
The United States Department of Defense’s Missile Defense Agency (MDA) has awarded Lockheed Martin a new contract with a $2.8 billion ceiling to continue development work on the Terminal High Altitude Area Defense (THAAD) ballistic missile defense system. In an award notice posted last Friday on the US Government’s contracting portal, MDA states: “Lockheed Martin Corp, Sunnyvale, California is being awarded an indefinite-delivery/indefinite-quantity contract with a maximum amount of $2,813,834,000. Under this follow-on […] contract, the contractor will continue efforts of the previous Advanced Capabilities Development (ACD) contract”.
Per MDA’s Fiscal Year (FY) 2025 Research, Development, Test and Evaluation (RTD&E) Budget, the current ACD contract’s final ordering period ended last month, with all current work under previous task orders scheduled to end by January 2026. The new THAAD Follow on Development Contract “will support continued development for [THAAD System Build] 6.0, future THAAD system builds, engineering and design support, testing efforts, obsolescence mitigation and software sustainment.”
The award notice expands on this further, noting that Lockheed Martin may receive task orders for: “development, integration and testing of any hardware and software upgrades; obsolescence surveillance and mitigation; information assurance and cybersecurity engineering; quality, safety and mission assurance; initial fielding; logistics support, and training products for THAAD upgrades and/or capabilities. The first Task Order is in the amount of $12,699,904 for System Test & Evaluation and will be issued at time of award. The work will be performed in multiple locations, primarily Sunnyvale, California, and Dallas, Texas.”
THAAD System Build [TH] 6.0 will provide a significant capability enhancement over current configurations once it is fielded, per MDA Director Lt. Gen. Collins. MDA and Lockheed Martin are in the process of upgrading the US Army’s 7 THAAD batteries to TH 4.0, with the battery permanently deployed to Guam having been completed in November 2023, and remaining batteries due for completion by the end of Calendar Year 2025. TH 4.0 provides a preliminary integration with PATRIOT Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE] launchers, and remote launch for both PAC-3 MSE and THAAD’s own Talon interceptors. This increases the defended footprint of both systems, and PAC-3 MSE in particular, with THAAD’s AN/TPY-2 radar being significantly more capable of detecting incoming ballistic threats than PATRIOT’s AN/MPQ-65.

TH 5.0, which is due to become operational in July 2026, “includes hardware upgrades that address obsolescence and enhances the mission assurance and cybersecurity posture of the weapon system. TH 5.0 incorporates system safety enhancements and engagement refinements resulting in improved performance against the current THAAD assessed threat set.”
TH 6.0, originally scheduled to become operational in 2032, has been expedited to 2027. It “will provide initial capability against maneuvering threats and increase the threat engagement space. TH 6.0 includes capability enhancements to the THAAD interceptor, increased integration with MSE, and improvements to the cybersecurity risk posture and program protection.” As part of these efforts, the Army and MDA had planned to contract Northrop Grumman and Lockheed Martin to “begin initial systems engineering in FY 2025 to support the Army’s Integrated Air and Missile Defense (IAMD) Battle Command System (IBCS) integration of THAAD.” However, the FY 2025 National Defense Authorization Act cut the authorized funding for this effort by a combined total of $87 million across both the Army & MDA budgets. The Department of Defense (DoD) had deemed IBCS-THAAD integration as “critical”, with then Secretary of Defense Austin appealing to lawmakers to adopt the Senate’s version of the bill, which fully funded the effort, rather than the House’s, which proposed the cuts. Ultimately the latter won the fight over this line item during conference committee negotiations.
As of last month the Army was reportedly cancelling plans to begin this work in FY 2025. This is indeed a major setback for the Army’s Program Executive Office Missiles and Space, which was counting on IBCS-THAAD integration to make up for the fact that they had cancelled the Lower Tier Future Interceptor program, the intended successor to PAC-3 MSE. Despite the cut in authorized funding, there may yet be hope for this project though. President Trump is putting emphasis on enhancing the United States’ missile defense capabilities, and Congressional Republicans plan on including $125 billion in additional defense spending in their reconciliation package. What that might be spent on will depend on negotiations between the Trump Administration and Congress, but both the DoD and Senate defense committees are almost certain to push for these budget line items to be authorized and fully funded.
Another key milestone for THAAD last week was Lockheed Martin’s announcement that the had delivered the 900th Talon interceptor missile to the MDA. In a statement to Defense Archives, Lockheed Martin confirmed that this figure is inclusive of orders for the US Army and THAAD’s two Foreign Military Sales (FMS) customers: the United Arab Emirates (UAE) and Saudi Arabia. Per MDA’s FY 2025 Procurement Budget, 534 missiles should have been delivered to the US Army to date, excluding 50 procured as part of the RDT&E process, with the balance for FMS orders. Saudi Arabia signed a Letter of Offer & Acceptance in at the end of 2018 for 360 missiles, with deliveries beginning in June 2023. There is a discrepancy in DoD’s publicly available records and documentation on the dates and quantities of the UAE’s THAAD orders, which Defense Archives is seeking clarity on.