Procurement of the Standard Missile-3 Block IB (SM-3 IB) ballistic missile interceptor, previously cancelled by the Missile Defense Agency (MDA), is being restored. The decision to continue procuring SM-3 IB is part of five framework agreements signed by RTX’s Raytheon business unit and the United States Department of War (DoW) to substantially increase the production of five critical missiles. The other four missiles are Standard Missile-3 Block IIA (SM-3 IIA), Standard Missile-6 (SM-6), Tomahawk, and AIM-120 AMRAAM. The deals, announced earlier this month, are the latest in a series since the first such agreement was signed in early January between the DoW and Lockheed Martin. That inaugural agreement, which concerned a more than threefold increase in PAC-3 MSE production, was followed by one for THAAD’s Talon interceptor missile, also made by Lockheed Martin. The Talon announcement coincided with Lockheed Martin’s Q4 2025 Earnings Call, during which CEO Jim Taiclet confirmed that other prime contractors were actively discussing their own deals with the Pentagon.
RTX has been under the microscope since the landmark deal with Lockheed Martin was announced, with President Trump singling them out as an example of a defense prime that has not been “responsive to the needs of the Department of War.” These five munitions deals will presumably improve relations between the Pentagon and their second largest supplier, although the DoW notably did not release a formal statement of their own on the agreement, as they did with Lockheed Martin. Explaining the significance of the agreements, RTX CEO and Chairman Chris Calio stated: “These agreements redefine how government and industry can partner to speed the delivery of critical technologies and are a direct result of the administration’s Acquisition Transformation Strategy and commitment to deliver the best technologies faster. We are proud to support the department’s Arsenal of Freedom to ensure the United States and its allies and partners have the decisive edge — now and in the future.” Although RTX revealed only limited details of how the deals would impact production rates of the five different munitions, and declined to comment further when Defense Archives inquired to them, we can exclusively report on the decision on SM-3 IB.
In a statement to us, the MDA confirmed that: “MDA plans to continue procurement for the SM-3 Block IB.” As previously explained, procurement of SM-3 IB had been cancelled in March 2024 by the FY2025 Presidential Budget Request, the Biden Administration’s final one. That decision prompted immediate criticism from Congress, which escalated following the expenditure of SM-3s by US forces in the defense of Israel against Iranian ballistic missile attacks. In an interim measure, MDA bought itself some additional “decision space” to evaluate the long term future of SM-3 IB with the award of a joint FY2024/FY2025 contract to Raytheon in May 2025. A month later though, the Trump Administration’s FY2026 MDA Budget Request left the Biden Admin’s decision unchanged, with zero dollars allocated to the AEGIS BMD (SM-3 IB) Procurement Account. While the MDA was in the process of releasing their budget request though, the US Navy was shooting down more Iranian ballistic missiles targeting Israel. The Wall Street Journal subsequently reported that 80 SM-3s and over 150 Talons had been expended. This, combined with the dozen SM-3s expended the previous April, amounted to about a 20% reduction in total inventory.
This was not overlooked by Congress, particularly the Senate Appropriations Defense Subcommittee (SAC-D), led by Chairman McConnell (R-KY), which allocated $450 million to AEGIS BMD Procurement in their draft Defense Appropriations bill from July, compared to zero in both the budget request and the House bill. Ultimately, the amount enacted in the Consolidated Appropriations Act, 2026, signed by President Trump earlier this month, was an even larger $475 million. How many missiles this will buy depends on contract negotiations with Raytheon. Projected FY2024 unit pricing had already escalated 40% to $12.5 million due to the expiry of the Multi-Year Procurement contract for FY2019-FY2023. Prior to these latest developments, it appeared that the unit cost for the FY2024/FY2025 synergy contract might be as high as ~$18 million. Enacted in both the Defense Appropriations Act and FY2026 National Defense Authorization Act though, is new Multi-Year Procurement Authority for all of the aforementioned munitions, with the curious exception of SM-3 IIA. However the previous SM-3 IIA contract ran for 3 years, from FY2023-FY2025, and back in May of last year MDA had already announced their intention of awarding Raytheon a successor contract “for production and integration of Standard Missile-3 (SM-3) Block IIA missiles over six (6) years through 2032 as part of the Aegis-Based Defense Program.” This was followed by a RFI in September, gauging industry interest and capability for both the Block IB & IIA programs. It stated further that: “MDA will utilize responses received to evaluate acquisition alternatives that may include competing all or portions of future SM-3 work. The MDA ABG anticipates contracting for future work to begin in 2026 and continue for up to 12 years.”
