JOINT STRIKE FIGHTER

Restructuring Added 

Resources and Reduced 

Risk, but Concurrency Is 

Still a Major Concern

Statement of Michael J. Sullivan, Director 

Acquisition and Sourcing Management

Testimony 

Before the Subcommittee on Tactical Air 

and Land Forces, Committee on Armed 

Services, House of Representatives

For Release on Delivery 

Expected at 3:00 p.m. EDT

Tuesday, March 20, 2012

GAO-12-525T

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-525T, a testimony 

before the Subcommittee on Tactical Air and 

Land Forces Committee on Armed Services, 

House of Representatives

March 20, 2012

JOINT STRIKE FIGHTER

Restructuring Added Resources and Reduced Risk, 

but Concurrency Is Still a Major Concern

Why GAO Did This Study

The F-35 Lightning II, also known as 

the JSF, is DOD’s most costly and 

ambitious aircraft acquisition, seeking 

to simultaneously develop and field 

three aircraft variants for the Air Force, 

Navy, Marine Corps, and eight 

international partners. The JSF is 

critical to DOD’s long-term 

recapitalization plans as it is intended 

to replace hundreds of legacy aircraft. 

Total U.S. investment in the JSF is 

nearing $400 billion to develop and 

procure 2,457 aircraft over several

decades and will require a long-term, 

sustained funding commitment. In 

2010, DOD began to extensively 

restructure the program to address 

relatively poor cost, schedule, and 

performance outcomes. 

This testimony draws on GAO’s 

extensive body of work on the JSF, 

including preliminary results from the 

current annual review mandated in the 

National Defense Authorization Act for 

Fiscal Year 2010. This testimony 

discusses (1) program costs, schedule 

changes, and affordability issues, (2) 

performance testing results, software,

and technical risks, and (3) 

procurement contract cost

performance, concurrency impacts, 

manufacturing results, and design 

changes. GAO’s work included 

analyses of a wide range of program 

documents and interviews with 

defense and contractor officials.

What GAO Recommends

GAO has made prior recommendations 

to help reduce risk and improve 

outcomes, which DOD has 

implemented to varying degrees. 

GAO’s forthcoming report will address 

these in detail along with potential new 

recommendations.

What GAO Found

Joint Strike Fighter (JSF) restructuring continues into a third year, adding to cost 

and schedule. Since June 2010, the total cost estimate increased about $15 

billion, $5 billion for development and $10 billion for procurement. There will likely 

be additional changes when the Department of Defense (DOD) approves a new 

program baseline, expected soon. Compared to the current approved baseline 

from 2007, total costs have increased about $119 billion, full-rate production has 

been delayed 5 years, and initial operational capability dates are now unsettled 

because of program uncertainties. While the total number of aircraft the U. S. 

plans to buy has not changed, DOD has for 3 straight years reduced near-term 

procurement quantities, deferring aircraft and costs to future years. Since 2002, 

the program has reduced aircraft procurement quantities through 2017 by threefourths, from 1,591 to 365. As the program continues to experience cost growth 

and delays, projected annual funding needs are unprecedented, averaging more 

than $13 billion a year through 2035. 

Most of the instability in the program has been and continues to be the result of 

highly concurrent development, testing, and production. Overall performance in 

2011 was mixed as the program achieved 6 of 11 primary objectives. 

Developmental flight testing gained momentum and is about one-fifth complete 

with the most challenging tasks still ahead. The program can expect more 

changes to aircraft design and manufacturing processes. Performance of the 

short takeoff and vertical landing variant improved this year and its “probation” 

period to fix deficiencies was ended early, even though several fixes are 

temporary and untested. Management and development of the more than 24 

million lines of software code continue to be of concern and late software 

releases have delayed testing and training. Development of the critical mission 

systems that give the JSF its core combat capabilities remains behind schedule 

and risky. To date, only 4 percent of the mission system requirements for full 

capability has been verified. Testing of a fully integrated JSF aircraft is now 

expected in 2015 at the earliest. Deficiencies with the helmet mounted display, 

integral to mission systems functionality and concepts of operation, are most 

problematic. DOD is funding a less-capable alternate helmet as a back-up. The 

autonomic logistics information system, a key ground system for improving 

aircraft availability and lowering support costs, is not yet fully developed. 

Cost overruns on the first four annual procurement contracts total more than

$1 billion and aircraft deliveries are on average more than one year late. Officials 

said the government’s share of the cost growth is $672 million; this adds about 

$11 million on average to the price of each of the 63 aircraft under those 

contracts. In addition to the overruns, the government also incurred an estimated 

$373 million in retrofit costs on produced aircraft to correct deficiencies 

discovered in testing. The manufacturing process is still absorbing a higher than 

expected number of engineering changes resulting from flight testing, which 

makes it difficult to achieve efficient production rates. Until engineering changes 

are reduced, there are risks of additional cost overruns and retrofit costs. The 

program now estimates that the number of changes will persist at elevated levels 

through 2019. Even with the substantial reductions in near-term procurement 

quantities, DOD is still investing billions of dollars on hundreds of aircraft while 

flight testing has years to go.

