The Missile Defense Agency awarded Raytheon [RTN] a contract modification worth up to $2.3 billion to procure the material for, fabricate, test, and deliver 52 Standard Missile (SM)-3 Block IB missiles, the Defense Department said Friday.

The contract amount includes is a sole-source fixed-price-incentive, firm-fixed-price, and cost-plus-fixed-free modification when all options are included.

An SM-3 1B launching off a Navy cruiser in Oct. 2013. Photo: Missile Defense Agency.
An SM-3 1B launching off a Navy cruiser in Oct. 2013. Photo: Missile Defense Agency.

In addition to production, testing, and delivery, the contract calls for Raytheon to provide all-up-round support and execute recertification efforts.

The modification also puts a lid on a previously awarded contract valued at $541 million effective April 30, for 44 SM-3 Block IB missiles with three one-year options through fiscal 2018. That contract came with a quantity of up to 52 SM-3s per option year.

This new modification includes support for recertification for the base year and up to three one-year options, the Defense Department said. The modification increases the total contract value from $604 million to $636 million.

“This announcement represents $18.6 million in new bookings by Raytheon Company in Q4 2015 on an existing FY 2015 production contract, and establishes pricing for as-yet-unexercised options for FY 2016-2018 efforts,” Raytheon added in a statement.

Fiscal 2015 defense-wide procurement funding of $173 million and fiscal 2016 operations and maintenance funding of $1.3 million was being obligated at award time.

Contract work is set to occur in Tuscon, Ariz. and Huntsville, Ala. Work is expected to be complete by Sept. 30, 2021. The contracting activity is the Missile Defense Agency in Dahlgren, Virginia.