Raytheon has been awarded a missile defense contract worth up to $6.3 billion, with production work planned in Huntsville and Tucson, Arizona.
The Department of War announced Thursday that Raytheon, an RTX business, received the multiyear contract to manufacture and assemble Standard Missile-3 Block IB interceptors for the U.S. military.
The award, issued Wednesday by the Redstone-based Missile Defense Agency, has a base value of $4.43 billion and could reach $6.34 billion if all options are exercised.
The agreement covers five years, with two additional option years, and is intended to provide greater stability for missile production and the suppliers supporting it.
“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,” said Michael P. Duffey, under secretary of War for Acquisition and Sustainment.
The Standard Missile-3 is a key component of the nation’s ballistic missile defense system. Used aboard U.S. Navy ships equipped with the Aegis Ballistic Missile Defense system, the interceptor is designed to destroy incoming ballistic missiles outside Earth’s atmosphere.
Unlike conventional missiles that rely on an explosive warhead, the SM-3 uses a kinetic kill vehicle to destroy its target through direct impact.
The system is designed to defend against short- to intermediate-range ballistic missile threats and is also deployed at land-based Aegis Ashore installations.
The latest contract adds to Huntsville’s role in the nation’s missile defense programs, with the Missile Defense Agency serving as the contracting authority and the city designated as one of two locations where Raytheon will perform the work.
According to the Department of War, the contract authorizes Raytheon to begin work immediately in Huntsville and Tucson.
The government obligated approximately $454.2 million in fiscal 2026 procurement funding at the time of the award.
The contract is a noncompetitive, undefinitized contract action, allowing work to begin while final contract terms are established.
Work is expected to continue through Oct. 31, 2034.
The award comes amid a broader federal effort to increase domestic missile production and strengthen the defense industry’s ability to meet growing demand.
For Huntsville, the contract represents another major missile defense award involving work in North Alabama, where the Missile Defense Agency and numerous defense contractors support the development, production and sustainment of missile defense systems.
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