The F-35 program has grown so large that even significant cost overruns and errors can get lost its massive scale. The General Accountability Office wants Congress to break out the planned upgrade of its F135 engines to ensure greater accountability and oversight. Senior Airman Yosselin Campos
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Strategy & Policy: Is the F-35 Program Too Big to Manage? 

June 14, 2023

The F-35 enterprise is the biggest military program in history, managed by a sprawling Joint Program Office (JPO) and a life cycle program cost of some $1.7 trillion over 50 years. 

The Government Accountability Office (GAO) thinks the time has come to break this behemoth into more manageable chunks. In a new report, GAO urges Congress and the Pentagon to separate the fighter aircraft from its engine upgrade as a first step, potentially making it easier to track and measure performance of these two distinct elements in terms of cost and schedule. 

GAO’s May report, “F-35 Joint Strike Fighter: More Actions Needed to Explain Cost Growth and Support Engine Modernization Decision,” said the F-35 is so vast that even big problems seem relatively small against the overall cost and scale. As a result, many concerns don’t get the high-level attention they deserve.

F-35 costs have increased $13.4 billion since 2019, a sum equal to the cost of more than 160 jets; but against that $1.7 trillion life cycle cost, it’s a drop in the bucket: less than three-quarters of 1 percent. Spread across the program’s development, test, production, logistics, sustainment and upgrade efforts, it’s hard to get a handle on where cost increases are and how to manage them, GAO said.

“Without the program formally tracking the estimated cost of each capability to the actual cost of developing each and sharing that information,” GAO said, it’s hard to hold prime contractor Lockheed Martin accountable.

GAO has recommended breaking up the F-35 program before. It previously proposed splitting off the F-35’s Block 4 upgrade into a distinct program to better manage cost and schedule and raise red flags where warranted. The Pentagon declined, however, so now GAO is asking Congress to step in and insist.

“The program’s cost-reporting mechanisms do not fully explain the reasons for cost growth,” the GAO reported. “For example, DOD’s reports to Congress on Block 4 cost growth do not distinguish higher-than-expected costs for previously planned Block 4 capabilities from growth due to adding new capabilities. Consequently, Congress does not have a complete picture of escalating F-35 modernization costs.”

If Block 4 and the F135 engine upgrade were separate from the overall F-35 program, GAO said, each would be a Major Defense Acquisition Program in its own right. Each would also be subject to the Nunn-McCurdy acquisition law, which requires the Pentagon to notify Congress when cost increases rise by 15 percent—“significant”—or 25 percent—“critical”—or when total costs grow 50 percent beyond the originally predicted program cost. 

Unless the Secretary of Defense certifies the vital importance of such overages, programs experiencing that level of cost growth are subject to automatic termination.

The critical nature of the F-35 ensures no one is likely to press for cancellation. But because Block 4 and the engine upgrade are hidden within the overall program, GAO said it’s extremely hard to understand how well these two efforts are progressing.  

In a second report, also released in May, GAO takes on F-35’s sprawling, global footprint—now with 11 international users and six more nations waiting to take delivery. Focusing on the fighter’s spare parts enterprise, GAO said F-35’s worldwide network of depots, operating bases, and factories has lost track of about 1 million spare parts, worth some $85 million. Lockheed Martin manages the parts inventory, so the Pentagon doesn’t have its own parts tracking system, GAO noted, indicating that “the full quantity and value of those spare parts may be significantly higher.” 

In its defense, the F-35 Joint Program Office said 99 percent of parts are accounted for, and that only 1 percent are not, well better than its goal, which is 5 percent. The JPO said it’s working to improve.

Breaking Up Is Hard To Do

Previous F-35 Program Executive Officers have rejected the idea of spinning off the engine and Block 4 upgrades, saying to do so would only make it harder to coordinate and comprehensively manage the many moving parts of developing, producing, and sustaining the fighter—especially because these upgrades are so tightly integrated with all other aspects of the jet.

Members of Congress have also urged the Pentagon to break up the Joint Program Office and let the various services manage their own logistics trains, given the variants—the Air Force’s F-35A; the Marine Corps’ short-takeoff and vertical-landing F-35B; and the Navy’s carrier-capable F-35C. 

The services already have their own F-35 offices to integrate them with the rest of their fighter fleets. 

