HUNTSVILLE, Ala., and WASHINGTON — Negotiations on a proposal in which NASA and the U.S. Air Force would jointly fund an Aerojet-led propulsion project that could pave the way for a U.S. alternative to the Russian-built RD-180 rocket engine are bogged down over cost sharing issues, according to government and industry officials.

The impasse centers on how much funding the Air Force would provide for tests Aerojet has proposed as part of a program aimed at upgrading NASA’s heavy-lift Space Launch System (SLS) crew and cargo rocket. Aerojet is one of four companies NASA selected in July to work on liquid- and solid-fueled booster concepts meant to improve SLS’s lift capacity and affordability.

When it debuts in 2017, SLS will rely on a pair of five-segment solid-rocket boosters and a cluster of four RS-25 engines — both remnants of the retired space shuttle program — to haul 70 metric tons to orbit. NASA plans to eventually add advanced boosters and a new upper stage to increase SLS’s hauling capacity to 130 metric tons.

Having set aside $200 million for a 30-month SLS Advanced Booster Engineering Demonstration and Risk Reduction effort, NASA announced Oct. 1 that it had signed contracts with Utah-based ATK Launch Systems; Huntsville, Ala.-based Dynetics; and Los Angeles-based Northrop Grumman Corp. The combined value of the awards is $137.3 million.

Conspicuously absent from the mix was Sacramento, Calif.-based Aerojet, one of the three main U.S. rocket propulsion providers.

“We’re in negotiations,” Julie Van Kleeck, Aerojet’s vice president of space and launch systems, said Oct. 16 during the American Astronautical Society’s Werner von Braun Memorial Symposium in Huntsville. “There have been additional partners brought into this, so we have a few weeks in front of us to complete that.”

NASA spokeswoman Jennifer Stanfield confirmed Oct. 26 that Aerojet’s Advanced Booster award was still in negotiations.

One aerospace executive, whose company is not involved with the SLS Advanced Booster studies, said Oct. 25 that the potential collaboration would leverage Aerojet’s work on the Air Force’s Hydrocarbon Boost Engine Technology program. In 2006, Aerojet won a nine-year, $110 million contract for that program, which is being managed by the Air Force Research Laboratory.

“What I know from discussions with the Air Force and NASA is that they are looking to combine the NASA effort with what the Air Force had been doing on the hydrocarbon boost initiative,” this executive said. Hydrocarbon typically refers to kerosene rocket fuel.

Another industry official, who spoke on condition of anonymity, said negotiations between Aerojet, NASA and the Air Force were hung up over how much funding each would bring to the table.

Aerojet canceled an Oct. 25 interview with Van Kleeck and referred questions about the engine project to company spokesman Glenn Mahone, who did not respond by press time.

During the Huntsville symposium, Van Kleeck would talk about Aerojet’s Advanced Booster proposal only in general terms.

“Without getting into too much detail, the focus is on a large liquid rocket engine — kerosene, closed-cycle,” Van Kleeck said Oct. 16. “Our offering is to look at those areas that might be perceived as high risk particularly in the area of combustion stability.”

During a separate presentation at the symposium the next day, Dale Thomas, associate director of NASA’s Marshall Space Flight Center in Huntsville, talked about the agency’s interest in collaborating with the Air Force on a large, kerosene-fueled engine that could both power an advanced SLS booster and replace the RD-180 on the United Launch Alliance Atlas 5. The Atlas 5 is one of two main rockets used to launch U.S. national security payloads.

“We know the Department of Defense is interested, being a little apprehensive about using a foreign-sourced engine on a strategic capability for our nation,” Thomas said. “So there may be an intersecting interest there. We have some technology work going on the [kerosene] engines for advanced booster. We are currently in talks with the Air Force about how we can intersect with [a kerosene] test bed, hydrocarbon test bed, that they have underway.”

In a brief interview with Space News after his presentation, Thomas declined to say whether he was talking specifically about Aerojet’s proposal.

Todd May, SLS program manager at Marshall, said some of the liquid-propulsion concepts NASA selected under the Advanced Booster program have “intriguing potential for solutions that not only benefit NASA but may benefit others like, say, the Air Force.

“As a matter of fact,” May added during an Oct. 16 interview at the symposium, “there are Air Force people here today meeting with my advanced development manager who has under his purview the Advanced Booster contracts”

The Air Force’s Hydrocarbon Boost Engine Technology program is aimed at producing a staged-combustion cycle kerosene-fueled demonstration engine capable of producing 250,000 pounds of thrust at sea level. The engine, intended for ground testing only, would be an incremental step toward a larger engine that eventually could displace the RD-180.

Unlike the gas-generator engines that have become the hallmark of the U.S. liquid rocket-propulsion industry, oxygen-rich staged-combustion engines were a specialty of the Soviet space program. For years, the U.S. government has sought a domestic alternative to the RD-180, but none has materialized.

Negotiations between NASA, the Air Force and Aerojet are proceeding against a backdrop of declining government budgets and a consolidating U.S. propulsion industry. In July, Aerojet announced it would acquire its main competitor in the liquid-rocket business, Pratt & Whitney Rocketdyne of Canoga Park, Calif., for $550 million. Assuming federal regulators approve the deal, the sale would close in early 2013.

Since before NASA unveiled its basic SLS design last September, Aerojet has sought a greater role on the project. In 2011, NASA sole-sourced a great deal of SLS work to Houston-based Boeing Space Exploration, ATK and Pratt & Whitney Rocketdyne, all of which had major development roles in the Ares family of rockets under the Constellation lunar exploration program that was canceled in 2010. The SLS design was derived in large part from the Ares 5 heavy-lift concept.

Besides the work it had already won for SLS, Pratt & Whitney Rocketdyne is a subcontractor to Dynetics for its two Advanced Booster awards, one of which focuses on reviving the kerosene-fueled F-1 engine that powered NASA’s Apollo-era Saturn 5 rocket. Aerojet would get that business after the companies merge.

The Air Force Research Lab’s Public Affairs Office did not respond to a request for comment.

Dan Leone is a SpaceNews staff writer, covering NASA, NOAA and a growing number of entrepreneurial space companies. He earned a bachelor’s degree in public communications from the American University in Washington.