“The U.S. Department of Defense, in partnership with Lockheed Martin, today announced the signing of a historic framework agreement that establishes a transformative new procurement model for expanding munitions production and procurement.”, — write: www.pravda.com.ua
Source: notice of the department, “European Truth”
Details: The new model provides long-term certainty in demand, spurs industrial investment to increase production, shortens order fulfillment times, increases efficiency in supply chain management, while reducing upfront government investment in infrastructure and capacity.
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This seven-year framework agreement with Lockheed Martin is a direct result of the Department’s new procurement transformation strategy unveiled by Secretary Pete Hegseth in his “Arsenal of Freedom” speech at Fort McNair in November. As the minister stated, “we will stabilize demand signals. We will conclude larger and longer contracts with companies for proven systems so that these companies are convinced of the need for greater investment to expand the industrial base that supplies our weapons systems in greater volumes and faster.”
Under the framework agreement, Lockheed Martin will increase annual production of interceptors for the Patriot PAC-3 Missile Segment Enhancement (MSE) systems from approximately 600 to 2,000, aligning industrial capacity with long-term demand from the US military, allies and partner nations.
The agreement also aligns the interests of Lockheed Martin, the government and taxpayers, with Lockheed Martin supporting investments to increase the required production volume while benefiting from confidence in long-term demand growth for the PAC-3 MSE.
The framework agreement sets the stage for negotiations on a seven-year supply contract, subject to congressional approval and appropriations, that would increase PAC-3 MSE production to about 2,000 missiles a year, up from about 600 today.
The Department of Defense recognizes that supply chain optimization is also necessary to support increased production capacity. As part of the framework agreement, the DoD will work with key PAC-3 MSE suppliers to enter into seven-year subcontracting agreements to ensure investment in optimizing and expanding manufacturing capacity to produce components to meet growing munitions demand.
We will remind, in November the USA approved the potential sale Equipment for maintenance of the Patriot air defense system with an estimated cost of 105 million dollars to Ukraine.
Before that, President Volodymyr Zelenskyi said that Ukraine wants to order 27 Patriot air defense systems in the USA.