a

GAO

United States Government Accountability Office

Report to Congressional Committees

March 2005 TACTICAL AIRCRAFT

Opportunity to Reduce 

Risks in the Joint 

Strike Fighter 

Program with 

Different Acquisition 

Strategy

GAO-05-271
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-271.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Michael J. 

Sullivan at (202) 512-4841 or 

sullivanm@gao.gov. 

Highlights of GAO-05-271, a report to 

Congressional Committees 

March 2005

TACTICAL AIRCRAFT

Opportunity to Reduce Risks in the Joint 

Strike Fighter Program with Different 

Acquisition Strategy 

Several program changes have made the original JSF business case 

unexecutable. Since initial estimates in 1996, development costs have grown 

over 80 percent, or $20 billion. Program acquisition unit costs have increased 

by 23 percent, or $19 million, since 2001. In addition, delivery of the first 

JSFs to the warfighter has been delayed 2 years so far. Continued program 

uncertainties make it difficult to estimate the resources needed for the 

program. For example, the full impact of recent aircraft design changes on 

the program may not be fully understood for some time, and the Navy, Air 

Force, and Marines—the program’s primary customers—have not 

determined the number of aircraft they expect to buy. Given the 

uncertainties, the program could use more time to gain knowledge before 

moving forward. DOD will also be challenged to deliver on future business 

case agreements if program accountability continues to be compromised by 

frequent changes in program management. 

Original and Latest Development Cost Estimates 

Source: GAO analysis of DOD data.

0

10

20

30

40

50

Dollars in billions

Original estimate Latest estimate

19941995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Fiscal year

The program’s current acquisition strategy does not follow a knowledgebased, evolutionary approach as dictated by best practices and DOD policy. 

Such a strategy is key to successfully executing a new JSF business case. 

However, JSF preliminary plans call for the developer to manufacture about 

20 percent of the JSF fleet in the low-rate initial production phase—at a cost 

of about $50 billion—while still developing JSF technologies and integrating 

and demonstrating the product design, making cost and schedule increases 

likely. To achieve low-rate production capacity, DOD will need to invest in 

personnel, facilities, and tooling—increasing its production investment from 

$100 million a month in 2007 to $1 billion a month in 2013---before flight 

testing is completed. Problems discovered late in flight tests could result in 

further cost increases and delivery delays, as well as reduced quality and 

reliability. To execute its strategy, the JSF program will need to compete 

with other large programs for scarce funding, which could be a significant 

challenge because JSF’s funding profile assumes an unprecedented $225 

billion over the next 2 decades—an average of $10 billion a year. Finally, the 

strategy assumes the use of a cost reimbursement contract for initial 

production, placing a high burden of risk on the government, given the large 

number of aircraft. 

The Department of Defense’s 

(DOD) Joint Strike Fighter (JSF) 

program aims to develop and field 

more than 2,400 stealthy fighter 

planes with greater capabilities 

than DOD’s aging tactical aircraft. 

JSF is DOD’s most costly aircraft 

program, with estimated life-cycle 

costs approaching $600 billion. 

Since the program began, in 1996, 

JSF has experienced significant 

cost and schedule overruns. While 

the program has worked to prepare 

more accurate cost and delivery 

estimates, upcoming investment 

decisions will indicate the level of 

risk DOD is willing to accept as the 

program moves forward and annual 

outlays significantly increase. 

GAO is required by law to review 

the JSF program annually for the 

next 5 years. This first report 

analyzes JSF’s business case for 

delivering new capabilities to the 

warfighter and determines whether 

JSF’s current acquisition strategy 

follows best practices. 

What GAO Recommends

GAO recommends that DOD 

establish an executable program 

consistent with best practices and 

DOD policy regarding knowledgebased, evolutionary acquisitions. If 

DOD moves the program forward 

without capturing adequate 

knowledge, it should not make 

investments to increase production 

capability until it has. DOD 

partially concurred but believes its 

current practices achieve the 

recommendations’ objectives. 
Page i GAO-05-271 Joint Strike Fighter Acquisition 

Letter 1

Results in Brief 2 

Background 4 

More Resources Are Now Needed to Deliver Planned Capabilities 6 

JSF’s Current Acquisition Strategy May Not Provide for Successful 

Program Execution 14 

Conclusions 24 

Recommendations for Executive Actions 25 

Agency Comments and Our Evaluation 26 

Appendix I Comments from the Department of Defense 30 

Appendix II Scope and Methodology 34 

Appendix III Projected Time Frames for Demonstration of Critical 

Technologies 36 

Appendix IV Measures of JSF Program Cost and Schedule Changes 38 

Tables 

Table 1: Military Services’ Planned Use for the Joint Strike Fighter 5 

Table 2: Changes in JSF Program Purchase Quantities, Costs, and 

Delivery Estimates 7 

Table 3: Changes in Unit Flyaway Cost for JSF Variants 10 

Table 4: Knowledge Attainment on JSF Program at Critical 

Junctures 17 

Figures 

Figure 1: Development Costs 9 

Figure 2: Changes to the Program Schedule 11 

Figure 3: JSF Acquisition Approach Compared with Best Practices 

Approach for an Evolutionary, Knowledge-Based 

Acquisition Process 15 

Contents 
Page ii GAO-05-271 Joint Strike Fighter Acquisition 

Figure 4: Overlap of JSF Low-Rate Production and System 

Development and Demonstration Activities 21 

Figure 5: JSF Program’s Annual Funding Requirements 23 

Abbreviations 

DOD Department of Defense 

JSF Joint Strike Fighter 

OSD Office of the Secretary of Defense 

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Page 1 GAO-05-271 Joint Strike Fighter Acquisition 

March 15, 2005 

Congressional Committees 

The Joint Strike Fighter (JSF) program is the Department of Defense’s 

(DOD) most costly aircraft acquisition. The program’s goals are to develop 

and field more than 2,400 stealthy strike fighter aircraft for the Navy, Air 

Force, and Marine Corps and potentially several hundred more aircraft for 

U.S. allies. The JSF is intended to provide greater capability and to replace 

DOD’s aging fighter and attack aircraft. DOD estimates that the total cost 

to develop and procure its fleet of aircraft will reach $245 billion, with 

total costs to maintain and operate the JSF adding another $344 billion 

over its life cycle. This expense must be measured against other DOD and 

national priorities as the government moves into lean budget years. The 

JSF will be competing for a decreasing share of the federal budget 

available for “discretionary” spending. This includes defense spending and 

is in contrast to “mandatory” spending, such as Social Security and 

Medicare/Medicaid. In fiscal year 2004, discretionary spending accounted 

for about 39 percent of the federal budget. The Congressional Budget 

Office projects that discretionary spending, as a percentage of the overall 

budget, is likely to decrease in the future.1

Since the program began, in November 1996, it has experienced technical 

challenges that have resulted in significant cost increases and schedule 

overruns. During most of 2004, program officials worked to understand 

and define current development risks in order to prepare more accurate 

cost and delivery estimates. The upcoming investment decisions to begin 

manufacturing development prototypes and to begin long-lead funding for 

production aircraft in 2006 will be prominent indicators of the risk DOD is 

willing to accept as the JSF program moves forward and annual outlays 

needed to support the program significantly increase. 

The Ronald W. Reagan National Defense Authorization Act for Fiscal Year 

2005 (P.L. 108-375) requires us to review the JSF program annually for the 

 1

Congressional Budget Office, The Budget and Economic Outlook: An Update. 

(Washington, DC: September 2004). 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-271 Joint Strike Fighter Acquisition 

next 5 years.2 This is our first report, and it (1) analyzes the JSF program’s 

business case3

 for delivering new capabilities to the warfighter and 

(2) determines whether the JSF program’s acquisition strategy follows an 

evolutionary, knowledge-based approach. The best practice is to establish 

an incremental—or evolutionary—approach to meet these needs by 

delivering increasingly better performance over time as funding and 

technologies permit and provide specific knowledge about the system at 

key decision points in the acquisition process. 

The act also requires us to certify whether we had access to sufficient 

information to make informed judgments on the matters contained in our 

report. As a result of a lengthy program replanning effort that had been in 

process during most of 2004, we did not have access to the cost estimate 

expected to be contained in JSF’s Selected Acquisition Report, to be 

delivered to Congress in the spring of 2005. At the time of our review, JSF 

program officials were still collecting the necessary information to 

develop and complete this estimate. Therefore, our review was limited to 

the estimated program costs contained in the December 31, 2003, Selected 

Acquisition Report. We did, however, have access to top-level program and 

preliminary schedule information reflecting the status of the replanning 

effort. Recognizing this limitation in scope, we did have access to 

sufficient information to make informed judgments on the matters covered 

in this report. We performed our work from June 2004 through March 2005 

in accordance with generally accepted government auditing standards. For 

more on our scope and methodology, see appendix II. 

