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Orbital ATK, SpaceX get U.S. contracts for rocket engine prototypes

By Andrea Shalal

WASHINGTON, Jan 13 (Reuters) - The U.S. Air Force has awarded contracts to Orbital ATK Inc and privately-held Space Exploration Technologies (SpaceX) to develop prototypes of new U.S.-built rocket engines under a broader effort aimed at ending reliance on Russian-made engines, the Pentagon announced on Wednesday.

Orbital ATK won an initial contract worth $47 million to develop three rocket propulsion system prototypes for the Air Force's Evolved Expendable Launch Vehicle (EELV) program, with the company slated to invest $31 million, according to the Defense Department's daily digest of major contract awards.

It said the total potential government investment under the contract, including all options, was $180 million, with Orbital ATK slated to contribute a total of $125 million, including all options.

The contract, which runs through Dec. 30, 2019, calls for development of prototypes of Orbital's GEM 63XL strap-on solid rocket motor, the Common Booster Segment (CBS) solid rocket motor and an Extendable Nozzle for the BE-3U upper stage engine built by Blue Origin, a company founded by Amazon.com founder Jeff Bezos.

SpaceX won an initial contract valued at $33.6 million to develop a prototype of the Raptor rocket propulsion system for the upper stage of the company's Falcon 9 and Falcon Heavy launch vehicles, with total government investment to reach $61 million, including all options, the Air Force said.

The company is contributing $67 million initially with its total investment to rise as high as $123 million, including all options, according to the Pentagon statement. The SpaceX contract runs through Dec. 31, 2018.

Negotiations with Aerojet Rocketdyne Holdings Inc are continuing, according to a source familiar with the matter.

Air Force General John Hyten, commander of U.S. Air Force Space Command, told reporters last month that the Air Force had received a wide range of proposals for a U.S.-built engine to end American reliance on the Russian RD-180 engine.

The RD-180 engine now powers the workhorse Atlas 5 rocket built by United Launch Alliance, a joint venture of Lockheed Martin Corp and Boeing Co.

Efforts to develop 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 Ukrainian region of Crimea in 2014.

Congress eased the ban as part of a massive fiscal 2016 spending bill, but Hyten and other U.S. officials are still pressing to end use of the Russian engines.

(Reporting by Andrea Shalal, editing by G Crosse)