Tucson-based Raytheon has secured a $745 million Missile Defense Agency contract to manufacture advanced ballistic missile interceptors for the United States and Japan, adding another major award to southern Arizona’s defense economy.
The Phoenix Business Journal reported that the noncompetitive contract covers production and assembly of Standard Missile-3 Block IIA all-up rounds. An official federal contract notice values the award at $745,387,095 and says work will occur in Tucson and Huntsville, Alabama, through Feb. 28, 2031. More than $275.6 million in fiscal 2026 U.S. procurement funds and $277.7 million in Japanese foreign military sales funds were obligated at the time of the award.
The SM-3 Block IIA is designed to destroy incoming ballistic missiles through a high-speed collision rather than an explosive blast. Raytheon says the interceptor’s larger rocket motor and enhanced kinetic warhead allow it to engage threats faster and protect wider areas against short- to intermediate-range ballistic missiles. The system was developed cooperatively with Japanese industry.
Barbara Borgonovi, president of Naval Power at Raytheon, called the interceptor a “cornerstone of regional defense” and said investments in production lines are helping the company increase capacity and deliver missiles more quickly.
The contract reinforces Raytheon’s outsized role in Tucson. The Business Journal reported the local operation employs about 13,500 people, making it one of southern Arizona’s biggest private-sector employers. Raytheon said it is hiring to support the program, although it did not disclose how many positions would be added in Arizona.
The award came alongside a separate $535.98 million modification for full-rate production and engineering work on the TOW Weapon System, all of which will be performed in Tucson. Together, the contracts underscore the growing flow of federal defense spending into Arizona’s missile manufacturing base.
