Huntsville, Alabama — Boeing has received an undefinitized contract action worth approximately $14.7 billion from Lockheed Martin to expand production and delivery of PAC-3 Missile Segment Enhancement (MSE) seekers.
The agreement will allow Boeing to triple its current PAC-3 MSE seeker production capacity under a previously established seven-year framework agreement with the U.S. Department of War.
Expansion of Huntsville Production
Boeing has already begun expanding production at its PAC-3 seeker facility in Huntsville, Alabama. The company has invested more than $200 million since 2024 to increase manufacturing capacity.
The expansion includes a 35,000-square-foot facility, manufacturing-process modernization, equipment upgrades and improvements to the supplier network. The measures are intended to increase production capacity, first-time quality, affordability and supply-chain resilience.
Production ramp-up and related hiring began earlier in 2026 following the framework agreement. The expansion is expected to create hundreds of direct and indirect jobs in the Huntsville area.
PAC-3 MSE Seeker
Lockheed Martin is the prime contractor for the PAC-3 MSE interceptor, while Boeing manufactures its seeker, which is installed in the missile’s nose.
The Boeing-built seeker uses an active Ka-band radar to identify, track and engage advanced threats. It provides range, range-rate and angle data to the interceptor's guidance system.
The PAC-3 MSE is designed to counter threats including hostile aircraft, ballistic missiles, cruise missiles and hypersonic weapons.
The interceptor combines the seeker with a Guidance Processor Unit (GPU), Inertial Measurement Unit (IMU) and Multi-band Radio Frequency Data Link (MRFDL). It uses a hit-to-kill method, destroying targets through direct kinetic impact rather than an explosive warhead.
PAC-3 Production Expansion
The Boeing contract supports a wider U.S. effort to increase PAC-3 MSE production.
In January 2026, Lockheed Martin reached a seven-year framework agreement with the Department of War to increase annual PAC-3 MSE interceptor production from about 600 to approximately 2,000 units.
In July 2026, Lockheed Martin received a seven-year contract action valued at up to $53.86 billion for the interceptors. Combined with an earlier award, the total multiyear contract potential is approximately $58.6 billion. Lockheed Martin reported delivering more than 600 interceptors in 2025.
The PAC-3 MSE achieved initial operational capability in August 2016 and entered full-rate production in 2018. Demand has increased due to its use in ongoing conflicts, including support for Ukraine and operations in the Middle East.
The seeker has been identified as a production bottleneck, making increased seeker output important to the planned growth in complete PAC-3 MSE interceptor production.
U.S. Defense Manufacturing Strategy
The $14.7 billion agreement supports the U.S. Department of War’s Acquisition Transformation Strategy, which focuses on accelerating delivery of critical defense systems and expanding domestic defense manufacturing capacity under the “Arsenal of Freedom” initiative.
Boeing Defense, Space & Security President and CEO Steve Parker said early investment and a focus on quality and execution have positioned the company to increase seeker deliveries and support U.S. and allied defense requirements.
Boeing develops, manufactures and services commercial aircraft, defense products and space systems for customers in more than 150 countries. The company is listed on the New York Stock Exchange under BA, while Lockheed Martin trades under LMT.
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