View GAO-12-525T. For more information, 

contact Michael J. Sullivan at (202) 512-4841

or sullivanm@gao.gov.
 

Page 1 GAO-12-525T 

Chairman Bartlett, Ranking Member Reyes, and Members of the 

Subcommittee:

Thank you for the opportunity to discuss our work on the F-35 Lightning II, 

also known as the Joint Strike Fighter (JSF). The JSF is the Department 

of Defense’s (DOD) most costly and ambitious aircraft acquisition, 

seeking to simultaneously develop and field three aircraft variants for the 

Air Force, Navy, Marine Corps, and eight international partners. The JSF 

is critical to DOD’s long-term recapitalization plans as it is intended to 

replace hundreds of legacy fighters and strike aircraft. Total U.S. 

investment in the JSF will be substantial—approaching $400 billion to 

develop and acquire 2,457 aircraft over the next few decades—and will 

require a long-term sustained funding commitment. Over the last 2 years, 

the JSF program has been extensively restructured to address relatively 

poor cost, schedule, and performance outcomes.

We have reported on JSF issues for a number of years.1 A recurring 

theme in our body of work since 2005 has been a concern about the 

substantial concurrency, or overlap, of JSF development, test, and 

production activities and the heightened risk it poses to achieving good 

program outcomes. The effects of concurrency became apparent in 2011 

as the JSF program incurred an estimated $373 million in additional costs 

to retrofit already-built aircraft to correct deficiencies discovered during 

testing. Our prior reports have also made numerous recommendations for 

reducing risks and improving chances for successful outcomes. DOD has 

agreed with and taken actions on these recommendations to varying 

degrees. More detail on the status of these prior recommendations will be 

provided in our forthcoming report. In April 2011, we reported that the 

department’s restructuring actions should lead to more achievable and 

predictable outcomes, albeit at higher costs and with extended times to 

test and deliver capabilities to the warfighter.2

 

1 See related GAO products at the end of this statement.

The report also identified 

continuing issues concerning affordability risks (both for acquiring JSF 

aircraft and supporting them over the life-cycle), delays in software 

development, a continued high rate of design changes, and immature 

manufacturing processes.

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

Progress Still Lags, GAO-11-325 (Washington, D.C.: Apr. 7, 2011).

 
 

Page 2 GAO-12-525T 

This testimony is largely based on preliminary results from our latest 

review. The National Defense Authorization Act for Fiscal Year 20103

requires GAO to review the JSF program annually for 6 years. We plan to 

issue our detailed report in April to incorporate new baseline cost and 

schedule data. My testimony will address (1) program cost and schedule 

changes and their implications on affordability; (2) performance testing 

results and technical risks; and (3) contract cost performance, 

concurrency impacts, and design and manufacturing maturity. To conduct 

this work, we reviewed program status reports, manufacturing data, 

contracts, test plans and performance, and internal DOD analyses. We 

evaluated restructuring actions and impacts, tracked cost and schedule 

changes, and identified factors driving the changes. We discussed 

program results to date and future plans with officials from the Office of 

the Secretary of Defense (OSD), JSF program office, military services, 

other defense offices, and contractors. We toured aircraft and engine 

manufacturing plants, obtained production and supply performance 

indicators, and discussed improvements underway with contractors. We 

discussed the information used to prepare this testimony with DOD 

officials and included their comments as appropriate. We conducted this 

performance audit from June 2011 to March 2012 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.

JSF restructuring continued throughout 2011 and into 2012 with 

additional costs and extended schedules incurred for key activities and 

decisions. The Department’s actions have helped reduce near term risks 

by lowering annual procurement quantities and allowing more time for 

flight testing. The Department is expected to soon approve a new 

acquisition program baseline that will likely make further changes in cost 

and schedule. This decision, critical for program management and 

oversight, has been delayed several times and it has now been 2 years 

since the Department announced that the JSF program had breached the 

 

3 Pub. L. No. 111-84 § 244 (2009). 

Restructuring 

Reduces Near Term 

Risk, but Long Term 

Affordability Is 

Challenging 
 

Page 3 GAO-12-525T 

critical cost growth statutory thresholds4 and that a new baseline would 

be established. Table 1 tracks historical changes in cost, schedule, and 

quantities since the start of development (2001), a major redesign (2004), 

a new baseline following the program’s Nunn-McCurdy breach of the 

significant cost growth statutory threshold (2007), initial restructuring 

actions after the second Nunn-McCurdy breach (2010), and an interim 

DOD cost estimate (2011).

