Lockheed Martin announced on 6 January 2026 that it has signed a landmark framework agreement with the US Department of War to (DoW) rapidly accelerate the production and delivery of PAC-3 Missile Segment Enhancement (MSE) interceptors for the Patriot air defence system.
The transformative partnership, designed to deliver sustained production at scale, will increase annual capacity from approximately 600 to 2,000 PAC-3 MSE rounds in a seven-year agreement, supporting US forces, allies and partner nations.
The framework agreement is a direct outcome of the US DoW’s Acquisition Transformation Strategy reforms to US defence acquisition. It introduces a new model that provides long-term demand certainty, enabling industry investment, increasing production rates and driving operational efficiencies. It incorporates a collaborative financing approach designed to preserve initial cash neutrality, allowing industry to invest confidently to meet the required production levels, with both Lockheed Martin and the DoW benefitting from the resultant cost savings enabled by long-term demand certainty.
Lockheed Martin has increased PAC-3 MSE production by more than 60% over the past two years. In 2025 the company delivered 620 PAC-3 MSE rounds, exceeding the previous year by more than 20%.
“Following recent real-world operations, global demand for PAC-3 MSEs continues to soar,” Lockheed Martin stated in a press release. “This agreement will more than triple production capacity to meet the needs of US forces, allies and partner nations. As a result, the PAC-3 program will add thousands of additional American jobs across the supply chain. Beyond increased output, the agreement strengthens the resilience and anti-fragility of the US defense-industrial base by enabling long-term supplier investment, predictable demand signals and sustained production.”
Lockheed Martin chairman, president and CEO Jim Taiclet stated of the framework agreement, “”We appreciate the Department of War’s leadership in advancing acquisition reform. This first-of-its-kind approach builds on years of advocacy and collaboration to bring commercial practices to major acquisition programs. We will create unprecedented capacity for PAC-3 MSE production, delivering at the speed our nation and allies demand while providing value for taxpayers and our shareholders.”
