Lockheed Martin has awarded L3Harris Technologies a $4.7 billion undefinitized contract award to produce propulsion systems for the PAC-3 Missile Segment Enhancement (MSE) interceptor, the companies announced in September 2026.
The contract spans seven years and is L3Harris’ largest PAC-3 propulsion award to date, according to a Sept. 8 statement from L3Harris. Work will support large-scale production of the interceptor’s advanced two-pulse solid rocket motor, attitude-control motors, and a fragment explosive device called a “lethality enhancer.”
The award follows Lockheed’s January announcement of a seven-year framework agreement increasing yearly PAC-3 interceptor production from 600 to 2,000 units. In June, L3Harris broke ground on two new facilities in Arkansas to support increased production capacity for the Army’s PAC-3 propulsion systems; both plants are expected to be operational by 2027.
Demand for the interceptor has grown amid ongoing conflicts. The Army and Navy’s requests for PAC-3 MSE have risen 839%, from 341 in fiscal year 2026 to 3,203 in fiscal year 2027, according to an August report from the Center for Strategic and International Studies examining the Defense Department’s fiscal year 2027 budget requests.
The Army already uses the interceptor in its Patriot air defense system. Earlier this spring, the Navy announced its intent to integrate PAC-3 MSE into its Aegis Combat System for the first time.
Experts cited by Defense News warn that even planned production increases cannot match the U.S. military’s current demand for PAC-3 MSE. The U.S. also faces an unfavorable cost ratio: the PAC-3 MSE is valued around $4 million, while Iran’s Shahed drones cost $35,000 each.
Sources: Defense News · DVIDS News · DVIDS News · DVIDS News