Part II : 1950-1957
Long Summer of Negotiations
 Stimulated by the high-level interest in Rex from his March 1955 trip to ARDC Headquarters, Philip Richie returned to his procurement duties at Wright Field's power plant laboratory expecting to let a contract on Rex within a month.35 This was not to be. In fact, what followed was an extraordinary series of proposals by Rae and Garrett on the one hand and revisions of statements of work by personnel of the power plant laboratory on the other, with many negotiations between the two groups. These actions reverberated up and down the line, affecting virtually every level of management in Air Force research and development as far as the Assistant Secretary. At the root of the problem was a fundamental difference in approach between Rae and Garrett on the one hand and Appold and his associates at the power plant laboratory on the other. Rae insisted on a contract for the complete airplane powered by his turbine engine. This differed from the usual Air Force practice. An airframe manufacturer usually is the prime contractor for an airplane, including its tanks and fuel system, with the engine furnished either by the government or by an engine manufacturer, as a subcontractor to the airframe manufacturer. Garrett, as a manufacturer of aircraft components and small turbine machinery, had often been a subcontractor but went along with Rae's desire to obtain the complete aircraft contract. Obviously, Garrett intended, at some point, to either license or work jointly with an airframe manufacturer.
The Air Force, on the other hand, respected Rae's position as the originator of a novel solution to a difficult problem, but never viewed either him or Garrett as potential contractors for an entire airplane. The Air Force became extremely interested in hydrogen as a fuel and the Rex engine as a means for reaching very high altitudes, but was not fully convinced that either was practical. For these reasons, the power plant laboratory, not the weapon systems directorate, took the lead in initiating the purchase requests to explore the Rex concept and in dealing with Rae and Garrett. The laboratory wanted a step-by-step approach to determine the feasibility of using hydrogen and the Rex engine before initiating a large development effort. Necessary steps included a study of engine cycles, selection of the optimum cycle, and  experimental work on selected components including the fuel tank. The laboratory would review the work at each step before approving the next. This logical and conservative approach was irksome to Rae and Garrett, who were convinced they had a great idea and wanted to move fast to capitalize on it. They did decide, however, to propose a series of engines using hydrogen.
The negotiations with Garrett began on 20 April 1955 when Rae and Snow presented the Garrett proposal to Wright Field and followed it up two days later with a report. Their proposal went so far beyond what the laboratory had intended that one listener commented that it covered PR 303 "like the state of Texas covers Rhode Island."36 Included in the proposal were three types of hydrogen-fueled engines called Rex I, II, and III.37 All were jet propulsion engines; the propeller had disappeared. Rex I used liquid hydrogen and liquid oxygen to drive multiple turbines, with the hydrogen-rich exhaust gases dumped overboard. It was the same turbine system as Rae's original Rex I (pp.119-121). The shaft power from the turbines was used to drive a fan which compressed incoming air (fig. 31, top). Thrust was obtained by expanding and accelerating the air through the nozzle.
Rex II was similar to Rex I except that the hydrogen-rich exhaust gases from the turbines were burned in the air in the afterburner (fig. 31, bottom). Rex II was essentially the same concept as a turborocket (p.122).
Rex III was quite different from the other two engines. Liquid oxygen was not used, and the hydrogen served two different functions. First, heated hydrogen alone was used to drive the turbines; and second, the hydrogen was burned with air to provide the heat for the first function. This sounds like a man lifting himself by his bootstraps, but it works (fig. 32). Hydrogen from the tank is raised to a high pressure by a pump and passes through a heat exchanger where it is heated to a sufficiently high temperature to drive the first turbine. After leaving the turbine, it is reheated in a second heat exchanger and the process repeated for the third turbine. After the third turbine, the hydrogen enters a combustion chamber where it mixes with part of the engine air and burns fuel-rich. The hot combustion gases provide the source of heat for the three exchangers that heat the incoming hydrogen. After the third heat exchanger, the hydrogen-rich gases are injected and burned in the main air stream of the engine in the afterburner. The three turbines drive the compressors for the incoming engine air and the air used to burn the hydrogen.
