Joint Strike Fighter: Progress Made and Challenges Remain
(15-MAR-07, GAO-07-360).
The Joint Strike Fighter (JSF) program--a multinational
acquisition program for the Air Force, Navy, Marine Corps, and
eight cooperative international partners--is the Department of
Defense's (DOD) most expensive aircraft acquisition program. DOD
currently estimates it will spend $623 billion to develop,
procure, and operate and support the JSF fleet. The JSF aircraft,
which includes a variant design for each of the services,
represents 90 percent of the remaining planned investment for
DOD's major tactical aircraft programs. In fiscal year 2004, the
JSF program was rebaselined to address technical challenges, cost
increases, and schedule overruns. This report--the third mandated
by Congress--describes the program's progress in meeting cost,
schedule, and performance goals since rebaselining and identifies
various challenges the program will likely face in meeting these
goals in the future.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-360
ACCNO: A66868
TITLE: Joint Strike Fighter: Progress Made and Challenges Remain
DATE: 03/15/2007
SUBJECT: Concurrency
Cost analysis
Defense cost control
Defense procurement
Developmental testing
Fighter aircraft
Military aircraft
Operational testing
Procurement planning
Program evaluation
Schedule slippages
Strategic planning
Cost overruns
Cost estimates
Program costs
Joint Strike Fighter program
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GAO-07-360
* [1]Results in Brief
* [2]Background
* [3]Program Cost Estimates Have Increased Significantly and Crit
* [4]Total Program Cost Estimates Have Increased
* [5]Delays in Key Program Events Have Compressed the Development
* [6]Design and Manufacturing of Development Aircraft Has Been a
* [7]The JSF Program Projects Key Performance Parameters Will Be
* [8]Challenges Remain in Executing the Balance of the JSF Progra
* [9]Challenges to Complete Flight Testing
* [10]Challenges Created by Continued Concurrent Development and P
* [11]Unprecedented Funding Requirements Could Challenge Program E
* [12]DOD Organizations Have Raised Concerns about Program Risks a
* [13]Conclusions
* [14]Recommendation for Executive Action
* [15]Agency Comments and our Evaluation
* [16]GAO's Mission
* [17]Obtaining Copies of GAO Reports and Testimony
* [18]Order by Mail or Phone
* [19]To Report Fraud, Waste, and Abuse in Federal Programs
* [20]Congressional Relations
* [21]Public Affairs
Report to Congressional Committees
United States Government Accountability Office
GAO
March 2007
JOINT STRIKE FIGHTER
Progress Made and Challenges Remain
GAO-07-360
Contents
Letter 1
Results in Brief 2
Background 4
Program Cost Estimates Have Increased Significantly and Critical
Milestones Have Been Delayed Since the JSF Was Rebaselined 6
Challenges Remain in Executing the Balance of the JSF Program 14
Conclusions 22
Recommendation for Executive Action 23
Agency Comments and our Evaluation 23
Appendix I Scope and Methodology 26
Appendix II Comments from the Department of Defense 28
Tables
Table 1: Changes in JSF Program Purchase Quantities and Costs 5
Table 2: JSF Cost Estimate Changes since the Rebaseline 7
Table 3: JSF Program Estimates for Achieving Key Performance Parameters 14
Table 4: Comparison between F-22A and Joint Strike Fighter Development
Programs 18
Figures
Figure 1: First JSF Development Aircraft in Flight 9
Figure 2: Changes in JSF Scheduled Events since the Replan 10
Figure 3: Manufacturing Efficiency of First Test Aircraft as of November
2006 11
Figure 4: Major Areas of JSF Flight Testing to Be Completed 15
Figure 5: Notional Illustration Showing the Different Paths That JSF
Development Can Take 17
Figure 6: JSF Program's Annual Funding Requirements 20
Abbreviations
CAIG Cost Analysis and Improvement Group
DCMA Defense Contract Management Agency
DOD Department of Defense
JSF Joint Strike Fighter
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United States Government Accountability Office
Washington, DC 20548
March 15, 2007
Congressional Committees
The Joint Strike Fighter (JSF) is the Department of Defense's (DOD) most
expensive aircraft acquisition program. The JSF aircraft design includes
three variants to be used by the Air Force, Navy, Marine Corps, and eight
cooperative international partners. JSF is a central part of DOD's overall
recapitalization strategy for its tactical aircraft fleet, representing 90
percent of the remaining planned investment for its major tactical
aircraft programs. DOD currently estimates it will spend $276 billion to
develop and procure about 2,443 aircraft and related support equipment by
2027 and an additional $347 billion to operate and support these aircraft
once they have been fielded.
The Ronald W. Reagan National Defense Authorization Act for Fiscal Year
2005 (P.L. 108-375) requires GAO to review the JSF program annually for 5
years.1 In the past 2 years, we issued reports identifying opportunities
for the program to reduce risks and improve the chance for more successful
outcomes. We recommended DOD pursue an acquisition strategy consistent
with best practices and DOD policy preferences regarding evolutionary and
knowledge-based acquisitions including deferring production investments
until the aircraft have been proven to work in flight testing.2 DOD has
taken no direct actions in response to these recommendations and has
stated that its current acquisition approach fulfills the intent of DOD
policy and further limits on production are unnecessary. In 2006 Congress
reduced the number of production aircraft to be funded in fiscal year 2007
and the number of aircraft to receive advanced procurement funds for
aircraft to be procured in fiscal year 2008.
1 Section 213 of the Act requires us to assess the extent to which the
system development and demonstration program is currently meeting cost,
schedule, and performance goals; the likelihood that the program will be
completed within estimated costs; and the program's current acquisition
plan leading to production.
2 GAO, Joint Strike Fighter: DOD Plans to Enter Production before Testing
Demonstrates Acceptable Performance, [22]GAO-06-356 (Washington D.C.: Mar.
15, 2006) and Tactical Aircraft: Opportunity to Reduce Risks in the Joint
Strike Fighter Program with Different Acquisition Strategy, [23]GAO-05-271
(Washington D.C.: Mar. 15, 2005).
