The U.S. Department of Defense (Pentagon) has signed a $35 billion procurement agreement with Lockheed Martin to boost production of advanced interceptor missiles for the THAAD system.
According to the Pentagon, the contract spans 7 years and aims to raise the annual production of THAAD missiles from 96 to approximately 400 units. American officials have noted that the system’s extensive use during direct confrontations with Iran has significantly depleted stockpiles, Bloomberg reports. This initiative is described as Washington’s largest effort to replenish ammunition and weapon stockpiles following the recent conflict.
The THAAD missiles, each costing over $12 million, play a crucial role in intercepting Iranian ballistic missiles aimed at U.S. bases and forces in the region, as well as at Israel. U.S. military sources have indicated that the high consumption of these missiles during combat operations has reduced strategic stockpiles to “alarming levels”.
Pentagon’s new procurement strategy
The new contract with Lockheed Martin is among the first major multi-year procurement agreements under the Pentagon’s procurement transformation strategy, which seeks to reform the defense industrial base and expedite product deliveries at a lower cost.
“This new approach advances our efforts to strengthen the defense industrial base, expand production, and provide capabilities to the American military with unprecedented speed and scale,” said Tim Cahill, head of the missiles and fire control systems division at Lockheed Martin.
To support this production expansion, Lockheed Martin began construction of a new ammunition production center in Troy, Alabama, in March of last year and opened an ammunition production acceleration center in Camden, Arkansas, in January. This is part of a $9 billion investment planned through 2030 to develop weapons production facilities across the United States.
Work under this contract will take place in 4 cities: Dallas (Texas), Sunnyvale (California), Troy (Alabama), and Camden (Arkansas). The contract terms are “fixed price,” according to the Pentagon’s statement, and will be effective from March 2026 to June 2032. The Department of Defense noted that more than $842 million was allocated from procurement funds for the 2026 fiscal year upon signing the contract.
In addition to the THAAD contract, Lockheed Martin has also signed agreements with the U.S. Department of Defense this year to increase production of PAC-3 MSE interceptor missiles and long-range Precision Strike Missile (PrSM) missiles.
Source: Sky News Arabia