US Warns Over Missing F-35 Components Worth $85 Million

GAO report summarizes persistent gaps in F-35 spare-part accounting and tracking

The Government Accountability Office (GAO) identified widespread inventory and tracking shortfalls that leave the F-35 program unable to prove the location or value of millions of parts. The Joint Program Office (JPO) manages a global pool of roughly 26 million spare parts estimated at about $31 billion, yet the GAO found the program cannot produce complete, accurate records. GAO traced missing-piece reports, inconsistent record updates, and fragmented data flows that prevent reliable real-time visibility across the supply chain.

$85 million in previously reported lost parts remain unlocated

GAO’s review updates a May 2023 audit that documented more than one million lost spare parts across five years valued at over $85 million. As of March 2026 those parts remain unaccounted for. The report attributes the continuing shortfall to the absence of standardized lost-part reporting procedures, incomplete training for accountable property officers, and unclear responsibilities for follow-up. These process failures create blind spots that extend beyond inventory valuation to obstruct detection of fraud, theft, or systemic waste.

Why the global spare-parts pool’s $31 billion value is uncertain

The F-35 support model pools hardware for US Air Force, Navy, Marine Corps and international partners. That pool spans everything from engine subassemblies and support equipment to fasteners and tires. GAO found that many items either are not included in official inventory counts or appear as missing because data from suppliers and contractors do not synchronize with JPO records. As a result, the $31 billion headline number likely under- or over-states true value depending on unrecorded disposals, lost shipments, or duplicate counts across systems.

How contractor systems and update frequency break tracking

Lockheed Martin and Pratt & Whitney operate their own property-management and logistics systems that do not integrate directly with the federal government’s enterprise logistics database. JPO therefore ingests snapshots from multiple external sources. Some suppliers update their inventories only quarterly, producing stale snapshots that fail to reflect movement or custody changes. This asynchronous reporting means that a part moved in the field may still appear at origin systems for months, and JPO cannot reliably reconcile those discrepancies without time-consuming manual work.

Physical inventories alone did not fix the problem

Beginning in fiscal 2020, JPO spent at least $17 million to physically count parts across government and contractor sites. GAO found those physical counts produced unreliable results because shipping in-transit items were often excluded, records used during counts contained errors, and subcontractor storeroom locations lacked precise bin-level mapping. In short, counting without clean source data and consistent shipping/location rules yields counts that cannot be reconciled back to financial ledgers.

Specific operational examples that illustrate gaps

1) A high-value part sent from Australia for repair diverted to Hong Kong illustrated weak airway-bill controls and incomplete chain-of-custody documentation. That shipment included components tied to sensitive systems and underscored international transport risk. 2) Contractor updates that arrive quarterly created apparent “phantom” inventory: parts that exist on contractor ledgers but never reached the intended base. 3) Multiple systems showed the same serialized item at different locations because transfer events did not post atomically across platforms.

How these issues affect financial audits and readiness

Inventory uncertainty directly contributes to the Department of Defense’s inability to pass certain financial audits. If parts cannot be traced to a custody location and reliably valued, the DoD must either exclude them from audited financial statements or record conservative adjustments that distort asset reporting. Operationally, lack of visibility forces logisticians to order replacement parts preemptively, driving avoidable cost growth and increasing the risk of shortages where mission-critical spares are actually absent.

GAO recommended concrete steps to improve accountability

GAO directed the Pentagon to establish standardized procedures for reporting and tracking lost F-35 parts, define training and duties for accountable property officers, and specify staffing levels and facility assignments required to execute those responsibilities. The recommendations include developing valuation methods for parts with incomplete cost data so that financial statements reflect more accurate asset values. JPO has accepted GAO’s recommendations, but implementation details and timelines remain essential to measure progress.

Practical fixes that will yield faster, measurable improvement

– Enforce near-real-time electronic transfer events: Require contractors to post serialized transfer events via automated interfaces that update JPO ledgers instantly or within a short SLA window.
– Implement mandatory chain-of-custody documentation for international shipments with federated tracking numbers and hold points for exception handling.
– Adopt periodic reconciliations based on transaction-level matching (not summary counts) and treat in-transit and repair-status items as distinct ledger categories.
– Train and certify accountable property officers on standardized procedures and audit-ready documentation practices.
– Deploy targeted cycle counts for high-value, high-movement items monthly rather than relying solely on annual or ad-hoc full counts.

What success looks like and key metrics to monitor

Short-term success measures: reduction in unresolved lost-part reports, percentage of transfer events posted within SLAs, and decreased time to reconcile contractor etc. JPOledgers. Medium-term measures: decline in redundant ordering rates and lower replacement-part procurement costs. Long-term success: passage of independent financial audits for inventory line items and demonstrable improvement in mission-availability rates tied to spare-parts readiness.

Takeaway for program managers and international partners

Program managers must treat inventory accuracy as an operational enabler rather than a purely accounting exercise. Integrating contractor systems, enforcing near-real-time transaction updates, clarifying roles and training property customers, and defining valuation approaches for incomplete-cost items will materially reduce risk. For international partners, transparent shipment tracking and agreed escalation paths for lost or misrouted consignments will protect shared readiness and financial integrity.