This report assesses the progress of the JSF program since it was
rebaselined in fiscal year 2004 to add resources needed to address
technical problems. Specifically, we (1) determined the JSF program's
progress in meeting cost, schedule, and performance goals; and (2)
identified the challenges and risk the program will face in meeting these
goals in the future. We performed our work from June of 2006 to March of
2007 in accordance with generally accepted government auditing standards.
For more information on our scope and methodology, see appendix I.
The Act also requires us to certify whether we had access to sufficient
information to make informed judgments on the matters contained in our
report. We were provided sufficient information to measure the program's
progress in meeting its goals based on cost data provided in April 2006 as
well as the challenges that remain for the program. At the time of our
review, DOD was still preparing its new cost estimate to be included in
the program's Selected Acquisition Report dated December 31, 2006,
expected to be delivered to the Congress by April 2007. Because the new
cost estimate for the JSF program will not be available until after this
report is issued we are unable to make informed judgments on those
estimated costs. It should be noted that after our 2006 report was issued
on March 15, 2006, DOD released its December 2005 Selected Acquisition
Report, which showed an increase of over $19 billion in estimated JSF
program costs.
Results in Brief
The JSF program has delivered and flown the first development aircraft and
has started manufacturing additional development aircraft for the test
program. JSF program costs have increased by $31.6 billion since the
program was rebaselined in fiscal year 2004. As a result, DOD will pay
more per aircraft than was expected when the program was rebaselined. The
program has also experienced delays in the start of the flight test
program but has not changed the dates for completing development reducing
the amount of time available for flight testing and development
activities. Late design drawings, changes in design and manufacturing
processes, and late subsystem deliveries caused delays that prevented
timely manufacturing and delivery of development aircraft. The program
currently projects that the JSF will meet all but one of its key
performance requirements--ability to fully interoperate with other
platforms. These performance projections are based largely on engineering
analysis, modeling, and laboratory testing and not on flight testing.
The degree of concurrency between development and production in the JSF
program's acquisition strategy still includes significant risks for cost
and schedule overruns or late delivery of promised capabilities to the
warfighter. For example, at the time of the low-rate initial production
decision, one aircraft will have flown, less than 1 percent of the test
program will have been completed, and none of the three variants will have
a production representative prototype built. It will not be until about
2012 that a fully capable, integrated JSF is scheduled to begin flight
testing. A 7-year flight test program that includes over 11,000 hours of
testing just began in December 2006. Therefore, almost all of critical
flight testing remains to confirm that the aircraft will indeed deliver
the required performance. Manufacturing and technical problems can delay
the completion of a flight test program, increase the number of flight
test hours needed to verify that the system will work as intended, and
affect when capabilities are delivered to the warfighter. The program also
faces uncertainties with the amount of funding that will be available to
support the program's plan. The program will demand unprecedented amounts
of annual funds over the next 2 decades--more than $12.6 billion a year on
average. Other DOD review and oversight organizations have expressed
similar concerns over the level of risk in the program that will challenge
the completion within estimated cost and schedule.
To improve chances of a successful outcome, we are recommending that the
Secretary of Defense limit annual production quantities to no more than 24
aircraft per year, the current manufacturing capacity, until each
variant's basic flying qualities have been demonstrated in flight testing
now scheduled in the 2010 time frame.
DOD non-concurred with our recommendation stating that the current JSF
acquisition strategy provides an effective balance of technical risk,
financial constraints, and operational needs of the services. However, we
believe DOD's actions to reduce aircraft quantities in the fiscal year
2008 President's Budget are in line with our recommendation to limit
production to current manufacturing capacity until each variant's flying
qualities have been demonstrated in flight testing. In the 2008 budget,
DOD reduced the number of production aircraft it plans to buy during the
flight test program by about 35 percent as compared to its previous plan
for the JSF. Under this new plan DOD does not substantially increase its
buy quantities of production aircraft until 2011. We continue to believe
that limiting production quantities until the design is demonstrated would
reduce the overlap in production and development while still allowing the
efficient transition from development to production. It would also make
cost and schedule more predictable and lessen the risk to DOD's production
investment.
Background
JSF is a joint, multinational acquisition program for the Air Force, Navy,
Marine Corps, and eight cooperative international partners. The program
began in November 1996 with a 5-year competition between Lockheed Martin
and Boeing to determine the most capable and affordable preliminary
aircraft design. Lockheed Martin won the competition, and the program
entered system development and demonstration in October 2001.
The program's objective is to develop and deploy a technically superior
and affordable fleet of aircraft that support the warfighter in performing
a wide range of missions in a variety of theaters. The single-seat,
single-engine aircraft is being designed to be self-sufficient or part of
a multisystem and multiservice operation, and to rapidly transition
between air-to-surface and air-to-air missions while still airborne. To
achieve its mission, JSF will incorporate low observable technologies,
defensive avionics, advanced onboard and offboard sensor fusion, internal
and external weapons, and advanced prognostic maintenance capability.
According to DOD, these technologies represent a quantum leap over legacy
tactical aircraft capabilities. At the same time, the JSF aircraft design
includes three variants: a conventional take-off and landing variant for
the Air Force; an aircraft carrier-suitable variant for the Navy; and a
short take-off and vertical landing variant for the Marine Corps and the
United Kingdom. JSF is intended to replace a substantial number of aging
fighter and attack aircraft in DOD's current inventory.
In 2003 the JSF program system integration efforts and a preliminary
design review revealed significant airframe weight problems that affected
the aircraft's ability to meet key performance requirements. Software
development and integration also posed a significant development
challenge. The program's inability to meet its ambitious goals resulted in
the Department's failing to deliver on the business case that justified
initial investment in JSF. As a result, purchase quantities have been
reduced, total program costs have increased, and delivery of the initial
aircraft has been delayed. These changes have effectively reduced DOD's
buying power for its investment as it will now be buying fewer aircraft
for a greater financial investment. It is too late for the program to meet
these initial promises. To its credit, in fiscal year 2004, DOD
rebaselined the program extending development by 18 months and adding
resources to address problems discovered during systems integration and
the preliminary design review. Program officials also delayed the critical
design reviews, first flights of development aircraft, and the low-rate
initial production decision to allow more time to mitigate design risk and
gather more knowledge before continuing to make major investments. Table 1
shows the evolution of cost and delivery estimates from the start of the
program up to the latest official program information as of December 2005.
