PARIS — British small-satellite specialist Surrey Satellite Technology Ltd. (SSTL) will use its first-ever satellite contract with the European Space Agency (ESA) to demonstrate a new platform for inexpensive telecommunications satellites.

The Guildford, England, company also will try to prove that it can maneuver faster than its much-larger competitors in manufacturing complex spacecraft.

The ESA contract, signed July 11, does not include the atomic clock; ESA will provide that. ESA has set aside about 30 million euros to launch the 400-kilogram satellite in 2005 aboard a Russian Soyuz rocket. Galileo satellites will operate in medium-Earth orbit at about 36,000 kilometers in altitude.

A separate ESA contract for another Galileo test satellite was signed with Galileo Industries S.A., a consortium that includes Europe’s biggest satellite builders: Alcatel Space of Paris, Alenia Spazio of Rome and EADS Space’s Astrium divisions in Germany and Britain. The consortium also includes Spanish and French firms.

The Galileo Industries contract is worth 72.3 million euros — nearly triple the SSTL amount. ESA officials explain the difference by saying the Galileo Industries satellite, also to be ready in 2005, will be more complicated and more representative of the operational Galileo satellites.

The David vs. Goliath aspect of the SSTL-Galileo Industries work has not been lost on either company. Managers of the two teams have gone so far as to place bets on which group will be able to deliver its satellite first.

John Paffett, project leader for SSTL’s Galileo test satellite, said his company fully intends to be first across the finish line and to highlight a small company’s ability to perform high-precision work inexpensively and quickly.

"The spirit of competition is already high," Paffett said July 16. "We plan on being ready first."

Olivier Colaitis, president of Galileo Industries, said the consortium wants to erase any impression that it is bogged down in internal bureaucracy. "We will perform this contract in 24-27 months, and we do not think [SSTL] will be able to," Colaitis said July 16. "Bigger does not mean slower, and we will prove that here."

Paffett said the geostationary-orbit version of the SSTL satellite platform is designed for direct injection into its final operating position over the equator. Most commercial telecommunications satellites are placed in a parking orbit and use on-board propulsion systems to reach their final destination. SSTL’s geostationary platform would not need to carry that additional motor.

Paffett and Davies said SSTL is likely to bid on at least part of the contract ESA plans to award this autumn for studies that will lead to the construction of three or four additional Galileo satellites.

SSTL’s chances of winning a significant portion of that work could hinge on a question that has not been settled clearly: whether the Galileo project, which is funded 50 percent by ESA and 50 percent by the European Commission, will operate according to ESA or commission rules with respect to mandatory geographic distribution of contract awards.

For ESA, spreading contracts among member governments is a pillar of agency practice. For the commission, it is illegal: The Brussels body insists on competitive bidding, with winners selected based on value for money only. Under an ESA regime, SSTL will be hard-pressed to form a team with as much geographic distribution as Galileo Industries.