The original business case for the JSF program has proven to be 

unexecutable. DOD now plans to buy 535 fewer aircraft than originally 

planned. Development costs have grown over 80 percent, from $25 billion 

to $45 billion, since the program started in 1996. Total program costs have 

increased by 5 percent, or $12 billion, and program acquisition unit costs 

have increased by 23 percent, or $19 million, since first estimates in 2001. 

 2

Section 213 of the act requires us to assess the extent to which the system development 

and demonstration program is currently meeting key cost, schedule, and performance 

goals; the likelihood that the program will be completed within estimated costs; and the 

program’s current acquisition plan leading to production. 

3

The business case is demonstrated evidence that (1) the warfighter need exists and that it 

can best be met with the chosen concept, and (2) the concept can be developed and 

produced within existing resources—including design knowledge, demonstrated 

technologies, adequate funding, and adequate time to deliver the product. 

Results in Brief 
Page 3 GAO-05-271 Joint Strike Fighter Acquisition 

This has resulted in a reduction in buying power in that DOD is now 

buying fewer JSFs at a higher investment than originally planned. The first 

delivery of initial operational capabilities to the warfighter has been 

delayed 2 years so far. DOD may not know for some time what the 

program will cost or when it will be able to deliver needed capabilities. 

The program is still redesigning the three variants of the aircraft that it 

plans to deliver and is examining the software development and flight test 

programs. The services—the program’s customers—have not determined 

the exact quantities of each variant they expect to buy. Finally, DOD’s past 

practice of changing JSF program managers approximately every 2 years 

decreases accountability and, if continued, will make it more difficult to 

deliver on future business case agreements. 

The program’s current acquisition strategy does not fully follow the intent 

of DOD’s evolutionary, knowledge-based acquisition policy that is based 

on best practices. An evolutionary, knowledge-based strategy will be 

necessary to successfully execute a new business case in the future. 

Instead, the program plans to concurrently develop the JSF technologies, 

integrate and demonstrate the expected product design, and produce 

deliverable fighters—a risky approach. JSF’s acquisition strategy is to 

have the developer manufacture nearly 20 percent of the planned JSF fleet 

at a cost of approximately $50 billion beginning in 2007, well before 

system development and demonstration is expected to be completed in 

2013. To achieve planned low-rate initial production capacity, DOD must 

make significant investments in tooling, facilities, and personnel. Once the 

production decision is made, DOD’s planned investment for production 

will increase from $100 million a month in 2007 to about $1 billion a month 

before testing is completed in 2013. Because this substantial investment in 

procurement will take place while the program is still designing and 

testing the development aircraft, it increases the likelihood of costly 

design changes to production aircraft and manufacturing processes, 

reduced quality and reliability, and further delays in the delivery of JSFs to 

the warfighter. Moreover, the program acquisition strategy assumes an 

unprecedented $225 billion in acquisition funding over the next 22 years, 

or an average of $10 billion a year. As a result, the JSF program will need 

to successfully compete with many other large programs for scarce 

funding during this same time frame. Finally, the strategy assumes the use 

of a cost reimbursement-type contract for initial production, placing a high 

risk burden on the government during the early production phase. 

We are recommending that DOD establish an executable program 

consistent with best practices and DOD policy regarding evolutionary 

acquisitions. DOD officials should define an affordable first increment, 
Page 4 GAO-05-271 Joint Strike Fighter Acquisition 

with its own business case, that clearly defines the warfighters’ most 

immediate needs and accurately identifies the resources required to 

deliver on this needed capability. We are also recommending DOD develop 

and implement a knowledge-based acquisition approach, as called for by 

best practices and DOD’s acquisition policy, an approach that ensures 

attainment and use of demonstrated product knowledge before making 

future investments for each product increment. Before increasing the 

investment in production resources (tooling, materials, and personnel) 

greater than that already in place to support the manufacturing of 

development test aircraft, the Secretary of Defense should ensure 

knowledge consistent with best practices is captured. 

DOD partially concurred with our recommendations, stating that the 

department is confident management practices and processes currently in 

place achieve the objective of our recommendations. It also stated that 

the JSF acquisition strategy and execution activities ensure the 

department commits resources only after determining that specific 

developmental or knowledge-based criteria are achieved. We continue to 

believe that our recommendations would reduce risks and save time and 

money over the life of the program through a more rigorous and 

comprehensive application of an evolutionary, knowledge-based process, 

a process anchored with high standards for capturing knowledge at 

critical junctures and used for making investment decisions in the future. 

JSF is a joint, multinational acquisition program for the Air Force, Navy, 

Marine Corps, and eight cooperative international partners. The program 

began in November 1996 with a 5-year competition between Lockheed 

Martin and Boeing to determine the most capable and affordable 

preliminary aircraft design. Lockheed Martin won the competition, and the 

program entered system development and demonstration in October 2001. 

The program’s objective is to develop and deploy a technically superior 

and affordable fleet of aircraft that support the warfighter in performing a 

wide range of missions in a variety of theaters. The single-seat, singleengine aircraft is being designed to be self-sufficient or part of a 

multisystem and multiservice operation, and to rapidly transition between 

air-to-surface and air-to-air missions while still airborne. To achieve its 

mission, the JSF will incorporate low observable technologies, defensive 

Background 
Page 5 GAO-05-271 Joint Strike Fighter Acquisition 

avionics, advanced onboard and offboard sensor fusion,4 and internal and 

external weapons. The JSF aircraft design has three variants: conventional 

takeoff and landing variant for the Air Force, aircraft carrier-suitable 

variant for the Navy, and short takeoff and vertical landing variant for the 

Marine Corps, the United Kingdom, and the Air Force. These aircraft are 

intended to replace aging fighter and attack aircraft currently in the 

inventory (see table 1). 

Table 1: Military Services’ Planned Use for the Joint Strike Fighter 

Service Planned use 

Air Force Replacement for the F-16 and A-10; complement the F/A-22 

Marine Corps Replacement for the AV-8B and F/A-18 A/C/D 

Navy Complement the F/A-18 E/F 

United Kingdom Replacement for the Sea Harrier and GR-7 

Source: DOD data. 

In 2004, DOD extended the JSF program schedule to address problems 

discovered during systems integration and the preliminary design review. 

Design efforts revealed significant airframe weight problems that affected 

the aircraft’s ability to meet key performance requirements. Software 

development and integration also posed a significant development 

challenge. Program officials delayed the critical design reviews, first 

flights of development aircraft, and the low-rate initial production decision 

to allow more time to mitigate design risk and gather more knowledge 

before continuing to make major investments. As a result, the initial 

operational capability date was delayed. DOD is in the process of 

reestablishing resource levels needed to deliver capabilities, given current 

and expected future conditions. The new business case will be presented 

to the Office of the Secretary of Defense (OSD) decision makers this 

spring. 

A key to successful product development is the formulation of a business 

case that matches requirements with resources—proven technologies, 

sufficient engineering capabilities, time, and funding—-when undertaking 

a new product development. First, the user’s needs must be accurately 

 4

Sensor fusion is the ability to take information from both multiple onboard and offboard 

aircraft sensors and display the information in an easy-to-use format for the pilot. This is 

vitally important, since the JSF is a single-seat aircraft, and the pilot needs help to carry out 

multiple types of missions. 
Page 6 GAO-05-271 Joint Strike Fighter Acquisition 

defined, alternative approaches to satisfying these needs properly 

analyzed, and quantities needed for the chosen system must be well 

understood. The developed product must be producible at a cost that 

matches the users’ expectations and budgetary resources. Finally, the 

developer must have the resources to design and deliver the product with 

the features that the customer wants and to deliver it when it is needed. If 

the financial, material, and intellectual resources to develop the product 

are not available, development does not go forward. If the business case 

measures up, the organization commits to the development of the product, 

including the financial investment. This calls for a realistic assessment of 

risks and costs; doing otherwise undermines the intent of the business 

case and invites failure. Program managers in organizations employing 

best practices are incentivized to identify risk early, be intolerant of 

unknowns, and be conservative in their estimates. Ultimately, preserving 

the business case strengthens the ability of managers to say no to 

pressures to accept high risks or unknowns. 

