Executive Summary

The F-35 Lightning II Program will go down in history as one of the most contentious, dysfunctional, yet important programs in the United States Defense and Aerospace History. The F-35 by design should never have been allowed. The number of diverse strategic gaps being filled or replaced by a single system spelled a criticality that was high. Plagued from the start by budget overages, project delays, and CAT-1 level accidents, it would leave the US Government no choice but to press onward. This report makes observations about how these issues could have been mitigated from a project management perspective and delivers recommendations moving forward.

Introduction

There are few projects across the US Aerospace and Defense industry as infamous, contentious, or as important as the F-35 program. The media have in recent times used phrases such as “dysfunctional trillion dollar fighter jet program,”[1] and “high profile problem child”[1] to describe this project which is still ongoing and has been the source of ire for the US Government, Lockheed Martin Corporation (the principal contractor), and United States taxpayers alike. While the program has a sordid past, its recent years have seen major signs of improvement with per unit costs decreasing from $241.2M USD to $89.2M USD in 2018, and a drastic decrease in major incidents.[1] While the future of this program may be viewed optimistically by decision makers and observers alike, the program will forever carry a legacy of dysfunction stemming from chronic budget overages, delays, and safety incidents. In this report, we will first briefly highlight the major issues that have insofar been observed with this program as viewed through a project management standpoint and finally provide recommendations for the project moving forward.

Establishing Scope and Project Initiation

The various dysfunctions in the F-35 program can all be tied in some manner back to the very concept of the aircraft. The F-35 was a platform that tried to be too many things. The concept of the F-35 was derived from the Joint Strike Fighter (JSF) program which ran throughout the 1980s and 1990s which was an effort to consolidate various legacy airframes into a single fighter for not only the USA but other countries including the United Kingdom, Italy, Canada, Australia, Turkey, the Netherlands, Denmark, and Norway.[4] Turkey was removed in July 2019.[5]

A US-led project, the consolidation of airframes was based on the needs of the US military, a template that US block allies could easily imitate. The Navy, Marines, and Air Force are the three components of the US military who operate aircraft which would categorically fall under the JSF program. [4] Varying mission sets and different mission requirements between the three branches would in turn lead to a demand for drastically different hardware and software requirements to be housed under a single airframe. The initial competition for the awarding of this contract was between Boeing and Lockheed Martin to see who would develop a concept aircraft that would ultimately be selected for production. The X-32 and X-35 were developed with the latter of the two belonging to Lockheed Martin, ultimately being selected to move into the System Development and Demonstration Phase (SDD). Because of the varying hardware and software specifications required between the Air Force, Navy, and Marines, project planners ultimately determined that three separate models would be pushed into service.

Program managers decided that the F-35A would be the first model developed followed by the F-35B and F-35C, which would have more complicated technical requirements.[1] The F-35A SDD was rolled out in 2006 at a unit cost of $241.2M USD.[1] Actual problems began from 2006 onward with the development of the F-35B and F-35C, which realized significant compounding problems due to their increased technical requirements. This ultimately led to an 18-month project delay due to the need for a total redesign that had reverberating budgetary effects on the entire program.[1]

If we look at this phase through a project management perspective, we can identify, in retrospect, several missteps. The core issue was not necessarily with the multidimensional project control, and the program’s reaction to scope creep and related budgetary and time overages, but the issue rather lay in the initial scope setting itself. It became apparent (post-2006) that the F-35 would need to sacrifice certain operational aspects in the B and C variants to accommodate additional hardware requirements. Simply put, the plane was trying to be too many different things. Time and budget overages were absolutely necessitated and justified in salvaging the project. At the onset of this project, the fierce bidding between contractors (Lockheed and Boeing) meant that highly optimistic rhetoric would be used with the release of the X-32 and X-35 as to the feasibility of being able to deliver the actual project much less execute it on a budget and schedule that would be competitive for consideration by the Pentagon. In project management terms, this was an unrealistic goal setting from the beginning. As with many defense contracts, budget overages and delays would be expected due to this phenomenon, but the risks of project failure, in this case, created a perfect storm.

