On a slow day at the Pentagon's contracting office Friday, Raytheon (NYSE:RTN) walked away with the biggest contract on offer, by orders of magnitude.
The Department of Defense announced it has awarded Raytheon a $126 million sole-source, cost-plus-incentive-fee contract modification -- which single award made up more than half the value of the $242 million in contracts DoD handed out today. The money will be used to pay upfront for parts and components needed to manufacture 29 Standard Missile-3 Block IB missiles for the U.S. Missile Defense Agency.
The SM-3IB is a new version of Raytheon's venerable Standard surface-to-air missile, which aims to enhance the original's effectiveness with enhanced, two-color infrared target seeking, and the use of 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 still collecting missile parts through at least Sept. 30, 2016.