Raytheon Wins Up to $6.34 Billion for SM-3 Block IB Missile Production

Raytheon has received a noncompetitive Missile Defense Agency contract worth up to $6.34 billion to manufacture and assemble Standard Missile-3 (SM-3) Block IB all-up rounds for the U.S. government. The multiyear award, announced October 7, 2026, calls for work in Tucson, Arizona, and Huntsville, Alabama, with estimated completion by October 31, 2034. The action has an initial value of $4.43 billion and was awarded before final contract terms were settled.

SM-3 Block IB Production Details

Raytheon will manufacture and assemble complete Block IB interceptor rounds. The award notice identifies Tucson and Huntsville as performance locations but does not assign particular production steps to either site. It also does not give a quantity of rounds for this new award.

The scope is a new production award for all-up rounds. Earlier Block IB production work described component fabrication, integration and testing, but those tasks are not separately identified in the October award notice and should not be read as additional requirements of the new contract.

SM-3 Block IB Program Background

SM-3 Block IB is an interceptor used in the Navy’s Aegis ballistic-missile-defense system to strike ballistic-missile threats during the midcourse phase of flight. A Government Accountability Office report describes improvements introduced with Block IB over the earlier Block IA, including its seeker, signal processor and divert-and-attitude-control system. The interceptor has also been used by allied Aegis forces; an MDA announcement described a Japanese destroyer’s successful Block IB live-fire exercise in 2022.

The new award follows a period of changing production plans. MDA’s fiscal 2026 procurement justification anticipated ending new Block IB purchases after fiscal 2025 as procurement shifted toward Block IIA, while retaining support for fielded Block IB missiles. The October 2026 production award extends beyond that published planning baseline; the notice does not explain how MDA’s longer-term procurement plans have changed.

Award and Contractor Background

MDA awarded the new contract without competition. In March 2026, the agency announced a separate, noncompetitive Block IB production modification adding 23 all-up rounds, bringing that contract’s total to 78. The modification included one-time costs to restart the Block IB production line and raised the existing contract’s value to $3.31 billion, with completion expected in May 2030.

That earlier contract builds on a May 2025 award for up to 55 Block IB rounds. Raytheon also holds a separate SM-3 Block IIA production contract with a potential value of $3.58 billion, covering all-up rounds for the U.S. government and Japan.

This award was disclosed by the DoW in its daily press release. Additional contract details will be available on HigherGov in approximately 90 days under HQ085127CE001 after the contract is formally disclosed by the government.