House funding measure leaves fate of F-35 alternate engine uncertain

By Megan Scully

December 7, 2010

The battle between the White House and Capitol Hill over funding for an alternate engine for the F-35 Joint Strike Fighter could all come down to the Obama administration's interpretation of legislation drafted by the House to keep the government operating for the rest of the fiscal year.

At stake is an engine produced by General Electric and Rolls Royce that lawmakers have kept alive for years, despite attempts by both the Obama and Bush administrations with support of the Pentagon, to terminate what officials have called a prime example of wasteful spending.

The maker of the F-35's main engine, Pratt and Whitney, has seized on the wasteful spending argument in a current ad campaign denouncing the alternate engine as "the mother of all earmarks."

But supporters of the alternate engine-who include key members of the House and Senate Armed Services and Appropriations panels-have long argued that competition will improve the product and reduce costs. Without competition, they say, Pratt and Whitney would have a monopoly on a $100 billion international market for the fighter engines.

The House's draft version of a 10-month continuing resolution does not include a line item allocating money for the engine. But it does contain a broad provision that would keep funding all programs in fiscal 2010 appropriations bills-language that would appear to keep the alternate engine alive.

Congress approved $465 million for the alternate engine last year.

But should Congress approve the CR, the White House will have the last word on how to proceed with the disputed engine program; budget officials already have made clear that a program must be included in both chambers' measures to be assured funding in a final continuing resolution. Efforts to obtain comment from the Office of Management and Budget about the House draft of the CR were unsuccessful.

If both the House and the Senate omit funding for the engine in their bills, Defense Secretary Robert Gates would have to request money in writing-which would be unlikely considering his steadfast opposition to the second engine.

Ignoring a veto threat, the House-passed fiscal 2011 defense authorization bill and the House Appropriations Defense Subcommittee's version of the fiscal 2011 defense spending bill both include money for the unwanted second engine.

But the Senate Armed Services and Appropriations committees did not add funding for the program to their bills, even though the chairmen of both panels support development of an alternate engine.

A Pratt and Whitney lobbyist said the Pentagon comptroller could rule the engine a congressional add-on and therefore refuse to spend money on it even if the program received fiscal 2010 funding.

A General Electric spokesman acknowledged Tuesday the CR would put the alternate engine in a "grave position." But the spokesman added there would likely be "significant debate" between lawmakers and the administration over whether the White House can kill a program so large without congressional approval.

Without new funding for the program, a stop-work order was expected December 3. But defense officials have extended the contract to keep the program alive until December 18, when the current continuing resolution expires.

The House's CR is considered a backstop in the event Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii, cannot get 60 votes for an omnibus spending package he has prepared.

Several sources tracking the issue said Tuesday they believe the Senate's omnibus includes funding for the alternate engine. But even Inouye has acknowledged it is unclear whether he has the votes for his spending package despite his arguments that an omnibus is better for federal agencies than a longterm CR.

Meanwhile, the House's draft CR does give the Navy the authority it needs soon to alter its strategy for the Littoral Combat Ship program, so officials can award 10 ships apiece to the two contractors who had been vying for the program.

The Navy, which had been planning to award one contract for 10 ships to either Lockheed Martin or Austal USA, announced its revised procurement strategy November 3. The firms' current proposals for the lucrative shipbuilding contract expire Decemver 14-the date by which congressional approval of the new approach is required.

Chief of Naval Operations Gary Roughead, who has been fielding lawmakers' questions on the closely watched program, earlier this month acknowledged the challenge in getting congressional authorization so quickly.

"But the fact of the matter is, it really is an incredible, incredible opportunity with regard to locking in the prices on 20 ships," he said.

By Megan Scully

December 7, 2010