Lockheed Martin is set to triple production capacity for its PAC-3 Missile Segment Enhancement (MSE) interceptors by 2030, following the award of a seven-year modification worth up to $53.86bn from the US Government.
The undefinitised contract action (UCA) modification, disclosed on 29 July 2026, brings the company’s total multiyear contract value for PAC-3 MSE to $58.62bn, after securing a $4.7bn contract for the same interceptors in April this year.
The expanded production will be centred at Lockheed Martin's Camden, Arkansas facility, which is expected to add around 650 new jobs and increase its workforce to approximately 1,850 employees.
Lockheed Martin stated that the multiyear award reflects its “shared commitment” with the Department of War (DoW) to enhance the Arsenal of Freedom and accelerate the delivery of advanced air-defence capabilities.
The increased output will also help meet growing demand from both US armed forces and international partners, as well as provide critical support to the DoW’s Acquisition Transformation Strategy.
The PAC-3 MSE interceptor is used to counter threats including tactical ballistic missiles, cruise missiles, and aircraft by striking targets directly, a method designed to deliver greater kinetic energy than traditional blast-fragmentation warheads.
The system’s two-pulse solid rocket motor enables extended range and higher altitude engagement.
According to Lockheed Martin, the interceptor has demonstrated effective performance in various operational environments, including recent missions in Ukraine and other deployments.
Lockheed Martin said the system has been used operationally in various global missions, including recent deployments in Operation Epic Fury and Ukraine.
Lockheed Martin chairman, president and CEO Jim Taiclet said: "This is a once-in-a-generation moment, and we are moving with wartime urgency to deliver the Arsenal of Freedom. Lockheed Martin is sparing no effort with our investment, hiring and facility upgrades as we deliver on the government's acquisition transformation."
This is the second major multiyear contract awarded to Lockheed Martin under the Department of War’s updated acquisition strategy, following a previous $35bn agreement for Terminal High Altitude Air Defense (THAAD) interceptors.
As part of its broader expansion, the company is investing $8–9bn through 2030 to modernise over 20 US facilities and increase munitions production, including new plants opened this year in Alabama and Arkansas.
Recently, Lockheed Martin also introduced the PAC-3 Adapted Capability Effector (ACE), a new air and missile defence interceptor designed to offer allied militaries a more affordable alternative to current options.
