Aerojet Rocketdyne's AR1 engine, meant for the US' primary launch provider United Launch Alliance (ULA), has surpassed a critical design review.
The company will carry on with developing the engine, which is scheduled for a full-scale test in 2017.
The AR1 is being seen as a replacement for the Russian-made RD-180 engine, which ULA was previously using for the Atlas V.
The Russian-made engine can no longer be used by ULA as the Congress has banned the use of Russian launch engines for US Air Force satellites.
If the ULA doesn't update its engines it could lose the military contract, its primary income source.
Aerojet Rocketdyne, recommends using the AR1 for the Atlas V, saying that the engine would be ready by 2019, the same time given to ULA to stop using the Russian RD-180s.
ULA is also working with Jeff Bezos's aerospace company Blue Origin, to build a new rocket. ULA is building the engine BE-4 for Blue Origin's rocket Vulcan, which is supposed to be ready by 2022-2023.
Even while ULA, a joint venture by Martin Lockeed and Space Systems and Boeing Defense, Space & Security, is distracted with the Vulcan, it might feel more inclined to work on the replacement engines since the Congress has decided to give subsidies for the development of a replacement.
However, it possible that the ULA wouldn't have to make a replacement at all, as the ban on the Russian-made rocket engines could be lifted, reports The Verge.
The budget bill for 2016, which is going on floors on 18 December, currently intends to lift the ban however Senator John McCain is opposing the move and threatening to not sign it.
The language of the 2016 budget bill says that US Air Force can use any company that is certified "regardless of the country of origin of the rocket engine that will be used on its launch vehicle," reports The Verge.
