The Air Force is performing a “business case analysis” of how much it would cost to produce the Russian-made RD-180 rocket engine in the United States, Air Force Under Secretary Eric Fanning said March 11. 

Though Fanning said the concerns over being dependent on Russian-made technology for critical national security space launches preceded the current crisis in Ukraine, he said the Air Force is monitoring the “current bilateral situation” that might impact the U.S.’ supply of the RD-180. It is rumored that Russia could cut off supplying the RD-180 to the U.S. in response to economic sanctions.

Fanning told a Defense Writers Group breakfast in Washington the Air Force has enough RD-180s to support launches “well into” 2016. He also said the Air Force would like to have a more varied supply of engines to minimize risk.

According to a source familiar with production lines, the cost to start a production line to produce the RD-180 is likely to be in the hundreds of millions of dollars and could possibly approach $1 billion. United Launch Alliance (ULA) CEO Michael Gass told a Senate panel March 5 that as part of a deal the company signed with RD AMROSS, the joint venture of United Technologies Corp. [UTX] and RD-180 developer NPO Energomash created to distribute the engine to the United States, ULA could co-produce the engine. ULA uses the RD-180 in its Atlas V heavy lift rocket.

Gass said ULA bought all the blueprints and specifications and translated them from Russian to English over the last several years. He also said ULA invested “hundreds of millions” of dollars to prove that it has the capability to develop the engine in the United States. The source questioned the extent the Russians fully shared the details of how to make the engine.

Though Gass told sister publication Defense Daily after the Senate Appropriations defense subcommittee (SAC-D) hearing last week ULA hasn’t made the RD-180 in the United States because of cost, he said there are things the company can do to potentially reduce costs. Gass said ULA could insert modern manufacturing technologies as the RD-180 was designed and built with technology from the 1980s. Gass also said the blueprints, specs and tools acquired are from the 1980s as well.

With today’s modern additive manufacturing and numerical control machines, ULA could build the RD-180 engine “most likely a lot less expensively,” Gass said.

“[It] may end up the same cost because you may be dealing with a difference in labor force costs (and) different wages (as) you’re dealing with a non-market economy versus here,” Gass said. “I think we could get to be much more producible and even take to the next step in technology.”

Fanning also reiterated the Air Force’s commitment to competition in the Evolved Expendable Launch Vehicle (EELV) program, of which ULA currently holds a monopoly. Fanning and the Air Force announced this month that it was reducing the number of competed EELV launches that were to be available between fiscal years 2015 and 2017 from 14 to seven because its fleet of Global Positioning System (GPS) position, navigation and timing (PNT) satellites is lasting longer than previously expected.

The Government Accountability Office (GAO) said March 4 if DoD requires all offerors to contain both fixed price and cost reimbursement features for launch services and capability, respectively, similar to the way it currently contracts with ULA, there could be benefits to both DoD and ULA, but potential burdens to new entrants like Space Exploration Technologies Corp. (SpaceX). Alternatively, GAO said, if DoD implements a fixed-price commercial approach to launch proposals, DoD could lose insight into contractor cost or pricing. DoD could also require a combination of elements from each of these approaches or develop new contract requirements for this competition.

“We want to maintain transparency into the cost of that launch,” Fanning said. “We (also) want to maintain access to proven, safe launch vehicles, but we want to do everything we can to increase competition.”

To facilitate competition, Fanning said the Air Force delayed a request for proposals (RFP) to give SpaceX more time to certify for launch. Air Force spokeswoman Maj. Toni Whaley said that mission was a National Reconnaissance Office (NRO) mission and that it expects to release the RFP in the May time frame.

The Air Force said in February SpaceX’s Sept. 29 launch of its Falcon 9 v.1.1 launch vehicle would count toward EELV certification. SpaceX must meet certification requirements and perform at least three successful flights of a common launch vehicle configuration to be considered for launching critical national security payloads. The service is also still assessing Falcon 9 v1.1 launches on Dec. 3 and Jan. 6 for their applicability toward the certification requirements.

SpaceX Chief Designer and CEO Elon Musk said via a spokeswoman that the United States cannot assure access to space when it relies on Russian President Vladimir Putin’s good graces to supply rocket engines to current suppliers. Musk asked why try to manufacture Russian engines, with massive costs, uncertain intellectual property rights, and unknown timetables, when proven all-American rockets already exist?

“As the only heavy lift rocket designed in the 21st century that uses modern manufacturing technology, Falcon 9 is capable of performing almost all the missions planned for Atlas V with greater design reliability and much lower cost,” Musk said. “The few exceptions can be transitioned in the short term to Delta IV and in the medium term to Falcon Heavy, which has more than twice the lift capacity of the largest ULA rocket.”

ULA is a joint venture of Lockheed Martin [LMT] and Boeing [BA].