The scope of the Garrett proposal of April 1955 became an issue between the company and the power plant laboratory, as negotiations continued. In early May, Rae complained to Brig. Gen. V.R. Haugen, director of laboratories at Wright Air Development Center, that the power plant laboratory had emasculated his program. Haugen investigated and satisfied himself that the laboratory's actions were proper and invited Rae to lunch in an effort to improve relationships.38
On 20 May, Garrett and Air Force officials met again. Some changes in the description of work were made by mutual consent. Garrett, willing to invest capital in developing Rex engines, sought a development contract, but Appold rejected this as untimely. Both parties, however, agreed on another matter: prompt action to ensure an adequate supply of liquid hydrogen.39
The government owned five acres of land within Garrett's facility at Phoenix, and this was studied as a possible site for a government-owned hydrogen liquefaction plant...
....for Garrett's experimental needs. In June, William C. Meister, a government Industrial specialist, reported that the site was satisfactory. He also reported that liquid hydrogen plant details could be obtained "from standard plants built in the past."40 He was probably thinking of the Bureau of Standards plant at Boulder or possibly the earlier Herrick L. Johnston plants, but none of these was "standard."
On 6 June the persevering Rae tried again to obtain acceptance of his original proposal for a complete airplane development but failed once more. The meeting ended with three unresolved issues: airframe work, Use of hydrogen in conventional engines, and burning hydrogen in an afterburner, as proposed in RexII.41 On 27 June, Rae's frustrations must have reached the breaking point for in a meeting with Wright
....Field officials, including a judge advocate, he refused to sign a contract with the Air Force, claiming that it neglected his patent rights.*
Meanwhile, individuals in other organizations were becoming interested in hydrogen. Silverstein of NACA had completed his analysis in April 1955 and....
....according to one Air Force observer, "took to the road" making a circuit of high-level Air Force officials. One of these was Lt. Gen. Thomas Power, commander of the ARDC.42 On 7 July, Power and Geri. Marvin Demler were briefed by WADC on the Rex program, with results that became evident from Appold's actions the following day. In discussions with his staff, Appold expressed concern about the Rex program, asked questions about the approach, the scope, and whether to go forward or cancel. He asked for a recommendation based on a comparison between the Rex and conventional engines available in the same time.43 On 16 July, ARDC authorized WADC to study high-altitude engines with a two-pronged approach. One was to use conventional engines and the other, a new propulsion system for altitudes to 30 500 meters.44 This essentially reiterated the ARDC directive of the previous year, but the sense of urgency had increased.
During July and August 1955, negotiations with Rae and Garrett continued without much success. On 25 August, Rae again refused to sign a contract, citing the inclusion of a study task as his reason. According to the notes of Frank Patella of the power plant laboratory who attended the meeting, Rae's position was: "The Garrett Corporation wants a development contract at this time and will not go along with anything less." Finally, however, after much additional negotiation and revision of work statements, two contracts with Garrett were signed in October 1955. One, coming from PR 303, was not far from what the power plant laboratory had originally specified. The other, from PR 339, was to study liquid hydrogen tanks. The two totaled $3 284 000-over four times the combined amount of the United Aircraft and Beech Aircraft contracts that had been in effect since June.45
 When the Rex division of Garrett received its two contracts from the Air Force, after five months of hard negotiating, there was a big party and celebration. The staff was confident that they were at last firmly on the road to engine development and a great future.46 Yet this was not to be, for the contract contained provisions that were to eventually knock Garrett out of the major competition.
* On the same day, Raeís attorney filed a patent application of a mulistage, high-altitude engine with a single combustion stage 9518049). On 18 Oct. 1960, he was granted patent 29256 402 for Rex III.