Raytheon Secures $6.3 Billion Multi-Year Contract for Standard Missile-3 Block IB Production

The Pentagon has announced a major multi-year agreement with Raytheon for the production of Standard Missile-3 Block IB (SM-3 IB) defense systems, valued at up to $6.3 billion.

The five-year contract has a base value of $4.4 billion, with potential options worth an additional $2 billion over two years to expand the inventory of these air defense munitions. The specific quantity of missiles ordered under this agreement was not disclosed.

“This contract provides production certainty to our defense industrial base, breaks sub-tier manufacturing bottlenecks, and ensures that our fleets and combatant commands have the interceptors required to dominate the battle space — air, sea, or land,” stated Michael Duffey, Under Secretary of Defense for Acquisition and Sustainment, in a Department of Defense release.

The SM-3 Block IB is classified by the Pentagon as a critical munition targeted for rapid scaling. According to Raytheon, the system is capable of being deployed from both naval vessels and land-based platforms, designed to intercept short- to intermediate-range ballistic missiles during their midcourse flight phase.

“SM-3 Block IB has proven its relevance in combat, and this contract helps ensure we can replenish inventories and keep pace with the evolving threats the U.S. Navy, the Missile Defense Agency (MDA), and their partners face around the world,” said Phil Jasper, President of Raytheon. The MDA served as the contracting agency for this agreement.

This agreement builds upon a framework contract signed between the Department of Defense and Raytheon in February, which laid the groundwork for this multi-year procurement.

This latest deal is part of a broader series of massive munition contracts between the government and the RTX subsidiary. In recent weeks, they have finalized a $24.4 billion agreement to accelerate production of the Standard Missile-6, a $22.9 billion contract to ramp up Tomahawk cruise missile production to 1,000 rounds annually, and a nearly $20.7 billion deal for the production of the Advanced Medium-Range Air-to-Air Missile (AMRAAM).

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