F-35 JOINT STRIKE 

FIGHTER

Problems Completing 

Software Testing May 

Hinder Delivery of 

Expected Warfighting 

Capabilities

Report to Congressional Committees

March 2014

GAO-14-322

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-322, a report to 

congressional committees

March 2014

F-35 JOINT STRIKE FIGHTER

Problems Completing Software Testing May Hinder 

Delivery of Expected Warfighting Capabilities

Why GAO Did This Study

The F-35 Lightning II, also known as 

the Joint Strike Fighter, is DOD’s most 

costly and ambitious acquisition 

program. The program seeks to 

develop and field three aircraft variants 

for the Air Force, Navy, and Marine 

Corps and eight international partners. 

The F-35 is integral to U.S. and 

international plans to replace existing 

fighter aircraft and support future 

combat operations. Total U.S. planned 

investment in the F-35 program is 

approaching $400 billion to develop 

and acquire 2,457 aircraft through 

2037, plus hundreds of billions of 

dollars in long-term spending to 

operate and maintain the aircraft.

The National Defense Authorization 

Act for Fiscal Year 2010 mandated that 

GAO review the F-35 acquisition 

program annually for 6 years. In this, 

GAO’s fifth annual report on the F-35, 

GAO assesses the program’s

(1) ongoing development and testing, 

(2) long-term affordability, and 

(3) manufacturing progress. 

GAO reviewed and analyzed 

manufacturing data through December 

2013, program test plans, and internal 

DOD analyses, and spoke with DOD, 

program, and contractor officials.

What GAO Recommends

GAO recommends that DOD assess 

and identify the specific capabilities 

that realistically can be delivered to the 

military services to support their 

respective initial operational

capabilities, and share its findings with 

the Congress and military services

prior to July 2015. DOD concurred with 

this recommendation.

What GAO Found

Delays in developmental flight testing of the F-35’s critical software may hinder 

delivery of the warfighting capabilities the military services expect. F-35 

developmental flight testing comprises two key areas: mission systems and flight 

sciences. Mission systems testing verifies that the software-intensive systems 

that provide critical warfighting capabilities function properly and meet 

requirements, while flight sciences testing verifies the aircraft’s basic flying 

capabilities. Challenges in development and testing of mission systems software

continued through 2013, due largely to delays in software delivery, limited 

capability in the software when delivered, and the need to fix problems and retest 

multiple software versions. The Director of Operational Test and Evaluation

(DOT&E) predicts delivery of warfighting capabilities could be delayed by as 

much as 13 months. Delays of this magnitude will likely limit the warfighting 

capabilities that are delivered to support the military services’ initial operational

capabilities—the first of which is scheduled for July 2015—and at this time it is 

not clear what those specific capabilities will be because testing is still ongoing. 

In addition, delays could increase the already significant concurrency between 

testing and aircraft procurement and result in additional cost growth. Without a 

clear understanding of the specific capabilities that will initially be delivered, 

Congress and the military services may not be able to make fully informed 

resource allocation decisions. Flight sciences testing has seen better progress, 

as the F-35 program has been able to accomplish nearly all of its planned test 

flights and test points. Testing of the aircraft’s operational capabilities in a 

realistic threat environment is scheduled to begin in 2015. The program has 

continued to make progress in addressing some key technical risks. 

To execute the program as planned, the Department of Defense (DOD) will have 

to increase funds steeply over the next 5 years and sustain an average of $12.6 

billion per year through 2037; for several years, funding requirements will peak at 

around $15 billion. Annual funding of this magnitude clearly poses long-term

affordability risks given the current fiscal environment. The program has been 

directed to reduce unit costs to meet established affordability targets before fullrate production begins in 2019, but meeting those targets will be challenging as 

significant cost reductions are needed. Additionally, the most recent cost 

estimate for operating and supporting the F-35 fleet is more than $1 trillion, which 

DOD officials have deemed unaffordable. This estimate reflects assumptions 

about key cost drivers the program can control, like aircraft reliability, and those it 

cannot control, including fuel costs, labor costs, and inflation rates. Reliability is 

lower than expected for two variants, and DOT&E reports that the F-35 program 

has limited additional opportunities to improve reliability. 

Aircraft manufacturing continued to improve in 2013, and management of the 

supply chain is evolving. As the number of aircraft in production has increased, 

critical learning has taken place and manufacturing efficiency has improved. For 

example, the prime contractor has seen reductions in overall labor hours needed 

to manufacture the aircraft, as expected. In 2013, the contractor delivered 35 

aircraft to the government, 5 more than it delivered in 2012 and 26 more than it 

delivered in 2011. The prime contractor has put in place a supplier management 

system to oversee key supplier performance. 

View GAO-14-322. For more information, 

contact Mike Sullivan at (202) 512-4841 or 

sullivanm@gao.gov
Page i GAO-14-322 F-35 Joint Strike Fighter

Letter 1 

Background 3

Testing of Critical Software Poses a Significant Challenge to the 

Delivery of F-35 Warfighting Capabilities 5

Program Funding Projections and Unit Cost Targets May Not Be 

Achievable 12

F-35 Aircraft Manufacturing Efficiency Continues to Improve 18

Conclusions 23

Recommendation for Executive Action 24

Agency Comments 24

Appendix I Prior GAO Reports and DOD Responses 27

Appendix Il Scope and Methodology 30

Appendix III Comments from the Department of Defense 32

Appendix IV GAO Contact and Staff Acknowledgments 34

Related GAO Products 35

Tables

Table 1: Changes in Reported F-35 Program Cost and Quantity 

and Deliveries 2001-2013 4

Table 2: Comparison of 2013 Unit Costs and 2019 Unit Cost 

Goals (dollars in then year millions) 14

Table 3: Cost Drivers That Affect F-35 Operation and Sustainment 

Cost Estimates 16

Contents
Page ii GAO-14-322 F-35 Joint Strike Fighter

Figures

Figure 1: F-35 Test Points Progress in 2013 9

Figure 2: Budgeted Development and Procurement Costs by 

Service, 2014-2037 (dollars in then year billions) 13

Figure 3: Relationship among Readiness, Reliability, and 

Sustainment Costs 17

Figure 4: F-35 Average Flying Hours between Failure Rates by 

Variant 18

Figure 5: Average Labor Hours Per Aircraft Since Beginning LowRate Production and 2014 Goal 20

Figure 6: Trend of F-35 Actual Delivery Dates Compared to 

Contractual Delivery Dates 21

Figure 7: Countries Currently Participating in F-35 Production 22

Abbreviations

ALIS Autonomic Logistics Information System

CAPE Cost Assessment and Program Evaluation

CTOL conventional takeoff and landing

CV carrier-suitable variant

DCMA Defense Contract Management Agency

DOD Department of Defense

DOT&E Director of Operational Test and Evaluation

IOC initial operational capability

STOVL short takeoff and vertical landing

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-14-322 F-35 Joint Strike Fighter

441 G St. N.W.

Washington, DC 20548

March 24, 2014

Congressional Committees

With estimated acquisition costs approaching $400 billion, the F-35 

Lightning II—also known as the Joint Strike Fighter—is the Department of 

Defense’s (DOD) most costly and ambitious acquisition program. The 

program is developing and fielding a family of next generation fighter 

aircraft, incorporating low observable (stealth) technologies as well as 

advanced sensors and computer networking capabilities for the United 

States Air Force, Navy, and Marine Corps as well as eight international 

partners.1

We have reported on F-35 issues for many years.

The F-35 family is comprised of three aircraft variants: (1) a 

conventional takeoff and landing (CTOL) variant, (2) a short takeoff and 

vertical landing (STOVL) variant, and (3) a carrier-suitable variant (CV). 

The F-35 is integral to U.S. and partner plans to replace existing fighter 

aircraft and support future combat operations. According to current plans, 

the U.S. portion of the program will require annual acquisition funding of 

more than $12 billion on average through 2037 to complete development 

and procure a total of 2,457 aircraft. In addition, the F-35 fleet is 

estimated to cost around $1 trillion to operate and support over its 

lifetime. In a time of austere federal budgets, cost projections of this 

magnitude pose significant fiscal challenges.

