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.

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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

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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.

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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 December 2020, 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 this phase will be incorporated into the process going forward in 2021-which will be the first iteration of the process as part of the program's regular planning and execution rhythm. These efforts demonstrate significant progress by DOD; we will continue to monitor the institutionalization of this process in 2021.
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 July 2020, DOD has taken some actions with regard to this recommendation, such as issuing a program instruction for F-35 Global Asset Management. This program instruction establishes policy and responsibilities, which is an important foundation for developing a plan. However, it does not provide detailed information about how the global network for moving parts will be established, including outlining clear requirements and milestones to reach full operational capability or mechanisms to identify and mitigate risks. 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, 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 July 2020, DOD had taken 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 it does not provide details on how this policy will actually be implemented retrospectively and prospectively. Further, DOD stated that this guidance is not contractually binding, although it does provide guidance on what elements should be included in contracts. Given the challenges that DOD has previously experienced in its negotiations with the prime contractors to obtain property-related data, additional implementation details are necessary to ensure that the directive is carried out as intended. 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 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 December 2020, DOD cited progress in obtaining comprehensive cost information for replenishment spares, including establishing required quarterly reports of the actual costs of replenishment and repairs as part of the FY20 Annual Sustainment Contract, which are then to be added to the next sustainment contract. However, we have not received detailed documentation of this progress. According to DOD, it has also made progress in collecting pricing for consumable parts, such as including price reporting requirements for consumable parts on its initial spares contracts after FY19, but is still addressing some gaps in its cost information for consumable parts. 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 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. DOD has stated that the Department of Defense Comptroller, with collaboration from the Services and the F-35 Program developed the Transfer of Pooled Assets Methodology as a candidate accounting construct under which the F-35 Program would become the single financial reporting entity for F-35 pooled assets, thus removing the need to allocate "shares" of the pool to the Services and participants. Prior to endorsement and implementation of this methodology, the Department of Defense Comptroller is assessing whether the Department of Navy or the U.S. Air Force would provide more streamlined financial accountability of the F-35 spare parts in the global spares pool. We will continue to monitor DOD's efforts 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 2021, documentation provided by DOD stated that has begun a Business Case Analysis (BCA) of its Product Support Strategy-that is, its strategy to support and sustain the F-35 aircraft. According to DOD, this BCA will examine the full Product Support Strategy and provide evaluation and recommendations for each alternative, to include quantitative assessment, qualitative assessment, and risk analysis. Following the BCA, DOD said that the F-35 Product Support Manager will re-assess the existing Product Support Strategy in 24 months based on the BCA recommendations and incorporate any changes into the F-35 program's plans for execution. We will continue to monitor DOD's efforts in this area.

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