General Electric chastises Gates over Senate F-35 testimony

In an extraordinary move for a Pentagon contractor, a senior General Electric executive chastised Defense Secretary Robert Gates on Thursday for unfavorable comments the Pentagon chief made during a Senate hearing this week about an alternate engine the firm is producing for the F-35 Joint Strike Fighter.

General Electric Co. Vice Chairman John Rice argued in a letter to Gates that remarks he made before the Senate Defense Appropriations Subcommittee Wednesday "clearly contradicted" assessments the Pentagon gave GE and its partner, Rolls Royce Group, according to a copy of the letter released by GE.

Specifically, Rice said the Defense Department has rated the alternate engine's performance as "exceptional" seven times and "very good" three times. Last month, the department's F-35 team provided "positive feedback" to General Electric, Rice wrote.

During the Senate hearing, Gates said the GE engine "probably does not meet the performance standards that are required, and the taxpayer would be required to pay for any enhancement that would bring it up to the performance standards that we require."

In his letter, Rice argued that his firm's engine is "on time, on budget and on schedule" and will be ready for flight testing on the F-35 next year.

Rice also questioned Gates' assessment during the hearing that the alternate engine would require another $2.9 billion. The Pentagon has said it would need that funding over the next six years to finish developing the engine and to buy equipment for initial production and spare parts.

"We take issue with that estimate," Rice wrote, citing GE's figures of $1.8 billion to complete development and cover "initial production tooling" and support costs.

In addition, Rice took issue with Gates' hearing testimony that there had been a competition to build the primary engine for the planes. Lockheed Martin Corp., the F-35 prime contractor, selected Pratt & Whitney to supply that engine.

General Electric "has never been given an opportunity to compete" for the primary engine contract, Rice wrote.

"We have a long-standing record as a reliable and responsible Pentagon contractor, including our work on the F136 [alternate engine]," Rice wrote. "We have repeatedly requested to meet on this matter and stand ready to discuss it at any time."

Pentagon spokesman Geoff Morell on Thursday night said General Electric's engine was "immature" compared to the primary engine. "It's going to take a lot of time and a lot of money [to continue the alternate engine] -- and we can't afford either one right now," he said.

The White House has threatened to veto any defense bill that contains funding for the alternate engine, which Gates has said is unnecessary and wasteful.

But supporters of the program emphasize that competition to power the supersonic aircraft would save money in the long run -- up to $20 billion over the life of the program -- and a second engine would serve as a backup if there were problems with the primary one.

During the hearing, Gates reiterated the veto threat and warned lawmakers that it would be a "very serious mistake" to believe President Obama would accept a defense bill that continues funding the alternate engine because it contains other provisions favored by the administration.

The House-passed version of the fiscal 2011 defense authorization bill includes $485 million for the alternate engine. The Senate Armed Services Committee's version of the bill does not authorize funding for it, although Sen. Carl Levin, D-Mich., the chairman of the committee, supports the program.

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