The Defense Property Accountability System (DPAS) is inadequate for the real-time inventory of property for the Lockheed Martin [LMT] F-35 at 671 government and contractor sites, per a new Government Accountability Office (GAO) report.

In 2019, the Pentagon Inspector General (IG) found that the F-35 program was unable to track parts adequately, as it had not chosen an Accountable Property System of Record (APSR) required by DoD Instruction 5000.64 until October 2017 and had not catalogued parts in the system, but the F-35 program has said that it will have an APSR with verified F-35 property records by the end of this year (Defense Daily, Aug. 27, 2021).

“In fiscal year 2020, the F-35 JPO designated DPAS as the official APSR, but DPAS currently does not have reliable JSF [Joint Strike Fighter] asset property records for financial reporting,” the new GAO report said.

“According to DOD guidance, establishing an APSR—which captures and stores changes to asset data elements in real time, such as changes to quantity and asset location—is an important step in maintaining JSF asset accountability,” per the study, DoD Financial Management:  Additional Actions Would Improve Reporting of Joint Strike Fighter Assets: GAO-22-105002.

“Our review found that because of the absence of a direct interface with the prime contractors-managed inventory tracking systems, DPAS currently is not able to capture changes to JSF property records resulting from the movement or the use of the assets,” GAO said. “Additionally, DPAS is missing some of the data elements required by DoD policy, and lacks some necessary controls, as identified by external auditors.”

The Pentagon IG in 2019 found a “material weakness” in the F-35 program, as DoD did not report some F-35 assets in financial statements. Such assets fall in four categories: aircraft, the global spares pool, support equipment/special tooling/special test equipment, and internal use software.

Based on contractual requirements, Lockheed Martin and Pratt & Whitney [RTX], the builder of the fighter’s F135 engine, are to allocate the F-35 assets to the 671 sites and program participants. The GAO said that in the last several years, “the third-party logistics responsibilities for warehousing and shipping JSF assets within the continental U.S. have been gradually transitioning from private contractors and subcontractors to DLA (Defense Logistics Agency) and United States Transportation Command.”

The F-35 program agreed with 10 of the 12 recommendations in the latest GAO report, among them that the DoD acquisition chief and the head of the F-35 program office “should develop and document a plan for verifying the completeness of JSF assets recorded in its APSR, including conducting an analysis and documenting the results on the feasibility of performing a wall-to-wall inventory to capture all JSF assets.”

The GAO said that last November the F-35 Joint Program Office (JPO) “entered into DPAS the JSF assets’ property records containing these data elements [on asset description, location, and quantity], creating DoD’s first official record of JSF assets in the history of the program.”

“However, since the inventory count was first performed, the status of the data elements for many of these assets may have changed because of either the movement of an asset to another location, use of the asset to repair aircraft currently owned by program participants, or the disposal of the asset because of damage,” the report said. “Because DPAS does not currently interface with prime contractors’ systems and capture real-time changes to JSF assets’ data elements that may have occurred since the inventory was first performed, many of the JSF assets’ property records in DPAS do not reflect current, accurate information. To update these changes in DPAS, the F-35 JPO will need to recapture the current status of over half of the JSF assets, such as panel assemblies, valves, and other consumable parts, that were inventoried during fiscal years 2019 through 2021.”

The F-35 JPO told GAO that it is working on a short-term workaround for asset verification by revising property records in DPAS each quarter, if needed, “with more recent data captured from several different data sources, such as Contract Data Requirements Lists, the Procurement Integrated Enterprise Environment, and the [F-35] Autonomic Logistics Information System (ALIS).”

In the long-term, “F-35 JPO officials stated that they are in discussions with the prime contractors to develop an interface between DPAS and contractor-managed inventory tracking systems that will allow DPAS to be updated with changes to its property records in real time,” the report said. “However, as of the end of November 2021, this interface was in the planning phase and is expected to take at least 2 to 4 years to become fully operational. Until then, only the contractor-managed logistics system will capture these changes.”