A key objective of the JSF acquisition program is to develop and produce 

fighter aircraft with greater capabilities and lower acquisition and 

ownership costs than previous fighter aircraft and to deliver the aircraft in 

time to replace DOD’s aging fleet. However, since the program began in 

1996, several program decisions have resulted in increased program costs, 

reduced procurement quantities, and delayed delivery dates—making the 

original business case unexecutable. Continued program uncertainties 

about the aircraft redesign, software development, flight test program, and 

procurement quantities make it difficult to estimate the total amount of 

resources needed. Given the uncertainties, the program needs more time 

to gain knowledge before committing to a new, more accurate business 

case. The current pause to replan JSF development and production 

provides the program this opportunity. Finally, frequent changes in JSF 

program management, if continued, will compromise efforts to execute 

the business case agreements. 

Several significant changes to the JSF acquisition program have made 

DOD’s original business case unexecutable. Purchase quantities have been 

reduced by more than 500 aircraft, total program costs have increased by 

about $12 billion, and delivery of the aircraft has been delayed by about 2 

years (see table 2 and app. IV for more details). These changes have 

effectively reduced DOD’s buying power for its investment, as it now plans 

to buy fewer aircraft with a greater financial investment. 

More Resources Are 

Now Needed to 

Deliver Planned 

Capabilities 

JSF’s Original Business 

Case Is Unexecutable 
Page 7 GAO-05-271 Joint Strike Fighter Acquisition 

Table 2: Changes in JSF Program Purchase Quantities, Costs, and Delivery Estimates 

November 1996 

(program start)

October 2001 

 (system 

development start) 

As of 

January 2005

Expected quantities 

Development quantities 10 14 15

Procurement quantities (U.S. only) 2,978 2,852 2,443

Total quantities 2,988 2,866 2,458

Cost estimates (then year dollars in billions) 

Development $24.8 $34.4 $44.8

Procurement Not available $196.6 $199.8

Other Not available $2.0 $0.2

Total program Not available $233.0 $244.8

Unit cost estimates (then year dollars in millions) 

Program acquisition Not available $81 $100

Total ownership Not available $217 $240

Estimated delivery dates 

First aircraft delivery 2007 2008 2009

Initial operational capability 2010 2010-2012 2012-2013

Source: GAO analysis of DOD data. 

The JSF acquisition program’s estimated development and procurement 

costs have increased. In addition, the number of aircraft it plans to deliver 

has been reduced. As a result, unit costs for the JSF aircraft have 

increased substantially, thereby reducing the program’s buying power. The 

most significant quantity reduction occurred after system development 

began in 2001, when the program reduced the number of aircraft it plans 

to procure from 2,852 to 2,443, or by 14 percent. The Navy—concerned 

that it could not afford the number of tactical aircraft it planned to 

purchase—reduced the number of JSF aircraft for joint Navy and Marine 

Corps operations from 1,089 to 680 by reducing the number of backup 

aircraft needed. However, the Navy has not indicated to the developer the 

exact mix of the carrier and short takeoff and vertical landing variants it 

intends to purchase. 

The cost estimate to fully develop the JSF has increased by over 80 

percent. DOD expected that by using a joint development program for the 

three variants instead of three separate programs, JSF development costs 

could be cut by about 40 percent. However, cost increases have nearly 

eroded all of the estimated savings. Development costs were originally 

estimated at $24.8 billion. By the 2001 system development decision, these 

Reduced Quantities and 

Increased Costs Have Lessened 

the JSF Program’s Buying 

Power 
Page 8 GAO-05-271 Joint Strike Fighter Acquisition 

costs had increased by $9.6 billion largely because of a 36-month schedule 

extension to allow more time to mature the mission systems and a more 

mature cost estimate. 

By 2004, costs increased an additional $10.4 billion to $44.8 billion. The 

program office cited several reasons, including efforts to achieve greater 

international commonality, optimize engine interchangeability, refine the 

estimating methodology, and extend the schedule for unexpected design 

work. Almost half of this increase, $4.9 billion, was a result of an 

approximately 18-month delay for unexpected design work caused by 

increased aircraft weight that degraded the aircraft’s key performance 

capabilities. Figure 1 compares the original and latest development cost 

estimates. 
Page 9 GAO-05-271 Joint Strike Fighter Acquisition 

Figure 1: Development Costs 

Current estimates for the program acquisition unit cost are about $100 

million, and the total estimated cost to own an aircraft over its life cycle is 

$240 million—an increase of 23 percent and 11 percent, respectively. In 

Source: GAO analysis of DOD data.

0

10

20

30

40

50

Latest estimate

Original estimate

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Fiscal year

Dollars in billions

5-year

cycle time

increase

81 percent

cost 

increase
Page 10 GAO-05-271 Joint Strike Fighter Acquisition 

1996, the program established unit flyaway cost5 goals for each variant, 

expecting the variants to have a high degree of commonality and to be 

built on a common production line. However, commonality among the 

variants has decreased, and the cost to produce the aircraft has increased 

(see table 3). The unit flyaway cost for the conventional takeoff and 

landing variant has increased by 42 percent; the cost for the short takeoff 

and vertical landing variant has increased by a range of 37 to 55 percent; 

and the cost for the carrier variant has increased by a range of 29 to 43 

percent. According to program data, a large part of the cost increase since 

the start of development can be attributed to labor costs for building the 

airframe and to the costs for producing the complex mission systems. 

Table 3: Changes in Unit Flyaway Cost for JSF Variants 

Variant 

(Unit flyaway costs are stated in millions of 

fiscal year 2002 dollars) 

November 1996

(program start)

October 2001 (system 

development start) 

As of 

January 2005

Conventional takeoff and landing $31.5 $37.0 $44.8

Short takeoff and vertical landing $33.7-39.3 $45.8 $54.0-61.1

Carrier $34.9-42.7 $47.8 $55.0-61.0

Source: DOD data. 

With reduced quantities and increased program costs, the JSF program is 

now buying fewer aircraft at a higher cost, thereby reducing the program’s 

buying power. How effectively DOD manages its JSF funds will determine 

whether it receives a good return on its investment. A sound and 

executable business case is needed to effectively do this. Our reviews over 

the past 20 years have consistently found that DOD’s weapon system 

acquisitions take much longer and cost more than originally planned, 

causing disruptions and increasing pressures to make unplanned tradeoffs to accommodate the resulting budget needs. 

The timely delivery of the JSF to replace aging legacy aircraft was cited as 

a critical need by the warfighter at the program start. When the program 

was initiated, in 1996, it planned to deliver initial operational capabilities 

to the warfighter in 2010. However, largely because of technical 

challenges, the program has delayed the delivery of operational aircraft, 

and current estimates put delivery at 2012 to 2013. Because of these 

 5

Unit flyaway costs include the recurring costs to produce the basic aircraft, propulsion 

system, and mission systems. Unit flyaway costs are stated in fiscal year 2002 dollars. 

Operational Capabilities Have 

Been Delayed 
Page 11 GAO-05-271 Joint Strike Fighter Acquisition 

delays, the services may have to operate legacy aircraft longer than 

expected. These challenges have also delayed interim milestones such as 

the start of system development, design reviews, and production 

decisions. Figure 2 illustrates changes to the overall program schedule 

since it began in 1996 through 2004. 

Figure 2: Changes to the Program Schedule (1996 through 2004) 

The full impact on costs, schedules, and aircraft performance brought 

about by recent design changes and aggressive software development and 

flight test programs add risks that may not be fully understood for some 

time. Continuing uncertainties about total quantities and types of the three 

JSF variants that the services and the international partners expect to 

purchase in the future also make it difficult to accurately estimate costs 

and schedules. 

In December 2003, DOD estimated program costs based on a notional idea 

of a restructured program. The cost estimates not only lacked detail but 

were based on a different aircraft design, development schedule, and 

procurement plan than what is now being considered. Over the past year, 

DOD has been working to restructure the JSF program to accommodate 

changes in the aircraft’s design; until this restructuring is completed, it will 

be difficult to accurately estimate program costs. The need for design 

Program Uncertainties 

Make It Difficult to 

Estimate Resources 

Aircraft Design, Software 

Development, and Flight Test 

Program Not Fully Understood 

Source: GAO analysis of DOD data.

