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The business of defense, October 20

Industry · Primes

Defense Systems drives most of Northrop Grumman's backlog growth this year

Through September, Defense Systems accounts for about 62% of Northrop Grumman's backlog increase since the end of 2025.

Northrop Grumman ended September 2026 with a $109.6 billion backlog. That was up 15% from the end of 2025. The company booked $16.4 billion in third-quarter net awards.1

Northrop Grumman's Defense Systems backlog grows faster than the company total

Backlog growth (%), December 31, 2025 to September 30, 2026

Defense Systems31%
Company total15%

Defense Systems is included in the company total. Both measures include funded and unfunded backlog.

Source: Northrop Grumman Q3 2026 earnings release, SEC Exhibit 99. As of October 20, 2026.

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Defense Systems backlog rose 31% to $36.5 billion from December 31, 2025 to September 30, 2026. The segment accounted for about 62% of the company's increase, by our calculation. Third-quarter awards included $2.0 billion for Sentinel.1

Defense Systems sales rose 12% from the third quarter of 2025. Northrop attributed the increase primarily to Sentinel's ramp-up, higher volume on the Guided Multiple Launch Rocket System Extended Range program tied to award timing, and higher tactical solid rocket motor volume.1

Defense Systems' third-quarter operating margin fell to 10.8% from 11.4% a year earlier, primarily because of a shift toward more cost-type contract content, Northrop said.1

Sources (1)
  1. Northrop Grumman Exhibit 99, Third Quarter 2026 Financial Results, October 20, 2026 www.sec.gov

Capital

JPMorganChase’s first-year security equity commitments reach $5 billion, including defense tech

Defense technologies are among the areas supported by the bank's equity investments; its broader financing work also reaches defense suppliers.

JPMorganChase has committed $5 billion of its initial $10 billion equity allocation for the Security and Resiliency Initiative in the program's first year. The bank announced the first-year tally on Oct. 19, 2026.1

JPMorganChase commits $5 billion to security and resiliency equity

Security and Resiliency Initiative, first year: equity commitments and financing activity

$5 billionEquity committed from the initial $10 billion allocation
More than $230 billionTransactions financed and facilitated across the initiative's five focus areas

The figures measure different activities. The release gives no defense share of either figure.

Source: JPMorganChase, as of October 19, 2026.

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The bank is investing its own capital through its Strategic Investment Group, led by Todd Combs, which backs venture, growth and later-stage companies. Recent investments support next-generation defense technologies, distributed battery storage, automated manufacturing and frontier technologies.1

JPMorganChase also reported that it financed and facilitated more than $230 billion in transactions over the past year across the initiative's five focus areas, including defense and aerospace. That work included financing for suppliers to the defense industrial base. The release does not identify equity portfolio companies or give the defense share of either the $5 billion committed or the more than $230 billion financed and facilitated.1

The bank has $5 billion of its initial equity allocation left to commit. For the initiative's second year, JPMorganChase plans to support companies that can expand critical capacity and develop structures that make strategic projects financeable.1

Sources (1)
  1. JPMorganChase press release, "One year in, JPMorganChase's Security and Resiliency Initiative is helping to strengthen industries critical to long-term economic growth," October 19, 2026 www.jpmorganchase.com

Industry · Munitions

Lockheed to bring Hadrian automation into its Texas munitions plant

Lockheed workers will run a 24-machine cell, expected to start operating in early 2027, as the company expands its Grand Prairie manufacturing operation.

Lockheed Martin announced Oct. 14 that Hadrian will bring a highly automated machining cell inside its Grand Prairie, Texas, facility. Lockheed expects the 24-machine cell to begin operating in early 2027 and add dedicated capacity for critical defense components.1

Hadrian will bring a highly automated machining cell to the Grand Prairie facility

Lockheed Martin's Grand Prairie operation

Hadrian24-machine cellplanned

Expected to be operational in early 2027

Lockheed Martinproduction workforceplanned

operated by Lockheed Martin's production workforce

Source: Lockheed Martin, Oct. 14, 2026

Sources
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Lockheed's production workforce will operate the cell. Hadrian CEO Chris Power said his company would bring automation, software and workforce training from its own factories into Lockheed to produce more, faster. The announcement follows a seven-year agreement the companies signed in 2025.1

