Lockheed Martin lands $35 billion THAAD contract tied to Camden-Pentagon production ramp-up

By Wesley Brown, Arkansas Delta Informer

June 24, 2026 — The Pentagon on Wednesday awarded Lockheed Martin a seven-year undefinitized contract action worth up to $35 billion to quadruple production of Terminal High Altitude Area Defense, or THAAD, interceptors. The award finalizes a framework agreement first announced in January and is expected to support production work at the defense contractor’s Munitions Acceleration Center in East Camden, Ark.

The award is one of the first major multiyear procurement contracts executed under the Department of War’s (DoW) Acquisition Transformation Strategy, moving the earlier framework agreement into contract execution.

“We are committed to further building on the Department of War’s vision for advancing acquisition reform with additional framework agreements for the critical munitions needed by the U.S. military and our allies,” Lockheed Martin CEO Jim Taiclet said in a statement.

“Today’s agreement to quadruple THAAD production means we will have more interceptors available than ever before to deter our adversaries.”

At noted, the contract puts into action the THAAD framework agreement between the DoW and Lockheed signed at the beginning of the year, shortly after the company broke ground on a new $1.25 billion munitions facility at Highland Industrial Park in Calhoun County.

That framework agreement calls for Lockheed Martin to increase THAAD production from 96 to 400 interceptors per year. The new contract allows the company to begin production work immediately, although final terms, bid specifications and pricing have not yet been completed. The deal was a key talking point by the White House in submitting the Pentagon’s $1.5 trillion defense budget to Congress for fiscal 2027.

The former Department of Defense said the agreement is critical to U.S. military readiness because it gives industry the long-term demand signal needed to expand production capacity, strengthen the defense industrial base and deliver missile defense capability more quickly for the U.S. and its allies.

THAAD is designed to intercept short-, medium- and intermediate-range ballistic missile threats, including targets inside and outside the atmosphere. Defense officials and contractors describe the system as a key layer in U.S. missile defense because it is built to destroy incoming threats by direct impact.

Defense analysts have said the U.S. faced severe strain on its THAAD interceptor inventories during recent conflicts, particularly the Iran war, exposing long-standing production and delivery gaps. Mark Cancian, senior adviser for defense and security at the Center for Strategic and International Studies, said in a research note this week that munitions represent the largest share of estimated war costs for the U.S. campaign against Iran.

“U.S. forces fired many expensive missiles, making munitions the largest component of the war cost estimate. All need replacement, given that prewar inventories were considered inadequate,” Cancian wrote in a research note on Tuesday (June 23).

In late April, CSIS reported that since Operation Epic Fury began in February, the U.S. military had spent about half of its Patriot and THAAD missile stockpiles. Lockheed Martin has said its Camden-area Munitions Acceleration Center will help prepare workers to build THAAD, PAC-3 and other missile defense capabilities. PAC-3 and THAAD are both used to defend U.S. forces and allies against short-, medium- and intermediate-range missile threats.

A THAAD battery consists of 90 soldiers, six truck-mounted launchers, 48 interceptors, radar surveillance and control, and a tactical fire control and communications unit.

Altogether, CSIS estimates the cost of the Iran war at $34.2 billion to $41.5 billion, with munitions representing about $26 billion of that total. Since Operation Epic Fury began in February, an estimated 190 to 290 THAAD missiles have been expended on U.S. air defense, at a total estimated replacement cost of $2.3 billion to $3.5 billion.

Patriot missiles represented the largest estimated use among the air defense systems, with 1,060 to 1,430 missiles expended at an estimated unit cost of $5.3 million to $7.1 million. For U.S. ground operations, nearly 3,000 Tomahawk cruise missiles, Joint Air-to-Surface Standoff Missiles, and Precision Strike Missiles, including Multiple Launch Rocket System (MLRS) rockets and High Mobility Artillery Rocket System (HIMARS), have been launched by U.S. field artillery units against Iranian targets. Both HIMARS and MLRS are manufactured in Camden.

Beyond the estimated $26 billion in munitions costs, the next-largest Department of War expenses from the conflict are base damage and equipment losses involving aircraft and ground vehicles, which CSIS estimates at $5.7 billion to $12.9 billion.

Camden military investment boom

In support of the Pentagon’s efforts to expand U.S. munitions and defense capacity, Lockheed said in its recent earnings report that it is planning a multibillion-dollar investment over the next three years to expand production and build and modernize more than 20 facilities in Arkansas, Alabama, Florida, Massachusetts and Texas.

This includes upgrading existing facilities and incorporating advanced manufacturing techniques, production lines, tooling and plant layouts to meet urgent production demand.

For South Arkansas, the new THAAD contract adds to a growing pipeline of missile defense work tied to Lockheed Martin’s Camden-area operations and the broader Highland Industrial Park defense manufacturing base. In late February, DoW Secretary Pete Hegseth, top Pentagon officials, Gov. Sarah Sanders and an entourage of Arkansas government and economic development officials visited the manufacturing sites of L3 Harris, General Dynamics, Lockheed and RTX, which are among the so-called “Big Five” defense contractors that receive the largest share of the Pentagon’s $1.5 trillion annual budget. 

Currently, Lockheed said it has more than 340,000 square feet of dedicated operations space in the U.S. for THAAD, with more than 2,000 U.S. employees supporting the program.

In support of U.S. THAAD production, L3 Harris also announced in February that it received a $400 million contract from the Pentagon to manufacture additional solid rocket boost motors for the Missile Defense Agency’s Terminal High Altitude Area Defense (THAAD) system.

As the THAAD rocket motor manufacturer for Lockheed, L3 Harris broke ground over a year ago on a new 60,000-square-foot state-of-the-art munitions production facility, which will bring together the production of key missile programs under one roof. Ken Bedingfield, president of Missile Solutions at L3Harris, said THAAD stands as a cornerstone of U.S. and allied security.

“THAAD is the only U.S. system designed to intercept targets outside and inside the atmosphere, making it a critical part of the United States’ missile defense system,” Bendingfield said. “THAAD is paramount to the security of this nation and our allies, and we are dedicated to delivering our proven propulsion for years to come.”

In Camden, L3 Harris has more than 1,200 employees and became one of the nation’s largest solid rocket motor manufacturers following its $4.7 billion acquisition of Aerojet Rocketdyne in July 2023. At its Highland facility, L3 Harris produces more than 100,000 solid rocket motors manufactured annually, ranging from steering motors you can fit in your hand to large boosters the length of an SUV.

In additional to its own munitions facility in East Camden, Lockheed also recently broke ground in late May on a new Munitions Production Center in Troy, Ala., as part of the company’s more than $9 billion investment through 2030.

It also opened the Next Generation Interceptor facility in Courtland, Ala., on June 1, where the defense giant will consolidate all the company’s most sophisticated digital manufacturing tools and smart processes under one roof, a new state-of-the-art, 88,000 square foot facility called Missile Assembly Building 5 (MAB-5).