	Background

The JSF program is DOD’s largest cooperative program. As currently planned, the program will cost about $200 billion to develop  and procure about 2,600 aircraft and related support equipment. United States and Partners Expect Significant Benefits

The United States and its partners expect to realize a variety of benefits  from cooperation on the JSF program. Partners also expect to benefit from increased  access to JSF program data, defined influence over aircraft requirements,  and technology transfers to their industries from U.S. aerospace  companies. United States Benefits from Financial Contributions and Access to Partner Industry

According to DOD and the program office, through its cooperative  agreements, the JSF program contributes to armaments cooperation  policy in the following four areas:    Political/military–expanded foreign relations. Operational–improved mission capabilities through interoperability  with allied systems. Partners Benefit Financially and from Shared Technology and Information

Partner governments expect to benefit financially by leveraging significant  U.S. resources and inventory requirements to obtain an advanced tactical  aircraft they could not afford to develop on their own. Program Challenges Force JSF Program to Balance Competing Pressures

International program participants have significant expectations regarding  government and industry return based on their contributions. Recent actions by  Lockheed Martin to address partner concerns could represent a departure  from the JSF competitive contracting approach and result in increased  program costs. International participation in the program also presents a  challenge because the transfer of technologies necessary to achieve DOD’s  goals for aircraft commonality is expected to far exceed past transfers of  advanced military technology. Alternate Contracting Approach May be Used to Meet Partner Expectations

DOD and the JSF Program Office have said that the use of competitive  contracting is central to meeting partner expectations for industrial  return and will assist in controlling program costs. To that end, Lockheed Martin performed assessments for  many of the partners to determine the ability of their industries to compete  for JSF contracts. Decisions in this area will be critical because the extent of  technology transfers necessary to achieve program goals will push the  boundaries of U.S. disclosure policy for some of the most sensitive  U.S. military technology. Due to the  degree of international participation at both a government and an industry  level, a large number of export authorizations are necessary to share  project information with governments, solicit bids from partner suppliers,  and execute contracts. Therefore, future cost  increases in the JSF program may fall almost entirely on the United States  because there are no provisions in the negotiated agreements requiring  partners to share these increases. DOD has not required any of the partners to share cost program  increases to date. International participation in the  program, while providing benefits, makes managing these challenges  more difficult and places additional risk on DOD and the prime contractor.
Why GAO Did This Study

The Joint Strike Fighter (JSF) is a cooperative program between the Department of Defense (DOD) and U.S. allies for developing and producing next generation fighter aircraft to replace aging inventories. As currently planned, the JSF program is DOD's most expensive aircraft program to date, costing an estimated $200 billion to procure about 2,600 aircraft and related support equipment. Many in DOD consider JSF to be a model for future cooperative programs. To determine the implications of the JSF international program structure, GAO identified JSF program relationships and expected benefits, and assessed how DOD is managing challenges associated with partner expectations, technology transfer, and recent technical concerns.

What GAO Found

The JSF program is based on a complex set of relationships among governments and industries from the United States and eight partner countries. The program is expected to benefit the United States by reducing its share of program costs, giving it access to foreign industrial capabilities, and improving interoperability with allied militaries. Partner governments expect to benefit financially and technologically through relationships with U.S. aerospace companies and access to JSF program data. Yet international participation also presents a number of challenges. Because of their contributions to the program, partners have significant expectations for financial returns, technology transfer, and information sharing. If these expectations are not met, their support for the program could deteriorate. To realize these financial returns, partners expect their industry to win JSF contracts through competition--a departure from cooperative programs, which directly link contract awards to financial contributions. However, recent actions by the prime contractor could indicate a departure from this competitive approach and a return to directed work share. Technology transfer also presents challenges. Transfers of sensitive U.S. military technologies--which are needed to achieve aircraft commonality and interoperability goals--will push the boundaries of U.S. disclosure policy. In addition, a large number of export authorizations are needed to share project information and execute contracts. These authorizations must be submitted and resolved in a timely manner to maintain program schedules and ensure partner industry has the opportunity to compete for subcontracts. Finally, recent technical challenges threaten program costs and possibly partner participation in the program. While partners can choose to share any future program cost increases, they are not required to do so. Therefore, the burden of any future increases may fall almost entirely on the United States. If efforts to meet any of these partner expectations come into conflict with program cost, schedule, and performance goals, the program office will have to make decisions that balance these potentially competing interests within the JSF program.