Pentagon gives Lockheed Martin $35 billion THAAD contract

The Pentagon has awarded Lockheed Martin a contract worth up to $35 billion over seven years to dramatically increase production of Terminal High Altitude Area Defense (THAAD) interceptors. The award, announced on June 24, aims to quadruple the annual production rate of the missile defense interceptors from approximately 96 to about 400 units.

The contract is an undefinitized contract action, a mechanism that allows work to begin before final terms are settled, and it formalizes a framework agreement signed between the Department of War and Lockheed Martin in January. Company officials described the award as one of the first major multiyear procurement contracts executed under the Department of War's Acquisition Transformation Strategy, a new approach intended to provide manufacturers with long-term demand signals so they can invest in expanding production capacity.

This initiative is part of a broader push by the administration to replenish missile defense stockpiles and strengthen the defense industrial base. The effort follows military operations against Iran, which have drawn down inventories. In a related move, the Pentagon awarded Lockheed Martin a $4.7 billion contract in...