Monday, February 1, 2010

Administration Budget Proposal Cancels Alternate Engine Program

Today the White House released its budget and has again proposed termination of the alternate engine program.

In his remarks this morning, the President said, "Even though the Department of Defense is exempt from the budget freeze, it's not exempt from budget common sense, it's not exempt from looking for savings.”

The budget proposal's "Terminations, Reductions, and Savings" section (available here) states:

The Administration proposes to terminate the Joint Strike Fighter (JSF) Alternate Engine Program (AEP) because it is no longer needed to prepare against the potential failure of the main JSF engine program. The Department of Defense (DOD) proposed canceling the JSF AEP in the 2007 Budget, and has not requested funding for it since, because development of the main engine is progressing well. In addition, analysis indicated that the savings from competition would not offset the high upfront costs of the AEP. However, the Congress has continued to fund the program.


The JSF AEP was started because DOD wanted to reduce technical risk in the development of a new engine for the JSF. However, since the main engine program for the JSF is progressing well, a second engine program is unnecessary and there is no longer any need to support two separate contractors. Moreover, financial benefits, such as savings from competition, have been assessed to be small, if they exist at all, because of the high cost of developing, producing, and maintaining a second engine. The reasons for canceling the AEP in 2007 remain valid today. Studies by both the Government Accountability Office and the Congressional Budget Office question the affordability of the current defense program, particularly the high cost of modernizing tactical aviation. Canceling the AEP will result in near-term savings of over a billion dollars.

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