By Andrea Shalal-Esa
WASHINGTON (Reuters) - Lockheed Martin Corp has resolved many quality problems on the $392 billion F-35 fighter jet program since a troubling audit by the Pentagon inspector general's office last year, top U.S. government and industry officials said on Monday.
The officials were commenting on a report on the year-long assessment by the inspector general, which was completed in December 2012 but not released until Monday.
The report identified hundreds of quality issues and faulted both the Pentagon's F-35 program office and the Defense Contracts Management Agency for "inadequate" and "ineffective" oversight of the Pentagon's costliest weapons program.
The report said the issues could lead to "nonconforming hardware, less reliable aircraft, and increased cost," but said the F-35 program office was implementing corrective actions.
The Pentagon's deputy F-35 program director and Lockheed executives cited significant improvements since the inspector general's assessment concluded last year. They said the study was the first of its kind ever done on a major weapons program.
"This was a wake-up call that we had to be more rigorous," Eric Branyan, Lockheed's F-35 vice president of program management, told Reuters in a telephone interview.
"We take this very seriously," he said, adding that Lockheed had implemented a host of specific initiatives to focus on quality across all of Lockheed, and had also set up a global quality council with 10 key suppliers.
Branyan said about 13 percent of the work on any F-35 fighter jet centered on resolving quality issues, down from around 18 percent during the first low-rate production batch.
He said Lockheed expected to drive that "scrap and rework" rate down to around 6 percent in several years when production reached between 500 and 600 jets. The company's popular F-16 fighter jet hit that 6 percent rate after production of four times as many jets -- around 2,600 planes, he added.
Lockheed had also reduced the number of hours associated with quality issues on each jet to around 80,000, down from around 190,000 hours seen during production of the first batch of low-rate production jets, Branyan said.
Navy Rear Admiral Randy Mahr, the No. 2 official in charge of the F-35 program, said Lockheed and its suppliers were making progress in addressing problems raised by the inspector general's assessment. He said his office was also working closely with the Defense Contracts Management Agency to ensure improved oversight.
Of 343 quality problems identified in a draft of the year-long audit, 269 -- or 78 percent -- had been addressed and closed through specific action plans, and remedies were under way for all but 10 items, where specific plans still needed to be approved, said a spokeswoman for the Pentagon's F-35 program.
"We're intentionally leveraging the lessons learned," Mahr told a small group of reporters. "You can't inspect yourself. We understand that. That's why the (inspector general) is there. We need people to come in and look and point out areas where we aren't paying enough attention."
(Reporting by Andrea Shalal-Esa; Editing by Leslie Adler)