U.S. Department of War Invests $1B to Expand Solid Rocket Motor Production

The U.S. Department of War has signed a letter of intent with L3Harris Technologies committing to a $1 billion convertible preferred equity investment to expand domestic solid rocket motor production for key U.S. missile programs.

Under the agreement, the Department of War will make a direct investment in L3Harris’ Missile Solutions business, which will be separated into a standalone company focused exclusively on missile systems. The arrangement marks the first direct-to-supplier partnership of its kind under the Department’s new acquisition framework. The investment is intended to increase production capacity, modernize facilities, and reduce supply chain bottlenecks in a sector identified as a critical vulnerability in the U.S. munitions industrial base.

The Department and L3Harris will use the framework to negotiate multi-year procurement agreements for solid rocket motors, subject to Congressional authorization and appropriations. An initial public offering of the Missile Solutions company is planned for the second half of 2026, with the U.S. government positioned to benefit from its equity stake under the proposed structure.

Solid rocket motors are essential components for several U.S. missile systems, including PAC-3, THAAD, Tomahawk, and the Standard Missile family. L3Harris has expanded capacity in this area since acquiring Aerojet Rocketdyne, now renamed Missile Solutions, and the Department said the new funding is intended to accelerate further expansion in response to sustained long-term demand.

“This direct-to-supplier model is a crucial step toward replenishing stockpiles, rebuilding our military, and reestablishing deterrence by ensuring the availability of critical components,” said Michael Duffey, Under Secretary of War for Acquisition and Sustainment.

The initiative is part of the Department’s Acquisition Transformation Strategy and its “Go Direct-to-Supplier” approach, which seeks to reduce delays and manage single points of failure by negotiating directly with critical manufacturers. Funding for the investment will come from Industrial Base Analysis and Sustainment authority resources.

The partnership also advances the work of the Department’s Munitions Acceleration Council, which was created to address structural barriers to weapons production and convert urgent operational demand into long-term industrial capacity. Multiple Department offices, including acquisition, economic defense, and strategic capital units, are involved in shaping similar investment models.