Joint Strike Fighter:
Additional Costs and Delays Risk Not Meeting Warfighter Requirements on Time
GAO-10-382: Published: Mar 19, 2010. Publicly Released: Mar 19, 2010.
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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 for recapitalizing tactical air forces and will require a long-term commitment to very large annual funding outlays. The current estimated investment is $323 billion to develop and procure 2,457 aircraft. As required by law, this report discusses (1) program cost, schedule, and performance; (2) manufacturing results; and (3) test plans and progress. GAO's work includes interviews, cost data, test plans, production measures, and analyses by defense and contractor officials.
The JSF program continues to struggle with increased costs and slowed progress--negative outcomes that were foreseeable as events have unfolded over several years. Total estimated acquisition costs have increased $46 billion and development extended 2 more years, compared to the program baseline approved in 2007. DOD leadership is now taking some positive steps which, if effectively implemented, should improve outcomes and provide more realistic cost and schedule estimates. Officials increased time and funding for system development, added 4 aircraft to the flight test program, and reduced near-term procurement quantities. Restructuring is not finished and further cost growth and schedule extensions are likely. The program is at risk for not delivering aircraft quantities and capabilities on time. Dates for achieving initial operational capabilities may have to be extended or some requirements deferred to future upgrades. Aircraft unit costs will likely exceed the thresholds established by the statutory provision commonly referred to as Nunn-McCurdy and may require DOD to certify the need for the JSF to Congress. Program setbacks in costs, deliveries, and performance directly affect modernization plans and retirement schedules of the legacy aircraft the JSF is slated to replace. Manufacturing JSF test aircraft continues to take more time, money, and effort than budgeted. By December 2009, only 4 of 13 test aircraft had been delivered and labor hours to build the aircraft had increased more than 50 percent above earlier estimates. Late deliveries hamper the development flight test program and affect work on production aircraft, even as plans proceed to significantly ramp-up annual procurement rates. Some improvement is noted, but continuing manufacturing inefficiencies, parts problems, and engineering technical changes indicate that design and production processes may lack the maturity needed to efficiently produce aircraft at planned rates. The independent manufacturing review team determined that the planned production ramp rate was unachievable absent significant improvements. Although restructuring actions should help, there is still substantial overlap of development, test, and production activities while DOD continues to invest in large quantities of production aircraft before variant designs are proven and performance verified. Slowed by late aircraft deliveries, technical problems, and low productivity, the flight test program only completed 10 percent of the sorties planned during 2009. Other technical challenges include (1) relying on an extensive but largely unproven and unaccredited network of ground test laboratories and simulation models to evaluate system performance; (2) developing and integrating very large and complex software requirements; and (3) maturing several critical technologies essential to meet operational performance and logistical support requirements. Collectively, testing and technical challenges will likely add more costs and time to development, affecting delivery of warfighter requirements and hampering start up of pilot and maintainer training and initial operational testing.
Matter for Congressional Consideration
Status: Closed - Implemented
Comments: Our report (GAO-10-382) suggested that Congress consider requiring DOD to provide a JSF "system maturity matrix" as a tool that could help Congress better measure the program's progress in maturing the weapon system. We also suggested a framework for the matrix, including key areas and potential criteria including manufacturing maturity; engineering maturity; performance and testing progress; and mission effectiveness and system reliability among other items. Subsequently, Congress in Section 122 of the Ike Skelton National Defense Authorization for Fiscal Year 2011, directed the Secretary of Defense to establish a system management plan and matrix for the JSF program. The matrix and criteria largely reflected what we identified in our "Matter for Congressional Consideration". In response to this legislation, DOD provided a report on the program system management plan and matrix dated October 28, 2011.
Matter: Congress may wish to consider requiring DOD to provide a JSF "system maturity matrix" as a tool that could help Congress better measure the program's progress in maturing the weapon system. The matrix should provide criteria and conditions for comparing documented results to expected progressive levels of demonstrated weapon system maturity in relationship to planned increases in future procurement quantities. This matrix should explain how increasing levels of demonstrated, quantifiable knowledge about the weapon system maturity at annual procurement decision points justify a ramp up of procurement quantities, and corresponding increasing funding needs, leading up to full-rate procurement. Key areas of the matrix and potential criteria could include: (1) manufacturing maturity (including on-time deliveries, manufacturing process control, quality rates, and labor efficiency rates); (2) engineering maturity (design traffic and design changes); (3) performance and testing progress (test points, hours and flights accomplished, capabilities demonstrated, key performance parameters, and attributes demonstrated); (4) mission effectiveness and system reliability (operational effectiveness and reliability growth); (5) cost estimate fidelity; and (6) training, fielding, and deployment status.
