SAC-D Drops F136 Dough; GE Not Worried

SAC-D Drops F136 Dough; GE Not Worried

UDATED: With Links to Sen. Inouye’s Markup Comments and Bill Summaries.

The Senate Appropriations defense subcommittee unexpectedly dropped funding for the F136, the second engine for the Joint Strike Fighter. Sen. Daniel Inouye, the powerful subcommittee’s chairman, had indicated before the August recess that he would support the second engine and his panel has always funded it in the past. But the markup of the defense spending bill contained no F136 money. But there were strong indications that Inouye may well have beaten a very tactical retreat, perhaps earning him something from the Obama administration in return for leaving the F136 money out of the bill.

After the subcommittee’s brief markup of the bill Wednesday morning, Inouye had quite a twinkle in his eye when he told several reporters that the engine was now a matter for conference and acknowledged that he worried about a fight on the Senate floor over the engine’s funding if the money had been n the defense appropriations bill. Making it a matter for conference may well ensure that the engine funding has a smoother sail than it would have if Inouye had included it in his bill.


General Electric and Rolls Royce made it very clear that they are not worried about the engine’s fate. “There is strong and broad support for an engine competition for the Joint Strike Fighter. In fact, both Inouye and (Senate Appropriations defense subcommittee) Ranking Member Cochran, along with a number of the members of the Defense Appropriations Subcommittee, are longtime supporters of the F136 engine. In addition, the competitive engine received strong endorsement in the House on an overwhelming 400–30 vote,” said GE spokesman Rick Kennedy in an email headed “Joint GE/RR statement.”

Kennedy went so far as to say the two companies are “confident of a successful outcome because competition and cost discipline in major defense procurement programs have proven to be in the best interest of taxpayers and our armed services.”

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“confident of a successful outcome because competition and cost discipline in major defense procurement programs have proven to be in the best interest of taxpayers and our armed services.”

LoL

If GE really wants a competition, build it on your own dime and prove that it is superior in performance and delivers savings to the taxpayer. Competition that is propped up by the government is no competition at all.

@Curt
By that logic, perhaps P&W can repay the money they took to develop the F135, and the F119, and the F100? Or by extending that logic, we should not develop any new weapons, we should make the companies fund full development. Or we could just buy what they are offering of course don’t expect a öot of innovation.

Every other sector of our economy and every other country in the world makes companies complete R&D on their own dime. Maybe we need to change the paradigm as well– it would save the tax payers money and force companies to be more focused and dilligent in development.

The problem with that Curt is that defense matters are significantly more expensive than many other areas in the economy and there is less of a market for such equipment. If a company that specializes heavily in defense like Lockheed Martin spends millions to develop a new missile, and nobody buys it, they haven’t gained anything, and are unlikely to lead similar independent projects.

In your example, that would be LM’s fault for developing a product that the customer does not want. Companies should know the expectations and demands of their customers– and should be in active communication with them inorder to develop and deliver that products they will need.

As a caveat– I do not believe we should get rid of DARPA. Those seedling projects are important for the promotion of advanced technological development. But back to my original point, the US government should not have to pay for the R&D on a production contract.

Curt, the problem with your argument is that the Government is a monopoly. Lets take the tanker deal as an example. USAF wants tankers, goes to Boeing to ask for new ones. Boeing has a plane they developed on their dime and offers to lease some. Commercially, everything would be fine, but for the Government things are different (witness the whole sad KC-X deal). The government can have unique requirements (To do the work KC-X work, Boeing or NG needs a separate production line. Congress can change the deal anytime they want (oops, sorry you spent billions on development of the MX, we’re not going to buy any). DoD can change their requirements (I know I said I wanted 750 F-22s but now I am going to buy 187). There are laws to allow a level playing field (you’re not a female, disabled, native american owned, small business, that is in an economically depressed area. You don’t get the contract). Commercial practices are fine for things that don’t push the envelope too far, especially when there is a civilian market, (combat boots come to mind) but if you want to develop new technology in which there is only one customer, the customer pays to develop it. Look around, works that way every where in the world, even in the commercial industry.

It is my understand that all the other developed countries in the world operate like the M-ATV procurment– the contractor supplies a prototype and the government picks what will fulfill their needs.

You make an excellent point about the government being a monopoly, but this could be a possible solution:

If contractors use their capital to develop technologies that the government ends up not needing, the contractor can sell their intellectual property to other contractors in the form of an auction or futures market. This way (non-specific names) LM can make a profit off technological developments that are not demanded, and GD could buy the rights to take a risk and use the technology to create a new product the government may want.

It just seems to me that there can be a better way to develop our technological and militaristic superiority with all the money we spend. Considering we devote the most amount of capital in the world to defense, yet there are complaints about a lack of basic items like armor, it just does not seem right. We need to realign our priorities and put more responsibility on contractors to provides the services we need.

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