The Pentagon is unable to explain the whereabouts of hundreds of thousands of F-35 Joint Strike Fighter spare parts worth over $85 million that are stored worldwide, according to a new report by the Government Accountability Office (GAO).
However, the actual value of the U.S. taxpayer-funded unaccounted components that have been “lost, damaged, or destroyed” is believed to be even higher, indicating a larger problem driven by the fact that the F-35 Joint Program Office – the most costly weapon system in history – lacks the capability to track the whereabouts of spare parts due to the setup of the fighter's supply chain.
Overall costs of the program are estimated to be more than $1.7 trillion over the program's life cycle.
The Department of Defense (DOD) explained that this is in part because various DOD offices and contractors haven't agreed on whether the spare parts should be categorized as government-furnished property.
“This lack of agreement affects how DOD processes lost parts. For example, of about a million lost parts worth $85 million, DOD only reviewed the circumstances surrounding 2% of identified losses since 2018,” the report said.
“Rather than owning the spare parts for their aircraft, the program participants share a common, global pool of spare parts that DOD owns and the prime contractors manage. These spare parts are held in over 50 domestic and international non-prime contractor facilities,” GAO explained.
As a consequence, the Joint Program Office (JPO) lacks the ability to monitor or have knowledge of the whereabouts of parts that are situated outside of the facilities of prime contractors. These parts encompass a wide range of items, including significant components like engines, wheels and landing gear, as well as basic items such as fasteners and screws.
“Without DOD taking steps to ensure that these spare parts are accountable under a contract, the F-35 Joint Program Office will be unable to either gain or maintain accountability over these spare parts and will not have data, such as locations, costs and quantities, needed for financial reporting or to ensure that government interests are protected,” GAO warned.
The release of the report coincides with ongoing discussions between the Pentagon and the main contractor, Lockheed Martin, regarding the future of the supply chain for the program. Both parties are anticipated to shift toward a new five-year agreement based on performance-based logistics (PBL) by the end of the year, a proposal that Lockheed has advocated for over the course of several years.
The GAO, meanwhile called for four changes moving forward to how the F-35 manages its supply lines, including “ensuring that all spare parts in the global spares pool are categorized appropriately and are accountable under a contract,” and that requiring the Under Secretary of Defense for Acquisition and Sustainment, in coordination with the Under Secretary of Defense to “review all applicable guidance and policies for asset accountability and update as necessary to ensure clarity regarding when an asset is considered government-furnished property.”
Other steps include: “develop and document a process for contractors to report government-owned global spares pool losses of spare parts that are not accountable under a contract, until all spare parts in the global spares pool are made accountable,” and “develop and document interim procedures to ensure that disposition instructions are provided, consistent with federal regulations, for the disposition of spare parts in the global spares pool that are excess, obsolete, or unserviceable, until such spare parts are entered into the GFP Module for disposition.”
