Aerojet Rocketdyne Holdings Inc.’s deal to develop a new generation of Air Force rocket engines gives the Rancho Cordova manufacturer a shot at a potentially major contract.
But nothing’s guaranteed.
Aerojet’s deal is one of four competing development contracts by the Air Force in the past month as the Pentagon seeks to replace the Russian-made engines that power most U.S. military satellite launches. Competitors include the aerospace companies founded by technology entrepreneurs Jeff Bezos and Elon Musk.
Congress has ordered the Air Force to be done with the Russian engines by 2019.
Despite the competition, Aerojet has some reason to feel good about its prospects. Of the four development contracts, “ours was the largest award,” Aerojet executive Julie Van Kleeck said Tuesday.
Van Kleeck, the company’s vice president of advanced space and launch, said it “could be a very significant contract” if Aerojet wins.
Aerojet shares closed Tuesday at $16.22, up 69 cents, on the New York Stock Exchange.
On Monday, the Air Force awarded a $115.3 million development contract to a partnership between Aerojet and United Launch Alliance, a Colorado company co-owned by Boeing and Lockheed Martin. United Launch spurned a takeover bid by Aerojet last fall.
The deal calls for Aerojet and United Launch to contribute $57.7 million of their own money. Eventually, the development could cost $804 million, with the Air Force putting in $536 million and the Aerojet-United Launch partnership putting in the rest. Van Kleeck wouldn’t disclose how much money Aerojet is contributing to the partnership.
The Air Force also awarded a development contract Monday to a partnership between United Launch and Blue Origin, the company founded by Bezos, best known as founder of Amazon.com. In January, development contracts were awarded to Orbital ATK and Musk’s SpaceX.