Inspector General Audit Highlights F-35 Contract Oversight Shortcomings
In a recent audit, the Department of Defense’s Inspector General revealed significant lapses in the oversight of Lockheed Martin’s performance under the 2024 F-35 sustainment contract. The findings suggest that the defense contractor was not adequately held accountable for its underperformance, despite being paid substantial amounts.
The audit scrutinized the F-35 Joint Program Office’s (JPO) management of the sustainment contract, which led to Lockheed Martin receiving $1.7 billion by mid-2025. This payment was issued in the absence of any “economic adjustment,” even though the aircraft’s readiness rate was only 50%, meaning they were operational just half the time.
Despite falling short of the military’s requirements for Full Mission Capable and Air Vehicle Availability rates, Lockheed Martin was still compensated over $1 billion. An Office of Inspector General (OIG) memo stated, “The average Air Vehicle Availability rate for all F-35 aircraft in FY 2024 was 50 percent, meaning the aircraft were not available to fly half of the time.”
The report criticized the JPO for not enforcing key performance metrics in the contract, such as aircraft readiness and material inspection requirements. The audit also highlighted the ineffective use of contracting officer’s representatives, who are crucial for overseeing performance at F-35 sites.
This lack of stringent oversight is concerning given that the F-35 program is the Department of Defense’s largest acquisition initiative, with an estimated cost of over $2 trillion over its lifetime. The F-35s are designed for a service life of approximately 8,000 flight hours, although testing indicates that the F-35A variant could endure up to 24,000 hours, according to Simple Flying.
In response to these findings, the OIG made several recommendations aimed at improving contract oversight and performance evaluation. These include incorporating incentive metrics aligned with military requirements, refining the roles of contracting officer’s representatives, and reassessing staffing levels at F-35 oversight locations.
“The official Performing the Duties of the Assistant Secretary of Defense for Sustainment, responding for the Under Secretary of Defense for Acquisition and Sustainment and the Program Executive Officer for the F-35 JPO, generally agreed with our recommendations,” noted the audit report.
Out of seven recommendations, six have been marked as resolved, though they remain open pending further action, while one remains unresolved. The office has requested feedback on the unresolved issue from the Under Secretary of Defense for Acquisition and Sustainment within 40 days from the report’s release.
To close the resolved recommendations, the OIG requires documentation proving the implementation of the proposed actions by management.
