The Pentagon has awarded Raytheon a contract to produce and maintain SM-3 Block IB interceptors worth up to $6.3 billion. The agreement is for five years, with a two-year extension option. Its base price is $4.4 billion, with options that could add nearly $2 billion.
The contract was awarded by the US Missile Defense Agency to Raytheon, part of the RTX defense group. Production will take place at the company's facilities in Tucson, Arizona, and Huntsville, Alabama. The Pentagon has not publicly stated the exact number of interceptors that will be produced.
Emphasis on the production chain
“This contract provides production stability for our defense industrial base, eliminates bottlenecks at the subcontractor level, and ensures that our fleets and combatant commands will have the interceptors they need to dominate the battlespace - in the air, at sea, or on land”, said Michael Duffy, the US Undersecretary of Defense for Procurement and Acquisition.
The quote was released by the Pentagon press service. According to Breaking Defense, the contract is structured with a base five-year term of $4.4 billion and additional options for nearly $2 billion.
Ballistic Missile Interceptor
The SM-3 Block IB is part of the US missile defense system and is designed to destroy ballistic missiles in the middle stage of their flight. The interceptors can be used by ships with the Aegis combat system, as well as by ground components of the system.
The new agreement comes amid US efforts to increase missile production, strengthen supply chains and replenish missile defense assets. Raytheon said the contract would support both production and maintenance of the SM-3 Block IB.
Reuters noted that the order is part of Washington's broader policy to increase production of munitions and replenish stocks used for missile defense. Individual options under the contract will be activated only if the US government decides to do so.
Sources: breakingdefense.com, investing.com, kold.com