Department of War awards Lockheed Martin US$58.62 billion to expand PAC-3 production

The US Department of War has awarded Lockheed Martin a seven-year Undefinitized Contract Action (UCA) modification for up to US$53.86 billion (about $77.3 billion) for PAC-3 Missile Segment Enhancement (MSE) interceptors, supporting the Department of War’s Acquisition Transformation Strategy. The award brings the total multiyear contract value to US$58.62 billion (about $84.2 billion), following the $4.7 billion UCA awarded in April for year one, says the company.

The PAC-3 MSE provides an advanced, accurate shield against evolving threats, adds Lockheed Martin. In operational environments during Operation Epic Fury, in Ukraine and in other missions around the world, PAC-3 MSE has performed beyond specifications, the company says.

The new funding further enables Lockheed Martin to increase PAC-3 MSE production dramatically and triple capacity by the end of 2030. It also supports a 50% increase in jobs, from 1,200 to approximately 1,850, in Camden, Arkansas, home to Lockheed Martin’s final all-up round production of PAC-3 MSE interceptors. In recent years, Lockheed Martin also proactively increased production of PAC-3 MSE to address the soaring demand from US and partner nations.

By embracing a multiyear procurement model, Lockheed Martin is expanding its production footprint, fortifying the defence industrial base and delivering critical interceptors into the hands of warfighters at unmatched speed, the company says.

The announcement provides 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, Under Secretary of War for Acquisition and Sustainment.

“This is a once-in-a-generation moment, and we are moving with wartime urgency to deliver the Arsenal of Freedom,” said Lockheed Martin Chairman, President and CEO Jim Taiclet.

The multi-year purchase will accelerate munitions acquisition reform, says Lockheed Martin: the company was the first in the industry to announce a framework agreement and one of the first to receive a contract for munitions acceleration under the Department of War’s Acquisition Transformation Strategy. This contract marks the second major multiyear contract for Lockheed Martin under the DoW’s new acquisition model, following the US$35 billion ($50 billion)  contract to accelerate production for Terminal High Altitude Air Defense (THAAD) interceptors.

It is also an investment in the US defence industrial base: Lockheed Martin says it is investing US$8 to $9 billion (about $11.5 to $13 billion) through 2030 to modernize more than 20 US facilities and rapidly scale munitions output. The company has already broken ground on two munitions facilities this year, including the Munitions Production Center Building 47 in Troy, Alabama, supporting THAAD and future work with Next-Generation Interceptor, and the Munitions Acceleration Center in Camden, Arkansas, supporting PAC-3.