 

4 Commonly referred to as Nunn-McCurdy, 10 U.S.C. § 2433 establishes the requirements 

for DOD to submit unit cost reports on major defense acquisition programs or designated 

major subprograms. Two measures are tracked against the current and original baseline 

estimates for a program: procurement unit cost (total procurement unit funds divided by 

the quantity of systems procured) and program acquisition unit cost (total funds for 

development, procurement, and system-specific military construction divided by the 

quantity of systems procured). If a program’s procurement unit cost or acquisition unit cost 

increases by at least 25 percent over the current baseline estimate or at least 50 percent 

over the original baseline estimate, it constitutes a breach of the critical cost growth 

threshold. Programs are required to notify Congress if a Nunn-McCurdy breach is 

experienced. When a program experiences a Nunn-McCurdy breach of the critical cost 

growth threshold, DOD is required to take a number of steps, including reassessing the 

program and submitting a certification to Congress in order to continue the program, in

accordance with 10 U.S.C. § 2433a.
 

Page 4 GAO-12-525T 

Table 1: JSF Program Cost and Quantity Estimates over Time 

October 2001 (system 

development start)

December 2003 

(2004 replan) 

March 2007 

(approved baseline)

June 2010

(Nunn-McCurdy)

June 2011 (interim 

DOD estimate)

Expected quantities

Development 

quantities 14 14 15 14 14

Procurement 

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

Total quantities 2,866 2,457 2,458 2,457 2,457

Cost estimates (then-year dollars in billions)

Development $34.4 $44.8 $44.8 $51.8 $56.6

Procurement 196.6 199.8 231.7 325.1 335.6

Military construction 2.0 0.2 2.0 5.6 4.9

Total program 

acquisition $233.0 $244.8 $278.5 $382.5 $397.1

Unit cost estimates (then-year dollars in millions)

Program acquisition $81 $100 $113 $156 $162

Average procurement 69 82 95 133 137

Estimated delivery and production dates

First production 

aircraft delivery 2008 2009 2010 2010 2011

Initial operational 

capability 2010-2012 2012-2013 2012-2015 TBD TBD

Full-rate production 2012 2013 2013 2016 2018 

Source: GAO analysis of DOD data.

The interim total program cost estimate increased about $15 billion since 

the June 2010 estimate included in the Nunn-McCurdy certification, about 

$5 billion for development and $10 billion for procurement. Compared to 

the current approved baseline set in 2007, total costs have increased 

about $119 billion, unit procurement costs have risen more than 40 

percent, and the start of full-rate production has been delayed 5 years. 

The department anticipates releasing its new cost and schedule 

estimates within the next few weeks. Department officials have indicated 

that the new figures will not be significantly different from the June 2011 

interim estimate. Initial operational capability dates for the Air Force, Navy 

and Marine Corps—the critical dates when the warfighter expects the 

capability promised by the acquisition program to be available—have 

been delayed over time and are now unsettled. Until greater clarity is 

provided on the program’s path forward, the military services are likely to 

wait to commit to new initial operational capability dates.
 

Page 5 GAO-12-525T 

Concerned about concurrency risks, in February 2012, DOD reduced 

planned procurement quantities through fiscal year 2017 by 179 aircraft. 

This marked the third time in 3 years that near-term quantities were cut; 

combined with other changes since 2008, total JSF procurement quantity 

has been reduced by 410 aircraft through fiscal year 2017. Since the 

department still plans to eventually acquire the full complement of U.S. 

aircraft—2,443 procurement jets—the procurement costs, fielding 

schedules, and support requirements for the deferred aircraft will be 

incurred in future years beyond 2017. Figure 1 shows how planned 

quantities in the near-term have steadily declined over time. With the 

latest reduction, the program now plans to procure a total of 365 aircraft 

through 2017, about one-fourth of the 1,591 aircraft expected in the 2002 

plan.

Figure 1: Changes in Procurement Plans over Time

Slowing down procurement plans reduces concurrency risks to a degree, 

but overall program affordability—both in terms of the investment costs to 

acquire the JSF and the continuing costs to operate and maintain it over 
 

Page 6 GAO-12-525T 

the life-cycle—remains a major risk. The long-stated intent that the JSF 

program would deliver an affordable, highly common fifth generation 

aircraft that could be acquired in large numbers could be in question. As 

the JSF program moves forward, unprecedented levels of funding will be 

required during a period of more constrained defense funding 

expectations overall. As shown in figure 2, the JSF annual funding 

requirements average more than $13 billion through 2035, and approach 

$16 billion annually for an extended period. The Air Force alone needs to 

budget from $8 to $11 billion per year from fiscal year 2016 through 2035 

for procurement.5

 

5 This is based on information contained in the December 2010 Selected Acquisition 

Report. Updated funding information for the entire JSF acquisition life-cycle was not 

available at the time of this testimony. The new baseline information is expected to add to 

JSF total costs through completion and change the distribution of annual budget 

requirements, but still show very large budget demands over a long period of time. 

At the same time, the Air Force is committed to other 

big-dollar projects such as the KC-46 tanker and a new bomber program.
 

