Raytheon secures $258.7 million contract for SM-2 missile development

Investing.com -- Raytheon Co. (NYSE: RTX) has been awarded a $258,742,330 contract by the U.S. Department of Defense for the development of the Standard Missile 2 (SM-2) Block IIICU All Up Round.

The cost-plus-incentive-fee contract includes options that could increase the total value to $263,137,090 if exercised.

The majority of the work, approximately 72%, will be performed at Raytheon's facilities in Tucson, Arizona. Additional work will be conducted across multiple locations including Simsbury, Connecticut (7%), Wolverhampton, United Kingdom (3%), and Salt Lake City, Utah (3%), with smaller portions distributed across other U.S. locations.

The project is expected to be completed by September 2031.

Funding for the contract comes from multiple sources: 65% ($52,054,849) from fiscal 2025 Navy research, development, test and evaluation funds; 23% ($18,473,766) from Foreign Military Sales to Canada; and 11% ($9,071,456) from fiscal 2024 Navy research, development, test and evaluation funds. The fiscal 2024 portion will expire at the end of the current fiscal year.

The contract was awarded without competitive procurement on July 31, 2025, under U.S. legal provisions that allow direct awards when only one responsible source exists and no other supplies or services will satisfy agency requirements.

Naval Sea Systems Command in Washington, D.C. is serving as the contracting activity for this project.

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