07:29 GMT, March 12, 2010 The Joint Strike Fighter (JSF) is the U.S. Department of Defense’s (DOD) most costly and ambitious aircraft acquisition. DOD is seeking to simultaneously develop and field three aircraft variants for the Air Force, Navy, Marine Corps, and eight international partners. The JSF program is to provide critical replacement aircraft that will serve as the heart of future tactical air forces. It will require a long-term commitment to very large annual funding outlays. The current estimated investment is $323 billion to develop and procure 2,457 aircraft.

Through March of 2009, GAO has issued five annual reviews of the JSF program under congressional mandate.[1] We have consistently reported on the elevated risk of poor program outcomes from the substantial overlap of development, test, and production activities and our concerns about the Government investing in large numbers of production aircraft before variant designs are proven and performance verified in testing. In our March 2009 report,[2] we again noted development cost increases, additional delays in manufacturing and testing schedules, and the government’s increased financial risk from plans to increase procurement in advance of testing. DOD concurred with, but has not yet implemented, our two recommendations to report on plans for transitioning from cost-reimbursement to fixed-price contracts for aircraft procurement and to ensure that the prime contractor performs detailed schedule risk analyses to provide important insight into use of management reserve funds and manufacturing progress.

This testimony is based on our sixth annual review, which will be released later this month. GAO’s work for this report began under a request from the Chairman and Ranking Member of the House Armed Services Air and Land Subcommittee. Subsequently, we received a new mandate in the National Defense Authorization Act for Fiscal Year 2010 to annually review the JSF program through 2015.[3] We examined (1) program cost, schedule, and performance; (2) manufacturing plans and results; and (3) test plansand progress. To conduct this work, we tracked and compared current cost and schedule estimates with those of prior years, identified changes, and determined causes. We obtained program status reports, manufacturing data, and test planning documents. We conducted our own analyses of the information. We discussed results to date and future plans to complete JSF development and move further into procurement with DOD, JSF, and contractor officials. We conducted this performance audit from May 2009 to March 2010. Our work was performed in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

In brief, Mr. Chairman, our work has found that, although the department has recently directed a number of strong actions that should improve JSF program outcomes in the future, development costs have continued to increase and key events were missed. Although improving, manufacturing inefficiencies and parts problems persist, slowing delivery of test aircraft and, in turn, delaying development flight tests. DOD’s restructuring actions should help, but there is still substantial overlap of development, test, and production activities while DOD continues to push ahead and invest in large quantities of production aircraft far ahead of completing testing. In light of these circumstances, we are recommending in our forthcoming JSF report that DOD (1) make a new, comprehensive and independent assessment of the costs and schedule to complete the program, including military construction, JSF-related expenses in other budgets, and life cycle costs; and (2) reassess warfighter requirements and, if necessary, defer some capabilities to future increments. GAO will also suggest that Congress consider requiring that DOD establish a management tool for tying annual procurement requests to demonstrated progress in testing and manufacturing. The report is currently at DOD for comment which we expect to receive soon.

(The above is an excerpt of a statement of Michael Sullivan, Director Acquisition and Sourcing Management at the GAO. To read the full statement, please visit: http://www.gao.gov/new.items/d10520t.pdf.)


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[1] Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, Pub. L. No. 108-375, § 213 (2004).
[2] GAO, Joint Strike Fighter: Accelerating Procurement before Completing Development Increases the Government’s Financial Risk, GAO-09-303 (Washington, D.C.: Mar. 12, 2009).
[3] National Defense Authorization Act for Fiscal Year 2010, Pub. L. No. 111-84 § 244 (2009).