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US Air Force eyes contracts for Russian engine follow-on in months

WASHINGTON, Dec 8 (Reuters) - The U.S. Air Force expects to award initial small-scale contracts in two months or sooner for work on a replacement for banned Russian rocket engines, General John Hyten, commander of U.S. Air Force Space Command said on Tuesday.

The Air Force has received a wide range of proposals for a U.S. built engine to end U.S. reliance on the Russian RD-180 engine, which powers the workhorse Atlas 5 rocket, Hyten told reporters after an event hosted by the Air Force Association’s Mitchell Institute.

“I would expect those awards in the next two month, probably sooner,” Hyten said.

Reuters reported Monday, quoting two sources familiar with the matter, that the Air Force was in talks with Aerojet Rocketdyne Holdings Inc about government funding for the AR-1 rocket engine that it is developing.

The Air Force is also in discussions about a possible contract with privately held Space Exploration Technologies, or SpaceX, according to a source familiar with the issue.

Work on the new engines gained urgency after U.S. lawmakers passed a ban on use of Russian RD-180 engines for launches of U.S. military or spy satellites following Russia’s annexation of the Crimea region of Ukraine last year.

Hyten said the Air Force “desperately” wanted to end its use of the Russian engines, but needed relief from the ban in the short term to ensure that it always had two separate ways to launch satellites into space in case one rocket failed.

The Air Force had been expected to award initial contracts for work on the new engines in the fourth quarter of 2015, but that date has now slipped by several months. The Air Force plans to split a total of about $160 million among rival bidders.

It was not immediately clear if Blue Origin, owned by founder Jeff Bezos, was also in the mix.

Blue Origin is developing an engine for United Launch Alliance (ULA), a 50-50 rocket launch venture of Lockheed Martin Corp and Boeing Co, although ULA is also maintaining a contract with Aerojet as a back-up plan.

The Air Force did not initiate contract talks with another industry team that included Pratt & Whitney, a unit of United Technologies Corp, which had proposed building a U.S. version of the RD-180 engine, according to one of the sources cited by Reuters on Monday. (Reporting by Andrea Shalal; Editing by David Gregorio)