New Scientist reports that Bigelow Aerospace plans a $760M contract for 8 crew launches that meet specific criteria. They need crew launch capability to support the inflatable space stations they plan. Bigelow already offers an incentive for development of crew launch: $50M for America's Space Prize. However, it doesn't look like anyone is about to win that prize, which has some very high hurdles - no government funding (use of government test and launch sites is allowed), significant reusability, significant crew size, and so on - and needs to be won in January 10, 2010.
What isn't clear (at least to me) is what will happen with America's Space Prize when this contract is issued. Will America's Space Prize be extended, or modified in some way, but still be present as an additional incentive (to the contract winner or other competitors)? Will the $760M contract have similar rules to the prize, or will launchers like SpaceX's Falcon 9 or EELVs, which get government funding, be allowed? Will government funding be allowed, as long as there is no government ownership of the company? Will it be a U.S. contract (America's Space Prize requires that the contestant live and work in the U.S.)? Will reusability be a requirement? It would be interesting to see the prize continue (perhaps in modified form), since even if the $760M contract works, Bigelow should want a backup!
There's more on this in posts and comments at Transterrestrial Musings, Personal Spaceflight, and RLV News.