Boeing will retain its prime position in the U.S. Ground-based Midcourse Defense (GMD) missile defense system for another seven years now that it has won the nearly $3.5 billion Development and Sustainment Contract (DSC).

The Pentagon announced the win late Dec. 30 after regular trading had stopped on U.S. stock markets. Boeing - which had experienced management and technical problems over the years with GMD, to the displeasure of the Missile Defense Agency - prevailed against a team led by Lockheed Martin and Raytheon. Boeing is partnered with Northrop Grumman.

“This contract was competitively awarded following the receipt of two proposals,” according to the official Pentagon announcement. The scope of work under this contract includes, but is not limited to: future development; fielding; test; systems engineering, integration and configuration management; equipment manufacturing and refurbishment; training; and operations and sustainment support for the GMD weapon system and associated support facilities.

Fiscal 2012 research, development, test and evaluation funds will be used to initially fund efforts under the DSC, the Pentagon said.

“Today’s award is the culmination of a two-year proposal process that brought together a broad industry group committed to delivering innovative solutions and a cost-effective approach to program management and execution,” Dennis Muilenburg, president and CEO of Boeing Defense, Space & Security, said in a preparted statement.

“By combining Northrop Grumman’s 50-year experience and success on the nation’s Minuteman ICBM program with Boeing’s heritage GMD leadership, we provide the optimum mix of integrated development and sustainment capabilities for a system that demands nothing less,” said Wes Bush, chairman, CEO and president, Northrop Grumman.

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

An immediate statement from Lockheed was not available.

Despite the win, Boeing and the GMD are expected to come under continued scrutiny in Washington as federal budgets tighten and contractors are held to higher standards of accountability. Meantime, the Obama administration has favored Lockheed’s Aegis-based Phased Adaptive Approach to global missile defense versus GMD, which was promoted under the George W. Bush administration.