Raytheon Wins Up To $6.3 Billion Deal To Build SM-3 Block IB Interceptors

Raytheon, an RTX business, has secured a five-year contract, with two additional option years, valued at up to $6.3 billion for the production and sustainment of Standard Missile-3 Block IB (SM-3 IB) interceptors, RTX announced on Thursday, October 8, 2026.

The Department of War and the Missile Defense Agency awarded the multi-year procurement contract, according to a department release. The award is structured as an Undefinitized Contract Action that authorizes Raytheon to begin work immediately in Tucson, Arizona, and Huntsville, Alabama. RTX said production under the contract will be primarily completed at Raytheon facilities in Tucson, Ariz., and Huntsville, Ala.

According to the company, the contract supports urgent replenishment of missile defense inventory that has been successfully used in combat and remains central to protecting U.S. forces, allies and critical infrastructure.

“This award underscores Raytheon’s commitment to increasing production of critical munitions, ensuring our customers have the defensive capabilities they need, when they need them,” said Raytheon President Phil Jasper. Jasper said SM-3 Block IB has proven its relevance in combat and that the contract helps ensure the company can replenish inventories and keep pace with the evolving threats the U.S. Navy, the Missile Defense Agency and their partners face around the world.

Under Secretary of War for Acquisition and Sustainment Michael P. Duffey said the SM-3 Block IB has proven its operational superiority against any adversary. “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,” Duffey said.

The department said the five-year agreement, which includes two additional option years, provides multi-year procurement stability for the Joint Force’s ballistic missile defense capabilities. It said the structure also removes programmatic and supply-chain friction that constrains private-sector capacity and directs capital into assembly lines, solid-rocket motor suppliers and critical domestic sub-tier vendors.

SM-3 Block IB Interceptor

RTX describes SM-3 IB as a ship- and land-based missile defense interceptor designed to defeat short- to intermediate-range ballistic missiles during the midcourse phase of flight. The company calls the interceptor combat-proven and designed for exo-atmospheric intercept with hypersonic hit-to-kill accuracy, launchable from both ships and land-based sites. According to RTX, SM-3 IB was first used in combat in April 2024, when it intercepted Iranian ballistic missiles headed toward Israeli targets. The company said the interceptor is an integral part of the U.S. Navy’s extended-range integrated air and missile defense together with SM-3 IIA and the rest of the Standard Missile family.

Framework Agreements and Related Contracts

The contract is part of the recent landmark agreements between Raytheon and the Department of War, according to RTX. On February 4, 2026, Raytheon entered five landmark framework agreements with the U.S. Department of War to significantly increase production capacity and speed deliveries of Land Attack and Maritime Strike variants of Tomahawk, AMRAAM missiles, SM-3 IB, SM-3 IIA and Standard Missile-6 (SM-6).

Under the up-to-seven-year frameworks, RTX said it will increase annual production of Tomahawks to more than 1,000, AMRAAMs to at least 1,900 and SM-6 to more than 500, while increasing production of SM-3 IIA and accelerating production of SM-3 IB. The company said many of these munitions will grow 2 to 4 times their existing production rates.

RTX CEO and Chairman Chris Calio said the agreements redefine how government and industry can partner to speed the delivery of critical technologies and are a direct result of the administration’s Acquisition Transformation Strategy.

RTX said the investments associated with the framework agreements were contemplated in its announced financial outlook for 2026 and that the long-term agreements incorporate a collaborative funding approach designed to preserve upfront free cash flow. Production under the framework agreements is to be completed at Raytheon facilities in Tucson, Ariz., Huntsville, Ala., and Andover, Mass.

On August 10, 2026, Raytheon received a $745 million contract from the Missile Defense Agency for the production and sustainment of SM-3 Block IIA interceptors. Barbara Borgonovi, president of Naval Power at Raytheon, said then that SM-3 Block IIA is a cornerstone of regional defense and that sustained investments in production lines and processes are allowing the company to increase capacity and deliver critical munitions to customers more quickly.

RTX describes SM-3 IIA as an interceptor created in a cooperative development program between the U.S. Missile Defense Agency, the Japan Ministry of Defense and their industry partners. According to the company, it features larger rocket motors and an enhanced kinetic warhead compared with its predecessors, allowing it to engage threats faster and protect larger regions from short- to intermediate-range ballistic missile threats.

RTX said it has made significant investments to expand capacity and accelerate production of critical munitions including the Standard Missile family. Those investments include a $115 million expansion of its Alabama missile integration facility, which the company said will increase the facility’s integration and delivery capacity by over 50%.