The inspector general’s report criticized Lockheed Martin’s systemic inability to meet contract requirements, as well as the F-35’s dismal readiness rate.

Just weeks before Lockheed Martin touted the record-level production levels reached in its F-35 Lightning II program—reaching 191 aircraft built in calendar year 2025—the US Department of Defense’s (DoD) Inspector General released a report that cited numerous concerns that remain with the fifth-generation fighter program.

“Audit of the DoD’s Oversight of Contractor Performance for the F-35 Joint Strike Fighter Sustainment Contracts,” released on December 19, warned that the US military will continue to face readiness shortfalls, even as the program remains the Pentagon’s costliest acquisition program to date.

“The F-35 program is the DoD’s largest acquisition program with an estimated cost of over $2 trillion to buy, operate, and sustain the F-35 over its lifetime,” the report observed in its opening background. It warned that the DoD had failed to “adequately oversee contractor performance on the June 2024 air vehicle sustainment contract,” and that the aerospace and defense firm wasn’t always held accountable for “poor performance related to F-35 sustainment.”

The audit further suggested that the F-35 Joint Program Office (JPO) failed to “include aircraft readiness performance or other measurable contract requirements.” Nor did it “enforce material inspection and government property reporting requirements” in the contracts with Lockheed Martin.

The F-35’s Mission Capable Rate Is Disastrously Low

One of the biggest criticisms of the F-35 remains its mission-capable rate, which continues to fall short of expectations. In FY24, the F-35 averaged a 50 percent rate, meaning that half of the aircraft in the Pentagon’s fleet were unable to fly half the time.

“This is 17 percent lower than the average minimum performance requirement,” the audit noted.

Maintainers have also been facing supply chain challenges in receiving adequate parts to keep the F-35s operational. In too many cases, “F-35 squadrons are also cannibalizing parts to keep aircraft flying instead of being able to rely on receiving parts from Lockheed Martin’s supply chain,” the report added.

Multiple bases were cited for “cannibalizing” parts from one F-35 to keep the remaining aircraft mission-capable, even as the IG found that a nearly $1.6 billion air vehicle sustainment (AVS) contract had been awarded to Lockheed Martin in June 2024.

“The DoD did not adequately oversee Lockheed Martin’s performance and did not always hold Lockheed Martin accountable for poor AVS performance,” the IG warned. “This occurred because the F-35 JPO did not include aircraft readiness performance or other measurable contract requirements and did not enforce material inspection and government property reporting requirements in the June 2024 AVS contract.”

Trump Has Raged Against Defense Industry Shortcomings

The IG report was critical in finding that the contractor failed to meet performance requirements. However, on Wednesday, President Donald Trump also expressed concern that defense companies are failing to meet schedules in a timely manner.

In a series of posts on Truth Social, the president was equally blunt about the state of the defense sector, noting that shareholders were receiving dividends and company executives were paid high salaries, even as numerous programs were running late or failing to deliver as promised.

“All United States Defense Contractors, and the Defense Industry as a whole, BEWARE: While we make the best Military Equipment in the World (No other Country is even close!), Defense Contractors are currently issuing massive Dividends to their Shareholders and massive Stock Buybacks, at the expense and detriment of investing in Plants and Equipment. This situation will no longer be allowed or tolerated!” President Trump wrote in one post.

The president also issued an executive order directing Secretary of Defense Pete Hegseth to identify contractors underperforming and to “return” the firm(s) to “sufficient performance.” The order included the capping of executive salaries at underperforming companies.

Following criticism of defense companies, Trump called for the Pentagon’s fiscal year 2027 (FY27) budget to exceed $1.5 trillion—a $500 billion increase over the current budget, which is already the highest on record. The president claimed tariffs would fund increased defense spending, pay down the national debt, and provide a dividend to “moderate income PATRIOTS.”

About the Author: Peter Suciu

Peter Suciu has contributed over 3,200 published pieces to more than four dozen magazines and websites over a 30-year career in journalism. He regularly writes about military hardware, firearms history, cybersecurity, politics, and international affairs. Peter is also a contributing writer for Forbes and Clearance Jobs. He is based in Michigan. You can follow him on Twitter: @PeterSuciu. You can email the author: Editor@nationalinterest.org.

Image: Wikimedia Commons.

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