Recommendations for Executive Action
Status: Closed - Implemented
Comments: In providing comments on this report, the agency concurred with this recommendation and indicated its intent to perform an a JSF program independent cost estimate (ICE). The Director, Capabilities Assessment and Program Evaluation (CAPE) conducted an independent cost estimate to support the program's new acquisition program baseline which was established in March 2012. This ICE included an update to the Department's Operating and Sustainment (O&S) cost estimate. In April 2012, CAPE officials discussed with GAO their work building the new program ICE.
Recommendation: Given the continuing changes in JSF program plans and future risks going forward and to provide DOD leaders and Congress with accurate and timely data for making decisions and appropriating funds, the Secretary of Defense should direct appropriate offices within DOD to expeditiously complete a full, independent, comprehensive cost and schedule estimate for the JSF acquisition program through completion and that this new estimate be established as the official program of record for planning, budgeting, and congressional reporting purposes. This effort should build upon the work already accomplished by the Joint Estimating Team, the Independent Manufacturing Review Team, the Joint Assessment Team, and NAVAIR. In addition to development and procurement costs, this effort should also include (1) a robust estimate of military construction costs, (2) identification of JSF-related costs not funded in the JSF program but which are needed to properly base and operate service fleets on the ground and at sea, and (3) a comprehensive evaluation of projected operating and support costs and the implications of higher JSF operating costs compared to legacy aircraft on future defense budgets and force structure.
Agency Affected: Department of Defense
Status: Closed - Implemented
Comments: In providing comments on this report, the agency concurred with this two-part recommendation. Part 1 Service IOC Dates: We recommended the Services review initial operational capability (IOC) dates and requirements to determine minimum needs and tradeoffs, otherwise dates needed to be extended to align with Joint Strike Fighter program changes. In February 2010, JSF program officials briefed the Joint Requirements Oversight Council and discussed IOC requirements with the Service representatives. In addition, the agency stated that the JSF Program Office will assist the Services' assessment of potential impacts of the restructure on their respective IOC plans. The Services requested earlier in 2012, with DOD support, to delay establishing IOC dates to gather more information on operational testing among other items. The program anticipates the Services will identify their IOC dates in 2013. Part 2 Legacy aircraft contingency plans: Due to JSF delays and reductions, we further recommended that legacy aircraft needs must be determined, briefed to Congress, and plans resourced before finalizing the revised JSF acquisition strategy and IOC dates. The Services accomplished this work during 2010 and 2011 with the submission to Congress of the Aircraft Procurement Plan, the FY 2012 budget request, briefings to the Hill, and budget plans for buying new F/AF-18EF Super Hornets and extending the life of F-16 Falcon fleet.
Recommendation: The Secretary of Defense should direct that the military services, with Joint Staff and combatant command participation, conduct a detailed review of each service's initial operational capabilities requirement to determine the minimum warfighter needs (both capabilities and capacity) and reasonable, realistic time frames for achieving the requirement. In conducting this review, the military services should consider trading off desired capabilities in order to more rapidly field JSF aircraft with an initial set of usable capabilities to reduce risks of a future tactical aircraft "gap" created by delays in fielding the JSF. Capabilities that are not needed to meet more immediate warfighter needs should be deferred to a future development increment. If options are not available for deferring capabilities to future increments, DOD needs to extend its IOC dates to better align operating plans with more realistic, higher confidence development and production schedules. In addition, because of remaining JSF development risks and uncertainties--including potential for future delays and possible reductions in JSF quantities--contingency plans for legacy aircraft need to be developed so that a properly resourced strategy is in place to fill the capability and capacity gaps until the JSF can replace the legacy aircraft. Completing this review before finalizing its ongoing program restructure would ensure that the program's acquisition strategy is in sync with and supports revisions to services' IOC requirements. The Secretary of Defense should report the results of this review to the congressional defense committees.
Agency Affected: Department of Defense