Table 1: Changes in JSF Program Purchase Quantities and Costs
October December
November 2001(system 2005a(latest
1996(program development December 2003a available
start) start) (rebaseline) data)
Expected
Quantities
Development 10 14 14 15
quantities
Procurement 2,978 2,852 2,443 2,443
quantities
(U.S. only)
Total 2,988 2,866 2,457 2,458
Quantities
Cost Estimates (Then Year $ in
billions)
Development $24.8 $34.4 $44.8 $44.5
Procurement Not available 196.6 199.8 231.7
Other Not available 2.0 0.2 0.2
Total Program Not available $233.0 $244.8 $276.5b
Acquisition
Unit Cost Estimates (Then Year $ in millions)
Program Not available $81 $100 $112
acquisition
Average Not available 69 82 95
procurement
Estimated
Delivery Dates
First 2007 2008 2009 2009
operational
aircraft
delivery
Initial 2010 2010-2012 2012-2013 2012-2015c
operational
capability
Source: GAO analysis of DOD data.
aThe Selected Acquisition Reports are dated December 2003 and 2005 but are
not officially released until March or April of the following year.
bNumbers may not add due to rounding.
cRecent program and President's budget information indicates that initial
operational capability for the Navy's carrier variant has been rescheduled
from the second quarter of 2013 to the first quarter of 2015.
Program Cost Estimates Have Increased Significantly and Critical Milestones Have
Been Delayed Since the JSF Was Rebaselined
Since establishing a new program baseline in fiscal year 2004, JSF program
costs have risen and key events have been delayed. JSF program costs have
increased by $31.6 billion since the program's decision to rebaseline in
fiscal year 2004. This includes a $19.8 billion increase in costs since
our report last year in March 2006. The program has experienced delays in
several key events including delays in the start of the flight test
program, manufacturing and delivery of the first development aircraft, and
delays in the testing of critical missions systems. These delays reduce
the amount of time available for completing flight testing and development
activities. The program projects that it will meet its key performance
requirements except for one dealing with the warfighter's ability to fully
interoperate with other platforms. Projections are based largely on
engineering analysis, modeling, and laboratory testing, and a 7-year test
program to demonstrate performance just started in December 2006.
Total Program Cost Estimates Have Increased
JSF program cost estimates have increased by $31.6 billion since the
program's decision to rebaseline in fiscal year 2004. During this period,
estimates in some cost areas grew by $48 billion but were offset by $16.4
billion due to quantity changes and the proposed termination of an
alternate engine program. According to the program, the cost estimate is
still mostly based on cost estimating relationships--like cost per
pound--not actual costs and, therefore, is subject to change as the
program captures the actual costs to manufacture the aircraft. Also, the
official program estimate is based on the program's December 31, 2005,
Selected Acquisition Report delivered to Congress in April 2006. We could
not review the most recent estimated costs of the JSF program. This
information is being used by the Office of the Secretary of Defense in
preparing its fiscal year 2008 budget request as well as for the program's
Selected Acquisition Report dated December 31, 2006, expected to be
delivered to the Congress in early April 2007. Although the most recent
estimates were not available for this review, we expect that, unless
program content is changed, future cost estimates will be higher based on
the history of similar acquisition programs and the risks that remain in
the program. Table 2 shows the changes to the program's costs since the
rebaseline in fiscal year 2004.
Table 2: JSF Cost Estimate Changes since the Rebaseline
(Then-year dollars in Research, development, test
billions) and evaluation Procurement Total
December 2003 estimated $44.8 $199.8 $244.6a
costs
Cost growth 1.8 46.2 48.0
Cost reductions (2.1) (14.3) (16.4)
Elimination of alternate (2.1) (5.1) (7.2)
engine program
Benefits from including -- (9.2) (9.2)
partner quantities
December 2005 estimated $44.5 $231.7 $276.2a
costs
Dollar change $(0.3) $31.9 $31.6
Percent change (0.6) 16 13
Source: GAO analysis of DOD data.
aDoes not include estimated military construction costs.
Since our last report, the program estimated a $19.8 billion net increase
in its total program costs. The majority of the cost growth, over 95
percent, was for procurement. According to the program office, several
factors led to an increase in the procurement cost estimate. The most
significant increases include:
o $10.3 billion--result of design and manufacturing changes to
large bulkheads in the wing section of the aircraft, need for 6
times more aluminum and almost 4 times more titanium than
originally estimated. At the same time, titanium costs almost
doubled.
o $3.5 billion--result of reduced manufacturing efficiency because
of plans to build a certain number of wings at a new
subcontractor.
o $5.5 billion--result of changing the business relationship of
the prime and two major subcontractors.
o $4.4 billion--result of projected higher support costs.
o $14.7 billion--result of changing assumptions for estimating
labor rates and inflation.
The increases in procurement costs were offset by two main factors. First,
the cost estimate reflects production efficiency benefits of $9.2 billion
from producing 508 international partner aircraft that were not included
in previous estimates. Secondly, the program reduced procurement costs by
$5.1 billion as a result of the proposed elimination of the alternate
engine program. According to the program office, it expected savings from
manufacturing efficiencies by having one engine contractor producing a
larger quantity of engines. Program officials stated that they have had
difficulty quantifying cost savings that might accrue from competing
engine buys between contractors. For now Congress has reinstated the
alternate engine program and has required further analysis from DOD and
others on the costs of the program.3
The program also reported that development costs decreased by $1.2
billion. The reduction in development costs was due almost entirely to the
removal of the remaining estimated costs to complete the alternate
engine's development. Again, Congress has since reinstated funding for the
alternate engine program.
The net effect of the JSF program cost increases is that DOD will pay more
per aircraft than expected when the program was rebaselined. The average
procurement unit costs have increased from $82 million to almost $95
million and the program acquisition unit costs has increased from $100
million to over $112 million.
