GE Rolls-Royce Fighter Engine Team Submits Fixed Price Contract Approach
September 14, 2009
In response to cost overruns and schedule delays in major weapon programs, The Weapon Systems Acquisition Reform Act of 2009 was signed into law to mandate competition through the entire life of major defense programs -- including funding competing sources.
The F-35 Joint Strike Fighter (JSF) program creates the perfect opportunity -- a multi-role aircraft replacing numerous tactical fighter aircraft, with potential production for the U.S. Air Force, Navy, Marines and international customers to reach 5,000 to 6,000 aircraft over 30 years. Without competing JSF engines, a $100 billion monopoly will be handed to a single supplier.
To drive head-to-head engine competition and predictable costs, the GE Rolls-Royce Fighter Engine Team has submitted an unsolicited fixed-price contracting approach for the JSF program office -- a unique approach for the early production years of the JSF F136 engines.
The approach covers initial F136 engine production, beginning with the F136 second production lot, shifting significant cost risk from taxpayers to the Fighter Engine Team until head-to-head competition begins between the F136 and the Pratt & Whitney F135 engine in 2013. Fixed-price contracting brings the cost discipline of competitive markets to military procurement.
The financial risk for early production engine lots would be shared between the government (which manages the engine configuration) and the GE Rolls-Royce Fighter Engine Team (which is responsible for the engine program execution).
Under current JSF schedules, the initial F136 production engines would be purchased directly from the government to get the production line up and running. Then, beginning in 2013, the F136 will enter an annual, head-to-head competition with engines produced by Pratt & Whitney.
Pratt & Whitney's competing F135 engine is funded through a Cost Plus contract. Since 2002, development costs for the P&W F135 engine have reached $1.9 billion over plan, as reported by the House Armed Services Committee. In addition, individual F135 prices have risen as much as 47 percent in recent years.
The GE Rolls-Royce Fighter Engine Team consistently receives top reviews from the Joint Program Office for program execution, including budget performance. Over time, the F136 engine will more than pay for itself through decades of annual competitions that drive performance and cost improvements by design.
In the history of the JSF program, there has never been an engine competition.
Reflecting the spirit of the Acquisition Reform Act, passed in May 2009, the U.S. House of Representatives recently voted 400 to 30 for a defense-spending bill for fiscal year 2010 that includes $560 million in funding for the F136 engine.
This year, the F136 engine has garnered support in both steps of the U.S. House budget process; defense authorization and defense appropriations.
More than $2.5 billion has been invested in developing the GE Rolls-Royce F136 engine, including more than $50 million from GE and Rolls-Royce. The benefits of competition have been verified by numerous studies and U.S. military experience. The JSF program's international partners in the F-35 program also support competing engines.
History has shown that competition in aircraft engine programs significantly reduces cost, while improving safety, reliability, and contractor responsiveness. The "Great Engine War," the 20-year battle to power the F-16 fighter, demonstrated these exact results with cost savings of at least 20 percent.
GE - Aviation, with responsibility for 60 percent of the F136 program, is developing the core compressor and coupled high-pressure/low-pressure turbine system components, controls and accessories, and the augmentor. Rolls-Royce, with 40 percent of the F136 program, is responsible for the front fan, combustor, stages 2 and 3 of the low-pressure turbine, and gearboxes. International participant countries are also contributing to the F136 through involvement in engine development and component manufacturing.
The F136 engine will be available, beginning in 2012, to power all variants of the F-35 Lightning II aircraft for the U.S. military and eight partner nations.
The first complete new-build F136 engine began testing earlier this year under the System Development and Demonstration (SDD) contract with the U.S. Government Joint Program Office for the F-35 Joint Strike Fighter program. The F136 engine is a product of the best technology from two world-leading propulsion companies. The GE Rolls-Royce Fighter Engine Team has designed the only engine specifically developed for the F-35 aircraft, offering a larger core, extra temperature margin and affordable growth.
F136 engine development is being led at GE Aviation in Evendale, Ohio (Cincinnati suburb); and at Rolls-Royce in Indianapolis, Indiana.
The F-35 is a 5th-generation, multi-role aircraft designed to replace the AV-8B Harrier, A-10, F-16, F/A-18 Hornet and the United Kingdom's Harrier GR.7 and Sea Harrier, all of which are currently powered by GE or Rolls-Royce.
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