The business of defense, October 22

The Department of War and Lockheed Martin finalized a 10-year framework for F-35 production and sustainment on Oct. 22, 2026.¹² The department says Lockheed will self-fund at least $7 billion in initiatives supporting the program in exchange for the decade-long commitment.¹

Lockheed Martin will self-fundat least $7 billionplanned

initiatives that support the F-35 Program

formal contract awardwill work to finalize contract terms, pricing, and schedulescontingent

If granted multiyear authority and associated appropriations in the coming months

Execution of the agreement remains subject to Congressional authorization and appropriations.

Sources: Department of War; Lockheed Martin. As of Oct. 22, 2026.

Sources

• news.lockheedmartin.com ↗
• www.war.gov ↗

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Execution remains subject to congressional authorization and appropriations.¹ If multiyear authority and associated appropriations are granted in the coming months, Lockheed says it and the F-35 Joint Program Office will work to finalize contract terms, pricing and schedules through a formal award.²

The department describes 850 U.S. aircraft as the framework’s minimum floor over 10 years.¹ The framework includes initial spares and 10 years of modification kits and sustainment.²

It also includes international customer orders across Lots 21–30. Lockheed describes a continued production rate of 156 aircraft a year under the framework.²

RTX's defense backlog rose $45 billion to $164 billion in the third quarter of 2026.^1–2 Commercial backlog increased $6 billion.¹

Defense+$45B

Commercial+$6B

Net changes between reported quarterly backlog balances.

Source: RTX Q2 and Q3 2026 results. As of Oct. 20, 2026.

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The increase shifted the company's backlog mix toward defense, which accounted for about 48% of the total, compared with about 41% in the second quarter.^1–2

RTX received Tomahawk and AMRAAM multi-year undefinitized production contracts during the quarter. Its results release did not disclose their values, leaving their contribution to the defense backlog increase unspecified. Chief executive Chris Calio cited more than $81 billion in new awards across commercial and defense combined.¹

RTX raised its full-year adjusted sales outlook to $97.0 billion to $97.5 billion, following an increase in July.^1–2 It also raised its 2026 organic sales growth forecast to 10% to 11%.¹

Space Systems Command and DIU announced prototype contracts for Northrop Grumman and True Anomaly on Sept. 18, 2026, to develop reconnaissance satellites under GHOST-R.¹

True AnomalyJackalplanned

Mosaic command-and-control system and a rendezvous and proximity operations sensor suite

Northrop GrummanESPASat-Lplanned

optical payloads from TRL11

Space Systems Command, Sept. 18, 2026; Reported by DefenseScoop, Sept. 21, 2026. As of Sept. 21, 2026.

Sources

• defensescoop.com ↗
• www.ssc.spaceforce.mil ↗

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GHOST-R supports the command's RG-XX office, with the goal of developing lower-cost reconnaissance satellites for its constellation. The agencies aim to use commercially developed space vehicles, buses and electro-optical payloads to produce high-resolution space-to-space imagery for characterizing objects in geostationary Earth orbit (GEO).¹

The department and vendor announcements did not disclose the awards' value, and Northrop declined to disclose its contract value, deferring to DIU, DefenseScoop reported.²

DefenseScoop reported that True Anomaly will provide its Jackal vehicle, Mosaic command-and-control system and a rendezvous and proximity operations sensor suite. The outlet cited a company release describing a single Jackal as designed to surveil dozens of satellites.²

Northrop plans to deliver its ESPASat-L satellite with optical payloads from TRL11, DefenseScoop reported. Northrop describes the satellite as the size of a small suitcase, according to the outlet.²

Teledyne's Digital Imaging sales rose 15% in the third quarter of 2026.² Companywide sales increased 9.4%.¹

Digital Imaging sales increase$117.6M

Incremental acquired sales$5.5M

The acquisition contribution is included in the total sales increase.

Source: Teledyne Q3 2026 earnings release; TGOs calculation. As of Oct. 21, 2026.

