Updated 6:30 p.m. Eastern June 28.

WASHINGTON — An independent assessment of rocket engine development delivered to a House committee last week has concluded that Blue Origin remains well ahead of Aerojet Rocketdyne despite a recent testing setback.

That assessment, provided in a closed-door meeting organized by the House Armed Services Committee June 23, comes as the full committee is scheduled to mark up a fiscal year 2018 National Defense Authorization Act (NDAA) on June 28 that would limit the Air Force’s ability to support launch vehicle development.

The “chairman’s mark” version of the bill, released by the committee June 26, includes a section restricting Air Force funding of vehicle development under the Evolved Expendable Launch Vehicle program. Under that provision, the Air Force would be limited to funding new engines, integration of those engines with vehicles, and related capabilities to support national security launches.

The section includes a specific prohibition against funding “the development of new launch vehicles under such program.” It also specifically defines a “rocket propulsion system” that can be funded as a first-stage rocket engine or motor. “The term does not include a launch vehicle, an upper stage, a strap-on motor, or related infrastructure,” it states.

Such language would allow the Air Force to continue funding development of Aerojet Rocketdyne’s AR1 engine. However, it could restrict funding to United Launch Alliance to support development of its Vulcan rocket, as that work goes beyond development of a first-stage engine.

“The Chairman continues to view assured access to space as a national security priority,” the committee said in a statement June 26 announcing the release of the legislation by committee chairman Rep. Mac Thornberry (R-Texas).

“This includes a continued focus on the development of a new American rocket engine to replace the Russian RD-180, ensuring we do not lose existing and highly-capable launch vehicles, and prioritizing national security-specific requirements over new launch vehicles to protect assured access to space and end reliance on Russian engines,” the statement added.

The Defense Department opposes that language in the bill. In a document submitted to the committee and obtained by SpaceNews, it warned that the language would force it to abandon some ongoing vehicle development efforts and rely primarily on ULA’s Delta 4 and SpaceX’s Falcon 9.

“Section 1615 appears to force the Department to end the more than $300 [million] investment in the industry-developed systems and instead use a modernized Delta IV launch vehicle and/or the Falcon 9,” it stated, referring to the section of the NDAA that contains the funding restriction. The Falcon 9, it noted, cannot handle many national security missions, while the Delta 4 is significantly more expensive than alternative existing vehicles.

The DOD estimated, based on the increased use of the Delta 4 and an expectation that Falcon 9 launch prices would increase without competition, that its launch costs would increase by up to $1.8 billion through 2027 as compared to its ongoing approach.

BE-4 retains its schedule lead

AR1 is one engine under consideration by ULA for Vulcan. However, the company has repeatedly stated that its first choice is Blue Origin’s BE-4, citing better economics of the engine and the fact that it was well ahead of development. In an April interview, ULA Chief Executive Tory Bruno said he estimated AR1 was 18 to 24 months behind BE-4 because its development started later.

That lead has been in question, though, since an incident May 13 at Blue Origin’s test site in West Texas. The company said it lost “a set of powerpack hardware,” a key component of the engine, for the BE-4 during preparations for full-scale testing of the engine. The company said at the time that a “hardware-rich” approach to testing would allow the company to quickly recover and resume testing soon.

Blue Origin has not provided a public update on the status of BE-4 testing since the mishap. Spokesperson Caitlin Dietrich said June 26 the company had no additional comments about BE-4 testing at this time.

The incident took place days after Aerojet Rocketdyne announced that the AR1 had completed a critical design review, clearing the way for full-scale development and keeping the program on schedule. “This important milestone keeps AR1 squarely on track for flight readiness in 2019,” company president Eileen Drake said in a May 8 statement announcing completion of the review. The company had said for some time it believed the engine could be completed and ready for use on a launch vehicle by 2019.

However, at a briefing of staff members organized by the House Armed Services Committee June 23, an independent assessment prepared by NASA’s Marshall Space Flight Center reportedly confirmed that BE-4 maintained a major schedule advantage over the AR1 despite the testing setback.