This tracks with the framework agreements covering a period of up to 7 years, and production backlogs of 4-5 years for both SM-3 variants. Raytheon did not offer specifics on what the production ramp up for SM-3 would look like, other than to say that they would “increase production of SM-3 IIA and accelerate production of the SM-3 IB.” Speaking of all 5 agreements, they added: “Many of these munitions will grow 2 to 4 times their existing production rates.” Parsing the choice of verbs does not provide much clarity on exact intentions, and MDA did not elaborate on specifics either. What can be calculated, is the range of possibilities. The current actual production baseline for SM-3 IB is 3-4 missiles per month, with maximum facilitization for 5 per month. Doubling or quadrupling production would therefore yield a possible range of 6 missiles per month to 20 missiles per month. The SM-3 IIA production line is currently operating at its maximum rate of 2 per month, with an already planned increase to 3 per month included in the budget request, which is now funded in full. The budget request made no mention of $65 million in reconciliation funds though, which are also available. With $18.5 million having been allocated to fund the increase to 3, that additional $65 million could certainly pay for further increases. In this case, the new production capacity could range from 4 missiles per month to 12 missiles per month. With SM-3 IIA being identified as a component of the Golden Dome architecture, its possible that it will be more towards that upper bounds.
Turning to their smaller cousin, the SM-6, Raytheon specifically identifies an increase “to more than 500”. This is exactly fourfold of the current production baseline of 125 per year, though an increase to 200 per year by FY2028 is already funded and underway. Initially designed as an extended range anti-aircraft missile, SM-6 has become something of a jack of all trades, with it being further developed and upgraded to now be capable of terminal defense against ballistic missiles, and even hypersonic threats, plus use as both an air to air and surface to surface missile. With demand from the US Navy, US Army, and Foreign Military Sales (FMS) customers 500 may still be short of what is needed to address looming order volumes. Raytheon has been working diligently on diversifying their supplier base for solid rocket motors for some time now though, with partnerships with Anduril, Ursa Major, and Avio, among others.
Tomahawk, the final naval missile among the group, is the most curious case. Both new production and re-certified missiles are delivered from the same production line, with a combined Minimum Sustaining Rate of 90 missiles per year. The US Navy’s own orders have been extremely anemic for some time, with orders from the US Army and Foreign Military Sales just barely making up the difference on some production lots. Scheduled deliveries for Calendar Year 2025 was 169 missiles, below the regular production rate of 250 per year, and far below the maximum production rate of 600 per year. Despite this, Raytheon announced that they will increase Tomahawk production to more than 1000 per year. This is a curious target given the abject under-utilization of the line currently. While there continues to be new FMS in Tomahawk, current and possible orders on the horizon are not sufficient to justify such a large expansion. It would therefor fall on the US Navy & US Army to drastically increase their volume of orders. The Navy has been expending considerable numbers of Tomahawks lately, predominantly in US Central Command’s Area of Responsibility, but also in US Africa Command. Funds from the Israel Security Supplemental Appropriation Act have already been reprogrammed to fund 20 replacement missiles, but that is far short of what is needed to make Navy stocks whole again. Replacement requirements don’t explain the 1000 per year target either though, so it suggests that Naval Air Systems Command may finally be getting serious about building out their inventory to address the growing threat posed by the People’s Liberation Army in East Asia.
Closing out with AMRAAM, Raytheon states that production will rise to “at least 1900”. The maximum production rate currently sits at 1200 per year, with scheduled deliveries of 1114 in CY2025. Phil Jasper, CEO of Raytheon, has previously spoken of their intention to double AMRAAM production, which suggests that the ceiling may be as high as 2400. With a combined quantity of 534 requested by the USAF & USN for FY2026, the majority of missiles ordered on Production Lot 40 (FY2026) upon its definitization will almost certainly be majority FMS. This will almost certainly continue, between the unprecedented growing FMS demand for AMRAAM, and the USAF shifting procurement priories to the new AIM-260 Joint Advanced Tactical Missile (JATM). Raytheon has already laid groundwork here too, having worked with Nammo to establish a new solid rocket motor production line for AMRAAM, which will be operational next year.