Lockheed Martin has been awarded a massive $9.8 billion contract by the U.S. Army to produce nearly 2,000 Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) interceptors and associated hardware. The deal is described by a company executive as the „largest contract in Lockheed Martin Missiles and Fire Control history.”
Unprecedented Demand Signals
„We’re sensing unprecedented demand signals from the US Army, the Department of Defense and our international partners and allies. All of them want increased numbers of these interceptors,” Jason Reynolds, vice president and general manager of Integrated Air and Missile Defense at Lockheed, told reporters. He cited the ongoing conflicts in Ukraine and the Middle East as driving forces behind the increased demand, highlighting the PAC-3’s proven effectiveness against complex and coordinated threats.
Steady Stream of Missiles
Reynolds explained that the contract provides for a „steady stream of missiles” to be delivered over the coming years. While the contract spans fiscal years 2024-2026, actual production and delivery will extend beyond that timeframe.
Multi-Year Contract Details
The multi-year contract, awarded by the Army’s program executive office for missiles and space and Army Contracting Command, covers 1,970 interceptors and associated hardware for both the U.S. and international partners. The Army declined to disclose the identities of the international partners. The announcement includes 870 interceptors from last fiscal year, valued at $4.5 billion, and projects 550 interceptors each year in fiscal years 2025 and 2026.
Hit-to-Kill Technology
The PAC-3 system employs a „hit-to-kill” interceptor, relying on direct physical impact to neutralize hypersonic, ballistic, and cruise missile threats.
Multiyear Procurement Benefits
Congress has granted the Pentagon multiyear procurement authorities for this program, offering „long-term stability for suppliers, improving planning and resource allocation,” according to the Army. Maj. Gen. Frank Lozano, PEO of missiles and space, stated that multi-year contracts enable the Army to procure larger quantities of missiles for more rapid delivery, benefiting both the government and industry partners.
Accelerated Production
Lockheed Martin announced plans to deliver approximately 618 missiles in 2025, contributing to its past agreement to deliver $9.5 billion worth of PAC-3 interceptors and associated equipment from fiscal years 2021-2023. Reynolds clarified that the 618 missiles are specifically an addition for fiscal year 2023.
He emphasized the company’s efforts to meet the high demand, including „advanced procurement of material” and „surging our workforce by working nights and weekends.”
Production Capacity Expansion
Lockheed Martin is on track to produce up to 650 PAC-3 interceptors per year by 2027, as previously announced.
