The week ahead: Oct 19–Oct 30

Lockheed Martin and Avio announced a strategic cooperation agreement for solid rocket motor (SRM) production on Tuesday, Oct. 13. It gives Lockheed access to a share of Avio's merchant supply capacity for the Extended Range GMLRS (ER GMLRS) and the Precision Strike Missile (PrSM). After qualification, initial work will focus on motors for those two programs, to be made at Avio USA's new plant in Hurt, Va.¹

Last November the two companies signed a non-binding term sheet under which Lockheed would have preferred access to a portion of the plant's capacity for "both tactical and strategic size SRMs." They said then that they intended to negotiate a Strategic Cooperation Agreement.⁴ The agreement now announced names two programs for that initial work. Neither company's release gives the agreement's value, motor quantities, delivery schedule or whether its terms are binding.¹

Lockheed is not the plant's only prospective customer. Avio USA, the U.S. subsidiary of Rome-based Avio S.p.A., broke ground in Hurt on Sept. 29.³ Avio CEO Giulio Ranzo said the group has launched an investment of more than $500 million in new U.S. SRM capacity "with a view to become a merchant supplier to the various defense customers."¹ Avio USA is developing the plant for Raytheon programs as well as Lockheed's.³ Under a memorandum of understanding signed the same day as Lockheed's term sheet, Raytheon will have preferred access to a share of the plant's production capacity.^4–5 That partnership builds on a July 2024 contract for preliminary engineering work on the Mk104 rocket motor.⁵

Lockheed Martin awarded Boeing an undefinitized contract action worth approximately $14.7 billion to scale production and deliver PAC-3 Missile Segment Enhancement (MSE) seekers, Boeing announced Oct. 5.¹ Boeing says the award enables it to triple seeker production under the seven-year framework with the Department of War that it announced April 1.^1–2

That is a step change in a long-running supply relationship. Boeing has delivered more than 6,000 PAC-3 seekers to the Army as a Lockheed subcontractor from Huntsville, Alabama, since 2000.⁵ Boeing-built seekers enable the most advanced Patriot interceptors to identify, track and engage threats.¹ In October 2025, Boeing announced multiyear seeker contracts valued at roughly $2.7 billion.⁵ The new award is more than five times that. Under the 2025 contracts, Boeing will deliver more than 3,000 seekers through 2030, at rates of up to 750 a year.⁵

The prime describes the same multiple for its own line. Lockheed's PAC-3 MSE multiyear contract reached a total value of $58.62 billion in July, most of it a seven-year undefinitized modification for up to $53.86 billion. Lockheed says that funding enables it to triple PAC-3 MSE capacity by the end of 2030.⁴

Boeing says ramp-up and hiring began earlier this year after the framework announcement, with hundreds of direct and indirect jobs expected in the Huntsville area. Its Oct. 5 release did not give seeker quantities, annual rates, the amount obligated or a definitization date.¹

The PAC-3 framework has a parallel on another missile. On Aug. 14, Boeing announced seven-year framework agreements with the department and Raytheon to increase production of Standard Missile-3 hardware.³