1996

Start of

concept

development

Concept development

Concept development

Concept development

System development and demonstration

System development and demonstration

System development and demonstration

Full-rate production

Full-rate production

Full-rate production

1996

estimate

2001

estimate

2004

estimate 1996

Start of

concept

development

2001

Start of

system

development

2006

First critical

design

review

2012-13

Initial

operational

capabilities

delivered

2013

Full-rate

production

start

1996

Start of

concept

development

2001

Start of

system

development

2004

First critical

design

review

2006

Low-rate

production

start

2010-12

Initial

operational

capabilities

delivered

2012

Full-rate

production

start

2001

Start of

system

development

2003

First critical

design review

2005

Low-rate

production

start

2009

Full-rate

production

start

2010

Initial

operational

capabilities

delivered

2007

Low-rate

production

start

Low-rate 

initial production

Low-rate 

initial production

Low-rate 

initial production
Page 12 GAO-05-271 Joint Strike Fighter Acquisition 

changes largely resulted from the increased weight of the short takeoff 

and vertical landing variant and the impact it was having on key 

performance parameters. The other JSF variants’ designs were affected as 

well. The program plans to have a more comprehensive cost estimate in 

the spring of 2005. However, a detailed assessment has not been 

conducted to determine the exact impact that the restructured program 

will have on meeting performance specifications. Until the detailed design 

efforts are complete—after the critical design review in February 2006—

the program will have difficulty assessing the impact of the design changes 

on performance. While the program office anticipates that recent design 

changes will allow the aircraft to meet key performance parameters, 

preliminary program data indicate that the design is still not meeting 

several speed, maneuverability, and radar cross section specifications.6

 In 

addition, program officials noted that they will not know with certainty if 

the weight problems have been resolved until after the plane is 

manufactured and weighed in mid-2007. 

Program officials recognize that JSF’s development schedule is aggressive 

and are examining ways to reduce program requirements while keeping 

costs and schedules constant. Design and software teams have found 

greater complexity and less efficiency as they develop the 17 million lines 

of software needed for the system. Program analysis also indicated that 

some aircraft capabilities will have to be deferred to stay within cost and 

schedule constraints. As a result, the program office is working with the 

warfighters to determine what capabilities could be deferred to later in the 

development program or to follow on development efforts while still 

meeting the warfighter’s basic needs. Many of these capabilities are 

related to the software-intensive mission systems suite. They are also 

examining the content and schedule of the planned 7-year, 10,000-hour 

flight test program. According to the program office, the test program was 

already considered aggressive, and recent program changes have only 

increased the risks of completing it on time. 

Continued uncertainty about the number and mix of variants the services 

plan to purchase also affects JSF’s acquisition plans. While the Air Force 

has announced its intention to acquire the short takeoff and vertical 

landing variant, it has yet to announce when or how many it expects to 

buy or how this purchase will affect the quantity of the conventional 

 6

Prior to these changes, the program was not meeting about 25 percent of the contract 

performance specifications. 

Quantities of Variants Still 

Unknown 
Page 13 GAO-05-271 Joint Strike Fighter Acquisition 

takeoff and landing variant it plans to buy.7 DOD’s 2003 acquisition report 

states that the annual total quantity and mix of JSF variants and their 

related procurement costs for Navy and Marine Corps JSF purchases 

remains to be determined. Foreign partners have expressed intent to buy 

about 700 aircraft between 2012 and 2015, but no formal agreements have 

been signed at this time. 

The upcoming 2005 Quadrennial Defense Review—an examination of U.S. 

defense needs conducted every 4 years—could also affect the 

procurement quantities and schedule. 

Since the JSF program began, a little over 8 years ago, the program has 

had five program managers—a new program manager assigned about 

every 2 years. The development program is estimated to last another 9 

years, and it is likely that the program manager currently involved in 

decisions about key program elements such as design, cost, and schedule 

will not be responsible for seeing JSF through its completion. In other 

words, plans accepted now will likely become the responsibility of future 

program managers. 

Leading commercial firms limit product development cycle times, thereby 

increasing the possibility that program managers will remain on programs 

until they are complete. Holding one program manager accountable for 

the content of the program when key decisions are made encourages that 

person to raise issues and problems early and realistically estimate the 

resources needed to deliver the program. This puts the manager in a good 

position to deliver a high-quality product on time and within budget. We 

note that the law governing the defense acquisition workforce recognizes 

the need for long-term assignments in the performance of the program 

manager function.8

 Specifically, the assignment period for program 

managers is required to be at least until completion of the major milestone 

that occurs closest in time to the date on which the manager has served in 

the position for 4 years. 

 7

In December 2004, Air Combat Command officials told us that the Air Force is considering 

buying about 250 short takeoff and landing JSFs and about 1,300 conventional takeoff and 

landing JSFs. However, these numbers are not official. 

8

10 U.S.C. section 1734 states this required assignment period can be waived “in 

exceptional circumstances.” 

Frequently Changing 

Program Managers 

Reduces Accountability 
Page 14 GAO-05-271 Joint Strike Fighter Acquisition 

The JSF program does not have an evolutionary, knowledge-based 

acquisition strategy that fully follows the intent of DOD’s acquisition 

policy. This type of strategy is necessary for having an executable business 

case in the future. The current strategy includes plans to make large 

production commitments well before system development and testing 

have been completed, significantly increasing the risk of further delays 

and cost increases due to design changes and manufacturing 

inefficiencies. It is also dependent on an aggressive test aircraft delivery 

schedule and an optimistic funding profile that assumes an unprecedented 

$225 billion over the next 22 years, or an average of $10 billion a year. 

DOD plans to bear the financial risk of concurrently developing and 

initially producing the JSF on a cost reimbursement basis with the prime 

contractor, an uncommon practice for such a large number of units, until 

the design and manufacturing processes are mature. Program officials 

currently have an opportunity to change the acquisition strategy. DOD 

policy and best practices call for programs to use an acquisition strategy 

that reflects an evolutionary, knowledge-based approach—that is, one that 

ensures appropriate technology, design, and manufacturing knowledge are 

captured at key milestones before committing to increased investments. 

Our past work has shown that when programs demonstrate a high level of 

knowledge before making significant commitments, they are able to 

deliver products within identified resources. 

In recent years, DOD has revised its acquisition policy to support an 

evolutionary, knowledge-based approach for acquiring major weapon 

systems based on best practices.9

 JSF’s acquisition strategy does not fully 

follow the intent of this policy. Instead, it strives to achieve the ultimate 

JSF capability within a single product development increment. While the 

acquisition strategy calls for delivering a small number of aircraft with 

limited capabilities, the program has committed to deliver the full 

capability by the end of system development and demonstration in 2013 

within an established cost and schedule, contrary to an evolutionary 

approach. The JSF program bypassed early opportunities to trade or defer 

to later increments those features and capabilities that could not be 

 9

DOD Directive 5000.1, The Defense Acquisition System (May 2003); DOD Instruction 

5000.2, Operation of the Defense Acquisition System (May 2003). The directive establishes 

evolutionary acquisition strategies as the preferred approach to satisfying DOD’s 

operational needs. The directive also requires program managers to provide knowledge 

about key aspects of a system at key points in the acquisition process. The instruction 

implements the directive and establishes detailed policy for evolutionary acquisition. 

JSF’s Current 

Acquisition Strategy 

May Not Provide for 

Successful Program 

Execution 

JSF Program Not Fully 

Employing an 

Evolutionary, KnowledgeBased Approach 
Page 15 GAO-05-271 Joint Strike Fighter Acquisition 

readily met. The planned approach will not capture adequate knowledge 

about technologies, design, and manufacturing processes for investment 

decisions at key investment junctures. Figure 3 shows a comparison of an 

evolutionary, knowledge-based process based on best practices and JSF’s 

more concurrent approach. 

Figure 3: JSF Acquisition Approach Compared with Best Practices Approach for an Evolutionary, Knowledge-Based 

Acquisition Process 

Successful commercial companies use an evolutionary acquisition 

approach where new products are developed in increments based on 

available resources. Companies have found that trying to capture the 

knowledge required to stabilize the design of a product that requires 

significant amounts of new content is an unmanageable task if the goal is 

to reduce cycle times and get the product to the customer as quickly as 

possible. With an evolutionary acquisition approach, design elements that 

are not currently achievable are planned for and managed as increments in 

Source: GAO analysis of DOD data.