Page 7 GAO-12-525T 

Figure 2: JSF Budgeted Development and Procurement Funding Requirements

Much of the instability in the JSF program has been and continues to be 

the result of highly concurrent development, testing, and production 

activities. During 2011, overall performance was mixed as the program 

achieved 6 of 11 primary objectives for the year. Developmental flight 

testing has recently gained momentum, but has a long road ahead with 

testing of the most complex software and advanced capabilities still in the 

future. JSF software development is one of the largest and most complex 

projects in DOD history, providing essential capability, but software has 

grown in size and complexity, and is taking longer to complete than 

expected. Developing, testing, and integrating software, mission systems, 

and logistics systems are critical for demonstrating the operational 

effectiveness and suitability of a fully integrated, capable aircraft and pose 

significant technical risks moving forward.

Mixed Performance in 

2011 Affected by 

Concurrency and 

Technical Risks
 

Page 8 GAO-12-525T 

The JSF program achieved 6 of 11 primary objectives it established for 

2011. Five of the objectives were specific test and training actions tied to 

contractual expectations and award fees, according to program officials. 

The other 6 objectives were associated with cost, schedule, contract 

negotiations, and sustainment. The program successfully met 2 important 

test objectives: the Marine Corps’ short takeoff and vertical landing 

(STOVL) variant accomplished sea trials and the Navy’s carrier variant 

(CV) completed static structural testing. Two other test objectives were 

not met: the carrier variant did not demonstrate shipboard suitability 

because of problems with the tail hook, which requires redesign, and 

software was not released to flight test on time. The program also 

successfully completed objectives related to sustainment design reviews, 

schedule data, manufacturing processes, and cost control, but did not 

meet a training deadline or complete contract negotiations.

Development flight testing sustained momentum begun in 2010 and met 

or exceeded most objectives in its modified test plan for 2011. The 

program accomplished 972 test flights in 2011, more than double the 

flights in 2010. Flight test points6

 

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

verify aircraft design and performance. 

accomplished exceeded the plan, 

overall as shown in figure 3. The flight test points accomplished on the Air 

Force’s conventional takeoff and landing (CTOL) variant were less than 

planned, due to operating limitations and aircraft reliability.

Program Performance 

against 2011 Objectives 

and Test Plans Was Mixed
 

Page 9 GAO-12-525T 

Figure 3: 2011 JSF Flight Test Points Progress

Even with the progress made in 2011, most development flight testing, 

including the most challenging, still lies ahead. Through 2011, the flight 

test program had completed 21 percent of the nearly 60,000 planned 

flight test points estimated for the entire program.7

 

7 According to program officials, completion of a test point means that the test point has 

been flown and that flight engineers ruled that the point has met the need. Further 

analysis may be necessary for the test point to be closed out.

Program officials 

reported that flight tests to date have largely demonstrated air worthiness, 

flying qualities, speed, altitude, and maneuvering performance 

requirements. According to JSF test officials, the more complex testing 

such as low altitude flight operations, weapons and mission systems 

integration, and high angle of attack has yet to be done for any variant 

and may result in new discoveries. Initial development flight tests of a fully 
 

Page 10 GAO-12-525T 

integrated, capable JSF aircraft to demonstrate full mission systems 

capabilities, weapons delivery, and autonomic logistics is now expected in 

2015 at the earliest. This will be critical for verifying that the JSF aircraft 

will work as intended and for demonstrating that the design is not likely to 

need costly changes. Like other major weapon system acquisitions, the 

JSF will be susceptible to discovering costly problems later in 

development when the more complex software and advanced capabilities 

are integrated and flight tested. With most development flight testing still 

to go, the program can expect more changes to aircraft design and 

continued alterations of manufacturing processes.

The STOVL variant performed better than expected in flight tests during 

2011. It increased flight test rates and STOVL-specific mode testing, 

surpassing planned test point progress for the year. Following reliability 

problems and performance issues, the Secretary of Defense in January 

2011 had placed the STOVL on “probation” for two years, citing technical 

issues unique to the variant that would add to the aircraft’s cost and 

weight. The probation limited the U.S. STOVL procurement to three 

aircraft in fiscal year 2011 and six aircraft in fiscal year 2012 and 

decoupled STOVL testing from CV and CTOL testing so as not to delay 

those variants. While no specific exit criteria was defined, the two year 

probation was expected to provide enough time to address STOVLspecific technical issues, engineer solutions, and assess their impact.

In January 2012, the Secretary of Defense lifted the STOVL probation 

after one year, citing improved performance and completion of the initial 

sea trials as a basis for the decision. The Department concluded that 

STOVL development, test, and product maturity is now comparable to the 

other two variants. While several technical issues have been addressed 

and some potential solutions engineered, assessing whether the 

deficiencies are resolved is ongoing and, in some cases, will not be 

known for years. According to the program office, two of the five specific 

problems cited are considered to be fixed while the other three have 

temporary fixes in place. The Director, Operational Test and Evaluation

reported that significant work remains to verify and incorporate 

modifications to correct known STOVL deficiencies and prepare the 

system for operational use. Until the proposed technical solutions have 

been fully tested and demonstrated, it cannot be determined if the 

technical problems have been resolved.

