Pentagon, Raytheon ink up to $6.3 billion multi-year contract for SM-3 IB missiles

WASHINGTON – Raytheon has secured another multi-year munition deal, this time for up to $6.3 billion for Standard Missile-3 Block IB production, the Pentagon announced today.

The base value of the five-year contract is $4.4 billion, but options include an additional nearly $2 billion for more of the air defense munitions over another two years. The announcement did not say how many of the missiles were under order.

“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,” Under Secretary of Defense for Acquisition and Sustainment Michael Duffey said in a DoD release.

The Pentagon has listed the SB-3 IB as one of the critical munitions it is looking to scale as quickly as possible. Raytheon says the weapon can be fired from both ships and land to intercept short‑ to intermediate‑range ballistic missiles during the 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, MDA [Missile Defense Agency] and their partners face around the world,” Raytheon President Phil Jasper said in a company release. (The MDA was the contracting agency for today’s deal.)

Back in February the DoD and Raytheon inked a framework agreement designed to pave the way for the multi-year deal.

Today’s announcement comes among a string of similar deals between the government and the RTX subsidiary. In recent weeks, the duo inked a $24.4 billion deal designed to “accelerate” production of the Standard Missile-6, a $22.9 billion contract to ramp up production of the Tomahawk cruise missile to 1,000 rounds a year, and a deal worth up to nearly $20.7 billion for production of the Advanced Medium-Range Air-to-Air Missile (AMRAAM).