Defense agency changes Raytheon missile contract

The nation's missile defense agency is shifting some funds from procurement of missile interceptors made by Tucson-based Raytheon Missile Systems to cover the cost of fixing technical and production issues with the missiles.

Under a contract modification announced by the Pentagon on Tuesday, the U.S. Missile Defense Agency is cutting its purchase of Standard Missile-3 Block IB ballistic-missile interceptors to 20 from 24 originally planned, paring nearly $49 million from a production contract worth about $1.9 billion.

At the same time, about $24 million will be added to the contract to cover "cost growth for resolving technical and production transition issues" with the SM-3, the Defense Department said.

The agency plans to reinstate the $49 million for the four missiles at a later date, the Pentagon said.

David Wichner

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