Lockheed Martin handed L3Harris Technologies a $4.7 billion undefinitized contract to manufacture propulsion components for the PAC-3 Missile Segment Enhancement interceptor, the company said in a Sept. 8 statement. The seven-year deal — the largest PAC-3 propulsion award L3Harris has received — covers production of a two-pulse solid rocket motor, attitude-control motors, and a lethality enhancer. L3Harris had announced the award the week prior.
What it means
The propulsion contract feeds into a broader framework Lockheed Martin put in place in January, which set a target of lifting annual PAC-3 interceptor output from 600 units to 2,000. L3Harris moved to support that ramp-up in June, breaking ground on two new manufacturing plants in Arkansas; both are expected to come online by 2027. The Army relies on the PAC-3 MSE in its Patriot air defense system, and the Navy announced earlier this spring that it intends to integrate the interceptor into the Aegis Combat System for the first time.
Conflicts in Ukraine and Iran have pushed demand sharply higher. Combined Army and Navy requests for PAC-3 MSE units climbed 839 percent between fiscal year 2026 and fiscal year 2027, going from 341 to 3,203 interceptors. A Center for Strategic and International Studies report released in August found that planned production increases still fall short of current U.S. military demand. The cost gap between the interceptor and the threats it counters is stark: each PAC-3 MSE runs roughly $4 million, while Iran’s Shahed drones cost approximately $35,000 apiece.
Key facts
- $4.7 billion: value of the undefinitized contract award from Lockheed Martin to L3Harris Technologies
- Seven years: contract duration
- Sept. 8: date of L3Harris statement on the production work
- January: month Lockheed Martin announced the seven-year framework agreement
- 600 to 2,000: targeted increase in annual PAC-3 interceptor production under the framework
- June: month L3Harris broke ground on two new Arkansas facilities
- 2027: expected year both Arkansas plants become operational
- 839%: growth in Army and Navy PAC-3 MSE requests from FY2026 to FY2027 (341 to 3,203 units)
- $4 million: approximate unit cost of one PAC-3 MSE interceptor
- $35,000: cost of one Iranian Shahed drone
Source: L3Harris Technologies news release