2 Over time we have 

reported significant cost, schedule, and performance problems and have 

found that those problems, in large part, can be traced to (1) decisions 

made at key junctures without adequate product knowledge; and (2) a 

highly concurrent acquisition strategy with significant overlap among 

development, testing, and manufacturing activities. We have made 

numerous recommendations aimed at addressing these issues, and DOD 

has taken action to address them to varying degrees.3

 

1

The international partners are the United Kingdom, Italy, the Netherlands, Turkey, 

Canada, Australia, Denmark, and Norway. These nations contributed funds for system 

development and signed agreements to procure aircraft. In addition, Israel and Japan 

have signed on as foreign military sales customers.

In March 2012, 

2

See related GAO products at the end of this report. 

3

See appendix I for a matrix of prior GAO reports, recommendations, and DOD actions. 
 

Page 2 GAO-14-322 F-35 Joint Strike Fighter

DOD completed an extensive restructuring of the F-35 program and we 

reported in June 2012 and again in March 2013 that the restructuring 

actions should lead to more achievable and predictable outcomes, albeit 

at higher cost and longer timeframes for testing and delivering capabilities 

to the warfighter than originally planned.4

The National Defense Authorization Act for Fiscal Year 2010 mandated 

GAO to review the F-35 acquisition program annually for 6 years.5

To conduct our work, we reviewed and analyzed program briefings, 

management reports, program test results, and internal DOD program 

analyses. We discussed key aspects of F-35 performance with both 

military and private contractor test pilots. We interviewed F-35 program 

and aircraft prime contractor officials to discuss developmental testing. 

We also collected developmental test plans, and data on test 

achievements to assess program progress through December 2013. We 

obtained current program acquisition and life-cycle sustainment cost 

estimates, reviewed the supporting documentation and discussed the 

development of those estimates with DOD and prime contractor officials 

instrumental in producing them. We toured F-35 manufacturing and test 

facilities and obtained and analyzed production and supply chain data as 

of December 2013. We assessed the reliability of DOD and contractor 

data by reviewing existing information about the data, and interviewing 

agency officials knowledgeable about the data. We determined that the 

data were sufficiently reliable for the purposes of this report. We also 

discussed ongoing manufacturing process improvements with prime 

contractor and Defense Contract Management Agency (DCMA) officials. 

Appendix Il contains a more detailed description of our scope and 

methodology.

This is 

our fifth report under that mandate, and in it, we assess the program’s (1) 

ongoing development and testing, (2) funding and long-term affordability, 

and (3) manufacturing progress.

 

4

GAO, Joint Strike Fighter: DOD Actions Needed to Further Enhance Restructuring and 

Address Affordability Risks, GAO-12-437 (Washington, D.C.: June 14, 2012); and GAO,

Joint Strike Fighter: Current Outlook Is Improved, but Long-Term Affordability Is a Major 

Concern, GAO-13-309 (Washington, D.C.: Mar. 11, 2013). 

5

Pub. L. No. 111-84, § 244 (2009).
 

Page 3 GAO-14-322 F-35 Joint Strike Fighter

We conducted this performance audit from June 2013 to March 2014 in 

accordance with generally accepted government auditing standards. 

Those standards required that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

As we have reported in the past, DOD began the F-35 acquisition 

program—also known as the Joint Strike Fighter—in October 2001, 

without adequate knowledge about the aircraft’s critical technologies or its 

design.6 In addition, the program’s acquisition strategy called for high 

levels of concurrency between development, testing, and production. As a 

result, the program encountered significant cost and schedule growth as 

well as performance shortfalls and was restructured three times: first in 

December 2003, then again in March 2007, and most recently in March 

2012. The most recent restructuring was initiated in early 2010, when the 

program’s unit cost estimates exceeded critical thresholds established by 

statute—a condition known as a Nunn-McCurdy breach. DOD

subsequently certified to the Congress in June 2010 that the program was 

essential to national security and needed to continue.

7

 

6

DOD then began 

efforts to significantly restructure the program and establish a new 

acquisition program baseline. These restructuring efforts continued 

through 2011 and into 2012, during which the department increased the 

program’s cost estimates, extended its testing and delivery schedules, 

and reduced near-term aircraft procurement quantities by deferring the 

procurement of 410 aircraft into the future. The new F-35 acquisition 

GAO-13-309; GAO-12-437; GAO, Joint Strike Fighter: Restructuring Places Program on 

Firmer Footing, but Progress Still Lags, GAO-11-325 (Washington, D.C.: April 7, 2011). 

7

Section 2433 of title 10 of the United States Code, commonly referred to as NunnMcCurdy, requires DOD to notify Congress whenever a major defense acquisition 

program’s unit cost experiences cost growth that exceeds certain thresholds. This is 

commonly referred to as a Nunn-McCurdy breach. Significant breaches occur when the 

program acquisition unit cost or procurement unit cost increases by at least 15 percent 

over the current baseline estimate or at least 30 percent over the original estimate. For 

critical breaches, when these unit costs increase at least 25 percent over the current 

baseline estimate or at least 50 percent over the original, DOD is required to take 

additional steps, including conducting an in-depth review of the program. Programs with 

critical breaches must be terminated unless the Secretary of Defense certifies to certain 

facts related to the program and takes other actions, including restructuring the program. 

10 U.S.C. § 2433a.

Background
 

Page 4 GAO-14-322 F-35 Joint Strike Fighter

program baseline was finalized in March 2012, and since that time costs 

have remained relatively stable. Table 1 notes the significant cost, 

quantity, and schedule changes from the original program baseline and 

the relative stability since the new baseline was established.

Table 1: Changes in Reported F-35 Program Cost and Quantity and Deliveries 2001-2013 

October 2001 

(initial 

baseline)

March 2012

(restructured 

baseline)

March 2013 

(current 

estimates) 

Change 

2001-2012

Change 

2012-2013

Expected quantities (number of aircraft)

Developmental quantities 14 14 14 0% 0%

Procurement quantities 

(U.S. only)

2,852 2,443 2,443 - 14 0 

Total quantities 2,866 2,457 2,457 - 14 0 

Cost estimates (then-year dollars in billions)

Development $34.4 $55.2 $55.2 60 0 

Procurement 196.6 335.7 330.6 71 - 2 

Military construction 2.0 4.8 4.6 140 - 4 

Total program acquisition 233.0 395.7 390.4 70 -1 

Unit cost estimates (then-year dollars in millions)

Program acquisition $81 $161 $159 99 - 1 

Average procurement 69 137 135 99 - 1 

Estimated delivery and production dates

Initial operational capability 2010-2012 TBD 2015-2018 NA NA

Full-rate production 2012 2019 2019 7 years 0 years

Source: GAO analysis of DOD data.

At the time the new F-35 acquisition program baseline was finalized, it did 

not identify new initial operational capability (IOC) dates for the three 

military services.8

 

8 Initial operational capability is obtained when organizations or units have received a 

specified number of systems and have the ability to employ and maintain those systems.

The following year DOD issued a memorandum noting 

that Marine Corps and Air Force were planning to field initial operational

capabilities in 2015 and 2016, respectively, and that the Navy planned to 

field its initial capability in 2018. The memorandum emphasized that the 

Marine Corps and Air Force initial operational capabilities would be 

achieved with aircraft that possess initial combat capabilities, and noted 

that those aircraft would need additional lethality and survivability 
 

Page 5 GAO-14-322 F-35 Joint Strike Fighter

enhancements to meet the full spectrum of warfighter requirements in the 

future. These new parameters represented a delay of 5 to 6 years from 

the program’s initial 2001 baseline and a reduction in the capabilities 

expected at IOC.

