Raytheon, Aerojet Rocketdyne strike USD1 billion strategic sourcing deal for Standard Missile programs

Raytheon's Missile Systems business has reached a $1 billion, five-year strategic agreement to purchase propulsion systems from Aerojet Rocketdyne for Standard Missile products. The deal represents a supply chain centerpiece of multi-year Standard Missiles contracts that Raytheon recently received.

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Raytheon and Aerojet Rocketdyne provide propulsion systems for Raytheon’s Standard Missile family (Picture source: Raytheon)

"Moving to multi-year, rather than annual-year contracting enables Raytheon and its supply chain to deliver even more value to our Missile Defense Agency and U.S. Navy customers, and the taxpayer," said Eugene Jaramillo, Raytheon Missile Systems vice president of Global Supply Chain Management. "These multi-year agreements also allow our suppliers to transform the way they do business with Raytheon."

Aerojet Rocketdyne provides propulsion systems spanning Raytheon's Standard Missile family. For the SM-2 missile, SM-3 interceptor and SM-6 missile, Aerojet Rocketdyne supplies the majority of the solid rocket motors for these systems. Also, for SM-3, the company produces the Divert and Attitude Control System, a high-precision, a quick-reaction propulsion system that positions the interceptor to defeat incoming ballistic missiles. "Aerojet Rocketdyne has supported one or more variants of the Standard Missile program for more than three decades; we are proud of our contributions to these vital defense products," said Eileen Drake, Aerojet Rocketdyne CEO and president. "This significant agreement on multi-year contracts strengthens our current relationship and positions Aerojet Rocketdyne favorably for future business opportunities and continued growth."

Work on the programs will be spread across Aerojet Rocketdyne sites in Orange County, Virginia, the Solid Rocket Motor Center of Excellence in Camden, Arkansas, and at its Advanced Manufacturing Facility in Huntsville, Alabama. Raytheon produces SM-2 in Tucson and SM-3 and SM-6 in Huntsville.

$2,139,779,656 contract for Standard Missile-3 Block IB all-up rounds for the U.S. and Foreign Military Sales (FMS) partners

A U.S. Army contract notification issued on 27th March also informs that Raytheon Missile Systems, Tucson, Arizona, is being awarded a sole-source, multi-year contract for $2,139,779,656. This contract is a hybrid of fixed-price incentive, firm-fixed-price, and cost-plus-fixed-fee.

This multi-year contract is for fiscal years 2019-2023. Under this contract, the contractor will provide the management, material and services associated with the procurement, manufacture and assembly of the Standard Missile-3 Block IB all-up rounds for the U.S. and Foreign Military Sales (FMS) partners. Work will be performed in Tucson, Arizona; and Huntsville, Alabama, with a period of performance from contract award through March 26, 2027. FY 2019 and 2020 procurement, defense-wide and FMS funds in the amount of $1,052,637,366 will be obligated at the time of the award. The Missile Defense Agency, Dahlgren, Virginia, is the contracting activity.