U.S. awards Lockheed Martin seven-year contract to build 400 THAAD interceptors annually

The U.S. Missile Defense Agency awarded Lockheed Martin a seven-year contract valued at more than $35 billion to produce Terminal High Altitude Area Defense interceptors. The agreement runs from March 2026 through June 2032 and obligates more than $842 million in fiscal 2026 procurement funds at the time of award.

Annual production of the interceptors will rise from 96 to 400 units under the contract. Work will take place at facilities in Dallas, Texas; Sunnyvale, California; Troy, Alabama; and Camden, Arkansas. Lockheed Martin has broken ground on a new Munitions Production Center in Troy, Alabama, and a Munitions Acceleration Center in Camden, Arkansas.

The company is investing $9 million through 2030 in weapons facilities across multiple states. The contract follows a separate $4.7 billion agreement reached in April to accelerate production of Patriot PAC-3 Missile Segment Enhancement interceptors.

The Pentagon described the THAAD award as one of the first major multiyear procurement actions under its Acquisition Transformation Strategy, which uses fixed-price contract line items to accelerate delivery and lower costs.

"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," said Tim Cahill, president of Lockheed Martin Missiles and Fire Control.

One estimate indicated that roughly 198 THAAD interceptors were expended in the first 16 days of the Iran war, consuming up to 80 percent of available stock. A May Center for Strategic and International Studies report stated that restoring stockpiles to pre-war levels would require at least three years.