The Navy picked Lockheed Martin Corp. and General Dynamics Corp. yesterday to build versions of a small combat ship that can hug enemy coastlines.

The initial contracts for the littoral combat ships are worth $46 million for Lockheed and $78 million for General Dynamics. Each company will design and build two vessels if the Navy pursues all of the options under the contract. Over the next few years, the Navy is expected to decide whether to buy 50 to 60 of the boats from one or both of the companies as part of a larger $12 billion to $15 billion program.

Bethesda-based Lockheed and Falls Church-based General Dynamics beat out Raytheon Co. of Waltham, Mass., for the contracts.

Navy officials have described the vessels as an important feature of a family of ships that includes a next-generation destroyer and a guided-missile cruiser. The littoral ship would destroy underwater mines and attack small enemy boats.

Lockheed said its ship will be 378 feet long and capable of operating in less than 13 feet of water. General Dynamics' version is 400 feet long, designed for a crew of 40 and capable of speeds of about 50 knots.

"We need this ship today," Adm. Vern Clark, chief of naval operations, said in a prepared statement.

The first ship is expected to be operational in 2007.

The winners have produced "designs that deliver solid value for the taxpayer's dollar and provide the speed, ride quality, and mission payload capacity sought by the fleet," said John Young, the Navy's acquisition chief.

For the military, a key attraction of the program is its cost. Once production begins, each ship would cost about $250 million, including sensors and other equipment, compared with $1 billon for the average destroyer.

Still in its infancy, the program has faced criticism in Congress. Critics question whether the ship is necessary and ask if submarines, tanks and guns would suffice. Earlier this month, the House Armed Services Committee voted to reduce funding for the program and delay deployment until 2006. "Littoral Combat Ship is a program that still needs to be more clearly defined by the Navy," Byron K. Callan, defense analyst for Merrill Lynch, said in a research note.