United Technologies unit Pratt & Whitney is making steady progress in completing development of its F135 engine for the F-35 fighter. Unit costs are way down, the readiness of engines in the field averages 96%, and tests indicate the F135 will be a highly resilient, reliable powerplant. Like the F-35 airframe, Pratt’s engine is looking more and more like a winner. But decades of production lie ahead, so the government is thinking about how it can keep Pratt focused despite all the other opportunities coming its way. The smart solution Pentagon acquisition chief Frank Kendall has come up with is called “indirect competition.” It avoids the high cost of funding a competing engine, but it uses research on a next-generation powerplant to keep Pratt focused on preserving its lucrative F135 monopoly. The bottom line is that if Pratt delivers the kind of price and performance its military users want — including gains in fuel efficiency, thrust and durability — then its franchise is safe; if it becomes complacent, a challenger is waiting in the wings. I have written a commentary for Forbes on how indirect competition will keep Pratt & Whitney motivated here.
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