Donald Trump’s Pentagon has given Raytheon a no-bid contract extension of up to $394 million after the manufacturer admitted to fraud. The move by Defense Secretary Pete Hegseth’s department is for the weapons manufacturer that, only two years back, put on record that it had overbilled the government in excess of $111 million.
The Missile Defense Agency awarded the contract to Raytheon, an RTX subsidiary, to continue upkeep of its AN/TPY-2 radar systems through 2028; $112.3 million has been set aside for that purpose. The news broke first with PunchUp, the Daily Beast’s sister Substack.
In a statement on the award, the Pentagon was forthright. “This modification provides for a non-competitive, two-year extension,” it said, putting the contract’s cap at close to $3 billion.
It came but a month after the Navy ruled that Raytheon would remain in good standing for federal work. In September, per RTX filings seen by PunchUp, Navy officials determined that “suspension or debarment proceedings are not necessary to protect the U.S. government’s interests.”
That was after the company’s 2024 confession to having jacked up the price of an Air Force radar maintenance contract by $11.1 million in 2017 and 2018. Raytheon also owned up to $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 put it then.
To stave off prosecution for the two frauds, Raytheon entered a deferred prosecution agreement and put itself under three years of hard government scrutiny.
Yet the funds have continued to come in. The Navy issued a $15.1 million order for ship radar parts from Raytheon on Oct. 13 under a current arrangement, and the Pentagon put out word of the $394 million extension eight days on. In October, the company was also given a Navy missile contract to the tune of up to $24 billion and another from the Missile Defense Agency worth up to $6.3 billion.
Hegseth is not the first to be accommodating to Raytheon. The Biden administration saw the Missile Defense Agency add $900 million to the ceiling of the same radar contract a mere nine days after the Justice Department made public 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 spokesperson for the Missile Defense Agency told the Daily Beast in defense of the latest award.
All this while, Hegseth is making his case to Congress for $67 billion for operations in the Middle East, having laid bare that the war has run up a tab of $37.5 billion already.