When the Department of Defense announced its contract awards for Aug. 6, the total funds handed out added up to $518.8 million -- but one single company walked away with more than half the funds on offer: Raytheon (NYSE:RTN).
Raytheon claimed its loot in the form of two contracts to perform work for the U.S. Missile Defense Agency, namely:
- $218.5 million: exercising an option under a sole-source, cost-plus-incentive-fee contract to fund the purchase of materials, and integrate same into the manufacture of "up to" 29 All Up Rounds SM-3 Block IB missiles. 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. Raytheon's SM-3IBs are scheduled to begin deployment in 2015. The current contract, now worth $398 million in total, is expected to run through Sept. 30, 2016.
- $49.9 million: exercising an option under a different sole-source cost-plus-incentive-fee contract to manufacture four All Up Rounds SM-3 Block IB missiles. These missiles are deliverable on or before Sept. 30, 2015.