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The segment supplied about 81% of Teledyne's sales increase. A recent acquisition contributed $5.5 million of Digital Imaging's $117.6 million sales increase.²

Executive Chairman Robert Mehrabian said organic growth accelerated in the segment, led by infrared detectors and subsystems for space and unmanned applications.¹ The segment's higher infrared sales were for both defense and commercial applications.²

Growth was slower in Aerospace and Defense Electronics, where sales rose 4.3%, compared with 8.2% year-over-year growth in the second quarter.^{2, 4} Defense electronics sales increased $16.5 million from a year earlier, partly offset by a $4.6 million decline in aerospace electronics.²

On Oct. 21, Teledyne raised its full-year 2026 non-GAAP earnings-per-share outlook. The company now expects $25.40 to $25.50 per share.¹ That follows increases in April and July.^{3, 5}

The Army is seeking additional domestic manufacturers of 155mm howitzer cannon tubes through a sources-sought notice posted Oct. 21. The survey covers tubes including the M284A2 for M109A6/A7 howitzers. It also covers the M776 for the M777A2.¹

Up to 10 tubes/monthDescribe facilities, equipment and tooling needed to reach this capacity within 36 months of the notice, regardless of caliber

40 tubesInitial quantity for a requested not-to-exceed rough-order-of-magnitude cost estimate, by caliber or as a flexible mix

Planning only: not a solicitation or a government obligation.

Source: Army sources-sought notice W15QKN-27-X-1CTG, SAM.gov. As of Oct. 22, 2026.

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The search follows BAE Systems' April 8 announcement of a $146 million undefinitized contract to begin manufacturing M776 cannons. BAE described that contract as establishing a second source of M776 cannons for the M777 howitzer.³

Respondents are asked to describe the facilities, equipment and tooling needed to reach up to 10 tubes a month, regardless of caliber, within 36 months of the notice. The Army also asks what production capacity could be available within 18 months of the notice. It wants a not-to-exceed rough-order-of-magnitude cost estimate for an initial 40 tubes, broken down by caliber or priced as a flexible mix.¹

The material questions cover steel preform production, forging, guide bore and heat treatment, among other steps. Companies are also asked to describe their own or a subcontractor's chrome bore coating capabilities for steel tubes up to 30 feet long and up to 7,500 pounds.¹

Defense News reported Pentagon concerns that the government's only plant for these barrels cannot keep up with increased artillery demand. The outlet identified Watervliet Arsenal in New York as the Army's sole production site for large-caliber howitzer and tank barrels.²

Lockheed Martin's Missiles and Fire Control segment increased sales 24% in third-quarter 2026.¹ Sales reached $4.5 billion. Its operating margin edged down to 14.0% from 14.1% a year earlier.² Companywide, sales rose 11% to $20.7 billion.¹

Missiles and Fire Control24%

Lockheed Martin companywide11%

Companywide sales include Missiles and Fire Control.

Source: Lockheed Martin third-quarter 2026 financial results. As of Oct. 22, 2026.

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Lockheed attributed the segment's sales increase primarily to production ramps on Patriot Advanced Capability-3, Terminal High Altitude Area Defense, Guided Multiple Launch Rocket Systems and Precision Strike Missile programs.¹

Also announced

Costs on the F-35 Lot 20 advance acquisition contract began exceeding current contractual authorization and funding during the quarter. Production contracts for lots 20 and higher remain under negotiation. Lockheed warned that without additional authorization and funding from the government, its operating results, cash flows and financial condition will suffer in future periods.¹

Applied Intuition announced Oct. 22 that it won a Navy production contract to deploy AI data infrastructure. Its Intelligent Perception System (IPS) will be deployed starting with five Arleigh Burke-class destroyers.¹

Five destroyersArleigh Burke-class ships in the planned initial deployment

Source: Applied Intuition. As of October 22, 2026.

