The Pentagon’s audit agency is digging into cost and pricing data for F-35 engines to determine why United Technology Corp.’s Pratt & Whitney unit isn’t extracting more savings from subcontractors on their share of the biggest U.S. weapons program.
As the sole provider of engines for the F-35, the company and its subcontractors are in line to collect as much as $66 billion of a projected $428 billion in acquisition costs for more than 3,000 of the fighter jets being built for the U.S. and its allies.
The agency’s review was initiated after Pratt & Whitney claimed cost savings of about 3% in its prices for the 12th through 14th F-35 contracts -- the largest to date -- over the prior contract. By contrast, Lockheed Martin Corp., which builds the rest of the plane, is projecting savings of as much as 15.3%. The Pentagon program office is wondering about the big difference.
“That the engine price is not coming down as fast as the air vehicle is a concern,” Greg Kuntz, spokesman for the Defense Department’s F-35 program office, said in a statement. “We are using all the tools available to us to get the best price for the taxpayer.”
As the F-35 program approaches a likely full-rate production decision this year, the Pentagon is under increasing pressure to wring costs from all areas. Congress has approved about $27 billion to date for F-35 engines. Two House Armed Services subcommittees are digging into long-term maintenance costs for the plane. (end of excerpt)
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