Officials in the F-35 Joint Program Office are making paper reclassifications of potentially life-threatening design flaws to make them appear less serious, likely in an attempt to prevent the $1.5 trillion program from blowing through another schedule deadline and budget cap.
The Center for Defense Information at the Project On Government Oversight (POGO) obtained a document showing how F-35 officials are recategorizing—rather than fixing—major design flaws to be able to claim they have completed the program’s development phase without having to pay overruns for badly needed fixes. Several of these flaws, like the lack of any means for a pilot to confirm a weapon’s target data before firing, and damage to the plane caused by the tailhook on the Air Force’s variant, have potentially serious implications for safety and combat effectiveness.
POGO also obtained a copy of the Pentagon’s previously unreleased plan to control costs that shows the proposed savings may quickly be overwhelmed by the program’s rising costs.
In acquisition programs, a deficiency is a design flaw that affects the weapon system’s performance or safety. During the test and evaluation process, the testing personnel identify and categorize design deficiencies based on severity, breaking them down into Categories I and II, with degrees of priority within each category. Category I deficiencies “may cause death, severe injury, or severe occupational illness; may cause loss or major damage to a weapon system; critically restricts the combat readiness capabilities of the using organization; or result in a production line stoppage.” A recent Government Accountability Office (GAO) report found that, as of January 2018, the F-35 program still had 111 of these. Category II deficiencies “could impede or constrain successful mission accomplishment.” The program had 855 of these significant, though less catastrophic, design flaws.
The testing engineers evaluating the F-35 flight tests and identifying design flaws determine their severity based on the potential impact on safety and mission effectiveness and recommend a categorization level. The testing agencies, the services, and the F-35 program office then review these recommendations to arrive at agreed-upon categorization levels, which are then entered into the formal reporting system as deficiency reports. Besides showing just how complex and incomplete the F-35’s development really is, 17 years in, the large number of deficiencies reported proves that many people have been conscientiously working toward improving the final engineering design to ensure it is safe and effective. With the revelation that officials made paperwork fixes to make these serious deficiencies appear acceptable, it seems that much of that work is being ignored in the name of political expediency and protecting F-35 funding.
There is reason to be concerned about the manner in which these deficiencies are being recategorized. A copy of the minutes from the F-35 Deficiency Review Board’s June 4, 2018 meeting, obtained by POGO, shows that the Board downgraded 19 serious (Category I) deficiencies to the less-serious Category II, including 10 with no plan in place to correct the known design flaws. In a few cases, the Board followed the recommendations of the testing engineers to downgrade flaws. For the rest of the 19, however, the minutes show that the Board acted on its own to change deficiency statuses, with no apparent justification or evidence that the flaws were in fact not as serious as initially categorized. In three instances, status changes were made “per direction from the F-35 DOE [Director of Engineering].” It should be noted that the director of engineering, Jay Fiebig, did not attend this meeting. Rather, the deputy director of engineering, Joe Krumenacker, served as chairman.
Without further documentation, it is unclear whether the F-35’s remaining 90 Category I deficiencies are being recategorized in the same manner.
Neither the Department of Defense nor Lockheed Martin responded to requests for comment on this investigation.
The minutes show that one deficiency the Board downgraded on June 4 involves the F-35’s emergency systems. Test teams found that the F-35’s Identification Friend or Foe transponder, which communicates with ground-control radar to confirm the aircraft’s identity, does not automatically send an emergency signal when the pilot ejects. It is supposed to automatically switch to emergency mode and transmit the international emergency transponder Mayday code 7700 that alerts air-traffic controllers of the emergency. Were a pilot to eject without first manually switching the transponder to transmit the emergency signal—and an ejecting pilot will often have little time or presence of mind to do so—hours could pass before anyone knows they have had a problem, let alone that they ejected and crashed. The officials who identified this design problem gave it the highest severity rating, characterizing it as a Category I “High” deficiency. But the Deficiency Review Board knocked it down to a Category II “High” problem, without indicating a plan to correct it.
This is not how the development process is supposed to work.
