Lockheed F-35 Quality Failings Cited by Inspector General

The Pentagon’s inspector general has flagged hundreds of deficiencies and corrective actions needed for Lockheed Martin Corp. (LMT)’s F-35 fighter, the military’s costliest program.

The watchdog office’s “quality assessment” outlines what it calls ineffective management by Pentagon oversight personnel and insufficient attention to quality assurance in the design and manufacturing phases of the $391.2 billion F-35 program, according to a summary obtained by Bloomberg News. The full report may be issued as soon as Sept. 30.

Since May 2012, the inspector general has been reviewing adherence to quality assurance standards by Bethesda, Maryland-based Lockheed and five subcontractors: Northrop Grumman Corp., BAE Systems Plc, L-3 Communications Holdings Inc., Honeywell International Inc. and United Technologies Corp.

The inspector general’s audit said the F-35 program office should modify its contracts to “include a quality escape clause, to ensure the government does not pay for nonconforming product,” according to the summary.

Lockheed and the subcontractors are taking specific steps to respond to 343 findings and recommended corrective actions, the summary said, without disclosing the nature of the failings found.

As of yesterday, 269 of the 343 “corrective action plans” have been fully implemented, according to data provided to the inspector general by the Pentagon’s F-35 program office.

All of the corrective action plans are scheduled to be in place by April, according to Laura Siebert a Lockheed spokeswoman.

Price Tag

The Pentagon’s projected price tag of $391.2 billion for a fleet of 2,443 aircraft is up 68 percent from the projection in 2001, as measured in current dollars. The number of aircraft also is 409 fewer than called for in the original program.

Kyra Hawn, a spokeswoman for the Pentagon’s F-35 office, said in an e-mailed statement that “partnering with the IG offered an additional expert look at manufacturing processes, oversight and compliance that will improve F-35 quality moving forward.”

Siebert, the Lockheed spokeswoman, said in an e-mailed statement that the report “is based on data that’s more than 16 months old and a majority of the corrective action requests” in the document “have been closed.”

“When discoveries occur, we take decisive and thorough action to correct the situation,” Siebert said.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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