Lockheed Martin Gets $10.4M PAC-3 Redesign Deal

The U.S. Army awarded Lockheed Martin a contract to redesign the guidance processor unit of the PAC-3 interceptor system.

Updated on Nov. 4, 2026 in Semiconductors

Lockheed Martin Gets $10.4M PAC-3 Redesign Deal

The U.S. Army awarded Lockheed Martin a $10,439,315 cost-plus-incentive-fee contract to redesign the guidance processor unit for the PAC-3 MSE interceptor. The work covers system-level testing, test-data analysis, problem resolution, and flight-test and analysis support.

Why it matters

The PAC-3 MSE is a hit-to-kill interceptor designed to defeat tactical ballistic missiles, cruise missiles, and other aerial threats. The redesign comes as the Army pursues a goal of expanding annual interceptor production capacity from approximately 600 to 2,000 over seven years.

The cost-plus-incentive-fee contract is valued at $10,439,315 and runs through an estimated completion date of November 30, 2027. The Army has not publicly specified the hardware or software changes the redesign will require, and a prior Defense Department report flagged development and cost problems with the guidance processor software.

The players

Lockheed Martin

Lockheed Martin is a major American aerospace and defense contractor and the manufacturer of the PAC-3 missile system.

U.S. Army Contracting Command

The U.S. Army Contracting Command is the Army organization responsible for procuring equipment and services, and it awarded this contract from Redstone Arsenal, Alabama.

The details

Army Contracting Command at Redstone Arsenal, Alabama, awarded the contract after soliciting one bid and receiving one offer, with work to be performed in Grand Prairie, Texas. The contract number is W31P4Q-27-F-A004.

January 2026: A framework agreement set the goal of increasing PAC-3 MSE production capacity to 2,000 interceptors annually over seven years.
November 4, 2026: The Army awarded the guidance processor redesign contract.
November 30, 2027: Estimated completion date for the redesign work.

The Tech Race

The PAC-3 MSE is the Army's primary hit-to-kill interceptor for tactical ballistic and cruise missile defense, and this redesign targets its guidance processor as the program moves toward a planned tripling of annual production. The Army's push to scale the interceptor reflects broader U.S. investment in layered missile defense against rapidly advancing threats.

The redesign affects the supply and capability of PAC-3 interceptors used for national missile defense rather than consumer products. Production scaling toward 2,000 interceptors per year would increase the availability of this defense system over the coming years.

The takeaway

Guidance processor redesigns are a key lever for keeping advanced interceptors effective as threats evolve. Watch for public detail on the specific hardware and software changes as the November 2027 completion date approaches.