Testers have also identified an issue with the arresting hook on the Air Force’s F-35A conventional takeoff variant. The F-35A, like other Air Force aircraft, is equipped with a single-use tailhook for emergency-landing situations when the pilot suspects a braking failure. Testing on the F-35A’s tailhook began in 2016. Testing engineers found that the arresting hook is causing damage to the aircraft due to “up-swing.” They originally rated this a Category I “Medium” deficiency. At this meeting, the deputy director of engineering, this time with the concurrence of the testing sites, downgraded the deficiency to Category II “High,” with instructions to study the maintenance- and replacement-cost data to better define the difference between “major damage” and “non-major damage”—but without actually proposing any fixes to the problem.
One combat-related flaw the Board downgraded has the potential to endanger the lives of troops on the ground. As testing officials have previously reported, the F-35’s current mission systems do not allow pilots to confirm the target coordinates entered into precision-guided bombs. The pilots can see what information they send to the weapon, but not what coordinates have actually been stored in the weapon. The Pentagon’s operational testing director characterized this as a serious concern in his most recent annual report. In close-combat situations, the rules of engagement require the pilot to read back the aimpoint target coordinates to a ground controller to prevent friendly troop and civilian casualties. This most commonly occurs when troops are locked in a difficult fight and urgently request close air support. F-35 test teams rated this a Category I “High” deficiency, but the Board downgraded it to Category II “High,” without any indication of whether plans exist to correct it.
The nature of the design flaws the Board downgraded is not the only matter of concern. Individually, each flaw may not prevent an aircraft from being launched, but the accumulation of flaws greatly increases the probability that the aircraft will be unable to execute the mission that is needed. The sheer number of outstanding deficiencies creates a problem of its own for the operating forces as they work to integrate the F-35 into their fleets. Each deficiency becomes one more issue that could keep an aircraft grounded or force the pilot to abort a mission. As these issues accumulate, it becomes an almost overwhelming challenge for the fleet to maintain an acceptable readiness and availability status. These cumulative F-35 deficiencies add significantly to the maintenance burden the services are already facing—and is one of many reasons the F-35 program can still muster only a 26 percent fully mission-capable rate.
The list of attendees of this particular Deficiency Review Board meeting partially explains why this process unfolded the way it did on June 4. The attendees include 11 members of the F-35 Joint Strike Fighter Board. These people have the most incentive to see the program completed quickly. The list also includes eight members of the Integrated Test Force from Edwards Air Force Base and three from the corresponding team at Naval Air Station Patuxent River. Sources closely involved with this process told POGO the 11 Integrated Test Force members effectively work for the F-35 program office. They ultimately answer to the services, whose senior leaders are eager to quickly end the development process and begin the Initial Operational Test and Evaluation (IOT&E) phase by September 15, 2018, without letting deficiencies slow down the purchase rate of new F-35s in the meantime.
Even though the operational testing of F-35 airframes loaded with deficiencies is a major threat to successful completion of the IOT&E process—the crucial legal hurdle before the program can move to full-rate production—only three members of the F-35 Joint Strike Fighter Operational Test Team attended the Deficiency Review Board meeting. Significantly, the highest-ranking member of this joint test team at the meeting was a major, rather than the higher-ranking officers in charge of the team or in charge of the various service operational testing agencies.
Similarly, the combat operating forces from the services were hardly represented while addressing deficiency decisions. Just one operating force representative, a lieutenant colonel from the Air Force’s Air Combat Command, participated. The Navy and Marine Corps operators were not represented at all. In other words, even though the combat-aircraft fleets of all three services will be comprised mainly of F-35s in the near future, the operating forces’ leaders, who represent the men and women who will have to fly these aircraft in combat, had essentially no say in deciding the priority of any F-35 deficiencies.
The Department of Defense’s acquisition regulations state that all critical deficiencies must be resolved before a program can proceed beyond low-rate initial production unless the official with milestone decision authority approves a deviation. In the case of the F-35, Ellen Lord, undersecretary of defense for acquisition and sustainment, has the authority to make the decision to insist on fixing crucial design flaws first or to push the program forward without fixes.
Hundreds of Design Flaws
This snapshot of how the F-35 program office deals—or doesn’t deal—with design deficiencies comes shortly after the Government Accountability Office released its annual assessment of the program, identifying the 966 unresolved design flaws. The report has the puzzlingly contradictory subtitle “Development is Nearly Complete, but Deficiencies Found in Testing Need to be Resolved.”