Delays in Key Program Events Have Compressed the Development Schedule
Since the JSF program was rebaselined, it has experienced delays in
several key development activities but without corresponding changes to
the end of development. Holding firm to these dates forces the program to
find ways to complete development activities in less time, especially if
problems are discovered in the remaining 6 years of development. The
program office is evaluating different ways to reduce the risk of this
compression by being more efficient in its flight test activities. The
first JSF flight was scheduled for August 2006 but did not occur until mid
December 2006--about 4 months later than expected. According to the
program office, the first flight was successful but was shortened because
of a problem with instrumentation on the aircraft. Although the first
aircraft will be able to demonstrate some performance--limited flying
qualities, propulsion, and vehicle subsystems--it is not a production
representative aircraft with fully functioning critical mission systems or
the design changes from the rebaselined program that reduced airframe
weight.
3 In section 211 of the John Warner National Defense Authorization Act for
Fiscal Year 2007 (P.L. 109-364), Congress required independent cost
analyses of the alternate engine program by March 15, 2007, from the DOD
Cost Analysis Improvement Group, a Federally Funded Research and
Development Center selected by DOD, as well as GAO.
Figure 1: First JSF Development Aircraft in Flight
The first flight of a production representative aircraft has been delayed
8 months to May 2008. This aircraft will be a short take-off and vertical
landing variant and will incorporate the design changes from the
rebaselined program. According to the latest program information, the
first fully integrated, capable JSF is scheduled to begin testing in the
early 2012 time frame, a delay of several months. The first flight of a
JSF with limited mission capability has been delayed 9 months. The
estimate for first flight of a production representative conventional
take-off variant has been delayed 11 months to January 2009 and the first
flight of a carrier variant has been delayed by as much as 4 months to May
2009.
The flying test bed, also critical to reducing risk in the flight test
program, has been delayed about 14 months to late 2007. This aircraft is a
modified Boeing 737 that will be equipped with the sensors and mission
system software and hardware. The test bed will allow the program to test
aircraft mission systems such as target tracking and detection, electronic
warfare, and communications. Figure 2 shows schedule delays and the
compression in the development schedule.
Figure 2: Changes in JSF Scheduled Events since the Replan
Design and Manufacturing of Development Aircraft Has Been a Major Source of
Delay
The program has completed manufacturing of its first development aircraft
and manufacturing data indicates that the program did not meet its planned
labor hour goals. Manufacturing data on subsequent development aircraft
that have begun manufacturing indicate these aircraft are not currently
meeting their planned manufacturing efficiencies either. According to
contractor data as of November 2006, the first development aircraft had
required 35 percent or 65,113 more labor hours than expected. The program
encountered most of the inefficiencies in the mate and delivery phase and
with the fabrication of the center fuselage and wing. Figure 3 shows the
planned hours versus the actual hours needed for completing the first test
aircraft.
Figure 3: Manufacturing Efficiency of First Test Aircraft as of November
2006
When the first aircraft began manufacturing, the program had released
about 20 percent of the engineering drawings needed for building the
aircraft. This led to a backlog of drawings, negatively impacting the
availability of parts needed for efficient manufacturing operations. To
compensate for delays and parts shortages for production, components of
the aircraft were manufactured out of sequence and at different
manufacturing workstations than planned. For example, the wing section was
mated to the center fuselage before work on the wing was completed. The
wing was only 46 percent complete and still required more than 18,500
hours of work. Because this remaining work was completed at a different
workstation than was planned, contractor officials stated that major
tooling--such as a stand that supports the wing structure upright to allow
workers to install wiring and other parts--was not available for use. As a
result, workers were required to lie on the ground or bend under or over
the wing structure to complete the wing assembly, significantly increasing
the number of hours needed to complete this effort. According to Defense
Contract Management Agency, out-of-station work performed on the wing
required an additional 46 percent more hours than planned. Late delivery
of parts and late qualification of subsystems were the major drivers to
the mate and delivery inefficiencies, more than doubling the hours needed
to complete this activity.
Lockheed Martin, the prime contractor, appears to be focused on developing
an efficient and effective manufacturing process for the JSF, but it is
still very early in that process. The development aircraft now in
manufacturing are not currently meeting their planned efficiencies. As
with the first test aircraft, the program does not expect to manufacture
the development aircraft in the planned manufacturing sequence. The
program expects to move some wing fabrication activities to final assembly
and do both fabrication and final assembly concurrently. Early development
aircraft are already experiencing inefficiencies and delays. As of
December 2006, wing manufacturing data for one of these aircraft shows the
program had completed less than 50 percent of the activities expected at
this time while requiring 41 percent more hours than planned. According to
the contractor and program officials, these inefficiencies are largely due
to late delivery of the wing bulkheads because of a change in their
manufacturing process. The Defense Contract Management Agency has rated
manufacturing as high risk, stating that the primary cause of risk is the
late delivery of parts to properly support the manufacturing work flow. It
projects further delays to schedule, increased costs, and subsequent
out-of-sequence work.
An early indicator of design stability is the completion of design
drawings at the critical design review. In February 2006, the program held
its critical design review for production representative conventional and
short take-off and vertical landing aircraft.4 At that time, the program
had completed 47 percent of the short take-off aircraft design and 3
percent of the conventional aircraft design. Our previous best practices
work suggests that completion of 90 percent of a product's engineering
drawings provides tangible evidence that the design is stable. As with the
first aircraft, the program has experienced late releases of engineering
drawings, which has delayed the delivery of critical parts from suppliers
to manufacturing for the building of the initial aircraft. For example,
based on program data as of October 2006, more than one-third of the
drawings needed to complete these two variants are expected to be released
late to manufacturing.
4 Critical design review for the carrier variant has been rescheduled from
late 2006 to spring 2007. According to program officials, this delay will
allow the program to mature the design of the variant.
Although the first aircraft encountered manufacturing inefficiencies, the
JSF Program and the contractor have pointed to some successes in this
initial manufacturing effort. For example, they have stated the mate of
the major sections of the aircraft was more efficient than in past
aircraft programs because of the state-of-the-art tools used to design the
aircraft and develop the manufacturing process. Likewise, they have
indicated that they have experienced fewer defects in this first aircraft
than experienced on legacy aircraft.