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IPS builds on the Data Edge Collection Kit (DECK), moving from a computer vision data-collection prototype to planned deployment of onboard AI perception.¹

The company says IPS uses shipboard cameras and infrared sensors for detection, tracking and classification, giving operators visual overlays and automated alerts for vessels on dangerous trajectories.¹

Breaking Defense reported that IPS will record sensor data and send it ashore when bandwidth is available and security conditions permit.²

California-based startup Long Wall announced Oct. 22 that the Missile Defense Agency awarded it $75 million to complete testing of Cyclops, its low-cost midcourse interceptor, Breaking Defense reported.¹

$75 millionMissile Defense Agency award

$75 millionPlanned private spending

Long Wall plans the private spending throughout the contract's period of performance. The figures describe an award and a spending plan, not payments received or spending completed.

Reported by Breaking Defense, citing Long Wall's announcement. As of October 22, 2026.

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The award follows two years of company-funded interceptor development, according to the release cited by the outlet. The company referred a question about the contract's duration to the agency, which had not responded to Breaking Defense by press time.¹

Long Wall emerged in February 2025 from the rebranding of launch firm ABL Space Systems, with a narrow focus on missile defense. It unveiled the liquid-fueled Cyclops in December 2025. The company's website says the interceptor fits in a shipping container and can launch from the ground or a sea-based platform, the outlet reported.¹

Through September 2026, Thales' defense business supplied nearly all of the group's reported sales increase from a year earlier. The segment contributed €1,098 million of the €1,167 million increase. Defense sales rose 13.3% as reported and 13.0% organically, meaning at constant scope and exchange rates.¹

Thales group€1,167M

Defense segment€1,098M

The group increase includes the defense segment's increase.

Source: Thales nine-month sales release; TGOs calculations. As of October 22, 2026.

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On a reported basis, Aerospace sales rose 3.2% and Cyber & Digital sales fell 1.6% over the same period. Thales credits increased production capacity with contributing to defense sales growth.¹ The segment maintained double-digit organic sales growth in the third quarter, at 12.8%.^1–2

Third-quarter defense order intake of €3,964 million fell 6% organically from a year earlier.¹ First-half intake had grown 28% organically year over year.² Nine-month defense orders reached €11,315 million, up 14% organically. Thales reports particularly sustained demand in the naval domain, in effectors and in air surveillance and air defense.¹

At group level, nine-month organic sales growth reached 8.1%. Thales now expects full-year sales growth at the upper end of its 6% to 7% organic range, potentially beyond it, assuming no new macroeconomic or geopolitical disruptions.¹

The White House on Oct. 22 directed the Secretary of War to use Section 303 of the Defense Production Act to expand domestic petroleum production, refining and logistics capacity.¹

Purchases, commitments and financial instrumentsAuthorized and directed to enable projects

Section 303(a)(1)-(a)(6)Requirements waived for expanding capacity

The memo specifies no dollar amount or appropriation.

Source: White House presidential determination. As of October 22, 2026.

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The Secretary is authorized and directed to make the purchases, commitments and financial instruments necessary to enable petroleum-capacity projects, though the memo specifies no dollar amount or appropriation.¹

The determination includes exploration and production, gathering and transmission pipelines, storage and marine terminals, identifying that capacity as essential to national defense.¹

Citing the national emergency declared under Executive Order 14156, the memo waives specified Section 303 requirements for expanding the capacity.¹

The Space Force needs a third spaceport for medium and heavy launch by 2030, Space Systems Command head Lt. Gen. Philip Garrant said, Air & Space Forces Magazine reported. Speaking to reporters Oct. 21 at AFCEA's Space Industry Days, he called the goal “aspirational.”¹

2030Aspirational goal for a third spaceport supporting medium and heavy launch

$1.3 billionCongress allocated in 2024 for existing-range upgrades through 2028

The allocation covers upgrades at existing ranges. Garrant called the third-spaceport goal aspirational.

Reported by Air & Space Forces Magazine, Oct. 21, 2026. As of Oct. 22, 2026.