STOVL Issues and Its Probation 

Period
 

Page 11 GAO-12-525T 

Software providing essential JSF capability has grown in size and 

complexity, and is taking longer to complete than expected. Late releases 

of software have delayed testing and training, and added costs. Software 

defects, low productivity, and concurrent development of successive 

blocks have created inefficiencies, taking longer to fix defects and 

delaying the demonstration of critical capabilities. The program has 

modified the software development and integration schedule several 

times, in each instance lengthening the time needed to complete work. In 

attempting to maintain schedule, the program has deferred some 

capabilities to later blocks. Deferring tasks to later phases of development 

adds more pressure and costs to future efforts and likely increases the 

probability of defects being realized later in the program, when the more 

complex capabilities in these later blocks are already expected to be a 

substantial technical challenge.

The lines of code necessary for the JSF’s capabilities have now grown to 

over 24 million—9.5 million on board the aircraft. By comparison, JSF 

has about 3 times more on-board software lines of code than the F-22A 

Raptor and 6 times more than the F/A-18 E/F Super Hornet. This has 

added work and increased the overall complexity of the effort. The 

software on-board the aircraft and needed for operations has grown 37 

percent since the critical design review in 2005. While software growth

appears to be moderating, contractor officials report that almost half of 

the on-board software has yet to complete integration and test—typically 

the most challenging phase of software development. JSF software 

growth is not much different than other recent defense acquisitions which 

have experienced from 30 to 100 percent growth in software code over 

time. However, the sheer number of lines of code for the JSF makes the 

growth a notable cost and schedule challenge.

JSF’s mission systems8

 

8 Mission systems provide combat effectiveness through next generation sensors with 

fused information from on-board and off-board systems (i.e., Electronic Warfare, 

Communication Navigation Identification, Electro-Optical Target System, Electro-Optical 

Distributed Aperture System, Radar, and Data Links). 

and logistics systems are critical to realizing the 

operational and support capabilities expected by the warfighter, but the 

hardware and software for these systems are immature and unproven at 

this time. Only 4 percent of mission systems requirements have been 

verified and significant learning and development remains before the 

program can demonstrate mature software and hardware. The program 

Software and Mission 

Systems Represent 

Significant Risks
 

Page 12 GAO-12-525T 

has experienced significant technical challenges developing and 

integrating mission and logistics systems software and hardware, 

including problems with the radar, integrated processor, communication 

and navigation equipment, and electronic warfare capabilities.

• Problems with the helmet mounted display may pose the greatest risk. 

The helmet is integral to fusing and displaying sensor and weapons 

employment data, providing situational awareness, and reducing pilot 

workload. Helmet shortfalls–including night vision capability, display 

jitter (varying image), and latency (or delay) in transmitting data–could 

limit capability or change operational concepts. DOD is pursuing a 

dual path by funding a less-capable alternate helmet as a back-up; 

this development effort will cost more than $80 million. The selected 

helmet will not be integrated with the baseline aircraft until 2014 or 

later, increasing the risks of a major system redesign, retrofits of 

already built aircraft, or changes in concepts of operation.

• The Autonomic Logistics Information System (ALIS) is a ground 

system essential to managing and streamlining logistics and 

maintenance functions and for controlling life-cycle operating and 

support costs. ALIS is also not mature and may require some design 

changes to address known deficiencies. ALIS is in limited operations 

at test and training sites and officials are evaluating proposed 

solutions. While additional development time and resources may 

resolve some deficiencies, several requirements are not going to be 

met given current schedules, according to the JSF test team report.

Initial dedicated operational testing of a fully integrated JSF is tentatively 

scheduled to begin in 2017. Operational testing is important for evaluating 

the warfighting effectiveness and suitability of the JSF, and successfully 

completing initial operational testing is required to support the full rate 

production decision, now expected in 2019. Operational testers assessed 

progress of JSF development testing and its readiness for operational 

testing, and concluded that the program was not on track to meet 

operational effectiveness or suitability requirements. The test team’s 

October 2011 report identified deficiencies with the helmet mounted 

display, night vision capability, aircraft handling characteristics, and 

shortfalls in maneuvering performance. The report also cited an 

inadequate logistics system for deployments, excessive time to repair and 

restore low observable features, low reliability, and poor maintainability 

performance. It also stated that the JSF will require substantial 

improvements in order to achieve sortie generation rates and life cycle 

cost requirements.
 

Page 13 GAO-12-525T 

The program has not yet demonstrated a stable design and 

manufacturing processes capable of efficient production. Engineering 

changes are persisting at relatively high rates and additional changes will 

be needed as testing continues. Manufacturing processes and 

performance indicators show some progress, but performance on the first 

four low-rate initial production contracts has not been good. All four have 

experienced cost overruns and late aircraft deliveries. In addition, the 

government is also incurring substantial additional costs to retrofit 

produced aircraft to correct deficiencies discovered in testing. Until 

manufacturing processes are in control and engineering design changes 

resulting from information gained during developmental testing are 

reduced, there is risk of more cost growth. Actions the Department has 

taken to restructure the program have helped, but remaining concurrency 

between flight testing and production continues to put cost and schedule 

at risk. Even with the substantial reductions in near-term procurement 

quantities, DOD is still investing billions of dollars on hundreds of aircraft 

while flight testing has years to go.

