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Raytheon Company’s Missile Systems business has reached a $1 billion, five-year strategic agreement to purchase propulsion systems from Aerojet Rocketdyne for Standard Missile products.
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The deal represents a supply chain centrepiece of multi-year Standard Missiles contracts that Raytheon recently received.
The agreement is designed to both stabilise and lower costs of the supply chain under Raytheon’s long-running contracts with the Missile Defense Agency (MDA) and the US Navy.
"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 US 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, 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 defence products," said Eileen Drake, Aerojet Rocketdyne chief executive and president.
"This significant agreement on multi-year contracts strengthens our current relationship and positions Aerojet Rocketdyne favourably 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.
Raytheon in December won a $1 billion contract modification for SM-3 Block IIA, bringing its total contract award for that missile alone to a whopping $2.5 billion, according to the company.
