Pentagon Gives Raytheon a $20.7 Billion Missile Contract as U.S. Stockpiles Run Low
The Pentagon has awarded RTX's Raytheon division a provisional multiyear contract worth $20.7 billion to sharply increase production of AMRAAM missiles, as the U.S. military races to rebuild weapons stockpiles thinned by the wars in the Middle East and Ukraine.
The award, announced Monday in Washington, is one of the largest missile procurement deals in recent years. It aims to push Raytheon to accelerate output of the Advanced Medium-Range Air-to-Air Missile, a weapon that has become central to American air power and to the air defenses of more than a dozen allied nations.
The deal reflects a growing worry inside the Pentagon: years of heavy weapons transfers to partners, combined with America's own military operations in Iran, have drained inventories of key munitions — particularly air defense interceptors and precision-guided weapons. Military planners have warned for months that at the current pace of production, the United States could struggle to sustain another major conflict while also arming its allies.
The AMRAAM is among the most widely used missiles in the American arsenal. It flies with fighter jets in air-to-air combat, and it also arms the National Advanced Surface-to-Air Missile System, known as NASAMS — the system that helps protect the airspace around Washington, D.C. Beyond the United States, NASAMS is operated by more than a dozen countries, including Ukraine, Oman, and Qatar, several of which have drawn heavily on their stocks during recent fighting.
The new contract follows a pattern the Pentagon has been using all year. In July, the Defense Department awarded Lockheed Martin a $58.6 billion deal for Patriot air-defense interceptors, structured as a seven-year procurement running through fiscal 2032. Both agreements use long-term commitments as an incentive: by guaranteeing demand for years ahead, the Pentagon hopes to give contractors the confidence to expand factories, hire workers, and order parts at scale.
That logic, however, comes with a catch. Industry executives have cautioned that Congress has not yet appropriated the money needed to back the full multiyear commitments. Without firm funding from lawmakers, contractors say they may be unable to make the large investments in components and facilities that faster production requires. The contracts are provisional in that sense — promises of work that still depend on congressional action.
The push fits a broader priority of the Trump administration, which has pressed defense companies to put weapons production ahead of shareholder returns. Pentagon officials have framed the effort under an "Arsenal of Freedom" initiative aimed at restoring the industrial base that supports American military power.
RTX, for its part, says it is already moving. The company said it nearly doubled AMRAAM production in 2025 compared with the year before, and it has set an annual production goal of at least 1,900 missiles. The new contract, if Congress ultimately funds it, would let the company continue investing in its workforce, supply chain, and facilities as demand keeps climbing.
The stakes go beyond any single company. U.S. defense officials have said that replenishing munitions is now one of the Pentagon's most urgent industrial challenges — a test of whether American factories can keep pace with the demands of allies at war and the needs of the U.S. military itself. The Raytheon deal is the latest bet that long-term contracts, even before the money is fully appropriated, will convince industry to build faster.
Whether that bet pays off will depend on two things: how quickly Raytheon can turn the commitment into missiles rolling off the line, and whether Congress follows through with the funding that makes the whole arrangement real.