The US Air Force has invited aerospace companies to submit their proposals to build new rocket propulsion systems for launching US military and intelligence satellites.
The competition is part of the US's efforts to cut its reliance on Russian RD-180 engines, which are currently being used to power American Atlas V rockets.
Lieutenant General Samuel Greaves, head of the Air Force's Space and Missiles Systems Centre, told reporters in a teleconference that initial proposals were due by 23 June, and the government hoped to divide $160m in contracts among up to four bidders on a rolling basis beginning in September.
The programme, a public-private partnership, will require bidders to cover up to a third of the cost of the prototype development from their own funds. After an initial 12 to 18 month period, the US Air Force will award service contracts to the selected companies to carry out the launches.
The US Congress gave the Air Force a deadline to end the use of Russian engines by 2019, a move prompted by the situation in Ukraine.
The United Launch Alliance, a joint project between Boeing and Lockheed Martin, is currently the only provider of launches of military satellites in the US. The firm is expected to be one of the competitors in the tender, alongside SpaceX and Aerojet Rocketdyne.
"The plan is to transition from the RD-180 by investing with industry partners to develop commercially viable launch systems that also assure access to space for our (national security space) systems," Greaves said.
The Air Force has also launched a separate process to fund development of a domestic oxygen-rich hydrocarbon combustion engine.