{"id":34046,"date":"2019-03-15T18:22:41","date_gmt":"2019-03-15T18:22:41","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2019\/03\/15\/dod-inspector-general-slams-f-35-program-office-for-allowing-lockheed-to-manage-government-property\/"},"modified":"2026-08-07T22:43:06","modified_gmt":"2026-08-07T22:43:06","slug":"dod-inspector-general-slams-f-35-program-office-for-allowing-lockheed-to-manage-government-property","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/air\/2019\/03\/15\/dod-inspector-general-slams-f-35-program-office-for-allowing-lockheed-to-manage-government-property\/","title":{"rendered":"DoD inspector general slams F-35 program office for allowing Lockheed to manage government property"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2014 The <a href=\"https:\/\/www.defensenews.com\/global\/europe\/2019\/03\/05\/top-us-general-in-europe-dont-give-turkey-f-35-if-they-buy-russian-system\/\" target=_blank>F-35 Joint Program Office<\/a> has not adequately tracked government property leant or leased to <a href=\"https:\/\/www.defensenews.com\/air\/2019\/02\/27\/how-the-us-air-forces-kessel-run-team-plans-to-solve-one-of-the-f-35-programs-biggest-headaches\/\" target=_blank>Lockheed Martin and its subcontractors<\/a>, an oversight that a new investigation by the Defense Department\u2019s inspector general said <a href=\"https:\/\/www.defensenews.com\/digital-show-dailies\/air-warfare-symposium\/2019\/02\/27\/congressional-supporters-stand-ready-to-protect-f-35-from-f-15x-budget-threats\/\" target=_blank>could impact readiness.<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Building the F-35 Joint Strike Fighter requires the use of government property such as materiel, special tooling like molds used to form the jet\u2019s structure and <a href=\"https:\/\/www.defensenews.com\/2018\/12\/07\/after-a-couple-months-delay-the-f-35-moves-into-operational-tests\/\" target=_blank>unique test equipment<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Over the lifespan of the program, the F-35 JPO has not followed the mandated procedures used to manage government-furnished property, or GFP, and instead <a href=\"https:\/\/www.defensenews.com\/digital-show-dailies\/farnborough\/2018\/07\/10\/4-ways-lockheeds-new-f-35-head-wants-to-fix-the-fighter-jet-program\/\" target=_blank>depended on Lockheed and its subcontractors<\/a> to keep track of such equipment, stated a DoD IG report released Friday.<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/defensenews\/air\/2019\/03\/08\/key-piece-of-f-35-logistics-system-unusable-by-us-air-force-students-instructor-pilots\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/4691097.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">Key piece of F-35 logistics system unusable by US Air Force students, instructor pilots<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">The Air Force&#039;s F-35 training squadrons have not used the Lockheed Martin-manufactured training management system, part of the Autonomic Logistics Information System, in about a year.<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">\u201cAs a result, the DoD does not know the actual value of the F\u201135 property and does not have an independent record to verify the contractor\u2011valued government property of $2.1 billion for the F\u201135 program,\u201d the report said. \u201cWithout accurate records, the F\u201135 Program officials have no visibility over the property and have no metrics to hold the prime contractor accountable for how it manages government property.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe lack of asset visibility restricts the DoD\u2019s ability to conduct the necessary checks and balances that ensure the prime contractor is managing and spending F\u201135 Program funds in the government\u2019s best interest and could impact the DoD\u2019s ability to meet its operational readiness goals for the F\u201135 aircraft.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The report claims the program office did not:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Maintain a record of GFP known as an \u201caccountable property system of record,\u201d or APSR.<\/li><li>Award contracts with complete GFP lists.<\/li><li>Coordinate with the Defense Contract Management Agency on the contracting actions necessary to transition property from being \u201ccontractor acquired\u201d to \u201cgovernment furnished.\u201d<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In short, \u201cDoD officials failed to implement procedures \u2026 to account for and manage government property for more than 16 years\u201d and, during that time, did not hold specific officials responsible for the resulting mismanagement, the report said.<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/defensenews\/air\/2019\/02\/01\/bad-data-in-f-35-logistics-system-resulting-in-lost-missions\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/4983561.