In March 2005 we recommended that DOD implement an evolutionary, 

incremental approach to developing and fielding the F-35—then known as 

the Joint Strike Fighter—to ensure that the warfighters would receive an 

initial combat capability that, at a minimum, would meet their most 

immediate needs.9 Again in March 2010, we recommended that DOD 

identify the absolute minimum combat capabilities that would be 

acceptable by each of the military services to field their initial operational

capabilities and establish reasonable, realistic timeframes for achieving 

those requirements.10 In both instances, we noted that the military 

services should consider trading off desired capabilities in order to more 

rapidly field aircraft with an initial set of useable capabilities and that any 

capabilities not needed to meet immediate warfighting needs should be 

deferred to a future development increment. In both instances, DOD 

agreed with the intent of our recommendation, but believed that its 

existing program management practices were sufficient.

Delays in the testing of critical mission systems software have put the 

delivery of expected warfighting capabilities to the Marine Corps at risk, 

and could affect the delivery of capabilities to the Air Force and Navy as 

well. F-35 developmental flight testing is separated into two key areas: 

mission systems and flight sciences. Mission systems testing is done to 

verify that the software and systems that provide critical warfighting 

capabilities function properly and meet requirements, while flight science 

testing is done to verify the aircraft’s basic flying capabilities. In a March 

2013 report we found that development and testing of mission systems 

software was behind schedule, due largely to delayed software deliveries, 

limited capability in the software when delivered, and the need to fix 

problems and retest multiple software versions. These same challenges 

continued thorough 2013, and as a result progress in mission systems 

 

9 GAO, Tactical Aircraft: Opportunity to Reduce Risk in the Joint Strike Fighter Program 

with Different Acquisition Strategy, GAO-05-271 (Washington, D.C.: March 15, 2005).

10 GAO, Joint Strike Fighter: Additional Costs and Delays Risk Not Meeting Warfighter 

Requirements on Time, GAO-10-382 (Washington, D.C.: March 19, 2010).

Testing of Critical 

Software Poses a 

Significant Challenge 

to the Delivery of F35 Warfighting 

Capabilities
 

Page 6 GAO-14-322 F-35 Joint Strike Fighter

testing has been limited. The Director of Operational Test and Evaluation 

(DOT&E) predicts that the delivery of expected warfighting capabilities to 

the Marine Corps could be delayed by as much as 13 months. Delays of 

this magnitude could also increase the already significant concurrency 

between testing and aircraft procurement and result in additional cost 

growth. Although mission systems testing is behind, the F-35 program 

has been able to accomplish nearly all of its planned flight science 

testing. The program also continued to make progress in addressing key 

technical risks, although some of that progress has been limited.

While the F-35 program was able to accomplish all of the mission system 

test flights it had planned in 2013, it did not accomplish all of the planned 

test points,

11

Developmental testing of Block 2B software is behind schedule and will 

likely delay the delivery of expected warfighting capabilities. The delivery 

of this software capability is of high near-term importance because it 

provides initial warfighting capability for the overall F-35 program, and is 

needed by the Marine Corps to field its initial operational capability in July 

2015. As of January 2014, the program planned to have verified the 

functionality of 27 percent of the software’s capability on-board the 

falling short by 11 percent. The F-35 program planned to fly 

329 mission systems test flights and accomplish 2,817 test points in 

2013. The program actually flew 352 test flights, exceeding the goal, but 

only accomplished 2,518 test points. According to program and contractor 

officials, slow progress in developing, delivering, and testing mission 

systems software continues to be the program’s most significant risk 

area. The F-35 program is developing and fielding mission systems 

software capabilities in blocks: (1) Block 1, (2) Block 2A, (3) Block 2B, (4) 

Block 3i, and (5) Block 3F. Each subsequent block builds on the 

capabilities provided in the preceding blocks. Blocks 1 and 2A provide 

training capabilities and are essentially complete, with some final 

development and testing still underway. Blocks 2B and 3i provide initial 

warfighting capabilities and are needed by the Marine Corps and Air 

Force, respectively, to achieve initial operational capability. Block 3F is 

expected to provide the full suite of warfighting capabilities, and is the 

block the Navy expects to have to achieve its initial operational capability.

 

11 Flight test points are specific, quantifiable objectives in flight plans that are needed to 

verify aircraft design and performance.

Limited Progress in 

Mission Systems Software 

Testing May Cause Delays 

and Add Cost to F-35 

Development
 

Page 7 GAO-14-322 F-35 Joint Strike Fighter

aircraft, but had only been able to verify 13 percent. This leaves a 

significant amount of work to be done before October 2014, which is 

when the program expects to complete developmental flight testing of this 

software block. According to DOT&E, Block 2B developmental testing will 

not be completed as scheduled and could be delayed by as much as 13 

months, as the program has had to devote time and resources to address 

problems and completing development of prior software blocks. Delays of 

this magnitude would mean that the Marine Corps will not likely have all 

of the capabilities it expects in July 2015, its planned initial operational

capability date. At this time it is not clear exactly which of the expected 

capabilities will be available as testing is still ongoing. The effects of these 

delays compound as they also put the timely delivery of Air Force and 

Navy initial operational capabilities at risk. The Air Force expects to field 

its initial operational capability in August 2016 with Block 3i aircraft that 

possess the same warfighting capabilities as the Marine Corps aircraft, 

but have upgraded computer hardware. The Navy plans to achieve its 

initial operational capability in August 2018 with Block 3F aircraft that 

possess the full suite of F-35 warfighting capabilities.

Program and contractor officials have stated that while they recognize 

that the program faces software risks, they still expect to deliver all of the 

planned F-35 software capabilities to the military services as currently 

scheduled. However, given the uncertainty in mission systems software 

testing and the significance of the F-35 to future force structure plans, it is 

important that the military services have a clear understanding of the 

specific capabilities that they can realistically expect to receive, and those 

capabilities that are not likely to be delivered by their initial operational

capability dates—the first of which is scheduled for July 2015. In addition, 

because the F-35 is DOD’s most costly and ambitious acquisition 

program, it is important that DOD keep Congress informed about the 

status of the program. Without a clear understanding of the specific 

capabilities that will initially be delivered, Congress and the military 

services may not be able to make fully informed resource allocation 

decisions.

Delays in mission systems software testing could also increase costs. As 

currently planned, DOD expects to complete developmental flight testing 

in 2017. If the flight test schedule is extended, the program may have to 

retain testing and engineering personnel longer than currently expected, 

which would increase development cost. DOD currently expects to have 

invested $70.2 billion to procure 359 aircraft by 2017 when developmental 

flight testing is scheduled to end. Our past reports have concluded that 

purchasing aircraft while concurrently conducting developmental flight 
 

Page 8 GAO-14-322 F-35 Joint Strike Fighter

testing increases the risk that problems will be discovered late in testing 

and additional funding will be needed to rework aircraft that have already 

been purchased.12

The F-35 contractor recognizes that additional testing efficiencies are 

important in order to deliver capabilities on schedule and cost. One way it 

plans to gain efficiency is to use test results from one F-35 variant to 

close out test points for the other two variants in instances in which the 

variants have common functions. According to test officials, most mission 

systems testing can be accomplished on any variant and only a limited 

amount of variant-specific testing is required. Contractor officials pointed 

out that this type of efficiency would help mitigate some testing risk, but 

they also recognized that it will still be difficult to make up the lost time in 

the test program. They noted that delays in specific test events generally 

impact the entire test schedule because the ability to conduct future 

testing is often dependent on the completion of the earlier events.

If F-35 procurement plans remain unchanged and 

developmental testing continues into 2018, the cost risks associated with 

concurrency will likely increase as DOD expects to have invested $83.4

billion in 459 aircraft by that point in time.

The program accomplished nearly all of the flight sciences testing, 

including weapons testing, it had planned for 2013. As of December 

2013, the program had achieved half of the total number of test points 

required to complete all flight science testing for the program. Figure 1 

below shows the number of flight science test points planned and 

accomplished for each F-35 variant as of December 2013, and also 

identifies the total number of test points required for each variant to 

complete flight science testing.

