Lawmakers Aim to Stop Pentagon From Destroying GE Engine

The chairman of the U.S. House Armed Services Committee plans to prohibit the Defense Department from destroying or discarding engines made by General Electric Co. (GE) for the F-35 Joint Strike Fighter.

The Pentagon canceled last month the alternative engine, known as the F136, over the objections of congressional supporters including committee chairman Howard P. “Buck” McKeon, a California Republican.

In yet unreleased legislation planned as part of the 2012 defense authorization bill, McKeon is proposing to block the Pentagon from spending any money for “activities related to destroying or disposing” any “property owned by the federal government that was acquired under the F136 propulsion system development contract.”

McKeon also plans to direct the secretary of defense to develop and carry out a plan to preserve and store the F136 engines developed jointly by General Electric and Rolls-Royce Group Plc so that the development of those engines can be “restarted after a period of idleness,” according to a copy of the legislation obtained by Bloomberg.

The committee is set to vote this week on the 2012 defense authorization bill, which will set military policy and funding targets for the fiscal year starting Oct. 1.

Termination

The Defense Department last month terminated the second engine, which Defense Secretary Robert Gates says is unneeded and wasteful spending. Pratt & Whitney, a unit of United Technologies Corp., is the primary engine supplier for Lockheed Martin Corp. (LMT)’s F-35.

The U.S. has spent close to $3 billion over the last 14 years to develop the GE-Rolls Royce alternative engine, according to GE Aviation spokesman Rick Kennedy.

McKeon will ask the Pentagon to give Congress a plan to preserve and store the GE engine. That plan, due within 45 days of the 2012 defense act becoming law, would also allow for the engine to be stored and preserved at government facilities or at the contractors’ facilities. The defense chief also has to identify the cost of restarting the development of the engine.

General Electric Co. will self-fund development of its alternative engine for the F-35 Joint Strike Fighter in fiscal 2012, McKeon said in a speech at the Heritage Foundation in Washington on Thursday.

“The GE team has committed to funding the engine for fiscal year ‘12 on their own dime,’’ said McKeon. ‘‘I will accept and support their approach.’’

Engine Competition

GE Aviation spokesman Kennedy said that the GE-Rolls Royce team will self-fund the development of the alternative engine for the rest of this year and next year. That would cost more than $100 million, Kennedy said. The company’s goal is to compete with primary engine maker Pratt & Whitney, a unit of United Technologies Corp. (UTX), starting in 2016, Kennedy said.

‘‘I thank GE and Rolls Royce for coming to us with a smart, viable solution to a tough problem,’’ McKeon said. The GE alternative engine is 80 percent done and the company will not lobby for the ‘‘final 20 percent’’ of funding needed to finish the engine.

Congress would have to reinstate the program in order for GE and Rolls Royce to have access to Defense Department test facilities. McKeon’s legislation, if it is approved by the U.S. House and Senate, would do just that.

Gates has said that completing development of the alternative engine would cost taxpayers $3 billion. GE disputed that figure, saying the development cost would be about $1 billion, with an additional $800 million to start production.

Subcommittee Action

Representative Roscoe Bartlett, a Maryland Republican who leads the House Armed Services air and land forces subcommittee, proposed last week as part of the bill to limit money spent on improving the F-35 Joint Strike Fighter engine, primarily its thrust, unless the secretary of defense makes funds available for ‘‘two options’’ for the F-35 propulsion system.

The House voted in February to strip $450 million for the second engine from the fiscal 2011 Pentagon spending bill --a first for the lower chamber, which previously had supported the project.

The sponsor of the House provision that cut funding for the GE-Rolls Royce engine, Florida Republican Tom Rooney, ‘‘is keeping all options on the table to make sure the defense authorization bill is not used to restart the wasteful extra engine program,’’ said Rooney’s spokesman, Michael Mahaffey. That might include Rooney challenging McKeon when the armed services panel considers the 2012 defense bill on Wednesday.

House Vote Ahead

‘‘I am confident that when this bill comes before the full House, we will again show the American people that we take their demand for spending cuts seriously, and we will not continue to throw away their hard-earned tax dollars on a program that the Pentagon has said repeatedly it does not want or need,’’ Rooney said in a statement last week.

For two years in a row, the Senate Armed Services Committee and the Senate Appropriations Committee haven’t included money for the additional engine in their versions of the defense authorization and appropriations bills.

-- Editors: Steven Komarow, Terry Atlas

To contact the reporter on this story: Roxana Tiron in Washington at rtiron@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

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