Tactical Aircraft:

Opportunity to Reduce Risks in the Joint Strike Fighter Program with Different Acquisition Strategy

GAO-05-271: Published: Mar 15, 2005. Publicly Released: Mar 15, 2005.

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Under the Ronald W. Reagan National Defense Authorization Act of 2005, GAO is required to to review the Joint Strike Fighter (JSF) program annually for the next 5 years. This is the first GAO report, and it (1) analyzes the JSF program's business case for delivering new capabilities to the warfighter and (2) determines whether the JSF program's acquisition strategy follows an evolutionary, knowledge-based approach. Also, the act requires GAO to certify whether we had access to sufficient information to make informed judgments on the matters contained in our report.

GAO found that the original business case for the JSF program has proven to be unexecutable. DOD now plans to buy 535 fewer aircraft than originally planned. Due to increases in total program costs and program acquisition unit costs, the DOD has reduced buying power and is now buying fewer JSF's at a higher investment than originally planned. The first delivery of initial operational capabilities to the warfighter have been delayed 2 years so far. The program's current acquisition strategy does not fully follow the intent of DOD's evolutionary, knowledge-based acquisition policy that is based on best practices. An evolutionary, knowledge-based strategy will be necessary to successfully execute a new business case in the future. Instead, the program plans to concurrently develop the JSF technologies, integrate and demonstrate the expected product design, and produce deliverable fighters, which is a risky approach. Finally, as a result of a lengthy program replanning effort that had been in process during most of 2004, GAO did not have access to the cost estimate expected to be contained in the JSF's Selected Acquisition Report, to be delivered by Congress in the spring of 2005. At the time of GAO's review, JSF program officials were still collecting the necessary information to develop and complete the estimate. Therefore, GAO's review was limited to the estimated program costs contained in the December 31, 2003, Selected Acquisition Report.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: Given that DOD has invested only about 10 percent of the estimated cost to develop and produce the JSF aircraft, and that significant investments are planned in the next few years that can lock the program into a higher-risk acquisition, the Secretary of Defense, to increase the likelihood of having a successful program outcome by delivering capabilities to the warfighter when needed and within available resources, should establish an executable program consistent with the best practices and DOD policy regarding evolutionary acquisitions. DOD officials should define an affordable first increment, with its own business case that clearly defines the warfighter's most immediate needs and accurately identifies the resources required to deliver on this needed capability. The business case should be established with a high degree of confidence based on known constraints about technology, engineering knowledge, time, and money. For those warfighter needs that cannot be accommodated within this first increment, the program should outline a strategy to meet these needs through subsequent increments, each dependent on having sufficient product knowledge to start system development and demonstration. Each increment should be managed as a distinct acquisition with its own business case for supporting the investment.

    Agency Affected: Department of Defense

    Status: Closed - Not Implemented

    Comments: DOD partially concurred, stating their current acquisition approach is incremental. However, GAO does not agree that the strategy as currently planned meets its specific recommendation, as the current strategy is to buy the full capability and not a true incremental approach.

    Recommendation: Given that DOD has invested only about 10 percent of the estimated cost to develop and produce the JSF aircraft, and that significant investments are planned in the next few years that can lock the program into a higher-risk acquisition, the Secretary of Defense, to increase the likelihood of having a successful program outcome by delivering capabilities to the warfighter when needed and within available resources, should develop and implement a knowledge-based acquisition approach, as called for by best practices and DOD's acquisition policy, an approach that ensures attainment and use of demonstrated product knowledge before making future investments for each product increment. Before increasing the investment in production resources (tooling, materials, and personnel) greater than investments already in place to support the manufacturing of development test aircraft, the Secretary should ensure knowledge consistent with best practices is captured. This should help minimize the number of low-rate initial production aircraft DOD procures on a cost reimbursement basis, reducing the potential financial risk to the government.

    Agency Affected: Department of Defense

    Status: Closed - Not Implemented

    Comments: DOD partially concurred with GAO's recommendation but did not take additional actions, as it believes the current strategy satisfies a knowledge-based approach. GAO disagrees and has further recommended in a budget fact sheet that fiscal year 2006 funds be reduced to ensure production knowledge is attained before further investing in production capability.

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