April 2 (UPI) -- Lockheed Martin was awarded an additional $2.5 billion contract to begin work on production of Terminal High Altitude Area Defense interceptors for Saudi Arabia as part of a $15 billion for the defensive ballistic missile systems.
Lockheed will provide interceptors and associated one-shot devices, the U.S. Missile Defense Agency announced Monday. With the new contract modification, the value of Lockheed's contract for the systems increased from from $1.4 billion to $3.9 billion.
The THAAD system is designed to shoot down short- and medium-range ballistic missiles, including weapons of mass destruction, in descent or reentry. The first flight test occurred in April 1995, and the system has now been deployed by the United States worldwide, in addition to being exported to allies.
The work will be performed in Dallas; Sunnyvale, Cal.; Huntsville, Ala.; Camden, Ark.; and Troy, Ala., and carries an expected completion date of April 1, 2026.
Fiscal 2019 U.S. government procurement funds in the amount of $922,700 and Saudi foreign military sales funds in the amount of $1.5 billion are being obligated at time of award.
Last March, Lockheed Martin was awarded a $945.9 million contract in the first down payment.
For the kingdom, Lockheed will provide 44 THAAD launchers, 360 missile interceptors, 16 THAAD Fire Control and Communications Mobile Tactical Station Group units and seven AN/TPY-2 THAAD radars.
In November, the United States and Saudi Arabia formalized terms for the sale of the THAAD launchers, missiles and related equipment.
The THAAD deal is part of a weapons deal that the United States negotiated with Saudi leaders in 2017. President Donald Trump's proposed 10-year defense deal was reached during his first full year in office when he met with King Mohammed bin Salman.
The State Department and Congress approved arms deals in August 2017 and November 2017.
"This sale furthers U.S. national security and foreign policy interests, and supports the long-term security of Saudi Arabia and the Gulf region in the face of Iranian and other regional threats," the Missile Defense Agency said in 2017. "This potential sale will substantially increase Saudi Arabia's capability to defend itself against the growing ballistic missile threat in the region."
Lockheed Martin Space Systems and Raytheon are the principal contractors for the THAAD system.
Last April, Lockheed Martin's top executive Marillyn Hewson hosted the Kingdom of Saudi Arabia's Crown Prince, His Royal Highness Mohammed bin Salman at the company's Sunnyvale, Calif.
Lockheed Martin has had a presence in the Kingdom of Saudi Arabia since 1965 with the first delivery of the C-130 Hercules.