We would agree that the contractor has made progress in demonstrating the
use of several large tools and fabrication processes in building the first
test aircraft. However, a key factor in developing an efficient and
effective manufacturing process is a mature aircraft design. Major design
modifications can cause substantial and costly changes in the
manufacturing process. For example, since the first aircraft entered
production, the manufacturing process has had to be altered due to
redesigning required to resolve weight and performance problems. According
to Defense Contract Management Agency officials, some tools already bought
and in place were either no longer useful or being used less efficiently.
New tools had to be procured and the manufacturing process had to change.
The Defense Contract Management Agency noted that these additional tooling
costs were about $156 million. Contractor officials stated that the
current manufacturing capacity is sufficient to produce about 24 aircraft
per year. Given that only one aircraft has been built and essentially all
of the flight and static and durability testing remains to be done there
is still significant risk that the JSF design for each of the three
variants will incur more changes as more design knowledge is gained.
The JSF Program Projects Key Performance Parameters Will Be Met Based on
Modeling and Simulations
Currently, the JSF program estimates that by the time the development
program ends the aircraft design will meet all but one of its key
performance parameters. The performance estimates to date are based on
engineering analyses, computer models, and laboratory tests. Key
performance parameters are defined as the minimum attributes or
characteristics considered most essential for an effective military
capability--for the JSF there are eight parameters. The program office
estimates that seven of the eight key performance parameters are being
met. The aircraft is currently not meeting its full interoperability
performance parameter due to a requirement for beyond-line-of-sight
communications. Meeting the full interoperability required is currently
dependent on other capabilities being developed outside the JSF program.
Most ground and flight tests will have to be completed before all the key
performance estimates are confirmed. At this time, the program has
completed less than 1 percent of the flight test program and no structural
or durability tests have been started. According to the program's test and
evaluation master plan, the key performance parameters will be verified
during testing from 2010 to 2013. Table 3 shows the program's estimate for
each key performance parameter.
Table 3: JSF Program Estimates for Achieving Key Performance Parameters
Confirmed through flight
Status testing
Key performance parameter Meeting Not meeting Yes No
Combat radius
CV Recovery
STOVL Performance
Interoperability
Radio frequency signature
Mission reliability
Sortie Generation Rate
Logistics footprint
Source: GAO analysis of JSF program office data.
Challenges Remain in Executing the Balance of the JSF Program
The JSF program's acquisition strategy includes significant challenges to
achieve projected cost and schedule goals. The program has begun
procurement but not yet demonstrated that the aircraft design is mature,
can be manufactured efficiently, and delivered on time. The flight test
program has just begun, and there is always risk of problems surfacing and
causing further delays. The degree of concurrency between development and
production in the JSF program's acquisition strategy still includes
significant risks for cost and schedule overruns or late delivery of
promised capabilities to the warfighter. The program also faces
uncertainties with the amount of funding that will be available to support
the program's plan. Other DOD review and oversight organizations have also
expressed concern over the level of risk in the program and the resulting
costs that will be incurred to complete this acquisition program.
Challenges to Complete Flight Testing
The program has planned a 7-year flight test program that includes over
11,000 hours of testing and over 6,000 flights. This is 75 percent more
than the F-22A's flight test program and more than double the F/A-18E/F
testing efforts. As of this report, the flight test program was only
beginning with essentially all critical flight testing remaining to
confirm that the aircraft will indeed deliver the required performance.
Figure 4 shows the planned flight tests by major test categories.
Figure 4: Major Areas of JSF Flight Testing to Be Completed
The JSF variants possess significant similarities--all designed to have
low observable airframe characteristics, fly at supersonic speeds, shoot
air-to-air missiles, and drop bombs on target--but each variant has unique
performance goals to support the services' different operational concepts
and environments. Test officials acknowledge that each variant will
require separate flight testing to demonstrate that it will fly as
intended. About two-thirds of the flight tests are planned for
demonstrating the performance of each aircraft design. The other one-third
of the flight tests are expected to confirm shipboard operations, mission
systems, survivability, and armament.
Manufacturing and technical problems can delay the completion of a flight
test program, increase the number of flight test hours needed to verify
that the system will work as intended, and affect scheduled delivery to
the warfighter. Under the current testing schedule, the JSF program plans
to manufacture and deliver 15 flight test aircraft and 7 ground test
articles in 5 years--an aggressive schedule when compared with other
programs with fewer variables. For example, the F-22A program took almost
8 years to manufacture and deliver nine flight test aircraft and two
ground test articles of a single aircraft design. When the B-2 program
began flight testing in July 1989, it estimated that the flight test
program would last approximately 4.5 years and require about 3,600 flight
test hours. When the test program ended in 1997, the flight test hours had
grown to 5,000 hours, or by 40 percent, over an 8-year period. Program
officials cited several causes, including difficulties in manufacturing
test aircraft and correcting deficiencies from problems discovered during
testing. The F-22A encountered similar delays increasing a planned 4-year
flight test program to about 8 years, affecting the program's ability to
conduct operational testing and move into production on schedule. As
discussed earlier, current JSF schedules are already showing that delivery
of early test aircraft will be later than the planned delivery date.
The flight test program will also hinge on the delivering aircraft with
the expected capabilities. JSF's expected capabilities are largely
dependent on software that supports vehicle and mission systems. The
program plans to develop over 22 million lines of code--more than 6 times
the lines of code needed for the F-22A--in five blocks. The first block is
nearly complete and the last block is scheduled for completion in late
2011. The program has completed less than 40 percent of the software
needed for the system's full functionality. Most of the completed software
is designed to operate the aircraft's flying capabilities, while much of
the remaining software development includes software needed for mission
capability, including weapons integration and the fusion of information
from onboard sensors and sources off the aircraft. Past programs have
encountered difficulties in developing software, which delayed flight test
schedules. JSF program officials acknowledged that the software effort
will become particularly challenging during 2007 and 2008 when all five
software blocks will be in development at the same time.