 

12 GAO-13-309; GAO-12-437

Program Accomplished 

Most Flight Science Test 

Goals in 2013
 

Page 9 GAO-14-322 F-35 Joint Strike Fighter

Figure 1: F-35 Test Points Progress in 2013

The program made progress despite the fact that flight testing was halted 

twice at the beginning of the year to investigate and fix cracks in an 

engine fan blade and leaky fuel hoses. In addition, program and 

contractor officials emphasized that employee furloughs that occurred in 

2013, due to mandatory sequestration, limited the amount of flight testing 

that could be done during that time as well.13

• Conventional takeoff and landing variant – The program successfully 

demonstrated the variant’s ability to launch AIM-120 missiles from its 

internal weapons bay and to refuel while in flight. The program also 

continued testing the aircraft’s ability to function at high vertical flight 

angles, although program officials noted that the testing took longer 

than expected. As of December 2013, the program had accomplished 

Some of the key flight 

science and weapons testing accomplishments included:

 

13 The President ordered a sequestration of budgetary resources on March 1, 2013 in 

response to the Balanced Budget and Emergency Deficit Control Act of 1985, Pub. L No. 

99-177, § 251, as amended by the Budget Control Act of 2011, Pub. L No. 112-25, § 302.
 

Page 10 GAO-14-322 F-35 Joint Strike Fighter

59 percent of its total expected flight science test points for this 

variant.

• Short takeoff and vertical landing variant – The program successfully 

demonstrated the STOVL’s ability to takeoff vertically, launch 

weapons from its internal weapons bay, and dump fuel when needed. 

In addition, the program conducted some testing of the variant at sea 

on an amphibious assault ship—specifically the USS WASP. As of 

December 2013, the program had accomplished 49 percent of its total 

expected flight science test points for this variant.

• Carrier-suitable variant – The program began testing the capability of 

the aircraft to function at high vertical flight angles. In addition, the 

program successfully demonstrated the aircraft’s ability to dump fuel 

when needed. Program and contractor officials noted that the program 

also made progress to begin testing to verify that the aircraft’s new 

arresting hook system could successfully catch a cable on a set of 

carrier arresting gear installed onshore at the Lakehurst facility. As of 

December 2013, the program had accomplished 43 percent of its total 

expected flight science test points for this variant.

Developmental testing is not the only testing that the program still has to 

complete. The F-35 program is also scheduled to begin operational 

testing in June 2015, to determine that the aircraft variants can effectively 

perform their intended missions in a realistic threat environment.14

While the F-35 program made progress addressing some key technical 

risks in 2013, it continued to encounter slower than expected progress in 

developing the Autonomic Logistics Information System (ALIS). Over 

time, we have reported on 4 areas of technical and structural risk that the 

program identified during flight, ground, and lab testing that if not 

addressed, could result in substantially degraded capabilities and mission 

effectiveness.15

• Helmet mounted display - provides flight data, targeting, and other 

sensor data to the pilot, and is integral to reducing pilot workload and 

achieving the F-35’s concept of operations. The original helmet 

In 2013, we found that the program made the following 

progress in each of those areas:

 

14 Interim Department of Defense Instruction 5000.02 Operation of the Defense 

Acquisition System, para. (5)(d)(11)(b)(2) (Nov. 25, 2013).

15 GAO-13-309; GAO-12-437

Program Progress in 

Addressing Key Technical 

Risks Has Been Mixed
 

Page 11 GAO-14-322 F-35 Joint Strike Fighter

mounted display encountered significant technical deficiencies, 

including display jitter, the undesired shaking of the visor display, and 

latency, the perceivable lag that occurs in transmitting sensor data, 

and did not meet warfighter requirements. The program made 

adjustments to the helmet design, including adding sensors to lessen 

the display jitter, and redesigning elements to minimize latency. The 

program tested these design changes in 2013 and found that most of 

the technical deficiencies had been adequately addressed, and that 

the helmet’s performance was sufficiently suitable to support Marine 

Corps initial operational capability in 2015. DOT&E and program test 

pilots noted that the current night vision camera continues to have 

problems. The program has identified a new camera that it believes 

will address those problems, but that camera has not been fully tested 

to verify its capabilities.

• Arresting Hook System - allows the F-35 carrier-suitable variant to 

engage landing wires on aircraft carriers, was redesigned after the 

original hook system was found to be deficient. The program 

determined that the original hook assembly was not strong enough to 

reliably catch the wire and stop the airplane. As a result, the program 

modified the hook system’s hydraulic components, and made 

structural modifications to the plane. In March 2013, the program 

completed a critical design review of the hook system to verify that the 

new design is sound. Land testing of the redesigned system has been 

successful, and the program anticipates that it will be ready for carrier 

testing in October 2014.

• Durability - structural and durability testing of the aircraft continued in 

2013, and the program completed the first round of this testing on all 

three variants. The conventional takeoff and landing variant and the 

short takeoff and vertical landing variants have also started their 

second round of testing. During this second round of testing, the short 

takeoff and vertical landing test aircraft developed bulkhead cracks at 

the equivalent of 17 years of service life. Contractor officials noted 

that they were working to develop a solution to those cracks, but the 

total cost and schedule impacts of these bulkhead cracks are 

unknown at this time.

• Autonomic Logistics Information System - an important tool to 

predict and diagnose maintenance and supply issues, automate 

logistics support processes and provide decision aids aimed at 

reducing life-cycle sustainment costs and improving force readiness. 

ALIS is being developed and fielded in increments. In 2013, the 

program had to release an update to the first increment because 

problems were discovered after the increment was released to the 

testing locations. The additional time to develop and field this update 

will likely delay the delivery of future increments. The program 
 

Page 12 GAO-14-322 F-35 Joint Strike Fighter

completed site activation of ALIS systems at some training and testing 

locations, and is in the process of adding capabilities and maturing 

ALIS in a second increment to support the Marine Corps’ initial 

operational capability. DOT&E notes that, although the second 

increment is scheduled to be delivered in time to support the Marine 

Corps’ initial operational capability, there is no margin for error in the 

development schedule. Testing of this ALIS increment is about two 

months behind largely due to a lack of test facilities. Program officials 

note that they are in the process of adding facilities. The third, and 

final, increment of ALIS that provides full capability is not expected to 

be released until 2016.

The F-35 program’s high projected annual acquisition funding levels 

continue to put the program’s long-term affordability at risk. Currently the 

acquisition program requires $12.6 billion per year through 2037, which 

does not appear to be achievable given the current fiscal environment. 

The program is reducing unit costs to meet targets, but a significant 

amount of additional cost reduction is needed if it expects to meet those 

targets before the beginning of full rate production—currently scheduled 

for 2019. Additionally, the most recent life-cycle sustainment cost 

estimate for the F-35 fleet is more than $1 trillion, which DOD officials 

have deemed unaffordable. The program’s long term sustainment 

estimates reflect assumptions about key cost drivers that the program 

does not control, including fuel costs, labor costs, and inflation rates. The 

program is also focusing on product reliability, which is something that the 

program can control, and something we have found in our prior best 

practices work to be a key to driving down sustainment costs. According 

to program reliability data, each F-35 variant was tracking closely to its 

reliability plan as of December 2013, although the program has a long 

way to go to achieve its reliability goals.

The overall affordability of the F-35 acquisition program remains a 

significant concern. As of March 2013, the program office estimated that 

the total acquisition cost will be $390.4 billion. DOD’s estimated annual 

funding levels to finish development and procurement of the F-35 are 

shown in figure 2.

Program Funding 

Projections and Unit 

Cost Targets May Not 

Be Achievable

Long-term Acquisition 

Funding Projections Pose 

Affordability Challenges
 

Page 13 GAO-14-322 F-35 Joint Strike Fighter

Figure 2: Budgeted Development and Procurement Costs by Service, 2014-2037 (dollars in then year billions)

From fiscal years 2014 to 2018, DOD plans to increase development and 

procurement funding for the F-35 from around $8 billion to around $13 

billion, an investment of more than $50 billion over that 5-year period. 

This build-up will occur during years of potential reductions in DOD’s 

budget as a result of sequestration. From fiscal year 2014 through fiscal 

year 2037, the program projects that it will require, on average, 

development and procurement funding of $12.6 billion per year, with 

several peak years at around $15 billion. Such a high average annual 

cost requirement poses affordability risks. At $12.6 billion a year, the F-35 

acquisition program alone would consume around one-quarter of all of 

DOD’s annual major defense acquisition funding. Therefore, any change 

in F-35 funding is likely to affect DOD’s ability to fully fund its other major 

acquisition programs. In addition, maintaining this level of sustained 

funding will be difficult in a period of declining or flat defense budgets and 

competition with other large acquisition programs such as the KC-46 
 

Page 14 GAO-14-322 F-35 Joint Strike Fighter

tanker and a new bomber. These costs do not include the costs to 

operate and maintain the F-35s as they are produced and fielded.