The cell will join a broader expansion at Grand Prairie, where Lockheed is investing $300 million and increasing its manufacturing footprint to more than 735,000 square feet. Across the facility, Lockheed expects to have added nearly 100 new advanced machines by the end of 2026. The release does not specify the Hadrian arrangement's value or commercial terms, who funds the cell, or which components or programs it will machine.1

Also announced: Lockheed plans to create 6,000 jobs across the United States, including 2,000 in Texas, as it expands advanced manufacturing capacity for critical munitions.1

Grand Prairie supports all of Lockheed's Missiles and Fire Control programs, including PAC-3 MSE, THAAD, PrSM and JATM. Lockheed expects the expansion and Hadrian partnership to help Grand Prairie reach record production levels and deliver components to final-assembly sites including Camden, Arkansas, and Troy, Alabama.1

Sources (1)
  1. Lockheed Martin: Lockheed Martin Expands Advanced Munitions Manufacturing in Texas, Driving Thousands of New American Jobs (Oct. 14, 2026) news.lockheedmartin.com

Budget · Foreign demand

Turkey proposes 229% rise in defense procurement spending, Breaking Defense reports

The fiscal 2027 proposal includes $44.5 billion in defense spending and awaits parliamentary approval, Breaking Defense reports.

· Updated

Turkey's proposed fiscal 2027 budget would raise National Defense Ministry allocations for weapons, ammunition, weapons systems and other defense equipment by 229 percent, Vice President Cevdet Yilmaz said Friday, Breaking Defense reported.1

Turkey proposes $44.5 billion in defense spending, Breaking Defense reports

Fiscal 2027 budget proposal; US dollars as reported

$44.5 billionProposed defense spending
$25.2 billionProposed internal security

Internal security is separate from the defense allocation. The budget proposal awaits parliamentary approval.

Reported by Breaking Defense; as of Oct. 20, 2026

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The proposed budget calls for $44.5 billion in defense spending, with a separate $25.2 billion for internal security. Yilmaz said the proposal had been sent to parliament for approval.1

According to Breaking Defense, Yilmaz did not specify how much of the increase would go to domestically developed systems versus imported platforms, though he said Turkey had reduced its dependence on foreign suppliers. The report gives no comparison year and does not say whether the 229 percent is nominal or inflation-adjusted.1

Clarification, November 1, 2026: We updated a source link to the current version of the Breaking Defense article. The reporting is unchanged.

Sources (1)
  1. Breaking Defense: Turkish defense procurement spending proposed to rise 229% in 2027 (Oct. 20, 2026) breakingdefense.com

Contracts · Maintenance

Gecko Robotics’ Navy ship-maintenance contract ceiling rises to $300 million, DefenseScoop reports

Gecko’s president tells DefenseScoop the expansion will enable its technology to scale to the Atlantic Surface Fleet, following an initial agreement covering 18 Pacific Fleet ships.

Gecko Robotics’ Navy ship-maintenance contract ceiling is rising to $300 million from $71 million, DefenseScoop reported, citing co-founder and President Troy Demmer on the expanded value. The original five-year agreement, unveiled in March by the Navy and General Services Administration, initially covered 18 Pacific Fleet ships.1

Gecko’s Navy contract ceiling rises to $300 million, DefenseScoop reports

Original and expanded contract ceilings, USD; reported Oct. 20, 2026

$71 millionOriginal agreement ceiling
$300 millionExpanded ceiling, per Demmer

The expanded total replaces the original ceiling; the two amounts do not add together. DefenseScoop did not report how much has been obligated.

Reported by DefenseScoop, citing Gecko Robotics’ president Troy Demmer. As of Oct. 20, 2026.

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Demmer told DefenseScoop the expansion would enable Gecko’s technology to scale to the Atlantic Surface Fleet next. DefenseScoop did not report how much of the higher ceiling has been obligated.1

Gecko’s Komodo ground robot can assess steel beneath a ship’s deck coating, Demmer told the outlet. He said the coating previously had to be stripped before evaluation, a costly and time-consuming process. The system uses electromagnetic acoustic transducer technology to measure steel thickness, DefenseScoop reported.1

Demmer told DefenseScoop the value lies in identifying needed repairs before a maintenance period begins, with the technology deployed while the ship is still in the water. Gecko’s software helps turn the robots’ measurements into evidence Navy engineers can use to scope repairs and prioritize maintenance, the outlet reported.1

Sources (1)
  1. DefenseScoop: Navy expands contract ceiling for AI-enabled repair robots (Oct. 20, 2026) defensescoop.com

Industry · Industrial base

Hanwha Defense USA plans U.S. supply chain for Army’s XM1776 cannon, DefenseScoop reports

DefenseScoop reports that the Army’s nine prototypes are on overseas production lines; a full program of record would require the cannons to be made entirely in the United States.

