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Auditor to Pentagon: Check your math

By Jen Rizzo, CNN Pentagon Producer
STORY HIGHLIGHTS
  • The cost of developing a second engine for a new jet fighter is estimated at $2.9 billion
  • Opponents of the program -- including Defense Secretary Gates -- have cited that figure
  • Despite the Defense Department opposition, Congress has continued to fund the program
  • A new audit says the $2.9 billion projection could be too high

Washington (CNN) -- When it comes to the cost of developing a controversial second engine for the F-35 Joint Strike Fighter, the Department of Defense's math could be way off, a new government report concludes.

The continued development of a second engine for the new fighter may cost significantly less than the government's $2.9 billion projection -- which as been cited by those opposing the program -- according to a report from the Government Accountability Office.

The F-35 second-engine program has been an ongoing battle between Defense Secretary Robert Gates, who wants the program stopped, and some Congressional members who have succeeded in continuing to fund the program despite the Defense Department's stance.

At the request of Sen. Carl Levin, chairman of the Senate Armed Services Committee, the GAO analyzed the $2.9 billion estimate that has been quoted by the Defense Department as the high cost of what it says is an unnecessary program.

In a letter released Wednesday, the GAO said the Defense Department was basing the number on assumptions that may have been overly pessimistic. "The funding projection for the alternate engine could be lower than DOD's projection," the GAO concluded.

Defense Department analysts have a 50 percent confidence level in the estimate, meaning it is equally likely to be too low as too high.

"The projection does not include the same level of fidelity and precision normally associated with a detailed, comprehensive estimate," the U.S. audit office said.

The Defense Department defended the estimate, saying it was built on "a solid foundation" that drew upon data from previous fighter jet programs. General Electric, the company that will build the second engine, also does not agree with the Defense Department estimate, saying a significantly lower figure of $1.8 billion is actually needed to finish the program.

Those in favor of the second engine say competition will drive down costs and lead to innovation, but in this instance the Defense Department believes there is no guarantee that enough long-term savings will be generated to outweigh the up-front costs, and the department believes the risk of relying on a single engine is low.

 
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