Raytheon has signed a $1bn strategic agreement to purchase propulsion systems from Aerojet Rocketdyne for standard missile (SM) products.

The five-year deal represents a supply chain centrepiece of multi-year SM contracts recently won by Raytheon.

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Raytheon Missile Systems Global Supply Chain Management vice-president Eugene Jaramillo said: “Moving to multi-year, rather than annual-year contracting enables Raytheon and its supply chain to deliver even more value to our Missile Defense Agency and US Navy customers, and the taxpayer.

“These multi-year agreements also allow our suppliers to transform the way they do business with Raytheon.”

Work on the programmes will be carried out across Aerojet Rocketdyne sites in Orange County, Virginia, the Solid Rocket Motor Center of Excellence in Camden, Arkansas, and at its advanced manufacturing facility in Huntsville, Alabama.

SM-2 will be produced in Tucson and SM-3 and SM-6 in Huntsville by Raytheon.

Propulsion systems spanning Raytheon’s standard missile family will be provided by Aerojet Rocketdyne.

The programme will also include the production of the majority of the solid rocket motors for the SM-2 missile, SM-3 interceptor and SM-6 missile. The motors will be supplied by Aerojet Rocketdyne.

The company also develops a high-precision and quick-reaction propulsion system. This system is used for SM-3 and positions the interceptor to defeat incoming ballistic missiles.

Aerojet Rocketdyne CEO and president Eileen Drake said: “Aerojet Rocketdyne has supported one or more variants of the Standard Missile program for more than three decades, we are proud of our contributions to these vital defence products.

“This significant agreement on multi-year contracts strengthens our current relationship and positions Aerojet Rocketdyne favourably for future business opportunities and continued growth.”