Hanwha Defense USA plans to work with the Army and U.S. manufacturers in the near term to build the XM1776 cannon’s domestic supply chain, DefenseScoop reported Oct. 19. The company held a supplier day at the Army summit the previous week as part of that effort.1

DefenseScoop: Hanwha’s XM1776 needs entirely U.S. production for a full program of record

XM1776 prototype production and company-reported American content, October 2026

Nine prototypesXM1776 systems on Hanwha production lines in South Korea and the Czech Republic
About 40 to 50%Of the vehicle is already American, CEO and President Michael Coulter told DefenseScoop

Moving into a full program of record would require the systems to be entirely made in the United States, DefenseScoop reports.

Reported by DefenseScoop, Oct. 19, 2026. As of Oct. 19, 2026.

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The Army is ordering nine wheeled XM1776 Mobile Tactical Cannon prototypes, which are on Hanwha production lines in South Korea and the Czech Republic. Moving into a full program of record would require the systems to be made entirely in the United States, the outlet reported.1

CEO and President Michael Coulter told DefenseScoop that about 40% to 50% of the vehicle is already American. He said all the suppliers attending the event were American, and discussions covered which components still need U.S. production and where they could be sourced or built.1

Hanwha Defense USA is a subsidiary of South Korea’s Hanwha Aerospace. Coulter described the company’s broader intent as replicating its Korean capacity in the United States, while saying it can refill stocks from Korea now.1

Coulter’s figure of about 40% to 50% American content leaves a gap to the all-U.S. system that DefenseScoop says a full program of record would require. The report gives no timetable for closing it.1

Sources (1)
  1. DefenseScoop: HDUSA wants to replicate South Korea’s ‘war footing’ industrial capacity in America (Oct. 19, 2026) defensescoop.com

Industry · Drone supply chain

Global Ordnance, Sparkz sign supply deal targeting 210,000 drone battery packs

The companies plan batteries with 100% U.S. content, including domestic base materials and assembly, with availability expected in early 2027.

Global Ordnance Holdings signed a Master Supply Agreement with Sparkz initially targeting 210,000 drone battery packs, announcing the deal on Oct. 20.1

Global Ordnance signed a Master Supply Agreement with Sparkz Inc.

Agreement initially targets 210,000 battery packs

Sparkzmanufacture and supply batteriesplanned

Sparkz will manufacture and supply batteries

Global Ordnancesales and distributionplanned

Global Ordnance will lead sales and distribution

batteries expected to be available in early 2027 and full manufacturing capacity expected to start in Q2 2027

Global Ordnance release via PR Newswire. As of Oct. 20, 2026.

Sources
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The agreement pairs Sparkz’s battery manufacturing with Global Ordnance’s defense sales and distribution network. The companies say the batteries will use a fully U.S. supply chain, including all base materials and assembly. They plan packs configurable to the power output and operational requirements of different unmanned systems.1

The companies expect batteries to be available in early 2027, with full manufacturing capacity expected to start in the second quarter of 2027.1

Sparkz markets U.S.-made lithium iron phosphate battery energy storage systems for the grid.2 Global Ordnance supplies ammunition, energetics and unmanned systems to the U.S. government and allied nations. The companies did not name a customer, purchase commitment or cell chemistry for the drone packs.1

The companies tie the agreement to tighter drone-component sourcing requirements under the Drone Dominance Program, describing the framework’s ultimate goal as a wholly domestic small-drone supply chain.1

Sources (2)
  1. Global Ordnance Holdings and Sparkz Establish First Fully Domestic-Sourced and Manufactured Drone Battery Production, PR Newswire, Oct. 20, 2026 www.prnewswire.com
  2. Sparkz sparkz.energy

Contracts · Tactical communications

Army tactical communications call reserves controlled files for current Department of War contractors

White papers are due Nov. 19. Access to controlled documents requires verification of an existing contract, vendor documentation and a nondisclosure agreement for all personnel needing access.

