Posted on 05/25/2023 5:36:23 AM PDT by Red Badger
Because "the F35 JPO does not have an independent record of the global spares pool, and the values of the lost spare parts are not the fully burdened cost, the $85 million of identified losses by [the subcontractor] may not accurately represent the full quantity and value of lost spare parts,” the GAO found.
WASHINGTON — The government cannot account for more than $85 million in F-35 Joint Strike Fighter spare parts, a number that is likely far smaller than the actual total of untracked components, the Government Accountability Office has found in a new report.
But worse than the unknown number of “lost, damaged or destroyed” taxpayer-funded equipment is fact that the F-35 Joint Program Office lacks the ability even to be aware of what spare parts are out in the world, thanks to how the supply chain for the fighter is set up.
As with almost all aspects of the F-35, the supply chain arrangement is uniquely complicated by the international structure of the program. “Rather than owning the spare parts for their aircraft, the program participants share a common, global pool of spare parts that DOD owns and the prime contractors manage. These spare parts are held in over 50 domestic and international non-prime contractor facilities,” GAO explained.
The result is that the JPO does not track or have visibility into parts that are located outside of prime contractor facilities — parts ranging from big ticket items like engines, wheels and landing gear down to basic items like fasteners and screws.
“Without DOD taking steps to ensure that these spare parts are accountable under a contract, the F-35 Joint Program Office will be unable to either gain or maintain accountability over these spare parts and will not have data, such as locations, costs, and quantities, needed for financial reporting or to ensure that government interests are protected,” GAO warned.
The report comes at a time that the Pentagon and primary contractor Lockheed Martin are hashing out the future of the program’s supply chain. The two sides are expected to transition by the end of the year to a new five-year, performance-based logistics (PBL) agreement, which Lockheed has pushed for over the years.
However, program officials are making a drive for more rights to the data underpinning the sustainment picture as part of the PBL, so that more upkeep can be performed directly by the military services rather than contracted out. Lockheed, whose business model on the F-35 has always been predicated on a lucrative, decades-long sustainment tail, has traditionally pushed back .
GAO auditors, attempting to understand the full risks of the supply chain setup, dove into one particular test case of a subcontractor from May 2018 through October 2022. In that timeframe, GAO found that the subcontractor “incurred losses of over 1 million spare parts from the global spares pool totaling over $85 million.” But of those losses, the subcontractor only informed the JPO of “approximately 60,000 losses worth approximately $19 million” — meaning the JPO was made aware of less than 2 percent of the total quantity of lost items.
“Because, as previously reported, the F35 JPO does not have an independent record of the global spares pool, and the values of the lost spare parts are not the fully burdened cost, the $85 million of identified losses by [the subcontractor] may not accurately represent the full quantity and value of lost spare parts,” GAO added. “According to DOD officials, the full quantity and value of these spare parts may be significantly higher.”
The issue isn’t the subcontractor trying to hide anything, GAO said, but rather that there is a disagreement at a fundamental level about what these companies have to report back to JPO on. Hence, the GAO calls for four changes moving forward to how the F-35 manages its supply lines. Quoting directly:
The Under Secretary of Defense for Acquisition and Sustainment, in coordination with the F-35 Program Executive Office, should take steps to ensure that all spare parts in the global spares pool are categorized appropriately and are accountable under a contract. The Under Secretary of Defense for Acquisition and Sustainment, in coordination with the Under Secretary of Defense (Comptroller), should review all applicable guidance and policies for asset accountability and update as necessary to ensure clarity regarding when an asset is considered government-furnished property. The Under Secretary of Defense for Acquisition and Sustainment, in coordination with the F-35 Program Executive Officer, should develop and document a process for contractors to report government-owned global spares pool losses of spare parts that are not accountable under a contract, until all spare parts in the global spares pool are made accountable under a contract and losses are entered into the GFP Module for DCMA’s adjudication. The Under Secretary of Defense for Acquisition and Sustainment, in coordination with the F-35 Program Executive Officer, should develop and document interim procedures to ensure that disposition instructions are provided, consistent with federal regulations, for the disposition of spare parts in the global spares pool that are excess, obsolete, or unserviceable, until such spare parts are entered into the GFP Module for disposition. RAF Typhoon Storm Shadow Recommended After watching Ukraine, UK ‘looking at’ more risk-taking in weapons development, integration “Making these decisions can actually affect the safety of people, so what we’re looking at now, [considering] there will always be an end-state of a design for a weapon, there may be occasions where we want to take greater risk and therefore accelerate integration,” said John Cunningham, Head of Weapons Evaluation and Capability Assurance (WECA) at the UK MoD.
