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Sunday, July 13, 2003

Competition saves taxpayer dollars



By David L. Calhoun
Guest columnist

Everyone at General Electric Aircraft Engines read with interest the Cincinnati Enquirer's July 3 story "Millions for GE added to legislation." It focused on Congressman Rob Portman's support for a $20 million addition to the House Defense Bill for the U.S. Navy to help GE to compete head-to-head for the next generation of naval propulsion systems.

A sidebar story could have cited the many examples in which millions of U.S. taxpayer dollars have been saved because initial government funding ensured head-to-head procurement competitions between defense contractors.

A local example was the "Great Engine War" of the 1980s and 1990s. The government provided funding to GE's already considerable investment in its F101 engine to allow it to compete head-to-head for the U.S. Air Force's F-16 fighter jet. Originally, only one engine supplier powered the aircraft.

Extraordinary benefits have been realized because competing engines now power the F-16. Billions of dollars have been saved over two decades and U.S. military readiness has been improved. Also, these U.S.-made aircraft attract international customers, in part, because competing engine suppliers drive down the sale prices. The winners in this scenario include the U.S. taxpayer, the Air Force, GE, and Greater Cincinnati.

We are confident similar benefits will result from Congressman Portman's support of funds added to the House Defense Bill to ensure that rigorous competitive pressure is placed on what could exceed $1 billion in naval propulsion systems procurement.

This upfront investment will preserve production competition, lower costs, reduce the risk involved in the engine development phase, and result in a much better product. In short, it will yield the classical benefits of competition - for taxpayers, the U.S. Navy, and, if we are as good as we like to think, for GE, as well as Greater Cincinnati.

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David L. Calhoun is president and chief executive officer of GE Aircraft Engines




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