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Missile Defense

New PAC-3 Agreement Possible With Guaranteed Cash Flows And Inflation Markers, Officials Say

Tuesday, January 6th, 2026

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New PAC-3 Agreement Possible With Guaranteed Cash Flows And Inflation Markers, Officials Say

A PAC-3 Missile Segment Enhancement (MSE) missile test is conducted at the White Sands Missile Range, N.M. as part of a flight test for the U.S. Army in 2016. (Photo: Lockheed Martin)

Defense Department and Lockheed Martin [LMT] officials confirmed specific measures around cash flows and accounting for inflation are key to a new framework agreement that aims to more than triple production of the Patriot Advanced Capability (PAC)-3 Missile Segment Enhancement (MSE). Lockheed Martin CEO Jim Taiclet told reporters during a Tuesday roundtable that two key cooperative elements of the framework that allow it to work for the company are the inclusion of an escalation index to cover inflation for ongoing…

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