Joint Strike Fighter
Assessment of DOD's Funding Projection for the F136 Alternate Engine Gao ID: GAO-10-1020R September 15, 2010The Joint Strike Fighter (JSF) program began in 1996 with an acquisition strategy that called for a competitive engine acquisition program. The program planned to first develop and procure the F135 primary engine and, with a few years lag time, develop the F136 second (or alternate) engine to compete with the F135 engine for future procurements and life-cycle support activities. The Department of Defense (DOD) requested funding for both engines annually as the JSF program progressed until the fiscal year 2007 budget submission, at which point the DOD stopped requesting funding for the F136 alternate engine. Defense officials believe that the operational risks of relying on a single engine supplier are low and do not justify the extra costs to maintain a second engine source. DOD further states that there is no guarantee that having an engine competition will create enough long-term savings to outweigh the up-front costs and now intends to acquire only the F135 primary engine. However, Congress has continued to fund the alternate engine development program annually through fiscal year 2010. According to the Secretary of Defense, DOD would need an additional $2.9 billion in funding over the next 6 years to support an alternate engine program up to the point where it believes it could begin competition in 2017. This amount includes the additional funding DOD says is needed with respect to the alternate engine to finish system development and demonstration, allow sufficient time for the contractor to gain production experience before DOD begins the competition, and create a logistics support system for the engine. DOD has stated that it has higher priority needs for this funding and has not included any funding in its fiscal year 2011 budget request for the alternate engine.
The $2.9 billion funding projection cited by DOD as the additional funding required to support an alternate engine program was intended to provide a general sense of the funding needed. As such, the projection does not include the same level of fidelity and precision normally associated with a detailed, comprehensive estimate. DOD analysts relied largely on data, assumptions, and methodologies from an analysis done 3 years ago and have characterized the $2.9 billion projection as having an equal chance of being too high or too low. Therefore, this projection should be viewed as one point within a range of possible costs depending on the factors and assumptions used, and not as an absolute amount. Different assumptions and more detailed information could either increase or decrease the $2.9 billion funding projection. That said, we found two key assumptions made by DOD in developing the $2.9 billion funding projection that have a significant impact on the estimated amount of upfront investment needed. These assumptions were (1) 4 years of noncompetitive procurements of both engines would be needed to allow the alternate engine contractor sufficient time to gain production experience and complete developmental qualification of the engine, and (2) the government would need to fund quality and reliability improvements for engine components. Past studies and historical data we examined indicate that it may take less than 4 years of noncompetitive procurements and that competition may obviate
GAO-10-1020R, Joint Strike Fighter: Assessment of DOD's Funding Projection for the F136 Alternate Engine
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GAO-10-1020R:
United States Government Accountability Office:
Washington, DC 20548:
September 15, 2010:
The Honorable Carl Levin:
Chairman:
Committee on Armed Services:
United States Senate:
Subject: Joint Strike Fighter: Assessment of DOD's Funding Projection
for the F136 Alternate Engine:
Dear Senator Levin:
The Joint Strike Fighter (JSF) program began in 1996 with an
acquisition strategy that called for a competitive engine acquisition
program. The program planned to first develop and procure the F135
primary engine and, with a few years lag time, develop the F136 second
(or alternate) engine to compete with the F135 engine for future
procurements and life-cycle support activities. The Department of
Defense (DOD) requested funding for both engines annually as the JSF
program progressed until the fiscal year 2007 budget submission, at
which point the DOD stopped requesting funding for the F136 alternate
engine. Defense officials believe that the operational risks of
relying on a single engine supplier are low and do not justify the
extra costs to maintain a second engine source. DOD further states
that there is no guarantee that having an engine competition will
create enough long-term savings to outweigh the up-front costs and now
intends to acquire only the F135 primary engine. However, Congress has
continued to fund the alternate engine development program annually
through fiscal year 2010.
According to the Secretary of Defense, DOD would need an additional
$2.9 billion in funding over the next 6 years to support an alternate
engine program up to the point where it believes it could begin
competition in 2017. This amount includes the additional funding DOD
says is needed with respect to the alternate engine to finish system
development and demonstration, allow sufficient time for the
contractor to gain production experience before DOD begins the
competition,[Footnote 1] and create a logistics support system for the
engine. DOD has stated that it has higher priority needs for this
funding and has not included any funding in its fiscal year 2011
budget request for the alternate engine.
