The Pentagon has signed a five year, $6.3 billion contract with Raytheon to maintain steady production of ballistic missile interceptors that destroy incoming targets through force rather than explosives. The agreement is intended to provide a continuous flow of a combat proven weapon.

The contract includes two additional option years and covers Standard Missile-3 Block IB interceptors for the War Department. Manufacturing will occur primarily in Tucson, Arizona, and Huntsville, Alabama, according to the details released by Raytheon.

The agreement gives the Pentagon a path to replenish interceptor inventories while maintaining production over several years. Raytheon announced the contract Thursday as the United States works to prevent its supply of critical munitions from continuing to diminish.

“SM-3 Block IB has proven its relevance in combat and this contract helps ensure we can replenish inventories and keep pace with the evolving threats the U.S. Navy, MDA and their partners face around the world,” Raytheon President Phil Jasper said in a statement.

The SM-3 Block IB is part of the broader family of “hit-to-kill” SM-3 missile interceptors. Rather than using an explosive payload to destroy a ballistic missile, the interceptor relies on speed and momentum to strike the incoming weapon directly.

The Block IB can be used by land forces as well as ships. It is frequently deployed aboard vessels because of its range and highly flexible steering, giving operators another means of engaging ballistic missile threats from the sea.

The interceptor tracks targets in flight using a seeker that detects two infrared colors. It then propels itself toward the target in short bursts, allowing it to maintain accuracy while traveling at high speed and closing on the incoming missile.

Its mission is to knock short range and intermediate range ballistic missiles out of the sky while they are midway to their intended targets. The interceptor also has a long striking reach, expanding the area in which it can engage a threat.

The SM-3 Block IB was used in combat for the first time in 2024. U.S. Navy destroyers USS Arleigh Burke and USS Carney fired the interceptors against Iranian missiles that were aimed at targets in Israel.

That combat use placed the interceptor squarely within a growing debate over the condition of American munitions inventories. The Center for Strategic and International Studies included the SM-3 Block IB among “seven critical munitions” in an April report detailing ammunition shortages.

The report also identified Patriot missiles, Precision Strike Missiles, Terminal High Altitude Area Defense missiles and Tomahawk Land Attack Missiles among the critical weapons. The new contract focuses on ensuring continued production of the SM-3 Block IB as demand puts pressure on available supplies.

Raytheon said the SM-3 Block IB contract was among five framework agreements the company signed with the Pentagon this February. The arrangement comes while the DoW is seeking to avert further declines in munitions stockpiles, particularly for interceptors used against incoming missiles.

National security specialists, defense analysts and foreign policy pundits warned in March that increased U.S. military use of missile interceptors during the war with Iran carried strategic risks. They said integral defense capabilities could face pressure if the fighting developed into a prolonged conflict.

Raytheon said the agreement “supports urgent replenishment of missile defense inventory that has been successfully used in combat and remains central to protecting U.S. forces, allies and critical infrastructure.”

The contract combines a multiyear production commitment with two possible additional years, giving the Pentagon a mechanism for continued deliveries. For the Navy, MDA and their partners, the deal centers on replacing interceptors already used while keeping pace with evolving missile threats around the world.