Lockheed Martin wins over $35 billion contract to quadruple THAAD production

Lockheed Martin won an over $35 billion contract to boost the production of Terminal High Altitude Area Defense, or THAAD, interceptors.

The seven-year contract, awarded by the U.S. Missile Defense Agency, will quadruple the interceptors’ production, according to a Wednesday Lockheed release, in a time when U.S. lawmakers are pushing for an increase in munitions procurement.

After the war in Iran and other conflicts, the U.S. munitions stockpile has dwindled, leaving the country to place pressure on defense contractors to deliver more weapons as policymakers worry over the amount of key air-defense and precision-guided weapons available.

Even though the U.S. had enough for the Iran war, to restore the munitions stockpile to pre-war levels, it will take at least three years, which creates a “window of vulnerability” for a potential Western Pacific conflict, a May Center for Strategic International Studies report found.

The recent Lockheed contract is one of the first major multiyear procurement contracts a part of the Pentagon’s Acquisition Transformation Strategy, which is meant to reform the defense industrial base to accelerate the delivery of products at a lower cost.

“This new approach propels our efforts to strengthen the defense industrial base, expand production and deliver capabilities to the American warfighter at unprecedented speed and scale,” Tim Cahill, Lockheed Martin Missiles and Fire Control president, said in the release.

The contract moves forward the January framework agreement between the Defense Department and Lockheed Martin, accelerating the number of THAAD interceptors from 96 to 400 per year, roughly a fourfold increase.

In support of ramped-up production, the company broke ground on a new Munitions Production Center in Troy, Alabama, in March as well as a new Munitions Acceleration Center in Camden, Arkansas, in January as part of a $9 million investment through 2030 for weapons facilities across the country.

The work for this contract will be completed across the four cities of Dallas, Texas; Sunnyvale, California; Troy, Alabama; and Camden, Arkansas.

Lockheed will provide THAAD missile rounds under “fixed-priced contract line-item numbers,” a Wednesday Pentagon release says, from March 2026 through June 2032.

At the time of the award, fiscal 2026 procurement funds of over $842 million are “being obligated,” the Pentagon release says.

Alongside the THAAD contract, Lockheed Martin has also established agreements with the department this year to produce more PAC-3 Missile Segment Enhancement, or MSE, interceptors and Precision Strike Missiles, or PrSM.