The F-35 Joint Strike Fighter, long bedeviled by cost overruns and schedule delays, is still not out of the woods but has made “a good deal of progress” in the past year, according to a key Pentagon official.

While the stealth fighter jet has challenges ahead, including completing flight tests and software development, the $400-billion program has been “fairly stable” since it was restructured three years ago, Department of Defense acquisition chief Frank Kendall told reporters last week. Flying and production costs are declining and the F-35 is largely holding to its schedule.

“It’s too early to declare victory; we have a lot of work left to do,” he said. “But this program is on a much sounder, much more stable footing than it was a year or two ago.”

Kendall said he is “cautiously optimistic” that DOD can decide this fall to begin to increase aircraft production in fiscal year 2015, barring any unexpected hiccups. Lockheed Martin, the prime contractor since 2001, is currently building about 30 “Lightning II” jets a year, and that figure is ultimately supposed to ramp up to several times that.

While deep federal budget cuts known as sequestration pose a potential threat to the program, Kendall said Pentagon officials will do “everything we can” to protect “our highest priority conventional warfare weapon system.”

Kendall made his comments after participating in the F-35 CEO conference, an annual meeting where senior leaders from the U.S. government, international partners and industry members discuss the program’s current state and future.

Kendall’s assessment came less than two months after the Government Accountability Office (GAO)  issued a similarly cautious appraisal of the program. While the congressional watchdog agency agreed that progress has been made, it warned that long-term affordability remains a concern, software development challenges persist, and ongoing design changes continue to add cost and risk.

The program is building three F-35 variants for the U.S. Air Force, Marine Corps and Navy and for international partners. Recent accomplishments include the first in-flight missile launch by the Air Force variant, and the first vertical takeoff by the Marine Corps variant.

The U.S. military plans to begin fielding the F-35 in December 2015, starting with the Marines. The Air Force will follow a year later, and the Navy will have its first operational squadron ready by February 2019.

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Marc Selinger is a journalist based in the Washington, D.C., area. He can be reached at marc2255@yahoo.com. Follow him on Twitter at @marcselinger.