F-35 Aircraft Sustainment: DOD Needs to Address Substantial Supply Chain Challenges

GAO-19-321 Published: Apr 25, 2019. Publicly Released: Apr 25, 2019.
Jump To:
Fast Facts

DOD needs to address supply chain issues with the F-35 advanced fighter jet, the country's most expensive weapons system with projected operating costs of more than $1 trillion.

The U.S. Air Force, Marine Corps, and Navy share a pool of spare parts with partners around the world. But shortages, repair backlogs, and mismatched parts are keeping F-35s on the ground. For example, F-35 aircraft were unable to fly nearly 30% of the time from May through November 2018 because they didn't have the parts they needed.

While DOD has taken steps to address these challenges and others, we’ve made 8 recommendations that address these specific issues.

F-35 Lightning II aircraft at Eglin Air Force Base, Florida

An F-35 jet on a runway preparing for takeoff.

An F-35 jet on a runway preparing for takeoff.

Skip to Highlights
Highlights

What GAO Found

F-35 aircraft performance is falling short of warfighter requirements—that is, aircraft cannot perform as many missions or fly as often as required.

Figure: F-35 Fleet Aircraft Performance, May 2018 November 2018

highlights_5_v2_102524

This lower-than-desired aircraft performance is due largely to F-35 spare parts shortages and difficulty in managing and moving parts around the world:

  • Spare parts shortages and limited repair capabilities. F-35 aircraft were unable to fly nearly 30 percent of the May—November 2018 time period due to spare parts shortages. Also, the Department of Defense (DOD) had a repair backlog of about 4,300 F-35 parts. DOD is taking steps to fix these issues, such as improving the reliability of parts. However, it has not fully determined actions needed to close the gap between warfighter requirements and the performance the F-35 supply chain can deliver.
  • Mismatched parts for deploying aircraft. DOD purchases certain sets of F-35 parts years ahead of time to support aircraft on deployments, including on ships. But the parts do not fully match the military services' needs because F-35 aircraft have been modified over time. For example, 44 percent of purchased parts were incompatible with aircraft the Marine Corps took on a recent deployment. Without a process to modify the sets of parts for deployments, DOD may be unable to meet the services' operational needs.
  • An immature global network to move F-35 parts. DOD's networks for moving F-35 parts around the world are immature, and overseas F-35 customers have experienced long wait times for parts needed to repair aircraft. Without a detailed plan for the network, DOD may not be ready to support an expanding fleet.

In addressing these challenges, DOD must grapple with affordability. The Air Force and Marine Corps recently identified the need to reduce their sustainment costs per aircraft per year by 43 and 24 percent, respectively. DOD has spent billions of dollars on F-35 spare parts but does not have records for all the parts it has purchased, where they are, or how much they cost. For example, DOD is not maintaining a database with information on F-35 parts the U.S. owns, and it lacks the necessary data to be able to do so. Without a policy that clearly defines how it will keep track of purchased F-35 parts, DOD will continue to operate with a limited understanding of the F-35 spare parts it owns and how they are being managed. If left unaddressed, these accountability issues will impede DOD's ability to obtain sufficient readiness within affordability constraints.

Why GAO Did This Study

DOD's F-35 fighter jet provides key aviation capabilities to support the U.S. National Defense Strategy. The F-35 is also DOD's most costly weapon system, with sustainment costs estimated at more than $1 trillion over a 60-year life cycle. The F-35's supply chain has a unique design. Rather than owning the spare parts for their aircraft, the Air Force, Navy, and Marine Corps—along with eight international partners and other foreign military sales customers—share a common, global pool of F-35 parts that are managed by the prime contractor.

You asked us to review the F-35 supply chain. This report assesses, among other things, the extent to which (1) F-35 performance is meeting warfighter requirements and any challenges related to the availability of spare parts; (2) DOD can effectively manage and move F-35 spare parts to support aircraft around the world; and (3) DOD can account for F-35 spare parts and their costs within the supply chain. GAO reviewed DOD and contractor documentation, analyzed performance data, and interviewed relevant officials.

