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 Rear Admiral Randy Mahr, deputy director of the Pentagon's $392
billion F-35 program, said Pratt had slowed its cost-cutting after
Congress in 2011 canceled an alternate engine being developed by
General Electric Co.
"We have reinvigorated the 'war on cost' that Pratt started and then
kind of slowed down on when they got the monopoly," Mahr told
industry executives and military officials at an annual conference
hosted by the Navy League.
"In no uncertain terms, they've been informed they need to continue
to drive the cost down on that engine," Mahr told reporters after
his remarks at the conference.
The comments revealed continuing friction between the program office
that runs the Pentagon's costliest weapons program and Pratt at a
time when the F-35 program chief, Air Force Lieutenant General Chris
Bogdan has talked about improved relations with Lockheed, the prime
contractor that builds the airplane.
In 2012, Bogdan described relations between Lockheed, Pratt and the
government as the worst he had seen in two decades of working on
acquisition programs.
Pratt said it had invested $60 million in "a very aggressive"
cost-cutting program that had already lowered the cost of the F135
engine by 40 percent.
"We are pursuing cost reductions in every aspect of the program,
including supply chain, configuration changes, process improvements,
and overhead," said Pratt spokesman Matthew Bates. He said
procurement delays affected costs.
Mahr said the government was close to reaching agreement with Pratt
on a seventh batch of engines for the new warplane that is being
developed for the U.S. military and its allies, but declined to
comment on the exact timing of a deal.
Bates said the company hoped to wrap up the negotiations by the end
of the second quarter.
The Pentagon finalized a contract worth $1.1 billion for 38 engines
in a sixth batch last October, which pushed the cost of the common
configuration engine built for the Air Force and Navy models down by
2.5 percent. It did not provide the exact cost.
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Mahr said lawyers from the Pentagon's F-35 office were also in talks
with Pratt to publicly release details on the cost of the engine,
which the government buys separately from the jet.
Pratt argues it should not be required to disclose details about the
costs of the engine or spare parts, since that could affect the
company's ability to compete in a next-generation engine procurement
that the Pentagon is kick-starting with a new $1 billion technology
demonstration program.
Bates said other companies that built sole source military engines
had successfully argued against releasing pricing data for such
competition reasons in the past.
Mahr said the overall F-35 program is making steady progress,
although he said some technical issues still needed to be to
resolved, including improving the performance of a complex
computer-based logistics system called ALIS, and a recent crack in a
fan blade on a Pratt engine. The Pentagon was also pressing the
industry to lower the cost of building and operating the new jet,
and making it more reliable, he said.
(Reporting by Andrea Shalal; editing by Jeffrey Benkoe and Grant
McCool)
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