The Missile Defense Agency (MDA) awarded Lockheed Martin [LMT] a $1.4 billion modification on March 31 to produce additional Terminal High Altitude Area Defense (THAAD) interceptors and associated one-shot devices for both the U.S. and Foreign Military Sales (FMS) to Saudi Arabia.

The Defense Department said this equipment will be procured under fixed-price incentive contract line items, increasing the base contract value from $6.4 billion to $7.76 billion.

Work will occur in Dallas, Texas; Sunnyvale, Calif.; Huntsville, Ala.; Camden, Ark.; and Troy, Ala., and is expected to be finished by August 2027.

$1.05 billion in Saudi Arabia FMS funds and $372 million in FY ‘21 U.S. government funds was obligated at the time of award.

Last year, MDA awarded Lockheed Martin a $610 million contract for Phase II FMS work to continue sales of the THAAD to Said Arabia (Defense Daily, April 2, 2021).

The Phase I part of that contract, covering $946 million in long lead items and early engineering work for that THAAD order, was awarded in 2019 (Defense Daily, March 5, 2019).

Also in 2019, MDA awarded Lockheed Martin a $1.47 billion modification for THAAD interceptor support items, increasing the total contract value at the time from $3.89 billion to $5.36 billion, with the contract performance period lasting through July 2023 (Defense Daily, July 22, 2019).

In 2017, the State Department first approved the sale of THAAD to Saudi Arabia, covering 44 launches, 360 interceptors, 16 fire control and communications mobile tactical station groups, and seven Raytheon Technologies [RTN] AN/TPY-2 radars (Defense Daily, Oct. 6, 2017).

In 2018, a Lockheed Martin official said the Saudi THAAD initial operating capability was scheduled for 2023 (Defense Daily, Oct. 23, 2018).

These THAAD sales to Saudi Arabia date back to the $110 billion in defense sales announced by former President Trump during his visit to the country in 2017 (Defense Daily, May 19, 2017).