From a risk perspective, when the scope of this project is examined in retrospect, it is apparent that the scope of a single project replacing so many airframes (ergo. mission capabilities) carries significant risk. The untenable criticality of this project was a major factor that continued to influence the style by how this project was managed. This project was designed to replace too many mission capabilities, and therefore the criticality of its success should have simply been assessed as too high from the beginning. If this were the case, the F-35 program could have been compartmentalized into separate airframes that would be managed as separate projects. The high criticality of this project meant that the project would drive on regardless of the cost.

Project Stakeholder Transparency 

The American People and by extension the United States Congress are arguably the most important stakeholders when considering the strategic implications of this project and the criticality of its success. Due to the extremely sensitive nature of the program, the American public was largely kept in the dark (pre-2010) as too many details surrounding the progress of the project, related delays, and budget overages.

A breach of the Nunn-McCurdy Act was triggered in 2010 in response to program budget overages that led to the per-unit cost ballooning over 89%.[1] Pursuant to this act, the US Congress would now launch an inquiry to evaluate the effectiveness of the program. Although from this point on, increased pressure and oversight was brought down onto the project. Military and congressional leaders had no choice but to continue moving forward at a pace and manner largely dictated by the primary contractor (Lockheed Martin), because of the high criticality strategic implications its failure would bring to the United States and its allies. Transparency across stakeholders post-Nunn-McCurdy was not however fully ameliorated. Transparency continued to be impeded by the fact that Lockheed Martin was not required to report financial data to the Program Management Office, in effect leaving them blind to the true nature of how or why money was being spent.[1] Additionally, Lockheed continued to keep control of certain key aspects that would drive project benchmarks, such as the test program schedule. It was during this time that Lockheed was observed to delay the execution of high criticality (and more complex) tests in favor of mitigating further delays rather than identify high priority problems early on.[1] This would lead to compounding failures as they moved into the production phase of the project.

Subsequent problems and concurrency

In June 2014, an F-35A (Air Force variant) burst into flames shortly before takeoff. The pilot luckily was able to escape unharmed. This represented the most serious incident involving an F-35 since the Block 1A was approved to fly in 2012. It identified the issue in this case as a fault in the engine turbine system that left fan blades prone to fracture. This is perhaps one serious example of many problems that required expensive overhauls across the product line that could be linked in some way to the practice of “concurrency.”[1] F-35’s that were pressed into service from the Block 1A release in 2012 onward were plagued with continuous problems because the contractor elected to enter the production phase while there were still unresolved issues with both hardware and software. This practice, dubbed as “concurrency,” is another example of the program management at the Pentagon having no choice but to select an option that would 1) most certainly be more costly both in terms of budget and human capital in the long run in order to 2) be delivered in a more timely basis because of the highly critical nature of the project.

According to a 2019 report by the Government Accountability Office (GAO), concurrency is still being used, with forwarding costs estimated to be $1.4B USD for concurrency-related expenditures on retroactive fixes for the 213 aircraft already delivered.[3] It was estimated over 550 aircraft will be delivered prior to operational testing and evaluation completion.[5] Concurrency projections are at their lowest levels since 2012[3] which seems to suggest that a more tightly managed practice of concurrency is still being used, with the continued employment of this project management method continuing to be favored over production delays.

