May 22, 2006

Congress Faults Pentagon Plan to Scrap New Engine

By Andrea Shalal-Esa

WASHINGTON (Reuters) - Congressional investigators said on Monday the Pentagon's controversial decision to cancel a $2.4 billion second engine for the radar-evading, supersonic Lockheed Martin Corp. F-35 Joint Strike Fighter was based on "insufficient cost, savings and performance data."

The Government Accountability Office criticized the Defense Department's decision, and said it relied mainly on selective elements from two earlier studies in 1998 and 2002 that in fact had supported the second engine program.

"In supporting the decision to cancel, officials focused only on the potential up-front savings in engine procurement costs. They did not, however, consider the full long-term savings that might accrue from competition for providing support for maintenance and operations over the life cycle of the engine," GAO concluded in a letter to lawmakers.

In its fiscal 2007 budget plan, the Pentagon proposed canceling an alternate JSF engine by General Electric Co. and Britain's Rolls-Royce Plc, saying the move would save $1.8 billion and posed little to no risk.

The decision angered Britain, a key partner in developing the Joint Strike Fighter, and even JSF program officials said they had not been consulted about the decision.

The House of Representatives and the Senate Armed Services Committee have each approved legislation to reinstate funding for the program, which lawmakers say could save money in the long-run by promoting more competition.

Lockheed is the prime contractor for the overall F-35 project, while Pratt & Whitney, part of United Technologies Corp., will build the plane's initial engine.

GAO, the nonpartisan investigative arm of Congress, also questioned the Pentagon's claim that favorable progress on the JSF primary engine and its predecessor F-22 engine reduced any operational risks from a single source.

It said the Pratt & Whitney engine had completed only a small portion of its ground tests and has not yet been flown, while the F-22 engine had completed only about 10 percent of its hours needed for system maturity and was currently not meeting some reliability goals.

"There has not been sufficient testing to demonstrate that the primary JSF engine will perform as expected," GAO said in a letter to Senate Armed Services Committee Chairman John Warner, a Virginia Republican, and Rep. Curt Weldon, the Pennsylvania Republican who heads the House tactical air subcommittee.

The GAO said a comprehensive life-cycle analysis would consider all the potential costs and savings of a second engine and could change the Pentagon's mind about canceling the program.

The Air Force engine manager who co-led the earlier studies on the second engine told GAO that problems were often magnified with a single engine system and could require "substantial manpower and extra hours to keep aircraft flying."

The F-35, expected to cost about $256 billion to develop, is a joint project of the United States, Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway.

The Pentagon called the GAO report "misleading" and said there was no data concluding a second engine could save in the longer term and that some operations costs could actually be higher with two suppliers, since they would require separate pipelines for spares, additional training and tools.