The F-35 Joint Strike Fighter program is a joint, multinational acquisition intended to develop and field an affordable, highly common family of next generation strike fighter aircraft for the United States Air Force, Navy, Marine Corps, and eight international partners. The F-35 is a single-seat, single-engine aircraft incorporating low-observable (stealth) technologies, defensive avionics, advanced sensor fusion, internal and external weapons, and advanced prognostic maintenance capability. There are three variants. The conventional takeoff and landing (CTOL) variant, designated the F-35A, will be an multi-role, stealthy strike aircraft replacement for the Air Force’s F-16 Falcon and the A-10 Thunderbolt II aircraft, and will complement the F-22A Raptor. The short takeoff and vertical landing (STOVL) variant, the F-35B, will be a multi-role stealthy strike fighter to replace the Marine Corps’ F/A-18C/D Hornet and AV-8B Harrier aircraft. The carrier-suitable variant (CV), the F-35C, will provide the Department of Navy a multi-role, stealthy strike aircraft to complement the F/A-18 E/F Super Hornet. Lockheed Martin is the aircraft contractor and Pratt & Whitney is the engine contractor. DOD began the Joint Strike Fighter program in October 2001 with a highly concurrent, aggressive acquisition strategy with substantial overlap between development, testing, and production. The program was rebaselined in 2004 following weight and performance problems and rebaselined again in 2007 because of additional cost growth and schedule slips. Following an extensive department-wide review, the Secretary of Defense in February 2010 announced a major restructuring of the program due to poor cost and schedule outcomes and continuing problems. DOD added time and money for development, provided additional resources for testing, and reduced the number of aircraft to be procured in the near-term. In March 2010, the department declared that the program exceeded critical cost growth thresholds established by statute—a condition known as a Nunn-McCurdy breach—and subsequently certified to the Congress in June 2010 that the F-35 program should continue. Due to the cost breach, the Under Secretary of Defense for Acquisition, Technology, and Logistics rescinded the program’s approval to enter system development and DOD began efforts to establish a new acquisition program baseline. The department continued restructuring actions during 2011 and 2012 that added more cost, extended schedules, and further reduced aircraft procurement quantities in the near-term. The quantity of F-35 aircraft to be procured in total was not changed, but restructured plans have deferred to future years the procurement of 410 aircraft originally planned to be procured through 2017 based on the 2007 revised baseline. Through the end of calendar year 2012, the contractor has delivered a total of 52 aircraft–14 test and 38 production aircraft. In March 2012, DOD established a new acquisition program baseline for the F-35 program that incorporated the numerous positive and more realistic restructuring actions taken since 2010. Officials also reauthorized continuation of system development, approved continuation of low rate initial procurement, divided the program for reporting purposes into aircraft and engine subprograms, and took other actions required due to the Nunn-McCurdy cost breach. The March 2012 baseline is the F-35’s fourth, including the original estimate at the start of development in October 2001. Table 1 shows changes in cost, quantity, and major schedules associated with each baseline and also a June 2010 interim estimate at the time of Nunn-McCurdy breach. The causes of cost growth and schedule delays from 2001 to 2012 are documented in past GAO reports (see appendix l and Related Products). The F-35 program made progress in 2012 on several fronts. The program met or substantially met most of its key management objectives established for the year. Also, development flight testing exceeded the planned number of flights by a good margin for 2012, but did not quite accomplish the planned number of test points.considerable progress in addressing significant technical risks needing resolution, such as the helmet mounted display. Furthermore, software management practices improved, but this area continued to require more time and effort than planned. While the F-35 program made progress in The program made 2012, the bulk of development testing and evaluation is ahead, is planned to continue into 2016, and is expected to identify additional deficiencies impacting aircraft design and performance. To date, slightly more than 11 percent of development contract performance specifications have been verified as met and the development flight test program has cumulatively accomplished just over one-third of the test points and test flights planned. The operational test community raised concerns about the F-35 readiness for training, development test plans and results, and the schedule and resources for starting initial operational testing in 2017. The F-35 program office annually establishes major management objectives it wants to achieve in the upcoming year. The program achieved 7 of the 10 primary objectives (70 percent) it established for 2012 and made substantial progress on one other. Table 2 summarizes the 2012 objectives and accomplishments. In