KP 1 (knowledge point 1): technologies and resources match requirements

KP 2 (knowledge point 2): design performs as expected

KP 3 (knowledge point 3): production can meet cost, schedule, and quality targets

Development

start

Best Practices Approach

JSF Program Approach

Third increment

(full capability)

Production

start

Development

start

Production

Production

start

Technology

development

KP 1

Integration Demonstration

Product development

KP 2 KP 3

Technology

development

Development

start

Production

Production

start

KP 1

Integration Demonstration

Product development

KP 2 KP 3

Technology

development

Product development Integration Demonstration

Production

KP 1 KP 2 KP 3

Second increment

(improved capabilities)

First increment

(basic capabilities)

Development

start

Production

start

First increment

(full capability with

interim capabilities delivered)

Production Technology

development

KP 1

Integration Demonstration

Product development

KP 2 KP 3
Page 16 GAO-05-271 Joint Strike Fighter Acquisition 

future generations of the product, and each increment is managed as a 

separate knowledge-based acquisition, with separate milestones, costs, 

and schedules. 

Programs that attain the right knowledge at the right time reduce the risk 

of incurring design, development, and manufacturing problems that result 

in cost and schedule overruns. Our past work has shown that to ensure 

successful program outcomes, a high level of demonstrated knowledge 

must be attained at three key junctures for each increment in the program. 

• At knowledge point 1, the customer’s needs should match the developer’s 

available resources—mature technologies, engineering knowledge, time, 

and funding—before system development starts. This is indicated by a 

demonstration that technologies needed to meet essential product 

requirements work in their intended environment and the producer has 

completed a preliminary design of the product that shows that the design 

is feasible. 

• At knowledge point 2, the product’s design is stable and has demonstrated 

that it is capable of meeting performance requirements before 

transitioning from system integration to system demonstration. This is 

best indicated by a prototype demonstration of the design and release of 

90 percent of the engineering drawings to manufacturing organizations. 

• At knowledge point 3, the product must be producible within cost, 

schedule, and quality targets and demonstrated to be reliable and work as 

intended before production begins. This is indicated by a demonstration of 

an integrated product in its intended environment and by bringing critical 

manufacturing processes under statistical control. 

The start of the JSF system development was approved in 2001—well 

before a match was made between the customer’s requirements and the 

resources needed to meet those requirements. Many of the technologies 

needed for the product’s full capabilities were demonstrated only in a lab 

environment or ground testing and not in the form, fit, or functionality 

needed for the intended product design. Also, while the program had a 

proposed technical solution to meet the warfighter’s requirements, it did 

not deliver a preliminary design based on sound systems engineering 

principles. At the JSF preliminary design review, held about 11⁄2 years after 

development started, significant design issues surfaced, potentially 

affecting the critical performance capabilities of the aircraft. The program 

has worked to find solutions to design problems, but at a substantial cost. 

The detailed design work has fallen behind schedule, delaying the critical 

design reviews for 16 to 22 months. Table 4 compares the product 

JSF Began System 

Development Well before 

Knowledge Point 1 
Page 17 GAO-05-271 Joint Strike Fighter Acquisition 

knowledge available at the JSF system development start and the 

knowledge expected to be available to support future decision points 

based on the current acquisition plan. 

Table 4: Knowledge Attainment on JSF Program at Critical Junctures 

Decision points Development start—2001 Design review—2006 Production start—2007 

Investment 

decision 

Develop a product that meets 

customer expectations within 

available resources. 

Requires a significant financial 

commitment to design, integrate, 

and demonstrate that the product 

will meet the user’s requirements 

and can be manufactured on time, 

with high quality, and at cost that 

provides an acceptable return on 

investment. 

Transition from system 

integration to system 

demonstration. 

Requires significant investment 

to start building and testing 

production representative 

prototypes in a manufacturing 

environment. 

Produce and deliver a product to 

the user. 

Requires significant investments for 

materials and resources such as 

additional tooling to build the 

product at planned rates, facilities, 

personnel, training, and support. 

Best practice Attain knowledge point 1. 

Separate technology and product 

development, deliver mature 

technology, and have preliminary 

design based on systems 

engineering principles. 

Attain knowledge point 2. 

Completion of 90 percent of 

engineering drawing packages 

for structures and systems, critical 

design review completed, and 

design prototyped. 

Attain knowledge point 3. 

One hundred percent of critical 

manufacturing processes under 

statistical control, demonstration of 

a fully integrated product in its 

operational environment to show it 

will work as intended, and reliability 

goals demonstrated. 

JSF practice Knowledge point 1 was not 

attained. 

Failed to separate technology and 

product development. Critical 

technologies not mature and sound 

preliminary design not established. 

Several technologies not expected 

to be mature until after production 

begins. 

Knowledge point 2 will not be 

attained under current plan. 

The program estimates 35 percent 

of the engineering drawing 

packages are expected to be 

released at the critical design 

review. Also, prototype testing will 

not be done prior to the design 

review. The design will not be 

stable until after production 

begins. 

Knowledge point 3 will not be 

attained under current plan. 

The program does not expect to 

demonstrate that the critical 

processes are under statistical 

control until 2009. The program 

expects to demonstrate that a fully 

integrated aircraft will work as 

intended and meets reliability goals 

in 2010-2012 time frame. 

Source: GAO data and analysis of DOD data. 

Knowing that a product’s design is stable before system demonstration 

reduces the risk of costly design changes occurring during the 

manufacturing of production representative prototypes—when 

investments in acquisitions become even more significant. The JSF 

program expects to have all critical drawings and a small number of other 

drawings completed by the planned February 2006 critical design review—

JSF Program Plans to Commit 

Significant Resources to 

System Demonstration before 

Reaching Knowledge Point 2 
Page 18 GAO-05-271 Joint Strike Fighter Acquisition 

the milestone at which design stability is determined.10 However, these 

drawings represent only about 35 percent of the total drawings needed to 

complete the JSF design. While program officials believe that having 35 

percent of the total drawings will allow them to track JSF’s design 

stability, we have found that programs that moved forward with less than 

90 percent of the total drawings at the start of the product demonstration 

phase were challenged to stabilize the design at the same time they were 

trying to build and test the product. This overlap frequently results in 

costly design changes and parts shortages during manufacturing, which, in 

turn, result in labor inefficiencies, schedule delays, and quality problems.11

The F/A-22 and PAC-3 missile are prime examples of programs that failed 

to complete 90 percent of their drawings by the critical design review and 

suffered substantial cost increases and schedule delays. 

Using prototypes to demonstrate the design is a best practice that provides 

additional evidence of design stability. JSF will not have this type of 

demonstration before the critical design review. Prototype testing allows 

the design to be demonstrated before making costly investments in 

materials, manufacturing equipment, and personnel to begin building 

production representative prototypes for the system demonstration phase. 

The JSF program is building an early prototype of the conventional takeoff 

and landing variant and plans to use this prototype to validate 

performance predictions, manufacturing processes, and reliability and 

maintainability models.12 According to the current schedule, however, the 

first demonstrations will occur after the critical design review, after most 

of the design drawings have been released, and after manufacturing has 

begun for many of the remaining test aircraft. Any significant design 

problems found during the prototype demonstrations would likely require 

more time and money for redesign efforts and retrofitting of test aircraft 

already in the manufacturing process. 

 10Critical drawings are primarily of structural parts weighing more than 5 pounds. The 

February 2006 critical design review is for both the conventional takeoff and landing 

variant and the short takeoff and vertical landing variant. The carrier variant will have its 

own design review about 1 year later. 

11Drawings include details on the parts and work instructions needed to make the product 

and reflect the results of testing. Completed drawings allow suppliers to produce the parts 

so they can be available to the manufacturer when needed for installation on the product. 

12Manufacturing of the first conventional take-off and landing prototype is currently under 

way. This aircraft, however, does not include many of the design changes that resulted 

from the redesign efforts to reduce airframe weight. According to program officials, 

essentially every drawing used to build this aircraft was affected by the redesign effort. 
Page 19 GAO-05-271 Joint Strike Fighter Acquisition 

In addition to lacking mature technologies and design stability, the JSF 

program will lack critical production knowledge when it plans to enter 

low-rate initial production in 2007. Between 2007 and 2013, when the 

program is scheduled to move to full-rate production, it expects to buy 

nearly 500 JSF aircraft—20 percent of its planned total buys—at a cost of 

roughly $50 billion. Under the program’s preliminary plan, it expects to 

increase low-rate production from 5 aircraft a year to 143 aircraft a year, 

significantly increasing the financial investment after production begins. 13

Between 2007 and 2009, the program plans to increase low-rate production 

spending from about $100 million a month to over $500 million a month, 

and before development has ended and an integrated aircraft has 

undergone operational evaluations, DOD expects to spend nearly $1 

billion a month. To achieve its production rate, the program will invest 

significantly in tooling, facilities, and personnel. According to contractor 

officials, an additional $1.2 billion in tooling alone would be needed to 

ramp up the production rate to 143 aircraft a year. Over half of this 

increase would be needed by 2009—more than 2 years before operational 

flight testing begins. 

