Lockheed Martin announced it has signed an agreement with the U.S. Department of Defense to accelerate the production and delivery of PAC-3 Missile Segment Enhancement (MSE) interceptors.
The agreement is designed to deliver sustained production at scale and will increase annual capacity from 600 to 2,000 over the agreement’s seven-year duration.
Officials said the agreement stems from the DoD’s Acquisition Transformation Strategy to reform U.S. warfighting acquisitions. The framework introduces a new model to provide long-term demand certainty, which will enable industry investment, increasing production rates and operational efficiencies. The strategy also incorporates collaborative financing and reflects years of collaboration to modernize acquisition and deliver critical capability at the speed and scale required today.
Lockheed said it had recently increased the PAC-3 MSE production by more than 60 percent, and delivered 620 PAC-3 MSEs in 2025, 20 percent more than in 2024. Lockheed also said it would support the necessary investments to drive production increase and that both it and the DoD would participate in the cost savings opportunity presented by long-term demand certainty.
Officials said global demand for PAC-3 MSEs has grown in recent years, and the agreement with the DoD would triple production capacity to meet the needs of U.S. forces, as well as that of allies and partner nations.
“We appreciate the Department of War’s leadership in advancing acquisition reform,” Lockheed Martin Chairman, president and CEO Jim Taiclet, said. “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.”