Raytheon Cleared for Likely $2.6 Billion in New Missile Orders

  • Review of test failure, production finds no systemic issues
  • New contract of Raytheon Standard Missile-3 IB was on hold

After a series of setbacks, Raytheon Co. cleared two hurdles needed to receive a new contract and likely full-production approval this year of a top missile interceptor for which the Pentagon wants to spend as much as $2.6 billion.

Missile Defense Agency inspectors have concluded that an October test failure of the weapon wasn’t the result of systemic quality failures, agency spokesman Christopher Johnson said via e-mail. Furthermore, Raytheon demonstrated in May during two flight tests that it managed to fix a glitch with a third-stage rocket motor that caused two earlier failures, Johnson added.

“All initial results” indicate that the missiles, which are fired from Navy ships to destroy short-to-intermediate range missiles by directly striking them, “performed nominally during” both flights tests, Johnson wrote. That confirms “the third-stage rocket motor upgrades fixed the flaws,” he said.

The Oct. 31 failure prompted the Pentagon agency to put a hold on a contract, valued at about $500 million, for 49 advanced versions of the Standard Missile-3 interceptor known as the “IB.” The failure triggered a review of the incident and inspection of Raytheon’s Tucson, Arizona, missile production line.

Looking ahead, the MDA plans to buy as many as 246 more missiles through fiscal year 2021, potential purchases valued at about $2.6 billion in the full-production phase, according to Johnson and the agency’s budget. Seeking Pentagon approval for this more lucrative phase was contingent on the outcome of the reviews and the two test flights designed to assess corrections of earlier flaws.

The agency “is finalizing findings and recommendations, but we can say that there has been nothing found that would preclude continued production,” Johnson wrote. The agency “expects to make a production recommendation,” he added.

Similarly, the agency determined that problems with excessive O-ring lubricant, which caused an internal component to not arm during flight, are being addressed, Johnson said.

The MDA and Raytheon “have implemented testing for all units and strict process controls to limit” the “amount of O-ring lubricant used in production to ensure this failure does not reoccur, and existing rounds will be examined during their recertification” for flight, he said.

"Raytheon is working closely with our customer to continue production and resume missile deliveries,” company spokesman Mike Doble said in an e-mail. “We are providing the warfighter the most sophisticated solutions in missile defense."

The SM-3 IB model that’s on U.S. vessels is to be deployed to Romania as part of a planned land-based U.S. missile defense. It has improved capabilities with a more advanced infrared seeker to identify and discriminate among missiles and upgraded steering and propulsion to hit an adversary’s weapon.

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