Raytheon awarded $22.9B Navy contract to expand Tomahawk missile production

The U.S. Navy has awarded Raytheon, a subsidiary of RTX, a $22.9 billion contract to accelerate the production of Tomahawk missiles. The seven-year agreement, announced by the Department of Defense (DOD), will fund workforce expansion, faster production cycles, and supply chain stabilization. However, neither DOD nor RTX disclosed the locations where the work will be carried out, and the company did not respond to inquiries about its manufacturing facilities.

## Production ramp-up and recent investments

This contract builds on earlier agreements between Raytheon and DOD, which supported the company’s goal of producing over 1,000 Tomahawk missiles annually. In January, Raytheon received an additional $380.8 million to recertify and upgrade existing missiles, with most of the work taking place at its Tucson, Arizona facility. Other tasks will be completed at sites across the U.S. and Canada.

RTX has significantly increased its investments in Tomahawk missile production and other munitions over the past few years. According to a press release, these efforts have tripled Tomahawk deliveries in the first half of 2026 compared to the same period in 2025. The new contract will also enable RTX to collaborate with small and midsized suppliers in the U.S. to scale up production.

## Broader defense industrial base strategy

The agreement aligns with DOD’s "Arsenal of Freedom" strategy, part of its Acquisition Transformation Strategy, which aims to increase production capacity for critical military systems. On August 14, DOD also announced deals with RTX and Boeing to boost component production for the Standard Missile-3 Block IB and Block IIA. Boeing will lead the manufacturing ramp-up to move parts from production lines to military fleets.

The contract was overseen by the Navy’s newly established Portfolio Acquisition Executive (PAE) Munitions department, created in May. The PAE focuses on high-level acquisition strategies to expedite munitions production and delivery, addressing shortages in U.S. military operations. The role was established under the National Defense Authorization Act for fiscal year 2026.

The PAE Munitions operates on four key pillars:

| Pillar | Focus Area | |---|---| | Weapons Industrial Base | Strengthening production capacity | | Air Weapons | Enhancing aerial munitions | | Surface Weapons | Expanding naval armaments | | Advanced Capabilities and Innovation | Developing cutting-edge technologies |

Acting Secretary of the Navy Hung Cao emphasized the importance of expanding the munitions industrial base to meet operational demands. "By working closely with industry, the Department is utilizing every available tool to ensure our forces are equipped to fight, win, and return safely," Cao stated.