At your request, we reviewed the basis for DOD's $2.9 billion funding
projection and its key assumptions. We obtained and discussed data
from the Office of the Secretary of Defense's Cost Analysis and
Program Evaluation office, including its assumptions and methods used
in formulating the estimate. We reviewed DOD's 2007 cost analysis of
the JSF alternate engine program and its 2010 update. In performing
our review, we used data and information collected over the past
several years from our body of work reviewing the overall JSF and
alternate engine programs.[Footnote 2] We also relied on guidance
provided in the March 2009 GAO Cost Estimating and Assessment Guide:
Best Practices for Developing and Managing Capital Program Costs. We
performed our review from July 2010 to September 2010 in accordance
with generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings
and conclusions based on our audit objectives. We believe that the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
Summary:
The $2.9 billion funding projection cited by DOD as the additional
funding required to support an alternate engine program was intended
to provide a general sense of the funding needed. As such, the
projection does not include the same level of fidelity and precision
normally associated with a detailed, comprehensive estimate. DOD
analysts relied largely on data, assumptions, and methodologies from
an analysis done 3 years ago and have characterized the $2.9 billion
projection as having an equal chance of being too high or too low.
Therefore, this projection should be viewed as one point within a
range of possible costs depending on the factors and assumptions used,
and not as an absolute amount.
Different assumptions and more detailed information could either
increase or decrease the $2.9 billion funding projection. That said,
we found two key assumptions made by DOD in developing the $2.9
billion funding projection that have a significant impact on the
estimated amount of upfront investment needed. These assumptions were
(1) 4 years of noncompetitive procurements of both engines would be
needed to allow the alternate engine contractor sufficient time to
gain production experience and complete developmental qualification of
the engine, and (2) the government would need to fund quality and
reliability improvements for engine components. Past studies and
historical data we examined indicate that it may take less than 4
years of noncompetitive procurements and that competition may obviate
the need for the government to fund component improvement programs. If
these conditions hold true for the alternate engine, the funding
projection for the alternate engine could be lower than DOD's
projection.
DOD's Alternate Engine Cost Projection Is Not A Detailed,
Comprehensive Estimate:
DOD projected that it would need $2.9 billion of additional funding to
support the alternate engine program to the point where DOD believes
it could begin competition in 2017. The projection was not based on,
nor intended to be, a detailed, comprehensive estimate. DOD cost
analysts stated the projection provides a general-level sense of the
budget required to put the alternative engine on a competitive level
with the primary engine. The analysts noted that DOD was in the midst
of a complex and comprehensive restructuring of the total JSF
acquisition program and they were unable to invest the time or
resources that normally would be part of a more detailed,
comprehensive estimate. Accordingly, they relied largely on data,
assumptions, and methodologies from their 2007 analysis. Using the GAO
Cost Estimating and Assessment Guide, DOD's estimate would be
characterized as a "rough order of magnitude" cost analysis. This type
of analysis is typically developed when a quick estimate is needed and
limited information is available, and does not include the same level
of fidelity and precision normally associated with a detailed,
comprehensive cost estimate. Table 1 summarizes DOD's projection of
additional development and procurement costs to enable JSF engine
competition.
Table 1: DOD's Projection of the Additional Funding Needed to Support
the Alternate Engine Program (in millions of then-year dollars):
Development total:
Additional funding projected by DOD (FY 2011-FY 2016): $1,533.
System Development and Demonstration:
Additional funding projected by DOD (FY 2011-FY 2016): $1,188.
Engine Component Improvement Program:
Additional funding projected by DOD (FY 2011-FY 2016): $345.
Procurement total:
Additional funding projected by DOD (FY 2011-FY 2016): $1,381.
Noncompetitive procurement of engines (including spares);
Additional funding projected by DOD (FY 2011-FY 2016): $747.
Production tooling:
Additional funding projected by DOD (FY 2011-FY 2016): $133.
Support:
Additional funding projected by DOD (FY 2011-FY 2016): $500.
Total:
Additional funding projected by DOD (FY 2011-FY 2016): $2,914.
Source: DOD (data); GAO (presentation).
Note: Some numbers may not add because of rounding.
[End of table]
The following examples help illustrate the level of fidelity and
precision of the information used in formulating DOD's $2.9 billion
funding projection:
* DOD's F136 system development and demonstration cost projection,
primarily developed in 2007, is based largely on historical analogy to
the development of other fighter engines with some limited updating of
data. DOD analysts emphasize that they did not conduct a detailed,
fact finding effort to assess the current status and costs of the F136
development for their current projection.
