WASHINGTON -- NASA intends to spend $500 million over the next four years subsidizing the development of commercial services for delivering cargo and possibly people to the international space station (ISS).

NASA hopes the investment will allow one or more firms to demonstrate by 2010 -- if not sooner -- that they are capable of delivering cargo and perhaps even crew members to the international space station. NASA would then competitively award flexible service contracts to the qualified firms to provide the services.

NASA kicked off the so-called Commercial Orbital Transportation Services Demonstration effort Dec. 5 with the release of a draft announcement spelling out how the competition will be structured. A final announcement is due out Jan. 9, with proposals due a month later on Feb. 10.

NASA expects to award one or more contracts in May.

According to the 33-page draft announcement posted on NASA's Exploration Systems Mission Directorate Web site, the space agency is looking for services that can deliver up to 7,000 kilograms of cargo and provide transport for up to three crew members.

NASA intends to spend $40 million on the demonstration effort in 2006, $130 million in 2007, $200 million in 2008 and $130 million in 2009. NASA has not said what it would be willing to pay for actual delivery services, which it intends to handle under separate contracts.

Companies that have expressed interest in the demonstration effort include: Constellation Services International of Woodland Hills, Calf.; SpaceDev of Poway, Calif.; Space Exploration Technologies of El Segundo, Calif.; and t/Space of Reston, Va.

Also taking a look at the program are more traditional NASA contractors including Houston-based Spacehab, Chicago-based Boeing, Bethesda, Md.-based Lockheed Martin and Los Angeles-based Northrop Grumman.

Representatives from these firms and at least a few dozen others were meeting at NASA's Johnson Space Center in Houston Dec. 8 to learn more about the demonstration effort.