Skip to Recommendations

Recommendations

GAO is making eight recommendations, including that DOD determine actions to close the gap between warfighter requirements and F-35 supply chain performance; and address challenges with deployments, global parts movement, and spare parts accountability. DOD concurred with all of GAO's recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, together with the F-35 Program Executive Officer, the Secretaries of the Air Force and Navy, and the Commandant of the Marine Corps, conducts a comprehensive review of the F-35 supply chain to determine what additional actions are needed to close the gap between warfighter requirements for aircraft performance and the capabilities that the F-35 supply chain can deliver, in light of the U.S. services' affordability constraints. Potential actions could include adjustments to the quantities of parts DOD is planning to procure, or developing a mechanism for providing increased availability of parts to operational units, as a means to mitigate fleet-wide shortages. (Recommendation 1)
Closed – Implemented
DOD concurred with this recommendation. As of December 2020, DOD had taken a number of actions to review the F-35 supply chain and identify actions needed to close the gap between warfighter requirements for aircraft performance and what the supply chain can deliver. Specifically, following the issuance of its revised Life Cycle Sustainment Plan in January 2019, DOD has developed detailed and iterative plans of action with milestones for key areas of sustainment-including plans for depot repair and the supply chain-that identify the levers that affect desired sustainment outcomes and the actions that must be taken to achieve those outcomes. DOD conducted an analysis to examine the option of increasing the quantities of parts that DOD will procure, but has determined that this would be unjustified without first addressing the other systemic program issues that are being targeted in its plans of action. Instead, DOD has made adjustments to its contracted performance incentives to prioritize the allocation of parts to operational units to achieve its target of 80% mission capability. These actions are reflective of DOD working to ensure that parts are going where they are most needed given budgetary and readiness trade-offs, as it continues efforts to improve overall supply chain performance. While DOD still faces challenges, taken together these actions better position DOD to work toward the required sustainment outcomes for the F-35. DOD has met the intent of our recommendation.
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, together with the F-35 Program Executive Officer, the Secretaries of the Air Force and Navy, and the Commandant of the Marine Corps, develops a process to modify the afloat and deployment spares packages, to include reviewing the parts within the packages to ensure that they match deploying aircraft and account for updated parts demand, and aligning any necessary funding needed for the parts updates. (Recommendation 2)
Open
DOD concurred with this recommendation. As of February 2022, documentation provided by DOD shows that it has developed an initial process for managing the configurations of the parts within the afloat and deployment spares packages, including issuing a configuration and update plan. In November 2020, the program completed its pilot and subsequent focused effort to review its 13 fielded afloat and deployment spares packages to identify needed updates-referred to as the "Catch-Up" Phase. According to program documentation, the process evolved throughout 2020 and lessons learned from that phase were be incorporated into the process in 2021--which was to be the first iteration of the process as part of the program's regular planning and execution rhythm. In January 2022, DOD officials said that the revisions to policy that formally document this process were nearly complete. These efforts demonstrate significant progress by DOD; we will continue to monitor DOD's progress as it finalizes this process.
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, together with the F-35 Program Executive Officer, the Secretaries of the Air Force and Navy, and the Commandant of the Marine Corps, revises the business rules for the prioritization of scarce F-35 parts across all program participants so as to clearly define the roles and responsibilities of all stakeholders, the process for assigning force activity designations, and the way in which deviations from the business rules will be conducted. (Recommendation 3)
Closed – Implemented
In October 2019, the F-35 Joint Program Office issued revised business rules for the prioritization of scarce F-35 parts. These revised business rules include additional detail that further defines the roles and responsibilities of all stakeholders, the process for assigning force activity designations, and how participants can request deviations from the business rules. As a result, the process for allocating scarce F-35 parts will be more transparent and participants can have more confidence in the equity of such decisions. These revised business rules meet the intent of our recommendation.
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, together with the F-35 Program Executive Officer, completes a detailed plan for the establishment of the global network for moving F-35 parts that outlines clear requirements and milestones to reach full operational capability, and that includes mechanisms to identify and mitigate risks to the F-35 global spares pool. (Recommendation 4)
Open
DOD concurred with this recommendation. As of February 2022, DOD has taken some actions to address this recommendation, including issuing a program instruction for F-35 Global Asset Management (GAM) which establishes policy and assigns responsibilities management and execution for global asset management. This program instruction establishes policy and responsibilities, which is an important foundation for developing a plan. Additionally, the F-35 program office has established an approach for transitioning importer/exporter functions, warehousing, and transportation functions from contracted to government solutions, which includes planning efforts such as a high-level transition dashboard and schedule to track progress, working groups and a risk register to identify potential risks, impacts, and associated mitigations to implementation. We have requested additional information about the detailed requirements and milestones behind these efforts as the program works to fully establish the network for moving parts and will continue to monitor DOD's progress in this area.
