Jan. 29 (UPI) -- The U.S. Missile Defense Agency has awarded Lockheed Martin a contract for additional Lot 10 Terminal High Altitude Area Defense, or THAAD, interceptors for the U.S. Army.
The deal, announced Friday by the Department of Defense, is valued at more than $459.2 million under a modified fixed-price incentive-firm target contract for line item numbers.
Friday's award is the second modification to the contract with Lockheed, which in December received a $553 million modification for Lot 9 and Lot 10 THAAD systems. The new modification -- the exercising of a $459.2 million option for more systems -- brings the total value of the contract up to $1.2 billion.
THAAD interceptors are Lockheed-designed anti-ballistic missile defense systems used to target a range of incoming ballistic missiles while in their terminal phase, the portion of a ballistic missile's descent to reenter Earth's atmosphere or as it approaches a target.
"The THAAD system's capability and reliability have been demonstrated with 15 out of 15 hit-to-kill intercepts dating back to 1999, and by exceeding readiness rates currently being experienced in the field with operationally deployed batteries," Richard McDaniel, Lockheed Martin's vice president for the THAAD system, said in a press release.
"THAAD interceptors defeat dangerous missile threats our troops and allies are facing today, and have capability against advancing future threats. Our focus on affordability, coupled with efficiencies of increased volume, is providing significant cost-savings opportunities to meet growing demand from the U.S. and allies around the globe," McDaniel said.
The additional interceptors are for use by Army THAAD units and other operational requirements, Lockheed said.
More than $459.2 million from fiscal 2018 procurement funds has been obligated to Lockheed at the time of award. Work on the new contract will occur in Texas, California, Alabama and Arkansas, and is expected to be completed by June 2021.