, 
2010. 

Joint Strike Fighter: Strong Risk Management Essential as Program 
Enters Most Challenging Phase. [hyperlink, 
http://www.gao.gov/products/GAO-09-711T]. Washington, D.C.: May 20, 
2009. 

Defense Acquisitions: Assessments of Selected Weapon Programs. 
[hyperlink, http://www.gao.gov/products/GAO-09-326SP]. Washington, 
D.C.: March 30, 2009. 

Joint Strike Fighter: Accelerating Procurement before Completing 
Development Increases the Government's Financial Risk. [hyperlink, 
http://www.gao.gov/products/GAO-09-303]. Washington D.C.: March 12, 
2009. 

Defense Acquisitions: Better Weapon Program Outcomes Require 
Discipline, Accountability, and Fundamental Changes in the Acquisition 
Environment. [hyperlink, http://www.gao.gov/products/GAO-08-782T]. 
Washington, D.C.: June 3, 2008. 

Defense Acquisitions: Assessments of Selected Weapon Programs. 
[hyperlink, http://www.gao.gov/products/GAO-08-467SP]. Washington, 
D.C.: March 31, 2008. 

Joint Strike Fighter: Impact of Recent Decisions on Program Risks. 
[hyperlink, http://www.gao.gov/products/GAO-08-569T]. Washington, 
D.C.: March 11, 2008. 

Joint Strike Fighter: Recent Decisions by DOD Add to Program Risks. 
[hyperlink, http://www.gao.gov/products/GAO-08-388]. Washington, D.C.: 
March 11, 2008. 

Tactical Aircraft: DOD Needs a Joint and Integrated Investment 
Strategy. [hyperlink, http://www.gao.gov/products/GAO-07-415]. 
Washington, D.C.: April 2, 2007. 

Defense Acquisitions: Analysis of Costs for the Joint Strike Fighter 
Engine Program. [hyperlink, http://www.gao.gov/products/GAO-07-656T]. 
Washington, D.C.: March 22, 2007. 

Joint Strike Fighter: Progress Made and Challenges Remain. [hyperlink, 
http://www.gao.gov/products/GAO-07-360]. Washington, D.C.: March 15, 
2007. 

Tactical Aircraft: DOD's Cancellation of the Joint Strike Fighter 
Alternate Engine Program Was Not Based on a Comprehensive Analysis. 
[hyperlink, http://www.gao.gov/products/GAO-06-717R]. Washington, 
D.C.: May 22, 2006. 

Defense Acquisitions: Major Weapon Systems Continue to Experience Cost 
and Schedule Problems under DOD's Revised Policy. [hyperlink, 
http://www.gao.gov/products/GAO-06-368]. Washington, D.C.: April 13, 
2006. 

Defense Acquisitions: Actions Needed to Get Better Results on Weapons 
Systems Investments. [hyperlink, 
http://www.gao.gov/products/GAO-06-585T]. Washington, D.C.: April 5, 
2006. 

Tactical Aircraft: Recapitalization Goals Are Not Supported by 
Knowledge-Based F-22A and JSF Business Cases. [hyperlink, 
http://www.gao.gov/products/GAO-06-487T]. Washington, D.C.: March 16, 
2006. 

Joint Strike Fighter: DOD Plans to Enter Production before Testing 
Demonstrates Acceptable Performance. [hyperlink, 
http://www.gao.gov/products/GAO-06-356]. Washington, D.C.: March 15, 
2006. 

Joint Strike Fighter: Management of the Technology Transfer Process. 
[hyperlink, http://www.gao.gov/products/GAO-06-364]. Washington, D.C.: 
March 14, 2006. 

Tactical Aircraft: F/A-22 and JSF Acquisition Plans and Implications 
for Tactical Aircraft Modernization. [hyperlink, 
http://www.gao.gov/products/GAO-05-519T]. Washington, D.C: April 6, 
2005. 

Tactical Aircraft: Opportunity to Reduce Risks in the Joint Strike 
Fighter Program with Different Acquisition Strategy. [hyperlink, 
http://www.gao.gov/products/GAO-05-271]. Washington, D.C.: March 15, 
2005. 

[End of section] 

Footnotes: 

[1] See related GAO products at the end of this report . 

[2] GAO, Joint Strike Fighter: Restructuring Places Program on Firmer 
Footing, but Progress Still Lags, [hyperlink, 
http://www.gao.gov/products/GAO-11-325] (Washington, D.C.: Apr. 7, 
2011). 

[3] Pub. L. No. 111-84, § 244 (2009). 

[4] The international partners are the United Kingdom, Italy, the 
Netherlands, Turkey, Canada, Australia, Denmark and Norway. These 
nations are contributing funds for system development and have signed 
agreements to procure aircraft. 

[5] Sensor fusion is the ability to take information from both 
multiple on-board and off-board aircraft sensors and display the 
information in an easy-to-use format for the single pilot. 