Challenges Created by Continued Concurrent Development and Production
The concurrency between development and production in DOD's acquisition
strategy for JSF did not substantially change as a result of the program's
rebaseline in fiscal year 2004. Therefore, the program is entering
low-rate initial production without demonstrating through flight testing
that (1) the aircraft's flying qualities function within the parameters of
the flight envelope--that is, the set limits for altitude, speed, and
angles of attack; (2) the aircraft design is reliable; or (3) a fully
integrated and capable aircraft system can perform as intended. Starting
production before ensuring design maturity through flight testing
significantly increases the risk because of the of costly design changes
that will push the program over budget and behind schedule. Failure to
capture key design knowledge before producing aircraft in quantity can
lead to problems that eventually cascade and become magnified through the
product development and production phases. Figure 5 is a notional
illustration showing the impacts that can result from a highly concurrent
acquisition strategy to one with less concurrency and that captures key
design and manufacturing data before production begins.
Figure 5: Notional Illustration Showing the Different Paths That JSF
Development Can Take
While some concurrency may be beneficial to efficiently transition from
the development stage of a program to production, the JSF is currently
planned to be significantly more concurrent than the F-22A program that
failed to deliver the warfighting capability on time and at predicted
costs. Table 4 provides a more detailed comparison between the JSF and
F-22A development programs and the accomplishments and requirements before
starting production in each program.
Table 4: Comparison between F-22A and Joint Strike Fighter Development
Programs
Status of Flight Test Programs
at the Start of Low Rate Initial Point When Joint
Production Strike Fighter
Joint Will Match
Strike SimilarF-22A
F-22A Fighter Accomplishments
Flight test
program
accomplished
Flight test Approximately Approximately 2008
hours 1,300 30
Percent of 20 percent Less than 1 2009
flight test percent
hours
Number of flight 6 of 9 1 of 15 2009
test aircraft
delivered
Months of flight 48 3 2010
testing
Key test events
accomplished
Initiated Yes No 2008
fatigue testing
Initiated Yes No 2009
separation of
weapons testing
Initiated radar Yes No 2009
cross section
testing
Full scale Yes No 2009
static testing
First flight of Yes No 2012
fully integrated
aircraft
Source: GAO analysis of DOD data.
As a result of the risk associated with highly concurrent development and
production, the JSF program plans to place initial production orders on
cost reimbursement contracts. Cost reimbursement contracts provide for
payment of allowable incurred costs, to the extent prescribed in the
contract. Such contracts are used when costs cannot be estimated with
sufficient accuracy to use any type of fixed price contract. Cost
reimbursement contracts place a substantial risk on the buyer--in this
case DOD--because the contractor's responsibility for the cost risks of
performance has been minimized or reduced. As knowledge is gained over
time, the program office intended to shift the contract type to one where
more cost risk is placed on the contractor. However, DOD materials
supporting the President's fiscal year 2008 budget show that all low rate
production orders will be placed on cost reimbursement contracts.
Unprecedented Funding Requirements Could Challenge Program Execution
To execute its current plan, the JSF program must obtain unprecedented
levels of annual funding--on average over $12.6 billion annually in
acquisition funds over the next 2 decades. Regardless of likely increases
in program costs, the sizeable continued investment in JSF--estimated at
roughly $252 billion over 20 years--must be viewed within the context of
the fiscal imbalance facing the nation within the next 10 years. The JSF
program will have to compete with many other large defense programs, such
as the Army's Future Combat System and the Missile Defense Agency's
ballistic missile defense system, for funding during this same time frame.
There are also important competing priorities external to DOD's budget.
Fully funding specific programs or activities will undoubtedly create
shortfalls in others.
Funding challenges will be even greater if the program fails to achieve
current cost and schedule estimates for the revised program baseline. The
consequences of an even modest cost increase or schedule delay on a
program this size is dramatic. For example, since the program rebaseline
in fiscal year 2004, the estimated annual funding requirements have
increased every year from 2012 to 2027 by at least $1 billion and in some
cases by $3 to $7 billion. These funding increases would be enough to fund
several major programs' activities. Figure 6 shows growth in estimated
annual funding requirements from December 2003 to December 2005.
Figure 6: JSF Program's Annual Funding Requirements
Due to affordability pressures, DOD is beginning to reduce procurement
budgets and annual quantities. The just-released fiscal year 2008 defense
budget shows declining procurement quantities for the first years of
production. To meet future constrained acquisition budgets, Air Force and
Navy officials and planning documents suggest a decrease in maximum annual
buy quantities from 160 shown in the current program of record to about
115 per year, a 28 percent decrease. While this will reduce annual funding
requirements, it will also stretch the procurement program at least 7
years to 2034, assuming buy quantities are deferred rather than
eliminated.
DOD Organizations Have Raised Concerns about Program Risks and Estimated Costs
DOD's military service operational test organizations, the Cost Analysis
and Improvement Group (CAIG), and the Defense Contract Management Agency
(DCMA) have expressed concerns over the level of risk and estimated costs
of the program. These oversight and testing organizations highlight some
of the program risks and the challenges the JSF program must overcome to
avoid further slips in schedule and more cost growth.
A February 2006 operational assessment of the JSF program by Air Force,
Navy and United Kingdom operational test officials noted several areas of
risk. According to the test report, several of these issues, if not
adequately addressed, are likely to pose substantial or severe operational
impact to the JSF's mission capabilities. Key concerns raised in the
report include the following:
o Software development and testing schedules are success-oriented
and have little margin to accommodate delays.
o Developmental flight test schedule provides little capability to
respond to unforeseen problems and still meet scheduled start of
operational testing. This threatens to slip operational testing
and initial operational capability.
o Predicted maintenance times for propulsion system support,
integrated combat turn, and gun removal and installation do not
meet requirements.
o Design requirements to preserve volume, power, and cooling for
future growth are in jeopardy and will limit capability to meet
future requirements.
o Certain technical challenges in the aircraft or its subsystem
design that could impact operational capability.
In a follow-up discussion on the report, test officials stated that these
concerns were still current and they had not been informed by the program
office of planned actions to address them. The December 2006 Annual Report
of DOD's Director, Operational Test and Evaluation recommended that the
JSF program follow up on these issues.
