WASHINGTON, January 2, 2026, 13:48 ET
- Taiwan News said the Pentagon set the Lockheed Martin Taiwan Air Force contract at NT$10.3 billion ($328.5 million) and allocated about NT$4.9 billion upfront. Taiwan News
- Benzinga said the latest Pentagon contracting round also included a $2.73 billion Boeing award tied to Apache helicopter support work. Benzinga
The Pentagon awarded Lockheed Martin a ceiling $328.5 million undefinitized letter contract — a preliminary deal that lets work begin before final terms are set — for fixed-wing sensor hardware for Taiwan, a U.S. government contracts notice said. The award covers 55 Infrared Search and Track (IRST) Legion Enhanced Sensor pods, which can detect aircraft by heat, plus related equipment under the Foreign Military Sales (FMS) program, the U.S. government’s channel for selling weapons to partners. The notice said $157.3 million in FMS funds were obligated at award, work will be performed in Orlando, Florida, and the project is expected to run through June 30, 2031; it described the deal as a sole-source acquisition. U.S. Department of War
Taiwan remained on high alert after China staged “Justice Mission 2025” drills around the island, keeping its emergency response centres running as it monitored Chinese naval manoeuvres, Taiwan’s coast guard said. Taiwan’s defence ministry said 77 Chinese military aircraft and 25 navy and coast guard vessels had been operating around the island in the past 24 hours. Lyle Goldstein, Asia programme head at the U.S. think tank Defense Priorities, said: “They threaten and bluster a lot, but ultimately (a war) would be very costly for China no matter what.” Reuters
U.S. arms sales to Taiwan are a persistent source of friction with China, which claims the democratically governed island as its territory and has not ruled out using force. Washington has formal diplomatic ties with Beijing but maintains unofficial relations with Taipei and is bound by law to provide Taiwan with the means to defend itself. In mid-December, the Trump administration announced $11.1 billion in arms sales to Taiwan, described as the largest U.S. weapons package for the island. Reuters
FMS deals are structured so the U.S. government manages the sale while contractors build the equipment, often over multiple years.
IRST systems are typically housed in an external pod carried by an aircraft. They help crews track targets by heat rather than radar, which can reduce the aircraft’s electronic signature.
The Pentagon’s use of a letter contract in this case signals urgency, allowing work to begin while final pricing and terms are completed.
Only a portion of the total ceiling value was funded immediately, reflecting how long-duration defence programmes are often financed in stages.
Boeing, another major U.S. defence contractor, also received a $2.7 billion Pentagon award for post-production support services related to Apache helicopters, a separate Reuters report said. The announcement followed a separate $4.7 billion Army contract awarded to Boeing a month earlier for new-build Apache AH-64E attack helicopters, crew trainers and related accessories. Reuters
Lockheed and Boeing are part of a small group of “prime” contractors that dominate large Pentagon programmes, from aircraft and missiles to sensors and sustainment work.
The Taiwan-linked award is likely to be closely watched in Beijing and in regional capitals as military activity across the Taiwan Strait keeps intensifying.
The Lockheed contract adds years of work tied to sensors for Taiwan’s air force, at a moment when Taipei is tracking frequent Chinese operations in waters and skies around the island.