Project Management Office- Contractor relationship 

Both pre and post-Nunn-McCurdy Act, industry observers noted that the Project Management Office at the Pentagon was not entirely fulfilling its duties to the project as they pertain to general oversight. In 2014, LTG Christopher Bogdan, the Air Force’s F-35 Program Manager noted that:

“all of the major decisions, whether they be technical, whether they be schedule, whether they be contractual, were really all being made by Lockheed Martin, and the program office was just kind of watching.”[1]

The fact of the matter was that Lockheed Martin not only was solely in charge of building the aircraft but also entirely controlled the supply chain, pilot training, gear, support, and other aspects of this project— thus giving this single contractor an enormous amount of power.[1][3] The criticality of this project as previously mentioned was a heavy influence in the sway that Lockheed Martin could have over the project. From a project management perspective, the program management office should have maintained de facto control over the project, as their purpose is to ensure the contractor is staying on track and is accountable to the needs of the Service and by proxy the taxpayer. Allowing Lockheed Martin to maintain de facto control over all aspects of the project could through the lens of modern project management best practices be viewed as a conflict of interest.

Recommendations 

As mentioned, recent years have seen major signs of improvement with per unit costs decreasing from $241.2M USD to $89.2M USD in 2018 and a drastic decrease in major incidents. Concurrency cost projections have decreased to $1.4B USD.[3] As of this writing, over 500[5]   aircraft have been delivered with full-rate production slated for between September 2020 and March 2021.[5] Peak production is slated for 2024 where the US will spend a slated $10.4B annually through 2044.[5] However, Lockheed Martin still maintains the lion’s share of control over all aspects of the project’s supply chain and continuing services. Even now, on average only 30% of delivered aircraft are operational, with the limiting factor being spare parts supply sourced from a variety of suppliers with Lockheed Martin fronting the bill and coordinating the supply efforts with the expectation of reimbursement down the line.[1]

The 2019 removal of Turkey as a partner has had more recent compounding effects on this supply chain disruption.[5] Continued transparency by Lockheed Martin and the Pentagons PMO is critical in ensuring continuous improvement in the program’s efficiency. Due to the high criticality of the mission capabilities satiated by the F-35, and the time-sensitive nature of production, concurrency practices should continue to be managed in an optimized fashion which balances the cost of production delays with the cost of retroactive fixes and CAT-1 safety hazards. In looking towards future projects, it would be prudent to remember the criticality of proposed life-cycle projects as they pertain to the filling of strategic and operational gaps, and evaluate whether criticality could be mitigated through compartmentalizing certain mission requirements into different systems.

Biography:

Derek Doddridge is a student at the China Europe International Business School (CEIBS). He formally served for seven years in the United States Army as an Infantryman and later as an Air Defense Artillery Officer where he oversaw organizational improvement projects and supported numerous Foreign Military Sales programs. Learn more about the author here: https://www.linkedin.com/in/derek-doddridge/

References:

[1] Insinna, V. (21 AUG 19). The New York Times. Inside Americas Dysfunctional Trillion Dollar Fighter Jet Program. Web. Retrieved from: https://www.nytimes.com/2019/08/21/magazine/f35-joint-strike-fighter program.html#:~:text=The%20F%2D35%20initiative%20is,investing%20in%20the%20aircraft’s%20development.

[2] Insinna, V. (12 June 2019). Defense News. The Pentagon is Battling the Clock to Fix Serious Unreported F-35 Problems. Web. Retrieved from: https://www.defensenews.com/air/2019/06/12/the-pentagon-is-battling-the-clock-to-fix-serious-unreported-f-35-problems/

[3] (13 JUN 18). The Government Accountability Office. Development Is Nearly Complete, but Deficiencies Found in Testing Need to Be Resolved. Web. Retrieved from: https://www.gao.gov/assets/700/692307.pdf

[4] (30 DEC 10). A History of the Joint Stroke Fighter Programme Martin Baker. A History of the Joint Strike Fighter Program: Searching for the Harriers Replacement. Web. Retrieved from: https://web.archive.org/web/20101230143911/http://www.martin-baker.co.uk/getdoc/d25952ab-5881-4999-8593-6f7f196c8770/a_history_of_the_joint_strike_fighter_programme.aspx

[5] (MAY 20). The Government Accountability Office. The F-35 Joint Strike Fighter Actions Needed to Address Manufacturing and Modernization Risks. Web. Retrieved from:  https://www.gao.gov/assets/710/706815.pdf