The U.S. Department of Defense has awarded Raytheon, an RTX subsidiary, a potentially $20.7 billion contract to manufacture Advanced Medium-Range Air-to-Air Missiles, known as AMRAAM.

Seven-Year Deal Covers the United States and 16 Foreign Customers

The agreement includes an initial five-year period, with options for two additional years. It covers missile deliveries for the U.S. Air Force and Navy, as well as 16 international customers.

Approximately $240 million in Air Force and foreign military sales funds was released when the contract was awarded. The move comes as U.S. officials work to replenish critical ammunition stocks depleted by military operations in Ukraine and the Middle East.

“This award strengthens our ability to equip the Joint Force and our allies with a proven air-to-air capability, ensuring that our warfighters maintain a decisive advantage,” Michael Duffey, the Pentagon’s acquisition chief, said.

AMRAAM Output Expected to Nearly Double

Raytheon has been steadily expanding AMRAAM production. The Defense Department said the new contract is expected to bring manufacturing capacity to nearly twice the level achieved under previous production rates.

Earlier this year, the company reached a framework agreement with the Pentagon to increase annual AMRAAM production to roughly 1,900 missiles. The newly announced contract effectively provides the financial foundation for that expansion.

The agreement was issued as an undefinitized contract action, allowing work to begin while final prices, quantities and other details are completed. The mechanism is designed to accelerate production even when funding arrangements have not been fully finalized.

Pentagon Seeks Long-Term Congressional Backing

The contract was announced ahead of the beginning of the new fiscal year on October 1, which is expected to start under a continuing resolution. A separate budget reconciliation package also faces uncertainty.

The Defense Department emphasized the importance of congressional support for multiyear procurement authority and additional funding. Such measures would give defense manufacturers greater certainty and support sustained production over the long term.

AMRAAM is one of the primary air-to-air weapons used by the U.S. Air Force and Navy. The missile can also be launched from the NASAMS ground-based air defense system and is currently operated by 44 countries.

Raytheon said it is investing in its workforce, technology, supply chain and manufacturing facilities to respond to rising demand from the United States and international partners.

Pentagon Expands Industrial Surge With More Than $6 Billion THAAD Propulsion Contract

The AMRAAM agreement forms part of a broader Trump administration effort to expand munitions production through multiyear contracts. The push has gained urgency after U.S. stockpiles were drawn down during the conflict in Iran.

Patriot and THAAD Components Move Into High Gear

The Pentagon has already established framework agreements covering other critical weapons, including Patriot missiles and key components used by those systems.

In July, the Defense Department reached an agreement with L3Harris to increase production of solid rocket motors for Patriot PAC-3 missiles and THAAD interceptors.

L3Harris has now received an undefinitized contract from Lockheed Martin, the prime contractor for the THAAD program, with an estimated value exceeding $6 billion. The seven-year agreement is expected to quadruple production of the THAAD interceptor propulsion system.

The company did not disclose the precise number of units to be manufactured.

New Facility Planned for THAAD Motor Production

L3Harris plans to build a new manufacturing facility dedicated to expanding production of solid rocket motors for the THAAD system.

“This contract underscores L3Harris’ demonstrated ability to quickly deliver critical defense technologies at the scale and speed required by the Department of Defense,” Ken Bedingfield, president of the company’s Missile Solutions division, said.