Skip to main content

F-35 Joint Strike Fighter: Actions Needed to Address Manufacturing and Modernization Risks

GAO-20-339 Published: May 12, 2020. Publicly Released: May 12, 2020.
Jump To:

Fast Facts

The F-35 program produced more aircraft and negotiated lower prices in 2019. However, the program is not meeting standards aimed at ensuring consistent, high-quality products, and fielded aircraft do not meet reliability goals.

Also, the cost to modernize aircraft systems went up about $1.5 billion (14%) since the program’s May 2019 annual report to Congress. Due to development delays, this reporting requirement will expire before the effort is complete. We suggest Congress consider extending it.

We made 5 recommendations, including some to help the Defense Department make its modernization cost estimate more comprehensive and credible.

An F-35B Exercising Its Short Takeoff and Vertical Landing Capability on the USS America

Fighter jet

Fighter jet

Skip to Highlights

Highlights

What GAO Found

The F-35 program is at risk of missing its test schedule and not meeting manufacturing leading practices. In 2019, the F-35 program conducted much of its planned operational testing but extended the schedule by 9 months, which delays the program's full-rate production decision to between September 2020 and March 2021. Over that time, the program will continue to deliver aircraft.

In addition, while the F-35 program has increased the production rate and negotiated lower aircraft prices, it is not meeting manufacturing leading practices identified by GAO. Specifically, only about 3,000 of the over 10,000 airframe contractor's manufacturing key processes meet predefined design standards for ensuring product quality. Also, the fielded aircraft, over 500 so far, do not meet the program's reliability and maintainability goals. Although the contractor is changing manufacturing processes to address problems and improve efficiency, more remains to be done. Unless the program office evaluates the risks of not meeting these leading practices, the military services and international partners are at risk of not receiving the quality aircraft they purchased.

An F-35 in Flight over Edwards Air Force Base

An F-35 in Flight over Edwards Air Force Base

In addition, the July 2019 suspension of Turkey from the F-35 program—due to security concerns after its acquisition of Russian defense equipment—is likely to compound production risks. The program has identified new sources for 1,005 parts produced by Turkish suppliers, but the program is assessing the effect of 15 key parts not currently being produced at the needed production rate.

In 2019, estimated development costs to modernize the F-35's hardware and software systems—known as Block 4—increased by over $1.5 billion. The cost increase puts estimated Block 4 development costs at $12.1 billion. However, the cost estimate did not fully adhere to leading practices, such as including all life cycle costs. In addition, while development will continue through 2026, reports on Block 4 that the program submits to Congress are slated to end in 2023. Without continued Block 4 reporting through the development phase, Congress will lack important oversight information.

Why GAO Did This Study

The acquisition cost for the F-35 program increased substantially in 2019, partially due to the program's addition of estimated costs for modernization of hardware and software systems, referred to as its Block 4 efforts.

This is the fifth report under the provision that Congress included in statute for GAO to review the F-35 program annually until the program reaches full-rate production. This is also the first report under another provision in statute to review the program's production and Block 4 progress annually through 2024. Among other objectives, this report assesses (1) the program's production performance and (2) the program's modernization cost estimate and development progress. GAO reviewed Department of Defense (DOD) and contractor documentation and interviewed DOD officials and contractor representatives.

Recommendations

Congress should consider extending DOD's reporting requirement for Block 4 modernization beyond 2023. GAO is also making five recommendations to DOD. While DOD did not concur with two of these recommendations—including to evaluate production risks and update its Block 4 cost estimate with a program-level plan, it identified actions that, if implemented, will meet the intent of these recommendations. DOD concurred with GAO's three other recommendations.

