The Pentagon, under Defense Secretary Pete Hegseth, has awarded Raytheon a no-bid contract extension worth up to $394 million, less than two years after the weapons manufacturer admitted to overbilling the U.S. government by more than $111 million.

The Missile Defense Agency (MDA) granted the extension to Raytheon, a subsidiary of RTX, one of the world's largest defense contractors, to continue upkeep of its AN/TPY-2 radar systems — radars designed to detect and track ballistic missiles — through 2028, with $112.3 million set aside for that purpose. The modification puts the contract's ceiling at close to $3 billion. “This modification provides for a non-competitive, two-year extension,” the Pentagon said in a statement on the award. The news was first reported by PunchUp, the Daily Beast's sister Substack.

The award came about a month after the Navy determined that Raytheon would remain in good standing for federal contracting work. Suspension and debarment are the government's tools for excluding companies from new federal contracts, proceedings the Navy opted not to pursue. According to RTX filings reviewed by PunchUp, Navy officials concluded in September that “suspension or debarment proceedings are not necessary to protect the U.S. government's interests.”

That determination followed the company's 2024 admissions that it had inflated the price of an Air Force radar maintenance contract by $11.1 million in 2017 and 2018. Raytheon also acknowledged $100.1 million in fraud on a Patriot missile contract with the Army in 2011 and 2012. “These schemes to defraud caused the DOD to pay Raytheon over $111 million more than Raytheon should have been paid on the contracts,” the Justice Department said at the time. To avoid prosecution for the two schemes, Raytheon entered into a deferred prosecution agreement that placed it under three years of heightened government scrutiny.

Federal funds have continued to flow to the company nonetheless. The Navy issued a $15.1 million order for ship radar parts from Raytheon on Oct. 13 under an existing arrangement, and the Pentagon announced the $394 million extension eight days later. In October, Raytheon also received a Navy missile contract worth up to $24 billion and a Missile Defense Agency contract valued at up to $6.3 billion.

The current administration is not the first to extend new business to Raytheon since the fraud settlement. Under the Biden administration, the Missile Defense Agency added $900 million to the ceiling of the same radar contract just nine days after the Justice Department announced the fraud accord in 2024.

“Because the contractor was not suspended or debarred, and the acquisition fulfilled a critical mission requirement for the agency, MDA executed the extension,” a Missile Defense Agency spokesperson told the Daily Beast in defense of the latest award.

The developments come as Hegseth asks Congress for $67 billion to fund operations in the Middle East, after disclosing that the war has already cost $37.5 billion. The funding request now awaits congressional action, and the extension runs through 2028, past the end of the three-year heightened-scrutiny period created by the 2024 agreement.

Source: Alternet