By Marina Malenic
The Defense Department may be giving too much weight to cost concerns, neglecting operational risk in its analysis of the need to continue developing an alternate engine for the F-35 Lightning II Joint Strike Fighter, the Marine general overseeing the airplane’s development and production said yesterday.
“We focus too much on the discussion of cost-benefit instead of operational risk-benefit,” said Brig. Gen. David Heinz.
Pratt & Whitney, a unit ofUnited Technologies [UTX], developed the F135 engine currently in use on early F-35 production models. A General Electric [GE]-Rolls-Royce team is developing the F136 alternate engine.
Like the Bush administration in recent years, the Obama administration is seeking no more money for the F136 program in its Fiscal Year 2010 budget request. In his proposed Pentagon budget rolled out last month, President Obama singled out the F136 program as a prime example of the “unnecessary defense programs that do nothing to keep us safe, but rather prevent us from spending money on what does keep us safe.”
However, Congress has earmarked funds for both engines in the past three budget cycles and may well do so again.
While he said he fully supports the president’s budget, Heinz warned that the Pentagon’s “ability to absorb an incident that may ground a large number of those motors…is going to lessen” if there is no alternative to the F135 engine.
That risk is heightened by the fact that the F-35 is expected to replace the majority of aging fighter aircraft in the U.S. inventory–the F-15s, F-16s and F/A-18s. Therefore, Heinz argues, any potential grounding based on engine defects cannot easily be mitigated by another line of airplanes.
“You don’t have the operational flexibility with the various type model series that you enjoy today,” he said.
Further, Heinz said he believes competition will lead to greater efficiency. As an example, he cited competition by Pratt & Whitney and General Electric Aircraft Engines for F-16 engine production contracts, which he says led to some 20 percent cost savings for the government.
“I do believe there will be a difference in behavior with competition,” Heinz said. “I actually believe that it would be OK to go forward with the premise that, at some point in the future, we make an assumption that says it’s cost-neutral and take the cost part out the equation and then weigh the rest of the benefit.”
The general acknowledged, however, that the economic model he has for the program “has no ability to calculate the value of competition.”
GE/Rolls is currently in the fifth year of its System Development and Demonstration (SDD) contract with the F-35 Joint Program Office, and some 70 percent of the total funding for the contract has already been allocated, according to budget documents.
F-35 engine production is expected to be worth some $100 billion over the life of the program.
Beyond the operational benefit of extra insurance against engine failure, two engine development programs would also push technology forward at a faster pace, according to Heinz. He said things like more efficient blades and fuel consumption are likely to result when two competitors work against each other to create the best product.
Asked whether the benefits of competition have already been fully realized with the dual development to date, Heinz said cost savings are still likely in the future. The first production F136 engines are scheduled to be delivered in 2012 to coincide with the fourth lot of F-35 aircraft production, and the general said FY ’13 would be the first year of “true competition,” when the two companies are projected to be building 60 engines apiece.
“Pratt is not truly competing with GE yet for the market share,” he said. “I think the real competition occurs when you are, no kidding, both making the engine, both given a chance to bid on that price in a particular lot…and that has not yet occurred.”
Obama’s proposed FY ’10 budget calls for procurement of 513 F-35s over five years, an increase of 25 over previous plans, with another 180 expected to be built for international partners. Heinz says Lockheed Martin could be churning out one aircraft per day by FY ’15.