Boeing Co beat out Lockheed Martin to retain its position as the prime contractor for the US long-range missile shield, the Pentagon said on Friday.

The US Defense Department said it was awarding Boeing a $3.48 billion, seven-year contract to develop, test, engineer and manufacture missile defense systems.

A team led by Lockheed Martin Corp and Raytheon Co had vied with Boeing to expand and maintain the Ground-based Midcourse Defense, or GMD, hub of layered antimissile protection.

Boeing partnered with Northrop Grumman Corp to retain the work.

"We believe the government conducted a fair and open competition, making the right decision for the future of the program," Norm Tew, Boeing vice president and program director of GMD, said in a statement.

A representative from Lockheed did not immediately respond to a request for comment.

The GMD contract's value to Boeing will have been about $18 billion from January 2001, when it formally became the system's prime contractor, through the end of this year, Boeing has said.

GMD uses radars and other sensors plus a 20,000-mile fiber optic communications network to cue interceptors in silos in Fort Greely, Alaska and Vandenberg Air Force Base, California.