U.S. Navy Signs Contract with Raytheon Worth Up to $25 Billion for SM-6 Missiles

The U.S. Navy signed a five-year contract with Raytheon, plus a two-year extension option, worth up to $25 billion for the procurement of SM-6 multi-mission interceptor missiles. This missile is designed for long-range anti-air warfare and has a proven capability to shoot down cruise missiles, drones, and ballistic missiles, in addition to a secondary anti-ship missile application, at a lower cost than the SM-3.

The deal seeks to address the decline in global stockpiles of high-end interceptors (Patriot, THAAD, SM-3, SM-6) recorded during the high-intensity phase of the conflict with Iran this year. According to the Congressional Budget Office (CBO), the United States likely used between half and two-thirds of its inventory of these munitions since June 2025.

The size and multiyear structure of the contract are intended to give defense contractors the predictability needed to scale up production. According to fiscal year 2025 budget estimates, each SM-6 costs around $6 million in procurement alone, although the CBO estimates a lower figure of $4 million. If that cost structure holds, the new contract would imply a production rate several times higher than previous contracts of 125 units per year. Congress still needs to approve the corresponding budget appropriations, amid a continuing resolution expected to run at least through early December without a complete defense budget for fiscal year 2027.

In parallel, the U.S. Army committed up to $59 billion for additional Patriot interceptors, the standard ballistic missile defense munition for ground-based applications, and is also moving forward on a new class of long-range anti-ship missiles, with a prototype round announced for competing designs from Anduril, RTX, Castelion, Lockheed Martin, and Mach Industries. In addition, the Navy awarded Ursa Major two contracts totaling $137 million, funded by the Office of the Under Secretary of War, to develop and qualify tactical solid rocket motors for the Compact Air-to-Air Missile (CAAM) and Naval Modular Missile (NMM) programs, aiming to expand propellant production capacity through additive manufacturing.