WASHINGTON and ORLANDO, Florida – United Launch Alliance’s (ULA) plan to field a new rocket engine with Blue Origin called the BE-4 is only step one of a larger strategic plan to take the company from a sole-source benefactor mentality to competing in a burgeoning commercial market.

With that plan, ULA’s current launchers – the Atlas V (developed originally by Lockheed Martin) and Delta IV (developed originally by Boeing) – will likely be supplanted by a new, yet-to-be-named rocket design within the next decade. The Atlas V and Delta IV are the workhorse rockets for the Defense Department and have been since the early 2000s. But both have a limited future. Last year, former ULA Chief Executive Officer Mike Gass said the per-unit cost of an Atlas V 401 mission was $164 million; a Delta IV heavy mission was priced at $350 million. These prices are averages for the 36-core deal signed between ULA and the Air Force.

Atlas V – the Pentagon’s rocket of choice for price and performance – is stunted due to tensions between Washington and Moscow over the latter’s ambitions in Ukraine. Russia supplies the RD180 engine for it and Congress has mandated that no Atlas engines to be purchased can be used for national security missions. Delta IV has a stellar launch record but is more expensive. Nonetheless, its heavy variant is one of a kind and is the driving reason why the family will remain active into the future.

That is until ULA or another company can build a replacement. ULA CEO Tory Bruno, who was named to that position last August, abruptly replacing Gass, says the company is also developing a new upper stage to take the place of the legacy RL-10 built by Aerojet Rocketdyne and Dynetics that now mates with the Atlas V and Delta IV.

He is also reducing the company’s infrastructure from five launch pads – supporting both launch vehicles – to two. One will be on each coast and will support operations for the Next-Generation Launch System (NGLS) as well as support the last Atlas V and Delta IV missions, Bruno told Aviation Week during a Feb. 17 interview. The company announced in 2008 it would drop one of its Delta II pads, leaving five pads in its infrastructure. The company oversees so many pads because it inherited both launch fleets supporting the Air Force’s policy of maintaining two launch vehicles for assured access to space. The company eventually plans to go to two pads "just a couple of years after we introduce the Next-Generation Launch System," which is slated to be flight tested in 2019, Bruno says. "We’ll be ramping up the new rocket and we’ll be ramping down the Atlas and Delta so it’ll be just a couple of years … before we can retire the other pads and be completely dependent on the new pads."

The assumption is that the national policy will be filled in the future with two competing launch companies – not a single company managing two different rocket fleets.

In September Bruno and Blue Origin, a secretive Seattle-based company funded by Amazon.com founder Jeff Bezos, announced a partnership to develop the BE-4, a liquefied natural gas engine designed to both replace the RD180 in the Atlas V and to support the NGLS design. The BE-4 was originally being designed for Blue Origin’s New Shepard Launch Vehicle, and the companies are scaling it up to produce about 550,000 lb. of thrust for Atlas V and NGLS – up to 15% more thrust than the RD180, Bruno says. "It is not a major amount of work having to be done over again in order to scale," he said. Two of the engines would be needed for the boost required by the Air Force.

The NGLS will be capable – when coupled with the new upper stage – to take over heavy payload missions now handled exclusively by the Delta IV heavy, Bruno says. Air Force certification for the engine is expected to take about one or two flights to achieve, Bruno says, adding that up to one year is likely required to allow the Air Force to review and qualify its hardware.

The company expects to require less time than SpaceX needed to certify its Falcon 9 v1.1, in part because it has already included the Air Force in its design review process and because the new system will rely on legacy processes already approved for the Atlas V and Delta IV programs. The Air Force and SpaceX signed the cooperative research and development agreement on its Falcon 9 certification in June 2013; Teague says certification is likely this summer.

The near-term priority for ULA is to field the BE-4. The team is now testing components for it and "they are right where I expected them to be" in development, Bruno said. Full-scale engine firings are slated for around 2017.

Bruno said ULA has a cost target for NGLS, but he declined to provide it.

Meanwhile, the Air Force is scrambling to devise an acquisition strategy to take advantage of both advances in the commercial market – SpaceX is also pushing for an upgraded Merlin engine and Aerojet Rocketdyne is developing the AR-1 as an RD180 replacement – as well as funding provided by Congress. Lawmakers set aside $220 million in fiscal 2015 to begin a next-generation rocket engine program, but the Air Force did not include a procurement strategy in its fiscal 2016 budget request sent to Congress Feb. 2. Experts estimate a new engine will cost at least $1 billion to develop, and the Air Force’s fiscal 2016 request includes only $514 million through fiscal 2020. This is in part because the fiscal 2015 appropriation arrived so late, said Maj. Gen. Roger Teague, director of space program procurement for the Air Force secretary. It gave the Air Force little time to plan to use the funding.

Air Force Space Command chief Gen. John Hyten says the strategy should be out in the spring or summer. It ultimately will call on industry for a large portion of the investment, Hyten told Aviation Week during a Feb. 12 interview at the annual Air Force Association Air Warfare Symposium in Orlando. "It is clear the Congress wants a competition as soon as possible," he said, adding that the Air Force wants to continue to purchase launch services rather than develop its own engine to be handed to industry as government-furnished equipment. "There are some very interesting engine development programs going on right now, so the first thing we have to do is to explore the public-private partnerships that can take advantage of the work that is already going on in industry … We want to use our investment dollars to continue to explore those engine technologies. If we can’t work those things out we have to basically figure out how to build an engine that can be used by anybody and get off the RD180."

Bruno, meanwhile, says ULA’s partnership with Aerojet Rocketdyne to develop the AR-1 is a "backup plan" to the BE-4. The AR-1 is a kerosene engine also being designed as an RD180 replacement by Dynetics and Aerojet Rocketdyne. NASA has invested about $50 million in risk-reduction work for this engine and advocates are hoping the Air Force will carry on the work, according to an industry source. Thus far, the team is conducting risk reduction for main injector stability, the source says. The Air Force recently signed a memorandum of understanding with NASA’s Marshall Space Flight Center allowing for the risk reduction to continue with Air Force oversight and funding. AR-1 advocates are arguing that the Air Force should build an engine directly and not contract simply for the launch services. The Air Force could do this using NASA as its technical overseer, they say.

Meanwhile, ULA is also planning to buy long-lead parts for "white tail" rockets – i.e., vehicles not yet sold – beyond the 36-core deal funded as a bulk buy by the Air Force. This is in anticipation of the company breaking further into the NASA market as well as the commercial market.

"We intend to go aggressively now after NASA commercial activities – cargo and crew – as well as pursuing [the] commercial market place which is largely comsats in the GEO orbit," Bruno says. "Some of these customers don’t order so far in advance that it would be earlier than the long-lead part requirement, so that forces us to act like a commercial company like we are and anticipate the need and place those long-lead orders having confidence that we will sell them later."

The concept of building white tails was anathema to ULA only a year or so ago as the company was in the luxurious position of being the monopoly launch services provider to the Pentagon for large national security missions. Now, however, Bruno notes that the market has changed substantially, driving ULA to change with it.