WASHINGTON — The costs of major upgrades to the F-35 fighter are continuing to rise, and repeated delays on critical simulation tests and on a full-rate production decision are increasing the risk the Defense Department buys faulty jets that need to be fixed, a new Government Accountability Office report said.

In Monday’s report, GAO found that the cost of the F-35′s Block 4 modernization effort grew to $15.1 billion in 2021, $741 million more than the estimated cost in 2020.

Much of that increase was due to a $330 million increase in the estimated cost of the Technology Refresh 3 effort, an upgrade to the F-35′s hardware and software that seeks to improve its processing capability, display units and increased memory, GAO said. The development of Tech Refresh 3 has proven to be more complicated than expected, program officials told GAO, and has driven up the price tag.

Another $312 million in cost increases came from modernizing aging test aircraft supporting weapons development, as well as other testing and lab upgrades, the report found. Operational test and evaluation officials told GAO more flight test capacity is needed to ensure several Block 4 capabilities, including weapons integration, work properly.

Multiple problems with software, funding issues that halted software development for eight months in 2021, and the addition of new capabilities has also delayed the delivery of final Block 4 capabilities to 2029, three years later than originally expected.

Lockheed Martin, which builds the F-35, and program officials took several steps to improve its software development, including increased lab testing of software, improved and more consistent monitoring of software development, and lengthening the schedule for developing Block 4 software “drops” from six to 12 months, beginning in 2022.

This longer software development timetable would make it easier to fix bugs, manage upcoming work schedules and ease the testing backlog that developed under the six-month schedule, program officials told GAO.

But GAO said it remains to be seen whether these changes will improve how Block 4 is rolled out.

The report noted the year-long software development period is a step away from the “agile” software development process of upgrades being delivered in chunks, rather than large quantities of changes dropping all at once, after a lengthy development period.

And test officials with the government told GAO that shifting to a 12-month software drop schedule won’t fix the problem of late deliveries if the program office keeps adding surprise changes. A longer time between software upgrades also means patches for bugs found in the field might take longer to deliver, GAO said.

Major test delay

GAO also raised concerns about the continued delay of the Joint Simulation Environment test, without which the Pentagon can’t wrap up the F-35′s initial operational test and evaluation process and make a decision on full-rate production.

The military is acquiring up to 152 F-35s each year for the Air Force, Navy and Marine Corps — which GAO noted is nearly the full production rate — and is on track to have 1,115 fighters delivered in 2023. If the full-rate production decision occurs that year, GAO said, that will mean about one-third of the total number of F-35s expected to be bought will have been delivered before it finishes operational testing.

This puts the program at risk of more cost overruns, GAO said, if additional performance issues are identified after large numbers of fighters are in the field.

The COVID-19 pandemic has also worsened ongoing supply chain issues and caused labor disruptions, which led to delays in the delivery of F-35s, the report said. The program office and contractors decided in September 2021 to adjust delivery schedules of aircraft through 2023 to absorb the blow from COVID-19. This meant 35 fighters of 120 delivered in 2020 were no longer considered to be late.

But the report also dinged engine contractor Pratt & Whitney for delivering “nearly all” F-35 engines late in 2021. Only six of the 152 engines delivered by Pratt & Whitney were on time, the report said, its lowest number in at least five years.

This was due to quality issues — such as some raw materials being manufactured incorrectly — and not due to COVID-related problems, at least since February 2021.

Stephen Losey is the air warfare reporter for Defense News. He previously covered leadership and personnel issues at Air Force Times, and the Pentagon, special operations and air warfare at Military.com. He has traveled to the Middle East to cover U.S. Air Force operations.

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