* Pentagon says 78 percent of issues raised already
* "Scrap and rework" rate said to be coming down
* Inspector general cites nearly 900 quality issues on every
By Andrea Shalal-Esa
WASHINGTON, Sept 30 Lockheed Martin Corp
has resolved many quality problems on the $392 billion F-35
fighter jet program since a troubling audit by the Pentagon
inspector general's office last year, top U.S. government and
industry officials said on Monday.
The officials were commenting on a report on the year-long
in depth assessment by the inspector general, which was
completed in December 2012, but not released until Monday.
The report said each radar-evading fighter jet built had
over 800 quality issues on average, and faulted both the
Pentagon's F-35 program office and the Defense Contracts
Management Agency for "inadequate" and "ineffective" oversight
of the Pentagon's costliest weapons program.
The report said the issues could lead to "nonconforming
hardware, less reliable aircraft and increased cost," but said
the F-35 program office was implementing corrective actions.
Additional assessments of the program were being planned,
the report added.
The F-35 program is running years behind schedule and 70
percent over initial cost estimates, but Pentagon officials say
it has made progress on flight testing, production and long-term
operating costs. They have also vowed to protect the program
from across-the-board budget cuts to ensure it stays on track.
Lockheed is building three variants of the new jet for the
U.S. military and eight countries that funded its development:
Britain, Canada, Australia, Norway, Italy, Turkey, Denmark and
the Netherlands. Israel and Japan have also ordered jets.
The Pentagon's deputy F-35 program director and Lockheed
executives cited significant improvements since the inspector
general's assessment concluded last year. The study was the
first of its kind ever done on a major weapons program, they
"This was a wake-up call that we had to be more rigorous,"
Eric Branyan, Lockheed's F-35 vice president of program
management, told Reuters in a telephone interview.
"We take this very seriously," he said, adding that Lockheed
had implemented a host of specific initiatives to focus on
quality company-wide and had also set up a global quality
council with 10 key suppliers.
Branyan said about 13 percent of the work on any F-35
fighter jet centered on resolving quality issues, down from
around 18 percent during the first low-rate production batch.
He said Lockheed expected to drive that "scrap and rework"
rate down to around 6 percent in several years when production
reaches between 500 and 600 jets. The company's popular F-16
fighter jet only hit that 6 percent rate after production of
four times as many jets - around 2,600 planes, he added.
The IG's report acknowledged some improvement in work on the
F-35 program, but said further gains were needed since repair
and rework rates continued to add significant cost.
It said there were an average of 859 "quality action
requests" per aircraft in the fourth lot of low-rate production
jets, down from over 900 on each of the three earlier sets.
The IG report said Lockheed's scrap, rework and repair rate
fell to 13.11 percent in fiscal year 2013, which ends Monday,
from 13.82 percent a year earlier, showing only "moderate"
"Although it would be unrealistic to expect first production
to be issue free, our contractor assessments indicate that
greater emphasis on quality assurance, requirement flow down and
process discipline is necessary, if the government is to attain
lower program costs," the report said.
Lockheed said it had also reduced the number of hours
associated with quality issues on each jet to around 80,000,
down from around 190,000 hours seen during production of the
first batch of low-rate production jets.
Navy Rear Admiral Randy Mahr, the No. 2 official in charge
of the F-35 program, said Lockheed and its suppliers were making
progress in addressing issues raised by the inspector general's
assessment. He said his office was also working closely with the
Defense Contract Management Agency to ensure improved oversight.
Of 343 quality problems identified by the IG assessment,
some 269 - or 78 percent - had been addressed and closed through
specific action plans, and remedies were under way for all but
10 items, where specific plans still needed approval, said Kyra
Hawn, spokeswoman for the Pentagon's F-35 program office.
Mahr said a majority of the findings were consistent with
weaknesses previously identified by the DCMA and the F-35 Joint
Program Office, and did not present new or critical issues that
affect the health of the program. But he stressed that the IG
assessment was professional and helpful.
"We're intentionally leveraging the lessons learned," Mahr
told a small group of reporters. "You can't inspect yourself. We
understand that. That's why the (inspector general) is there. We
need people to come in and look and point out areas where we
aren't paying enough attention."
The inspector general's office looked specifically at work
done by Lockheed, the prime contractor on the F-35 program, and
five suppliers: Northrop Grumman Corp ; Britain's BAE
Systems Plc ; L-3 Communications Holdings Inc,
Honeywell International Inc and the United Technologies
Corp unit that makes the plane's landing gears.
F-35 program officials said the inspector general's office
initially planned to look at Pratt & Whitney, another United
Technologies unit that builds the plane's engine under a
separate contract with the government, but later skipped that
part of the assessment due to funding constraints.
Two engine-related groundings last year occurred after the
inspector general's office completed its assessment, Mahr said.