Just when you thought General Electric’s unneeded extra engine for the F-35 Joint Strike Fighter was about to bite the dust, here comes Bloomberg L.P.’s government research arm to confuse the issue. Last week BGov, as it is called, put out a short study stating the Pentagon might save billions of dollars by purchasing engines from both United Technologies and General Electric, thereby reaping the pricing benefits of competition. What it failed to mention was that two-thirds of the life cycle costs for the program come after production, when its approach would require the government to sustain dual maintenance systems whose services could not be competed. It also neglected a variety of programmatic and behavioral factors that help explain why the last time the government bought competing fighter engines, there were almost no cost savings in the production process. I have written a critique of Bloomberg’s wrongheaded study for Forbes.com, that can be found here.
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