Lobbyists stage Capitol Hill dogfight over joint strike fighter engine

Introduction

An intense spending fight over a second engine for the Joint Strike Fighter has partners General Electric and Rolls Royce and rival Pratt & Whitney deploying armies of representatives on Capitol Hill, as Defense Secretary Robert Gates makes opposition to that second engine a centerpiece of his push for Pentagon procurement reform.

Despite the intensity of the battle, the outcome is uncertain. So far, only one clear winner has emerged: the lobbyists.

This year, 13 different lobbying firms plus each contractor’s in-house lobbyists are engaging lawmakers on the engine issue – focusing on the defense authorization and appropriations bills where the engine debate will likely be decided.

At the root of the disagreement is this question: Are the long-term savings that might come from competition worth several billion dollars more now to fund a second source for the fighter’s engine?

“If they [the Pentagon] have to pay for the second engine, something else isn’t getting done… or they have to ask for more money,” said Jack Gansler, a former Pentagon acquisition official during the Clinton administration. “It’s a short-sighted perspective….it’s this year’s money versus the big savings.”

The development of two different engines was originally part of the plan for the Joint Strike Fighter program when it was conceived in the 1990s, but in 2006 the Pentagon ceased its support for a second engine by GE and Rolls Royce on the grounds that it was wasteful. Since then, Congress has annually overruled the Pentagon and White House by adding funds to continue a second engine’s development, with the intention of holding annual competitions between the two engines when the JSF enters wide-scale production in several years.

Lobbyists and the Second Engine Showdown

This year, there are 75 lobbyists working on defense issues at the firms engaged in the second engine showdown, of whom at least 56 — or 75 percent — are former congressional staffers or executive branch officials. Of those, at least 33 are registered to work on the engine issue specifically.

Rolls-Royce Group, which hired Mattoon & Associates last year, added mCapitol Management in late May for more lobbying firepower specifically on the engine issue. General Electric Co. took on Stonebridge Strategies last year for the engine and on rail issues.

GE also scooped up former Senate Defense Appropriations Subcommittee staff director Margaret “Sid” Ashworth this year, after a brief stint heading her own lobbying firm. The company last year poached lobbyist Darby Becker away from Pratt & Whitney’s parent company, United Technologies Corp.

But GE’s team isn’t the only one with former insiders. Another former Senate Defense Appropriations Subcommittee staffer, Kraig Siracuse, is a lobbyist for United Technologies. Siracuse works for Park Strategies LLC, founded by former New York Sen. Alfonse D’Amato, who also lobbies for United Technologies on defense funding.

United Technologies also added lobbying firms Marshall Brachman, Mehlman Vogel Castagnetti, and the Podesta Group last year – all are lobbying on defense legislation.

“The fight is just vicious over this,” said Leslie Paige of the non-profit Citizens Against Government Waste, which opposes funding the second engine.

Many are comparing the Pentagon’s war against the JSF second engine to last year’s F-22 fighter cancellation. But unlike the battle over the F-22, the main companies affected by a potential cut – GE and Rolls Royce – are putting up a fight. Lockheed Martin Corp. ceased lobbying for the F-22 by April 2009; Lockheed is the maker of the Joint Strike Fighter as well.

The companies have a lot on the line. GE and Rolls-Royce say the end of funding would shut them out of the high-performance combat engine market for decades. For United Technologies, the cessation of alternate engine funding would give it a monopoly on up to a $100 billion market for engines.

Congressional Support, Executive Opposition

The fight continues to rage, even though 2010 marks the fourth consecutive year of executive branch opposition to the second engine.

“The Bush administration opposed this engine. The Obama administration opposes it. We have recommended for several years now against funding this engine, considering it a waste of money,” Defense Secretary Robert Gates said at a May 20 news conference.

“And to argue that we should add another $3 billion in what we regard as waste to protect the billion and a half (dollars) that we believe already has been wasted, frankly, I don’t track the logic,” Gates said. The $3 billion is how much the Pentagon estimates it would cost to complete development of a second engine design over the next several years.

After the House voted 231-193 in late May to support the second engine with $485 million in 2011, President Barack Obama threatened to veto funding for it. “I stand squarely behind Secretary Gates’ position on the JSF second engine,” Obama said in a statement.

But some key lawmakers who Gates and Obama counted on to support previous weapons cuts are taking a different view of the JSF engine.

In the case of the F-22, intense lobbying by Gates, the White House, and influential Senate Armed Services Committee Chairman Carl Levin (D-Mich.), led to its cancellation. But this time around, that consensus is broken.

Levin supports continued funding for the second engine. “It makes sense to have that competition,” Levin told reporters after the House vote on a defense authorization bill last month, adding it is “difficult for me to believe” that Obama would veto the defense funding bill over the second engine. Although the Senate version of the bill does not contain language supporting a second engine, Levin said he would support House language funding the second engine in a conference committee.

The separate defense appropriations bill, which represents another possible round in the fight, is months away.

Two Paths?

There is less consensus against the JSF alternate engine, in comparison to past fights, because GE and Rolls-Royce backers have shrewdly cast the issue as one of defense acquisition reform. Instead of relying on jobs or even national security arguments, the two companies say competition from their second engine is crucial for the Pentagon to keep JSF costs down.

They point to a 2009 study by the Congress’s Government Accountability Office, a staunch critic of current defense procurement practices, which says annual competition between the GE/Rolls-Royce team and Pratt could deliver savings of at least 10 percent on the estimated $100 billion to be spent on JSF engines.

The Democratic chairman and top Republican on the House’s Defense Acquisition Reform Panel sent a letter in late May to their colleagues echoing the GAO’s finding.

“In our judgment, we can walk down one of two paths,” wrote Reps. Robert Andrews (D-N.J.), and Michael Conaway, (R-Texas). “For the next thirty years, we can have two companies engaging in annual competitions to give the American taxpayer the lowest costs and the best performance – or we can give one company a 30-year, $100 billion monopoly.”

Some also view the second engine as a hedge in a troubled aviation program slated to provide up to 95 percent of the U.S. jet fighter force and the bulk of several allied countries’ air forces in the coming decades.

On June 1, the Pentagon notified Congress that the JSF program could reach a total cost of up to $382 billion based on latest estimates for 2,457 planes, up from the $328 billion the Pentagon reported in April for the same number of aircraft.

A dependence on one engine means almost the entire U.S. fighter force could be grounded if a serious problem were discovered with that engine. In late 2007, all F-15s were grounded when fatigue of a structural component that did not meet specifications on one F-15 resulted in the plane coming apart in flight. However, the Pentagon was far less dependent on the F-15 then than it plans to be on the JSF. The JSF is slated to replace the F-15, F-16, F/A-18, A-10, and AV-8B.