WASHINGTON -- NASA has picked 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.

NASA released no information on the value of the contracts awarded to the two teams or the period of performance, 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 press release dated June 13 that the second phase of the CEV competition will cover the final CEV design and production. Phase 2 originally was scheduled to start with a down-selection to a single industry team in 2008. To reduce or eliminate the gap between the Shuttle's retirement in 2010 and an operational CEV, the Phase 2 selection of a single winner now is planned for 2006, NASA said in its June 13 release.

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 getting the CEV done as close to the space shuttle's 2010 retirement date as possible, the Lockheed Martin and Northrop Grumman-Boeing teams had largely completed 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 NASA acquisition strategy for the CEV was bound to change.