Cray today announced that the Engineering and Physical Sciences Research Council (EPSRC), the main funding agency in the United Kingdom for research in engineering and the physical sciences and the managing agent on behalf of the other Research Councils for High Performance Computing, has selected Cray as the preferred bidder to provide the computing hardware for the Councils' next generation national high performance computing service for the UK academic community. This project, commonly referred to as HECToR, which stands for High End Computing Terascale Resources, is expected to operate for up to six years and have an initial theoretical peak capability of over 50 teraflops. The contract is expected to provide for customer options for additional capability in the future. Contract negotiations are ongoing and an official announcement will be made once the contract has been completed, which is expected to occur in late 2006. The full scope, conditions, options and other contract terms are subject to the negotiation process. The timing of revenue recognition is uncertain but would not begin before 2007. The Council also is in the process of selecting third parties to provide the other aspects of the project: Service Provision and Computational Science and Engineering support. The selection of the service provider to supply the facilities for, and operation of, the supercomputer is currently a prerequisite to the Cray agreement. No assurance can be given that the negotiations will be completed successfully by Cray.