t/Space's Spiral 1 CXV as entry for America's Space Prize?

In their recently-released mid-term architecture briefing for NASA
(available at http://transformspace.com/Background.htm), t/Space shows
some images and details of their proposed Spiral 1 CXV (S1CXV) for
ferrying a crew of six to LEO. The S1CXV would be launched on top of a
rocket supplied by a company like SpaceX, Kistler, or AirLaunch.

If t/Space doesn't get the final NASA contract for the VSE, would the
S1CXV be eligible for America's Space Prize? The craft's proposed
capabilities with regards to docking and crew size seem like a perfect
match for the prize. I'm concerned that it might not be eligible
though, since NASA is funding some of the initial designs.

-- Neil

America's Space Prize rules state that government money can't be used
to develop the winning vehicle. However, if YOU want to pay for the
development of the t/Space vehicle, then it would be eligible.

I think I'm somewhat ambiguous as to how things like this work. Would
it be permissible for t/Space to use NASA funding to develop plans for
the rest of the CEV architecture, but then use internal funds just for
the S1CXV?