By TIM MARTIN
In a response included with the report, undersecretary of defense for acquisition and sustainment Bill LaPlante concurred with the GAO’s findings.
A Lockheed spokesperson told Breaking Defense in a statement that the company “manages F-35 spare part inventory in compliance with contract requirements. We continue to partner with the Joint Program Office to increase insight into spare part availability and support fleet readiness.”
In a statement, JPO spokesman Russ Goemaere said that “Although the F-35 JPO concurs with the recommendations it is important for the American people and our global partners to understand that we know where the vast majority of F-35 spare parts are in the global supply chain. At this time, our error rate is around 1%, and while this is considered much better than the government goal of 5%, we will continue to work with the services and our industry partners to improve spare parts accountability and drive readiness for our warfighters.
“Accountability of F-35 spare parts is currently managed through a non-government system; however, we are working with industry to move this data to a government system,” Goemaere added.
Adopt a soviet style government and economy, expect soviet style corruption and incompetence.
Eyeran involved?
10% for the Big Guy.
Parts available now on E Bay.
“incurred losses of over 1 million spare parts from the global spares pool totaling over $85 million.”
That’s $85 per part. In the DOD world, from what little I do know, you may be able to buy fasteners for $85 each, but not much more. So they either mean $85 Billion, or the amount lost is in the noise.
So, that’s what - about two wheelbarrow loads?
It is obvious this will NEVER get better. In five years, the dollar figure of “missing” F-35 parts will be ten times larger.
Truly.
Most likely one pallet of custom hydraulic fittings.
Check with our enemies.
Biden sold them to China to reverse engineer.
Somebody’s building an F-35 in their garage.
Good for them.
You won’t get any help from the Defense Contract Audit Agency, a truly incompetent agency. Working there was the worst 3 years of my life.
DCAS?....................
Somebody is taking one part home evry day in order to build his own private F35.
https://www.youtube.com/watch?v=Hb9F2DT8iEQ
I was involved in inventory issues for over 20 years. When you look at the value of the whole inventory of parts, that is inconsequential.
My organization used to provide tools and shop material in support of Navy and Air Force maintenance depots. I used to hate it when contracting officers used to try to interject themselves into what tools were to be used. I had one contracting officer throw a hissy fit over a $60 screw driver. She said that a 12 dollar black iron screw driver was all that was needed. Here is the thing, iron screw drivers were not authorized, because iron rusts and rust flakes could not be allowed in certain areas. That particular screw driver was: 1) the longest screw driver that would fit into a blind access hole 2) made of a special alloy giving it the strength of steel an be made of non- ferrous material. That access hole was angled so that you had to use a camera to see the screw needed to be tightened. That depot only needed 4 of those screw drivers and they were closely controlled and only used for that one particular application. At the moment of this incident, there was only two special screw drivers, so they need to buy two new ones (Yes, screw drivers wear out.)
We had a special meeting with the contracting officer over purchasing two new $60 screw drivers. When I was asked for my opinion I stated, "looking at who is in this meeting and how long this has gone on we have wasted over $500 of taxpayer money in labor costs on $120 worth of screw drivers. Document why the screw drivers are needed, buy the screw drivers and let's worry about real problems. The contracting officer blew a gasket, but her boss (a more operationally focused contracting officer) told her that he was not going to tell the plane mechanics how to do their jobs, nor was he going to tell a depot what they needed to run their operations.
“She said .......”
That’s all I needed to know....................😎
DCAA is their acronym. I think DCAS refers to Defense Contract Audit Standards.
Defense Contract Administration Services ..............
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