Wednesday, May 26, 2010

Letter from Defense Secretary Robert Gates on the alternate engine

Dear Representative Larson:

Thank you for your recent letter regarding the Joint Strike Fighter (JSF) program. This program is one of the Defense Department's (DOD) most important, largest and costliest acquisition programs. The JSF budget request reflects DOD's careful, analytical judgment of the best way proceed with a program that is the backbone of future tactical aircraft inventory for the Air Force, Navy, Marine Corps and international partners.

It is true that the DOD identified problems with this program in 2009. Therefore, earlier this year, we took aggressive action to restructure and manage the program. These actions included providing additional funding, replacing the program manager, withholding $614 million in contractor award fees and reducing the number of aircraft purchased in FY11 from 48 to 42. It is DOD's judgment that further reduction of the number of aircraft will increase cost, delay the program and negatively impact our international partners. DOD is confident that the JSF restructuring properly balances production rate with other relevant factors.

Further, I firmly believe that the interests of the taxpayers, our military, and the JSF program are best served by not pursuing an extra engine. Despite the continued opposition by the DOD under two Administrations, Congress has provided $1.3 billion in unrequested additional funding for continued development of this program. We have reached a critical point in this debate where spending more money on an extra engine simply makes no sense and diverts limited modernization funds from more pressing DOD priorities.

DOD's independent Cost Analysis and Program Evaluation (CAPE) estimates that an additional $2.9 billion would be required to take an alternate engine, the F136, to competitive procurement in FY17. While the $2.9 billion cost is real and certain, the benefits of a second engine are not. CAPE has concluded that a second engine might provide savings ifboth engine vendors respond to competitive pressures and drive prices lower and the second engine supplier matches the F135's vendor prices for the duration of the competition. Some international partners are almost certain to only buy the F136 engine made by the General Electric (GE) and Rolls Royce team, and the Navy has stated they will only buy one engine to avoid having to maintain two different engines aboard a ship. While DOD favors competition where possible, in this case there would not be a true competition between the engine vendors, with accompanying reductions in cost. Therefore, it is DOD's strong judgment that these real costs outweigh the theoretical benefit.

In addition, we believe the new GE proposal for the F 136 engine is based on overly optimistic assumptions. This proposal offers a fixed price for the existing engine, but not necessarily the engine that meets DOD specifications. If development problems on this immature design require design or other changes, DoD would be responsible for funding those changes. The proposal also calls for a large number of engines being produced while testing is ongoing, with that risk borne by DOD. The F136 engine is also far less mature than the F 135 engine, with only 200 hours of testing compared to the more than 13,000 hours for the F135 engine. This proposal would simply delay the current F135 engine's progress so the F136 engine could play catch up.

A single engine strategy is not new and does not create unacceptable levels of risk. Contrary to some assertions, the use of a single engine production source has seen a successful strategy for critical tactical fighter programs such as the F-22 and F-18. Further, since the F135 engine is derived from the successful F119 engine program for the F-22, the risk of a fundamental design flaw or other circumstance that would ground the fleet is significantly reduced and manageable.

Given the many pressing needs facing our military and the fiscal challenges facing our country, we cannot afford a business as usual approach to the defense budget. Tough choices must be made -by both the department and Congress -to ensure that current and future military capabilities can be sustained over time. This means programs and initiatives of marginal or no benefit -like the F136 engine -are unaffordable luxuries.

Accordingly, as I have stated repeatedly, I will strongly recommend that the President veto any legislation that contains funding for an extra JSF and unneeded engine.


Robert M. Gates

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