NASA has selected Lockheed Martin and the team of Northrop Grumman and Boeing to work on competing designs for the Crew Exploration Vehicle (CEV), the spacecraft the U.S. space agency hopes to field around 2010 as a replacement for the space shuttle.

The two teams submitted the only CEV bids NASA had received by May 2, the deadline for proposals.

NASA has not disclosed how much the awards, announced June 13, would be worth but did say the agency plans to have two contractors compete at this stage of the procurement of an eventual shuttle replacement.

NASA said in a June 13 press release that the second phase of the CEV competition will cover the final CEV design and production. That phase originally was scheduled to start with a down-selection to a single industry team in 2008.

That timetable now has been accelerated by two years.

To reduce or eliminate the gap between the shuttle’s retirement in 2010 and the fielding of an operational CEV, the Phase 2 selection of a single winner now has been moved up to 2006, NASA said.

The contract to design and build the CEV could be worth as much as $6 billion, according to U.S. government and aerospace industry sources.

By the time NASA Administrator Mike Griffin announced in late April his intention to forgo a lengthy competition and pick a prime contractor early next year in hope of completing the CEV by the space shuttle’s set 2010 retirement , the Lockheed Martin and Northrop Grumman-Boeing teams had largely finished their proposals.

Those proposals were built around the assumption that NASA would hold a prototype fly-off in 2008 that would help the agency pick the team it wanted to design and build a CEV that could be ready to carry astronauts by 2014. The two teams were anticipating three-year contracts worth about $1 billion each.

NASA went ahead and accepted the proposals from Lockheed Martin and the Northrop-Boeing team in early May but warned that the NASA acquisition strategy for the CEV was bound to change.

Those changes will be driven by the results of a 60-day study Griffin commissioned in late April to recommend an overall approach to sending astronauts to the Moon, which also will include recommendations to accelerate the CEV program and the types of launchers NASA will need in the future.

Industry and government sources said NASA had no immediate answers on how much, if anything, it intended to pay the Lockheed Martin and Northrop Grumman-Boeing teams to update their CEV proposals in preparation for a down-select planned for early 2006. At one point, the teams had been urging NASA to give each team $30 million to $40 million to fund their efforts through the end of the year. A few days after the announcement, industry sources tracking the program said NASA appeared willing to pay each team $15 million, or about $3 million a month.

Brian Berger is editor in chief of and the SpaceNews magazine. He joined in 1998, spending his first decade with the publication covering NASA. His reporting on the 2003 Space Shuttle Columbia accident was...