The Pentagon bumped up its long-term Patriot missile order to nearly $59 billion, the latest sign of the U.S. military's demand for a defensive weapon used heavily during the Iran war.
The modified Army contract with missile maker Lockheed Martin is worth up to $53.9 billion, adding to an existing $4.7 billion Patriot missile order issued in April. The U.S. also issued Lockheed a preliminary $35 billion multiyear contract for Thaad interceptors, a larger munition also capable of thwarting ballistic missiles.
The massive seven-year contract reflects the Pentagon's changing approach to buying missiles. The military has proposed a series of multiyear contracts instead of annual purchases to guarantee a smoother supply of weaponry over time.
The effort, launched last year under Deputy Defense Secretary Steve Feinberg, is designed to motivate contractors to invest in new factories and supply-chain agreements in exchange for a reliable signal of future orders.
Both recent deals for Patriot and Thaad missiles are undefinitized contracts, meaning that they lack full congressional funding. Democrats and some Republicans have expressed skepticism about the Trump administration's unprecedented $1.5 trillion military spending request, though some lawmakers have said they generally support higher spending on munitions like the Patriot.
The military has pushed contractors to accept framework agreements ahead of official contracts to motivate them to invest early. Lockheed clinched the first of those deals in January when it committed to more than triple its Patriot missile production to 2,000 a year by 2030.
Trump administration officials were already planning to surge missile production before the war with Iran in February added urgency to the issue. A widening conflict in the Middle East has only deepened global demand for Patriots, an air-defense system capable of thwarting attacks from cruise and ballistic missiles.
Replenishing stockpiles is a challenge for advanced weapons systems. Lockheed manufactures the system's most advanced ammunition, a variant known as PAC-3 MSE. Each round costs more than $4 million and takes years to produce.
Lockheed this month proposed building a lower-cost version of the missile called PAC-3 ACE using parts built with help from European subcontractors. Developing, building and fielding a new missile also takes years. The company said it aims to start testing the lower-cost Patriot in 2028.
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