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Take Advantage of Competition in Large Fighter Engine Programs

Much has been written in opinion pages, and offered as commentary in the halls of Congress, as to the merits of having an alternate engine program for the Joint Strike Fighter (now known as the F-35). [IMGCAP(1)]Quite frankly I am surprised at how uninformed or simply flat wrong much of the commentary from the opponents has been with respect to the JSF alternate engine. The alternate engine is not an earmark for some pork project (as the New York Times editorial of Aug. 3 claimed). Rather, it’s an honest difference of opinion over national security, procurement strategies and public policy choices. When it comes to these types of difficult choices, history is often our best guide and this is certainly true in the case of the alternate engine.No one can overstate the benefits of competition in defense programs. Indeed, competition is a central element in Congress’ latest effort to enact defense acquisition reform (just this spring). There is no better example of the value of competition than with large fighter engine programs. In the late 1970s and early 1980s there were very serious problems with the sole-source engine used in the F-15 and, subsequently, F-16 fighter aircraft. Significant portions of the fleet were grounded for extended periods. In response to the growing engine concerns, and in recognition that the single-engine F-16 fighter was ramping up production, DOD decided to hold an annual engine competition to drive better performance. This engine competition (splitting the buy between the two engine manufacturers) became known as “The Great Engine War.—The benefits derived from this annual competition (known as “competitive dual-sourcing—) came quickly, were many in number, and have proved enduring. There was an immediate improvement in engine reliability, increased performance, and 20 percent lower unit cost. In addition, the improved reliability resulted in far less maintenance (half as many shop visits for repairs, and more than four times longer between scheduled overhauls); as well as significantly lower warranty bids from both engine supplies. Overall, the Air Force estimated net life-cycle savings of $2 billion to $3 billion (in then-year dollars). Importantly, “jet engine maintenance— is the single largest DOD support-cost item. Since those difficult growing pains in the early days of the F-16, thousands of the fighters have been produced, making it one of the most cost-efficient fighters the U.S. has ever built; and, because of its low cost, high performance and high reliability, has been procured by many other nations.Fast-forward to the present: The new single engine F-35 Joint Strike Fighter is slated to become the backbone of the DOD fighter force with the Air Force, Navy and Marines; all relying on it, as are many of our allies. More than 3,000 JSF aircraft are planned, with projections for many more. In fact, it is slated to be the largest single weapon-system program in history. And like the F-15 and the F-16, the JSF needs to be fielded with head-to-head annual engine competition. Competition works. It keeps everyone honest; it inspires better performance, and drives efficiencies — not just once but every single year. Despite the overwhelming historic evidence, and the fact that the development of the alternate engine is almost complete, the Defense Department has decided it prefers a sole-source contractor for the JSF engine. The theory seems to be that over time, increased volume for one engine manufacturer yields lower cost and better quality. This is simply not the case. In fact, the extensive historic data on DOD programs shows that with sole-source producers the costs rise over time (as the performance improves); while with competitive dual sources the costs are continuously driven down, while the performance and reliability, for both producers continue to rise (since the share of the production to be awarded to each competitor is based on the combination of cost, performance and reliability).The history suggests that an alternate engine will not disrupt the JSF program. Rather it will make the fighter more affordable, more reliable and improve performance. Giving a $100 billion sole source contract to one company for the JSF engine is not only bad acquisition policy, it’s bad public policy, and likely to seriously disrupt the program by allowing fewer aircraft to be purchased. In the end the taxpayer and the war fighters will be the losers.Jacques Gansler, Ph.D., served as undersecretary of Defense for acquisition, technology and logistics from 1997 to 2001. He serves on the faculty of the University of Maryland School of Public Affairs, where he holds the Roger C. Lipitz Chair in Public Policy and Private Enterprise.

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