ARLINGTON, Va., — Raytheon, a business of RTX , has received a multi-year contract worth up to $6.3 billion from the U.S. Department of War and the Missile Defense Agency (MDA) to produce and sustain Standard Missile-3 Block IB (SM-3 IB) interceptors.
The agreement has a five-year base period valued at approximately $4.4 billion, with two additional option years that could increase its total value to $6.3 billion. Issued as an undefinitized contract action, it allows Raytheon to begin work while the remaining contractual details are finalized. Production will take place primarily at facilities in Tucson, Arizona, and Huntsville, Alabama, with work expected to continue through October 2034. The exact number of interceptors covered by the contract has not been disclosed.
Contract to Replenish Missile Defense Inventories
The award is part of framework agreements Raytheon signed with the Department of War in February 2026 to expand production capacity and accelerate deliveries of critical munitions, including the SM-3 family, SM-6, Advanced Medium-Range Air-to-Air Missile (AMRAAM) and Tomahawk variants.
The agreement aims to replenish missile defense inventories reduced through combat use. The SM-3 interceptor family saw its first combat use in 2024, when U.S. Navy ships engaged ballistic missile threats during Iranian attacks on Israel.
Raytheon President Phil Jasper said the contract demonstrates the company's commitment to increasing production of critical munitions. He added that the SM-3 Block IB's combat experience highlights its continued relevance and that the agreement will help the U.S. Navy, the MDA and partner nations maintain their defensive capabilities against evolving threats.
Under Secretary of War for Acquisition and Sustainment Michael P. Duffey said the contract provides production certainty for the defence industrial base, helps address manufacturing bottlenecks among lower-tier suppliers and supports interceptor availability for fleets and combatant commands operating across air, sea and land domains.
SM-3 Block IB Capabilities
The SM-3 Block IB is a ship- and land-based interceptor designed to destroy short- to intermediate-range ballistic missiles during the midcourse phase of flight, outside Earth's atmosphere. It uses hit-to-kill technology, destroying targets through direct collision rather than an explosive warhead.
The interceptor features a two-colour infrared seeker and a throttleable divert and attitude control system to support target discrimination and manoeuvrability. It can be launched from Aegis-equipped U.S. Navy ships using the Mk 41 Vertical Launching System and from land-based Aegis Ashore installations.
The SM-3 Block IB operates alongside the more advanced SM-3 Block IIA and other members of the Standard Missile family as part of the United States' layered ballistic missile defence network.
RTX Expands Missile Production
RTX has been investing in additional manufacturing capacity and faster production across the Standard Missile family. The latest award follows other multi-year agreements, including a major SM-6 production contract and earlier framework arrangements covering AMRAAM and Tomahawk variants.
The SM-3 Block IB production line had previously slowed, with a contract modification earlier in 2026 adding 23 interceptors to an existing order. The new agreement establishes a longer-term production framework, although the annual delivery schedule and total interceptor quantity remain undisclosed.
The contract is intended to help restore and maintain U.S. and allied inventories of a combat-proven ballistic missile defence capability.
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