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WASHINGTON: Raytheon Missile Systems has signed a $1 billion deal with Aerojet Rocketdyne for provision of Aerojet Rocketdyne’s propulsion systems for Raytheon’s Standard Missiles (SM) for the next five years, Raytheon announced today.
The agreement is designed to both stabilize and lower costs of the supply chain under Raytheon’s long-running contracts with the Missile Defense Agency (MDA) and the Navy.
“Moving to multi-year, rather than annual-year contracting enables Raytheon and its supply chain to deliver even more value to our Missile Defense Agency and U.S. Navy customers, and the taxpayer,” Eugene Jaramillo, Raytheon Missile Systems vice president of Global Supply Chain Management, said in a statement.
Raytheon is prime contractor for the venerable SM-2 air defense missile that still equips the Navy’s Aegis Weapon System (AWS). Eventually, they will be replaced by the SM-6, able to engage cruise missiles, aircraft and ballistic missiles. Besides the US Navy, at least 15 foreign navies have bought the SM-2 — of which there have been a number of variants since its original development in the 1970s — according to the Center for International and Strategic Studies (CSIS) Missile Threat Project.
It also is the prime contractor for the SM-3 ballistic missile interceptor for the Aegis system. MDA currently plans to test a new variant, SM-3 Block IIA, being developed in partnership with Japan, in the third quarter of this year. Another variant, the Block IB, already is being deployed as part of MDA’s Aegis Ashore program Romania, although in the end Romania along with Poland and Japan will deploy the newer Block IIA.
Raytheon in December won a $1 billion contract modification for SM-3 Block IIA, bringing its total contract award for that missile alone to a whopping $2.5 billion, according to the company.
Aerojet Rocketdyne supplies the majority of the solid rocket motors for those systems. For SM-3, it also produces the Divert and Attitude Control System for improved speed and accuracy of intercept.
The multi-year buys “allow our suppliers to transform the way they do business with Raytheon,” Jaramillo said.
“This significant agreement on multi-year contracts strengthens our current relationship and positions Aerojet Rocketdyne favorably for future business opportunities and continued growth,” Eileen Drake, Aerojet Rocketdyne CEO and president, said.
Work will be spread across Aerojet Rocketdyne sites in Orange County, Va., the Solid Rocket Motor Center of Excellence in Camden, Ark., and at its Advanced Manufacturing Facility in Huntsville, Ala.. Raytheon produces the SM-2 in Tucson, and SM-3s and SM-6s in Huntsville.
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