The Pentagon's Office of Inspector General, which assesses the department's performance from within the massive federal agency, also criticized two internal Defense Department offices responsible for overseeing the F-35 project, saying their oversight has been weak to nonexistent.
"Lockheed Martin's Fort Worth, Texas, quality-management system and the integrity of the F-35 product are jeopardized by a lack of attention to detail, inadequate process discipline and a 'we will catch it later' culture," the report concluded. "We believe the quality-assurance culture at (the F-35 plant) must improve and that robust technical oversight by the government is required to ensure program performance and mission success."
Lockheed Martin downplayed the report, saying it is based on old data.
Joe DellaVedova, chief Pentagon spokesman for the F-35 program, said Wednesday that the cost of each fighter jet is dropping, from $133 million last year to a projected $112 million in 2015, as problems are ironed out and full production is reached in 2018.
"We haven't reached full-rate production," DellaVedova told McClatchy. "We're still following a learning curve."
But the Pentagon and foreign governments have slowed their purchases as problems have increased and costs have risen from original projections.
The F-35, formally called the Joint Strike Fighter, has encountered numerous design and production difficulties since it was first conceived as the U.S. military's fifth-generation stealth aircraft more than a decade ago. Its original $400 billion price tag has doubled, with critics predicting more increases to come.
"The F-35 is now the first $1 trillion weapon system in history - a consistent series of cost overruns that have made it worse than a disgrace," Sen. John McCain, R-Ariz., said last month at a Senate Armed Services Committee hearing.
Partly in response to such criticism from lawmakers, Pentagon and congressional investigators, and outside watchdog groups, Lockheed Martin in March announced a new management team for its aeronautics division. The Joint Program Office, the Pentagon agency that oversees the F-35 project, has also overhauled its leadership.
The Lockheed Martin plant on Fort Worth's west side has 14,000 employees, with more than 9,300 working on the F-35 program. The giant defense contractor has promised the project will produce 127,000 jobs in 47 states through subcontractors and suppliers.
During a 13-month probe of the troubled project, which is the largest U.S. weapons acquisition program ever, the Defense Department inspector general found 70 problems at the Lockheed Martin factory in Fort Worth, identifying 28 of them as major. It found 119 other major issues at Lockheed Martin's five main subcontractors' plants in the United States and Great Britain, including the United Technologies factory in Fort Worth where the F-35 landing-gear systems are being made.
"Identified issues could adversely affect aircraft performance, reliability, maintainability and ultimately program cost," the inspector general said.
Lockheed Martin largely dismissed the report, saying it relied on outdated information and described problems that have been resolved.
"This 2012 DOD IG report is based on data that's more than 16 months old, and the majority of the Corrective Action Requests have been closed," the aerospace firm said in a statement. "Producing quality products is a top priority of the F-35 program, and Lockheed Martin and its suppliers strive every day to deliver the best aircraft possible to our customers. When (problem) discoveries occur, we take decisive and thorough action to correct the situation."
While Pentagon inspectors initially spent 11 days at the Fort Worth plant in March and April last year, the overall report, which included extensive follow-up correspondence with Lockheed Martin, was conducted between February 2012 and July 2013. It was released Monday.
The Pentagon's Joint Program Office, which oversees the F-35 program and was reprimanded in the inspector general's report, took a more conciliatory stance.
Calling the probe "thorough, professional, well-documented and useful," the Joint Program Office said, "A majority of the findings are consistent with weaknesses previously identified . and do not present new or critical issues that affect the health of the program."
Pratt & Whitney, which manufacturers the engine for the F-35, was not included in the report.
Winslow Wheeler, a defense analyst with the Project on Government Oversight in Washington, an independent, nonprofit watchdog group, said the Pentagon has allowed Lockheed Martin do sloppy work.
"While we expect government contractors to try to get away with as much as they can, in the case of the F-35, the Joint Program Office - the designated agent of the taxpayers and military operators - was not adequately minding the store," Wheeler said.
In a sign of an improved production outlook for the aircraft, the Netherlands announced last month that it would spend $6 billion for 52 F-35s, with the first jets scheduled to enter its military service in 2019.
But earlier in the year, Australia delayed a decision on buying more F-35s beyond the 19 it has already purchased, after having said previously it would buy 100.
With the Defense Department facing tens of billions of dollars in forced budget cuts, it has also slowed procurement, casting doubt on whether the U.S. government will make good on its initial pledge to buy 2,443 of the F-35s to replace aging military planes.
The Pentagon, however, agreed in July on terms of purchase for an additional 71 fighter jets in another signal that the embattled program's woes may be easing.
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