Pentagon Still Cannot Account for Billions of Dollars in F-35 Spare Parts, GAO Finds

A new GAO report highlights persistent failures to reconcile government and contractor inventories, with more than 17,000 parts worth at least $1.3 billion missing from official records.

The U.S. Department of Defense (DoD) is still struggling to properly account for the global inventory of F-35 Lightning II spare parts. According to a new report published by the Government Accountability Office (GAO) on Nov. 9, 2026, inaccurate and incomplete records are preventing officials from determining exactly how many components are available and where they are located.

The report mentions the program includes approximately 26 million parts worth an estimated $31 billion, distributed across more than 700 contractor- and government-managed facilities worldwide. Of these, more than 17,000 parts, worth at least $1.3 billion, can’t be accounted for by the Pentagon and the F-35 Joint Program Office (JPO).

The publication of the report comes few months after the revelation that an intermediary company, transporting F-35 spare parts for the manufacturer Lockheed Martin, had sent components from Australia to Hong Kong instead of their intended destination in the U.S. The Pentagon has since revealed that a number of these spares are missing and that it is not clear how they ended up in China and where are now.

Pentagon cannot reconcile F-35 inventory records

One of the most significant problems identified by GAO is the lack of effective reconciliation between the different inventories and property management systems used throughout the F-35 supply chain. The program relies on records maintained by its two prime contractors, Lockheed Martin and Pratt & Whitney, individual facilities, and the DoD itself.

However, the F-35 Joint Program Office (JPO) does not have an effective process to ensure that these different records accurately reflect the same inventory of government-owned components. The JPO uses an Accountable Property System Of Record (APSR) called the Enterprise Logistics Management System (ELMS), which should provide the government with an authoritative record of its assets.

A U.S. Marine Corps F-35B Lightning II assigned to Marine Fighter Attack Squadron (VMFA) 121, 31st Marine Expeditionary Unit, takes off during a joint service flyover in the Philippine Sea, Feb. 26, 2026. | Source: U.S. Marine Corps photo by Lance Cpl. Victor Gurrola However, ELMS does not currently interface directly with the property management systems operated by the two prime contractors. Instead, the JPO relies on information provided through multiple sources, including Contract Data Requirements Lists (CDRLs), which are generally submitted by the contractors quarterly for parts in the joint spares pool.

The GAO found that the JPO has not fully developed procedures to ensure in real time the accuracy and completeness of this data. However, for some categories of spare parts, this data remains the only source.

As of March 2026, the GAO report mentions that approximately 17,000 components undergoing maintenance or repair, with an estimated value of $1.3 billion, had not been recorded into ELMS. In addition, only 29% of the records in a December 2025 contractor submission included serial numbers, while 43% contained National Stock Numbers. Almost 6% of the records also listed acquisition costs of $0.01 or less.

The problem is not limited to the exchange of information between contractors and the JPO. The program office is having difficulties to reconcile the information provided by contractors and the physical inventories.

In particular, the GAO says the JPO has not adequately verified both the existence of components listed in the records and the completeness of the inventor. This requires confirming that every component physically present at a facility is also recorded in its property management system.

The process is further complicated by the extensive network of more than 700 facilities involved in the F-35 program. For instance, some parts are held at sub-subcontractor facilities whose locations are not known to the prime contractors, while others may be in transit or undergoing repairs without being tracked in either government or contractor systems.

A U.S. Navy F-35C Lightning II, attached to the “Salty Dogs” of Air Test and Evaluation Squadron (VX) 23, makes an arrested landing on the flight deck aboard PCU John F. Kennedy (CVN 79), marking the first time an F-35C lands on a Ford-class aircraft carrier. | Source: U.S. Navy photo by Mass Communication Specialist Seaman Kaitlyn Bailey The problem also highlights shortcomings in accountability, and especially with the Accountable Property Officers (APOs). The GAO found that they lack program-specific procedures and training to carry out responsibilities such as maintaining accurate records, coordinating physical inventories and reconciling inventory results against property records.

Physical inventories have failed to solve the problem

The JPO has struggled to establish a reliable baseline of the parts physically held across the F-35 supply chain. The report mentions that, since fiscal year 2020, the JPO has spent at least $17 million for physical inventories at contractor- and government-managed facilities, although they did not adequately verify either the existence or the completeness of the parts.

Among the problems identified by GAO is the use of information from a prime contractor whose property management system had received a disapproved rating from the Defense Contract Management Agency (DCMA). The disapproved rating meant that the system did not comply with contractual requirements, partly because of failures to document movements and maintain records.

As mentioned earlier, prime contractors did not have complete visibility of parts held at lower levels of the supply chain, and plans to conduct a 100% physical inventory encountered difficulties. The Defense Contract Audit Agency (DCAA) is now working with the JPO to establish an auditable baseline of F-35 parts, with the first full inventory targeted for completion in March 2027.

Pentagon agrees with GAO recommendations

GAO issued four recommendations calling for the Pentagon to strengthen its oversight of F-35 parts. These include establishing procedures to monitor reported losses, providing program-specific guidance and training to accountable property officers, and clarifying the structure and staffing requirements of the JPO’s property accountability organization.

From left to right: the F-35C, F-35A and F-35B Lightning II fighter jets. | Source: U.S. Air Force/Senior Airman Duncan C. Bevan The DoD concurred with all four recommendations and outlined steps being taken to address the shortcomings. In a statement published by Breaking Defense, the F-35 JPO said it was developing procedures and tailored training for accountable property officers while improving the monitoring and analysis of reported losses.

The office also said it was modernizing its property management infrastructure by establishing direct, real-time data interfaces between government and prime contractor systems, an effort intended to address the existing gaps in inventory accountability. However, as the GAO report makes clear, the problems have persisted through several previous reviews and recommendations.

The security implications of inadequate supply-chain oversight

The shortcomings in the F-35 parts’ inventory are not simply a logistical concern. The recent incident involving components diverted to Hong Kong has highlighted the potential national security implications of inadequate oversight across the aircraft’s global supply chain.

The incident prompted concerns that China could have gained access to technology associated with the F-35’s low-observable characteristics. While a single component would not reveal the secrets of the entire aircraft, physical access could potentially provide valuable information about materials, manufacturing techniques and surface treatments.

The diversion also raised questions about the oversight of contractors and intermediaries responsible for transporting government-owned components. While there is no evidence establishing a direct connection between this incident and the inventory deficiencies identified by GAO, both cases illustrate the challenges of maintaining accountability across the extensive, multinational supply chain of the F-35 program.