DOD's Cancellation of the Joint Strike Fighter Alternate Engine Program Was Not Based on a Comprehensive Analysis
GAO-06-717R, May 22, 2006
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The Department of Defense (DOD) expects to purchase about 2,400 Joint Strike Fighter (JSF) aircraft, with potential international sales of 2,000 to 3,500 aircraft. When the number of aircraft engines and spare parts expected to be purchased is considered--along with the lifetime support needed to sustain the engines--the future financial investment will be significant. DOD implemented the JSF alternate engine development program in 1996 to provide competition between two engine manufacturers in an effort to achieve cost savings, improve performance, and gain other benefits. Since then, DOD has invested $1.2 billion in the alternate engine program, and, in August 2005, it awarded a $2.4 billion contract for system development and demonstration of an alternate engine. However, in its fiscal year 2007 budget submission, DOD proposed canceling the alternate engine program. Concerned whether this decision was based on sound analysis, Congress asked us to review DOD's rationale for canceling the program and the analysis supporting it, including the life cycle savings, benefits, and risks assessed.
DOD's decision to cancel the JSF alternate engine program was driven by the need to identify sources of funding in order to pay for other priorities within the department. In making the decision, the department did not conduct a new and comprehensive analysis, but instead relied on selective elements of two prior studies done in 1998 and 2002. In supporting the decision to cancel, officials focused only on the potential up-front savings in engine procurement costs. They did not, however, consider the full long-term savings that might accrue from competition for providing support for maintenance and operations over the life cycle of the engine. Both prior studies had recommended proceeding with the alternate engine program, despite the lack of significant procurement cost savings, because of a number of other benefits competition was likely to provide. Also in supporting the decision to cancel, officials cited favorable progress made by the primary JSF engine and its predecessor F-22A engine as reducing operational risks from a single source. However, the primary JSF engine has completed only a small portion of its ground tests and has not yet been flown, while the F-22A engine has completed about 10 percent of its hours needed for system maturity and is not currently meeting some reliability goals. Further, experts from one early study concluded that the commonality with the F-22A engine is of limited benefit for reducing development risk of the JSF engine.