Tucson-based Raytheon Missiles & Defense has been awarded a contract worth up to $1.3 billion to produce the latest version of a ship-defense missile for the U.S. Navy and allied nations.
The contract from the Naval Sea Systems Command initially awards Raytheon $358 million for full-rate production of the Evolved SeaSparrow Missile (ESSM) Block 2 through March 2025.
Contract options running through March 2027 could bring the cumulative contract value to $1,278,097,632, the Pentagon said in a contract notice.
The contract combines purchases for the Navy and the governments of Canada, Australia, Greece, Germany, Norway, Turkey, Portugal, Belgium, the Netherlands and Denmark under a NATO SeaSparrow consortium.
The contract notice did not detail the number of missiles ordered or how they will be allocated.
Navy budget documents show each new ESSM Block 2 has a gross unit cost of about $2.3 million for fiscal 2022, when the service plans to buy 108 missiles.
About 60% of the initial contract work will be performed in Tucson, where Raytheon is the areaβs biggest employer with about 13,000 workers. Other work will be spread across various U.S. and international sites, the Pentagon said.
Developed as a cooperative international program and in service since 2004, the 12-foot-long ESSM can fly at speeds of up to Mach 4 and is designed to defeat high-speed, highly maneuverable anti-ship missiles.
The Block 2 version features upgrades including an enhanced communications system to allow mid-course guidance corrections and an active-radar homing seeker to allow the missile to find its target without the help of ship radars.
Separately this week, the Navy awarded Raytheon a $106 million contract for engineering and technical services in support of the U.S. and NATO Evolved SeaSparrow programs this year. With options, that contract could be worth up to $362 million through 2025, the Pentagon said.