As was the experience with building the development test aircraft, 

manufacturing the procurement aircraft is costing more and taking longer 

than planned. Cost overruns and delivery slips are two indicators that 

manufacturing processes, worker efficiency, quality control, and supplier 

performance are not yet sufficiently capable to handle the volume of work 

scheduled. Cost overruns on each of the first four annual procurement 

contracts are projected to total about $1 billion (see table 2).

Table 2: Procurement Contract Costs as of November 2011

Dollars in millions

Contract

Number

of aircraft

Contract

cost at award

Current contract

cost estimate

Cost

increase

Percent

increase

LRIP 1 2 $511.7 $561.5 $49.8 9.7

LRIP 2 12 $2,278.5 $2,607.7 $329.2 14.4

LRIP 3 17 $3,154.2 $3,569.5 $415.3 13.2

LRIP 4 32 $3,458.3 $3,703.3 $245.0 7.1

Total 63 $9,402.7 $10,442.0 $1,039.3 11.1

Source: GAO analysis of DOD data.

Note: LRIP is low-rate initial production. These are the first four annual procurements.

Contract Overruns 

and Concurrency 

Costs Indicate the 

Program Has Not Yet 

Stabilized Design and 

Manufacturing 

Cost Overruns and 

Delivery Delays Indicate 

Need to Further Mature 

the Manufacturing Process
 

Page 14 GAO-12-525T 

According to program documentation, through the cost sharing provisions 

in these contracts, the government’s share of the total overrun is about 

$672 million. On average, the government is paying an additional $11 

million for the 63 aircraft on under contract (58 are U.S. aircraft and 5 are 

for international partners). There is risk of additional cost overruns 

because all work is not completed. Defense officials reduced the buy 

quantity in the fifth annual procurement contract to help fund these cost 

overruns and additional retrofit costs to fix deficiencies discovered in 

testing.

While Lockheed Martin, the prime contractor, is demonstrating somewhat 

better throughput capacity and showing improved performance indicators, 

the lingering effects of critical parts shortages, out of station work9

Pratt & Whitney, the engine manufacturer, had delivered 42 production 

engines and 12 lift fans at the time of our review.

, and 

quality issues continue to be key cost and schedule drivers on the first 

four production lots. Design modifications to address deficiencies 

discovered in testing, incorporation of bulkhead and wing process 

improvements, and production of the first carrier variant further impacted 

manufacturing during 2011. Lockheed had expected to deliver 30 

procurement aircraft by the end of 2011 but delivered only nine 

procurement aircraft. Each was delivered more than 1 year late. The 

manufacturing effort still has thousands of aircraft planned for production 

over the next 25 years and the rate of production is expected to increase 

substantially starting in 2015. This will make it vital that the contractor 

achieve an efficient manufacturing process.

10

 

9 Out of station work occurs when manufacturing steps are not completed at its 

designated work station and must be finished elsewhere later in production. This is highly 

inefficient, increasing labor hours, causing delays, and sometimes quality problems. 

Like the aircraft 

system, the propulsion system is still under development working to 

complete testing and fix deficiencies while concurrently delivering engines 

under the initial procurement contracts. The program office’s estimated 

cost for the system development and demonstration of the engine has 

increased by 75 percent, from $4.8 billion to $8.4 billion, since the start of 

development. Engine deliveries continue to miss expected contract due 

dates but still met aircraft need dates because of longer slips in aircraft

10 Note: The prime engine contractor has production contracts with the government and 

the engines are provided as government furnished equipment to the JSF prime contractor. 
 

Page 15 GAO-12-525T 

production. Supplier performance problems and design changes are 

driving cost increases and late engines. Lift fan system components and 

processes are driving the major share of cost and schedule problems.

Going forward, Lockheed Martin’s ability to manage its expanding global 

supplier network is fundamental to meeting production rates and 

throughput expectations. DOD’s Independent Manufacturing Review 

Team earlier identified global supply chain management as the most 

critical challenge for meeting production expectations. The cooperative 

aspect of the supply chain provides both benefits and challenges. The 

international program structure is based on a complex set of relationships 

involving both government and industry from the United States and eight 

other countries. Overseas suppliers are playing a major and increasing 

role in JSF manufacturing and logistics. For example, center fuselage and 

wings will be manufactured by Turkish and Italian suppliers, respectively, 

as second sources. In addition to ongoing supplier challenges–parts 

shortages, failed parts, and late deliveries– incorporating international 

suppliers presents additional challenges. In addition, the program must 

deal with exchange rate fluctuations, disagreements over work shares, 

technology transfer concerns, different accounting methods, and 

transportation requirements that have already caused some delays. Also, 

suppliers have sometimes struggled to develop critical and complex parts 

while others have had problems with limited production capacity. 

