By Jonathan Amos
Science reporter, BBC News, Le Bourget
The IOVs are currently under construction in Portsmouth, UK
Europe's satellite-navigation system has taken a big step forward with the signing of new industrial contracts.
Satellite firms EADS Astrium and OHB have been asked to provide spacecraft components that will be needed for the forthcoming constellation.
And rocket company Arianespace has signed the deal which will loft the system's first operational platforms.
The agreements, announced at the Paris air show, are a much needed fillip for the delayed programme.
Galileo came close to collapse in 2007 when a public-private partnership (PPP) set up to construct and run the project fell apart.
The European Commission, which is leading the endeavour, has set aside more than two billion euros to build 26 satellites (plus two spares), buy launch rockets and set up the ground control centres.
Its partner on the venture, the European Space Agency (Esa), is running a procurement contest with the aim of having Galileo up and running by 2013.
Monday's deals are the first formal contracts to come out of the post-PPP process.
GALILEO UNDER CONSTRUCTION
A European Commission and European Space Agency project
30 satellites to be launched in batches by end of 2013
Will work alongside US GPS and Russian Glonass systems
Promises real-time positioning down to less than a metre
Guaranteed under all but most extreme circumstances
Suitable for safety-critical roles where lives depend on service
Astrium, a pan-European outfit, and OHB, based in Bremen, Germany, have been given 6m and 10m euros respectively to start to source so-called "long-lead items".
These are components - management computers, software, attitude control systems, atomic clock systems, etc - that take a long time to acquire and which, if not pursued soon, will further delay the project.
This will give the EC and Esa additional time to sort who they finally want to build the satellites proper - Astrium or OHB, or a combination of the two.
The companies, with partners, are currently in competition to build 26 (plus the two spares) of the 30 required operational platforms. The other four are already in production and nearing completion.
Known as the "in orbit validation" (IOVs) models, these spacecraft will be the first "stars" in the Galileo constellation, and will prove the system.
Monday's second contract signing saw Arianespace agree to launch the IOVs on Soyuz rockets from Europe's spaceport in French Guiana in 2010.
The satellites will go up in pairs. They will be boosted into a circular orbit at 23,000km.
Galileo is expected to improve substantially the availability and accuracy of timing signals delivered from space.
Users should get quicker, more reliable fixes and be able to locate their positions with an error of one metre compared with the current US GPS (Global Positioning System) error of several metres.
It is anticipated that the extra performance will give entrepreneurs the confidence to bring forward many more sat-nav applications, especially with this functionality being built into more and more mobile phones and other handheld devices.
The question remains as to who will win the final contract for the 26+2 spacecraft, to be awarded before the end of the year.
Monday's Astrium and OHB agreements are not supposed to be an indicator of the eventual outcome, although many commentators have speculated that the EC-Esa process could result in a dual procurement, with both companies being asked to provide a proportion of the satellites.
But Evert Dudok, the head of Astrium satellites, warned against such a conclusion. He told journalists that a dual track approach would lead to a 35% increase in the total cost of the Galileo space segment.
"I want to be extremely clear: 'there is one winner and one loser, and the winner takes it all' has to be the principle for best value for money - otherwise we will be in a mess. I promise you, we will be in a mess," he said.
Mr Dudok claimed the increased cost would result from the loss of economies of scale - the inability to bulk purchase various items.
But Paul Verhoef, who leads the Galileo project at the EC, said competition was imperative not just for price but also for the timeline to an operational system. He told the BBC that the commission and Esa reserved the right to split the final contract if deemed necessary.
"Sure, there is an issue of price in absolute time and in absolute terms, but there is also an issue of what happens if there are delays - if there are production problems," Mr Verhoef explained.
"Dual sourcing always costs more initially, but the purpose is to avoid risky situations that can end up costing you even more in the long term.
"From a market perspective, we are on a critical path. The Americans are modernising, the Russians are modernising and the Chinese are coming. Schedule is very important to us."