The Pentagon announced on Wednesday (March 25) that it has reached framework agreements worth hundreds of millions of dollars with the world’s three largest defense manufacturers to increase defense system and ammunition production. This is part of President Trump and War Secretary Pete Hegseth’s efforts to “put the defense industrial base on a wartime footing”.
The three defense giants are BAE Systems from the UK, Lockheed Martin from the US, and Honeywell Aerospace.
According to the agreement, Honeywell Aerospace will “significantly increase the production of critical components in the US ammunition inventory”. The multi-year contract is valued at $500 million, including navigation systems, actuators, and “electronic warfare solutions”.
“By providing long-term and stable demand for critical ammunition, the Department of War has facilitated a $500 million multi-year investment by Honeywell Aerospace in modernizing and expanding its manufacturing capabilities,” the Department of War said. “This marks a critical victory for the defense industrial base, directly responding to President Trump and Secretary Hegseth’s call to establish a flexible and enduring ‘Arsenal of Freedom’.”
The Pentagon added that BAE Systems and Lockheed Martin will quadruple the production of seekers for the Terminal High Altitude Area Defense (THAAD) system.
By strengthening the core component of missile seekers, the Department of War is breaking the traditional mode of working solely with prime contractors and actively leading the revival of the entire supply chain’s production capacity to ensure rapid and large-scale delivery of critical components. The system has been widely used in the Russo-Ukrainian War and is heavily relied upon in the ongoing Iran conflict.
Michael Duffey, the Deputy Under Secretary responsible for procurement and sustainment, said: “The agreement with BAE Systems sends a clear, stable long-term demand signal. We are providing the certainty needed for partners to make investments, expand, and hire. This is how we put the industrial base on a wartime footing.”
At the same time, a new framework agreement has been reached with Lockheed Martin to accelerate the production of Precision Strike Missiles (PrSM).
Under the agreement, Lockheed Martin will make special investments in advanced tools, facility modernization, and key test equipment to significantly shorten the production cycle. The framework agreement also establishes the possibility of negotiating multi-year contracts for up to seven years in the future, subject to congressional authorization.
Duffey emphasized, “By giving the industry the ability to invest in factory production lines, we are establishing a decisive enduring advantage for our warriors.”
These initiatives are at the core of the Department of War’s Acquisition Transformation Strategy, led by the Munitions Acceleration Council and closely coordinated with the US Army and the Economic Defense Unit.
As these announcements are made, the US and Israel’s military strikes against Iran have entered the fourth week. With the conflict ongoing, the Department of War is shifting its focus to emphasize speed and scale in a new business model to ensure that the US and its allies maintain absolute military superiority.