A Defense Department statement on Tuesday said contract awards were structured to carry "two designs into the technology development and risk reduction phase of the acquisition program to reduce technical and schedule risk."

Funding will be limited to $1.6 billion in total for Fiscal Year 2022, but Lockheed Martin's contract calls for $3.69 billion through May 2026, while Northrop Grumman's offers $3.93 billion through May 2026.

A Lockheed Martin statement noted that Aerojet Rocketdyne, which was acquired by Lockheed in December, will collaborate on the project. Northrop Grumman identified Raytheon Technologies as a partner.

A bid by Boeing, with General Atomics and Aerojet Rocketdyne, also was submitted for the project but was not chosen.

The Pentagon announced plans in 2019 for the NGI, an upgraded, ground-based homeland defense system against anti-ballistic missiles. Current plans include installation of the missiles by 2027 or 2028.

Gen. Paul VanHerck, chief of the U.S. Northern Command, stressed the need for effective ballistic missile defense in testimony before the Senate Armed Survives Committee on March 16.

He noted that his command worked "with MDA to ensure all of our operational requirements are addressed in the NGI acquisition process."

VanHerck cited China, Russia, North Korea and Iran as potential adversaries capable of firing missiles at the United States.

"We are excited and proud the MDA entrusted Lockheed Martin to lead the development of this game-changing system that will greatly improve our nation's security for decades to come," Sarah Reeves, vice president of Lockheed Martin's Next Generation Interceptor Program, said Tuesday in a statement.

Northrop Grumman was similarly enthusiastic about its selection.

"We are honored to be selected by the MDA as prime contractor to develop the NGI system to protect our nation from advanced missile attacks," Scott Lehr, vice president for launch and missile defense at Northrop Grumman, also said Tuesday in a statement.