The Department of War (DoW), working in partnership with L3Harris Technologies, said it has signed a letter of intent laying out investment terms aimed at expanding U.S. production capacity for solid rocket motors—an input the Department described as a critical node in the munitions supply chain.
Under the framework described in the announcement, the DoW would commit a $1 billion convertible preferred equity investment in L3Harris’ Missile Solutions business. The business is expected to become a separate company as part of the transaction, positioning the DoW as an anchor investor in the newly formed, missile-focused entity.
The Department said the structure is designed to enable negotiations toward multi-year procurement framework agreements for solid rocket motors used across multiple munitions programs, subject to Congressional authorization and appropriations. The parties also anticipate an initial public offering in the second half of 2026, which the announcement said would create a pathway for the U.S. government to potentially benefit from the investment framework.
DoW framed the initiative as a direct outcome of its Acquisition Transformation Strategy and “Go Direct-to-Supplier” effort, which it said is intended to shorten timelines and reduce costs by negotiating and investing directly with critical suppliers. In the Department’s view, the approach is also meant to proactively address single points of failure by providing upfront capital and demand stability to modernize facilities, increase throughput, and strengthen industrial resilience.
L3Harris has been increasing solid rocket motor capacity since its acquisition of Aerojet Rocketdyne, now referred to as Missile Solutions in the announcement. DoW said the new investment—paired with long-term demand signals—would support an accelerated expansion of capacity tied to missile programs including PAC-3, THAAD, Tomahawk, and Standard Missile.
The Department said the investment would be made using Industrial Base Analysis and Sustainment (IBAS) authority resources and would serve as a foundation for creating a publicly traded company focused exclusively on missile solutions. The stated goal is to scale domestic production in a way that is faster and more predictable than traditional procurement pathways while reinforcing the broader munitions industrial base.
DoW also positioned the partnership as a milestone for its Munitions Acceleration Council, which it said was established to identify and remove structural barriers—such as supply chain vulnerabilities—that constrain weapons production. The Department said multiple components are involved in supporting and advising these investment approaches, including the Office of the Under Secretary of War for Acquisition and Sustainment, the Economic Defense Unit, the Office of Strategic Capital, and the Military Departments.
KEY QUOTE:
“We are fundamentally shifting our approach to securing our munitions supply chain. By investing directly in suppliers we are building the resilient industrial base needed for the Arsenal of Freedom. 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.”
Michael Duffey, Under Secretary of War for Acquisition and Sustainment
