Defense Department poorly managed design, construction of F-35 fighter, auditor says

Introduction

The Pentagon failed to supervise the design and construction of its new fleet of F-35 stealth warplanes adequately, its own auditor concluded on Sept. 30, placing the blame squarely on military brass for performance and safety problems in the largest and most expensive weapons program in history.

Previous government audits of the $1 trillion military program have criticized its contractors or focused on technical flaws in the plane itself. But this report, probably the deepest dive so far into the origins of the fighter jet’s performance troubles, is the first to focus intensively on the Pentagon’s mismanagement of what a Senator has depicted as a “textbook” example of poor procurement.

In double-barrelled criticisms, the Defense Department’s Office of Inspector General report said the F-35 program office’s oversight of Lockheed Martin, the prime contractor, was “inadequate,” while the Pentagon’s Defense Contract Management Agency’s oversight of contractors was “ineffective.”

It said that as of March 2013, there were on average more than 850 “quality action requests” for each aircraft in the four production lots ordered so far by the Pentagon, and that “scrap, rework, and repair rates” for each aircraft have exceeded 13 percent for the past two years.

“Although it would be unrealistic to expect first production to be issue free, our contractor assessments indicate that greater emphasis on quality assurance … and process discipline is necessary, if the Government is to attain lower program costs,” the audit stated.

The 136-page report, signed by deputy inspector general for policy and oversight Randolph Stone, urged the Pentagon to reassess all the critical safety problems in the advanced aircraft, which can’t fly in thunderstorms, has poor cockpit visibility, and relies on the use of a state-of-the-art helmet that designers are having difficulty getting to work.

Auditors in particular recommended that Pentagon contracts related to the plane should be changed to include an “escape clause” stipulating that the government isn’t required to pay for products that don’t meet its standards, rather than simply accepting the bills.

It also said the lead defense contractor, Lockheed Martin, had not implemented a thorough, compliant quality assurance program, and that it lacked clear criteria for deeming aircraft fully completed. “As a result, acceptance of F-35 aircraft depends on the judgment of individual subject matter experts without the use of clearly measurable and verifiable acceptance criteria to confirm” that the aircraft are able to do all they are supposed to do.

The Joint Program Office, or JPO, said it was complying with the recommendation, saying that under a new fixed-price agreement with Lockheed, the contractor would “absorb a level of cost for poor quality.”

The report in part was based in part on a series of visits by auditors to defense plants in the U.S. and abroad. During those inspections, documents reprinted in the report show, the auditors repeatedly found a lack of respect for written procedures, discipline in following them and attention to detail.

A June 2012 audit of F-35 subcontractor L-3 Communications in Alpharetta, Georgia, which is building the cockpit display system, found was a “failure to follow established procedures throughout most quality management processes reviewed.” The investigation, documented in a July 11 memo published with the report, also found that the system for calibrating tools — a key to insuring that parts fit together and work properly — “had serious deficiencies,” and that quality control records weren’t properly maintained.

“L-3’s lack of process discipline in the area of product verification was particularly disconcerting,” the report said. “We noted systematic breakdowns … that raises questions about the integrity of the L-3 product.”

Vide Admiral David Velent, the F-35 program’s executive officer, accepted the findings and said the office was working with Lockheed and L-3 to develop a plan for correcting the problems. A spokesman for L-3 in New York said she could not immediately comment.

The F-35 Program Office’s written response to the report was in part a mea culpa, calling the assessment of quality assurance programs “thorough, professional, well-documented and useful to the F-35 Enterprise.” It agreed with most key findings, including that insufficient instructions from the office and poor execution by the contract management agency “resulted in ineffective government oversight of the F-35 program.”

But the Joint Fighter Office also defended itself by asserting that the crisis had passed. The JFO said that its employees and those of the Defense Contract Management Agency had previously identified all the “weaknesses” documented, saying these “do not present new or critical issues that affect the health of the program.”

The JPO also rejected a recommendation that it create an independent quality assurance organization, saying that it and the contract management agency have, in part, have been working together to improve the process.The office said further it didn’t have the “responsibility or resources” to track the quality of work through Lockheed Martin’s supply chain, which includes five major subcontractors, as the report recommended. Instead, it says, it performs spot checks and conducts regular program reviews.

Despite the F-35’s troubles, the military shows no signs of backing away from its plans to build 2,443 of the planes, for an estimated cost of $321 billion. Operations and maintenance costs alone will exceed $1 trillion over the fleet’s 35-year lifespan.

Gen. Mark Welsh, the Air Force chief of staff, told a June 19 congressional hearing that the F-35 was “the only viable option” to replace the service’s aging F-16s, a cheaper and much simpler aircraft — a view he reaffirmed at an Air Force Association meeting in Sept

At the June 19 hearing, however, Sen. Dick Durbin, D-Ill., called the F-35 a “textbook on how not to run a major acquisition effort.” That was the same month a Government Accountability Office auditor warned that paying the F-35 program’s bills could break the Pentagon budget. J. Michael Gilmore, the Pentagon’s chief weapons tester, similarly warned that the fighter’s costs are climbing — not shrinking as they typically do once production begins — as officials scramble to fix problems cropping up during flight tests.

He noted that combat testing — the “most challenging portions” of the testing — isn’t scheduled to begin until 2018.

The Joint Fighter Office said in its response that of the 363 corrective actions suggested in the report, 78 percent had been completed as of Monday. The remaining 74 actions, it said, were still being implemented or developed.

The two Pentagon agencies, the statement said, “are working together with Lockheed Martin and suppliers to address all findings. We will continue to conduct internal audits, maintain government oversight, and apply process controls to ensure compliance. In addition, the program team will look for additional opportunities to improve workmanship and quality.”

Michael J. Rein of Lockheed Martin issued a statement noting that the Inspector General’s investigation was concluded last year and that most issues had been addressed.

“Producing quality products is a top priority for the F-35 Program, and Lockheed Martin and its suppliers strive every day to deliver the best aircraft possible to our customers,” the statement said. “When discoveries occur, we take decisive and thorough action to correct the situation. Our commitment is to deliver the F-35’s world class 5th Generation fighter capabilities to the warfighter on time and within budget.”