In a recent op-ed for the Wall Street Journal, the Chairman of the House Armed Services Committee, Rep. Buck McKeon, praised the initiative as a positive step for the process of defense acquisitions, as it reduced the monopoly power of defense firms. With GE-Rolls Royce paying out of pocket, Rep. McKeon argued, Pratt & Whitney would have a competitor for work that will be worth as much as a hundred billion dollars in the coming decades.
There's little doubt that the defense industry could benefit from more competition. The Pentagon has precious little choice when it comes to the costliest weapons programs like warships or fighter jets, and the result is often outrageous project overruns and lost years of stalled development.
It is not at clear, however, that competition makes sense in this case. At a basic level, competition only works when there is demand -- and the Pentagon hasn't wanted a second engine design for years. Billions have already been spent against the wishes of the Department's budgeteers because Congress keeps funding the program. Supporters do cite sensible reasons for doing so, among them avoiding a fleet-wide grounding if a dire problem surfaces.
But affordability issues are so acute now that such a concern is not enough for the Obama administration to fund the engine. The GE-Rolls Royce engine only saves taxpayer dollars barring further setbacks. In March of this year, the Government Accountability Office noted that both engine projects demonstrated systemic, across-the-board cost overruns and failures to meet basic operational requirements. It's not clear why we should assume the General Electric and Rolls Royce engine will not experience similar setbacks and cost overruns, or how those overruns will be minimized through competition between two similarly over-budget projects.
Presumably, having two engine providers fighting it out will result in less costs and more responsive contractors. Though this has been true in the past, there is no guarantee in the F-35's case. In March, the GAO appealed to the Pentagon's experience with engine competition for the F-16 fighter in the 1980s. However, that appeal rests on uncertain assumptions, including the requirement of competition to produce a minimum amount of program savings. Much more importantly, the F-16 and the F-35 are different aircraft -- the former was meant for a narrow mission for the Air Force, while the latter is meant for a much broader range of missions for all branches of the military.
Indeed, it is difficult to understand how engine competition in the F-35 would actually reduce costs. The GAO criticizes the Pentagon for relying on history to estimate cost overruns, then uses the history of the F-16 program, which saved money through engine competition, to claim that the F-35 will see similar savings. That notion rests on similar conditions, including the Pentagon buying enough competing F-35 engines, which is far from certain. There could be savings in there somewhere, but it's anyone's guess where they actually are.