The Department of War (DoW), working in partnership with Lockheed Martin, Tuesday announced the signing of a landmark framework agreement that establishes a transformative new acquisition model to expand munitions production and procurement- one that delivers long-term demand certainty, incentivizing industrial investment to increase production, cut lead times, drive supply chain management efficiencies, while reducing upfront government facilitization and capacity investments.
This seven-year framework agreement with Lockheed Martin is a direct outcome of the Department's new Acquisition Transformation Strategy, as unveiled by Secretary of War Pete Hegseth in his Arsenal of Freedom speech at Fort McNair in November.
As the Secretary stated, "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."?
Under the framework agreement, Lockheed Martin will increase annual production of the PAC-3 Missile Segment Enhancement (MSE) interceptor from approximately 600 to 2,000, aligning industrial capacity to the long-term demand required by U.S. forces, allies and partner nations.
The agreement also aligns the interests of Lockheed Martin, the government, and taxpayers, with Lockheed Martin?supporting investments to scale the required production increases, while benefitting from the certainty of long-term, growing demand for the PAC-3 MSE.
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