Lockheed Martin has implemented a stricter supplier assessment 

program to help manage supplier performance.

We and several defense offices cautioned the Department years ago 

about the risks posed by the extremely high degree of concurrency, or 

overlap, among the JSF development, testing, and production activities.11

 

11 GAO, Joint Strike Fighter: DOD Plans to Enter Production before Testing Demonstrates 

Acceptable Performance, 

To date, the Government has incurred an estimated $373 million in retrofit 

costs on already-built aircraft to correct deficiencies discovered in 

development testing. This is in addition to the $672 million for the 

government’s share of contract cost overruns. The program office 

projects additional retrofit costs through lot 10, but at decreasing 

amounts. Questions about who will pay for additional retrofit costs under 

GAO-06-356 (Washington, D.C.: Mar. 15, 2006) and GAO, Joint 

Strike Fighter: Progress Made and Challenges Remain, GAO-07-360 (Washington, D.C.: 

Apr. 2, 2007).

Testing and Production 

Overlap Increases 

Engineering Changes and 

Concurrency Costs
 

Page 16 GAO-12-525T 

the planned fixed price contracts–the contractor or the government–and 

how much, have delayed final contract negotiations on the fifth lot.

Producing aircraft before testing sufficiently demonstrates the design is 

mature increases the likelihood of future design changes, which drives 

cost growth, schedule delays, and manufacturing inefficiencies. Design 

changes needed in one JSF variant could also impact the other two 

variants, reducing efficiencies necessary to lower production and 

operational costs with common parts and manufacturing processes for 

the three variants. While the JSF program’s engineering change traffic–

the monthly volume of changes made to engineering drawings–is 

declining, it is still higher than expected for a program entering its sixth 

year of production. The total number of engineering drawings continues to 

grow due to design changes, discoveries during ground and flight testing, 

and other revisions to drawings. Figure 4 tracks design changes over time 

and shows that changes are expected to persist at an elevated pace 

through 2019.

Figure 4: JSF Design Changes Over Time
 

Page 17 GAO-12-525T 

Defense officials have long acknowledged the substantial concurrency 

built into the JSF acquisition strategy, but until recently stated that risks 

were manageable. However, a recent high-level departmental review of 

JSF concurrency determined that the program is continuing to discover 

issues at a rate more typical of early design experience, questioning the 

assumed design maturity that supported the highly concurrent acquisition 

strategy.12

Restructuring actions by the Department since early 2010 have provided 

the JSF program with more achievable development and production 

goals, and has reduced, but not eliminated, risks of additional retrofit 

costs due to concurrency in current and future lots. The Department has 

progressively lowered the production ramp-up rate and cut near term 

procurement quantities; fewer aircraft procured while testing is still 

ongoing lowers the risk of having to modify already produced aircraft.

However, even with the most recent reductions in quantities, the program 

will still procure a large number of aircraft before system development is 

complete and flight testing confirms that the aircraft design and 

performance meets warfighter requirements. Table 3 shows the current 

plan that will procure 365 aircraft for $69 billion by the end of planned 

developmental flight tests.

DOD’s November 2011 report concluded that the “team 

assesses the current confidence in the design maturity of the F-35 to be 

lower than one would expect given the quantity of LRIP aircraft 

procurements planned and the potential cost of reworking these aircraft 

as new test discoveries are made. This lack of confidence, in conjunction 

with the concurrency driven consequences of the required fixes, supports 

serious reconsideration of procurement and production planning.” The 

review identified substantial risk of needed modifications to already 

produced aircraft as the flight testing enters into more strenuous test 

activities. Already, as a result of problems found in less strenuous basic 

airworthiness testing, critical design modifications are being fed back 

through the production line. For example, the program will be cutting in 

aircraft modifications to address bulkhead cracks discovered during 

airframe ground testing and STOVL auxiliary inlet door durability issues. 

More critical test discoveries are likely as the program moves into the 

more demanding phases of testing.

 

12 F-35 Joint Strike Fighter Concurrency Quick Look Review, Office of the Under

Secretary of Defense for Acquisition, Technology and Logistics, Nov. 29, 2011.
 

Page 18 GAO-12-525T 

Table 3: JSF Procurement Investments and Flight Test Progress

Source: GAO analysis of DOD budget and test plan data.

Note: Advanced procurement funding from 2006 was incorporated into fiscal year 2007 total funding, 

as 2007 was the first year of aircraft procurement. Flight testing data reflect the percentage of the 

total flight test completed at the time of the planned investment decision, which is the beginning of the 

fiscal year.

