NASA awarded contracts worth up to $767 million Thursday to being developing the technologies needed for a new generation of reusable launch vehicles that could eventually replace the space shuttle.

The contracts, given to 20 companies and two universities, are the first major awards of the Space Launch Initiative (SLI), NASA's $4.8-billion, five-year effort to make space flight more reliable and less expensive than possible with the shuttle and other launch vehicles.

The goal of the SLI is develop two or more competing proposals for a second-generation reusable launch vehicle (RLV) by the middle of this decade that could launch payloads for $1,000 per pound - a tenth of current shuttle costs - while increasing crew safety by a factor of 100. Such a vehicle, which would begin operations early next decade, could eventually replace the space shuttle.

"The Space Launch Initiative is a comprehensive R&D effort that provides technology developments that dramatically increase the safety, reliability and affordability of space transportation systems," said Art Stephenson, director of NASA's Marshall Space Flight Center, the lead center for SLI. Such developments, he said, would not only help NASA meet its objectives more efficiently but would allow commercial launch providers be more competitive in the international marketplace.

To achieve those goals, NASA is asking industry to look into a wide range of technologies and concepts. The contracts awarded Thursday range from system engineering and architecture studies to investigations of propulsion, airframes, and related vehicle technologies to flight demonstrations.

The key, said SLI program manager Dennis Smith, is to "focus on developing new systems that allow us to operate away from the ragged edge." By developing systems with adequate margins, he explained, future launch vehicles would not have to be pushed to their limits, increasing their reliability and reducing their cost to operate.

The contracts awarded Thursday have a 10-month base plus options for one or more years for additional work; the $767 million figure announced by NASA includes all the options, some of which may not be exercised. The 10-month base period allows NASA to evaluate the progress of the contractors and adjust their awards accordingly, according to Smith.

Contracts were let to both large and small companies, as well as North Carolina State and Ohio Universities. NASA officials emphasized that they exceeded their goal of awarding 12% of the funds to small companies, although the bulk of it - $561.4 million - went to five large, established aerospace companies: Boeing, Lockheed Martin, Orbital Sciences Corporation, Northrop Grumman, and Pratt & Whitney.

Notably absent from the list of contract winners were most of the companies that have spent the last several years working on their own commercial reusable launch vehicles, such as Rotary Rocket Company, Kelly Space and Technology, Pioneer Rocketplane, and Space Access LLC. However, small contracts were given to two other companies in this field, Andrews Space & Technology and Universal Space Lines.

One of the more unusual contracts went to another commercial RLV company, Kistler Aerospace. The company won $135 million, all but $10 million in the form of options for flight demonstrations of technologies developed by other SLI contractors should Kistler get its K-1 RLV operational in the next few years. "We don't pay anything to Kistler unless they are successful," said NASA's Smith.

SLI is not without its critics. Some have argued that by awarding contracts to some companies, and locking others out of this round, NASA is effectively beginning to choose winners and losers in the marketplace years before a final design is chosen. ProSpace, a citizen space policy group, asked Congress to consider cutting all SLI funding during the group's annual March Storm lobbying effort.

"It is now apparent that NASA has put itself back on the same path that led to X-33 and X-34 by judging pieces of paper instead of results," ProSpace noted in a policy document. The group instead advocates a program that combines investment incentives, contracts to provide commercial resupply of the International Space Station, and focused technology research.

NASA officials said Thursday that companies not awarded contracts in this round are still eligible for SLI contracts in the future. Stephenson said that additional procurement cycles are planned for later this year and next year that could bring new companies on board, particularly to fill technology gaps left by the current contracts.

They also noted that the technologies being developed under the SLI program will be available to any American company interested in developing new launch vehicles, a "suite of technologies that can support multiple architectures," according to Smith. "We have an excellent program with a lot of competition."

NASA would select from the two or more competing proposals through an unspecified competition around 2006. How the winning vehicle would be financed, and by whom, is unknown, although Stephenson said he believes the agency can achieve a "substantial reduction" from the cost to develop the space shuttle, which he estimated to be $30 billion in current dollars.

If SLI is a success, NASA believes the vehicles that result from it will have a major effect beyond simply reducing the cost of space access. "A second-generation reusable launch vehicle will open up the space frontier and significantly improve life on Earth," said Stephenson.