The Pentagon signed a $6.3 billion, five-year contract with Raytheon for continuous production of Standard Missile-3 Block IB interceptors, with two additional option years, as the Defense Department tries to rebuild missile inventories drawn down by the war with Iran.
Raytheon will manufacture the hit-to-kill interceptors primarily in Tucson, Arizona and Huntsville, Alabama. The SM-3 Block IB, which destroys short- and intermediate-range ballistic missiles with sheer kinetic energy, saw combat for the first time in 2024 when US destroyers fired them against Iranian missiles aimed at Israel. Raytheon President Phil Jasper said the contract ensures replenishment of inventories for the Navy, the Missile Defense Agency and partners.
The deal, announced Thursday, was one of five framework agreements the defense company signed with the Pentagon this February. Analysts have warned since March that heavy interceptor use in the Iran war poses strategic risks to US defense capabilities if fighting extends into a long conflict, and the Center for Strategic and International Studies listed the SM-3 Block IB among seven critical munitions facing shortages.