Recognizing the affordability challenges posed by the F-35 program, the 

Under Secretary of Defense for Acquisition, Technology, and Logistics 

established affordability unit cost targets for each F-35 variant to be met 

by the start of full rate production in 2019. The program is likely to be 

challenged to meet those targets, as the three variants still require 

anywhere from $41 million to $49 million in unit cost reductions (see table 

2). In addition, the program’s current funding and quantity projections 

indicate that unit costs in 2019 could actually be higher than the targets. 

The Under Secretary issued a memorandum in April 2013 explaining that 

affordability constraints are intended to force prioritization of 

requirements, drive performance and cost trades, and ensure that 

unaffordable programs do not enter the acquisition process. The 

memorandum goes on to state that “if affordability caps are breached, 

costs must be reduced or else program cancelation can be expected.” 

Table 2: Comparison of 2013 Unit Costs and 2019 Unit Cost Goals (dollars in then 

year millions)

F-35 variant

Unit cost of 

aircraft procured 

in 2013

Unit cost target of 

aircraft to be 

procured in 2019

Amount 

currently over 

cost targets a

Conventional takeoff and 

vertical landing

$124.8 $83.4 $41.4

Short takeoff and vertical 

landing

$156.8 $108.1 $48.7

Carrier-suitable variant $142.6 $93.3 $49.3

Source: GAO analysis of DOD data.

a

The F-35 program made progress this year in decreasing the unit costs of 

the conventional take-off and landing and carrier-suitable variants, but the 

unit cost of the short takeoff and vertical landing variant increased by 

nearly $10 million. According to program officials, the unit cost of the 

short takeoff and vertical landing variant increased because the program 

had to delay the procurement of a number of aircraft into the future, which 

reduced near-term quantities and made each individual unit more costly, 

and engine costs were higher than originally estimated. There is still 

These targets are based upon planning assumptions reflected in the FY 2013 President’s Budget 

and the 2011 projection for international partner procurement. If there are subsequent changes to 

either the U.S. or international partner procurement quantities the program will isolate the effect that 

this has on the targets as a factor that is not within their control.
 

Page 15 GAO-14-322 F-35 Joint Strike Fighter

uncertainty surrounding these estimates depending upon how DOD 

chooses to implement sequestration in future budgets.

In addition to the concerns about the affordability of the F-35 acquisition 

program, there are also significant concerns about the cost of operating 

and supporting the F-35 fleet over the coming decades. Currently, the 

Cost Assessment and Program Evaluation (CAPE) office, within the 

Office of the Secretary of Defense, estimates that the cost to operate and 

support the fleet over 30 years is likely to exceed $1 trillion, which is 3 

times higher than what was projected when the development program 

began in 2001. CAPE’s estimates also indicate that F-35 operations and 

support costs could surpass the average cost of legacy aircraft by 40 

percent or more, when original estimates indicated that the F-35 would 

cost less than the legacy aircraft. Program officials recently stated that 

their estimates indicate that operation and support costs are likely to be 

closer to $860 billion, and not the $1 trillion estimated by CAPE. 

According to CAPE, program, and contractor officials, F-35 sustainment 

cost estimates differ as the assumed future values for key cost drivers, 

like inflation rates and fuel costs, vary among cost estimators. CAPE 

officials emphasize that the difference between cost estimates is almost 

entirely attributable to the use of different inflation indices. Table 3 below 

lists the top cost drivers in the F-35 operation and sustainment estimates. 

While it is important for the program to consider potential reductions or 

increases in these variables listed below as it estimates the F-35’s longterm operation and sustainment costs, some of those variables can be 

directly controlled by the program office while others like inflation rates 

and fuel costs cannot.

Estimated Sustainment 

Costs Remain High but 

Emphasis on Improving 

Reliability Could Reduce 

Costs
 

Page 16 GAO-14-322 F-35 Joint Strike Fighter

Table 3: Cost Drivers That Affect F-35 Operation and Sustainment Cost Estimates

Input Cost driver Risk/Uncertainty

On-site repairs and number of 

spares

Cost of providing maintenance with 

spares on site

Services are in the process of determining the 

location of F-35 repair work as well as the number of 

spare parts needed. The services decide locations, 

but the number of spares may be determined based 

on other factors outside of military control.

Fuel costs Cost of fuel to fly planes at expected 

hours 

Fuel usage is currently based on data gathered from 

developmental test aircraft. Jet fuel costs are 

volatile. The cost of jet fuel grew 769 percent for 

American private flight carriers between 1977 and 

2013. Although the services cannot control the cost 

directly, they can determine the number of hours 

flown which affects the amount of fuel used.

Mission personnel Cost of employing and training personnel The services have not yet defined the number of 

personnel needed. 

Government versus contractor 

support labor rates

Percentage of work conducted by 

government versus contractor personnel; 

cost of reimbursement 

The F-35 program office has not yet made a 

decision on the percentage of work to be conducted 

by government versus contractor personnel.

Number and size of squadrons Includes the number/size of squadrons, 

and squadron personnel estimates 

The military services are currently considering the 

number and size of squadrons.

Equipment costs and reliability Costs of equipment needed to keep 

fleets operational

Development is ongoing, so actual aircraft reliability 

is not yet known. The services have little control 

over equipment costs, but can impact reliability as 

the system is developed. 

Number of planes and flight hours Air Force: 1,763 planes at 250 hours; 

Navy: 340 planes at 316 hours; Marine 

Corps: 340 planes at 302 hours

The services have decreased their anticipated flight 

hours throughout development, and may do so 

again in the future.

Inflation rates Annual Inflation indices used by the 

Department of Defense 

These rates are adjusted by the Office of 

Management and Budget annually. 

Source: GAO Analysis of DOD, contractor, and aircraft industry data.

The F-35 program office and prime contractor are working to make the 

long-term program more affordable. Starting in September 2013, they 

established a sustainment cost initiative team to meet regularly and 

discuss options for driving down sustainment costs. According to 

contracting officials, they also developed a management team dedicated 

to improving the aircraft’s prognostics and health management system. 

Additionally, the program is awaiting the results of a business case 

analysis of the costs and benefits of various sustainment options. The first 

phase of that analysis, completed in 2012, found that relying on 

government personnel for sustainment processes would be less costly 

than having contractors do the work. The second phase, which began in 

2013, is examining multiple aspects of the F-35 sustainment strategy, 

including the program’s approach to maintenance management and 

supply chain support. The findings of this second phase are expected to 
 

Page 17 GAO-14-322 F-35 Joint Strike Fighter

identify affordability opportunities and areas for additional future analysis. 

Those findings are expected to be provided to the program by March 

2014.

As the program faces key decisions about its F-35 operation and support 

strategy reliability is still a significant concern. Our past work has found 

that weapon system operating and support costs are directly correlated to 

weapon system reliability, which is something the program can affect.16

We found that lower reliability causes an imbalance in the relationship 

between readiness and operating costs, and lends toward the need for 

high costs to maintain readiness, as seen in figure 3 below. We also 

previously found that reliability problems identified in DOD weapon 

systems resulted in cost overruns and schedule delays.17

Figure 3: Relationship among Readiness, Reliability, and Sustainment Costs

DOD and the contractor use various measures to track and improve F-35 

reliability, including average flying hours between failures, which is 

defined as the number of flying hours achieved divided by the number of 

failures incurred. As indicated in figure 4, the conventional takeoff and 

landing variant and the short takeoff and vertical landing variant were not 

meeting expected reliability as of September 2013, while the carriersuitable variant was performing better than expected.

 

16 See GAO, Best Practices: Setting Requirements Differently Could Reduce Weapon 

Systems’ Total Ownership Costs, GAO-03-57 (Washington, D.C.: Feb. 11, 2003).

