The Pentagon has awarded Lockheed Martin a contract worth up to $35 billion to dramatically expand production of Terminal High Altitude Area Defense (THAAD) interceptors after the U.S. military depleted a substantial portion of its inventory during the conflict with Iran. The agreement comes as the Trump administration seeks an additional $87.6 billion in emergency funding from Congress to replenish weapons consumed during Operation Epic Fury.
Announced by the Missile Defense Agency on June 24, the seven-year contract will increase annual THAAD interceptor production from 96 missiles to 400 through June 2032. The Pentagon obligated $842.9 million at the time of the award, while the remaining funding will be distributed over the life of the agreement.
The production increase follows assessments that the Iran conflict significantly strained one of the U.S. military's most advanced missile-defense systems. According to an analysis by the Center for Strategic and International Studies (CSIS), American forces fired between 190 and 290 THAAD interceptors during the campaign, potentially consuming as much as 80% of an estimated inventory of roughly 360 missiles.
Other estimates vary but point to a similar conclusion. War Department assessments reportedly placed interceptor usage at more than 200 missiles, while researchers at the Payne Institute for Public Policy estimated approximately 198 THAAD interceptors were launched during the first 16 days of fighting. At current prices of roughly $15.5 million per interceptor, replacing 290 missiles alone would cost about $4.5 billion.
Defense analysts argue the concern extends beyond replacing missiles used in the conflict. CSIS warned that shortages of high-end precision munitions, already an issue before the war, have become "now even more acute," raising questions about U.S. readiness for future large-scale conflicts.
Lockheed Martin said the expanded production is part of a broader effort to strengthen America's missile-defense industrial base. Chairman and Chief Executive Jim Taiclet said, "Today's agreement to quadruple THAAD production means we will have more interceptors available than ever before to deter our adversaries."
The defense contractor said it plans to invest more than $9 billion through 2030 across more than 20 new or upgraded manufacturing facilities, including operations in Alabama and Arkansas. Even with accelerated production, CSIS estimates rebuilding THAAD inventories to pre-war levels could take at least three years.
The contract was announced the same day the White House submitted an $87.6 billion emergency funding request to Congress. Of that total, approximately $67.1 billion would go to the Pentagon, including $21 billion dedicated to replenishing munitions and expanding the industrial base needed to produce them.
Senate Democratic Leader Chuck Schumer said, "President Trump is asking taxpayers to clean up his messes, to the tune of $87.6 billion." Senator Patty Murray also criticized the proposal, saying she would "not rubber-stamp tens of billions more for this disastrous war of choice." The White House defended its position, with spokeswoman Anna Kelly insisting the military "has more than enough munitions, ammo, and stockpiles" to meet the administration's objectives, even as the Pentagon moves ahead with one of the largest missile-defense production expansions in recent years.
