As a result, the initial  operational capability date was delayed. With reduced quantities and increased program costs, the JSF program is  now buying fewer aircraft at a higher cost, thereby reducing the program’s  buying power. Over the past year,  DOD has been working to restructure the JSF program to accommodate  changes in the aircraft’s design; until this restructuring is completed, it will  be difficult to accurately estimate program costs. The program plans to have a more comprehensive cost estimate in  the spring of 2005. JSF’s Current Acquisition Strategy May Not Provide for Successful Program Execution

The JSF program does not have an evolutionary, knowledge-based  acquisition strategy that fully follows the intent of DOD’s acquisition  policy. This type of strategy is necessary for having an executable business  case in the future. Table 4 compares the product  knowledge available at the JSF system development start and the  knowledge expected to be available to support future decision points  based on the current acquisition plan. Recommendations for Executive Actions

Given that DOD has invested only about 10 percent of the estimated cost  to develop and produce the JSF aircraft, and that significant investments  are planned in the next few years that can lock the program into a higher- risk acquisition, we recommend the Secretary of Defense take the  following two actions to increase the likelihood of having a successful  program outcome by delivering capabilities to the warfighter when needed  and within available resources:  (1) Establish an executable program consistent with best practices  and DOD policy regarding evolutionary acquisitions. Appendix I: Comments from the Department of Defense

Appendix II: Scope and Methodology

To determine the status of the Joint Strike Fighter (JSF) business case for  delivering new capabilities to the warfighter, we compared the original  program estimates with current estimates. To evaluate whether the current acquisition plan follows an evolutionary,  knowledge-based approach to meeting business case goals in the future,  we applied GAO’s methodology for assessing risks in major weapon  systems. We also reviewed DOD’s acquisition policy to  determine whether JSF’s approach met its intent.
Why GAO Did This Study

Under the Ronald W. Reagan National Defense Authorization Act of 2005, GAO is required to to review the Joint Strike Fighter (JSF) program annually for the next 5 years. This is the first GAO report, and it (1) analyzes the JSF program's business case for delivering new capabilities to the warfighter and (2) determines whether the JSF program's acquisition strategy follows an evolutionary, knowledge-based approach. Also, the act requires GAO to certify whether we had access to sufficient information to make informed judgments on the matters contained in our report.

What GAO Found

GAO found that the original business case for the JSF program has proven to be unexecutable. DOD now plans to buy 535 fewer aircraft than originally planned. Due to increases in total program costs and program acquisition unit costs, the DOD has reduced buying power and is now buying fewer JSF's at a higher investment than originally planned. The first delivery of initial operational capabilities to the warfighter have been delayed 2 years so far. The program's current acquisition strategy does not fully follow the intent of DOD's evolutionary, knowledge-based acquisition policy that is based on best practices. An evolutionary, knowledge-based strategy will be necessary to successfully execute a new business case in the future. Instead, the program plans to concurrently develop the JSF technologies, integrate and demonstrate the expected product design, and produce deliverable fighters, which is a risky approach. Finally, as a result of a lengthy program replanning effort that had been in process during most of 2004, GAO did not have access to the cost estimate expected to be contained in the JSF's Selected Acquisition Report, to be delivered by Congress in the spring of 2005. At the time of GAO's review, JSF program officials were still collecting the necessary information to develop and complete the estimate. Therefore, GAO's review was limited to the estimated program costs contained in the December 31, 2003, Selected Acquisition Report.