General Electric and Rolls-Royce have given the Pentagon a fixed-price offer for their F136 engine for the joint strike fighter (JSF).
The proposed offer will create and accelerate engine competition, and will shift the risk of cost overruns from the government to defence contractors.
GE Aviation president and CEO David Joyce said the company could create a competitive environment that would save the government $1bn over the next five years, and $20bn over the life of the JSF programme.
The offer can change the government's acquisition model to acquire about 150 F136 engines initially for the fighter programme.
The GE / Rolls-Royce F136 engine development programme is over 70% complete and will enter flight testing in 2011.
A fifth-generation multirole aircraft, the F-35 JSF will replace several tactical fighter aircraft in service with the US Air Force, Navy and Marines.
It will also replace the AV-8B Harrier, A-10, F-16, F/A-18 Hornet and the UK's Harrier GR.7 and Sea Harrier F-35.
The F136 engine is the only engine specifically developed for the F-35 aircraft by the GE Rolls-Royce fighter engine team.