WASHINGTON — A team led by defense contractor ITT Corp. yesterday won a government contract worth up to $1.8 billion to build the first portion of a new satellite-based air traffic control system.

The Federal Aviation Administration, which awarded the contract, said upgrading the system used to manage commercial and general aviation traffic will help reduce congestion on runways and in the skies, and do so at a lower cost than the existing radar-based system.

White Plains, N.Y.-based ITT beat out teams led by defense contracting giants Lockheed Martin Corp. and Raytheon Co.

The full upgrade of the air traffic control system is expected to cost more than $15 billion and take nearly 20 years to build.

ITT will receive $207 million for the first three years of its work on the contract, which could be spread out over a total of 18 years.

Vincent Capezzuto, director of FAA's surveillance and broadcast services, said the ITT proposal presented the "best value ... with no technical risks." ITT's team includes AT&T Inc., SAIC Inc. and others.

"We certainly felt like we put together, and now the FAA is confirming that we put together, the best technical solution," said ITT spokesman Andy Hilton.

Still, the government's decision has its detractors.

Patrick Forrey, president of the National Air Traffic Controllers Association, said outsourcing such critical surveillance and navigation systems is "risky at best."

"If they go out of business, who's responsible?" Forrey said, adding that his group, which represents about 14,000 controllers and another 6,000 federal aviation employees, was not involved in the contracting process.

The contract is expected to be completed by 2013 in two phases, the first of which calls for the installation of about 300 communications stations in Philadelphia, Louisville and Juneau, Alaska, as well as on oil and gas platforms in the Gulf of Mexico, according to FAA officials.

The current system uses 50-year-old analog radar technology to handle roughly 85,000 flights per day, a number predicted to reach more than 111,000 daily flights by 2020. A satellite-based system could handle about three times current air traffic levels.

Congress has until Sept. 30 to reauthorize the FAA and possibly raise taxes and fees to pay for upgrades to the traffic control system and other aviation programs. But commercial airlines are battling corporate jets and small plane operators over what share of the cost they each should shoulder.