* DOD's analysts chose to be methodologically consistent with their
2007 analysis and assumed competition would not begin until after JSF
system development was complete. This would delay the start of
competition by 3 years, from 2014 to 2017. At the time the 2007 study
was done, the overall JSF system development program and F136
development efforts were scheduled to be complete at about the same
time. However, since that time, the JSF development program has
slipped about 3 years while projected completion of F136 engine
development has slipped about 7 months.
* DOD's procurement cost projection did not use actual production cost
data for either the F135 or F136 and relied on historical data from
the F119 engine used on the F-22. DOD's analysis also assumed the
initial F136 engine procurement unit prices would be the same as the
F135's initial unit prices, and that both engines would follow the
same price curve. We note that the F136 engine is a different design
and the contractor will likely use different manufacturing processes.
In addition, the F136 engine development began 3 to 4 years after the
F135 engine development and may benefit from F135 lessons learned and
flight test results.
* To project support costs for the alternate engine, the analysts
applied a historical cost factor of 21 percent to the estimated F136
flyaway procurement costs for fiscal years 2013 through 2016, and then
equally divided the amount over this same time period for an estimated
"level of effort."
* DOD's analysis did not take into account $70 million of appropriated
but unobligated F136 engine procurement funding that could potentially
be used to offset some of the projected costs.
Different assumptions and more detailed information could either
increase or decrease the $2.9 billion funding projection accordingly.
DOD analysts have characterized the projection as being at a 50
percent confidence level--meaning that it is equally likely to be too
low as too high. In addition, the DOD analysts stated that they did
not conduct a sensitivity analysis that looked at different scenarios
with alternative assumptions, uncertainty, and risks levels, instead
choosing to stay largely consistent with their 2007 analysis. Based on
the GAO Cost Estimating and Assessment Guide, providing decision
makers with a range of costs around a point estimate would be more
useful, particularly when information on cost, schedule, and technical
risks is limited. DOD believes any additional costs for continuing the
alternate engine program are an unwarranted use of resources and that
conducting a sensitivity analysis would not fundamentally change that
position.
Two Key Assumptions Significantly Affect Projected Funding Needs:
Two key assumptions made by DOD in developing the $2.9 billion funding
projection have a significant impact on the estimated amount of up-
front investment needed. These two assumptions alone account for more
than one-third of DOD's projection. First, DOD's funding projection
reflects the assumption that 4 years of noncompetitive annual
procurements of both engines are needed to allow the alternate engine
contractor sufficient time to gain the production experience and
learning necessary for competitive procurement and to complete
developmental qualification of the alternate engine. DOD estimates
additional costs of $747 million to the U.S. government for procuring
both primary and alternate engines (including spares) over these four
years.[Footnote 3] Second, DOD assumes that $345 million of additional
funding will be required through fiscal year 2016 to maintain the
alternate engine's currency and improve its reliability once fielded.
However, if different assumptions are made, such as (1) competition
beginning 2 years earlier than DOD assumes, and (2) competition
driving increased quality and reliability into the contractors'
designs and processes reducing the need to fund engine component
improvement programs,[Footnote 4] the amount of additional funding to
support the alternate engine program could potentially be lower.
Amount of Time Needed for Noncompetitive Procurements:
Some period of noncompetitive procurements of both engines may be
needed to ensure that the alternate engine has a mature design and can
be efficiently produced, but how long a period can be debated. The 4
years assumed by DOD may not all be necessary. Historical data
provided by DOD show that during the "Great Engine War,"[Footnote 5]
the price of the alternate contractor's engine actually became
competitive with the price of the initial contractor's engine after
only 1 year of noncompetitive procurements. Assuming 2 years of
noncompetitive procurement of JSF engines instead of 4 years could
significantly reduce DOD's projection of $747 million because
competition would start 2 years sooner (see fig.1).[Footnote 6]
Figure 1: Comparison of 4-Year and 2-Year Noncompetitive Procurement
Options:
[Refer to PDF for image: illustration]
Scenario 1: 4 years, noncompetitive procurements:
Alternative engine development: FY 2007-2014;
Noncompetitive procurement, F123 only (183 engines): FY 2007-2012;
Noncompetitive procurement. F135 and F136 (743 engines): FY2013-2016;
Annual competition, 2,723 engines: FY 2016 and beyond.
