Defense Industry
Raytheon wins contract worth up to $6.3 billion to produce and sustain SM-3 Block IB interceptors
RTX’s Raytheon has secured a five-year contract, with two option years, worth up to $6.3 billion for SM-3 Block IB ballistic missile interceptors, announced on October 8 as the US replenishes its missile defence inventories.
Raytheon 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 October 8. The contract supports what the company calls the urgent replenishment of missile defence inventory.
The contract is part of a series of agreements between Raytheon and the US Department of War to increase munitions production. Production will be completed primarily at the company’s facilities in Tucson, Arizona, and Huntsville, Alabama. “SM-3 Block IB has proven its relevance in combat and this contract helps ensure we can replenish inventories and keep pace with the evolving threats the U.S. Navy, MDA and their partners face around the world,” said Raytheon President Phil Jasper.
A second major interceptor contract in October
On October 1, RTX’s Raytheon was awarded a contract worth up to $24.4 billion for SM-6 interceptors for the US Navy, as Geopolitiki reported. RTX says it is investing to expand production capacity across the Standard Missile family, and Raytheon notes that replenishment supports the protection of US forces, allies and critical infrastructure.
The SM-3 Block IB is a ship- and land-based interceptor, fired from ships and from Aegis Ashore sites, designed to defeat short- to intermediate-range ballistic missiles in the midcourse phase of flight, outside the atmosphere. It was first used in combat in 2024 and serves alongside the SM-3 Block IIA.
Why the stockpiles are emptying
US Navy interceptor stocks have fallen significantly in recent years. According to the original report, the SM-3 was first used in combat in April 2024, when US destroyers helped intercept Iran’s ballistic missile attack on Israel; operations in the Red Sea and this year’s war with Iran then increased demand further.
The SM-3 Block IB carries no explosive warhead. It destroys its target by direct impact, using a kinetic vehicle that separates from the missile in space. RTX, which had sales of more than $88 billion in 2025 and employs more than 180,000 people, presents the new multi-year contracts as a guarantee of stable production, something the defence industry has long asked for in order to invest in new production lines.
The contract follows the Department of War’s policy of multi-year munitions contracts, which give industry the visibility to invest in staff and production lines. Besides the US Navy, Japan is a user of the SM-3: it operates Aegis destroyers with Block IB interceptors and co-developed the Block IIA.