The Army has opened a call for tactical communication systems procurement, services and sustainment, with controlled information available only to vendors holding a current Department of War contract.1

Army communications call requires existing contract for controlled-file access

Tactical Communication Systems Procurement, Services & Sustainment. Controlled information is available only to current Department of War contract holders.

26 October 2026Questions and comments due at 16:00 EST
19 November 2026White papers due at 17:00 EST

Access also requires vendor verification: a CAGE code, contract number, DD Form 2345 and Joint Certification Program number, plus a nondisclosure agreement for all personnel needing access.

Source: SAM.gov, Army Contracting Command at Aberdeen Proving Ground. As of Oct. 20, 2026.

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The call directs vendors to the controlled attachment for full submission instructions, evaluation criteria and detailed technical characteristics.1–2

Army Contracting Command at Aberdeen Proving Ground is issuing the call for Product Manager Tactical Communication Systems under the Defense Commercial Solutions Opening authority, DFARS subpart 212.70.1

Questions and comments are due Oct. 26 at 16:00 EST. White papers are due Nov. 19 at 17:00 EST.1

An Oct. 19 amendment establishes access requirements for attachments marked as Controlled Unclassified Information with limited dissemination controls and/or export controls. Vendors seeking access must provide a CAGE code, contract number, copy of DD Form 2345 and Joint Certification Program number. They must also submit a nondisclosure agreement for all personnel who need access.1

Sources (2)
  1. sam.gov sam.gov
  2. sam.gov sam.gov

M&A

D. E. Shaw-backed Threadlock acquires Arizona aerospace and defense tube maker

Threadlock says Service & Sales brings a new specialty in hydraulic tube bending and assembly to its manufacturing network.

Threadlock Precision, backed by the D. E. Shaw group, announced its acquisition of Service & Sales, Inc. (SSI) on Oct. 20, 2026. The Tempe, Arizona, company makes precision hydraulic tube assemblies for aerospace and defense.1

Threadlock says SSI adds a tube-bending specialty

Service & Sales, Inc. (SSI); acquisition announced Oct. 20, 2026

30,000 square feetSSI's facility in Tempe

The acquisition announcement did not disclose closing status.

Source: Threadlock Precision release. As of Oct. 20, 2026.

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Threadlock says SSI’s tube bending and assembly capabilities add a new specialty to its network.1 The network includes R&S Machining in St. Louis, whose capabilities span large-format gantry work, Swiss turning, milling, assembly and fabrication.2–3

Founded in 1970, SSI operates from a 30,000-square-foot facility in Tempe. Its work includes hydraulic tube fabrication, precision machining, welding and pressure testing. Threadlock describes SSI as a direct supplier to defense prime contractors, supporting rotorcraft, fixed-wing and other programs.1

Threadlock’s other listed network partners include J&F Machine in Cypress, California, and Kremin in Frankenmuth, Michigan.3 The SSI announcement discloses neither a purchase price nor whether the transaction has closed.1

Threadlock CEO Todd McDonald said it plans to invest in SSI’s people and equipment and expand SSI’s capacity to support customers’ growing programs.1

Sources (3)
  1. Threadlock Precision: Threadlock Precision, Supported by The D. E. Shaw Group, Acquires Service & Sales, Inc. (PR Newswire, Oct. 20, 2026) www.prnewswire.com
  2. Threadlock Precision: Home www.threadlockprecision.com
  3. Threadlock Precision: Operations www.threadlockprecision.com

M&A

NexTech Solutions buys Halcyon Days Consulting, adding tactical mission networks

The acquisition adds more than 90 engineers, operators and mission specialists, along with tactical networks that already use NexTech’s video transport product.

NexTech Solutions (NTS) announced its acquisition of Halcyon Days Consulting on Oct. 19, adding a company that engineers tactical mission networks and operational software for the U.S. military and allied partners.1

NexTech adds Halcyon Days' team and network experience

Acquisition announced Oct. 19, 2026. Figures reported by NexTech Solutions.

More than 90Engineers, operators and mission specialists added to NexTech
Approximately 20,000Users in Halcyon Days' network-management experience
More than 15,000Managed devices in Halcyon Days' network-management experience

The network figures span two active theaters. Personnel, users and devices are separate measures, not additive totals.

Source: NexTech Solutions release via PR Newswire, Oct. 19, 2026. As of Oct. 20, 2026.

