# Missile Defense Agency awards Raytheon multiyear SM-3 IB contract worth up to $6.3 billion

The Missile Defense Agency award carries a $4.4 billion base value. It is undefinitized, so work can begin before terms, specifications or price are agreed.

Published 2026-10-08 by TGOs. Canonical: https://tgos.io/news/2026/10/08/missile-defense-agency-awards-raytheon-multiyear-sm-3-ib/

The Missile Defense Agency awarded Raytheon a noncompetitive, multiyear contract on Oct. 7 to manufacture and assemble Standard Missile-3 Block IB interceptors, with a total value of $6.3 billion including options.[2] RTX says the award is part of Raytheon's recent agreements with the Department of War and supports urgent replenishment of an interceptor first used in combat in 2024.[3]

That link runs back to February. Breaking Defense reported that the department and Raytheon signed a framework agreement in February designed to pave the way for this multiyear deal, and that under the agreements Raytheon would accelerate SM-3 IB production.[4][5] RTX said at the time that the agreements would span up to seven years once contracts were finalized, according to Breaking Defense.[5] With both option years, this contract's five-plus-two-year span reaches that outer bound.[1]

The department's case for the contract runs through the suppliers beneath Raytheon. It says the deal forces capital allocation "directly into assembly lines, solid-rocket motor suppliers, and critical domestic sub-tier vendors."[1] Michael Duffey, the Under Secretary of War for Acquisition and Sustainment, said it "breaks sub-tier manufacturing bottlenecks."[1]

As an undefinitized contract action, the award authorizes Raytheon to begin work immediately in Tucson, Ariz., and Huntsville, Ala.[1] Neither the department's announcements nor Raytheon's said how many missiles the contract buys.[1][2][3]

## Why it matters

The milestone to watch is definitization, the agreement on or determination of terms, specifications and price that converts the award into a definitive contract.[6] At award, $454 million in fiscal 2026 procurement funds was obligated against the $4.4 billion base.[2] Funding actions on contract HQ0851-27-C-E001 will show the pace of any further obligations.[2]

## Sources

1. Department of War: Department of War Awards $6.3 Billion Multi-Year Contract to RTX's Raytheon for SM-3 BLOCK IB Interceptors (Oct. 8, 2026) <https://www.war.gov/News/Releases/Release/Article/4622796/department-of-war-awards-63-billion-multi-year-contract-to-rtxs-raytheon-for-sm/>
2. Department of War: Contracts for Oct. 8, 2026 <https://www.war.gov/News/Contracts/Contract/Article/4622898/contracts-for-oct-8-2026/>
3. RTX: RTX's Raytheon awarded $6.3 billion multi-year contract for SM-3 IB interceptors (Oct. 8, 2026) <https://www.rtx.com/news/news-center/2026/10/08/rtxs-raytheon-awarded-6-3-billion-multi-year-contract-for-sm-3-ib-interceptors>
4. Breaking Defense: Pentagon, Raytheon ink up to $6.3 billion multi-year contract for SM-3 IB missiles (Oct. 8, 2026) <https://breakingdefense.com/2026/10/pentagon-raytheon-ink-up-to-6-3-billion-multi-year-contract-for-sm-3-ib-missiles/>
5. Breaking Defense: RTX to ramp up production of five weapons in new deal with Pentagon (Feb. 4, 2026) <https://breakingdefense.com/2026/02/rtx-to-ramp-up-production-of-five-weapons-in-new-deal-with-pentagon/>
6. DFARS 217.7401, Definitions <https://www.acquisition.gov/dfars/217.7401-definitions.>