On Monday, in an all-but-unreported news item, the Pentagon announced that it would be paying $946 million to Lockheed Martin toward the installation of a missile defense system that was purchased — not by the United States government — but by Saudi Arabia. In other words, the Pentagon is paying nearly $1 billion to subsidize a purchase made by a foreign power.
In its announcement, the Pentagon referred to the payment as an “undefinitized contract action” that would be used, in part, to prepare Saudi Arabia’s current missile defense system for the installation of the $15 billion Terminal High Altitude Area Defense (THAAD) system manufactured by Lockheed.
The Pentagon said the payment was intended to prevent major delays in the delivery and production of the THAAD system, suggesting it was likely a hedge against past Saudi interest in the THAAD’s main (and cheaper) competitor, the Russian-made S-400. However, the payment is also authorized for use by Lockheed to pay for materials, tools and engineering development.