Despite this substantial investment, the key event to support the decision 

to enter low-rate production in 2007 is the JSF’s first flight. Significant 

commitments will thus be made to JSF production before requisite 

knowledge is available. This is a much lower standard than called for by 

best practices. The following are examples of technology, design, and 

production knowledge that will not have been achieved at the time JSF 

enters low-rate initial production. 

Technology: According to information provided by the program 

office, only one of JSF’s eight critical technologies is expected to 

be demonstrated in an operational environment by the 2007 lowrate production decision. The remaining seven technologies, which 

include the complex mission systems and prognostics and health 

maintenance systems, are not expected to be mature prior to 

entering production. (See app. III for program office’s projected 

time frames for demonstrating the eight critical technologies.) 

 13The preliminary plan was what was being considered at the time of our review. Since 

then, in its fiscal year 2006 budget submission, DOD has reduced the planned procurement 

quantities for the U.S. by 38 aircraft through fiscal year 2011. The preliminary figures also 

includes planned quantities for the United Kingdom of 2 aircraft in fiscal year 2009, 4 

aircraft in fiscal year 2010, 9 aircraft in fiscal year 2011, 9 aircraft in fiscal year 2012, and 10 

aircraft in fiscal year 2013. 

JSF Program Plans to Enter 

Production before Knowledge 

Point 3 
Page 20 GAO-05-271 Joint Strike Fighter Acquisition 

Design: Low levels of design knowledge will continue beyond the 

production decision. Only about 40 percent of the 17 million lines 

of code needed for the system’s software will have been released. 

The complex software needed to integrate the advanced mission 

systems is not scheduled for release until about 2010—3 years after 

JSF is scheduled to enter production. In addition, most structural 

fatigue testing and radar cross section testing of full-up test 

articles—needed to verify the stability of the aircraft’s structural 

design—are not planned to be completed until 2010. 

Production: The program will not demonstrate that critical 

manufacturing processes are in statistical control when it enters 

production. At that time, only one test aircraft will be completed 

and delivered. According to the contractor, manufacturing 

processes will not be under statistical control until after all of the 

system development and demonstration aircraft have been built. 

Also, flight testing of a fully configured and integrated JSF (with 

critical mission systems and prognostics technologies) is not 

scheduled until 2011. Operational testing to evaluate the 

effectiveness and suitability of the integrated system will continue 

until the full-rate production decision in 2013. 

The JSF, like many past DOD weapons programs, is very susceptible to 

discovering costly problems late in development when the more complex 

software and advanced capabilities are tested. In the case of the JSF, 

several hundred aircraft costing several billions of dollars may already be 

on order or delivered, making any changes that result from testing costly 

to incorporate. Figure 4 shows the proposed low-rate initial production 

plan and how it overlaps with development and test activities. 
Page 21 GAO-05-271 Joint Strike Fighter Acquisition 

Figure 4: Overlap of JSF Low-Rate Production and System Development and 

Demonstration Activities (Includes U.S. and U.K. Quantities) 

If the JSF program cannot meet aggressive delivery schedules for test 

aircraft, flight testing will be delayed. Flight testing provides key 

knowledge about JSF performance needed to make investment decisions 

for production. The JSF program is attempting to develop three different 

aircraft, for three different services. All want to fly at supersonic speeds, 

shoot air-to-air missiles, and drop bombs on a target, but they all have 

vastly different operational concepts. While each of the variants may look 

similar externally, subtle design differences provide many needed 

capabilities that are unique to each service. As a result, the program will 

attempt to design, build, and test simultaneously three distinct aircraft 

designs. This difficult task is further complicated by plans to manufacture 

and deliver in a 5-year period, 15 flight test aircraft and 8 ground test 

articles. When compared with schedules of other programs with fewer 

variables, JSF’s schedule is aggressive. For example, the F/A-22 program 

took almost 8 years to manufacture and deliver nine flight test aircraft and 

two ground test articles of a single aircraft design. 

While the first aircraft had only been in assembly for about 8 months, it 

was already behind schedule as of January 2005. According to the Defense 

Contract Management Agency, based on the manufacturing status of the 

center fuselage, wing, forward fuselage, and software development, the 

first flight, scheduled for August 2006, could be delayed from 2 to 6 

months. Late engineering releases to the manufacturing floor have resulted 

in parts shortages and manufacturing inefficiencies. According to 

Failing to Meet Aggressive 

Delivery Schedule Could 

Delay Flight Testing 

Long-lead decision

for low-rate initial production

Low-rate initial

production decision

Develop and test full capability

Develop and test limited capability

Develop and test improved capability

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

System development

and demonstration

Low-rate initial

production orders

(519 aircraft)

Source: GAO analysis of DOD data.

5 aircraft

52 aircraft

18 aircraft

70 aircraft

98 aircraft

133 aircraft

143 aircraft
Page 22 GAO-05-271 Joint Strike Fighter Acquisition 

contractor data, as of January 2005, it had taken about 50 percent more 

labor hours than planned to complete manufacturing efforts. 

To execute its current acquisition strategy, the JSF program must obtain 

on average over $10 billion annually in acquisition funds over the next 2 

decades. Regardless of likely increases in program costs, the sizable 

continued investment in JSF—estimated at roughly $225 billion over 22 

years14—must be viewed within the context of the fiscal imbalance facing 

the nation within the next 10 years. The JSF program will have to compete 

with many other large defense programs, such as the Army’s Future 

Combat System and the Missile Defense Agency’s ballistic missile defense 

system, for funding during this same time frame. There are also important 

competing priorities external to DOD’s budget. Fully funding specific 

programs or activities will undoubtedly create shortfalls in others. 

Funding challenges will be even greater if the program fails to translate 

current cost estimates into actual costs. For example, we estimate that 

another 1-year delay in JSF development would cost $4 billion to $5 billion 

based on current and expected development spending rates. A 10 percent 

increase in production costs would amount to $20 billion. The JSF 

program’s latest planned funding profile for development and 

procurement—as of December 2003—is shown in figure 5. 

 14 This figured is based on DOD’s December 2003 JSF cost estimate. 

Program Funding Level 

Assumptions May Be 

Difficult to Achieve 
Page 23 GAO-05-271 Joint Strike Fighter Acquisition 

Figure 5: JSF Program’s Annual Funding Requirements (as of December 2003) 

The program’s acquisition strategy is to concurrently develop, test, and 

produce the JSF aircraft, creating a risky approach. Because of this risk, 

the program office plans to place initial production orders on a cost 

reimbursement basis. According to program officials, a cost reimbursable 

contract is necessary during the initial production phase because of the 

uncertainties inherent in concurrent development and production 

programs that prevent the pricing of initial production orders on a fixedCurrent Strategy Requires 

Prolonged Reliance on 

Cost Reimbursement 

Contract 

0

2

4

6

8

10

12

14

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

Source: GAO analysis of DOD data.

Dollars in billions

Fiscal year
Page 24 GAO-05-271 Joint Strike Fighter Acquisition 

price basis. Cost reimbursement contracts provide for payment of 

allowable incurred costs, to the extent prescribed in the contract. They are 

used when uncertainties involved in contract performance do not permit 

costs to be estimated with sufficient accuracy to use any type of fixedprice contract. Cost reimbursement contracts require only the contractor’s 

“best efforts,” thus placing a greater cost risk on the buyer—in this case, 

DOD. In contrast, a fixed-price contract provides for a pre-established 

price and places more risk and responsibility for costs and resulting profit 

or loss on the contractor and provides more incentive for efficient and 

economical performance. However, to negotiate a fixed-price contract 

requires certainty about the item to be purchased, which in the case of the 

JSF will not be possible until late in the development program. 

The program plans to transition to a fixed-price contract once the air 

vehicle has a mature design, has been demonstrated in flight test, and is 

producible at established cost targets. According to program officials, this 

transition will occur sometime before full-rate production begins in 2013. 