Undersecretary of Defense for Acquisition and Sustainment William LaPlante rejected that idea at a Potomac Officers Club conference last fall, however. Disbanding the JPO and turning over development of new F-35 capabilities to the individual services would be “pretty stupid,” he said.

Even though the F-35 was launched in 2001—and had already completed a five-year requirements, experimentation, and prototyping phase—the program is still, in fact, new, and “still in development,” LaPlante noted. The Block 4 upgrade is necessary to keep the F-35 ahead of current and future threats.

“You don’t break up a program office that’s doing development,” he said. “We need the JPO to finish development.” 

LaPlante said development will probably take another five years, and only then should DOD consider breaking up the JPO. 

The international character of the program has to be a prime consideration, LaPlante stated. The foreign partners are “part of the governance” of the F-35 and are not simply customers. They “view the JPO as an honest broker … trying to balance the equities between the partners, and maybe even our services in this country.” The partners trust the JPO and would strongly object to its being undercut, he said. 

LaPlante further asserted that the F-35, despite its ambitious goals and setbacks, has been “one of the most successful programs … in the history of DOD.” But, he agreed that services should eventually “own the sustainment . … That’s where I see that moving.”

An Ambitious Upgrade

Block 4 is a huge upgrade, comprising a new, more sensitive AN/APG-85 radar, new antennas, a new electronic warfare system, improved electro-optical targeting, upgraded communications and navigation, cockpit enhancements, new weapons, and unnamed, classified capabilities. 

Expected to cost $10.6 billion in 2018 and be completed by 2025, Block 4 costs have risen and the schedule has stretched. By 2020, it was to have cost $14.4 billion and be completed by 2028; a year later, $15.1 billion and completion by 2029. The latest projection, in September 2022, was $16.5 billion by 2030. 

GAO said it cannot clearly decipher how much of those cost increases are due to inflation, added capabilities, or even mismanagement. 

The Air Force has held back on buying more F-35s in recent years in order to ensure more aircraft will include Block 4 capabilities installed at the factory. 

The package is built on a computer upgrade that boosts processing power 25 fold. Called Tech Refresh 3, and currently in flight testing, it will enable the F-35 to capture, correlate, and share sensor data and engage in spectrum warfare.

The new engine is no less crucial. Among its requirements is generating more power for cooling the advanced processors. The Air Force would also like more thrust and dogfight performance from the engine.

Rather than an all-new powerplant from General Electric or Pratt & Whitney, developed under the Adaptive Engine Transition Program (AETP), the service instead settled on the F135 Engine Core Upgrade (ECU) put forward by Pratt & Whitney. Air Force Secretary Frank Kendall wanted the new engine, but ultimately opted for the less costly ECU, which should meet Block 4’s needs.

Along with the engine, will be a Power and Thermal Management System (PTMS) upgrade. The GAO said the Pentagon must “move fast and deliver additional cooling capacity to enable capabilities planned by 2029 and beyond.” But GAO criticized the JPO for not building the business case to support those decisions.

“Without this type of information on technical risk, technology maturity, and costs, the military services may risk warfighters receiving less capability than anticipated while taking more time and resources than the military services can afford,” GAO said. It suggested that work on the AETP engines continue in order to ensure future options. The Air Force is doing that through its Next-Generation Advanced Propulsion (NGAP) program, which is focused on its sixth-generation fighter.

The Pentagon and the services are “best served by allowing those maturation efforts to continue to drive down risk,” GAO said. The JPO should better define its requirements to avoid “repeating the mismatch in engine and thermal management capability versus future modernization needs; similar to what happened with Block 4.” DOD should set a new baseline for engine performance, GAO stating, without one, “it will be difficult for Congress to hold DOD accountable.” 

Pratt & Whitney’s director of F135 business, Jennifer Latka, said her company also wants the government to settle on a way forward for thermal management. The existing F135 engine can provide the needed power and cooling for Block 4, she said, but without the upgrades, will wear out more quickly, taxing the F-35 supply chain to keep enough engines in the pipeline. 

The GAO noted that as of early this year, the F-35 still has 821 open deficiencies, of which five are considered critical. These Category 1 deficiencies could “jeopardize safety, security or another requirement.” The remainder are Category 2 shortcomings that could “impede or constrain” mission success. 

Not all the Category 2 deficiencies will be resolved, according to the report. The JPO, “in consultation with warfighters and contractors,” has decided “they do not need resolution.”