In the midst of a government shutdown that's closed off the spigot of most defense contract announcements for 11 days and counting, defense contractor Raytheon (NYSE:RTN) just announced a contract win from the Pentagon -- and it's a big one.

Thursday evening, Raytheon confirmed that it has won the Navy's competition for the right to build a next-generation Air and Missile Defense S-Band Radar (AMDR-S) and Radar Suite Controller (RSC), both of which will be installed as upgrades to Flight III Arleigh Burke-class (DDG 51) guided missile destroyers beginning in 2016.

Consisting of an S-band radar, an X-band radar, and a Radar Suite Controller to manage them, they will be used to detect long-range threats from hostile aircraft and missiles, and will be integrated into the ships' Aegis combat systems.

Valued at $385.7 million initially, Raytheon's new contract contains options to extend it and build new systems. If exercised in full, these options could raise the total value of Raytheon's new defense contract past $1.6 billion, the company said. Raytheon's win marks a loss for rival Northrop Grumman, which had bid against Raytheon on the contract, and an even bigger loss for Lockheed Martin, which not only competed to build the AMDR-S, but is the incumbent provider on the system AMDR-S will replace, the AN/SPY-1 naval radar system.


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