The program office believes the combination of the early concept 

development work, the block development approach, and what it 

characterizes as the relatively small numbers of aircraft in the initial 

production buys allow decisions to be made earlier than normal with an 

acceptable level of risk. 

The JSF program is at a crossroads. DOD has not been able to deliver on 

its initial promises, and the sizable investment DOD plans to make over 

the next few years greatly raises the stakes to meet future promises. Given 

the many uncertainties surrounding JSF’s development, program officials 

need more time to gain knowledge before committing to a business case. 

JSF’s failure to adequately match requirements and resources has already 

resulted in increases in cost, schedule, and performance estimates, and a 

reduction in DOD’s buying power. The new business case must also be 

accompanied by an acquisition strategy that adopts an evolutionary 

approach to product development—one that enables knowledge-based 

investment decisions to maximize remaining program dollars. While the 

warfighter may not receive the ultimate capability initially, an evolutionary 

approach provides a useful product sooner and in sufficient quantities to 

start replacing the rapidly aging legacy fighter and attack force. The 

decisions DOD makes now and over the next 2 years will greatly influence 

the efficiency of its remaining funding—over 90 percent of the $245 billion 

estimated total program costs. Chief among these are the investments 

needed to increase production to 143 aircraft a year, increasing production 

expenditures from $100 million a month to $1 billion a month by 2013. 

Conclusions 
Page 25 GAO-05-271 Joint Strike Fighter Acquisition 

While delays are never welcomed, time taken by DOD now to gain more 

knowledge and reduce risk before increasing its investment may well save 

time and money later in development and production. Now is the time to 

get the strategy right for delivering on the remainder of the investment. 

With an evolutionary, knowledge-based plan in place, DOD managers will 

be in a better position to succeed in delivering the warfighter needed 

capabilities within budgeted resources. 

Given that DOD has invested only about 10 percent of the estimated cost 

to develop and produce the JSF aircraft, and that significant investments 

are planned in the next few years that can lock the program into a higherrisk acquisition, we recommend the Secretary of Defense take the 

following two actions to increase the likelihood of having a successful 

program outcome by delivering capabilities to the warfighter when needed 

and within available resources: 

(1) Establish an executable program consistent with best practices 

and DOD policy regarding evolutionary acquisitions. DOD officials 

should define an affordable first increment, with its own business 

case that clearly defines the warfighter’s most immediate needs 

and accurately identifies the resources required to deliver on this 

needed capability. The business case should be established with a 

high degree of confidence based on known constraints about 

technology, engineering knowledge, time, and money. For those 

warfighter needs that cannot be accommodated within this first 

increment, the program should outline a strategy to meet these 

needs through subsequent increments, each dependent on having 

sufficient product knowledge to start system development and 

demonstration. Each increment should be managed as a distinct 

acquisition with its own business case for supporting the 

investment. 

(2) Develop and implement a knowledge-based acquisition approach, 

as called for by best practices and DOD’s acquisition policy, an 

approach that ensures attainment and use of demonstrated product 

knowledge before making future investments for each product 

increment. Before increasing the investment in production 

resources (tooling, materials, and personnel) greater than 

investments already in place to support the manufacturing of 

development test aircraft, the Secretary should ensure knowledge 

consistent with best practices is captured. This should help 

minimize the number of low-rate initial production aircraft DOD 

Recommendations for 

Executive Actions 
Page 26 GAO-05-271 Joint Strike Fighter Acquisition 

procures on a cost reimbursement basis, reducing the potential 

financial risk to the government. 

The Office of the Under Secretary of Defense (Acquisition, Technology, 

and Logistics), provided us with written comments on a draft of this 

report. The comments appear in appendix I. 

DOD partially concurred with our recommendation that the Secretary 

establish an executable program that includes an affordable first 

increment with its own business case that clearly defines the warfighter’s 

most immediate needs and accurately identifies the resources required to 

deliver on this capability. DOD stated that the JSF program acquisition 

strategy is based on an appropriate balance of technical, cost, and 

schedule risk considerations to achieve program objectives. Warfighter 

representatives are involved in determining the content for each block 

capability, and technology maturity is factored into the decision plan that 

has been endorsed by DOD leadership. DOD stated its JSF management 

practices achieve the objectives of the GAO recommendation. 

We believe DOD’s acquisition strategy will not provide the full benefits of 

an evolutionary approach as suggested by DOD’s policy and best practices. 

DOD has not structured the JSF development program into increments 

managed as separate acquisitions with their own cost, schedule, and 

decision milestones, making the likelihood of successful program 

outcomes low. The JSF strategy resembles other past major acquisition 

programs that have attempted to achieve the ultimate capability in a single 

development increment. DOD has allowed technology development to spill 

over into product development, weakening any foundation for program 

cost or schedule estimates. This has led to poor outcomes for other 

programs, such as the F/A-22 and Comanche, where lengthy and costly 

development efforts resulted in either program cancellation or a 

significant reduction in the number of systems to be acquired, a real loss in 

DOD buying power. Without a true evolutionary approach supported by a 

business case for each increment, it will be difficult for the JSF program to 

meet product requirements within current estimates of time and money. 

DOD also partially concurred with our recommendation to develop and 

implement a knowledge-based acquisition approach, which ensures 

attainment and use of demonstrated product knowledge before making 

future investments for each product increment. The department agrees 

that a knowledge-based approach is critical to making prudent acquisition 

decisions and stated that its current JSF acquisition strategy incorporates 

Agency Comments 

and Our Evaluation 
Page 27 GAO-05-271 Joint Strike Fighter Acquisition 

this type of approach. The department admits it has accepted some 

concurrency between development and production to reduce schedule 

and cost, but it will consider the production readiness of the JSF design at 

the low-rate and full-rate production decision milestones. It states that the 

new program plan includes clear entry and exit criteria for critical 

milestones to ensure technologies are mature and required incremental 

objectives are achieved before obligating funds. DOD stated that it 

conducts regular program reviews, and the Defense Acquisition Board will 

review program readiness prior to making any milestone decision. The 

frequent rotation of program leadership ensures ongoing cooperative 

oversight of emerging challenges and program decisions, and ensures 

accountability for the implementation of those decisions. Finally, DOD 

states that the acquisition strategy is consistent with acquisition directives 

and ensures the department commits resources only after determining that 

specific developmental or knowledge-based criteria are achieved. 

We believe the JSF’s acquisition strategy will not capture the right 

knowledge at the right time for informed decisions on future 

investments—over $200 billion dollars. The program does not have the 

practices in place to capture knowledge at key junctures. DOD will not 

have captured knowledge before production starts that ensures the design 

is mature, reliable, and works or that manufacturing processes are in 

control---keys to successful outcomes in the production phase. Further, 

the large investments planned in production capability for the JSF over the 

next few years are vulnerable to costly changes as the aircraft is still being 

designed and tested. DOD has historically developed new weapon 

systems in a highly concurrent environment that usually forces acquisition 

programs to manage technology, design, and manufacturing risk at the 

same time. While DOD believes it can manage the risk of concurrent 

development and production by holding regular program reviews and with 

entrance and exit criteria for decisions, DOD’s own experience has shown 

this approach to be risky and often not totally effective. This has been 

DOD’s traditional approach to weapons acquisition, the same approach 

that has led to programs costing significantly more than planned and 

taking much longer to develop. This environment has made it difficult to 

make informed decisions because appropriate knowledge has not been 

available at key decision points. If decisions are tied to the availability of 

critical knowledge, program managers can be held accountable for the 

timely capture of that knowledge instead of less precise or ill-defined 

criteria included in risk reduction plans. DOD’s practice of frequently 

changing program managers also decreases accountability because 

commitments made today will likely not be carried through by the same 

managers who made the commitments. 
Page 28 GAO-05-271 Joint Strike Fighter Acquisition 

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. We will also provide copies to others 

on request. In addition, the report will be available at no charge on the 

GAO Web site at http://www.gao.gov. 

If you or your staff have any questions concerning this report, please 

contact me at (202) 512-4841 or Michael Hazard at (937) 258-7917. Other 

staff making key contributions to this report were Marvin Bonner, 

Matthew Drerup, Matthew Lea, David Schilling, Karen Sloan, and Adam 

Vodraska. 

