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. 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. 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. 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.