More cost overruns, delays and uncertainty for F-35

GAO drops another bomb on the world's largest defense program, but there appears to be no real danger from Congress.

Cost overruns for the first batches of F-35 Lightning IIs total more than $1 billion, Congress’ watchdog agency said Tuesday, in the latest report to detail the woes of the world’s largest defense program.

The overall cost estimate for the whole program is now close to $400 billion, according to the Government Accountability Office, and although investigators were careful to note the progress DoD and Lockheed Martin have made in the past year, the overall picture remained very bleak.

GAO unveiled the findings when one of its top acquisitions experts, Michael Sullivan, appeared Tuesday before a panel of the House Armed Services Committee. But the panel met so briefly — to account for floor votes and an off-site event, said subcommittee chairman Rep. Roscoe Bartlett — and members asked so few questions, that you had to read Sullivan’s report to get the full extent of GAO’s continued pessimism about the program.

Here is a sample:

Developmental flight testing gained momentum and is about one-fifth complete with the most challenging tasks still ahead. The program can expect more changes to aircraft design and manufacturing processes. Performance of the short takeoff and vertical landing variant improved this year and its “probation” period to fix deficiencies was ended early, even though several fixes are temporary and untested. Management and development of the more than 24 million lines of software code continue to be of concern and late software releases have delayed testing and training. Development of the critical mission systems that give the JSF its core combat capabilities remains behind schedule and risky. To date, only 4 percent of the mission system requirements for full capability has been verified. Testing of a fully integrated JSF aircraft is now expected in 2015 at the earliest. Deficiencies with the helmet mounted display, integral to mission systems functionality and concepts of operation, are most problematic. DOD is funding a less-capable alternate helmet as a back-up. The autonomic logistics information system, a key ground system for improving aircraft availability and lowering support costs, is not yet fully developed.

Cost overruns on the first four annual procurement contracts total more than $1 billion and aircraft deliveries are on average more than one year late. Officials said the government’s share of the cost growth is $672 million; this adds about $11 million on average to the price of each of the 63 aircraft under those contracts. In addition to the overruns, the government also incurred an estimated $373 million in retrofit costs on produced aircraft to correct deficiencies discovered in testing. The manufacturing process is still absorbing a higher than expected number of engineering changes resulting from flight testing, which makes it difficult to achieve efficient production rates. Until engineering changes are reduced, there are risks of additional cost overruns and retrofit costs. The program now estimates that the number of changes will persist at elevated levels through 2019. Even with the substantial reductions in near-term procurement quantities, DOD is still investing billions of dollars on hundreds of aircraft while flight testing has years to go.

It goes on and on like that. Boiled down to talking points, Sullivan said he had five main worries about the program: Its infamous software; the ongoing engineering changes necessitated by discoveries in flight testing; the sustained cost of the program, which will average about $13 billion per year from now until 2035 (!); the mission system “validation,” including the F-35’s off-board Autonomic Logistics Information System; and the complexity of the global supplier base.

On software, Sullivan said the F-35’s 24 million lines of code are “as complicated as anything on earth,” and it’ll take all of them working as intended before the F-35 can perform as advertised. On cost, GAO’s report reinforces the worry that defense analysts have been voicing for years — the large sustained yearly costs for the F-35 not only will continue more or less in perpetuity, but in the case of the Air Force, they’ll come due even as the service must also buy full-rate production KC-46A tankers and new bombers.

F-35 program boss Vice Adm. David Venlet told lawmakers he still does not have an estimate for when the F-35 will reach its initial operational capability, although the committee members could not be bothered to ask why. GAO’s report gives an explanation: The program is not performing reliably enough for them to try to guess: “Until greater clarity is provided on the program’s path forward, the military services are likely to wait to commit to new initial operational capability dates,” GAO said.

If there’s a silver lining here, it’s that a lot of the expensive discoveries about the F-35 have been made, and now DoD just has to stick it out and get through this difficult period. GAO praised the F-35B’s debut at sea and the progress in testing, but even there, it was a mixed bag: “Two other test objectives were not met: the carrier variant did not demonstrate shipboard suitability because of problems with the tail hook, which requires redesign, and software was not released to flight test on time,” GAO said.

And one of the central “achievements” of the program over the last year — the lifting of the B’s “probation” — may not have meant anything at all. Not only because “probation” was a non-thing, as you’ve read here, but because the “fixes” engineers proposed are themselves temporary, GAO found:

While several technical issues have been addressed and some potential solutions engineered, assessing whether the deficiencies are resolved is ongoing and, in some cases, will not be known for years. According to the program office, two of the five specific problems cited are considered to be fixed while the other three have temporary fixes in place. The Director, Operational Test and Evaluation reported that significant work remains to verify and incorporate modifications to correct known STOVL deficiencies and prepare the system for operational use. Until the proposed technical solutions have been fully tested and demonstrated, it cannot be determined if the technical problems have been resolved.

So it’s another barrage of bad news for the Joint Strike Fighter, although the few House lawmakers who showed up for Tuesday’s brief hearing appeared mostly bored about it. Of the little discussion there was, no one broached cancellation. In fact, their outward lack of interest in the F-35 could be a sign of resignation — an ultimate acceptance that a program this big, this important, can endure almost anything.