Michael J. Sullivan 

Director 

Acquisition and Sourcing Management 
Page 29 GAO-05-271 Joint Strike Fighter Acquisition 

List of Congressional Committees 

The Honorable John Warner 

Chairman 

The Honorable Carl Levin 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Ted Stevens 

Chairman 

The Honorable Daniel K. Inouye 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

United States Senate 

The Honorable Duncan Hunter 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

The Honorable C.W. Bill Young 

Chairman 

The Honorable John P. Murtha 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

House of Representatives 
Appendix I: Comments from the Department of Defense 

Page 30 GAO-05-271 Joint Strike Fighter Acquisition 

Appendix I: Comments from the Department 

of Defense 
Appendix I: Comments from the Department of Defense 

Page 31 GAO-05-271 Joint Strike Fighter Acquisition 
Appendix I: Comments from the Department of Defense 

Page 32 GAO-05-271 Joint Strike Fighter Acquisition 
Appendix I: Comments from the Department of Defense 

Page 33 GAO-05-271 Joint Strike Fighter Acquisition 
Appendix II: Scope and Methodology 

Page 34 GAO-05-271 Joint Strike Fighter Acquisition 

To determine the status of the Joint Strike Fighter (JSF) business case for 

delivering new capabilities to the warfighter, we compared the original 

program estimates with current estimates. For development, we used the 

program estimates that justified the program when it started in 1996. This 

was the point at which JSF transitioned from a technology development 

environment to an acquisition program environment, with the commitment 

to delivery a family of strike aircraft that meet the Air Force, Navy, and 

Marine Corps needs. At that time, total production, acquisition, and 

ownership costs had not been estimated. However, the program had 

estimated the unit flyaway costs for each variant. The total production, 

acquisition, and ownership estimates were first established to support the 

decision to enter the system development and demonstration phase in 

2001. We used these estimates as the baseline for these costs. We 

identified changes in costs, quantities, and schedules as well as the causes 

for the changes. We also identified program conditions that may affect 

these estimates in the future. To accomplish this, we reviewed 

management plans, cost reports, progress briefings, program baselines, 

risk reports, and independent program assessments. We also interviewed 

officials from the Department of Defense’s (DOD) acquisition program 

management office and prime contractor. 

To evaluate whether the current acquisition plan follows an evolutionary, 

knowledge-based approach to meeting business case goals in the future, 

we applied GAO’s methodology for assessing risks in major weapon 

systems. This methodology is derived from best practices and experiences 

of leading commercial firms and successful defense acquisition programs. 

We reviewed Office of the Secretary of Defense (OSD), program office, 

and prime contractor processes and management actions. We compared 

the program’s plans and results to date against best practice standards in 

capturing product knowledge in terms of technology, design, and 

production maturity information and in applying knowledge to support 

major program investment decisions. We reviewed management plans, 

acquisition strategies, test plans, risk assessments, and program status 

briefings. We identified gaps in product knowledge, reasons for these gaps, 

and the risks associated with moving forward with inadequate knowledge 

at future decision points. We also reviewed DOD’s acquisition policy to 

determine whether JSF’s approach met its intent. 

In performing our work, we obtained information and interviewed officials 

from the JSF Joint Program Office, Arlington, Virginia; Lockheed Martin 

Aeronautical Systems, Fort Worth, Texas; Defense Contract Management 

Agency, Fort Worth, Texas; Institute for Defense Analyses, Alexandria, 

Virginia; and offices of the Director, Operational Test and Evaluation, and 

Appendix II: Scope and Methodology 
Appendix II: Scope and Methodology 

Page 35 GAO-05-271 Joint Strike Fighter Acquisition 

Acquisition, Technology and Logistics, which are part of the Office of 

Secretary of Defense in Washington, D.C. 
Appendix III: Projected Time Frames for 

Demonstration of Critical Technologies 

Page 36 GAO-05-271 Joint Strike Fighter Acquisition 

Critical 

technologies Technology description 

Actual or planned date 

technology demonstrated in 

relevant environmenta

Actual or planned date 

technology 

demonstrated in 

operational environmentb

Integrated flight 

propulsion 

control 

Includes integration of propulsion, vehicle management 

system, and other subsystems as they affect aircraft 

stability, control, and flying qualities (especially short 

takeoff and vertical landing). Aircraft improvements are 

to reduce pilot workload and increase flight safety. 

First quarter 2006 Third quarter 2007 

Prognostics 

and health 

management 

Involves the ability to detect and isolate the cause of 

aircraft problems and then predict when maintenance 

activity will have to occur on systems with pending 

failures. Life-cycle cost savings are dependent on 

prognostics and health management through improved 

sortie generation rate, reduced logistics and manpower 

requirements, and more efficient inventory control. 

Third quarter 2009 Third quarter 2010 

Integrated 

support system 

Involves designing an integrated support concept that 

includes an aircraft with supportable stealth 

characteristics and improved logistics and maintenance 

functions. Life-cycle cost savings are expected from 

improved logistics and maintenance functions. Life-cycle 

cost savings are expected from low observable 

maintenance techniques and streamlined logistics and 

inventory systems. 

Third quarter 2010 Third quarter 2011 

Subsystems Includes areas of electrical power, electrical wiring, 

environmental control systems, fire protection, fuel 

systems, hydraulics, landing gear systems, mechanisms 

and secondary power. Important for reducing aircraft 

weight, decreasing maintenance cost, and improving 

reliability. 

Demonstrated in 2002 Demonstrated in 2004 

Integrated core 

processor 

Includes the ability to use commercial-based processors 

in an open architecture design to provide processing 

capability for radar, information management, 

communications, etc. Use of commercial processors 

reduces development and production costs, and an 

open architecture design reduces future development 

and upgrade costs. 

Third quarter 2009 First quarter 2011 

Radar Includes advanced integration with communication, 

navigation, and identification functions and electronic 

warfare functions through improved apertures, 

antennas, modules, radomes, etc. Important for 

reducing avionics cost and weight, and decreasing 

maintenance cost through improved reliability. 

Fourth quarter 2007 Fourth quarter 2008 

Appendix III: Projected Time Frames for 

Demonstration of Critical Technologies 
Appendix III: Projected Time Frames for 

Demonstration of Critical Technologies 

Page 37 GAO-05-271 Joint Strike Fighter Acquisition 

Critical 

technologies Technology description 

Actual or planned date 

technology demonstrated in 

relevant environmenta

Actual or planned date 

technology 

demonstrated in 

operational environmentb

Mission 

systems 

integration 

Involves decreasing pilot workload by providing 

information for targeting, situational awareness, and 

survivability through fusion of radar, electronic warfare, 

and communication, navigation, and identification data. 

Improvements are achieved through highly integrated 

concept of shared and managed resources, which 

reduce production costs, aircraft weight, and volume 

requirements, in addition to providing improved 

reliability. 

First quarter 2010 Fourth quarter 2011 

Manufacturing Involves lean, automated, highly efficient aircraft 

fabrication and assembly techniques. Manufacturing 

costs should be less through improved flow time, lower 

manpower requirements, and reduced tooling cost. 

Second quarter 2007 Second quarter 2007 

Source: Joint Strike Fighter Program Office. 

a

Technology is in a form that closely represents the form, fit, and function needed for the JSF and is 

demonstrated in an environment that closely approximates the realities of its intended use but is short 

of the eventual operating environment itself, such as in a high-fidelity laboratory. 

b

Technology is in the form, fit, and function needed for the JSF and is demonstrated in an operational 

environment similar to that intended for the JSF, such as on a surrogate platform or test bed. 
Appendix IV: Measures of JSF Program Cost 

and Schedule Changes 

Page 38 GAO-05-271 Joint Strike Fighter Acquisition 

Appendix IV: Measures of JSF Program Cost 

and Schedule Changes 

(120355) 

0

10

20

30

40

50

Latest estimate

Program start 1996

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Fiscal year

Dollars in billions

0 5 10 15 20 25

22

18

23

12

9

9

First critical design review

First flight

Low-rate initial production

First operational aircraft

delivered

Initial operational

capabilities delivered

Full-rate production

Total program acquisition unit costs have increased

Development start 2001

Latest estimate

100

0

20

40

60

80

100

81

Dollars in millions

Program start 1996

Latest estimate

2,443

2,978

500

1,000

1,500

2,000

2,500

3,000

0

Number of aircraft

Source: GAO analysis of DOD data.

Procurement quantities have decreased

Development costs and cycle time have increased Key events delayed since development start in 2001

5-year

cycle time

increase

18 percent decrease 23 percent increase

Month delay

81 percent

cost 

increase
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