Pentagon Issues $4.7B More for Missiles

The U.S. Army awarded a four-year, $4.76-billion contract to Lockheed Martin Corp. for production of Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) missile interceptors, including all incidental services, hardware, equipment, technical planning, management, and manufacturing efforts. The majority of the funding obligated at the time of the award is to be supplied by the Pentagon’s foreign military sales funds.

The Patriot missile system consists of multiple elements produced by different manufacturers. Raytheon is the prime contractor responsible for the radar, engagement control station, and overall system integration. Lockheed Martin produces the PAC-3 and PAC-3 MSE interceptor missiles; Boeing Defense Boeing manufactures the “seeker” missile guidance system, and other critical components. MBDA in Germany and Mitsubishi Heavy Industries in Japan perform licensed production and maintenance of components.

The PAC-3 MSE is a high-velocity interceptor for the Patriot mobile air-defense system powered by a dual-pulse solid rocket motor, and designed to destroy advanced tactical ballistic, hypersonic, and cruise missiles, as well as aircraft, according to Lockheed.

The new contract has an estimated completion date of June 2030, with work to be conducted at more than a dozen Lockheed locations in the U.S. As recently as September 2025, the Army awarded $9.8 billion to Lockheed to produce nearly 2,000 PAC-3 MSE missiles through 2026.

In January, the Pentagon announced a seven-year agreement on PAC-3 MSE purchases, to incentivize Lockheed to triple its production capacity for the missiles.

The Pentagon has adopted a long-term strategy to increase industrial production of PAC-3 MSE missiles and the critical components, like rocket motors and guidance systems. Earlier this month,

Recently, the department initiated a series of framework agreements with Lockheed, BAE Systems, and Honeywell Aerospace to accelerate defense procurement practices, in order to encourage the manufacturers to increase investments in new manufacturing capacity for missile systems.

On April 1, Boeing announced a seven-year framework agreement with the Pentagon to triple its production of PAC-3 seekers (which allow PAC-3 interceptors to identify and track advanced threats) to meet global demand for air and missile defense.