U.S. Auditors Question Pentagon on GE Engine’s Cost

General Electric Co.’s bid to complete development of a second engine for the F-35 Joint Strike Fighter, a plan opposed by Defense Secretary Robert Gates, may cost less than the Pentagon’s $2.9 billion estimate, U.S. auditors said.

The projection “does not include the same level of fidelity and precision normally associated with a detailed, comprehensive estimate,” the Government Accountability Office said in a report sent today to Senator Carl Levin, the Democratic chairman of the Senate Armed Services committee.

General Electric has urged U.S. lawmakers to continue funding its alternate engine for Lockheed Martin Corp.’s F-35 jet to compete against Pratt & Whitney, the plane’s primary engine maker. The GAO report comes a day after a Senate defense panel voted against paying for the GE engine.

Pentagon officials including spokesman Geoff Morrell have repeatedly called the $2.9 billion needed to support an alternate engine program for the next six years “a colossal waste of money.”

GE Estimate

GE disagrees with Pentagon estimates, saying it would take $1.8 billion to complete work necessary to compete, Rick Kennedy, a GE spokesman, reiterated today.

The U.S. House defense appropriations panel in July approved $450 million for the alternate engine.

The estimate was reached not by extensive analysis but was instead a “rough order of magnitude” that with different economic assumptions could either increase or decrease, according to the GAO study.

Pentagon Director of Cost Assessment and Program Evaluation Christine Fox said in a response included with the report that the department’s estimate “is built upon a solid foundation.”

Still, “based on the rigor in the methods used in building estimates, the collection and use of historical cost information and the review of assumptions, we project that it is equally likely our $2.9 billion cost projection would be too low or too high,” Fox wrote.

Pratt & Whitney, a unit of Hartford, Connecticut-based United Technologies Corp., has supported Gates’s position. Today, the division cited the Defense Department’s assertion backing the $2.9 billion estimate.