The Pentagon on Wednesday selected industry teams led by Lockheed Martin, General Dynamics and BAE to develop light tactical vehicles to replace the Humvee.

The three teams have until January 2011 to develop and test the vehicles for the army and marines, positioning them to compete for production contracts that could ultimately be worth 40 billion dollars.

Lockheed Martin Systems Integration was awarded a 35.9 million dollar development contract, General Tactical Vehicles received a 45 million dollar contract, and BAE Systems Land and Armaments-Ground System Division won a 40.4 million dollar contract.

General Tactical Vehicles is a joint venture between General Dynamics Land Systems and AM General.

The army and marine corps are expected to buy as many as 60,000 of the vehicles over the next few years as they replace the estimated 160,000 Humvees now in service.