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≈$10.48B Army DEFINITIVE CONTRACT W31P4Q20C0023

PAC-3 Patriot interceptor production: ~$10.5B — an Army contract with Lockheed Martin (USAspending)

Department of the Army ・2020-04-30 〜 2033-09-30

The U.S. Army awarded a production contract for the Patriot air-defense system's "PAC-3 (Advanced Capability-3)" interceptor to Lockheed Martin, covering FY21–23 production for the U.S. and Foreign Military Sales (FMS). The value is about $10.5 billion ($10,478,694,386).

Contract key facts

  • RecipientLockheed Martin
  • Contract value$10,478,694,386 (≈$10.48B)
  • BranchArmy
  • Awarding agencyDepartment of Defense
  • Awarding sub-agencyDepartment of the Army
  • Award typeDEFINITIVE CONTRACT
  • Period of performance2020-04-30 〜 2033-09-30
  • Contract ID (PIID)W31P4Q20C0023

Contract scope (original)

THE CONTRACT AWARD IS FOR THE FY21/FY22/FY23 BASE AND OPTION PRICING FOR PHASE ARRAY TRACKING RADAR TO INTERCEPT ON TARGET (PATRIOT) ADVANCED CAPABILITY-3 (PAC-3) PRODUCTION REQUIREMENTS FOR THE UNITED STATES (US) AND FOREIGN MILITARY SALES (FMS)

Key points

  • FY21–23 production of the Patriot "PAC-3" interceptor
  • Awarded to Lockheed Martin; awarding component is the U.S. Army; U.S. + FMS
  • Value ~$10.5B ($10,478,694,386), definitive contract, Apr 2020–Sep 2033
  • PAC-3 is a hit-to-kill interceptor = core of air & missile defense
  • Bundling US and Foreign Military Sales requirements into one production requirement levels utilisation and gains procurement efficiency.

1PAC-3 as an interceptor

This contract covers FY21/FY22/FY23 base and option pricing for production of the Patriot air-defense system's "PAC-3 (PATRIOT Advanced Capability-3)" interceptor, for both the United States and Foreign Military Sales (FMS).

2How Patriot air defense works

Patriot is a ground-based air-defense system, and PAC-3 is its latest "hit-to-kill" interceptor against ballistic missiles and aircraft. Bundling U.S. requirements with allied FMS orders into one production run improves procurement efficiency.

3Rising demand for air and missile defense

Air and missile defense is an area of rising demand, and this contract is one of the Army's major equipment buys.

4Bundling US and allied requirements

What this contract covers is the PAC-3 production requirement for FY21, FY22 and FY23 at base and option prices, for the United States and for Foreign Military Sales. The point lies in handling the two demands not separately but as one production requirement.

Ordering separatelyBundling into one production requirement
Quantity and timing are set country by countryEverything rides on the same production flow
Swings in demand hit production directlyUtilisation can be levelled
Unit cost tends to riseEfficiency in procurement is gained

Patriot is a ground-based air-defence system, and PAC-3 is its latest interceptor, destroying ballistic missiles and aircraft by direct impact. Air and missile defence is a field of rising demand, and bundling allied requirements with US ones bears on both the speed of supply and the price.

Why it matters

A read on procurement in the rising air- and missile-defense field and how allied (FMS) orders are bundled into production. Useful for defense supply chains and security watchers.

FAQ

What data is this?
A single Department of Defense (DoD) federal procurement contract recorded in "USAspending," the U.S. open government-spending dataset. The recipient, awarding component, value, and scope are public. This site is not an official U.S. government website.
Is the amount final?
It is a cumulative figure as of collection. Large defense contracts accumulate modifications over many years, so amounts change. The latest figure is available at the source, USAspending.
What is PAC-3?
The latest interceptor of the Patriot air-defense system, using "hit-to-kill" to intercept ballistic missiles and aircraft. U.S. and allied (FMS) orders are produced together.

Related profiles

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Sources (primary)

This article is an independent organization based on the U.S. official spending data below. Verify the exact, latest details with the official source.

#Defense#Department of Defense#Army#Missile defense#PAC-3#Federal procurement

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