Scenario 2: 2 years, noncompetitive procurements:
Alternative engine development: FY 2007-2014;
Noncompetitive procurement, F123 only (183 engines): FY 2007-2012;
Noncompetitive procurement. F135 and F136 (292 engines): FY2013-2014;
Annual competition, 3,174 engines: FY 2014 and beyond.
Source: DOD (data), GAO (analysis).
Note: Based on the number of U.S, international, and spare engine
procurements used in DOD's analysis.
[End of figure]
Given the alternate engine contractor's current schedule, 2 years of
noncompetitive procurements could still allow sufficient time to
complete the alternate engine development and qualify the engine.
According to DOD analysts, they did not assess any scenarios other
than 4 years of noncompetitive procurements, but stated that they
believe a scenario in which there is less than 4 years would require
the alternate engine provider to accept more risk in order to offer a
competitive price.
Funding for Engine Component Improvements:
Competition could drive increased quality into the contractors'
designs and processes, and decrease or eliminate the need for DOD to
fund component improvement programs for both engines. A key tenet of
competition identified in studies on competition benefits is that it
typically results in increased contractor responsiveness and
technological innovation leading to better and more reliable products.
A 2002 program management advisory group study examined the JSF
alternate engine program and concluded that competition has the
potential to incentivize the F135 and F136 contractors to invest their
own resources in durability and reliability improvements, thereby
eliminating or offsetting the need for government-funded component
improvement programs. Also, the Great Engine War was able to generate
significant benefits because competition gave contractors an incentive
to improve designs and reduce costs during production and sustainment.
If these benefits of competition are assumed, as much as $345 million
of DOD's projected $2.9 billion up-front costs projected for a F136
component improvement program through 2016 could potentially be
eliminated. Similarly, funding currently planned for the F135
component improvement program through fiscal year 2016 could become
available to further offset the additional cost projected to support
the F136 engine program. According to DOD analysts, they did not
assume that competition would result in both significant price
decreases and improved product quality. While they agree that
competition could motivate the contractors to invest their own
resources to improve product quality, they assumed that the
contractors would also increase their engine unit prices to cover the
additional investment.
Agency Comments and our Evaluation:
DOD provided us written comments on a draft of this report (enclosed).
In its comments, DOD further explains the rationale for the
assumptions and methods it used in developing its projection. DOD also
cites our previously-reported concerns about excessive concurrency
with the JSF aircraft program as indirectly supporting its assumption
that 4 years of non-competitive procurements are needed for the
alternate engine. Our concerns, however, have focused on the degree of
concurrency with the overall JSF aircraft program, not with the F136
alternate engine program specifically. We note that the projected
completion of the JSF aircraft development program has slipped about 3
years while projected completion of F136 engine development has
slipped about 7 months. Therefore, we believe the risks of concurrency
in this situation would be considerably lower than that of the overall
JSF program.
Also, DOD comments that our analysis focused solely on describing
factors that could drive alternate engine funding requirements lower
than its projection and that we were generally silent with respect to
a number of plausible scenarios where costs could be higher. DOD
believes this may mislead readers to assume that the $2.9 billion is
at the high end of the range of possible funding needs, which it
states is not the case. We do point out in our report that different
assumptions and more detailed information could either increase or
decrease the funding projection accordingly. The two key assumptions
we highlight in our report--the number of years of noncompetitive
procurements and the need for government funded component improvement
programs--are examples where past studies and historical data provide
evidence that the funding requirements could be lower than DOD's
projection. In its comments, DOD agrees that there are a number of
plausible scenarios that could impact its projection and reiterates
that it is equally likely that their $2.9 billion projection will be
either too high or too low, but does not provide a potential range of
how high or low. As result, we believe DOD's $2.9 billion projection
should be viewed as one point within a range of possible costs. Given
the number of plausible scenarios and the limited amount of data
available, providing a range of costs, which include the consideration
of different assumptions, uncertainty and risk levels, may be more
useful to decisionmakers.
We are sending copies of this report to the Secretary of Defense;
Secretary of the Air Force; Secretary of the Navy; and Director of the
Office of Management and Budget. The report is also available at no
charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-4841 or sullivanm@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Staff members making key
contributions to this report were Bruce Fairbairn, Matthew Lea, and
Travis Masters.
