Interesting Findings in the DOD IG's F-35 Report

The Department of Defense Inspector General (DOD IG) published, on September 30, 2013, its "Quality Assurance Assessment of the F-35 Lightning II Program."

Unfortunately, the report makes for painfully dry reading. As is the case with many GAO reports, some of the DOD IG's gems are buried in the appendices or left to the reader to deduce. The "Results in Brief" give a reasonably good and concise account of what the report says, even if some of the terminology is horribly stilted. The "Findings" section states on p. i:

"The F-35 Program did not sufficiently implement or flow down technical and quality management system requirements to prevent the fielding of nonconforming hardware and software. This could adversely affect aircraft performance, reliability, maintainability, and ultimately program cost. Lockheed Martin Aeronautics Company (Lockheed Martin) and its subcontractors did not follow disciplined AS9100 Quality Management System practices, as evidenced by 363 findings, which contained 719 issues.

The Joint Program Office did not:

• Ensure that Lockheed Martin and its subcontractors were applying rigor to design, manufacturing, and quality assurance processes.
• Flow down critical safety item requirements.
• Ensure that Lockheed Martin flowed down quality assurance and technical requirements to subcontractors.
• Establish an effective quality assurance organization.
• Ensure that the Defense Contract Management Agency perform adequate quality assurance oversight.

In addition, the Defense Contract Management Agency did not:

• Sufficiently perform Government quality assurance oversight of F-35 contractors.

To summarize in plain English and as the text of the report bears out:

• The work of Lockheed Martin and five of its major subcontractors (not including engine manufacturer Pratt & Whitney, which was not included in this report) was sloppy up through 2012;
• Lockheed's oversight of its own subcontractors was inadequate, and most important and significant,
• The oversight performed by the F-35 Joint Program Office (and the Defense Contract Management Agency) over Lockheed and its subcontractors was narrow, shallow, and sometimes nonexistent.

The last bullet is particularly important-and stunning. While we expect government contractors to try to get away with as much as they can, in the case of the F-35, the Joint Program Office (JPO)-the designated agent of the taxpayers and military operators-was not adequately minding the store.

That point is made painfully clear in the Results in Brief section labeled "Management Comments and Our Response" (and in the body of the report). The JPO told the DOD IG as recently as August 23, 2013 that it was not its job to "ensure contractual compliance to prevent nonconformance" with system requirements or "to update the contract if the requirements are deficient." Just as amazing was the JPO position that the "independent quality assurance" the IG found that the program lacks was being adequately performed by the Defense Contract Management Agency, the very entity that the IG found "not accountable" for that very task. (See pp. ii - iii.)

It's as if the JPO were saying, comprehensive contractor oversight and independent quality assurance are not the JPO's responsibility.

Throughout the text of the report both the Joint Program Office and Lockheed Martin are singled out for particularly serious failings.

Under the title "Overall Findings and Recommendations," the report reads on page 55:

"The F-35 Program [Office] did not sufficiently implement or flow down technical and quality management system requirements to prevent the fielding of nonconforming hardware and software. This could adversely affect aircraft performance, reliability, maintainability, and ultimately program cost. Lockheed Martin and its subcontractors did not follow disciplined AS9100 Quality Management System practices, as evidenced by 363 findings, which contained 719 issues."

And below that, under the title "Insufficient Rigor in Design, Manufacturing, and Quality Assurance Processes," the report reads on page 55:

"The F-35 JPO, Lockheed Martin, and its subcontractors were not ensuring that the necessary quality assurance process controls and disciplines were in place to produce a consistent and reliable product. This lack of process discipline and attention to detail creates an elevated risk of delivering nonconforming aircraft to the warfighter."

Under the heading "Ineffective Quality Assurance Organization," the report states on page 65:

"JPO's quality assurance organization did not have the appropriate resources and authority to effectively manage DoD's largest acquisition program. The lack of a strong and effective quality assurance organization contributed to the program's cost, schedule, and performance issues."

That is further explained by the statement on page 66:

"As evidenced by our assessment that identified 363 findings, JPO appeared to rely on Lockheed Martin and DCMA to identify, report, and address quality assurance issues. This indicates a lack of quality assurance and technical expertise within JPO to recognize F-35 supply chain issues."

The criticism of the JPO notwithstanding, Lockheed Martin is singled out for particularly revealing descriptions in Appendix C on page 77:

"On average, at final assembly each aircraft has 200+ corrective actions requiring rework or repair. The DoD IG team's overall conclusion is that LMA's, Fort Worth, Texas quality management system and the integrity of the F-35 product are jeopardized by a lack of attention to detail, inadequate process discipline, and a 'we will catch it later' culture. We believe the quality assurance culture at LMA, Fort Worth, Texas must improve and that robust technical oversight by the government [found elsewhere in the report to be lacking] is required to ensure program performance and mission success."

Comparing this "overall conclusion" about Lockheed Martin to those for the five subcontractors leads one to conclude that the IG team found Lockheed to be the most problematic contractor on the F-35-not a good thing for the lead or prime contractor. The other contractors' "overall conclusions" were negative but less damning, and the IG report was even partially positive about Northrop Grumman, stating on page 83:

"The DOD IG's team overall conclusion is that NGC's quality management system is not always implemented or sufficiently defined; however, management is actively engaged in the day-to-day production activities and proactively working issues as they arise. Their general attitude was that the issues noted by the DOD IG assessment team were opportunities to improve their product."

Since the IG report was published, the Joint Program Office and Lockheed Martin have attempted to argue that most of the findings and recommendations have been addressed, and that the report is, by implication, obsolete. This assertion gives program defenders on Capitol Hill an excuse to dismiss the report, and it ensures that the contention will be included in any news articles to show what modern journalism calls "balance."

We will only know what is fixed, or not, when we read a follow-up report from the DOD IG. Self-serving statements from the JPO, let alone Lockheed, cannot be taken seriously unless they are explicitly confirmed by the DOD IG. The IG explicitly or partially endorsed actions the JPO or DCMA have taken on six recommendations, but those on another seven are found seriously wanting. (See pp. 55-73.)

Indeed, DOD IG audits of the F-35 program should be an annual feature of DOD's largest acquisition program in history, and the reach of the audits should be increased from quality assurance to annual finances. Such auditing should certainly include the confusion described by insiders to exist for the F-35 program in its 2013 and 2014 accounts.