Tucson-based Raytheon Missile Systems has been awarded a $65 million contract to continue development of the nation’s next-generation air-to-ground missile.

Raytheon is in a competition with Lockheed martin to develop and produce the Joint Air-to-Ground Missile (JAGM), a potentially multi-billion-dollar program to replace three existing missiles. The Army-led program was nearly canceled amid Pentagon budget-cutting but instead has been put on an extended development track.

Raytheon’s contract award by the Army Aviation Missile Command was expected, since Lockheed Martin was awarded a similar contract worth $64 million in August.

Raytheon said that under the contract for “continued technology development," the company will develop and deliver a next-generation guidance section for the JAGM, with four months devoted to updating its design and a preliminary review, followed by two years for a critical design review, guidance section qualification and testing, and delivery of JAGM guidance sections.