U.S. Air Force awards rocket engine development contracts

WASHINGTON (Reuters) - The U.S. Air Force on Monday awarded contracts worth more than $160 million to two separate firms involved in the development of new rocket engines to help end U.S. reliance on Russian-made rocket motors for national space launches.

The Air Force awarded a $115-million contract to Aerojet Rocketdyne Holdings Inc for development of its AR1 rocket propulsion system prototype.

The contract marked a victory for the company after a big setback last year, when one of its key customers, United Launch Alliance, a joint venture of Lockheed Martin Corp and Boeing Co, announced a surprise switch to solid rocket boosters made by Orbital ATK after 2018.

It also awarded a $46.6-million contract to a partnership of United Launch Alliance of Centennial, Colorado, and Blue Origin, a Kent, Washington-based startup owned by Inc founder Jeff Bezos, for development of Blue Origin’s BE-4 rocket engine.

The Air Force awarded two similar contracts worth up to $108 million to Orbital ATK and privately-held Space Exploration Technologies (SpaceX) last month.

ULA has said it intends to replace the Russian-made engines on its workhorse Atlas 5 launcher with Blue Origin’s BE-4 motors. However, ULA also is keeping open its options to use Aerojet’s engine instead.

Congress banned the import of Russian engines for rockets flying U.S. military missions as part of trade sanctions to punish Russia for annexing Ukraine’s Crimea peninsula in 2014.

Development of the BE-4 engine, which runs on liquid oxygen and methane, has been fully funded by Blue Origin, with investment by ULA.

“Development is on schedule to achieve qualification for flight in 2017,” ULA said in a statement.

The company intends to use the BE-4 in its new Vulcan rockets as early as 2019.

The Air Force’s agreement with Aerojet, which also is working in partnership with ULA, could be worth up to $804 million, with two-thirds of the money coming from the Air Force, Aerojet said in a statement.

A Pentagon statement said the two contracts implement a 2015 law requiring the development of a next-generation rocket propulsion system to end the U.S. military’s dependence on the Russian-supplied RD-180 rocket engine.

SpaceX is working to break ULA’s monopoly on flying U.S. military and national security missions with its American-made Falcon rockets. The company is poised to win its first contract to launch a U.S. Air Force Global Positioning Satellite later this year, after ULA decided to skip the competition.

Reporting by David Alexander in Washington, Irene Klotz in Cape Canaveral, Fla., and Andrea Shalal in San Francisco; Editing by Alan Crosby and Matthew Lewis