The interceptor program is aimed at defeating current ballistic missile threats and future technological advances from countries such as North Korea and Iran

Lockheed Martin has won a USD 17 billion contract to develop the next generation of interceptors to defend the United States against an intercontinental ballistic missile attack, the US Missile Defence Agency said on Monday.

The interceptor program is aimed at defeating current ballistic missile threats and future technological advances from countries such as North Korea and Iran.

The win represents a shot in the arm for Lockheed after the United States said it wanted to reduce F-35 orders, and the Army in February abandoned development of a Future Attack Reconnaissance Aircraft, a next-generation helicopter for which Lockheed had submitted a design.

The multi-year missile contract covers the development of the Next Generation Interceptor (NGI) to modernise the Ground-Based Midcourse Defence (GMD) program. The network of radars, interceptors and other equipment is designed to protect the United States from intercontinental ballistic missiles.

Lockheed shares closed up 0.6 per cent at USD 462.08 on Monday.

Lockheed is "committed to delivering reliable interceptors," said Sarah Hiza, general manager of Strategic and Missile Defence.

The first interceptor is expected to be operational in 2028.

The NGI is currently in its technology development phase and will transition to the product development phase in May, according to written testimony submitted by the head of the Missile Defence Agency, Lieutenant General Heath Collins, last week. The US plans to buy 20 interceptors and deploy them at Fort Greely, Alaska.

Collins had said the agency would select either Lockheed or Northrop Grumman for the program. The companies were awarded separate contracts in 2021 to develop designs.

In 2019, the Pentagon scrapped work on a Boeing Co contract for a "kill vehicle," the tip of an interceptor that detaches in space and destroys the incoming warhead, due to technical design problems after spending USD 1.2 billion on the project.

The United States then decided to restart the contract process to gather bids for the whole interceptor. Boeing was knocked out of the competition in 2021.

The next-generation interceptor program will be worth about USD 17.7 billion over its lifetime, according to government estimates.

The Biden administration has requested USD 28.4 billion for missile defenses in its fiscal 2025 budget, Collins testified.

Work on GMD began in the late 1990s and after about USD 40 billion in research and development costs, it was declared operational in 2004.

Just over half of the system's interception tests have been successful, however, and the Pentagon's Office of the Director, Operational Test and Evaluation, said in 2023 that GMD could defend against "a small number of ballistic missile threats."

In January, Lockheed forecast its 2024 profit below Wall Street expectations, as the defence contractor's largest aeronautics segment - which makes the F-35 jets - faces supply-chain snags.

Reuters has reported that Lockheed would cut 1 per cent of its jobs over the course of 2024 in a bid to cut costs and streamline operations.

US defence giants have benefited from robust demand for weapons amid heightened geopolitical tensions over the last two years. Sales of US military equipment to foreign governments in 2023 rose 16 per cent to a record USD 238 billion.

(With Agency Inputs)