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.

FMI: www.rolls-royce.com, www.geae.com