Pentagon Announces Agreements With Defense Startups for Low-Cost Missile Production

The Pentagon is preparing to test low-cost missiles developed by several defense technology companies as part of an effort to build large stockpiles of affordable cruise and hypersonic weapons. The agreements cover Anduril, CoAspire, Leidos, and Zone 5 Technologies.

A fifth company, Castelion, will support development and production of low-cost hypersonic weapons. The effort focuses on what officials described as disruptive new entrants to the defense sector. It reflects a broader push to expand the U.S.

military industrial base beyond traditional prime contractors amid concerns about the ability to produce sufficient munitions in a major conflict. Those concerns have been highlighted by recent operations. The U.S.

conflict with Iran demonstrated how quickly high-end munitions can be depleted in combat. The war in Ukraine has shown the utility of producing and using large quantities of less expensive weapons when stocks of more advanced systems run low. The Department of Defense said it hopes to procure more than 10,000 low-cost cruise missiles over three years beginning in 2027.

The purchases would occur through firm-fixed-price production contracts. Officials said the approach is intended to create a pathway for rapid and repeatable production of high-volume lethal strike capabilities. The department plans to begin buying test missiles from the four cruise missile companies in June 2026 ahead of military assessments.

Castelion is set to receive a multi-year procurement contract for at least 500 hypersonic weapons annually once its munitions complete testing. Several participating companies are expected to scale production without direct military investment. Officials described the model as one designed to reward speed, innovation and private capital.

The initiative is part of an effort to leverage private-sector investment in weapons production. The search for low-cost munitions extends beyond this program. The Pentagon's research arm is also exploring ways to develop missiles that can be built in days rather than months.

Officials said the steps are intended to expand the industrial base, accelerate testing timelines and send a long-term demand signal to new companies in the sector. "We are moving beyond the traditional prime contractors to expand our industrial base, accelerating testing timelines, and sending a clear, long-term demand signal to innovative new entrants," the Under Secretary of War for Acquisition and Sustainment said in the release announcing the effort.