Lockheed Martin’s US$35bn DoW Multiyear Procurement Award

US Aerospace and Defence company Lockheed Martin has been awarded a seven-year undefinitised contract action (UCA) for up to US$35bn by the US Government’s Department of War (DoW).

The award is one of the first major multiyear procurement contracts executed under the Department of War's Acquisition Transformation Strategy, which the DoW call “an aggressive systemic overhaul” of its acquisition system. 

US munitions stockpiles have been depleted as a result of the US and Israel instigated war on Iran and the war in Ukraine, it has been widely reported. 

US President Donald Trump recently invoked the Defence Production Act of 1950 to shore up US munitions supply chains. 

The procurement agreement

The procurement award seeks to quadruple production of Terminal High Altitude Area Defense (THAAD) interceptors. 

Lockheed Martin says the UCA represents one of the first full-scale transitions from Acquisition Transformation Strategy framework agreement to contract execution. 

Tim Cahill, President, Lockheed Martin Missiles and Fire Control, says: “This award reflects our shared vision with the Department of War to strengthen America's Arsenal of Freedom through a transformational shift to multiyear procurement. 

“This new approach propels our efforts to strengthen the defense industrial base, expand production and deliver capabilities to the American warfighter at unprecedented speed and scale.”

The US$35bn contract

According to the DoW the total value of the contract is US$35,327,237,604. The work will be performed by Lockheed Martin at its sites in Dallas, Texas; Sunnyvale, California; Troy, Alabama and Camden, Arkansas.

The agreement is undefinitised, which the Wall Street Journal notes means the awards require additional funding from Congress to deliver the manufacturer a final agreement.

The DoW says the performance period is from March 2026 through June 2032.

THAAD procurement

According to the DoW’s Fiscal Year (FY) 2027 Budget Program Acquisition Cost by Weapon System report, for FY 2027 the DoW investment request totals US$413.1bn for procurement. 

The US is looking to increase THAAD spend significantly through 2027. The report lists FY2026 spend for THAAD as US$1.326bn and FY2027 spend is set to increase to US$12.489bn.  

The report says the funds for the DoW’s FY2027 program support the procurement of 857 THAAD interceptors. 

Limited capacity and fragile supply chains

The Centre for Strategic and International Studies noted in May 2026 that the 39 day bombing and air defence campaign against Iran had depleted inventories of key US munitions stockpiles.

The US bipartisan thinktank said the time needed to rebuild those inventories has become a major concern.

To shore up supply in munitions, President Trump has recently invoked the Defence Production Act of 1950. 

The act grants the president broad authority to influence domestic industry. He wrote in the June 11 document: “I hereby find that conditions exist which may pose a direct threat to the national defence or its preparedness programs.

“In particular, systemic constraints in the munitions industrial base, including limited production capacity, fragile supply chains, long-lead dependencies and related production bottlenecks, may impair the ability of the United States to produce, sustain and expand the availability of munitions, missiles and equipment required for the national defence.”

Meeting US demand

President Trump recently proposed an increase to the US defence budget to US$1.5tn for the year 2027. Reuters reported on June 24 that President Trump had met with munitions makers at the White House reportedly to replenish weapons stockpiles. 

Like other aerospace and weapons companies, Lockheed Martin is rapidly increasing production to meet demand by the US Government. 

In January 2026, Lockheed Martin and the DoW signed a framework designed to quadruple the production capacity of THAAD interceptors and an additional framework to accelerate PAC‑3 Missile Segment Enhancement interceptor output.

The award follows Lockheed Martin breaking ground on a new munitions production centre in Troy, Alabama, as part of the company's more than US$9bn investment through 2030.