[6] Commonly referred to as Nunn-McCurdy, 10 U.S.C. § 2433 establishes 
the requirements for DOD to submit unit cost reports on major defense 
acquisition program or designated major subprograms. Two measures are 
tracked against the current and original baseline estimates for a 
program: procurement unit cost (total procurement funds divided by the 
quantity of systems procured) and program acquisition unit cost (total 
funds for development, procurement, and system-specific military 
construction divided by the quantity of systems procured). If a 
program's procurement unit cost or acquisition unit cost increases by 
at least 15 percent over the current baseline estimate or at least 30 
percent over the original baseline estimate, it constitutes a breach 
of the significant cost growth threshold. If a program's procurement 
unit cost or acquisition unit cost increases by at least 25 percent 
over the current baseline estimate or at least 50 percent over the 
original baseline estimate, it constitutes a breach of the critical 
cost growth threshold. Programs are required to notify Congress if a 
Nunn-McCurdy breach is experienced. When a program experiences a Nunn-
McCurdy breach of the critical cost growth threshold, DOD is required 
to take a number of steps, including reassessing the program and 
submitting a certification to Congress in order to continue the 
program, in accordance with 10 U.S.C. § 2433a. 

[7] In addition to the aircraft and engine contract costs shown in 
figures 1 and 2, the total development cost of $55.2 billion in the 
new baseline includes program management, testing, and other 
government costs of about $15.0 billion. 

[8] Flight test points are specific, quantifiable objectives in flight 
plans that are needed to verify aircraft design and performance. 

[9] According to program officials, completion of a test point means 
that the test point has been flown and that flight engineers ruled 
that the point has met the need. Further analysis may be necessary for 
the test point to be closed out. 

[10] The JSF Operational Test Team consists of members from the Air 
Force Test and Evaluation Center, the Navy's Operational Test and 
Evaluation Force, and the United Kingdom's Air Warfare Centre. 

[11] Mission systems provide combat effectiveness through next 
generation sensors with fused information from on-board and off-board 
systems (i.e. Electronic Warfare, Communication Navigation 
Identification, Electro-Optical Target System, Electro-Optical 
Distributed Aperture System, Radar, and Data Links). 

[12] Latency is a perceivable discrepancy or lag that occurs between a 
physical input (e.g. head movement) and the time it takes the computer 
to recalibrate with a corresponding change. This is the result of 
system delay including the head tracker delay, computer graphic delay, 
and display delay. Display jitter is the undesired shaking of display, 
making symbology unreadable under those conditions. Regarding the JSF, 
jitter results from worse than expected vibrations, known as aircraft 
buffet. 

[13] Out of station work occurs when manufacturing steps are not 
completed at the designated work station and must be finished 
elsewhere later in production. This is highly inefficient, increasing 
labor hours, causing delays, and sometimes quality problems. 

[14] [hyperlink, http://www.gao.gov/products/GAO-08-388] and 
[hyperlink, http://www.gao.gov/products/GAO-09-303]. 

[15] The Earned Value Management System is an important tool that can 
provide objective production data, track actual costs to budgets, and 
project contract costs at completion. DOD requires its use by major 
defense suppliers to facilitate good insight and oversight of the 
expenditure of government dollars, thereby improving both 
affordability and accountability. In 2007, DCMA found that Lockheed 
was deficient in meeting 19 of 32 required guidelines, calling into 
question its ability to manage the escalating costs and complex 
scheduling of the JSF program. 

[16] Note: The engine contractor has production contracts with the 
government and the engines are provided as government furnished 
equipment to the JSF prime contractor. 

[17] GAO, Joint Strike Fighter: DOD Plans to Enter Production before 
Testing Demonstrates Acceptable Performance, [hyperlink, 
http://www.gao.gov/products/GAO-06-356] (Washington, D.C.: Mar. 15, 
2006) and GAO, Joint Strike Fighter: Progress Made and Challenges 
Remain, [hyperlink, http://www.gao.gov/products/GAO-07-360] 
(Washington, D.C.: Apr. 2, 2007). 

[18] F-35 Joint Strike Fighter Concurrency Quick Look Review, Office 
of the Undersecretary of Defense for Acquisition, Technology and 
Logistics, November 29, 2011. 

[19] GAO, Best Practices: Capturing Design and Manufacturing Knowledge 
Early Improves Acquisition Outcomes, [hyperlink, 
http://www.gao.gov/products/GAO-02-701] (Washington, D.C.: July 15, 
2002). 

[20] [hyperlink, http://www.gao.gov/products/GAO-11-325]. 

[21] Under Secretary of Defense Acquisition, Technology and Logistics 
Report to Congress on Probationary Period in Development of Short Take-
off, Vertical Landing Variant of the Joint Strike Fighter: National 
Defense Authorization Act for Fiscal Year 2012, section 148. 

[End of section] 

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