Jeremiah Gertler at the Congressional Research Service has published a very useful document on the F-35 alternate engine dispute. You can download it here: CRS report – alternate engine – Sept 2010.pdf
The report includes a list of frequently asked questions, which I excerpt below. My only quibble is the part that says the F-16 is the only US jet with more than one engine. The F-15 community might beg to differ. [UPDATE: To be fair to CRS, I'm referring to foreign F-15 owners. If this is only about jets in US service, CRS is correct.] But this should clear up some of the most important facts in the dispute.
Has DOD always opposed the alternate engine program?
No. From FY1996 to FY2006, funding for an alternate engine was included in the Administration budget request. Starting in FY2007, both the G.W. Bush and Obama Administrations deleted this request.
Was there an earlier competition for F-35 engines that one contractor won?
No. Three aircraft companies bid to design and build the F-35. One design used the GE/Rolls-Royce engine; two used the Pratt & Whitney engine. The two aircraft chosen as finalists both used the Pratt & Whitney engine. There was no separate engine competition.
Is this about replacing the existing engine supplier?
No. The issue is whether to underwrite development of a second engine to the point where a competition for production engines can be held. The estimated cost to do so ranges from $2 billion-3 billion.
Will F-35 engine competition save money?
Studies disagree. DOD, the Institute for Defense Analyses, and the GAO have done separate studies of potential F-35 engine competitions. DOD and IDA found that competition would not save enough to repay the initial investment; GAO found that it would. All studies found non-monetary benefits to the competition.
Will the competition be winner-take-all?
The rules for the competition(s) have not been established. In the 1985-1990 competition for F-15/F-16 engines, engine contracts were awarded in annual lots. Although annual ratios differed markedly, overall one contractor won 51% and the other 49%.
Do other military jets have multiple engine suppliers?
Yes. The F-16C/D fleet includes engines from different suppliers. All other U.S. jet models use single engine types and suppliers.
What is the chance that all F-35s will be grounded if they have the same engine?
It is impossible to state. Historically, with the F-14, F-15, and F-16, significant engine issues were discovered early in development, leaving time for the issues to be addressed through technical fixes, competitions, and/or wholesale replacement by another engine. No such issue has yet surfaced for the F-35. It is possible that a serious flaw could remain undiscovered until much later, when a significant portion of the F-35 fleet shared a common engine. There is no way to calculate the probability of this.