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Investment in the existing ranges is proceeding alongside planning for a third site, Air & Space Forces Magazine reported. The Cape Canaveral and Vandenberg ranges expect to run out of space in coming years as government and commercial launch demand grows, the magazine reported.¹

A newly formed operational planning team is examining what building the spaceport would require, including options to buy or lease land. Garrant said a public-private partnership, commercial land and a new federal installation remain under consideration, with no decision made.¹

NATO will allow Ukraine to buy weapons, ammunition and military equipment through its centralized procurement agency, Defense News reported in a Reuters story citing the Financial Times.¹

Ukraineweapons, ammunition and military equipmentplanned

NATO will allow Ukraine to buy

NATOcentralized procurement agencyplanned

will allow Ukraine to buy weapons, ammunition and military equipment via its centralized procurement agency

Reported by Defense News (Reuters), citing the Financial Times

Sources

• www.defensenews.com ↗

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The arrangement would give Ukraine a more structured framework for using the agency’s procurement expertise, support services and access to the established industrial base, Jacqueline Borsboom told the Financial Times. Borsboom is director of support to operations at the NATO Support and Procurement Agency (NSPA).¹

The European Commission announced €168.2 million in allocations on Oct. 14 to expand production of components used in missiles, drones and ammunition.¹

ROCMAN: solid fuel missile rocket motors€30,000,000

THUNDER: military-grade TNT€30,000,000

RAGNARASA: loitering munition warheads and explosives€29,500,811

SECURE-NC: military-grade nitrocellulose€29,312,757

E-WARP: loitering munition warheads and explosives€25,828,760

Announced EU budget allocations for planned production expansion.

European Commission, European Defence Industry Programme results factsheet. As of 14 October 2026.

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The Commission expects the projects to mobilize €1.26 billion in industrial investment. It expects that investment to support production at 17 sites across 14 EU member states and Norway.¹

These are the first eight projects under the European Defence Industry Programme’s Industrial Reinforcement Action pillar, which has more than €700 million allocated to it. They come from the pillar's first call dedicated to energetic components, which builds on the Act in Support of Ammunition Production, an emergency instrument addressing immediate production bottlenecks.¹

Two projects have allocations of €30 million each: ROCMAN, for solid fuel rocket motors for missiles, and THUNDER, for military-grade TNT. Other allocations cover military-grade nitrocellulose, loitering munition warheads and explosives, small turbojet engines for missiles and drones, 155mm base bleed and small-calibre cartridges.²

Rheinmetall has opened its UK Gun Hall in Telford, where barrel production began in June 2026. The company announced the opening on October 22.¹

June 2026Barrel production began

Up to 245Barrels per year across both calibres at peak capacity, Rheinmetall states

Peak capacity does not establish output to date. Rheinmetall's opening announcement gives no output to date.

Source: Rheinmetall. As of October 22, 2026.

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The hall will manufacture 120mm and 155mm weapon systems. Rheinmetall says that, at peak capacity, the hall can produce up to 245 barrels across both calibres and more than 50 breeches annually. Its opening announcement gives no output to date, so the capacity figure does not establish the volume being produced.¹

Breech and breech block production began in May 2026, a month before barrel production.¹ When Rheinmetall confirmed the Telford site in May 2025, it said production was set to begin by 2027.²

The Gun Hall employs 35 people, and Rheinmetall expects it to support more than 100 as production develops. The facility forms part of the company’s investment of more than £200 million across its UK operations over the past five years.¹

Denmark announced plans on Oct. 22, 2026, to acquire long-range precision missiles, Breaking Defense reported. The purchases cover Kongsberg’s Joint Strike Missile for the F-35 and Covenant’s ground-launched Anthem cruise missile.¹

KongsbergF-35 Joint Strike Missilesplanned

Denmark will acquire

Covenantground-launched Anthem cruise missilesplanned

Denmark will acquire

Copenhagen did not disclose the cost or quantities involved in either procurement.

Reported by Breaking Defense. As of Oct. 22, 2026.

