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Implementation of GAO recommendation on F–35 joint strike fighter use of contract incentive fees

Division A · Title I: Procurement · Subtitle E: Defense-wide, Joint, and Multiservice Matters

Plain-language summaryAI

The Secretary of Defense must create and carry out a plan to address a specific Government Accountability Office recommendation about the use of contract incentive fees for the F–35 fighter program. Within 180 days, the Secretary must report on this plan, including actions taken or reasons for not implementing the recommendation. One year later, the Secretary must provide an update on the plan’s progress, including details on reevaluating and potentially changing incentive fees for F–35 contracts and how the effectiveness of these changes will be measured.

AI-generated from this section’s text — a quick orientation, not a substitute for the full text below. Not legal advice.

Section Text · Sec. 168.
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(a) Implementation plan

(1) In general

The Secretary of Defense shall develop and implement a plan to address recommendation 3 from the report of the Government Accountability Office titled F–35 Joint Strike Fighter: Actions Needed to Address Late Deliveries and Improve Future Development (GAO-25-107632).

(2) Report

Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall submit to the congressional defense committees and to the Comptroller General of the United States a report on the plan developed under paragraph (1). Such report shall include—

(A)
(i)

a summary of actions that have been taken or will be taken to implement the recommendation specified in paragraph (1); and

(ii)

a schedule, with specific milestones, for completing implementation of the recommendation; or

(B)

if the Secretary does not intend to implement the recommendation, discussion of the reasons and alternative actions taken or intended to be taken to address the issues to which the recommendation pertains.

(b) Report on implementation

Not later than one year after the submittal of the plan under subsection (a), the Secretary of Defense shall submit to the congressional defense committees and the Comptroller General of the United States a report on the status of the implementation of the plan. Such report shall include, at a minimum—

(1)

the results of a reevaluation of contract incentive fees for inclusion in future F135 and F–35 production contracts;

(2)

a timeframe for implementing a new incentive fee structure in future F135 and F–35 production contracts;

(3)

a plan for determining the effectiveness of a new incentive fee structure in achieving desired production outcomes; and

(4)

an explanation of any efforts to apply a new incentive fee structure more broadly across the F–35 contracting enterprise.