F-35 Joint Strike Fighter: DOD Needs to Complete Developmental Testing Before Making Significant New Investments
Fast Facts
For years we've reported on the F-35 program's cost and schedule overruns, knowledge gaps, and performance issues. Although DOD has taken a number of steps to address these concerns, the department continues to struggle to keep the development costs for the baseline aircraft in check—raising questions about DOD's plan to make significant investments in developing new F-35 capabilities.
Our recommendation? Before committing dollars to future F-35 capabilities, DOD should complete development of the baseline aircraft.
Photo of four F-35s in flight.
Highlights
What GAO Found
Cascading F-35 testing delays could cost the Department of Defense (DOD) over a billion dollars more than currently budgeted to complete development of the F-35 baseline program. Because of problems with the mission systems software, known as Block 3F, program officials optimistically estimate that the program will need an additional 5 months to complete developmental testing. According to best practices, credible estimates are rooted in historical data. The program's projections are based on anticipated test point achievements and not historical data. GAO's analysis—based on historical F-35 flight test data—indicates that developmental testing could take an additional 12 months (see table below). These delays could affect the start of the F-35's initial operational test and evaluation, postpone the Navy's initial operational capability, and delay the program's full rate production decision, currently planned for April 2019.
Assumptions Used to Determine Delays in F-35 Completion of Developmental Testing
|
Assumptions |
F-35 program office |
GAO |
|
Monthly test point execution rate |
384 |
220 |
|
Test point additions |
42 percent |
63 percent |
|
Test point deletions |
13 percent |
10.8 percent |
|
Schedule growth estimates |
|
|
|
Developmental test completes |
October 2017 |
May 2018 |
|
Month slip |
5 months |
12 months |
Source: GAO analysis and presentation of Department of Defense data. | GAO-17-351
Program officials estimate that a delay of 5 months will contribute to a total increase of $532 million to complete development. The longer delay estimated by GAO will likely contribute to an increase of more than $1.7 billion, approximately $1.3 billion of which will be needed in fiscal year 2018.
Meanwhile, program officials project the program will need over $1.2 billion in fiscal year 2018 to start two efforts. First, DOD expects it will need over $600 million for follow-on modernization (known as Block 4). F-35 program officials plan to release a request for Block 4 development proposals nearly 1 year before GAO estimates that Block 3F—the last block of software for the F-35 baseline program—developmental testing will be completed. DOD policy and GAO best practices state that requirements should be approved and a sound business case formed before requesting development proposals from contractors. Until Block 3F testing is complete, DOD will not have the knowledge it needs to present a sound business case for Block 4. Second, the program may ask Congress for more than $650 million in fiscal year 2018 to procure economic order quantities—bulk quantities. However, as of January 2017 the details of this plan were unclear because DOD's 2018 budget was not final and negotiations with the contractors were ongoing. According to internal controls, agencies should communicate with Congress, otherwise it may not have the information it needs to make a fully informed budget decision for fiscal year 2018. Completing Block 3F development is essential for a sound business case and warrants funding priority over Block 4 and economic order quantities at this time.
Why GAO Did This Study
The F-35 Joint Strike Fighter is DOD's most expensive and ambitious acquisition program. Acquisition costs alone are estimated at nearly $400 billion, and beginning in 2022, DOD expects to spend more than $14 billion a year on average for a decade.
The National Defense Authorization Act for Fiscal Year 2015 included a provision for GAO to review the F-35 acquisition program annually until the program reaches full-rate production. This, GAO's second report in response to that mandate, assesses, among other objectives, (1) progress of remaining program development and testing and (2) proposed future plans for acquisition investments. To conduct this work, GAO reviewed and analyzed management reports and historical test data; discussed key aspects of F-35 development with program management and contractor officials; and compared acquisition plans to DOD policy and GAO acquisition best practices.
Recommendations
GAO recommends that DOD use historical data to reassess the cost of completing development of Block 3F, complete Block 3F testing before soliciting contractor proposals for Block 4 development, and identify for Congress the cost and benefits associated with procuring economic order quantities of parts. DOD did not concur with the first two recommendations and partially concurred with the third while outlining actions to address it. GAO continues to believe its recommendations are valid, as discussed in the report.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To ensure that DOD adequately prioritizes its resources to finish F-35 baseline development and delivers all of the promised warfighting capabilities and that Congress is fully informed when making fiscal year 2018 budget decisions, the Secretary of Defense should reassess the additional cost and time needed to complete developmental testing using historical program data. |
DOD did not concur with our recommendation to reassess the additional cost and time needed to complete developmental testing using historical program data. DOD stated that it would continue to assess the assumptions and decisions made, and communicate any necessary adjustments relative to both cost and time needed to complete developmental testing. DOD did not conduct an assessment because it believed that it had already adequately considered historical data in its assessment and concluded that developmental testing would complete in October 2017, but could extend into February 2018. Developmental testing was ultimately completed in April 2018.
|
| Department of Defense | To ensure that DOD adequately prioritizes its resources to finish F-35 baseline development and delivers all of the promised warfighting capabilities and that Congress is fully informed when making fiscal year 2018 budget decisions, the Secretary of Defense should delay the issuance of the Block 4 development request for proposals at least until developmental testing is complete and all associated capabilities have been verified to work as intended. |
DOD did not concur with our recommendation to delay the issuance of the Block 4 development request for proposals until developmental testing is complete. According to DOD, delaying the request for proposals could unnecessarily delay delivery of needed capabilities to the warfighters. Since our report, the F-35 program office has reassessed its approach to Block 4, and delayed its Block 4 contracting plans by one year. The decision to delay Block 4 allowed additional time to complete developmental testing of F-35 baseline capabilities.
|
| Department of Defense | To ensure that DOD adequately prioritizes its resources to finish F-35 baseline development and delivers all of the promised warfighting capabilities and that Congress is fully informed when making fiscal year 2018 budget decisions, the Secretary of Defense should finalize the details of DOD and contractor investments associated with an economic order quantities (EOQ) purchase in fiscal year 2018, and submit a report to Congress with the fiscal year 2018 budget request that clearly identifies the details, including costs and benefits of the finalized EOQ approach. |
DOD stated that it partially concurred with our recommendation to finalize the details of investments associated with an EOQ purchase in fiscal year 2018, and submit a report to Congress with the fiscal year 2018 budget request that clearly identifies those details. DOD stated that it had already finalized the details of DOD and contractor investments associated with an EOQ purchase and will brief Congress. Subsequent to our report and in line with our recommendation, Congress, through Section 141, of the National Defense Authorization Act for Fiscal Year 2018 (Public Law 115-91), directed DOD to provide details of the costs and benefits of the EOQ approach including a certification that the approach would yield significant cost savings. In May 2018, the Under Secretary of Defense, Acquisition and Sustainment issued a report to Congress providing details of the EOQ approach as required. Specifically, DOD determined and the Under Secretary of Defense, Acquisition and Sustainment certified that the EOQ approach would result in $300 million in U.S. savings.
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