Over the last 2 years, the JSF program has undergone extensive 

restructuring that places it on a more achievable course, albeit a lengthier 

and more expensive one. At the same time, the near-constant churn

(change) in cost, schedule, and performance expectations has hampered 

oversight and insight into the program, in particular the ability to firmly 

assess progress and prospects for future success. Going forward, it will 

be imperative to bring stability to the program and provide a firm

understanding of near- and far-term financial requirements so that all 

parties—the Congress, Defense Department, and international partners—

can reasonably set priorities and make informed decisions amid a tough 

fiscal environment.

The JSF remains the critical centerpiece of DOD’s long-term tactical 

aircraft portfolio. System development of the aircraft and engine ongoing 

for over a decade, continue to experience significant challenges. The 

program’s strategic framework, laden with concurrency, has proved to be 

problematic and ultimately, a very costly approach. DOD over the past 

year has identified substantial cost overruns attributed to relatively poor 

execution in production and specific concurrency-related inefficiencies. 

There is risk of future cost growth from test discoveries driving changes to 

design and manufacturing processes. Effectively managing software and 

the global supply chain is critical to improving program outcomes, 

increasing manufacturing throughput, and enabling future expansion of 

JSF procurement.

fiscal years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Cumulative procurement 

(billions of dollars) $0.8 $3.5 $7.1 $14.3 $21.3 $27.6 $33.8 $40.1 $47.9 $57.8 $69.0

Cumulative aircraft 

procured 2 14 28 58 90 121 150 179 223 289 365

Percentage of total 

planned flight tests 

completed (est.) <1 <1 <1 1 5 17 32 52 72 91 100

Concluding 

Observations 
 

Page 19 GAO-12-525T 

Chairman Bartlett, Ranking Member Reyes, and members of the House 

Armed Services Committee, this completes my prepared statement. I 

would be pleased to respond to any questions you may have. We look 

forward to continuing to work with the Congress as we finalize our 

upcoming report with potential new recommendations that will address 

these issues in more detail.

For further information on this statement, please contact Michael Sullivan 

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

Congressional Relations and Public Affairs may be found on the last page 

of this statement. Individuals making key contributions to this statement 

are Bruce Fairbairn, Charlie Shivers, LeAnna Parkey, W. Kendal Roberts, 

Sean Merrill, and Matt Lea.

GAO Contacts and 

Acknowledgments 
Related GAO Products

Page 20 GAO-12-525T 

Joint Strike Fighter: Implications of Program Restructuring and Other 

Recent Developments on Key Aspects of DOD’s Prior Alternate Engine 

Analyses. GAO-11-903R. Washington, D.C.: September 14, 2011.

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.

Defense Management: DOD Needs to Monitor and Assess Corrective 

Actions Resulting from Its Corrosion Study of the F-35 Joint Strike 

Fighter. GAO-11-171R. Washington D.C.: December 16, 2010.

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

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

15, 2010.

Tactical Aircraft: DOD’s Ability to Meet Future Requirements is Uncertain, 

with Key Analyses Needed to Inform Upcoming Investment Decisions. 

GAO-10-789. Washington, D.C.: July 29, 2010.

Joint Strike Fighter: Significant Challenges and Decisions Ahead. 

GAO-10-478T. Washington, D.C.: March 24, 2010.

Joint Strike Fighter: Additional Costs and Delays Risk Not Meeting 

Warfighter Requirements on Time. GAO-10-382. Washington, D.C.: 

March 19, 2010.

Joint Strike Fighter: Significant Challenges Remain as DOD Restructures 

Program. GAO-10-520T. Washington, D.C.: March 11, 2010.

Joint Strike Fighter: Strong Risk Management Essential as Program 

Enters Most Challenging Phase. GAO-09-711T. Washington, D.C.: 

May 20, 2009.

Related GAO Products
Related GAO Products

Page 21 GAO-12-525T 

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: Impact of Recent Decisions on Program Risks. 

GAO-08-569T. Washington, D.C.: March 11, 2008.

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

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

Tactical Aircraft: DOD Needs a Joint and Integrated Investment Strategy. 

GAO-07-415. Washington, D.C.: April 2, 2007.

Defense Acquisitions: Analysis of Costs for the Joint Strike Fighter Engine 

Program. GAO-07-656T. Washington, D.C.: March 22, 2007.

Joint Strike Fighter: Progress Made and Challenges Remain. 

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

Tactical Aircraft: DOD’s Cancellation of the Joint Strike Fighter Alternate 

Engine Program Was Not Based on a Comprehensive Analysis. 

GAO-06-717R. Washington, D.C.: May 22, 2006.

Tactical Aircraft: Recapitalization Goals Are Not Supported by 

Knowledge-Based F-22A and JSF Business Cases. GAO-06-487T. 

Washington, D.C.: March 16, 2006.

Joint Strike Fighter: DOD Plans to Enter Production before Testing 

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

March 15, 2006.

Joint Strike Fighter: Management of the Technology Transfer Process. 

GAO-06-364. Washington, D.C.: March 14, 2006.

Tactical Aircraft: F/A-22 and JSF Acquisition Plans and Implications for 

Tactical Aircraft Modernization. GAO-05-519T. Washington, D.C: April 6, 

2005.

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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