Joint Strike Fighter: Accelerating Procurement before Completing Development Increases the Government's Financial Risk
Highlights
The Joint Strike Fighter (JSF) is the Department of Defense's (DOD) most complex and ambitious aircraft acquisition, seeking to simultaneously produce and field three different versions of the aircraft for the Air Force, Navy, Marine Corps, and eight international partners. The total investment required now exceeds $1 trillion--more than $300 billion to acquire 2,456 aircraft and $760 billion in life cycle operating and support costs, according to program estimates. The Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 requires GAO to review the JSF program annually for 5 years. This is the fifth and final report under the mandate in which GAO (1) determines the program's progress in meeting cost, schedule, and performance goals; (2) assesses manufacturing results and schedule risks; and (3) evaluates development test plans, progress, and risks. GAO's work included analyses of a wide range of program documents, cost data and interviews with defense and contractor officials.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To enhance congressional oversight, increase the likelihood of more successful program outcomes, and maintain confidence that the program is on track to meet planned cost, schedule, and performance goals, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology and Logistics to report to the congressional defense committees by October 1, 2009. This report should include, at minimum (1) an explanation of the cost and other risks associated with a cost-reimbursable contract as compared to a fixed-price contract for JSF's future low-rate production quantities, (2) the program's strategy for managing and mitigating risks associated with the use of cost contracts, and (3) plans for transitioning to fixed-price contracts for production to include time frames and criteria. |
GAO recommended in 2009 that the Secretary of Defense direct that the Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L) report to the congressional committees regarding the risks associated with cost reimbursable contracts for JSF's low rate production quantities, the program's plans for managing those risks, and plans for transitioning to fixed price contracts. In February 2010, AT&L issued an acquisition decision memorandum stating that future aircraft and engine production contracts should move to fixed-price incentive fee structures as soon as possible. In March 2010, AT&L further noted that it was discussing the issue with JSF prime contractors and professional staff members from all four defense committees reiterating that the Department planned to move to fixed price contracts as soon as possible and earlier than expected. Finally, as part of the Nunn McCurdy certification of the program in June 2010, the Under Secretary of Defense for Acquisition, Technology and Logistics informed the Congress that contracts for low rate production would be fixed price beginning in November 2010. We believe DOD's actions meet the intent of the recommendation.
|
| Department of Defense | To enhance congressional oversight, increase the likelihood of more successful program outcomes, and maintain confidence that the program is on track to meet planned cost, schedule, and performance goals, the Secretary of Defense should direct the JSF Program Office to ensure that the prime contractor performs periodic schedule risk analyses for the JSF program to provide better insight into management reserve, production efficiencies, and schedule completion to allow for corrections as early as possible. |
DOD concurred with this recommendation and implemented it in the summer of 2011. The Undersecretary of Defense for Acquisition Technology and Logistics specifically directed the JSF program office to conduct a comprehensive schedule risk assessment in an Acquisition Decision Memo dated June 2, 2010. The program completed a schedule risk assessment in 2011 as part of the overall process to establish its new acquisition program baseline (APB). The program will continue to do schedule risk assessments every 6 months.
|