17 See GAO, Best Practices: Increased Focus on Requirements and Oversight Needed to 

Improve DOD’s Acquisition Environment Weapon System Quality, GAO-08-294 

(Washington, D.C.: Feb. 1, 2008).
 

Page 18 GAO-14-322 F-35 Joint Strike Fighter

Figure 4: F-35 Average Flying Hours between Failure Rates by Variant

DOT&E’s recent report noted concerns about the program’s ability to 

achieve its reliability goals by the time each of the F-35 variants reaches 

maturity—defined as 75,000 flight hours for the CTOL and STOVL 

variants; and 50,000 flight hours for the CV. DOT&E also noted that the 

F-35 design is becoming more stable, and although the program still has 

a large number of flight hours to go until system maturity, additional 

reliability growth is not likely to occur without a focused, aggressive and 

well-resourced effort.

F-35 manufacturing has improved and the contractor’s management of its 

suppliers is evolving. As the number of aircraft in production has 

increased, learning has taken place and manufacturing efficiency has 

improved. For example, the prime contractor has seen reductions in 

overall labor hours needed to manufacture the aircraft. The number of F35 aircraft produced and delivered annually by the prime contractor has 

steadily increased since the first low rate production aircraft were 

delivered in 2011. In 2013, the contractor delivered 35 aircraft to the 

F-35 Aircraft 

Manufacturing 

Efficiency Continues 

to Improve
 

Page 19 GAO-14-322 F-35 Joint Strike Fighter

government, 5 more than it delivered in 2012 and 26 more than it 

delivered in 2011. The prime contractor has put in place a supplier 

management system to oversee key supplier performance allowing them 

to identify poor performers and take appropriate action to address issues 

such as part shortages and poor quality. According to contractor officials, 

actions taken as a result of this system contributed to improvements in 

supplier performance over the past year.

The prime contractor continues to gain efficiencies in the manufacturing 

process as it learns more about manufacturing the aircraft. Reductions in 

the amount of time spent on work completed out of its specific work 

station have contributed to overall labor hour reductions. Aircraft delivered 

in 2012 averaged about 93 hours of out of station work per aircraft, while 

in 2013 about 8 hours of out of station work were expended per aircraft 

on average. While these gains in efficiency have moved the program 

closer to meeting its established labor hour goals, there is still a long way 

to go. In 2013, the prime contractor was unable to reach labor hour goals 

for both the CTOL and STOVL variants.18

 

18 The CV recently entered production, limiting the data that were available for trend 

analysis. As a result it has been excluded in this assessment. 

By the end of 2014, the prime 

contractor expects to significantly reduce the average labor hours to 

produce the CTOL and STOVL variants. However, in order to meet its 

goal, the program will have to reduce the average number of hours per 

aircraft for CTOL production by nearly 20,000 and the average number of 

hours per aircraft for STOVL production by more than 14,000 over the 

next year. While challenging, this goal appears to be achievable given 

that the program has been able to reduce the average labor hours for 

CTOL and STOVL production by more than 20,000 hours annually since 

2011. Figure 5 identifies the prime contractor’s trend in reduction of labor 

hours since the beginning of low-rate initial production as well as the 

contractor’s plans for 2014.

Program Manufacturing 

Processes Continue to 

Show Improvement
 

Page 20 GAO-14-322 F-35 Joint Strike Fighter

Figure 5: Average Labor Hours Per Aircraft Since Beginning Low-Rate Production 

and 2014 Goal

As manufacturing efficiency has improved, the prime contractor has also 

been able to increase throughput, delivering more aircraft year over 

year—9 in 2011, 30 in 2012, and 35 in 2013. Over the past year, the 

prime contractor continued to deliver aircraft closer to contracted delivery 

dates. Last year we found that deliveries averaged 11 months late, but 

had improved considerably.19

 

19

We found similar results this year with 

deliveries in 2013 averaging about 5 months late. While deliveries in 2013 

were later than planned, the trend continued to move in the right direction. 

Figure 6 tracks the actual delivery dates against the dates specified in the 

contract.

GAO-13-309. 
 

Page 21 GAO-14-322 F-35 Joint Strike Fighter

Figure 6: Trend of F-35 Actual Delivery Dates Compared to Contractual Delivery Dates

The improvements in throughput in 2013 were achieved despite setbacks 

that kept the contractor from delivering aircraft for several months during 

the year. Those setbacks included a fleet grounding due to engine 

problems discovered in testing and the need to repave the runway used 

by the prime contractor. The prime contractor took actions that helped 

mitigate the impacts of these events and as a result delivered 35 aircraft 

in 2013—one aircraft short of its plan.

The prime contractor is responsible for managing a complex supply chain 

made up of a large number of national and international suppliers. 

Currently, the prime contractor oversees about 1,500 domestic suppliers 

and 80 international suppliers spread across 11 countries. Figure 7 

identifies those countries participating in F-35 production. The number of 

suppliers has grown significantly over the past three years. Since 2011, 

Prime Contractor Supplier 

Management System
 

Page 22 GAO-14-322 F-35 Joint Strike Fighter

153 new suppliers have been added to the supply chain, 67 of those were 

added between 2012 and 2013. The prime contractor expects more 

suppliers to be added as production increases and the program 

progresses. 

Figure 7: Countries Currently Participating in F-35 Production

The prime contractor’s insight into the performance of 52 of its key 

suppliers through its Supplier Integration Management system has led to 

actions that have improved supplier performance. The system tracks 

supplier performance data in 23 areas including, but not limited to, cost 

growth, parts shortage occurrences, and the number of corrective action 

reports filed. That data is reviewed and scored on a monthly basis, with 

each supplier receiving an overall score based on their performance. 

According to the prime contractor, a score of 80 or above, out of 100, is 

considered good performance. All 52 of the key suppliers tracked using 
 

Page 23 GAO-14-322 F-35 Joint Strike Fighter

this system were considered good performers as of December 2013. In 

addition, 15 showed improvement in performance over the last year. 

According to contractor officials, the system identifies poor performers 

who are counseled and corrective actions are identified and implemented. 

For example, according to officials from the prime contractor, one supplier 

was identified through this process as having a large number of parts that 

did not conform to specifications. The prime contractor held meetings with 

and provided direction to that supplier. As a result of the prime 

contractor’s actions, the supplier’s performance has improved over the 

last year. In addition, officials from the prime contractor have identified 

part shortages—parts that are late to production need—as a major 

concern. The number of part shortages has slightly increased over the 

last year. Although the root cause of the shortages is still being assessed, 

officials from the prime contractor stated they are currently working on 

ways to improve part availability.

Since the F-35 program restructuring was completed in March 2012, 

acquisition cost and schedule estimates have remained relatively stable, 

and the program has made progress in key areas. However, persistent 

software problems have slowed progress in mission systems flight 

testing, which is critical to delivering the warfighting capabilities expected 

by the military services. These persistent delays put the program’s 

development cost and schedule at risk. As a result, DOT&E now projects 

that the warfighting capabilities expected by the Marine Corps in July 

2015, will not likely be delivered on time, and could be delayed as much 

as 13 months. This means that the Marine Corps may initially receive less 

capable aircraft than it expects, and if progress in mission systems 

software testing continues to be slower than planned, Air Force and Navy 

initial operational capabilities may also be affected. The program may 

also have to extend its overall developmental flight test schedule, which 

would increase concurrency between testing and production and could 

result in additional development cost growth. In addition to software 

concerns, the current funding plans may be unaffordable, given current 

budget constraints. This situation could worsen if unit cost targets are not 

met. Finally, the estimated cost of operating and supporting the fleet over 

its life-cycle continues to be high and could increase further if aircraft 

reliability goals are not met.

