US says Lockheed GPS contract worth up to $3.6 bln

WASHINGTON, May 15 (Reuters) - The U.S. Air Force said on Thursday it awarded Lockheed Martin Corp (LMT.N) a contract worth up to $3.6 billion to start building a new generation of global positioning satellites.

Col. Dave Madden, commander of the Air Force Space Command's Global Positioning Systems Wing, told reporters the initial contract was for two "research and development" satellites worth $1.5 billion, with options for 10 more.

If the government exercises all options, the contract would be worth nearly $3.6 billion, Madden said on a conference call.

Lockheed beat Boeing Co (BA.N) to win the deal. (Reporting by Jim Wolf; Editing by Tim Dobbyn)