The Pentagon is shooting expensive missiles faster than it can replace them, and its solution is to build cheaper missiles, according to defense officials and industry executives. The U.S. military is using nonstandard contracts and tasking defense contractors to design new weapons from scratch to cut years of production time and hundreds of millions of dollars off their cost.
Even before the Iran war cut into U.S. armament supplies, lawmakers and military leaders worried that the country cannot rearm fast enough to deter threats and respond to conflicts. The war has accelerated those concerns.
One Army initiative, the Low-Cost Containerized Missiles program, would amass thousands of missiles fired from containers that can be moved on vehicles. A key requirement for producers: each missile fired must cost less than $500,000. Another Army project has asked companies to develop air-defense missiles that cost less than $250,000 apiece. For comparison, the newest Patriot surface-to-air interceptors from Lockheed Martin take more than two years to make and cost about $4 million each.
A separate Air Force project aims to procure tens of thousands of less-costly missiles over the coming years.
Military officials have said the newer initiatives will not soon replace top-shelf missiles from companies such as Lockheed and RTX, which U.S. forces have used and trained with for decades. But officials have said they want to rev up new production lines now so that more options are available in the years ahead.
The war against Iran has sharply boosted demand. The U.S. has shot off more than 1,000 Tomahawk missiles this year. At the cost of at least $2.5 billion and climbing. The Center for Strategic and International Studies estimates that RTX takes at least a year to produce each Tomahawk cruise missile, which can be fired from ships, submarines and ground launchers and strike targets 1,000 miles away.
Jerry McGinn, a defense-contracting expert at CSIS, told the Journal that many high-end missiles are “essentially handmade munitions” even after years of investment in automation. Some plants that build parts for the missiles often share more in common with specialized workshops than factory assembly lines, he said.
The time and cost required to make everything from missiles to tanker jets has ballooned over the years. Defense contractors have outfitted strike weapons and interceptors with layers of sophisticated electronics to hit targets and thwart enemy countermeasures. Industry experts told the Journal that slow and expensive production owes to unpredictable congressional funding and indecisive Pentagon officials. But the system works for defense contractors, which generate billions of dollars in annual revenue from munitions sales and also benefit from contracts that bring new revenue with each modification.
Government watchdogs have alleged that some defense contractors overcharged the military for products and parts, and Republican and Democratic lawmakers have called for stricter oversight. President Trump and Defense Secretary Pete Hegseth in recent months have pledged to scrutinize defense contractors’ performance and penalize those that do not improve. Officials have yet to publicly punish any underperforming companies.
The Pentagon’s cheaper-missile push includes startup companies using nonstandard contract vehicles. Doug Denneny, a former Topgun instructor and Boeing executive, launched CoAspire in 2013 to develop weapons that could reach the battlefield in months instead of years. Denneny told the Journal that the company’s low-cost containerized missile, the Ghost, will start flight testing this year. CoAspire seeks to avoid delays by ordering off-the-shelf gear from commercial manufacturers and 3-D printing some parts, which he said enables significant savings when modifications are needed.
A nonstandard contract under the Pentagon’s “other transaction authority” gives CoAspire more flexibility to build a missile it can make today rather than delaying production months or longer to meet rigid program requirements, Denneny said. “In the missile business, you are constantly having to make changes, to fix flight-test failures or improve capabilities,” he said. An “open and frank dialogue” with customers such as the Army and Air Force speeds timelines and avoids delays and mounting costs.
CoAspire is one of four companies competing to build less-costly missiles for the Army. Anduril Industries, Leidos Holdings and Kongsberg Gruppen subsidiary Zone 5 have pitched their own missile designs. The Army has set a high bar for the group, seeking more than 10,000 missiles by 2030.
Leidos said it plans to make 3,000 containerized cruise missiles over the coming three years by taking a weapon it already makes and adding a few basic features, such as a booster rocket. Doug Jones, Leidos’s chief technology officer for its defense segment, told the Journal: “Instead of building one Cadillac, can I build 10 Honda Accords?” He said a mix of new weapons could also prove more effective.
Todd Harrison, a defense expert at the American Enterprise Institute, told the Journal that the biggest hurdle is overcoming the Pentagon’s habit of micromanaging the process. “The idea is precision-guided weapons that you can field and use on a massive scale,” Harrison said. “They don’t need to be perfect.”