“If deficiencies have emerged during development that are still unresolved, then development is manifestly not nearly complete,” Thomas Christie, a director of operational test and evaluation during the George W. Bush Administration, told POGO.
F-35 officials have been saying for months that the program will finally wrap up the development phase later this year. It has taken the better part of two decades to get to this point. The GAO report lays out in stark terms just how far off-track the program has gone since its inception at the end of the last century. According to the 2003 F-35 program baseline, the development phase was to have been completed before 2010, with the services receiving 1,966 aircraft by 2019. The realities of producing an aircraft meant to incorporate a vast array of unproven technologies quickly asserted themselves, and annual F-35 production figures dropped precipitously as costs climbed.
When F-35 officials arbitrarily call an end to the development phase of the program in September, they will really just be procrastinating on the inevitably needed development work—and its attendant cost-overrun funding.
Failing to address these design flaws now threatens the Initial Operational Test and Evaluation process set to begin September 2018. This field-testing phase will be used to determine whether or not the F-35 will be adequately effective in realistic combat scenarios. It will also be used to see whether the entire system, including maintenance and logistics, is supportable and can deliver adequate fleet availability and reliability in the hands of the troops. Evaluators independent of the services will analyze the results of these operational tests for the Pentagon’s top weapons testing official, the director of operational test and evaluation, who will then report them directly to the secretary of defense and Congress.
By federal law, full-rate production cannot begin until the testing director submits a report stating “whether the results of such test and evaluation confirm that the items or components actually tested are effective and suitable for combat.” For the F-35 program, the “low-rate” in “low-rate initial production” has become a nebulous term. Lockheed Martin is funded to deliver 90 deficiency-ridden F-35s this year. That figure is hardly “low” when it represents 56 percent of the expected 160 aircraft per year to be delivered in the full-rate production runs currently scheduled to begin in 2023.
F-35 program officials plan to address these issues after the current development phase in their newly invented and ill-defined Follow-on Modernization phase, previously known as Block 4, and now sometimes called Continuous Capability Development and Delivery. Whatever name the new phase goes by, in practice it is nothing more than a continuation of the peremptorily ended development phase that will also add more new and untested technologies to the system—all hidden under the “Continuous Delivery Development and Delivery” framework that deliberately eliminates scheduled milestones for delivery of well-defined, specific capabilities.
Cutting off development and substituting a new, vaguely scheduled modernization phase is the F-35 program office’s device for not admitting further major cost overruns and schedule slippages, given that Congress has already paid for multiple research and development overruns and has repeatedly criticized the program’s many years of stretch-outs. Questions remain as to whether the program will ever have the capacity to complete all the necessary development-phase design fixes—capacity that involves augmenting system-integration labs, mission software labs, test aircraft, test-flight hours, and testing personnel.
Because of all the risky, undeveloped technologies that fail to perform as promised and have been concurrently incorporated into the F-35’s design, the program never had enough capacity in these areas even at the outset of the current development phase. That and the 966 still-unresolved design flaws are the major reasons the program has fallen so many years behind schedule. It is unclear how program officials intend to address the mountain of deficiencies while also developing new, untested capabilities and keeping to their schedule to begin full-rate production in 2023. Their current solution, as the Deficiency Review Board meeting minutes show, is to wave them away with paper and pen.
The Follow-on Modernization program easily meets the criteria to qualify as a separate Major Defense Acquisition Program (MDAP), but Pentagon officials have adamantly resisted efforts to classify it as such, likely because they do not want to be constrained by the budget caps, scheduled milestones, and detailed reporting requirements that would entail. Department of Defense regulations set the minimum threshold for an MDAP at either $480 million for research, development, and testing, or $2.79 billion for procurement. The most recent, though undoubtedly optimistic, estimates easily clear the bar, putting the cost of completing F-35 development under this scheme at $10.8 billion through 2024.
The average program unit cost for each F-35 has more than doubled, from $62.2 million at the program’s inception in 2001 to an average $158.4 million in 2018. It is also 12 years behind schedule. Establishing new budget and schedule goals for the program at this point would likely be too big an admission of failure for the Pentagon to endure, as it would create tremendous pressure for lawmakers on Capitol Hill to pull the plug on the entire endeavor.