“They are two years behind Blue Origin,” one meeting attendee, not authorized to speak on the record, said of the assessment’s conclusion about AR1. Another year would be needed to integrate the engine with a launch vehicle.

The BE-4 powerpack testing mishap raised a number of questions by those at the briefing, the source said, but the NASA assessment concluded it would not have a major effect on the overall testing program for the engine. “They should be on track to restart testing in late summer and still stay on schedule,” the attendee recalled.

That confidence is based on the hardware-rich testing approach the company has promoted. The briefing attendee noted the NASA assessment’s concerns about the AR1 were focused on its schedule and cost, rather than its technical development.

NASA spokesman Bob Jacobs confirmed June 26 that agency representatives conducted that briefing, but that it could not disclose its contents. “It included proprietary data and we are not in a position to share any additional information regarding discussions with Hill representatives,” he said.

NASA has not otherwise discussed the independent assessment, but Bruno alluded to it in an April interview, noting it was chartered by Congress and separate from the company’s own independent non-advocate review.

“We also have another team that Congress stood up staffed with NASA personnel from Marshall Space Flight Center,” Bruno said. “I was actually happy to hear that they did that. And we’ve made all of our suppliers and facilities available to them, too.”

Aerojet Rocketdyne, in a June 28 statement to SpaceNews, said it had not seen the study presented last week. However, the company reaffirmed its plans to have the AR1 engine certified and ready for use by 2019.

“This is the same development schedule for AR1 that we laid out over two years ago,” the company said in the statement. “In contrast, the engine downselect for ULA’s proposed launch vehicle has slipped more than a year due to delays in the competitor’s engine development effort,” a reference to Blue Origin.

Aerojet Rocketdyne, in its statement, emphasized its experience with large-scale engines like the AR1, and with requirements for national security space launch, that give the company confidence that it can remain on schedule through the rest of the engine’s development. “Certified AR1 engines, in rate production, will be available in 2019 — before any competitor’s engine,” it stated.

Blue Origin selects Huntsville

Initial, low-rate production of the BE-4, both for Blue Origin and ULA, will take place at Blue Origin’s headquarters in Kent, Washington. However, the company had previously stated it planned to develop a separate facility for higher-volume engine production, particularly to meet ULA’s requirements.

Blue Origin announced June 26 that it has decided to build that engine factory in Huntsville, Alabama. The company said it will make a $200 million investment to develop the facility, capable of producing up to 30 BE-4 engines per year. It anticipates hiring as many as 342 people to work at the factory.

“The area’s skilled workforce and leading role in rocket propulsion development make Huntsville the ideal location for our state-of-the-art manufacturing facility,” Blue Origin President Rob Meyerson said in a statement announcing the company’s decision to build the factory in Huntsville.

Aiding that decision is an estimated $50 million in incentives offered by the state to locate the factory there. Alabama beat out offers from several other states, including Florida, where Blue Origin is building a factory for its New Glenn rocket, and Washington state.

Blue Origin’s decision will make it neighbors with its competitor in the ULA engine competition. Aerojet Rocketdyne announced in January that it would build the AR1 in Huntsville, creating 100 jobs.

The move could also ultimately help remove political obstacles for Blue Origin and ULA. Blue Origin’s decision was hailed by Sen. Richard Shelby (R-Ala.), a leading member of the Senate Appropriations Committee. “I am pleased to see Blue Origin investing in Alabama, and I look forward to working with them and other businesses to continue boosting economic development opportunities,” he said in the statement.

The deal is contingent on both approvals by local officials, expected in July, as well as a formal decision by ULA to select the BE-4 for Vulcan. Neither Blue Origin nor ULA have announced a timetable for doing so, which ULA has previously indicated will be contingent on progress in engine testing by Blue Origin.

“This is a big decision and if you don’t get it right, it’s very hard to come back from that. So I’m going to take my time and listen to all these experts and stakeholders and then do it,” Bruno said in April. “I expect to do that this year.”