DOD has already made a number of difficult decisions to put the F-35 on 

a more sound footing. More such decisions may lie ahead. For example, 

if software testing continues to be delayed, if funding falls short of 

expectations, or if unit cost targets cannot be met, DOD may have to 

Conclusions
 

Page 24 GAO-14-322 F-35 Joint Strike Fighter

make decisions about whether to proceed with production as planned 

with less capable aircraft or to alter the production rate. Also, if reliability 

falls short of goals, DOD may have to make decisions about other ways 

to reduce sustainment costs, such as reduced flying hours. Eventually, 

DOD will have to make contingency plans for these and other issues. At 

this point, we believe the most pressing issue is the effect software 

testing delays are likely to have on the capabilities of the initial 

operational aircraft that each military service will receive. In order to make 

informed decisions about weapon system investments and future force 

structure, it is important that Congress and the services have a clear 

understanding of the capabilities that the initial operational F-35 aircraft 

will possess.

Due to the uncertainty surrounding the delivery of F-35 software 

capabilities, we recommend that the Secretary of Defense conduct an 

assessment of the specific capabilities that realistically can be delivered 

and those that will not likely be delivered to each of the services by their 

established initial operational capability dates. The results of this 

assessment should be shared with Congress and the military services as 

soon as possible but no later than July 2015. 

DOD provided comments on a draft of this report, which are reprinted in 

appendix lll. DOD concurred with our recommendation.

We are sending copies of this report to appropriate congressional 

committees; the Secretary of Defense; the Secretaries of the Air Force, 

Army, and Navy; the Commandant of the Marine Corps; and the Director 

of the Office of Management and Budget. The report is available at no 

charge on the GAO website at http://www.gao.gov. 

Recommendation for 

Executive Action

Agency Comments 
 

Page 25 GAO-14-322 F-35 Joint Strike Fighter

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

me at (202) 512-4841 or sullivanm@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. Staff members making key contributions to 

this report are listed in appendix IV.

Michael J. Sullivan

Director

Acquisition and Sourcing Management
 

Page 26 GAO-14-322 F-35 Joint Strike Fighter

List of Committees

The Honorable Carl Levin

Chairman

The Honorable James Inhofe

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Richard Durbin

Chairman

The Honorable Thad Cochran

Ranking Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Howard P. McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable Rodney Frelinghuysen

Chairman

The Honorable Pete Visclosky

Ranking Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Appendix I: Prior GAO Reports and DOD 

Responses

Page 27 GAO-14-322 F-35 Joint Strike Fighter

GAO report 

Est. dev. Costs dev. 

Length 

Aircraft unit cost Key program event Primary GAO message DOD response and actions 

2001 

GAO-02-39 

$34.4 Billion 

10 years 

$69 Million 

Start of system 

development and 

demonstration approved. 

Critical technologies needed 

for key aircraft performance 

elements are not mature. 

Program should delay start of 

system development until 

critical technologies are 

mature to acceptable levels. 

DOD did not delay start of system 

development and demonstration 

stating technologies were at 

acceptable maturity levels and 

will manage risks in development. 

2005 

GAO-05-271 

$44.8 Billion 

12 years 

$82 Million 

The program undergoes 

re-plan to address higher 

than expected design 

weight, which added $7 

billion and 18 months to 

development schedule. 

We recommend that the 

program reduce risks and 

establish executable 

business case that is 

knowledge-based with an 

evolutionary acquisition 

strategy. 

DOD partially concurred but does 

not adjust strategy, believing that 

their approach is balanced 

between cost, schedule and 

technical risk. 

2006 

GAO-06-356 

$45.7 Billion 

12 years 

$86 Million 

Program sets in motion 

plan to enter production 

in 2007 shortly after first 

flight of the nonproduction representative 

aircraft. 

The program plans to enter 

production with less than 1 

percent of testing complete. 

We recommend program 

delay investing in production 

until flight testing shows that 

JSF performs as expected. 

DOD partially concurred but did 

not delay start of production 

because they believe the risk 

level was appropriate. 

2007 

GAO-07-360 

$44.5 Billion 

12 years 

$104 Million 

Congress reduced 

funding for first two lowrate production buys 

thereby slowing the ramp 

up of production. 

Progress is being made but 

concerns remained about 

undue overlap in testing and 

production. We recommend 

limits to annual production 

quantities to 24 a year until 

flying quantities are 

demonstrated. 

DOD non-concurred and felt that 

the program had an acceptable 

level of concurrency and an 

appropriate acquisition strategy. 

2008 

GAO-08-388 

$44.2 Billion 

12 years 

$104 Million 

DOD implemented a MidCourse Risk Reduction 

Plan to replenish 

management reserves 

from about $400 million 

to about $1 billion by 

reducing test resources. 

We believe new plan 

increased risks and DOD 

should revise it to address 

concerns about testing, 

management reserves, and 

manufacturing concerns. We 

determined that the cost 

estimate was not reliable and 

that a new cost estimate and 

schedule risk assessment is 

needed. 

DOD did not revise risk plan or 

restore testing resources, stating 

that they will monitor the new 

plan and adjust it if necessary. 

Consistent with a report 

recommendation, a new cost 

estimate was prepared, but DOD 

did not conduct a risk and 

uncertainty analysis. 

Appendix I: Prior GAO Reports and DOD 

Responses
Appendix I: Prior GAO Reports and DOD 

Responses

Page 28 GAO-14-322 F-35 Joint Strike Fighter

GAO report 

Est. dev. Costs dev. 

Length 

Aircraft unit cost Key program event Primary GAO message DOD response and actions 

2009

GAO-09-303

$44.4 Billion

13 years

$104 Million

The program increased 

the cost estimate and 

adds a year to 

development but 

accelerated the 

production ramp up. 

Independent DOD cost 

estimate (JET I) projects 

even higher costs and 

further delays.

Moving forward with an 

accelerated procurement 

plan and use of cost 

reimbursement contracts is 

very risky. We recommended 

the program report on the 

risks and mitigation strategy 

for this approach. 

DOD agreed to report its 

contracting strategy and plans to

Congress and conduct a 

schedule risk analysis. The 

program reported completing the 

first schedule risk assessment 

with plans to update semiannually. The Department 

announced a major program 

reducing procurement and 

moving to fixed-price contracts. 

2010 

GAO-10-382

$49.3 Billion

15 years

$112 Million

The program was 

restructured to reflect 

findings of recent 

independent cost team 

(JET II) and independent 

manufacturing review 

team. As a result, 

development funds 

increased, test aircraft 

were added, the 

schedule was extended, 

and the early production 

rate decreased. 

Costs and schedule delays 

inhibit the program’s ability to 

meet needs on time. We 

recommend the program 

complete a full 

comprehensive cost estimate 

and assess warfighter and 

IOC requirements. We 

suggest that Congress 

require DOD to tie annual

procurement requests to 

demonstrated progress. 

DOD continued restructuring, 

increasing test resources and 

lowering the production rate. 

Independent review teams 

evaluated aircraft and engine 

manufacturing processes. Cost 

increases later resulted in a 

Nunn-McCurdy breach. Military 

services are currently reviewing 

capability requirements as we 

recommended. 

2011

GAO-11-325

$51.8 Billion

16 years

$133 Million

Restructuring continued 

with additional 

development cost 

increases; schedule 

growth; further reduction 

in near-term procurement 

quantities; and 

decreased the rate for 

future production. The 

Secretary of Defense 

placed the STOVL 

variant on a two-year 

probation; decoupled 

STOVL from the other 

variants; and reduced 

STOVL production plans 

for fiscal years 2011 to 

2013.

The restructuring actions are 

positive and if implemented 

properly, should lead to more 

achievable and predictable 

outcomes. Concurrency of 

development, test, and 

production is substantial and 

provides risk to the program. 

We recommended the 

program maintain funding 

levels as budgeted; establish 

criteria for STOVL probation; 

and conduct an independent 

review of software 

development, integration, and 

test processes.

DOD concurred with all three of 

the recommendations. DOD lifted 

STOVL probation citing improved 

performance. Subsequently, DOD 

further reduced procurement 

quantities, decreasing funding 

requirements through 2016. The 

initial independent software 

assessment began and ongoing 

reviews are planned to continue 

through 2012.
Appendix I: Prior GAO Reports and DOD 

Responses

Page 29 GAO-14-322 F-35 Joint Strike Fighter

GAO report 

Est. dev. Costs dev. 