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The deal combines technologies already used together: Halcyon Days’ networks use NTS’s VidTerra COMPASS product to transport full-motion video. Those networks are built on the Team Awareness Kit (TAK), a framework for tactical command and control.1

Based in Stevensville, Maryland, Halcyon Days adds more than 90 engineers, operators and mission specialists to Huntsville, Alabama-based NTS. NTS says Halcyon Days has experience managing networks with approximately 20,000 users and more than 15,000 managed devices. That experience spans two active theaters, according to NTS.1

NTS received a strategic investment from Clairvest, a Toronto private equity investor, in 2023. The acquisition announcement disclosed no purchase price.1

NTS co-founder Biney Dhillon says the acquired networks, combined with NTS’s MANTLE provisioning software and VidTerra COMPASS video distribution, give customers an end-to-end TAK-centric tactical stack. NTS says MANTLE will reduce the time needed to stand up a complete TAK-ready environment from weeks to hours, a projected benefit of combining the technologies.1

Sources (1)
  1. NexTech Solutions release, Oct. 19, 2026 www.prnewswire.com

Contracts · Foreign buyer

Northrop Grumman named principal contractor for possible Dutch countermeasure sale estimated at $294 million

The Netherlands requested infrared countermeasure systems and radar warning receivers, with engineering, training and logistics support also included.

· Corrected

The State Department approved a possible Foreign Military Sale to the Netherlands with an estimated total cost of $294 million. The congressional notification is dated October 19, 2026.1

The principal contractor will be Northrop Grumman

A possible Foreign Military Sale to the Government of the Netherlands

OT-228/U Common Infrared Countermeasure systemssixteen (16)requested

The Netherlands has requested

AN/APR-39E(V)2 Radar Warning Receiversthirty-eight (38)requested

The Netherlands has requested

The estimated total cost is $294 million.

The notice's opening sentence describes the purchase as Counter-Unmanned Aerial Systems Platforms and related equipment

Source: U.S. Department of State. As of October 19, 2026.

Sources
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Northrop Grumman, located in Rolling Meadows, Illinois, would be the principal contractor. The Netherlands requested 16 OT-228/U Common Infrared Countermeasure systems and 38 AN/APR-39E(V)2 Radar Warning Receivers.1

The notice describes the purchase as Common Infrared Countermeasure systems and related equipment.1

The proposed package extends beyond hardware to nonrecurring engineering, site surveys, new equipment training and logistics support. The $294 million estimate covers the combined equipment and support package approved for a possible sale.1

Correction, October 25, 2026: An earlier version of this brief said the State Department notice's opening referred to counter-unmanned aerial systems platforms. The notice now describes the purchase as Common Infrared Countermeasure systems and related equipment.

Sources (1)
  1. State Department: The Netherlands – Common Infrared Countermeasure Systems, Transmittal #26-120, October 19, 2026 www.state.gov

M&A

The Partner Companies buys Advanced CNC to expand Optiforms’ machining capacity

The acquisition adds equipment and engineering capabilities to TPC’s optics business, which already makes components for aerospace, defense and other markets.

The Partner Companies (TPC) has acquired Advanced CNC Industries, a precision machining and engineering company in Temecula, California, to expand capabilities at its Optiforms optics business in the same city. TPC announced the acquisition Oct. 20, 2026, without disclosing a purchase price.1

TPC announced that it acquired Advanced CNC Industries

Optiforms, TPC's Temecula-based optics business

Optiformsin-house CNC milling, turning, programming and engineering solutionsplanned

The addition will strengthen Optiforms

Advanced CNC IndustriesDavid Swansonplanned

Swanson will remain with the company through the transition.

The Partner Companies (TPC), acquisition release. As of Oct. 20, 2026.

Sources
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Optiforms already makes custom metal components for aerospace, defense and other markets and has multi-axis CNC machining capabilities.2–3 TPC plans to strengthen that operation with Advanced CNC’s in-house milling, turning, programming and engineering capabilities.1

Advanced CNC was founded in 2023 by David Swanson, who will remain with the company through the transition.1

TPC Group President Travis Wood said the acquisition gives Optiforms greater production capacity. The company says the added equipment and capabilities will help meet growing demand for precision optical components.1

Sources (3)
  1. The Partner Companies: TPC Acquires Advanced CNC Industries (PR Newswire, Oct. 20, 2026) www.prnewswire.com
  2. Optiforms: Home www.optiforms.com
  3. Optiforms: CNC machining www.optiforms.com