GE/RR Claims $20B JSF Savings

UPDATED: Hill Worries Gates Won't Listen; Pratt Calls It "Distraction"

Clearly responding to the persistent heat from the Pentagon and to wavering support on Capitol Hill, the General Electric and Rolls Royce F136 consortium today announced a fixed price deal they say will save $1 billion over the next five years and $20 billion over the life of the Joint Strike Fighter program.

“Today, we are announcing a fixed-price offer for F136 engines purchased in 2012, followed by further price reductions for engines procured in each 2013 and 2014,” said David Joyce, president and CEO of GE Aviation. “We can create a competitive environment that will save the government $1 billion over the next five years, and $20 billion over the life of the JSF program.”

The GE/RR team claimed "more than 70 percent" of the engine's development is complete and the engine "is poised for flight-testing next year."

The company has already briefed the proposal to defense staff on both the appropriations and authorizing committees on Capitol Hill. I asked Joyce how they've reacted. His claim: "They are very supportive."

One Hill aide was, in fact, supportive of the GE/RR offer, but worried that opposing the F136 has become a "manhood" issue for Defense Secretary Gates, who regularly threatens to recommend a presidential veto of any bill that funds the F-136.

"With engines, both contractors are falling all over themselves, seeking advantage – Pratt to keep GE out; GE, to get GE in the game with DoD. What worries me is that the DoD position has nothing to do with programmatics so nothing will change. This is about ego and manhood. Nothing factual or substantive can change the inertia and momentum of DoD. Every time I brief someone who doesn’t have a stake in the outcome, their brow furrows, and I get, 'why is Gates taking this position?' It is irrational and not likely to change."

Competitor Pratt & Whitney issued a statement, calling the fixed price proposal a "distraction."

"This belated offer and its timing, coming just prior to Congressional consideration, is simply a
distraction. The fact is the DoD and two Presidential administrations have said an alternate engine for the F-35 is not wanted or needed. There is no military requirement for it, which is why they have requested for the last five years that Congress stop funding it and that the money saved instead be spent instead on the things that actually keep our warfighters safe," Pratt's Erin Dick said in an email. "Spending an additional $2.9B to potentially save a billion is not a responsible use of taxpayers dollars. Pratt & Whitney will meet government savings and cost objectives, which is what we are successfully doing today."