At a Glance

• The U.S. Navy awarded Raytheon a multiyear contract worth up to $24.4 billion for SM-6 missiles.
• The five-year agreement includes options for two additional years and is intended to accelerate production.
• The contract comes as the Pentagon works to replenish missile stocks depleted during the conflict with Iran.
• The Congressional Budget Office says heavy use of missile-defense interceptors will leave the U.S. with reduced inventories for several years.

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The U.S. Navy has awarded Raytheon, an RTX company, a multiyear contract worth up to $24.4 billion to accelerate production of SM-6 missiles as Washington works to replenish weapons stocks following the war with Iran.

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Key Statements

“This five-year agreement, with two additional option years, will drive faster production.”

— U.S. Department of Defense

“By continuously investing in our operations and facilities, we are removing constraints and boosting capacity.”

— Phil Jasper, Raytheon President

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Large-Scale Missile Production

The SM-6 is used by the U.S. Navy for both anti-air and anti-surface warfare missions. The Pentagon said the new agreement is designed to increase production and give defense manufacturers greater certainty to expand their workforce and secure critical supply chains.

Replenishing War Stocks

The contract comes as the United States seeks to rebuild inventories following extensive weapons expenditure during Operation Epic Fury.

The Congressional Budget Office said the conflict's major impact on U.S. defense readiness has been the large expenditure of missile-defense interceptors, leaving the country with reduced interceptor inventories for several years.

Industrial Base Pressure

The new contract also reflects broader efforts to address production capacity and supply-chain constraints. Raytheon said it has been investing in facilities and operations to increase output and remove production bottlenecks.

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The Pentagon's contract with Raytheon provides for SM-6 production over five years, with two additional option years. The agreement is valued at up to $24.4 billion.

The Pentagon described the SM-6 as a critical anti-air and anti-surface warfare weapon and said the multiyear arrangement would provide the defense industry with the predictability needed to expand production capacity.

The deal follows months of heightened U.S. weapons consumption during the conflict with Iran. A September 15 CBO assessment found that the expenditure of missile-defense interceptors would leave U.S. inventories reduced for several years.

Raytheon has also acknowledged increased efforts to meet demand, saying investment in production facilities is intended to remove constraints and increase capacity.

FYI

The contract highlights the longer-term industrial and readiness consequences of the Iran conflict beyond the battlefield. While the Pentagon is seeking to accelerate production, the CBO's assessment indicates that rebuilding missile-defense inventories will take years, underscoring the challenge of simultaneously maintaining current operational requirements and restoring strategic stockpiles.

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