What does Lockheed have to do to mark the end of the F-35's SDD?
The clearest explanation I have found, comes from the Congressional Research Service (www.crs.gov), from RL30563.pdf:


  The F-35 is currently in low-rate initial production, with 280
  aircraft delivered as of April 2018. At least 250 of those were in
  U.S. service. Four to five aircraft are currently delivered each
  month, with the production rate scheduled to increase to 120 per year
  by 2019. In keeping with the acquisition plan that overlapped
  development and production (known as “concurrency”), the F-35 was also
  in system development and demonstration (SDD), with testing and
  software development ongoing, from October 2001 until April 11, 2018.
  The SDD phase will formally continue until the end of Initial
  Operational Test and Evaluation, when a “Milestone C” full-rate
  production decision will be made.


A copy of the full PDF is available here:

https://fas.org/sgp/crs/weapons/RL30563.pdf

We know from other sources that Initial Operational Test and Evaluation (IOT&amp;E), will formally begin later this year, 2018.