General Electric (NYSE: GE) and Rolls-Royce have offered the Pentagon a fixed price offer on their F136 engine for the Joint Strike Fighter (JSF).
The offer would foster competition between the JSF program’s two engine suppliers, and to shift the risk of cost overruns from the government to defense contractors.
According to GE, the offer could change the Government’s acquisition model for procuring approximately 150 F136 engines in the early years of the fighter program, allowing the Government to know immediately its costs over this period. Also, the approach is intended to drive lower pricing between the two competing engine suppliers.
With more than 70 percent of its development complete, the GE/Rolls-Royce F136 engine program is poised for flight-testing next year.
“Today, we are announcing a fixed-price offer for F136 engines purchased in 2012, followed by further price reductions for engines procured in each 2013 and 2014, ” said David Joyce, president and CEO of GE Aviation. “We can create a competitive environment that will save the government $1 billion over the next five years, and $20 billion over the life of the JSF program.”