The CAIG has expressed concerns about the reality of estimated program
costs. Its preliminary cost estimate in 2005 was substantially higher than
the program office estimate. The CAIG cited costs associated with mission
systems, system test, engines, and commonality as drivers in the
difference between its estimate and that of the program office. According
to discussions in 2006 with CAIG officials, they still have concerns and
continue to expect program costs to be much higher than the program
office's current estimate. The CAIG is not required to submit its next
formal independent cost estimate until the preparations for Milestone C,
which for the JSF program is full-rate production. For major defense
acquisition programs, this milestone generally should occur before
low-rate initial production. Milestone C is scheduled for late 2013.
DCMA's concerns focus on the prime contractor's ability to achieve its
cost and schedule estimates. DCMA, responsible for monitoring the prime
contractor's development and procurement activities, found that delays in
aircraft deliveries and critical technical review milestones put at risk
the contractor's ability to meet the current schedule. DCMA also
identified manufacturing operations as a high-risk area highlighting
issues with parts delivery, raw material availability, and subcontractor
performance. Finally, it raised concerns with contractor cost growth
stating that the contractor has shown continuing and steady increases
since development started, even after the contract's target price was
increased by $6 billion as part of the program's rebaseline. As of
November 2006, DCMA projects that the contractor's current estimated
development costs will increase by about $1 billion.
Conclusions
The JSF is entering its 6th year of a 12-year development program and is
also entering production. The development team has achieved first flight
and has overcome major design problems found earlier in development. In
addition, the department counts on this aircraft to bear the brunt of its
recapitalization plans. Therefore, we believe the program is critical to
the department's future plans and is viable, given progress made to date.
However, the current acquisition strategy still reflects very significant
risk that both development and procurement costs will increase and
aircraft will take longer to deliver to the warfighter than currently
planned. Even as the JSF program enters the mid point of its development,
it continues to encounter significant cost overruns and schedule delays
because the program has continued to move forward into procurement before
it has knowledge that the aircraft's design and manufacturing processes
are stable. Although some of the additional costs were predictable, other
costs, especially those resulting from rework, represent waste the
Department can ill afford.
Flight testing began just a few months before the decision to begin
low-rate initial production. The challenges and risks facing the program
are only expected to increase as the program begins to ramp up its
production capabilities while completing design integration, software
design, and testing. DOD's approval to enter low-rate initial production
this year committed the program to this high risk strategy. If the program
is unable to mitigate risks, its only options will be to reduce program
requirements or delay when the program achieves initial operational
capability. We see two ways this risk can be reduced: (1) reducing the
number of aircraft for procurement before testing demonstrates their
performance capabilities, thereby reducing the potential for costly
changes to the aircraft and manufacturing processes or (2) reexamining the
required capabilities for initial variants with an eye toward bringing
them up to higher capability in the future.
Last year Congress reduced funding for the first two low-rate production
lots of aircraft thereby slowing the ramp up of production. This was a
positive first step in lowering risk during the early years of testing.
However, a significant amount of ground and flight tests remains over the
next 6 years. All three variants need to demonstrate their flight
performance. The carrier variant will be the last of the three variants to
be delivered to the flight test program. It is now scheduled to start
flight testing in May 2009 and has nearly 900 flight tests planned to
demonstrate its flight performance. If the program executes its plan for a
steep ramp up in production before proving the basic flying qualities of
each aircraft variant, the likelihood of costly changes to its significant
investment in production will remain high.
Recommendation for Executive Action
To improve chances of a successful outcome, we are recommending that the
Secretary of Defense limit annual low-rate initial production quantities
to no more than 24 aircraft per year, the current manufacturing capacity,
until each variant's basic flying qualities have been demonstrated in
flight testing now scheduled in the 2010 time frame.
Agency Comments and our Evaluation
DOD provided us with written comments on a draft of this report. The
comments appear in appendix II.
DOD non-concurred with our recommendation stating that the current JSF
acquisition strategy provides an effective balance of technical risk,
financial constraints, and operational needs of the services. However, we
believe DOD's actions to reduce aircraft quantities in the fiscal year
2008 President's Budget are in line with our recommendation to limit
production to current manufacturing capacity until each variant's flying
qualities have been demonstrated in flight testing. In the 2008 budget,
DOD reduced the number of production aircraft it plans to buy during the
flight test program by about 35 percent as compared to its previous plan
for the JSF. Under this new plan DOD does not substantially increase its
buy quantities of production aircraft until 2011. We continue to believe
that limiting production quantities until the design is demonstrated would
reduce the overlap in production and development while still allowing the
efficient transition from development to production. It would also make
cost and schedule more predictable and lessen the risk to DOD's production
investment. The JSF program is still only in its sixth year of a 12-year
development program with significant challenges remaining such as
completing the design, software development, and flight testing. As such,
there is continued risk that testing will not go as planned and
demonstrating the aircraft's capability could be delayed beyond the
current plan. Therefore, we maintain our recommendation and will continue
to monitor the progress in the test program and the resulting dynamics
between development and production.
We are sending copies of this report to the Secretary of Defense; the
Secretaries of the Air Force, Army, and Navy; and the Director of the
Office of Management and Budget. We will also provide copies to others on
request. In addition, the report will be made available at no charge on
the GAO Web site at http://www.gao.gov .
If you or your staff have any questions concerning this report, please
contact me at (202) 512-4841. Contact points for our offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. Other staff making key contributions to this report were
Michael Hazard, Assistant Director; Lily Chin; Matthew Lea; Gary
Middleton; Daniel Novillo; Karen Sloan; Brian Smith, Adam Vodraska; and
Joe Zamoyta.
Michael J. Sullivan
Director
Acquisition and Sourcing Management
List of Congressional Committees
The Honorable Carl Levin
Chairman
The Honorable John McCain
Ranking Minority Member
Committee on Armed Services
United States Senate
The Honorable Daniel K. Inouye
Chairman
The Honorable Ted Stevens
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
United States Senate
The Honorable Ike Skelton
Chairman
The Honorable Duncan L. Hunter
Ranking Minority Member
Committee on Armed Services
House of Representatives
The Honorable John P. Murtha
Chairman
The Honorable C.W. Bill Young
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
House of Representatives
Appendix I: Scope and Methodology
To determine the status of the Joint Strike Fighter (JSF) program's cost,
schedule, and performance, we compared current program estimates against
estimates established after the program rebaselined in fiscal year 2004.