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">Bad data in F-35 logistics system resulting in lost missions<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">Ever wonder what&#039;s driving down the F-35&#039;s mission capable rates? Here&#039;s one factor.<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">As a result, the IG asserts that the JPO hasn\u2019t been able to provide the level of oversight needed to establish that contractors aren\u2019t misusing government property. Lockheed has self-reported losing $271 million in government property, but the Pentagon has no way to validate that figure, the report noted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Meanwhile, Defense Contract Management Agency officials indicated that confusion over the inspection procedures necessary to shift equipment from the \u201ccontractor-acquired property\u201d label to the GFP designation led to delays in the ability to use that equipment \u2014 which could have a detrimental effect on readiness.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In a statement, the F-35 JPO responded that it was not surprised by the report\u2019s findings and that efforts are underway to address the IG\u2019s recommendations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe F-35 Program will continue to inventory, track and contractually account for all GFP associated with the F-35 system, and will diligently strive for opportunities to improve as highlighted by the DoD IG report,\u201d the statement said. \u201cBy incorporating both the lessons learned from the DoD IG findings and the JPO\u2019s own internal assessments, we expect to measurably enhance our management of GFP.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The IG recommended a course of action that it advised should be put in place before the move to full-rate production later this year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It suggests that the JPO should ensure current lists of GFP are complete and accurate before awarding contracts. It calls for appointing a \u201ccomponent property lead\u201d and \u201caccountable property officer\u201d to ensure that happens and that a formal APSR is created. The IG also directs the program to create procedures that ensure the APSR is updated with the latest data.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The F-35 JPO, in its response, said that a component property lead will be named and will be responsible for ensuring all government property is properly tracked and maintained \u2014 and that all relevant financial statements are accounted for.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cPrior to the onset of full-rate production, the JPO has begun physical inventories at all F-35 sites housing GFP. This inventory is expected to run through the end of calendar year 2019,\u201d it said. \u201cSome corrective actions already determined are in process for Low Rate Initial Production (LRIP) Lot 12 and should be complete prior to [a full-rate production] decision. These actions will be worked in concert with the stand-up of the F-35 Program\u2019s Accountable Property System of Record.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The IG, in its report, said it was satisfied with the corrective actions proposed by the JPO, but that it would review their implementation at a later date.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Creating a record of government property will not be as simple as copying over Lockheed Martin\u2019s record.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Lockheed estimates there are 3.45 million pieces of government property used for the F-35 program, and that equipment is worth an estimated $2.1 billion. However, its records are not written to the same standard that the Defense Department mandates.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, federal regulations require that government records keep track of the contract number associated with a given piece of GFE, while Lockheed did not include that information. Other data recorded by the company \u2014 such as the name of a part or its quantity \u2014 were incomplete by Pentagon standards.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The F-35 Joint Program Office has no visibility into how contractors are using \u2014 or misusing \u2014 government property, the IG found.<\/p>\n","protected":false},"author":7,"featured_media":35369,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":7,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":{"4":{"categories":["pentagon-congress","news","daily-news-roundup","newsletters","middle-column","home"],"primary_category":"pentagon-congress"}}},"categories":[7,160,36,19],"tags":[],"coauthors":[3384],"class_list":["post-34046","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-air","category-daily-news-roundup","category-newsletters","category-pentagon"],"acf":{"subheadline":"","legacy_arc_id":"2ZQXVWHY3REZFNSJXAGWT4JD34","arc_canonical_url":"\/air\/2019\/03\/15\/dod-inspector-general-slams-f-35-program-office-for-allowing-lockheed-to-manage-government-property\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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