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The Department of War has unveiled a $1 billion direct investment aimed at strengthening the United States’ solid rocket motor supply chain, a critical pillar of modern missile production.
The department announced the move alongside L3Harris Technologies, confirming the signing of a letter of intent that sets investment terms for expanded domestic production capacity. According to the Department of War, the initiative represents its first direct-to-supplier equity partnership designed to address industrial bottlenecks.
Under the agreement, the department will make a $1 billion convertible preferred equity investment in L3Harris’ Missile Solutions business. L3Harris plans to separate the unit into an independent company as part of the transaction.
A New Model for Industrial Investment
The arrangement supports the Department of War’s new Acquisition Transformation Strategy and its “Go Direct-to-Supplier” initiative. The approach seeks to reduce procurement delays and address single points of failure within the defense industrial base.
Rather than relying solely on traditional contracting, the department aims to invest directly in critical manufacturers. Officials say the model provides financial stability while accelerating production expansion and facility modernization.
The Missile Solutions business traces its roots to Aerojet Rocketdyne, which L3Harris acquired in 2023. Since that acquisition, the company has increased solid rocket motor output to meet rising defense demand.
Solid rocket motors form the backbone of several high-priority U.S. missile systems. These include PAC-3 interceptors, the Terminal High Altitude Area Defense system, Tomahawk cruise missiles, and the Standard Missile family.
Procurement and Market Implications
The letter of intent also establishes a framework for negotiating multi-year procurement agreements. These deals would cover solid rocket motors across multiple weapons programs, pending congressional authorization and appropriations.
L3Harris and the Department of War plan an initial public offering for the Missile Solutions company in the second half of 2026. The structure would allow the U.S. government to benefit financially from its equity position, according to the department.
Funding for the investment will come from Industrial Base Analysis and Sustainment authorities. The department has increasingly used these funds to stabilize fragile sectors of the munitions supply chain.
Officials describe solid rocket motor production as a “critical node” in national security manufacturing. Limited suppliers and long lead times have constrained missile output in recent years.
Strategic Context
Michael Duffey, Under Secretary of War for Acquisition and Sustainment, said the investment reflects a broader shift in industrial policy.
“We are fundamentally shifting our approach to securing our munitions supply chain,” Duffey said, according to the Department of War. He added that direct supplier investment would help rebuild stockpiles and reinforce deterrence.
The announcement also marks a milestone for the department’s Munitions Acceleration Council. The council was established to remove structural barriers that limit weapons production scale.
Several defense organizations contributed to the effort, including the Office of Strategic Capital and the Economic Defense Unit. Military departments also participated in shaping the investment framework.
As global demand for precision munitions grows, U.S. officials view industrial capacity as a strategic asset. The Department of War says the L3Harris partnership demonstrates how targeted capital can translate urgent operational needs into long-term manufacturing resilience.
