Cite 2009 Law Mandating Competition In Defense
Acquisitions
The GE Rolls-Royce Fighter Engine
Team has formally submitted an unsolicited fixed-price contracting
approach to the JSF program office. The companies say the
effort will drive head-to-head engine competition and predictable
costs.
The companies cite The Weapon Systems Acquisition Reform Act of
2009, which was signed into law to mandate competition through the
entire life of major defense programs – including funding
competing sources.
In a news release, the F136 engine designers say the F-35 Joint
Strike Fighter (JSF) program creates the perfect opportunity
– a multi-role aircraft replacing numerous tactical fighter
aircraft, with potential production for the U.S. Air Force, Navy,
Marines and international customers to reach 5,000 to 6,000
aircraft over 30 years. Without competing JSF engines, a $100
billion monopoly will be handed to a single supplier.
The GE Rolls-Royce approach covers initial F136 engine
production, beginning with the second production lot, shifting
significant cost risk from taxpayers to the Fighter Engine Team
until head-to-head competition begins between the F136 and the
Pratt & Whitney F135 engine in 2013. Fixed-price contracting
brings the cost discipline of competitive markets to military
procurement.
The financial risk for early production engine lots would be
shared between the government (which manages the engine
configuration) and the GE Rolls-Royce Fighter Engine Team (which is
responsible for the engine program execution).
F136 JSF Engine
Under current JSF schedules, the initial F136 production engines
would be purchased directly from the government to get the
production line up and running. Then, beginning in 2013, the F136
will enter an annual, head-to-head competition with engines
produced by Pratt & Whitney.
Pratt & Whitney has not offered a fixed-price contract for
its competing F135 engine, but is funded through a Cost Plus
contract. Since 2002, development costs for the P&W F135 engine
have reached $1.9 billion over plan, as reported by the House Armed
Services Committee. In addition, individual F135 prices have risen
as much as 47 percent in recent years.
The GE Rolls-Royce Fighter Engine Team consistently receives top
reviews from the Joint Program Office for program execution,
including budget performance. Over time, the companies say the F136
engine will more than pay for itself through decades of annual
competitions that drive performance and cost improvements by
design.
The U.S. House of Representatives recently voted 400 to 30 for a
defense-spending bill for fiscal year 2010 that includes $560
million in funding for the F136 engine. This year, the F136
engine has garnered support in both steps of the U.S. House budget
process; defense authorization and defense appropriations.
GE Rolls-Royce says more than $2.5 billion has been invested in
developing the F136 engine, including more than $50 million from
the two companies. The benefits of competition have been verified
by numerous studies and U.S. military experience, including
the F-16 engine competition. They say the JSF program’s
international partners in the F-35 program also support competing
engines.