WASHINGTON — The Army awarded Lockheed Martin a $9.8 billion award for the production of nearly 2,000 Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) interceptors and associated hardware today, in what a company executive called the “largest contract in Lockheed Martin Missiles and Fire Control history.”
“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 today. “The real world events in Ukraine as well as the Middle East have really highlighted the ability for PAC-3 to perform against the most challenging threats in a complex and coordinated grade.”
“This specific contract basically provides for a steady stream of missiles to be delivered over the coming years,” he said, adding that the contract is for fiscal years 2024-2026, but the missiles “will actually be produced and delivered several years after that.”
The multi-year contract awarded by the Army’s program executive office for missiles and space along with Army Contracting Command is for 1,970 interceptors and associated hardware for the US and international partners, though the Army declined to comment on who the international partners were. Today’s announcement includes an award to Lockheed for 870 interceptors from last fiscal year costing $4.5 billion. In fiscal year 2025 and 2026, Lockheed plans to contribute 550 interceptors each year, bringing the total number of interceptors to 1,970.
The PAC-3 system is designed as a “hit-to-kill” interceptor, meaning it delivers “direct body-on-body contact” to take down hypersonic threats as well as ballistic and cruise missiles, according to Lockheed.
It’s one of the weapon systems that Congress granted the Pentagon multiyear procurement authorities for, which “offer long-term stability for suppliers, improving planning and resource allocation,” the Army said in its release today.
“Our procurements at PEO Missiles and Space are beneficial because they enable the Army to procure a larger quantity of missiles for more rapid delivery, thus filling our inventory faster,” Maj. Gen. Frank Lozano, PEO of missiles and space, said in an Army release today. “Plus, multi-year contracts mutually benefit both the government and our industry partners.”
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The company announced it plans to deliver approximately 618 missiles in 2025 for the first time, which will go toward the company’s past agreement to deliver $9.5 billion worth of PAC-3 interceptors and associated equipment from fiscal years 2021-2023. Reynolds said that the 618 missiles are specifically an add-on to for fiscal year 2023.
“We’re doing that by advanced procurement of material, and we’re surging our workforce by working nights and weekends,” he said. “Because this interceptor is in such high demand, so as soon as we have all the parts to assemble a missile, our workforce works around the clock to put it together, to get it out of the factory.”
As previously announced, Lockheed is on contract to produce up to 650 PAC-3 interceptors per year by 2027.