Raytheon Wins $85 million Deal to Support ESSM Block 2 Program
Raytheon Company’s RTN Missiles Systems business unit recently secured a modification contract to procure low rate initial production (LRIP) requirements for fiscal 2020 Evolved Sea Sparrow Missiles (ESSM) Block 2. Work related to the deal is expected to be completed by June 2023. Valued at $84.8 million, this latest deal was awarded by the Naval Sea Systems Command, Washington, DC.Majority of work related to the deal will get executed in Tucson, AZ.
Raytheon’s ESSM is an international cooperative upgrade of the RIM-7 Sea Sparrow Missile. It provides enhanced ship defense against high-speed, highly maneuverable anti-ship missiles in the naval environment including aircraft, high and low velocity air threats.
The program is a global joint initiative undertaken by the United States, the North Atlantic Treaty Organization (NATO) and other allied nations that include Australia, Canada, Denmark, Germany, Greece, Norway, Spain, Turkey and the Netherlands. Under this initiative, these countries plan to design, develop, examine and procure ESSM missiles. At present, ESSM has more than 2,000 proven rounds in service or in production, with another 1,500 rounds anticipated.
Increasing geopolitical tensions across the globe have prompted nations, both developed and developing, to strengthen their defense systems manifold. Following the rapid technological advancements, missile defense has steadily emerged as a key catalyst for a nation’s defense strategy.
With the United States being the world’s largest weapons supplier, it’s a golden era for the nation’s premier defense contractors like Raytheon. Being a prominent missile maker, Raytheon frequently secures a number of major contracts for missile development and enhancements. Such contract flows aid its Missile Systems segment to register solid top-line growth. Evidently, the segment registered solid sales growth of 4% year over year during the third quarter of 2019.
Considering the prevailing socio-economic challenges worldwide, we may expect Raytheon to consistently secure such contracts in coming days.
Moreover, the fiscal 2020 U.S. defense budget includes a spending plan of $13.6 billion for varied missile defense programs, which in turn, should usher in notable contract wins for prominent missile-makers like Raytheon. The latest won contract is a testament to that.