US Department Of Defense (DoD) awards USD 4.1 Billion Contract for Missile Defense System

Over the last two decades, the US has continuously invested in technology development and deployment of layered missile defense systems for the protection of its homeland and its forces abroad. It faces threats from countries, such as North Korea, Iran, Russia, and China as these countries are deploying offensive missile systems. The US continues to make significant progress in the development and deployment of active missile defense capabilities. Some of the major missile defense systems deployed by the US include the Terminal High Altitude Area Defense (THAAD), Aegis Sea-based Missile Defense, Aegis Ashore, and Patriot Advanced Capability-3 (PAC-3) systems.

As a part of a comprehensive missile defense strategy, the US DoD has awarded a modification contract a worth USD 4.1 billion to a consortium led by Boeing (US), Northrop Grumman (US) and Raytheon (US) for the expansion and capability enhancement of a ground-based midcourse defense anti-ballistic missile system through 2023. Under this agreement, the team, led by Boeing, will undertake the development, integration, assessment, and deployment of boost vehicles, ground system software, cybersecurity, and expanded systems testing through flight & ground trials. The new contract is an extension of the USD 6.56 billion contract awarded to Boeing in January 2018 for upgrades to the Ground-based Midcourse Defense (GMD) system, bringing the total value of the contract to USD 10.8 billion.

US Missile Defense Agency (MDA) Budget (2012-2018)

US DOD Awarded Missile Defense System Contract

Source: US Department of Defense

Missile Defense Systems: Essential in an Evolving Threat Environment

Missile defense systems are developed to ensure the safety of personnel from aerial attacks, such as ballistic missile fire; UAV attacks; and rocket, artillery, or mortar fire in battlefields or administrative and industrial installations. They comprise weapon systems, interceptors, fire control systems, radar, infrared sensors, electro-optic sensors, etc. Air and ballistic missile defense, air-to-air combat, strategic long-range surveillance, and multiple other military applications are dependent on missile defense systems. Major countries across the globe deploy missile defense systems to perform weapon control operations such as neutralizing the impact of missiles launched by enemy systems, along with monitoring borders from terrorist threats. These systems are used on airborne, naval, and land-based platforms to carry out electronic countermeasures in electronic warfare.

Countries such as India, China, South Africa, and Russia are investing increasingly in the development and deployment of missile defense systems to ensure protection from ballistic and other missile attacks. Though developed countries across the globe are reducing their overall defense expenditure, emerging economies are exhibiting the opposite trend. China and India are among the major upcoming markets for missile defense systems due to the rise in insurgency and terror attacks in these countries. These growing economic powers are increasing their military spending to increase their regional dominance and stay ahead of other countries in terms of weapons. For instance, in 2018, India signed a USD 5.2 billion contract with Russia to acquire the S-400 air defense missile system.

Regional conflicts among various countries in the Middle East and Asia Pacific are anticipated to fuel the procurement of missile defense systems by countries in these regions. The changing nature of aerial warfare across the globe has led to the acquisition of advanced missile defense systems by various countries, which help them defend themselves from aerial threats. For instance, according to data published by Israel’s Ministry of Defense, the Iron Dome air defense system deployed in Israel has prevented more than 1,000 missile and mortar attacks with a success rate of over 90%.

MarketsandMarkets™ View Point

Anket Dungarwal, a Senior Research Analyst in the Aerospace and Defense sector at MarketsandMarkets™, estimates the air defense systems market to reach USD 49.19 billion by 2024, growing at a CAGR of 5.74% between 2017 and 2024.

Increasing defense expenditure for the development of missile defense systems, growing geopolitical instabilities across the globe, and technological advancements in missile defense systems are factors expected to drive the growth of the missile defense system market during the forecast period.

Companies such as Saab AB (Sweden), Israel Aerospace Industries Ltd. (Israel), Lockheed Martin Corporation (US), Raytheon Company (US), Boeing (US), BAE Systems (UK), and Thales Group (France) have made significant investments for the development of advanced missile defense systems. Most of these players are based in the European and North American regions. Furthermore, these companies have entered into agreements and received contracts from government agencies of their respective countries for the development of advanced missile defense systems.


The need for missile defense systems is growing across the globe due to the increasing demand for surveillance along attack-prone borders, rising defense spending of emerging economies, increasing incidences of terror attacks, and the rising number of inter-country conflicts. Governments of various countries are making significant investments towards developing advanced missile defense systems to enhance their security. Technological developments in the field of weapons, fire control systems, radar, and command & control systems have led to the development of missile defense systems that are highly efficient. While the major focus of countries is to resolve threats in a diplomatic manner, it is equally important to maintain a robust missile defense system capable of protecting the nation, if diplomacy fails.

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