Winner-take-all contract for jet fighter is opposed

Senator aims to split pact among finalists Boeing, Lockheed

October 11, 2001|By Robert Little | Robert Little,SUN STAFF

As the Pentagon prepares to pick a sole winner in its $300 billion contest to design and build the nation's newest jet fighter, some members of Congress are renewing the call for multiple winners instead, saying the United States must preserve its defense industry now more than ever.

The Department of Defense is sticking with its winner-take-all strategy as it prepares to announce Oct. 26 whether Lockheed Martin Corp. of Bethesda or Boeing Co. will build the Joint Strike Fighter, a multiservice jet fighter.

But Missouri Sen. Christopher S. Bond wants Joint Strike Fighter production shared by both companies, even if that means spending $1 billion more. The Republican is preparing an amendment to the defense appropriations bill, saying several colleagues have signed on since Sept. 11.

"There are only two major tactical fighter manufacturers in the United States, and as a matter of national security we cannot allow it to get down to one," said Bond, who represents the state where Boeing's fighter assembly line is located. "If you put either one of them out of business, that's a real blow."

The Joint Strike Fighter will likely be the largest government contract ever, calling for more than 3,000 aircraft for the Navy, Marine Corps, Air Force and Great Britain. Arguments in favor of sharing the contract among several companies often surface, mostly because of the potential consequences for whichever company is not selected.

Boeing, which already expects to lay off 30,000 employees in its passenger aircraft division because of a crippling drop in demand since Sept. 11, is counting on the Joint Strike Fighter to keep its military assembly line in St. Louis in business.

Lockheed Martin wants the contract for its plant in Fort Worth, Texas, which now makes the F-16. Both companies build other fighter planes, but are expected to eventually abandon the business if they can't win a share of Joint Strike Fighter production.

The Pentagon argues that its winner-take-all contest will produce the most efficient, least expensive aircraft. The potential for reduced costs is the primary reason that the joint-service fighter was ever proposed.

In a letter last month to the Senate Armed Services Committee, the Pentagon acquisitions chief assured senators that "there will be sufficient work" to go around, regardless of which company wins.

Besides building aircraft already in production, the aerospace industry can expect contracts for unmanned aircraft and foreign jet fighters, said Edward C. "Pete" Aldridge.

"It would be unfair to the winner to force him to restructure his team to accept the loser," the letter said.

Splitting the contract could also delay the program nine months and increase costs as much as $1 billion by forcing changes in how the planes will be built, the letter suggested.

But Bond said a one-winner contract could leave the nation with only one assembly line for fighter planes at a time of heightened need for a healthy defense industrial base.

"If we're talking about a $300 billion program, I think a half percent to keep two assembly lines open is reasonable," he said. "You might save that much through competition."

Defense contractors often work together, and some work on the Joint Strike Fighter will certainly be shared. Many interior components will be made by subcontractors such as Northrop Grumman Corp., United Technologies Corp. or Raytheon Co.

Only a sizable percentage of the production and design contract can keep an entire Boeing or Lockheed Martin assembly line in operation, however.

Not everyone is convinced that's necessary. The United States already enjoys crushing superiority over virtually every other air force in the world, and air power is not necessarily the type of force needed in the conflicts of the future, said Ivan Eland, director of defense policy studies for the libertarian Cato Institute.

Eland predicts that the government will eventually support both Boeing and Lockheed Martin regardless of how it initially awards the Joint Strike Fighter contract.

But, he says, the money would be better spent on new technology for intelligence gathering.

"The people with vested interests are just using this as an excuse to ride the crisis to get more funding for their programs," Eland said. "Anywhere else, that's called tacky. In the defense industry it's called patriotic."

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