F-35 JPO Begs to Differ with GAO

F-35A Lightning IIs from the 34th Fighter Squadron at Hill AFB, Utah, land at RAF Lakenheath, England, April 15, 2017. Air Force photo by TSgt. Matthew Plew.

The F-35 Joint Program Office disputes several of the conclusions in the Government Accountability Office’s second annual assessment of the project, released Monday.

The GAO said testing the F-35’s 3F software version could slip as much as a year, incurring extra costs of up to $1.7 billion as Navy operational service and full-rate production of all variants would be delayed. The GAO also recommended delaying the Block IV F-35 upgrade program until the 3F is thoroughly tested. The JPO said it didn’t concur with GAO’s prediction that 3F testing could be a year late, saying “so far, the testing remains on track to complete in February 2018,” and estimates of completion did indeed take into account “historical data,” which the GAO said the JPO didn’t do.

As 3F testing winds down, the Pentagon will “reassess” program progress and “any necessary adjustments relative to both cost and time needed to complete developmental testing.” The JPO is following an “event-based” approach to testing, and doesn’t expect delays that would affect the Navy’s “initial operational capability … in 2018” or “other US and international allies’ F-35 operational milestones.”

Moreover, “We do not agree with the GAO’s assessment that an additional billion dollars will be needed to complete” system design and development. “The remaining cost to complete the F-35’s $55 billion development program is estimated to be $2.3 billion—money that was already budgeted for the program.”

If there’s a delay, the JPO is under orders from Congress to reserve enough money to continue testing through May 2018, and if it goes beyond that, “the JPO will hold $100 million” of follow-on modernization funding from Fiscal 2018 to cover the bill. “Use of this internal funding will result in no impact” to any other Pentagon programs or service budgets, the JPO said.

The JPO also rejected GAO’s suggestion that Block IV work be postponed until after 3F testing is done. “Waiting until developmental testing is fully complete” to release the request for proposals “will introduce undue delay and negatively impact the warfighter’s ability to counter a wide spectrum of current and evolving … threats,” such as adversary air defense systems, “as well as current and advanced fighter threats.” The Block IV requirements were validated in March by the Joint Requirements Oversight Council and delay will “prolong critical US and Partner…capability gaps,” decrease lethality, and “decrease pilot survivability,” the JPO said. Block IV will be managed by the JPO “with full transparency to the enterprise for reporting on cost, schedule and performance.”

The JPO “partially” concurred with GAO’s recommendation to nail down how much the partners and the contractors will invest in the “economic order quantity [EOQ] purchase”—the so-called “block buy”—beginning in 2018 and continuing through Lot 14 in Fiscal 2020, and sending Congress this information.

The Pentagon has already collected these data, the JPO said, and plans to send a “legislative proposal” for the EOQ to Congress for authorizing the block buy, and that proposal will have all the details in it.

Across 440 aircraft, the block buy is estimated to save “approximately $2 billion compared to the Lot 11 annual procurement price,” the JPO said, adding that this estimate has been vetted by the JPO, “an industry analysis study, and an independent assessment conducted by the RAND Corporation.”

Lt. Gen. Christopher Bogdan, JPO director, said the GAO’s report, without context, “may lead the reader to misinterpret the statements” in it. He said there were “no surprises” in the GAO report, and that all the issues mentioned are “well known” to the entire F-35 team and partners.

“While nearing completion,” Bogdan said, “the F-35 is still in development and technical challenges are to be expected. The program has a proven record of solving technical issues and we’re confident we’ll continue to do so.”