Boeing receives Lockheed PAC-3 MSE contract worth up to $14.7 billion (updated)

Lockheed Martin

05/10/2026 19:47

Adds background on Lockheed's PAC-3 MSE contract throughout
Oct 5 (Reuters) - Boeing BA.N on Monday said it was awarded a seven-year contract worth about $14.7 billion by Lockheed Martin LMT.N to scale production and deliver PAC-3 Missile Segment Enhancement (MSE) seekers.
PAC-3 MSE is a hit-to-kill interceptor used within the Patriot air defense system to counter ballistic missiles, cruise missiles and aircraft.
The contract award enables Boeing to triple the production of PAC-3 MSE seekers, the missile's guidance component that detects, tracks and helps intercept incoming targets.
In January, Lockheed announced a seven-year framework agreement with the US Department of War to increase the annual production capacity for its PAC-3 missile interceptors to 2,000 units a year from about 600 previously.
The production agreements are designed to entice contractors to move faster on increasing output.
They are part of a ‌broader push by the Trump administration to prioritize weapons production over shareholder returns.
Industry executives have warned that Congress has not yet appropriated funding for the deals, meaning contractors may be unable to invest at scale in components and facilities until lawmakers act.
Demand for the interceptor has surged as conflicts in Iran and Ukraine strain US weapons stockpiles, prompting the US Army in July to award Lockheed Martin a contract worth up to $58.6 billion to boost PAC-3 missile production.

 (Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Maju Samuel)
 ((Aatreyee.Dasgupta@thomsonreuters.com;))