Pentagon Awards Raytheon Up to $20.7 Billion to Nearly Double AMRAAM Production

The Pentagon has awarded Raytheon, an RTX business, a five-year contract with two option years valued at up to $20.7 billion to build Advanced Medium-Range Air-to-Air Missiles (AMRAAM), according to Defense News. The Department of War said the deal will nearly double AMRAAM production and framed it as part of its "Arsenal of Freedom" campaign to bolster weapons output, Defense News reported.

The department awarded the contract on Sept. 25 and announced it Monday alongside RTX. Defense News reported that the department described the award as a joint buy involving the Air Force, the Navy and allied nations.

Contract Structure and Scale

RTX, in a release carried by PR Newswire, said the five-year multi-year contract with two option years is valued up to $20.7 billion and is intended to push AMRAAM production to "record-setting levels." Defense News reported that neither the Pentagon nor RTX specified how many missiles the new contract buys or laid out an associated annual production rate. Neither the Defense News report nor RTX's release detailed how the $20.7 billion ceiling divides between firm obligations and the two option years, or between U.S. inventory replenishment and allied purchases.

The $20.7 billion ceiling is well above the Pentagon's previous largest AMRAAM award, a $3.5 billion contract issued in July 2025 that covered missiles for the Air Force, Navy and allies across Europe, Asia and the Middle East, per Defense News. By our calculation, based on those two reported figures (20.7 minus 3.5), the new ceiling is $17.2 billion higher than the prior record award, a roughly 491% increase (17.2 divided by 3.5, multiplied by 100).

Production Targets

The new contract follows five framework agreements Raytheon signed with the department in February that set long-term production targets ahead of formal contracts, Defense News reported. Under those agreements, RTX committed to raising annual output to more than 1,000 Tomahawks, at least 1,900 AMRAAMs and more than 500 Standard Missile-6 interceptors. RTX's own release, via PR Newswire, said the new AMRAAM contract follows that landmark framework agreement and supports annual production of at least 1,900 AMRAAM missiles.

RTX said it nearly doubled production of AMRAAM and other critical munitions in 2025 compared with 2024, work it attributed to collaboration with "hundreds of small and mid-sized suppliers nationwide," and said it is now exploring international co-production, according to the PR Newswire release. Defense News reported the same production comparison. Raytheon President Phil Jasper said, per PR Newswire, "We continue to make significant investments in our workforce, technology, supply chain and facilities to rapidly scale production capacity and meet surging demand from the U.S. Air Force, Navy and our international partners."

Funding Caveat

Congress has not yet funded the full deal, and Defense News, citing Reuters, called the award provisional. Reuters reported that industry executives have warned defense contractors may hold off on major investments in parts and factories until lawmakers act. The department thanked Congress for multiyear procurement authority, which lets the Pentagon commit to buying missiles over several years rather than one at a time, and said it hopes lawmakers will provide additional authority and funding to sustain production, according to Defense News.

Michael Duffey, under secretary of defense for acquisition and sustainment, said the award "strengthens our ability to equip the Joint Force and our allies with a proven air-to-air capability, ensuring our warfighters maintain a decisive advantage," and that the department is "working across the defense industry to ramp production and build the Arsenal of Freedom," Defense News reported.

Strategic Backdrop

Defense News reported the award comes as the Pentagon works to rebuild munitions stockpiles drawn down by the war with Iran. AMRAAM, now in its fifth generation, operates on 14 platforms and is fielded by 44 countries, with more than 7,000 successful live fires in test and combat, according to PR Newswire and corroborated by defence-industry.eu. The missile also serves as the primary interceptor for the NASAMS ground-based air defense system, which RTX's website says has protected the U.S. National Capital Region since 2005 and is relied on by 14 international partners; Defense News, citing Reuters, similarly reported that the system defends the Washington area and is used by more than a dozen other countries.

Defense News also reported that the Pentagon is preparing AMRAAM's eventual successor, noting the department signed a framework deal with Lockheed Martin earlier in September to boost production of the AIM-260 Joint Advanced Tactical Missile, which is being developed for the Air Force and Navy to outrange and eventually replace AMRAAM.

Bottom Line

The reported $20.7 billion ceiling marks a sharp escalation from the Pentagon's prior largest AMRAAM award of $3.5 billion, and RTX and Pentagon officials have framed the deal as central to a broader munitions-production push. As an interpretation of those reported facts, the practical scale of the ramp remains open: the cited Defense News report and RTX release do not specify missile quantities or how the ceiling splits between firm obligations and option years, and Defense News, citing Reuters, reported that Congress has not yet funded the full deal, which Reuters called provisional.