The fact that it will take a quarter-century to complete the F-35’s design is evidence of the disastrous price we have paid for the Pentagon’s decision to initiate concurrent development and production of yet another weapons system that deliberately incorporates multiple undeveloped, untested technologies. Recent history provides several examples of programs with huge schedule slippages, cost overruns, and technological failures, with the F-111, C-5, B-70, B-1, B-2, and F-22 programs.
Frank Kendall, the former Pentagon acquisition chief, famously described the push to buy F-35s before the development process concludes as “acquisition malpractice.” Compounding the mistake of concurrency, the overlap of design and production, the Pentagon sold Congress on the F-35 in part with the idea of creating a common aircraft for three services, alleging it would save money—despite the well-documented and glaring failure of the tri-service F-111 program 25 years before Congress signed off on the very same plan with the F-35 in 2001. As the doubling of the F-35’s acquisition cost clearly demonstrates, the American people are paying heavily for the misleading claim that the three F-35 versions would achieve 70-90 percent part-commonality when in fact they achieved 20-25 percent. Even Lieutenant General Christopher Bogdan, the former F-35 program chief, cautioned against using joint programs in the future due to the difficulties and compromises associated with balancing the conflicting requirements of three different services, each with differing missions. As both the F-111 and F-35 have proven in practice, joint aircraft development programs lead to higher cost and underperforming designs.
888 Cost-cutting Initiatives
Efforts are now underway to rein in the program’s out-of-control costs.
In late 2016, then-President-elect Trump famously, and correctly, questioned the efficacy of the F-35 program before Pentagon officials got to him and he suddenly proclaimed it to be great. He now praises the aircraft, and even posed in front of one that had been trucked onto the White House lawn. Secretary of Defense James Mattis and his deputy, Patrick Shanahan, have been highly critical of Lockheed Martin’s efforts at controlling costs.
This public pressure from within the Pentagon prompted the F-35 Joint Program Office to put together a report in early 2017 exploring ways to tamp down the runaway costs threatening to make the program unaffordable; POGO obtained a copy of the report through the Freedom of Information Act.
While the F-35 Affordability Study provides a clear picture of the program’s complexity, it offers a route to only modest and largely hypothetical savings.
For example, one proposal calls for executing a block buy (also known as an Economic Order Quantity) for the Low Rate Initial Production lots 12, 13, and 14 approved in last year’s defense authorization act subject to cost conditions. The program estimated that the commitment to a three-year buy would save approximately $2 billion. Along with the fact that entering into a three-year commitment to an aircraft unapproved for full production violates the spirit, if not the actual letter, of federal laws governing multiyear procurement plans, program officials likely overstated the savings by well over half. By October 2017, the estimate had been revised down to $1.2 billion for the U.S. and the F-35 partner nations. The Pentagon’s Cost Assessment and Program Evaluation (CAPE) office threw cold water on even that estimate: in a letter first reported on by Inside Defense in June, CAPE officials said the U.S. savings would likely be no more than $300 million, a mere 0.08 percent of the $400 billion total buy.
The document includes an annex detailing the initiatives the F-35 program office intends to use to get costs under control. It will probably not surprise anyone with even a passing familiarity with the F-35 program to learn that these lists are quite extensive. They include a total of 888 initiatives spanning three broad categories: development, production, and sustainment.
A number of the ideas are gambits to reduce accountability for program performance. The development initiatives include a proposal to slash the testing program by 3,800 test points, in a move the program office estimates would shave off about 10 months’ worth of flight tests. The production initiatives mainly deal with the block-buy proposal, but also include 244 manufacturing and material improvements for an estimated $234.6 million in savings. The biggest effort by far is on the program’s long-term sustainment. Officials claim the program has already identified $60.7 billion in potential savings, through 514 initiatives, with future savings yet to be determined. Only time will tell if these efforts will actually bear any fruit—or whether these fruits will be buried under the major overruns associated with fixing 966 deficiencies.