Sincerely yours,
Signed by:
Michael J. Sullivan, Director:
Acquisition and Sourcing Management:
Enclosure:
[End of section]
Enclosure:
Comments from the Department of Defense:
Office Of The Secretary Of Defense:
Cost Assessment And Program Evaluation:
1800 Defense Pentagon:
Washington, D.C. 20301-1500:
Mr Michael J. Sullivan:
Director, Acquisition and Sourcing Management:
U.S. Government Accountability Office:
441 G. Street, N.W.
Washington, DC 20548:
Dear Mr. Sullivan:
This is the Department of Defense (DoD) response to the GAO Draft
Report, GAO-10-1020R, Joint Strike Fighter: Assessment of DoD's
Funding Projection for the F136 Alternate Engine, dated September 15,
2010 (GAO Code 120927).
Thank you for the opportunity to review this draft report. We
understand that your report contains no recommendations and therefore
DoD comments are optional; however, we would like to take this
opportunity to comment on your findings. Our detailed response is
enclosed.
I appreciate the healthy dialogue and interaction between our staffs.
It is an important element of providing visibility and transparency
into critical national security topics such as this.
Signed by:
Christine H. Fox:
Director:
Enclosure:
[End of letter]
Enclosure: DoD Comments to GAO Draft Report, GAO-10-1020R:
Department of Defense (DoD) Comments on Draft GAO-10-1020R, Joint
Strike Fighter: Assessment of Don's Funding Projection for the FI36
Alternate Engine, dated September 15, 2010 (GAO Code 120927).
GAO Finding: (Page 2) "DoD'S Alternate Engine Cost Projection is Not a
Detailed, Comprehensive Estimate"
DoD Comment: The DoD cost projection was prepared to inform the
Department's senior leadership on resources necessary to make the
alternate engine competitive if a decision were made to fully fund the
F 136 alternate engine program to support a competitive acquisition
strategy. This spans 2011 to 2016. The two largest components of this
cost estimate are the costs to complete development of the F136
engine, and costs to initiate non-competitive procurement of engines
during a period of "directed buys." The cost estimates for these two
activities are derived from previously prepared, detailed, and careful
analyses of costs based on empirical data from these and prior
tactical fighter propulsion programs. The strength and validity of
these cost estimates is proven by the fact that subsequent actual cost
return information from the F135 and F136 engine programs is
consistent with the DoD forecasts. As a result, we continue to believe
that the Department's $2.9 billion cost estimate to complete F136
development activities and prepare the vendor for competition is built
upon a solid foundation.
GAO Finding: (Page 4) "Two Key Assumptions Significantly Impact
Projected Funding Needs"
DoD Comment: The GAO points out two scenarios in which less than $2.9
billion would be required to fund the alternate engine program
throughout the FYDP: 1) if the period of directed buys is less than
the four years assumed by the Department; and 2) if the incentives
introduced through competition encourage the contractors to employ
their own corporate resources to fund product improvements, obviating
the need for a separate government-funded component improvement
program (C1P) during the competition.
-Period of Directed Buys: The Department's cost estimate assumes four
years of directed buys are necessary, consistent with the analytic
assumptions used in the Department's 2007 Congressionally-mandated
study on the alternate engine program. More importantly, a period of
four years offers the appropriate balance of risk in planning for the
conduct of concurrent engine and aircraft development, test, and
production activities. We note that GAO itself has consistently
expressed concern about the potential for introduction of excessive
concurrency into the Joint Strike Fighter program.[Footnote 1]
A period of four years of directed buys would enable the alternate
engine contractor to complete engine qualification activities;
establish a production line; and achieve a competitive footing to
begin production. The assumption that these activities can be
successfully accomplished in less than four years would impose
additional risks on the JSF propulsion and aircraft programs. As of
April 2010, the alternate engine had completed only 700 hours of a
planned 10,000-hour test program. The bulk of the planned testing for
the alternative engine is planned to occur in FY 2012 thru FY 2014.
Also, no flight testing of the F 136 engine has occurred to date.
Qualification activities for the JSF aircraft program are now planned
to extend into FY 2015. With this JSF program schedule, the
Department's assumption of four years of directed buys for the JSF
engine competition would incorporate two years of concurrency with
development and qualification activities for the second engine (i.e.,
FY 2013-14), and would allow the two years following (i.e., FY 2015-
16) for the second engine vendor to mature production processes to
enable engine price offers that are comparable to those of the lead
engine vendor.
