Raytheon Taps General Dynamics for $250 Million Missile Defense Contract

General Dynamics will assist Raytheon in prepping new AMDR anti-missile radar for integration.

Feb 25, 2014 at 10:51PM

Three months after receiving word that it had won the contract to build the U.S. Navy's next-generation Air and Missile Defense S-Band Radar, or AMDR, system for ship-based missile defense -- a potential $1.6 billion contract -- Raytheon (NYSE:RTN) agreed Tuesday to share a good portion of these funds with partner General Dynamics (NYSE:GD).

Specifically, on Tuesday, General Dynamics announced that Raytheon has hired it to support engineering and manufacturing development of AMDR. Raytheon will use General Dynamics' "proven open architecture design philosophy and business model" to keep costs in check as it builds and tests the system, and attempts to integrate AMDR into the Aegis missile defense systems aboard Arleigh Burke-class (DDG 51) guided missile destroyers -- a process that is expected to begin in 2016.

AMDR is described as consisting of an S-band radar, an X-band radar and a Radar Suite Controller. Once complete, it will give American destroyers an improved ability to detect and destroy incoming ballistic and cruise missiles at long ranges, and over the horizon.

General Dynamics confirmed that the contract, if all options are exercised, could be worth as much as $250.1 million to it.

Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Dynamics and Raytheon. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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