F-35 LIGHTNING II JOINT PROGRAM OFFICE 200 12th Street South, Suite 600 Arlington, Virginia 22202-5402 Fort Worth Warehouses Assessment March 13 – 17 PEO Action Item: The PEO wants our program office to work with DCMA to do a full review of the LM parts warehouse and tracking system Scope: Six F-35 warehouses were assessed: Hollingsworth (Production), GFP warehouse (Production), CEVA (Sustainment and Mod Kit assembly), CEVA (Liberty way, overflow), Last Mile (for big items ready to be put into production or shipped to other facilities) and CEVA (DFW airport) by the JPO Property and SCM teams Where we are:  DCMA wanted to limit the effort scope to Sustainment only items. Coordination assistance was limited. Data to be released by LM is stuck at DCMA  LM did not provide the data requested for processes review or inventory listings. LM claimed the data was LMPI and required contractual justification. This made the assessment challenging as it impacted preparation  LM deployed a new property management system in Dec 2016 and it was not reviewed by DCMA until late February 2017  Not all systems are integrated or interface appropriately. CEVA still uses its own system (UNICODE) and RMS uses theirs, PROP and RMS SAP. LM uses Maximo and SAP. Systems between LM and RMS are out of synch. Not all the major suppliers are using TMS for shipments so this increases chances for disconnects  Assets seem to sit in inventory for many years (10+) without proper justification, which is against property management regulations  DCMA seemed to have delegated audit responsibilities to LM. There did not seem to be a clear understanding of when DCMA Property had last audited/inventoried the sites. All LM could come up with were dates when their own team had done so and not for all the warehouses  Disconnects in processes at LM causing disconnects in the management of GFP. There seems to be an understanding that only Propulsion is provided as GFP for production, which is not the case  All equipment at CEVA warehouses needs to be submitted to LM as GFP since it’s DD250d  LM not adhering to labeling requirements for USG assets per regulations  F-16, F-22 and F-35 assets comingled as well as comingling of commercial items with USG without proper labelling / identification. Could not verify how their processes are setup due to data not being released  Warehouse (Liberty Way) under construction has very expensive SE assets that seemed exposed to both construction workers / activity  LM owned assets (LM ownership labels) stored in Last Mile warehouse  Side note: a couple of labs were visited and they reflect similar issues as identified for the warehouses Where we need to be:  LM needs more / better focus on Property management across the board. There is not a property management organization within the program to support F-35 needs  Need LM to release data when needed by the JPO or any other USG agency as their current practice interferes with USG business / responsibilities  Need DCMA Property to have a tighter surveillance approach to LM’s management of USG property  LM needs to have better automatic interfaces between their and some of their major suppliers’ systems to ensure sound property management practices and better data quality  Need LM to do an assessment on assets sitting in inventory to make a determination on excess property requirements  Need LM to have better control and management of GFP by ensuring contractual requirements are being met  Need LM to label USG assets according to contractual requirements  LM needs to have a systems integration solution that will allow for better traceability of USG property