Pentagon Signs Framework Agreements with Lockheed Martin and Northrop Grumman to Boost THAAD and PAC-3 Missile Defense Production
Key Takeaways
- •The framework agreements target a fourfold increase in THAAD interceptor component production and a threefold rise in PAC-3 missile manufacturing capacity.
- •Northrop Grumman entered into agreements totaling $3 billion, comprising $2 billion for rocket motors and safety devices and $1 billion for expanded THAAD component deliveries.
- •Lockheed Martin secured a seven-year PAC-3 contract modification worth up to $53.86 billion, raising the total multiyear contract value to $58.62 billion.
- •Northrop Grumman plans to triple PAC-3 solid rocket motor production capability at its West Virginia facility by 2027 and is also expanding capacity at plants in Utah and Maryland.
- •The agreements establish a second domestic source for solid rocket motors, addressing a recognized production bottleneck and reducing supply-chain risk across multiple U.S. weapons programs.
President Donald Trump's War Department has signed framework agreements with Lockheed Martin and Northrop Grumman aimed at significantly expanding U.S. missile-defense manufacturing capacity. The deals are intended to quadruple output of Terminal High Altitude Area Defense (THAAD) interceptor structural components and support a threefold increase in Patriot Advanced Capability-3 (PAC-3) production, according to a War Department release issued Monday.
THAAD and PAC-3 are central pillars of the U.S. layered ballistic missile defense architecture. THAAD, manufactured by Lockheed Martin, is designed to intercept short- and medium-range ballistic missiles at high altitude during their terminal descent. The PAC-3 Missile Segment Enhancement (MSE), also a Lockheed Martin program, is the hit-to-kill interceptor used by the Patriot air and missile defense system and is deployed by the U.S. Army and more than a dozen allied nations. Demand for both systems has intensified as the U.S. replenishes domestic inventories and fulfills allied procurement requests, including Patriot transfers to Ukraine and continued missile-defense cooperation with partners in the Middle East and Indo-Pacific.
"Building the Arsenal of Freedom requires robust, dynamic supply chains at every level of the industrial base," Michael Duffey, undersecretary for acquisition and sustainment, said in a statement. "Framework agreements with munition components suppliers like Northrop Grumman are vital to accelerating the tripling of PAC-3 and quadrupling of THAAD interceptor production."
The department said the agreements would provide suppliers with longer-term demand commitments needed to justify investments in tooling, facility upgrades, and workforce development.
While financial terms and production timelines were not included in the War Department announcement, Northrop Grumman disclosed that it entered into agreements worth a combined $3 billion. These consist of a $2 billion agreement to supply rocket motors and safety devices and a $1 billion agreement to increase deliveries of THAAD components.
"Our long-term investments in breakthrough manufacturing technologies and resilient supply chains let us pivot from steady production to a production surge in record time," Northrop Grumman Vice President Ben Davies said in a statement. "As one of America's leading producers of solid rocket motors, we're supporting the administration's push to accelerate munitions output."
Davies added: "It's a mission-critical leap forward that ensures America's defense edge stays sharper, faster, and farther ahead of global threats."
Under the agreements, Northrop plans to raise PAC-3 solid rocket motor production at its Allegany Ballistics Laboratory in West Virginia, where the company has doubled tactical motor capacity since 2021 and expects to triple production capability by 2027. The expansion will support U.S. Army plans to increase annual PAC-3 MSE missile production from approximately 600 units to thousands for both American forces and allied nations.
The deal also establishes a second source for solid rocket motors and increases production of ignition safety devices. The Pentagon said adding another rocket-motor supplier would increase competition and reduce supply-chain risks. Solid rocket motor manufacturing has been a recognized constraint across multiple U.S. weapons programs, with only a small number of domestic producers capable of producing tactical-grade motors at scale.
Northrop is additionally doubling solid rocket motor capacity at its Utah facilities and increasing capacity by 25% at its Elkton, Maryland, plant.
Under the THAAD agreement, Northrop will increase monthly deliveries of structural components, including interceptor shell cores, aft bulkheads, and heat-shield assemblies. The company has supplied components for the THAAD missile-defense system since 2002.
Northrop said it has invested more than $2 billion in munitions-related technologies and facilities since 2019, including over $1 billion specifically for solid rocket motor production.
Separately, Lockheed Martin announced a seven-year contract modification for up to $53.86 billion for PAC-3 missiles. The award brings the total multiyear contract value to $58.62 billion, following a $4.7 billion undefinitized contract action (UCA) awarded in April for year one.
The framework agreements were developed in coordination with the Munitions Acceleration Council, the Economic Defense Unit, the Missile Defense Agency, and the Office of the Under Secretary for Acquisition and Sustainment, according to the War Department.