- Government Funded Component Improvement Program: As the GAO points
out, the Department's estimate includes $345 million for a discrete
Component Improvement Program (CIP) for the F136 engine. DoD did not
assume that competition itself would incentivize the contractor to
bear the full burden of the costs of a CIP program, while
simultaneously offering dramatic reductions in engine prices during
procurement competitions. The Department's analysis of the alternative
engine accounted for the benefits of competition through projected
price reductions beginning in FY 2017, together with the assumption
that some level of government funding is required to maintain a
standard CIP for the alternate engine during the competition. In
reality, the benefits of competition would be driven by the incentives
the government chose to emphasize during annual competitions, whether
focus on reduced acquisition prices, design and reliability
improvements, or some combination of the two. Using the terms of
competition to drive design improvements would tend to reduce the
direct benefits realized from price reductions offered during a
competitive procurement phase.
GAO Finding: (Page 4) "Based on the GAO Cost Estimating and Assessment
Guide, providing decision makers with a range of costs around a point
estimate would be more useful, particularly when information on cost,
schedule and technical risks is limited."
DoD Comment: The purpose of the Department's $2.9 billion cost
projection was to inform decision-making on resourcing of the
alternative engine program in the President's Budget request and the
Future Years Defense Program (FYDP). A point estimate is most
appropriate for this decision since the FYDP, as well as the
President's budget request, requires a single estimate of required
resources for a given program in each specific fiscal year.
General DoD Comments: Based on the rigor in methods used in building
estimates, the collection and use of historical cost information from
the F135, F136, and other tactical aircraft propulsion programs, and
the review of applied assumptions, we project that it is about equally
likely that our $2.9 billion cost projection to prepare the F136 for
competition would prove too low or too high. The GAO analysis is
focused solely on describing factors that would drive funding
requirements for the alternative engine to be lower than our $2.9
billion figure (i.e., directed buys and discrete funding of CIP).
Also, GAO's assessment (i.e., page 4) identifies other factors that
may generate lower prices, specifically a different design that
results in a different cost improvement curve, or the ability of the
F136 engine to take advantage of lessons-learned from the F135
experience. The benefits of these two items are ambiguous: it may be
that the design of the F136 results in a higher, rather than a lower
initial price and production cost improvement curve. Also, issues
associated with sharing contractor proprietary information during
competition could reduce the benefits of lessons-learned that could be
shared between two engine providers.
GAO's assessment is generally silent with respect to a number of
plausible scenarios in which the estimate of the cost of preparing the
alternate F 136 engine for competition would be higher than the $2.9
billion figure. Instead, the focus of the report is on scenarios in
which costs could be reduced. This may mislead readers to assume that
$2.9 billion is at the high end of the range of possible outcomes for
the F136 program. This is not the case.
Footnote:
[1] For example, Mr Sullivan, in GAO-10-478T (Testimony Before the
Subcommittees on Air and land Forces and Seapower and Expeditionary
Forces, Committee on Armed Services, House of Representatives), stated
the following regarding the JSF program: "A recurring theme in our
work has been concern about what we believe is undue concurrency of
development, test, and production activities and the heightened risks
it poses to achieving good cost, schedule, and performance outcomes."
[End of section]
Footnotes:
[1] This refers to a period of time for noncompetitive procurement of
both engines, providing the alternate engine contractor an opportunity
to gain production experience and learning before DOD begins
competitive engine procurements.
[2] Our latest testimony on this subject is GAO, Joint Strike Fighter:
Significant Challenges and Decisions Ahead, [hyperlink,
http://www.gao.gov/products/GAO-10-478T] (Washington, D.C.: Mar. 24,
2010).
[3] According to DOD officials, noncompetitive procurements reduce the
number of engines any one contractor would produce, affecting
manufacturing efficiencies and increasing prices for both during the
period that DOD buys the engines noncompetitively.
[4] Engine component improvement programs typically begin with the
delivery of the first production engine and are intended to improve
engine component quality and reliability, and resolve problems
encountered after the engines are fielded.
[5] The competition between Pratt & Whitney and General Electric to
supply military engines for the F-16 and other fighter aircraft
programs which began in the 1980s is known as the "Great Engine War."
[6] DOD estimated that a total of $317 million in additional U.S.
government funding would be needed to procure F135 and F136 engines
and initial spares through the last 2 years of noncompetitive
procurements (fiscal year 2015 and fiscal year 2016).
[End of section]
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