Bloomberg News

F-35’s Quality Controls Under Review by Pentagon’s Inspector

March 02, 2012

The Pentagon’s inspector general has started a review of the quality assurance system for Lockheed Martin Corp. (LMT)’s F-35 fighter, the Pentagon’s costliest program.

“The objective is to assess” the program’s quality management at Lockheed Martin’s Fort Worth, Texas, facility and those of subcontractors Northrop Grumman Corp. (NOC) and BAE Systems Plc (BA/), the inspector general said in a summary included in its March activities newsletter posted online.

“The assessment will focus on conformity to specified quality management systems, contractual quality clauses and internal processes and procedures,” according to the summary issued by Acting Inspector General Lynne Halbrooks.

While the Defense Department hasn’t publicly cited significant issues in quality control for the F-35, it has found failings in program management and test performance.

Lockheed, the world’s largest defense contractor, lost $31.5 million of a possible $52.5 million in U.S. payments last year because the F-35 failed to meet three of five performance goals set for the fighter.

The reduced fees marred a year when the Pentagon’s test office reported the three versions of the F-35 matched or exceeded the program’s restructured plan for tests designed to evaluate flying qualities. The jet met most test goals in 2010 after falling behind in 2009.

“We believe the F-35 program made outstanding progress in flight test, training and production in 2011,” Michael Rein, a spokesman for Bethesda, Maryland-based Lockheed, said in an e- mail last month.

‘Probation’ Ended

Defense Secretary Leon Panetta cited improvements in January, when he ended a “probation” that his predecessor, Robert Gates, had imposed on the Marine Corps version of the plane, the F-35B designed for short takeoffs and vertical landings. It is the most complex model.

Separately, the Pentagon said this week that Lockheed will have payments withheld under a new Pentagon rule intended to correct deficiencies with internal systems that track cost, schedules, accounting and purchases. The Pentagon said it will hold back about $1 million a month in billings on the latest F-35 production contract until Lockheed demonstrates improvements.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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