An SM-3 Block IB interceptor missile launching from Aegis Ashore in Hawaii

vizmaya desk · Oct 12, 2026 · Defense

The Pentagon signed a five-year missile deal 85 days before a new sourcing rule starts

A deal built for speed meets a rule built for security. The shell numbers show why rules alone may not be enough.

Photo: SM-3 Block IB launch, U.S. Missile Defense Agency / Wikimedia Commons, public domain.

The story in four numbers

Four numbers hold the whole story.

$4.43B

Base value of the SM-3 contract. Up to $6.34B with options.

Oct 8, 2026 · Dept. of War contracts

85 days

From signing to the day routine waivers end.

Oct 8, 2026 to Jan 1, 2027 · our count from two official dates

2031

The contract is expected to finish on Dec 31.

Dept. of War contracts

14,500 to 100,000

155mm shells a month: before 2022, and the Army's goal for Oct 2025.

Defense Post, Army targets

What changed this week

One very large contract was signed.

FactOn Oct 8, the Pentagon gave Raytheon a contract to build SM-3 missiles. They shoot down other missiles. It is worth $4.43 billion, or up to $6.34 billion with options, and runs to Dec 31, 2031.

Two other items this week rest on one news outlet each. We hold them back until a second source confirms them.

Source: Dept. of War contracts, Oct 8, 2026

Aerial view of the Pentagon building in Arlington, Virginia
The Pentagon, 2003. U.S. Navy photo / Tech. Sgt. Andy Dunaway, Wikimedia Commons, Public Domain Mark.

Plain words

Three words explain how this deal was made.

NoncompetitiveThe Pentagon chose one company. There was no bidding contest.
Multi-yearOne order covers many years of building, not just one.
UndefinitizedWork starts before the final price is agreed. The price is settled later.

Our readThe buyer trades price certainty for speed and steady work.

Why long deals

Congress told the Pentagon to buy in long deals.

FactThe House Armed Services Committee says the 2026 defense law requires multi-year deals for munitions, to grow factory capacity.

Our readA company will not build a new production line for an order that might end next year.

We read the committee's own summary, not the full law. HASC summary

An XM1128 155mm artillery projectile
An XM1128 155mm artillery round. Photo: Ductri Nguyen / Wikimedia Commons, public domain.

The rule

A rule says: stop excusing parts from adversary countries.

A law (10 U.S.C. 4872) limits defense contractors from using certain materials from certain adversary countries. A waiver is written permission to do it anyway.

FactAn order signed Jul 20, 2026 (EO 14415) ends that routine permission from Jan 1, 2027.

Source: White House, EO 14415

Until Dec 31, 2026Waivers can be granted as routine.
From Jan 1, 2027Waivers only if the company hands in a plan to remove the material, and the Pentagon accepts it.

The overlap

Nearly all of this contract falls under the stricter rule.

FactSigned 85 days before the cutoff. Runs to the end of 2031.

Not knownWhether any part of the SM-3 uses a covered material. Public sources do not say.

Sources: Dept. of War, Federal Register

Who pushed for it

We can show who wrote the rules, not who lobbied for them.

The House Armed Services Committee wrote the multi-year and supply-chain parts of the 2026 defense law, by its own summary.
Rep. Tom Emmer and Sen. Jim Risch introduced the Ammunition Supply Chain Act on Apr 18, 2024. It asks the Army to report on gunpowder ingredients. It went to committee. We found nothing after.
GapWe found no lobbying records for the waiver cutoff or this contract. That is a gap in our search, not proof that nobody lobbied.

The factory test

The 155mm shell shows whether this works.

14,500

shells a month before 2022. A 155mm shell is fired from a large gun called a howitzer.

Two news reports give 14,000 and 14,500. Defense Post, CBS via Ukrainian News

Soldiers firing rounds from an M777 howitzer in Afghanistan
Firing an M777 howitzer, Afghanistan, 2009. Photo: Spc. Evan D. Marcy, U.S. Army / Wikimedia Commons, public domain.

Goals and output

Output nearly tripled. The goal was almost seven times.

FactThe Army set goals of 60,000 a month by Oct 2024, 75,000 by Apr 2025 and 100,000 by Oct 2025.

ContestedOne report puts mid-2025 output near 40,000. Another puts late 2024 at 36,000.

Source: Defense Post, Jun 2025. Shells a month.

A missing link

Some pieces take decades to rebuild.

FactTNT fills most 155mm shells. The US stopped making TNT in 1986. In Nov 2024 the Army awarded $435 million to Repkon USA for a plant in Graham, Kentucky.

Our readA rule can change what a company may buy. It cannot make a missing plant appear.

Source: Breaking Defense

Stacks of shell casings outside an ammunition plant building in Longview, Texas
Archive photo: shell casings at a plant in Longview, Texas, June 1972. Marc St. Gil, National Archives / Wikimedia Commons, public domain.

Where Europe put its money

Europe bet on powder and explosives.

FactIn March 2024 the EU set aside €500 million under its ammunition law, ASAP. €248 million went to powder and €124 million to explosives. The aim: add over 10,000 tonnes of powder and over 4,300 tonnes of explosives a year. These are plans, not finished plants.

In Nov 2025 the European Commission said Chemring Nobel in Norway got €66.7 million to more than double its explosives output.

Source: European Commission

Demand is locked in

€80B+

of orders waiting to be filled

The orders are already in.

FactGerman arms maker Rheinmetall reported an order backlog above €80 billion in Q2 2026. Backlog means orders accepted but not yet delivered. It added €11.4 billion of new orders in that quarter alone.

Our readDemand is locked in. The hard part is building.

Source: Rheinmetall filing, Jul 29, 2026

Risks and counter-case

What could prove this reading wrong.

Waivers may stay easy to get.The order still allows them with an accepted plan. We do not know how generous the Pentagon will be.
Rules do not make shells.After years of goals, reported 155mm output stayed far below 100,000 (contested).
The rule may never touch this missile.No public source says the SM-3 uses a covered material.

What to watch next

Four dates to watch.

Jan 1, 2027Routine waivers end.
Jan 16, 2027Deadline for guidance on mapping critical supply chains. The same order tells the Pentagon to write rules making contractors map and check their suppliers.
Apr 16, 2027When the rules could arrive, if guidance is on time. This is a law firm's estimate (Holland and Knight), not the order's.
Dec 31, 2031The Raytheon contract is expected to finish.

Sources and claims log · vizmaya desk · Oct 12, 2026

What we checked, and what we left out.

20claims logged
11verified, on the page
1contested, labelled
8unverified, left out

Gaps: no official monthly 155mm series; no lobbying records; no public word on SM-3 materials. The Oct 8 contract text was read from a search snippet because the site blocked direct fetching.

Dept. of War, contracts Oct 8, 2026

Defence Industry Europe, Raytheon SM-3

White House, EO 14415

Federal Register, EO 14415

Holland and Knight, order summary

House Armed Services, 2026 NDAA summary

ProPublica, S. 4163

Defense Post, 155mm output

Breaking Defense, TNT plant

European Commission, ASAP

European Commission, Chemring Nobel

Rheinmetall filing, Jul 29, 2026

Photos, all public domain via Wikimedia Commons: U.S. Missile Defense Agency; Tech. Sgt. Andy Dunaway; Ductri Nguyen; Spc. Evan D. Marcy; Marc St. Gil (National Archives).

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