BAE Systems Inc. will install an infrared missile defense system on up to three American Airlines commercial airliners for testing as part of a $29 million contract from the Homeland Security Department.

The test will evaluate whether the technology is compatible with daily passenger aircraft operations. It is the third phase of the department’s testing of systems to safeguard against the possibility of terrorists using shoulder-fired missiles against aircraft, known as the counter Man-Portable Air Defense System program.

BAE Systems will install its Jeteye aircraft missile defense system on up to three aircraft. The Jeteye system’s missile-defeating capabilities will not be tested in this phase; those evaluations were done at government test ranges in an earlier phase of the program.

The Jeteye system is based on military technology. DHS selected BAE Systems in 2004 to adapt the countermeasures technology to passenger aircraft.

“From the beginning, we actively engaged with U.S. cargo and passenger carriers to commercialize our technology to meet the needs of the airlines,” Burt Keirstead, director of commercial aircraft programs for BAE Systems, said in a statement. “We’re confident that the passenger-aircraft phase of the program will provide valuable data for DHS’ findings, providing critical, fact-based information to the airline industry and policy-makers.”

BAE Systems ranks No. 15 on Washington Technology’s 2007 Top 100 list of the largest federal government prime contractors. No. 15 on Washington Technology’s Top 100 list of prime federal contractors.