F-35 program plagued by delays, GAO warns of modernization and production risks

The US Government Accountability Office (GAO) has warned that persistent delays in the F-35 Joint Strike Fighter program, including late aircraft deliveries and ballooning modernization costs, could undermine the Department of Defense’s ability to field critical capabilities on time. 

In its latest report to Congress, GAO claims that Lockheed Martin was late in delivering all 110 F-35s during 2024, with delays averaging 238 days, compared to 61 days in 2023. The main culprit is Technology Refresh 3 (TR-3), a $1.9 billion hardware and software upgrade essential to the upcoming Block 4 modernization package. TR-3 is running three years late, forcing the Pentagon to accept 174 provisionally delivered aircraft in a non-combat-capable configuration. 

Block 4 modernization years behind schedule 

The Block 4 upgrade, intended to enhance sensors, weapons and electronic warfare systems, is now at least five years behind schedule and $6 billion over initial cost estimates. A reduced-scope version of Block 4 is being structured as a new major subprogram, but GAO noted that costs remain uncertain and new estimates are not expected until later in 2025. 

At the Paris Air Show in June 2025, Lockheed executives described TR-3 as “the foundation for the most aggressive upgrade in fighter history,” enabling more processing power, AI enhancements, and interoperability features. Planned Block 4 enhancements include sensor and radar improvements, expanded weapons integration, and advanced electronic warfare capabilities. Some of these upgrades are also intended to prepare the F-35 to serve as a central node in future Collaborative Combat Aircraft (CCA) operations. 

Supply chain and parts shortages add pressure 

Beyond software, GAO highlighted worsening supply chain strains. As of early 2025, Lockheed Martin faced more than 4,000 parts shortages, twice the historic average, which left 52 aircraft stalled in the final assembly stage. 

Pratt & Whitney also failed to deliver F135 engines on time, despite repeated corrective action orders. Although quality has improved, late deliveries continue to strain production schedules. 

These issues have already disrupted delivery schedules for several international customers. In 2024, Denmark warned of uncertainty over its next F-35 deliveries, while Belgium and other European partners also faced delays linked to TR-3 certification problems. 

Incentives misaligned with performance 

GAO criticized the Pentagon’s incentive fee structure, which allowed contractors to earn millions in bonuses even while delivering late. Lockheed Martin and Pratt & Whitney have been awarded hundreds of millions of dollars in fees, despite failing to meet delivery schedules. 

In parallel, the Department of Defense began withholding $5 million per late aircraft throughout 2024, later reducing the penalty to $3.8 million per jet in January 2025 as Lockheed showed progress on TR-3 integration. The majority of those withheld funds remain frozen until the jets can be upgraded to combat-capable configuration. 

“Unless the F-35 program reevaluates its use of incentive fees and better aligns them with desired outcomes, taxpayers risk continuing to reward contractors for underperformance,” the report said. 

Six GAO recommendations 

GAO issued six recommendations, including: 

Evaluating Lockheed Martin’s production capacity and adjusting schedules accordingly. 
Reassessing incentive fees to better link payments with on-time delivery. 
Expanding the use of modern design practices, such as digital twins and iterative development. 
Formalizing acquisition pathways for engine and power system upgrades. 
The Department of Defense concurred with four recommendations and partially concurred with two, citing steps already underway. 

A $2 trillion lifetime cost 

The F-35 program, the Pentagon’s most expensive weapons system, is projected to exceed $2 trillion over its 77-year lifecycle. With more than 1,100 jets already delivered, the US plans to procure 2,470 more aircraft, while partner nations and foreign customers continue to add orders. 

However, the Trump administration’s FY26 defense budget proposal is reducing procurement from 68 to 47 jets and redirecting funds to drones, hypersonics and advanced munitions. As such, the program faces added political and fiscal headwinds. 

GAO has warned that, unless modernization and production challenges are addressed, the F-35 may not deliver the capabilities needed to maintain US and allied air superiority. The post F-35 program plagued by delays, GAO warns of modernization and production risks appeared first on AeroTime.

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