The U.S. government has awarded Lockheed Martin a contract worth up to $58.62 billion to produce Patriot interceptor missiles amid increased demand for interceptors driven by U.S. and allied air-defense requirements.
The Lockheed award converts a previous one-year deal worth $4.7 billion awarded in April into a seven-year draft agreement, creating a multiyear procurement plan for the interceptors from fiscal 2026 through 2032.
Lockheed Martin said the new funding will allow it to triple production of PAC-3 Missile Segment Enhancement (MSE) interceptors by the end of 2030.
The company said the expansion will increase employment at its Camden, Arkansas, production site by about 50 percent. The workforce there is expected to grow from about 1,200 employees to roughly 1,850.
Camden is home to Lockheed Martin’s final assembly line for PAC-3 MSE interceptors. The company said the multiyear procurement gives it greater certainty to expand manufacturing, strengthen its supplier network, and invest in facilities needed to produce more missiles.
Lockheed Martin said the award supports the Department of War’s Acquisition Transformation Strategy, which encourages multiyear procurement to expand production capacity.
“Today’s announcement turns concept into reality, providing industry with the long-term demand signals it needs to build a resilient supply chain, scale production, and deliver critical capabilities to our Warfighters at the speed of relevance,” said Michael P. Duffey, undersecretary of war for acquisition and sustainment.
Investment Plans
Lockheed Martin said it is investing between $8 billion and $9 billion through 2030 to modernize more than 20 facilities across the United States.
This year, Lockheed Martin has already begun construction on new munitions facilities in Troy, Alabama, and Camden, Arkansas.
The Alabama facility will support production of Terminal High Altitude Area Defense (THAAD) interceptors and future Next-Generation Interceptor work, while the Arkansas site will focus on PAC-3 production.
A man looks at a Patriot Advanced Capability (PAC-3) Missile Segment Enhancement (MSE) model by Lockheed Martin at an international military fair in Kielce, Poland, on Sept. 7, 2017. Kacper Pempel/Reuters
Jim Taiclet, Lockheed Martin’s chairman, president, and CEO, said the company was moving quickly to expand manufacturing capacity.
“This is a once-in-a-generation moment, and we are moving with wartime urgency to deliver the Arsenal of Freedom,” Taiclet said. “Lockheed Martin is sparing no effort with our investment, hiring and facility upgrades as we deliver on the government’s acquisition transformation.”
Lockheed Martin is also working to reduce the cost of Patriot interceptors.
A Patriot missile PAC-3 system on display in South Korea in 2008. Jung Yeon-Je/AFP/Getty Images
Last week, the company introduced a new missile, known as the PAC-3 Adapted Capability Effector (PAC-3 ACE). The new interceptor will cost less than half as much as the current PAC-3 MSE, according to the company, while remaining compatible with the Patriot air defense system.
The U.S. Army’s fiscal 2026 budget request includes funding for 224 PAC-3 MSE missiles at an average unit cost of $3.871 million. That figure includes the missile, supporting equipment, and investments to strengthen production capacity.
