DoW-Lockheed Pact Triples Production of PAC-3 MSE Interceptors

Partnering with Lockheed Martin, the U.S. Department of War (DoW) has signed a seven-year framework agreement for a new acquisition plan for PAC-3 Missile Segment Enhancement (MSE) interceptor systems. The plan, which boosts annual production of PAC-3 systems from about 600 to 2,000 systems, is meant to match industrial production capacity with long-term demands of U.S. forces and allies. It's designed to cut lead times and increase supply-chain efficiency. 

The efficient acquisition strategy was outlined by Secretary of War Pete Hegseth in November 2025 during his Arsenal of Freedom speech at U.S. Army post Fort McNair (Washington, DC). During that speech, Hegseth noted, “We will stabilize demand signals. We will award companies bigger, longer contracts for proven systems so those companies will be confident in investing more to grow the industrial base that supplies our weapons systems more and faster.”

Michael Duffey, Under Secretary of War for Acquisition and Sustainment, added, “This framework agreement marks a fundamental shift in how we rapidly expand munitions production and magazine depth, and how we collaborate with our industry partners. Lockheed Martin's willingness to help pioneer this transformative acquisition model is a win-win for the taxpayer, our national security, and the rebuilding of the industrial base needed for the Arsenal of Freedom.”

To make the increase in production possible, the DoW will work with key suppliers of PAC-3 system (see image above) components. The DoW and Lockheed Martin will share in any enhanced profitability resulting in new components and supply-chain modifications.