The Pentagon awarded Raytheon (NYSE: RTN) a $136.2 million contract to perform upgrades, conversions, and system overhauls on Navy MK15 Phalanx Close-In Weapon Systems (CIWS) on Tuesday.
Raytheon will perform this work primarily for the U.S. Navy but also for the Army as well as for foreign allies Japan and Pakistan. According to Raytheon, more than 890 Phalanx systems have been built and deployed to the navies of 25 nations around the globe.
As clarified in the Department of Defense's daily digest of contract awards, Raytheon's new contract may be extended by the exercise of "options," which could extend its work past the anticipated September 2017 deadline, and increase the value of the contract to as much as $231 million.
The Pentagon describes CIWS as "a fast-reaction terminal defense against low- and high-flying, high-speed maneuvering anti-ship missile threats that have penetrated all other defenses. The CIWS is an integral element of the Fleet Defense In-Depth concept and the Ship Self-Defense Program."
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Raytheon. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.