Matter for Congressional Consideration

Matter Status Comments
Congress should consider revising Section 224(d) of the National Defense Authorization Act for Fiscal Year 2017, Pub. L. No. 114-328, to extend DOD's Block 4 reporting requirement until all Block 4 capabilities are fielded to ensure that Congress is aware of cost and schedule growth beyond 2023. (Matter for Consideration 1)
Closed – Implemented
Congress took action in Section 225(a) of the FY24 NDAA stating that the Secretary of Defense shall designate all Block 4 and Technical Refresh-3 elements of the F-35 aircraft acquisition program, collectively, as a single major subprogram of the F-35 aircraft acquisition program. This action meets the intent of our recommendation.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The OUSD (A&S) should direct the F-35 program office to provide information that is similar to that which is statutorily required after the milestone C review to Congress ahead of the milestone C review (full-rate production decision). This submission should include an evaluation of the production risks associated with critical production processes that are not in control, reliability and maintainability (R&M) targets that are not met, and supplier readiness—particularly for those replacing Turkish suppliers, along with the steps it is taking to address those risks. (Recommendation 1)
Open
DOD did not concur with this recommendation, citing updates the F-35 program office provides to oversight entities within DOD. We maintain that the program office should provide these same updates to Congress as well. Without a substantive assessment highlighting specific production risks, as well as the steps DOD will take to mitigate them, Congress may not have key insights into the risks that remain with the program and to the overall effort to deliver F-35s to the warfighter. DOD has agreed to keep the Congress apprised of these matters in its quarterly briefings to the defense committees. As of October 2023, DOD has not provided information on their actions.
Department of Defense The OUSD (A&S) should direct the F-35 program office to establish a Block 4 cost estimate baseline that includes all Block 4 costs, including incurred costs and future costs in its reports to Congress as required by the NDAA for Fiscal Year 2017, so that Congress has a complete understanding of all Block 4 costs and can compare this baseline to future cost estimates and performance. (Recommendation 2)
Closed – Implemented
DOD concurred with this recommendation. In response to our report, DOD stated that future reports to Congress will include prior and future costs, outside of the Future Years Defense Program costs. The program office updated the Block 4 cost estimate in May 2020 to reflect cost data for all years of Block 4 development, instead of the more limited cost estimates DOD had previously reported to Congress. For example, in the September 2020 Block 4 report to Congress, the program reported a total cost of $14.4 billion for Block 4, which reflects not only earlier incurred costs but also an additional 3 years of Block 4 development.
Department of Defense The OUSD (A&S) should direct the F-35 program office to complete a program office level, product-oriented work breakdown structure for the next update to its Block 4 cost estimate to ensure that the estimate meets the comprehensive leading practices. (Recommendation 3)
Open
Though DOD did not concur with this recommendation, in response to this report, DOD agreed to evaluate moving to a program-level, product-oriented work breakdown structure in 2021. As of October 2023, DOD has not provided information on their actions.
Department of Defense The OUSD (A&S) should direct the F-35 program office to conduct risk and uncertainty analyses for the next update to its Block 4 cost estimate to ensure that the estimate meets the credible leading practices. (Recommendation 4)
Open
DOD concurred with this recommendation. In response to this report, DOD stated that the F-35 program office estimate is aligned with the DOD's Cost Assessment and Program Evaluation's approach and methodology for performing development cost estimates. However, DOD did not identify specific actions it plans to take to include risk and uncertainty into its next Block 4 cost estimate update. The program office reported in July 2021 that an updated 2021 cost estimate will be released by the end of fiscal year 2021 and it will include a discussion of risk. In June 2022, the program office reported that it was still determining what steps, if any, to address the recommendation. As of October 2023, DOD has not provided information on their actions. We will continue to monitor any actions DOD takes in this regard.
Department of Defense The OUSD (A&S) should direct the F-35 program office to consider the results of its future technology readiness assessment of all Block 4 technologies and incorporate the cost and schedule risks of developing those technologies in the next update to its Block 4 cost estimate to ensure that the estimate meets the comprehensive leading practices. (Recommendation 5)
Open
DOD concurred with this recommendation. In response to this report, DOD stated that it continues to evaluate technology readiness levels for Block 4. It noted that Office of the Under Secretary of Defense for Research and Engineering would conduct an independent technology readiness assessment of the Block 4 effort, which the program would use to inform future cost estimates. In May 2020, the F-35 Program Office issued a Technology Readiness Assessment Plan for Block 4. This plan outlines an incremental assessment approach aligned with Block 4 capability drops beginning with the drop scheduled for April 2021. In July 2021, the program office reported that the updated 2021 cost estimate will be informed by TRL levels finalized in May 2020. However, the joint program office did not believe there are any low TRL hardware or capabilities and the program typically bases its estimate on an analogy with an existing, proven technology, in accordance with standard cost estimating procedures. In June 2022, the program office reported that the 2022 cost estimate would be released in September 2022. As of October 2023, DOD has not provided information on their actions. We will continue to monitor DOD's efforts to address this recommendation.

Full Report

Office of Public Affairs

Topics

Aircraft acquisition programsCost and scheduleCost estimatesJoint strike fighterManufacturingOperational testingProgram evaluationTechnology modernization programsAircraftBest practices