The affordability plan fails to address the fact that the F-35s we have now and are continuing to buy have known design flaws that must be fixed in the future, one of the inevitable penalties of concurrency. Nearly 300 F-35s have thus far been delivered to the services. All of these aircraft—plus the additional 300 aircraft scheduled to be acquired before the Initial Operational Test and Evaluation final report declares whether or not the plane is combat-suitable—will require myriad fixes for current deficiencies, not to mention for the many future defects will likely be discovered during the more stringent operational tests. The GAO estimates—based on unaudited numbers—that the program will end up spending at least another $1.4 billion to retrofit design corrections into aircraft purchased early in the production cycle. Indeed, the program has already spent more than that retrofitting F-35s to fix design flaws: the Pentagon has spent more than $1.5 billion upgrading F-35s since 2012. The 2019 National Defense Authorization Act alone includes $305 million to retrofit design corrections into F-35s recently purchased and delivered.
While the F-35’s sticker price tends to draw the most attention, its ownership costs are what may ultimately doom the program. The costs to sustain the program have already risen so much that Pentagon leaders are considering cutting the Air Force’s planned F-35 fleet by a third, or 590 aircraft, simply to have any hope of balancing the books.
The April 2018 contract awarded to Lockheed Martin just for its piece of sustaining the services’ existing F-35 fleet illustrates how ownership costs could be so high. Lockheed will be paid $1.4 billion for one year of providing “air system maintenance; pilot and maintainer training; depot activation; sustaining engineering; Automatic Logistics Information System (ALIS) support, data analytics and predictive health management; supply chain logistics and more.” The contract supports 280 F-35s, at $5 million per aircraft for a single year. When the fleet grows to the current plan’s 2,443 aircraft, the American people can expect to pay Lockheed Martin $12.2 billion a year to keep the aircraft flying.
This problem is not unique to the F-35. The government awarded Lockheed Martin a similar contract in December 2017 for the F-22 fighter jet, at more than $3.7 million per airframe per year. Of course, that followed right on the heels of Pratt & Whitney winning a contract to sustain the F-22’s F-119 engines. That contract provides for nearly $4.5 million per aircraft, just for the engines. That works out to $8.2 million per year to sustain each F-22.
Because government contracting officials negotiated a poor deal for the American people by not acquiring the intellectual property rights for the F-35 program, or the F-22, Lockheed Martin (and Pratt & Whitney) holds all the cards in future negotiations over upgrades and annual sustainment.
To take one example, the F-35 cannot operate without the Autonomic Logistics Information System (ALIS). This complex, extremely troubled computer network combines combat-mission planning, threat analysis, maintenance diagnosis, supply shipments, and scheduling. Lockheed Martin owns and operates the network, which means that without Lockheed, the services cannot fly the aircraft they supposedly own. Until the government acquires the data rights for the program, there’s no option but to continue paying Lockheed Martin pretty much whatever it demands. Without addressing the matter of intellectual property rights, any of the government’s attempts to rein in the program’s costs are bound to amount to very little in the grand scheme of things.
While any effort to reduce the costs of this monumentally wasteful program is to be applauded, the F-35 Affordability Study itself is quite revealing of one of the program’s fundamental problems. The F-35 program office claims this study “has instilled a culture of cost consciousness to ensure decisions at all levels of the program take into account the cost impact of each decision made.” Why did officials wait until 2017 to do this when such a culture should have been cultivated from the beginning? Or—better yet—the Pentagon could have pursued a less complex, less risky, and less concurrent program from the outset and precluded the need for such machinations now, nearly two decades down the line.
Despite any proclamations from the Pentagon, the F-35 program’s development phase will not be complete in any meaningful sense this year, or for many years to come. The F-35 Deficiency Review Board document reveals that F-35 Joint Program Office officials are not even attempting to deal with serious design flaws, just so they can claim to have finished this phase without busting the budget and the schedule yet again. Instead, without admitting it, they will complete development work and fixes later, that is, within their newly devised, amorphous “modernization” phase, free of the restrictions and accountability imposed by a budget and milestone baseline.
Congress—instead of exercising its oversight authority to prevent the inevitable cost overruns, performance degradations and safety hazards caused by these bureaucratic machinations—has rewarded the program with unrequested billions of budget add-ons every year for the last three years running.
The men and women who will have to entrust their lives to these planes in combat, and the taxpayers footing the enormous bill, deserve better from their military leaders, their secretary of defense, and their Congress.
Ness Perry contributed to this investigation.
The Center for Defense Information at POGO aims to secure far more effective and ethical military forces at significantly lower cost.