Lockheed Martin and U.S. Department of War Sign Framework to Boost PAC‑3 MSE Production

Lockheed Martin has entered into a landmark framework agreement with the U.S. Department of War aimed at rapidly accelerating the production and delivery of PAC-3 Missile Segment Enhancement (MSE) interceptors. This strategic partnership is designed to sustain production at scale, raising annual output from roughly 600 to 2,000 units over a seven-year period. The initiative is intended to strengthen the capabilities of U.S. forces while also supporting allied and partner nations.

PAC-3 MSE. Credit: Lockheed Martin

The PAC-3 MSE interceptor has become a critical component of modern air defense, with its operational record underscoring its importance. In Ukraine, the system has successfully intercepted Russian cruise and ballistic missiles, including hypersonic threats such as the Kinzhal. The first confirmed intercept of a Russian Kinzhal missile in May 2023 marked a significant milestone in missile defense history, demonstrating the system’s ability to counter advanced threats.

Lockheed Martin has already demonstrated its ability to expand production capacity. Over the past two years, the company increased PAC-3 MSE output by more than 60 percent. In 2025, deliveries reached 620 interceptors, surpassing the previous year’s total by more than 20 percent. This performance positions the company to meet the ambitious targets set under the new framework agreement.

The PAC-3 MSE program has evolved significantly since its origins. Building upon the PAC-3 CRI, the MSE variant introduced a larger dual-pulse solid rocket motor and expanded tail fins, enhancing both speed and maneuverability. Development contracts were initiated between 2003 and 2014, with testing conducted in the early 2010s. The U.S. Army declared Initial Operational Capability between 2015 and 2016, and by 2021 the interceptor was integrated into the Integrated Air and Missile Defense Battle Command System, enabling coordinated operations across multiple platforms.

The interceptor’s technical specifications highlight its advanced design. It employs a hit-to-kill mechanism, relying on kinetic energy rather than explosive warheads. Guidance is provided by an active Ka-band radar seeker, while propulsion comes from a dual-pulse motor that extends both range and altitude. The system can engage tactical ballistic missiles at distances exceeding 50 kilometers and at altitudes significantly higher than those achievable by the PAC-3 CRI. Each M903 launcher can carry 12 interceptors, and the single-canister configuration enhances logistical flexibility.

Operational features further distinguish the PAC-3 MSE. Enhanced agility allows it to counter sophisticated maneuvering threats, while updated software improves performance against emerging adversary capabilities. Embedded artificial intelligence supports detection, tracking, and engagement, ensuring rapid response against diverse targets including tactical ballistic missiles, cruise missiles, advanced aerial threats, and aircraft.

The framework agreement itself is a direct product of the Department of War’s Acquisition Transformation Strategy, regarded as one of the most significant reforms in U.S. warfighting acquisition in decades. The model provides long-term demand certainty, enabling industry to invest confidently in expanded production capacity. It also incorporates a collaborative financing approach designed to maintain initial cash neutrality, ensuring that industry partners can scale operations without undue financial risk.

As of 2026, the PAC-3 MSE is fielded by 17 partner nations alongside the United States, reflecting its status as one of the most sought-after air defense interceptors worldwide. Its proven effectiveness and growing deployment underscore the importance of the new production framework, which is expected to deliver sustained capacity increases while driving operational efficiencies.

Both Lockheed Martin and the Department of War will share in the cost savings generated by long-term demand certainty. This arrangement incentivizes investment in production infrastructure while ensuring that critical capabilities are delivered at the speed and scale demanded by today’s security environment. The agreement represents years of collaboration between government and industry to modernize acquisition processes and strengthen collective defense.

Written by Henry Wan

Henry Wan is an independent defense journalist with over 14 years of experience reporting on military affairs and security issues. He has covered defense strategies, military technology, and geopolitical developments with a consistent focus on accuracy, independence, and a comprehensive understanding of global security matters.