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, together with the F-35 Program Executive Officer, issues a policy consistent with DOD guidance that clearly establishes how DOD will maintain accountability for F-35 parts within the supply chain, and identify the steps needed to implement the policy retrospectively and prospectively—for example, how DOD will obtain the necessary data from the contractor. This policy should provide clarity on how F-35 parts will be categorized, specify how the program will implement DOD regulations, and define prime contractor roles and responsibilities. (Recommendation 5)
Open
DOD concurred with this recommendation. As of February 2022, DOD had taken some steps to address this recommendation. In particular, it has issued a program directive that establishes a F-35 Accountable Property Management Framework. This directive clarifies several key aspects of property accountability for the program, including clarifying certain roles and responsibilities and establishing that global-pooled assets, such as spare parts, are to be categorized as government furnished property. This is a critical first step, but this framework does not provide details on how it will be implemented and DOD also continues to face challenges with establishing accountability for the global spares pool, including with establishing a fully functioning Accountable Property System of Record. DOD stated that it is working to implement a plan to complete internal policy changes to bring the F-35 program fully into alignment with Department policy by January 2023. We will continue to monitor DOD's efforts in this area.
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, together with the F-35 Program Executive Officer, develops a methodical approach to consistently obtain comprehensive cost information from the prime contractor for F-35 spare parts within the supply chain. (Recommendation 6)
Open
DOD concurred with this recommendation. As of February 2022, DOD officials cited progress in obtaining comprehensive cost information from the prime contractors for parts within the supply chain. For example, DOD officials have said that all contracts for new spares now identify the unit acquisition cost for each spare part, and require contractors to include these unit acquisition costs in the totals listed on Material Inspection and Receiving Reports at the time of delivery. Additionally, DOD stated that the F-35 program receives data on actual spares replenishment and repair costs associated with its sustainment contracts quarterly from the contractors. However, the F-35 program faces continued challenges in this area. For example, the F-35 program has not established a clear methodology for obtaining the fully burdened costs for each asset. The program is relying upon the Material Inspection and Receiving Reports for these costs, but those reports may not consistently include all costs such as transportation. In addition, the program has not established consistent procedures for capturing continuous transaction costs for each asset after initial delivery. We will continue to monitor DOD's progress in this area.
Department of Defense The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, together with the Department of Defense Comptroller, the Secretaries of the Air Force and Navy, and the F-35 Program Executive Officer, completes and formalizes a methodology for the U.S. services to use in recording on their financial statements the funds spent on F-35 parts within the global spares pool. (Recommendation 7)
Open
DOD concurred with this recommendation. As of December 2021, DOD stated that the Comptroller is currently developing a white paper to formalize the methodology for the US Services to use in recording on their financial statement the funds spent on F-35 parts within the global spares pool. In parallel to the development of the white paper, in order to ensure that the Department is prepared to implement the methodology once it is complete, DOD said that the spares pool data is being incorporated into an Accountable Property System of Record, and the JPO is working to establish accurate cost values for the global spares pool. However, as of February 2022, there were still a number of issues for DOD to address in order to establish and implement such a methodology, including establishing an accurate inventory of parts on bases around the world, determining how continuing transactions will be tracked, and agreeing with the services on who will be responsible for tracking and reporting assets. We will continue to monitor DOD's progress in this area.
Department of Defense
Priority Rec.
This is a priority recommendation.
The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, together with the F-35 Program Executive Officer, the Secretaries of the Air Force and Navy, and the Commandant of the Marine Corps, clearly defines the strategy by which DOD will manage the F-35 supply chain in the future and update key strategy documents accordingly, to include any additional actions and investments necessary to support that strategy. (Recommendation 8)
Open
DOD concurred with this recommendation. As of February 2022, documentation provide by DOD stated that it completed a Business Case Analysis (BCA) of its Product Support Strategy in May 2021--that is, its strategy to support and sustain the F-35 aircraft. According to DOD, this BCA examines the full Product Support Strategy and provides evaluation and recommendations for each alternative, to include quantitative assessment, qualitative assessment, and risk analysis. According to DOD, the F-35 program is now working to analyze the findings of this BCA and gain stakeholder agreement on the path forward. It will then formally define the program's future supply chain strategy. DOD officials estimated that this effort would not be completed until at least summer of 2022. We will continue to monitor DOD's efforts in this area.

Full Report

GAO Contacts