Length 

Aircraft unit cost Key program event Primary GAO message DOD response and actions 

2012

GAO-12-437

$55.2 Billion

18 years

$137 Million

The program established 

a new acquisition 

program baseline and 

approved the 

continuation of system 

development, increasing 

costs for development 

and procurements and 

extending the period of 

planned procurements by 

2 years. 

Extensive restructuring 

places the program on a 

more achievable course. 

Most of the program’s 

instability continues to be 

concurrency of development, 

test, and production. We 

recommend the Cost 

Assessment Program 

Evaluation office conduct an 

analysis on the impact of 

lower annual funding levels; 

JSF program office conducts 

an assessment of the supply 

chain and transportation 

network. 

DOD partially concurred with 

conducting an analysis on the 

impact of lower annual funding 

levels and concurred with 

assessing the supply chain and 

transportation network. 

2013

GAO-13-309

$55.2 Billion

18 years

$137 Million

The program continued 

to move forward following 

a new acquisition 

program baseline in 

2012. In doing so, the 

program incorporated 

positive and more 

realistic restructuring 

actions taken since 2010 

including more time and 

funding for development 

and deferred 

procurement of more 

than 400 aircraft to future 

years

The program is moving in the 

right direction but must fully 

validate design and 

operational performance and 

at the same time make the 

system affordable. We did 

not make recommendations 

to DOD. 

DOD agreed with GAO’s 

observations.

Source: GAO
Appendix Il: Scope and Methodology

Page 30 GAO-14-322 F-35 Joint Strike Fighter

To assess the program’s ongoing development and testing we reviewed 

the status of software development and integration and contractor 

management improvement initiatives. We also interviewed officials from 

the program office, prime contractor, and the Defense Contract 

Management Agency (DCMA) to discuss current development status and 

software releases. In addition, we compared management objectives to 

progress made on these objectives during the year. We obtained and 

analyzed data on flights and test points, both planned and accomplished 

during 2013. We compared test progress against the total program plans 

to complete. We also reviewed the Director, Operational Test and 

Evaluation’s annual F-35 assessment. In addition, we interviewed officials 

from the F-35 program office and aircraft prime contractor to discuss 

development test plans and achievements. We also collected information 

from the program office, prime contractor and Department of Defense

(DOD) test pilots regarding the program’s technical risks including the 

helmet mounted display, autonomic logistics information system, carrier 

arresting hook, and structural durability.

To assess the program’s funding and long-term affordability, we reviewed 

financial management reports, annual Selected Acquisition Reports, and 

monthly status reports available as of December 2013. In addition, we 

reviewed total program funding requirements from the Defense 

Acquisition Executive Summary. We used this data to project annual 

funding requirements through the expected end of the F-35 acquisition in 

2037. We also analyzed the fiscal year 2014 President’s Budget data to 

identify the current status of unit costs for each variant, and the 

differences in this cost since 2012. We reviewed the Office of the 

Secretary of Defense’s F-35 Joint Strike Fighter Concurrency Quick Look 

Review, and discussed and analyzed reported concurrency costs with the 

prime contractor and program office. We obtained and discussed the lifecycle operating and support cost through the program’s Selected 

Acquisition Report and projections made by the Cost Analysis and 

Program Evaluation (CAPE) office. We identified changes in cost and 

interviewed officials from the program office prime contractor, Naval Air 

Systems Command, and the CAPE office regarding reasons for these 

changes. We also discussed future plans of the DOD and prime 

contractor to try and reduce life-cycle sustainment costs with officials from 

the prime contractor, program office, and CAPE. We analyzed reliability 

data and discussed these issues with program and prime contractor 

officials.

To assess manufacturing progress we obtained and analyzed data 

related to aircraft delivery rates and work performance data through the 

Appendix Il: Scope and Methodology
Appendix Il: Scope and Methodology

Page 31 GAO-14-322 F-35 Joint Strike Fighter

end of calendar year 2013. This data was compared to program 

objectives identified in these areas and used to identify trends. We 

reviewed data and briefings provided by the program office, prime 

contractor, and DCMA in order to identify issues in manufacturing 

processes. We discussed reasons for delivery delays and plans for 

improvement with the prime contractor. We also toured the prime 

contractor’s manufacturing facility in Fort Worth, Texas and collected and 

analyzed data related to aircraft quality through December 2013. We 

reviewed and discussed information on the prime contractor’s global 

supply chain including their management processes for oversight.

We assessed the reliability of DOD and contractor data by reviewing 

existing information about the data, and interviewing agency officials 

knowledgeable about the data. We determined that the data were 

sufficiently reliable for the purposes of this report. We conducted this 

performance audit from June 2013 to March 2014 in accordance with 

generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on 

our audit objectives. 
Appendix III: Comments from the Department 

of Defense

Page 32 GAO-14-322 F-35 Joint Strike Fighter

Appendix III: Comments from the 

Department of Defense
Appendix III: Comments from the Department 

of Defense

Page 33 GAO-14-322 F-35 Joint Strike Fighter
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 34 GAO-14-322 F-35 Joint Strike Fighter

Michael Sullivan (202) 512 – 4841 sullivanm@gao.gov

In addition the contact name above, the following staff members made 

key contributions to this report: Travis Masters, Assistant Director; Marvin 

Bonner; Peter Anderson, Megan Porter, Roxanna Sun and Abby Volk.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments
F-35 Joint Strike Fighter: Restructuring Has Improved the Program, but 

Affordability Challenges and Other Risks Remain. GAO-13-690T. 

Washington, D.C.: June 19, 2013.

F-35 Joint Strike Fighter: Program Has Improved in Some Areas, but 

Affordability Challenges and Other Risks Remain. GAO-13-500T. 

Washington, D.C.: April 17, 2013.

F-35 Joint Strike Fighter: Current Outlook Is Improved, but Long-Term 

Affordability Is a Major Concern. GAO-13-309. Washington, D.C.: March 

11, 2013.

Joint Strike Fighter: DOD Actions Needed to Further Enhance 

Restructuring and Address Affordability Risks. GAO-12-437. Washington, 

D.C.: June 14, 2012.

Joint Strike Fighter: Restructuring Added Resources and Reduced Risk, 

but Concurrency Is Still a Major Concern. GAO-12-525T. Washington, 

D.C.: March 20, 2012.

Joint Strike Fighter: Restructuring Places Program on Firmer Footing, but 

Progress Is Still Lagging. GAO-11-677T. Washington, D.C.: May 19, 

2011.

Joint Strike Fighter: Restructuring Places Program on Firmer Footing, but 

Progress Still Lags. GAO-11-325. Washington, D.C.: April 7, 2011.

Joint Strike Fighter: Restructuring Should Improve Outcomes, but 

Progress Is Still Lagging Overall. GAO-11-450T. Washington, D.C.: 

March 15, 2011.

Tactical Aircraft: Air Force Fighter Force Structure Reports Generally 

Addressed Congressional Mandates, but Reflected Dated Plans and 

Guidance, and Limited Analyses. GAO-11-323R. Washington, D.C.: 

February 24, 2011.

Joint Strike Fighter: Assessment of DOD’s Funding Projection for the 

F136 Alternate Engine. GAO-10-1020R. Washington, D.C.: September 

15, 2010.

Related GAO Products
Joint Strike Fighter: Accelerating Procurement before Completing 

Development Increases the Government’s Financial Risk. GAO-09-303. 

Washington D.C.: March 12, 2009.

Joint Strike Fighter: Recent Decisions by DOD Add to Program Risks. 

GAO-08-388. Washington, D.C.: March 11, 2008.

Joint Strike Fighter: Progress Made and Challenges Remain. 

GAO-07-360. Washington, D.C.: March 15, 2007.

Joint Strike Fighter: DOD Plans to Enter Production before Testing 

Demonstrates Acceptable Performance. GAO-06-356. Washington, D.C.: 

March 15, 2006.

Tactical Aircraft: Opportunity to Reduce Risks in the Joint Strike Fighter 

Program with Different Acquisition Strategy. GAO-05-271. Washington, 

D.C.: March 15, 2005.
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