Boeing [BA] said yesterday that it has received a $106 million contract extension from the Air Force for nearly 2,700 Small Diameter Bomb Increment I (SDB I) munitions and approximately 380 BRU-61 carriages.

It will deliver the munitions and carriages starting in January 2012, according to a company statement. The Lot 7 production order is the seventh option exercised by the Air Force’s Air Armament Center since 2003 and contains the most SDB I weapons ordered in a single lot, Boeing said.

Lots 1 through 7 comprise a total of 12,379 munitions and 2,059 carriages. All the contracts resulted from options created under the 2003 SDB I System Development and Demonstration (SDD) contract.

Boeing has delivered approximately 7,000 munitions and 1,200 carriages to the Air Force under Lots 1 through 5. Production of the 2,613 munitions and 472 carriages in Lot 6 is ahead of schedule, with the first munitions delivery planned for later this month and the first carriage delivery planned for December.

SDB I is a 250-pound class precision strike weapon. It incorporates a steel case and penetrating blast-fragmentation warhead.

This summer, the Air Force awarded Raytheon [RTN] a $450.8 million contract to build SDB under increment II of the program over a bid from a Boeing- Lockheed Martin [LMT] team.

SDB II is a joint Air Force and Navy program. The weapon is a precision-strike standoff munition designed to defeat moving and fixed targets in adverse weather conditions.

When first conceived, the SDB II program was supposed to be satisfied through a sole-source follow-on contract with Boeing. However, improper contracting activities caused the service to open a competition.

The SDB II contract calls for Raytheon’s GBU-53/B to begin engineering and manufacturing development, with delivery expected to begin in 2013.