Raytheon wins up to $6.3 billion interceptor contract

Raytheon has received a U.S. government contract worth up to $6.3 billion to produce and sustain SM-3 Block IB missile interceptors, under a five-year agreement with two additional option years. The Department of War and Missile Defense Agency awarded the contract as the United States seeks to replenish missile defense inventories and expand munitions production. The $6.3 billion figure is a ceiling, not a guaranteed payment. The award does not specify how many interceptors will be purchased or when deliveries will begin. The contract was issued as an undefinitized contract action, allowing work to begin while the government and Raytheon negotiate final pricing and terms. Production is expected to take place primarily at Raytheon facilities in Tucson, Arizona, and Huntsville, Alabama. The SM-3 Block IB is designed to intercept short- to intermediate-range ballistic missiles during the midcourse phase of flight, outside Earth’s atmosphere. It is launched from Aegis-equipped Navy ships and land-based Aegis Ashore sites. Rather than using an explosive warhead, the interceptor is designed to destroy its target through direct impact.