The Pentagon plans to spend $3 billion over the next six years to develop Block 4 upgrades for the F-35, a program so large that it qualifies as a separate major defense acquisition effort within the $1.3 trillion program.
As such, the Government Accountability Office (GAO), recommends in a report published April 14 that the Block 4 F-35 follow-on modernization program be managed as a “separate and distinct” program with its own cost, performance and schedule metrics.
“DoD does not currently plan to manage Block 4 as a separate program with its own acquisition program baseline but rather as part of the existing baseline,” the GAO report says. “As a result, Block 4 will not be subject to key statutory and regulatory oversight requirements, such as providing Congress with regular, formal reports on program cost and schedule performance.”
The report is one of a pair published Thursday by GAO, which was directed to scrutinize the program by the National Defense Authorization Acts of 2015 and 2016. The second report details the Pentagon’s need for a plan to address deficiencies in development of the aircraft’s complex operation and mission-planning system called the Autonomic Logistics Information system, or ALIS.
The Defense Department set aside $91 million in the current fiscal year to fund F-35 Block 4 development. Funding for the effort is expected to nearly triple to $265 million in fiscal 2017, then again to $609 million in fiscal 2018. Funding levels off to $649 million in 2019 and slightly increases to $655 million in fiscal 2020 and to $668 million in fiscal 2021.
“If the Block 4 effort is not established as a separate acquisition program, transparency will be limited,” the report said. “Therefore, it will be difficult for Congress to hold it accountable for achieving its cost, schedule, and performance requirements.”
As if on cue, the F-35 Joint Program Office (JPO) issued a defense of the program in tandem with the GAO reports. The JPO objected to the “administrative burden” posed by managing Block 4 development as a separate acquisition program.
“The Department of Defense does not concur with this recommendation because it believes such an approach would generate an unnecessary administrative burden and create challenges in maintaining a partnered environment outside of the existing program charter,” Air Force Lt. Gen. Christopher Bogdan, who heads the JPO, said in a prepared statement. “The F-35 Joint Program Office is fully committed to providing robust insight on [follow-on modernization] cost, schedule, and performance to program stakeholders, including the U.S. Congress, and will establish reporting requirements as necessary to meet their needs.”
At a total estimated cost of $1.3 trillion over the life of the program, the F-35 is the most expensive weapon ever built. The Pentagon and manufacturer Lockheed Martin [LMT] are bracing for a ramp up in production that will require massive spending–about $14 billion annually for 10 years–while bringing the per-jet cost down through economies of scale.
GAO acknowledges that program costs have decreased since 2014 and have remained relatively stable since a new baseline was set in 2012. About 20 percent of development testing, including testing of the final 4F mission systems software configuration remain, “which will be challenging,” GAO said, crediting the program also for improved manufacturing efficiency and supply chain management.
Troubles with ALIS
Sustainment cost make up the bulk of the F-35’s $1.3 trillion price tag. Much of the aircraft’s mission planning, spare parts management and maintenance work will be directed by the highly complex and ambitious ALIS system, which will cost an estimated $16.7 billion over the 56-year planned service life of the aircraft.
ALIS collects and manages data on the health and performance of all the F-35s in the entire fleet and automates the delivery of spare parts, maintenance scheduling and tasking. GAO found the system has a single point of entry for data collection that then funnels data to its main operating system, neither of which have a backup system or built-in redundancy.
“If either of these fail, it could take the entire F-35 fleet offline,” GAO said.
While the Marine Corps has declared initial operational capability of an F-35B squadron, the service has not determined whether its ALIS system can deploy aboard ships in far-flung regions where Marines operate. IOC was declared in July 2015 without testing whether ALIS was suitable for deployment. A newer version of the system was fielded around the time the Marine Corps jets went operational, but it has not been tested for deployability either, GAO said.
“DoD is taking some steps to address these and other risks such as resolving smaller ALIS functionality issues between major software upgrades and considering the procurement of additional ALIS infrastructure but the department is attending to issues on a case-by-case basis,” GAO finds. “By continuing to respond to issues on a case-by-case basis rather than in a holistic manner, there is no guarantee that DoD will address the highest risks by the start of full-rate production in 2019, and as a result, DoD may encounter further schedule and development delays, which could affect operations and potentially lead to cost increases.”
Bogdan and the JPO said the report contained no surprises–the findings are “well-known” to the Defense Department, Lockheed Martin and F-35 international partners–and is acting to implement all four recommendations made by GAO regarding ALIS.
The JPO said it initiated an ALIS “Technical Roadmap” initiative earlier this year to further define strategic priorities and meet the F-35’s increasing global operational footprint. That plan will be completed this summer and inform budget submissions in the fall.
“Overall, the F-35 program is executing well across the entire spectrum of acquisition, to include development and design, flight test, production, fielding and base stand-up, training, sustainment of fielded aircraft, and building a global sustainment enterprise,” Bogdan said. “We thank the GAO for its support and feedback as we remain focused on developing, delivering and sustaining the F-35.”