Support the F136 Engine Program

F136 Fighter Engine Team Site

The F136 Engine Program - More compeition. Lower spending. Better quality.

Secretary of Defense Robert Gates provided a statement

to the Senate Armed Services Committee on February 2,

which included five reasons why the Department of Defense

(DoD) is moving to cancel the F136 competitive engine for

Joint Strike Fighter (JSF). GE Rolls-Royce wishes to respond

to those arguments.

DoD: The F136 still requires a $2.5B investment over the next five years.

By the end of FY2010, almost $3B will have been spent on the F136 since 1996, with less than $1B needed to complete development. Over the next five years, additional costs associated with tooling and support infrastructure bring the total to about $1.3B -- far less than cited by the DoD.

DoD: The F136-F135 competition would not offset the additional costs. Analytical models produce a break-even scenario at best.

The JSF engine program will ultimately reach $100B, and a decades-long engine competition needs only to generate a 1 percent to 2 percent cost benefit to recoup the remaining dollars needed to complete the F136 program. Last May, the Government Accountability Office anticipated a 20 percent benefit from a JSF engine competition, using the F-16 "Great Engine War" as a comparison. There are also vast benefits beyond sheer cost - related to operational readiness and contractor responsiveness.

Last September's proposal by GE Rolls-Royce for a unique fixed-price contract for early F136 production engines has already created a significant benefit - causing P&W to respond to their cost issues.

DoD: The F136 is three to four years behind the F135.

The F136 production is fewer than 100 engines behind the F135 production for a JSF program designed to exceed 3,000 engines.

DoD: Split or shared buys don’t produce competitive behavior.

The GE Rolls-Royce presence in JSF has already influenced more responsive contract behavior. Split buys for JSF will create a unique opportunity to drive competitive behavior beyond the acquisition phase into competing engine sustainment costs lasting for decades. The JSF engine competition is different from the storied F-16 competition because the JSF model extends to engine sustainment. The opportunity for cost savings through competition is outstanding, as cited by the Government Accountability Office and many other procurement experts.

DoD: The many JSF customers are unwilling to buy from two engine suppliers.

All eight international JSF partners have signed an MOU that recognizes competing engines as a key JSF feature. The international JSF partners strongly support competing engines. Competing engines led to a resurgence in F-16 sales and are a valuable feature of ongoing F-15 and F-16 international competitions today. International sales are critical to the affordability model for JSF, which will be greatly enhanced by competing engines.

Without question, the JSF program needs to complete the F136 development to meet its challenging objectives.

Let me address the question of the F136, the so-called "alternate engine." This committee has maintained the view for more than a decade that having competing engine production lines for the F-35 program is the best way to control overall program costs, manage risk over the life of the program, and ensure engine performance and sustainability. When 95% of the Department's fighters will be F-35 variants by 2035, this is not a question of pork; it is a sincere concern for the success of the F-35 program and for the benefits of competition. As we have discussed previously, the Congress and the Department must operate from a common set of facts. This committee looks forward to receiving the analysis you have promised on this program.

Chairman Ike Skelton, Excerpt from Opening Statement at Hearing on the FY 2011
National Defense Budget Authorization Request

Recent law and US Government directives demand reform of

defense acquisition programs, including fixed-price contracts and

mandated competition throughout the life cycle of major weapon

systems programs.

Delivering Acquisition Reform

The GE/Rolls-Royce (GE R-R) Fighter Engine Team has submitted a fixed-price contracting approach on the competitive F136 engine for the Joint Strike Fighter (JSF), answering the call of the Weapon Systems Acquisition Reform Act.

This submittal follows several months of discussion with the Department of Defense, and covers initial production of the F136 engine.

The approach shifts a significant cost risk from taxpayers to GE R-R until head-to-head competition begins in 2013.

Fixed-price contracting brings the cost discipline of competitive markets to military procurement.

Driving Reform Behavior

Cost overruns have become an increasing concern in defense programs.

Under cost-plus contracting, schedule and cost risks are borne by taxpayers.

In contrast, fixed-price contracting accelerates the learning curve to achieve lower cost on/ahead of schedule, and shifts the execution risks to the manufacturer.

Competition and fixed-price contracting change manufacturers’ behavior, and the benefits are realized throughout the program lifecycle, from development through production.

A Perfect Candidate

The JSF is a multi-role aircraft replacing numerous fighter aircraft, with potential production to reach 5,000 to 6,000 aircraft over 30 years.

The sheer size and scope of the JSF program makes engine selection a perfect candidate for acquisition reform, especially since the F136 competitive engine is already 70% complete.

The JSF program deserves the combined benefits of fixed-price contracting and ongoing competition, as called for by acquisition reform advocates and mandated by law.