Current official program cost estimates are based on the program's
December 31, 2005, Selected Acquisition Report to Congress. At the time of
our review, the Office of the Secretary of Defense was still preparing its
new cost estimate to be included in the program's Selected Acquisition
Report dated December 31, 2006, expected to be delivered to the Congress
in April 2007. Because the new official cost estimate for the JSF program
will not be available until after this report is issued we are unable to
make informed judgments on those estimated costs. It should be noted that
after our 2006 report was issued on March 15, 2006, DOD released its
December 2005 Selected Acquisition Report, which showed an increase of
over $19 billion in total estimated JSF program costs.
We identified changes in the program's cost, schedule, and performance
since the program rebaseline and analyzed relevant information to
determine the primary causes of those changes. We reviewed JSF management
reports, acquisition plans, test plans, risk assessments, cost reports,
independent program assessments, and program status briefings. We
interviewed officials from the DOD acquisition program management office
and prime contractor to gain their perspectives on the performance of the
program.
To identify the challenges the program will face in the future, we
compared the programs plans and results to date with future plans to
complete development. We analyzed design and manufacturing data from the
program office and the prime contractor to evaluate performance and
trends. We reviewed program risk reports, earned value management data,
and manufacturing data to identify uncertainties and risks to completing
the program within the new targets established by the program rebaseline.
We analyzed test program and software data to understand the readiness and
availability of development aircraft for the test program. We also
obtained information on past DOD programs from Selected Acquisition
Reports and prior work conducted by GAO over the past two decades. We
interviewed officials and reviewed reports from several DOD independent
oversight organizations to gain their perspectives on risk in the program.
To assess the likely impacts of concurrently developing and manufacturing
JSF aircraft we compared the program's plans and results to date against
best practice standards for applying knowledge to support major program
investment decisions. The best practice standards are based on a GAO body
of work that encompasses 10 years and visits to over 25 major commercial
companies. Our work has shown that valuable lessons can be learned from
the commercial sector and can be applied to the development of weapons
systems. We identified gaps in product knowledge at the production
decision, reasons for these gaps, and the risks to the program. We also
examined the F-22A program's acquisition approach. We interviewed
officials from the DOD acquisition program management office and prime
contractor to gain their perspectives on program risks and their
approaches to managing risks.
In performing our work, we obtained information and interviewed officials
from the JSF Joint Program Office, Arlington, Virginia; F-22A Program
Office, Wright-Patterson Air Force Base, Ohio; Lockheed Martin
Aeronautics, Fort Worth, Texas; Defense Contract Management Agency, Fort
Worth, Texas; and offices of the Director, Operational Test and
Evaluation, and Acquisition, Technology and Logistics, Program Analysis
and Evaluation-Cost Analysis Improvement Group, which are part of the
Office of Secretary of Defense in Washington, D.C. We performed our work
from June of 2006 to March of 2007 in accordance with generally accepted
government auditing standards.
Appendix II: Comments from the Department of Defense
(120570)
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Highlights of [32]GAO-07-360 , a report to congressional committees
March 2007
JOINT STRIKE FIGHTER
Progress Made and Challenges Remain
The Joint Strike Fighter (JSF) program--a multinational acquisition
program for the Air Force, Navy, Marine Corps, and eight cooperative
international partners--is the Department of Defense's (DOD) most
expensive aircraft acquisition program. DOD currently estimates it will
spend $623 billion to develop, procure, and operate and support the JSF
fleet. The JSF aircraft, which includes a variant design for each of the
services, represents 90 percent of the remaining planned investment for
DOD's major tactical aircraft programs. In fiscal year 2004, the JSF
program was rebaselined to address technical challenges, cost increases,
and schedule overruns.
This report--the third mandated by Congess--describes the program's
progress in meeting cost, schedule, and performance goals since
rebaselining and identifies various challenges the program will likely
face in meeting these goals in the future.
[33]What GAO Recommends
GAO is recommending that DOD limit annual production quantities to no more
than 24 aircraft per year until each variant's basic flying qualities have
been demonstrated in flight testing now scheduled in the 2010 time frame.
DOD non-concurred, believing its current strategy provides a balance of
technical risk, financial constraints, and operational needs.
The JSF program has delivered and flown the first development aircraft.
However, cost and schedule goals established in the fiscal year 2004
rebaselined program have not been met. Total JSF program acquisition costs
(through 2027) have increased by $31.6 billion and now DOD will pay 12
percent more per aircraft than expected in 2004. The program has also
experienced delays in several key events, including the start of the
flight test program, delivery of the first production representative
development aircraft, and testing of critical missions systems. Delays in
the delivery of initial development aircraft were driven by incomplete
engineering drawings, changes in design, manufacturing inefficiencies, and
parts shortages. Despite these delays, the program still plans to complete
development in 2013, compressing the amount of time available for flight
testing and development activities. Also, the program projects it will
meet all but one key performance requirement--line of sight
communications---that is currently dependent on other capabilities being
developed outside the JSF program.
Accurately predicting JSF costs and schedule and ensuring sufficient
funding will likely be key challenges facing the program in the future.
JSF continues to pursue a risky acquisition strategy that concurrently
develops and produces aircraft. While some concurrency may be beneficial
to efficiently transition from development to production, the degree of
overlap is significant on this program. Any changes in design and
manufacturing that require modifications to delivered aircraft or to
tooling and manufacturing processes would result in increased costs and
delays in getting capabilities to the warfighter. Low-rate initial
production will begin this year with almost the entire 7-year flight test
program remaining to confirm the aircraft design. Confidence that
investment decisions will deliver expected capability within cost and
schedule goals increases as testing proves the JSF will work as expected.
The JSF program also faces funding uncertainties as it will demand
unprecedented funding over the next 2 decades--more than $12.6 billion a
year on average through 2027.
Overlap of Production Investments and Testing
References
Visible links
22. http://www.gao.gov/cgi-bin/getrpt?GAO-06-356
23. http://www.gao.gov/cgi-bin/getrpt?GAO-05-271
32. http://www.gao.gov/cgi-bin/getrpt?GAO-07-360
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