US Navy awards Raytheon $22.9 billion contract to produce over 1,000 Tomahawk missiles annually

Production boost and contract terms

On 17 August 2026, the United States Department of Defense announced a 22.9 billion dollar contract awarded to Raytheon, a division of RTX, by the US Navy. The seven-year agreement aims to scale the production of Tomahawk cruise missiles from a baseline of approximately 60 units per year to more than 1,000 per year. Tomahawk missiles, which cost approximately 2.6 million dollars each according to the Center for Strategic and International Studies (CSIS), are long-range precision weapons launched from warships and submarines against ground targets at distances exceeding 1,600 kilometres. The deal formalizes a preliminary framework agreement established between the Pentagon and Raytheon in February 2026, while seeking to compress an order-to-delivery lead time that previously reached 47 months.

Munitions consumption and inventory strains

The procurement push follows sustained missile expenditures during military operations against Iran that began on 28 February 2026. CSIS estimates indicate that the US Navy held approximately 3,100 Tomahawk missiles in inventory prior to the conflict. US forces deployed between 850 and over 1,000 Tomahawks during subsequent strikes, depleting nearly a third of that stock. CSIS analysts estimated that replenishing pre-conflict Tomahawk levels under prior production rates would have extended until 2031. Air defense stockpiles have faced comparable strain, with CSIS estimating that inventories of Patriot interceptors (exceeding 2,300 at the start of 2026) and THAAD systems (approximately 450) fell by at least half after roughly 1,400 Patriots were launched.

The Department called on industry to expand munitions production, and RTX answered that call. This Tomahawk missile award enhances our ability to equip the Joint Force, ensuring our warfighters never enter a fair fight.

Industrial mobilization and procurement policy

To address these supply demands, the Pentagon has pursued multi-year procurement commitments across defense contractors under its Acquisition Transformation Strategy. In July 2026, the Department of Defense concluded a separate seven-year, 58.6 billion dollar contract with Lockheed Martin for Patriot missile interceptors. Raytheon reported that its deliveries in the first half of 2026 tripled compared to the first half of 2025 as manufacturing lines expanded. Phil Jasper, president of Raytheon, stated that the company is investing in workforce, tooling, supply chains, and production facilities to accommodate the expanded output targets.

Political responses and leadership changes

Stockpile drawdowns have generated friction within Washington, where Democratic lawmakers and military leaders, including Chairman of the Joint Chiefs of Staff General Dan Caine as reported by The Wall Street Journal, expressed concern regarding munitions depth. Disagreements over munitions management contributed to the resignation of Navy Secretary John C. Phelan in April 2026 during a naval blockade in the Strait of Hormuz, after which Hung Cao assumed duties as acting secretary. President Donald Trump rejected claims of critical shortages, stating that the United States maintains ample munitions reserves.

By working closely with industry to expand the capacity of our munitions industrial base, the Department is utilizing every available tool to meet the demands of current operations.