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The Department of Defense awarded 10 new defense contracts Thursday, worth $1.094 billion in total. Raytheon (NYSE: RTN ) didn't win the biggest of these contracts -- but it did win the third biggest.
Not to exceed $156 million in value, the award in question went to Raytheon Missile Systems in the form of a sole-source, undefinitized "contract action, with a hybrid contract structure with firm-fixed-price and cost reimbursable contract line item numbers."
Under this award, Raytheon will supply the U.S. Missile Defense Agency with eight Standard Missile-3 Block IB "missile material and all up round build up."
The SM-3IB is a new version of Raytheon's venerable Standard surface-to-air missile, which aims to enhance the original Standard Missile's effectiveness with enhanced, two-color infrared target seeking, and the ability to use short bursts of precision propulsion to steer the missile toward incoming targets. The SM-3IB is scheduled to begin deployment in 2015, but this new contract modification will have Raytheon continuing to deliver missiles to MDA through September 2016.