Sources

• breakingdefense.com ↗

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For Covenant, the Danish purchase announcement follows Anthem’s unveiling last month. Co-founder and chief executive Michael Kaufman said the company had flown the weapon more than 200 times since its first flight in August 2025.¹

The Joint Strike Missile would equip Denmark’s growing F-35 fleet. Denmark is on track to operate 43 F-35s. It pledged to acquire another 16 last year. The F-35A can carry the missile internally, preserving the aircraft’s stealth profile.¹

Arlington Capital Partners announced Oct. 19 that it had completed its acquisition of UK photonics supplier Gooch & Housego (G&H). Arlington plans to invest in organic growth, including manufacturing capacity, to support expansion of G&H's aerospace and defense business while strengthening its industrial and life sciences businesses.¹

organic growthcapacity expansionsplanned

across existing US and UK manufacturing

aerospace & defense businesscontinued expansionplanned

These investments will support the continued expansion of G&H’s aerospace & defense business

Source: Arlington Capital Partners, October 19, 2026

Sources

• www.arlingtoncap.com ↗

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Headquartered in Ilminster, G&H has about 1,000 employees globally and makes precision optics, acousto- and electro-optics, fiber optics and thin-film coatings. Its technologies are used in directed energy, counter-drone systems and precision GPS-denied navigation, as well as semiconductor fabrication and subsea and space communications.¹

Acquisitions are also part of management's ambitions. In Arlington's Oct. 19 announcement, G&H chief executive Charlie Peppiatt said committed capital and strategic support would give the company greater flexibility to invest and “pursue strategic acquisitions at scale.”¹

The Department of War's Responsible AI Division had three of its 10 authorized positions filled, officials told the Government Accountability Office.² The count was as of February 2026; GAO published its report Oct. 14.^1–2

3 of 10Authorized positions filled

Officials reported this staffing count to GAO as of February 2026.

Source: GAO-27-107837, published Oct. 14, 2026. Staffing as of February 2026.

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Officials from the Chief Digital and Artificial Intelligence Office, or CDAO, described the division's task as accelerating AI adoption by building trust through assessment, test and evaluation, and monitoring. The department's January 2026 AI strategy re-emphasized accelerating integration and adoption.¹

CDAO officials said the office was unlikely to fill vacancies or add staff, citing ongoing restructuring after its August 2025 realignment and the need to account for the new strategy. As of April 2026, CDAO documentation showed 29 of the 64 lines of effort in the department's 2022 responsible AI implementation pathway were incomplete.¹

Officials said the Responsible AI Working Council did not meet from late 2024 until August 2025. Officials from four components reported implementation challenges during that period that would have benefited from collaboration. Meetings resumed, but GAO warned that the absence of a charter defining responsibilities and meeting frequency left the council at risk of lapsing again.²

GAO recommended issuing a council charter and addressing the division's workforce needs; the department concurred with both recommendations, which GAO lists as open.^1–2 GAO also recommended that Congress consider directing the department to implement its prior recommendations on AI collaboration and workforce issues.²

Fairbanks Morse Defense broke ground Oct. 20 on a $60 million expansion at its Bird-Johnson Propeller Company facility in Pascagoula, Mississippi. The company says the new Center of Excellence will effectively double the facility’s capacity to produce naval propulsion systems.¹

38,000 square feetNew manufacturing space planned

TwoNew five-axis computer numerical control machines planned

By Q1 2028New capacity scheduled to come online

Source: Fairbanks Morse Defense, Oct. 20, 2026. As of Oct. 22, 2026.

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The project includes a $27 million U.S. Navy investment. Of that amount, $22 million comes from Australia’s initial contribution to the U.S. Submarine Industrial Base under AUKUS Pillar I.¹

The center will complement existing foundry capacity with 38,000 square feet of manufacturing space. It will house two new five-axis computer numerical control machines. Equipped for parts weighing up to 100 metric tons, the new machines will bring the facility’s total to four. The design also reserves a machine-ready expansion slot and a bay for a future 3D sand printer.¹

Fairbanks Morse expects the upgrade to increase the foundry’s workforce by 25%, to 100 craftspeople.¹