addition to the 7 objectives met, the F-35 program substantially met one more–the block 3 critical design review was completed in late January 2013 following the preliminary design review in November 2012. The remaining two objectives that were not met: (1) the contractor delivered 30 production aircraft compared to the program goal of 40 and (2) its Earned Value Management System (EVMS) corrective action plan was not approved. EVMS compliance is a long-standing issue and concerns all Lockheed Martin aircraft produced for DOD, not just the F- 35. In 2007, the Defense Contract Management Agency, the agency responsible for auditing defense contractors’ systems, found Lockheed Martin’s process did not meet 19 of 32 required guidelines and, in October 2010, withdrew the determination of compliance. While acknowledging that Lockheed Martin has made improvements, DCMA in 2012 found the company still deficient on 13 guidelines. EVMS is an important, established tool for tracking costs, controlling schedule, identifying problems early, and providing accurate product status reports. DOD requires its use by major defense suppliers to facilitate good insight and oversight of the expenditure of government dollars. The F-35 development flight test program also substantially met 2012 expectations with some revisions to original plans. The program exceeded its planned number of flights by 18 percent, although it fell short of its plan in terms of test points flown by about 3 percent, suggesting that Test officials had to the flights flown were not as productive as expected.make several adjustments to plans during the year due to aircraft operating and performance limitations and late releases of software to test. As a result, none of the three variants completed all the 2012 baseline points as originally planned. However, the test team was able to add and complete some test points that had been planned for future years. In this manner, the program was actually able to accomplish more test points in total than planned. Figure 1 compares the total baseline flight test points accomplished in 2012 against the initial plan for each test vehicle. Results from flight testing in 2012 included the following: Aircraft dedicated to testing mission systems exceeded the number of planned flights and fell just short of accomplishing the total test points planned. Testing supported development of software providing training and initial warfighting capability as well as baseline signature testing. Overall progress in verifying and fielding enhanced capabilities was limited, largely because of late and incomplete software. The Navy’s F-35C carrier-suitable variant exceeded its number of planned flights and planned test points for 2012. Testing verified the basic flight envelope (demonstrating ranges of speed and altitude), flight with external weapons, and prepared the aircraft for simulated carrier landings. The program also accomplished shore-based tests of a redesigned arresting hook (the hook engages the landing wires on aircraft carriers). The Marine Corp’s F-35B short takeoff and vertical landing variant exceeded the number of flights and test points. It successfully completed the first weapons release, engine air start tests, fuel dump operations, expanded flight envelope with weapons loaded, and radar signature testing. It also tested re-designed air inlet doors in vertical lift operations. The Air Force’s F-35A conventional takeoff and landing variant accomplished high angle of attack testing, initial weapons separation, and engine air start. It also evaluated flying qualities with internal and external weapons, and expanded the envelope for airspeed and altitude. This variant did not accomplish as many flights as planned and fell short of planned test points by about 15 percent. Operating restrictions and deficiencies in the air refueling system were the main constraints. Flight, ground, and lab testing has identified significant technical and structural concerns that, if not addressed, would substantially degrade the F-35’s capabilities and mission effectiveness. The F-35 program made considerable progress in 2012 to address these major technical risks: The helmet mounted display (which provides flight data, targeting, and other sensor data to the pilot) is integral to the mission systems architecture, to reduce pilot workload, and to achieve the F-35’s concept of operations. The original helmet mounted display encountered significant technical deficiencies and did not meet warfighter requirements. The program is pursuing a dual path by developing a second, less capable helmet while working to fix the first helmet design. Both helmets are being evaluated and program and contractor officials told us that they have increased confidence that the helmet deficiencies will be fixed. DOD may make a decision as to which helmet to procure in 2013, but the selected helmet is not expected to be integrated into the baseline aircraft until 2015. The Autonomic Logistics Information System (ALIS) is an important tool to predict and diagnose maintenance and supply issues, automating logistics support processes and providing decision aids aimed at reducing life cycle sustainment costs and improving force readiness. ALIS is developed and fielded in increments. Limited capability ALIS systems are in use at training and testing locations.