GAO: ‘Action Needed’ to Solve F-35 Block 4 Issues

Even after reducing the scope of Block 4 F-35 upgrades, Lockheed Martin will still needs two years to develop and install planned improvements, the Government Accountability Office said in a new audit of the fighter program. Details about what upgrades will be carried into production, as well as a new cost estimates won’t be available until this fall, the report said.

The report, “F-35 Joint Strike Fighter: Actions Needed to Address Late Deliveries and Improve Future Development,” was released Sept. 3. The watchdog agency recommended increased government intervention in Lockheed Martin’s supply chain management and changes to the way the company and its engine partner, Pratt & Whitney, receive progress and incentive fees.

Block 4 now will “have fewer capabilities, will experience schedule delays, and will have unknown costs” until the F-35 Joint Program Office finishes separating Block 4 into a sub-program and completes a new cost estimate, GAO said. Those actions should be complete this fall.

Then-F-35 program director Lt. Gen. Michael Schmidt said last year that Block 4 would be “reimagined,” saying the upgrade was overly ambitious and that some of the planned improvements weren’t worth the money or effort needed to complete them. Marine Corps Lt. Gen. Gregory Masiello succeeded Schmidt this summer.

At GAO’s recommendation, Congress in 2023 directed that Block 4 be broken out as a distinct sub-program so that cost increases and schedule delays attributable to the upgrade could be better understood. Block 4 technical, cost, and schedule problems had been largely hidden by the scale of the $2 trillion program, which includes three aircraft variants and numerous partner countries.

Block 4 will now consist of “a subset of the original 66 … capabilities and those added in later years,” the GAO said, but the JPO did not reveal what specific improvements will be included. Some that required an upgrade to the engine will be deferred until the Engine Core Upgrade comes along, circa 2033. Others have been removed because “they … no longer meet warfighter needs.” At one point, Block 4 was said to cover more than 80 discrete improvements.

The F-35 program, meanwhile, is still struggling to complete testing of the Technology Refresh 3 effort, a precursor that provides the enhanced processing power and software needed for Block 4’s enhancements. Testing delays for TR-3 led to a yearlong hold on F-35 deliveries. GAO noted that holdup, reporting that airframe and engine deliveries averaged 238 days late in 2024.

“According to program officials, Lockheed Martin plans to begin delivering combat-capable aircraft with the TR-3 that will enable Block 4 capabilities in 2026, a three-year delay, due to hardware and software issues,” the GAO said.

But GAO also cited “supply chain challenges [that] continue to strain” aircraft and engine production schedules, “leading to increasingly late deliveries.”

GAO said the program office continues to push for faster production without addressing these issues.“ Better aligning planned production and sustainment demands with contractor capacity would improve on-time deliveries, the report argues.

The GAO also recommended:

The Pentagon evaluate “Lockheed Martin’s capacity to meet planned deliveries on time”
The use of incentive fees, which it criticized for effectively “reward[ing] contractors for delivering aircraft and engines late.
The JPO expand use of digital design, development and evaluation processes

The Pentagon concurred with most of the recommendations, and the GAO “acknowledges the Pentagon has taken some positive steps,” the report said, but the authors believe “further action is warranted to fully address the recommendations.”

The JPO said it is developing a response to the GAO’s comments but could not provide them by press time.

In its conclusions, the GAO said that the F-35 “remains critical to our national defense, as well as that of our partners and allies,” and will remain so “for decades to come.” It noted two decades of reports in which it “recounted cost and schedule overruns,” but said that now that the program is focused on production, and less on development, “it has an opportunity to cut a new path of greater accountability for delivering highly capable aircraft that meet warfighter needs at the pace of relevance.”

A definitized contract for F-35 production Lots 18 and 19 will be announced “at the start of autumn,” a JPO spokesperson said. Lockheed and the JPO reached a “handshake deal” on the Lots last November, and the JPO promised the final contract details—which give unit costs for all variants and customers—in the spring, and then the summer.