Lockheed Martin Corp. will help manage employee payroll and other human resources functions for the Transportation Security Administration under a contract with a maximum value of $1.2 billion over eight and a half years.

The contract consolidates workforce services that include recruitment and hiring, personnel and payroll processing, employee benefits, workforce management and help desk services that had been performed by three separate contractors in the past, TSA said.

The contract has a six-month transition period, followed by a one-year base period and seven option years. The total value is $1.2 billion if all options are exercised, TSA said.

The contract also includes an option for the government to use Lockheed Martin’s human resources services to a larger degree, creating a possible maximum value of $3 billion over the eight and a half years, TSA said.

TSA is an agency of the Homeland Security Department. It employs more than 40,000 airport screeners as well as federal air marshals and other full- and part-time officials.

Lockheed Martin, of Bethesda, Md. ranks No. 1 on Washington Technology’s 2008 Top 100 list of the largest federal government prime contractors.