Forum: F-35 Lightning II

JSF development will cost more and take longer to complete than reported to the Congress in April 2008, primarily because of contract cost overruns and extended time needed to complete flight testing. DOD is also significantly increasing annual procurement rates and plans to buy some aircraft sooner than reported last year. Total development costs are projected to increase between $2.4 billion and $7.4 billion and the schedule for completing system development extended from 1 to 3 years.

Manufacturing of development test aircraft is taking more time, money, and effort than planned, but officials believe that they can still deliver the 9 remaining test aircraft by early 2010. The contractor has not yet demonstrated mature manufacturing processes, or an ability to produce at currently planned rates. It has taken steps to improve manufacturing; however, given the manufacturing challenges, DOD’s plan to increase procurement in the near term adds considerable risk and will be difficult to achieve.
DOD is procuring a substantial number of JSF aircraft using cost reimbursement contracts. Cost reimbursement contracts place most of the risk on the buyer—DOD in this case—who is liable to pay more than budgeted should labor, material, or other incurred costs be more than expected when the contract was signed.
JSF flight testing is still in its infancy and continues to experience flight testing delays. Nonetheless, DOD is making substantial investments before flight testing proves that the JSF will perform as expected. DOD may procure 273 aircraft costing an estimated $42 billion before completing flight testing.

Total development costs are projected to increase between $2.4 billion and $7.4 billion and the schedule for completing system development to be extended from 1 to 3 years, according to estimates made in late 2008—one by the JSF Program Office and one by a joint team of Office of the Secretary of Defense (OSD), Air Force, and Navy officials. Cost overruns on both the aircraft and engine contracts, delays in manufacturing test aircraft, and a need for a longer, more robust flight test program were the primary cost drivers. The joint team’s estimate is higher than the program office’s because it included costs for the alternate engine program directed by the Congress and used more conservative assumptions based on current and legacy aircraft experiences.

After reducing test resources and activities to save money in 2007, the JSF Program Office developed a new test plan in the spring of 2008 that extended the development period by 1 year, better aligned test resources and availability dates, and lessened the overlap between development and operational testing. While improved, the new plan is still aggressive and has little room for error discovery, rework, and recovery from downtime should test assets be grounded or otherwise unavailable. The sheer complexity of the JSF program—with 22.9 million lines of software code8, three variants, and multi-mission development— suggests that the aircraft will encounter many unforeseen problems during flight testing requiring additional time in the schedule for rework. Given the complexity of the program, the joint estimating team noted that an additional 2 years beyond the recent 1 year extension may be needed to complete development.
The test plan relies heavily on a series of advanced and robust simulation labs and a flying test bed to verify aircraft and subsystem performance. Figure 3 shows that 83 percent of the aircraft’s capabilities are to be verified through labs, the flying test bed, and subject-matter analysis, while only 17 percent of test points are to be verified through flight testing. Program officials argue that their heavy investment in simulation labs will allow early risk reduction, thereby reducing the need for additional flight testing, controlling costs, and meeting the key milestones of the program’s aggressive test plan. However, while the JSF program’s simulation labs appear more prolific, integrated, and capable than the labs used in past aircraft programs, their ability to substitute for flight testing has not yet been demonstrated.

Despite an improved test plan, JSF flight testing is still in its infancy. Only about 2 percent of its development flight testing had been completed as of November 2008. (...) Past programs have shown that many problems are not discovered until flight testing. As such, the program is likely to experience considerable cost growth in the future as it steps up its flight testing, discovers new problems, and makes the necessary technical and design corrections.

Despite the nascency of the flight test program and subsequent flight testing delays, DOD is investing heavily in procuring JSF aircraft. Procuring aircraft before testing successfully demonstrates that the design is mature and that the weapon system will work as intended increases the likelihood of expensive design changes becoming necessary when production is underway. Also, systems already built and fielded may later require substantial modifications, further adding to costs. The uncertain environment as testing progresses is one reason why the prime contractor and DOD are using cost-reimbursable contracts until rather late in procurement.

While the program must move forward, we continue to believe that the program’s concurrent development and production of the aircraft is extremely risky. By committing to procure large quantities of the aircraft before testing is complete and manufacturing processes are mature, DOD has significantly increased the risk of further compromising its return on investment—as well as delaying the delivery of critical capabilities to the warfighter. Furthermore, the program’s plan to procure large quantities of the aircraft using cost-reimbursement contracts—where uncertainties in contract performance do not permit costs to be estimated with sufficient accuracy to use a fixed-price contract—places additional financial risk on the government. Until the contractor demonstrates that it can produce aircraft in a timely and efficient manner, DOD cannot fully understand future funding requirements. DOD needs to ensure that the prime contractor can meet expected development and production expectations. At a minimum, the contractor needs to develop a detailed plan demonstrating how it can successfully meet program development and production goals in the near future within cost and schedule parameters. As such, in our March 2009 report, we recommended that Secretary of Defense direct the Under Secretary of Defense for Acquisition, Technology and Logistics to report to congressional defense committees explaining the risks associated with using cost-reimbursable contracts as compared to fixed price contracts for JSF’s production quantities, the program’s strategy for managing those risks, and plans for transitioning to fixed-price contracts for production. DOD agreed with our recommendation. With an improved contracting framework and a more reasoned look to the future, the JSF program can more effectively meet DOD and warfighter needs in a constrained budget environment.

The facts are that the JET report was out last year and was cited in the GAO report in March and May.

It is not new information and if a congressman did not know of it before voting on the F-22 funding, then he did not do his homework.

Without teh Report itelf, we cannot get the true meaning of "2 year delay" re: FRP.

While the program must move forward...the contractor needs to develop a detailed plan demonstrating how it can successfully meet program development and production goals

LM did not help, with the apparent utmost interest not to threaten, or 'out-compete' JSF. Perhaps to their detriment or not, will be the interesting evolution to watch. There could a reasoned scenario where substantially fewer F-35s are produced over time, yet profits per unit increase to a more advantageous 'net-wash' situation for LM anyway. In a way, not entirely dislike the manner in which Gasoline inventories and production affect Refiners' interests and bottom line.