WASHINGTON: The US Army has signed a major agreement with Lockheed Martin worth up to $58.6 billion to expand production of Patriot interceptor missiles, as rising demand for air defence systems from conflicts in Iran and Ukraine puts pressure on American weapons inventories.
The Pentagon said on Wednesday that the deal transforms a previous one-year, $4.7 billion contract awarded in April into a seven-year procurement framework covering fiscal years 2026 through 2032. The agreement is intended to increase the supply of Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) interceptors and strengthen long-term production capacity.
The United States has supplied large quantities of weapons to its allies while also using advanced munitions in its own military operations in the Middle East, creating concerns over the availability of key air defence and precision-guided weapons.
Pentagon officials have been urging defence contractors to accelerate production, with preliminary manufacturing agreements reached earlier this year as part of efforts to increase missile output. The administration of President Donald Trump has also pressed defence companies to prioritise military production and improve contract performance.
Read More: US Army Chief Randy George fired amid Iran tensions
In January, Trump signed an executive order directing officials to identify defence contractors considered underperforming on government contracts, while encouraging companies to focus on meeting production demands.
Defence industry executives have supported efforts to expand manufacturing but have warned that congressional approval of funding is necessary before companies can make larger investments in production lines, suppliers and workforce growth.
The Pentagon said that final details, including delivery schedules for several munitions contracts, are still being negotiated.
Lockheed Martin said the new funding would help the company achieve its goal of tripling PAC-3 MSE production capacity by the end of 2030. The company also plans to increase employment at its Camden, Arkansas, facility by about 50%, growing the workforce from 1,200 to approximately 1,850 employees.
The defence contractor previously announced plans to raise PAC-3 missile interceptor production to 2,000 units annually. Lockheed Martin is also investing between $8 billion and $9 billion through 2030 to modernise more than 20 US facilities, including new munitions centres in Alabama and Arkansas.
The PAC-3 MSE is a hit-to-kill interceptor used by the Patriot air defence system to defend against ballistic missiles, cruise missiles and aircraft.
The Pentagon has also established a similar framework agreement with RTX, the parent company of Raytheon, to increase production of Tomahawk cruise missiles. The plan aims to raise annual production from the current rate of about 60 missiles for US forces to as many as 1,000 units.
The Center for Strategic and International Studies (CSIS), a Washington-based think tank, estimated that the US military currently has fewer than 1,000 Patriot interceptors and fewer than 250 Terminal High Altitude Area Defense (THAAD) interceptors available. Both systems have faced increased demand due to recent military operations in the Middle East.
The Lockheed Martin agreement marks a significant effort by the United States to expand its air defence manufacturing base and address concerns over declining missile stockpiles. However, officials say sustained funding, increased production capacity and stronger supply chains will be essential to meet future military requirements.
