On Thursday, the Department of Defense announced that it has awarded defense contractor Raytheon (NYSE:RTN) a $33.3 million cost-only contract to procure "long-lead material" needed to manufacture Standard Missile-6 (SM-6) Block I missiles for the Navy.

The SM-6, the most modern variant of Raytheon's Standard missile family, is a surface-to-air defense missile, usually based on a destroyer or cruiser, and used to shoot down enemy aircraft and anti-ship cruise missiles. It is also designed to shoot down ballistic missiles in their terminal phase, and thus useful for anti-ballistic missile defense.

The first version of the SM-6 -- the Block I described in the contract -- is due to enter service in 2015. Accordingly, work on this contract is scheduled to be complete by February 2015. A subsequent Block II version of the SM-6 is expected to appear around 2018.