Boeing Friday won a $3.48-billion contract to build a U.S. shield against long-range ballistic missiles, said the U.S. Defense Department.

The seven-year contract, which the company won after defeating rival Lockheed Martin Corp, will help Boeing retain its position as the prime contractor for the U.S. long-range missile defense system.

According to the contract, the Chicago-based company will test, engineer and manufacture defense systems against intercontinental ballistic missiles.

Boeing collaborated with Northrop Grumman to win the contract. The company said that Northrop Grumman would oversee the ground system and other aspects of the project, agencies reported.

Lockheed Martin Corp and Raytheon Co participated in the bid to expand and maintain the Ground-based Midcourse Defense (GMD) hub of layered antimissile protection. Lockheed had hoped to edge out Boeing, but the contract ultimately went to the latter.

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, was quoted as saying by Reuters.