Joint Strike Fighter: Restructuring Added Resources and Reduced Risk, but Concurrency Is Still a Major Concern
Published: 2012-03-20T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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 three-fourths, 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.
section_title: What GAO Recommends
paragraphs: 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.

section_title: Letter
paragraphs: 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. 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   The report also identified  test and deliver capabilities to the warfighter.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.
This testimony is largely based on preliminary results from our latest  review. The National Defense Authorization Act for Fiscal Year 2010  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.
subsections: section_title: Restructuring Reduces Near Term Risk, but Long Term Affordability Is Challenging
paragraphs: 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   and that a new baseline would  critical cost growth statutory thresholdsbe 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).
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.
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.
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  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. 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.
section_title: Mixed Performance in 2011 Affected by Concurrency and Technical Risks
paragraphs: 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.
subsections: section_title: Program Performance against 2011 Objectives and Test Plans Was Mixed
paragraphs: 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 points 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.
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. 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  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 STOVL- specific 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.
section_title: Software and Mission Systems Represent Significant Risks
paragraphs: 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 systemsoperational 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   and logistics systems are critical to realizing the  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.
section_title: Contract Overruns and Concurrency Costs Indicate the Program Has Not Yet Stabilized Design and Manufacturing
paragraphs: 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.
subsections: section_title: Cost Overruns and Delivery Delays Indicate Need to Further Mature the Manufacturing Process
paragraphs: 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).
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 work, 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.
Pratt & Whitney, the engine manufacturer, had delivered 42 production  engines and 12 lift fans at the time of our review. 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   Like the aircraft  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.
section_title: Testing and Production Overlap Increases Engineering Changes and Concurrency Costs
paragraphs: 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.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  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.
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. 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.
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.
section_title: Concluding Observations
paragraphs: 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.
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.
section_title: GAO Contacts and Acknowledgments
paragraphs: 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.
section_title: Related GAO Products
paragraphs: 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.
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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