Honeywell Inc. was awarded a contract potentially worth $3.5 billion for development of GPS navigation system modernization, the Pentagon announced.

The indefinite delivery/indefinite-quantity contract calls for production, sustainment and engineering technical services for Embedded GPS Internal Navigation System Modernization, or EGI/EGI-M, the Defense Department said in a statement on Friday.

The system is an effort of the U.S. Air Force to embed a 5-channel GPS receiver into self-contained inertial navigation system of laser gyroscopes, creating a 17.9-pound unit for use in processing targeting information. The unit has navigation, pointing, stabilization, and flight-control applications.

The open-systems architecture of EGI/EGI-M incorporates a military code GPS receiver to add clarity to GPS signals, with the primary lead platforms for the new technology expected to be the F-22 fighter plane and the E-2D early-warning plane.

The EGI-M system can support the rapid insertion of new capabilities and adaptability based on unique platform requirements. Additionally, the modernized navigation system will incorporate new generation GPS receivers, which will be capable to securely and accurately transmit the new military signals for use in space.

The system is expected to be integrated into a variety of platforms across the branches of the U.S. military, and developed for foreign military sales customers as well.

The system is also of value on civilian aircraft. A Honeywell statement said the company has produced over 60,000 EGI/EGI-M units since the mid-1990s.

Work will be performed at Honeywell's Clearwater, Fla., facility. The contract's completion date is Dec. 31, 2035.