WASHINGTON (Reuters) - The head of the Senate Armed Services Committee said on Friday he would examine a Pentagon decision to again cancel funding for a second F-35 Joint Strike Fighter engine, but said he remained convinced an alternate engine would improve competition and quality in the long run.
President George W. Bush on Monday proposed for the third straight year to cancel a multibillion-dollar project to develop a second engine for Lockheed Martin Corp's (LMT.N: Quote, Profile, Research, Stock Buzz) F-35 fighter jet, sparking yet another fight with Congress.
U.S. lawmakers have reversed the engine decision the past two years in defense spending law, and may well act again this year, according to congressional aides.
"If there's another engine that's waiting in the wings, you have a better chance at improving quality at your main contractor. It tends to drive both quality and improve price," Sen. Carl Levin, a Michigan Democrat, told the Reuters Regulation Summit.
Levin added he would review the case for cancellation before making a final decision.
"Up to now I've supported having that second engine," he said. "I'd want to look at it each year."
The alternate, interchangeable engine, being developed by General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz) in partnership with Rolls-Royce Group Plc (RR.L: Quote, Profile, Research, Stock Buzz) would vie for orders against one built by Pratt & Whitney, a unit of United Technologies Corp (UTX.N: Quote, Profile, Research, Stock Buzz), in a projected $100 billion market over coming decades.
The F-35 is a $299 billion program to build a family of warplanes for the U.S. Air Force, Marine Corps and Navy, as well as for export. Current plans call for production of 2,458 aircraft in three versions over a 28-year delivery period.
An additional 738 aircraft are expected to be ordered by eight co-development partners: Britain, Australia, Italy, Canada, Denmark, Turkey, the Netherlands and Norway.
Levin cited Britain's $2 billion investment in the overall F-35 program, and its stake in the engine issue, as another factor that led Congress to reinstate funding for the GE-Rolls Royce engine.
Pratt & Whitney has discovered a second engine with the turbine problems, it was reported last year, news that could slow flight testing of the F-35 and strengthen congressional support for the GE-Rolls alternate engine.
Levin said he remained concerned about runaway costs in a variety of defense programs. His Senate committee was considering holding a hearing this year about the Pentagon's use of "cost-plus" contracts, under which the military services are responsible for cost overruns in big weapons programs.
The Air Force and other services have not followed the rules mandating reviews of major weapons programs to identify cost problems before they became unmanageable, Levin said. Many big U.S. arms programs were over budget, he said.
Levin said he generally did not support moves by Congress to add funding for programs such as the Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) C-17 transport plane to the defense budget when extra money was not sought by the Pentagon.
If Congress did add extra funding, it also must find savings elsewhere in the budget, he said. Continued...
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