In a surprise decision, NASA announced yesterday that it had selected Lockheed Martin (NYSE:LMT) over Boeing (NYSE:BA) and Northrop Grumman (NYSE:NOC) to design, develop, and build the Orion Crew Exploration Vehicle -- the manned lunar spacecraft that is it expected to place astronauts back on the moon by 2019.

It's a huge win for Lockheed Martin. The first phase of the contract -- estimated to be valued at almost $4 billion -- covers the development and testing of the Orion capsule. If that portion of the project goes according to plan, and a test flight takes place by 2014, the company stands to gain an additional $4.25 billion in production and follow-on engineering work. In total, it could manufacture as many as eight separate spaceships, which have been described as "Apollo-like capsules on steroids."

It's the first time NASA has awarded a manned spaceship contract to Lockheed since 1996, when it accepted the company's proposal to build the X-33 -- a spacecraft that was suppose to serve as a replacement for the aging space shuttle.

That project faced severe technical problems and never quite got off the ground. It's somewhat ironic, then, that the initial bid to build Orion reportedly relied on many aspects of the X-33 design. NASA subsequently informed Lockheed that it wanted an Apollo-like capsule, so the company changed its proposal.

Although NASA didn't explain what exactly it preferred abut Lockheed Martin's design, insiders have suggested that despite its setbacks with the X-33, NASA officials were confident that the company could pull off the project because the capsule-like approach was based on known capabilities (unlike the X-33). I'm sure that Lockheed's successful work on several unmanned space probes, including 1998's Lunar Prospector, helped as well.

It's also been suggested that NASA wanted to "share the wealth" and ensure that it had at least one other contractor in addition to Boeing and Northrop Grumman that knew the manned space business.

The final factor, however, may have simply come down to management. According to a report in the Wall Street Journal, Rep. Ken Calvert suggested that NASA had greater confidence in Lockheed Martin management's ability to meet budget and schedule requirements.

Regardless of the reason, it's a huge win, and I'm sure it has Lockheed executives feeling like they're walking on the moon. The contract catapults the company into a strong position to pursue additional civilian space efforts.

Lockheed is flying high
Back on Earth, Boeing and Lockheed also appear to be flying in opposite directions. The London Times recently reported that Boeing is developing a light aircraft powered by fuel cells and electric motors. The combination would arguably make it the "greenest" plane ever to fly. Unfortunately, this environmentally friendly quality comes at a cost: The prototype two-seat plane is expected to fly at only 70 miles an hour.

In stark contrast, Lockheed Martin's advanced "Skunk Works" unit is currently designing a small, 12-seat passenger jet capable of traveling at Mach 1.8 -- a blazing 1,200 miles per hour. The new design is called QSST, which stands for "quiet supersonic travel."

Obviously, the two planes are designed to serve radically different markets, but it's still worth considering which one represents the better long-term business opportunity.

From my perspective, Lockheed's QSST project appears to be the more potentially profitable of the two. Both the aircraft's technology and the potential markets it seeks to serve appear more viable.

For one thing, the hydrogen powering Boeing's plane is untested at best and a real danger at worst. The fuel cell might also be unable to provide the aircraft with enough power to take off. Although Boeing designers claim to have overcome that with a powerful battery, a battery-operated plane is unlikely to instill a great deal of confidence in would-be purchasers. In addition, Boeing has not yet identified a "green" source of hydrogen. Most hydrogen is still produced from fossil fuels, a liability that cancels out many of the environmental benefits that a fuel cell aircraft would provide.

It's perhaps most troubling that even if Boeing succeeds in scaling up a fleet of fuel-cell planes for commercial use, it will take years to do so. Ford (NYSE:F), Toyota (NYSE:TM), General Motors (NYSE:GM), and Honda (NYSE:HMC) have all been pursuing fuel cell technology for years, and have collectively invested far greater amounts of money than Boeing. Yet those companies still aren't close to manufacturing safe and affordable fuel-cell vehicles on a large scale.

On the other hand, the QSST appears highly viable. Lockheed is currently designing the 130-foot long plane at an estimated cost of $2.5 billion. Like Boeing's fuel-cell plane, it will take some time to reach the market -- company officials estimate that it'll be ready by 2013. Nonetheless, Lockheed is confident that it can sell 300 of the planes. That sounds like a reasonable estimate, given the QSST's ability to fly from New York to L.A. in two hours, or from Tokyo to Paris in no more than five. At an estimated $80 million per jet, the QSST could generate $24 billion in revenues.

T-minus five, four, three..
That estimate's far from a sure thing -- but the first $4 billion from Lockheed's Orion contract is a bankable number. If I were a long-term investor in either Boeing or Lockheed Martin, I'd be asking two questions:

  1. Does the new Orion contract position Lockheed to compete on stronger terms with Boeing in the new space race?
  2. Does the future of the airline industry lie in fewer, faster, more expensive jets, or in greater numbers of cheaper, slower, greener planes?

The answer to the first question is an obvious "yes," and despite my green and sometimes plodding tendencies, I'd also bet on air passengers' continued desire to "feel the need for speed."

Lockheed Martin seems to have its feet firmly planted on the ground in the contest for next-generation aircraft, but at the same time, it's reaching for the stars -- or, in this case, the moon -- in developing spacecraft. The two initiatives appear to be a winning combination, and they strongly suggest that the company is moving in the right direction.

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Fool contributor Jack Uldrich does not own stock in any of the companies mentioned in this article. The Fool has a strict disclosure policy.