ITT Exelis , Britain's BAE Systems and L-3 Communications Holdings have created a joint venture to bid for a huge contract to manage and maintain the U.S. Air Force's satellite launch and test ranges.

The companies said all three were already working on the Air Force's existing Air Force Spacelift Range System (SLRS) contract, which should give the newly formed joint venture, IBL JV, a competitive edge.

Other big defence contractors, including Lockheed Martin Corp , Boeing Co and Raytheon Co , are also expected to bid for the work, one of few new service contracts to be awarded in coming months.

CSC Corp , now teamed with Raytheon to manage the Air Force's eastern space launch range, also plans to bid for the new deal in a new team with Honeywell International Inc .

The new contract will allow the Air Force to combine the operations, maintenance and sustainment services of its eastern and western space launch ranges under a single contract.

Pat Carr, vice president and general manager of command, control and communications systems for ITT Exelis, said he expected the Air Force's new approach to generate significant savings by cutting overhead.

Carr said he did not expect mounting pressures on the U.S. defence budget to derail the Air Force's LISC program, given the imperative to ensure the safety of critical satellite launches.

The Air Force uses its launch and test ranges to deploy satellites and conduct testing and verification of intercontinental ballistic missiles and submarine-based missile defence systems.

Air Force Colonel Kathleen Cook said using one contract for both the eastern and western ranges should help drive personnel and other costs lower.

She said the Air Force planned to award a one-year base contract, with nine one-year options, with the total value seen at $3 billion if all options are executed.

Cook said the Air Force expected to release a final request for proposals for the new contract in the second quarter, with an eye to awarding a contract in the fourth quarter.

(Reporting By Andrea Shalal-Esa; Editing by Gary Hill and Matthew Lewis)