Lockheed Martin secures $1.2 billion contract for next-generation precision strike missiles

12:12

By: Azzat Manal

Lockheed Martin secures $1.2 billion contract for next-generation precision strike missiles

Lockheed Martin has secured a contract worth up to $1.2 billion from the U.S. Army to produce the second increment of its Precision Strike Missile, or PrSM, strengthening the company’s position in the Army’s long-range precision fires program.

The indefinite-delivery, indefinite-quantity agreement covers the initial procurement of PrSM Increment 2 missiles, future orders, follow-on production and continued development of the system. Work will be carried out at Lockheed Martin facilities and across its U.S. industrial base.

The award follows a second flight test of the upgraded missile, conducted after its first test earlier in 2026. According to Lockheed Martin, the latest test provided additional data on the system’s ability to engage moving maritime targets, an expanded capability compared with the missile’s original land-attack role. Further flight testing is planned as development continues.

PrSM is being developed as the U.S. Army’s next-generation long-range precision strike system and is intended to replace the Army Tactical Missile System, known as ATACMS. The missile is designed to operate from existing launch platforms, including the High Mobility Artillery Rocket System, or HIMARS, as well as the M270A2 launcher.

The Increment 2 version introduces a multimode seeker intended to improve the missile’s ability to identify and engage moving targets. The additional maritime-strike capability is designed to broaden the range of missions that can be performed by the Army’s long-range fires units.

The new contract also comes as Lockheed Martin expands its manufacturing capacity for the PrSM family. The company says it is working to quadruple production capacity while continuing development of additional versions of the missile. The approach reflects the broader U.S. military focus on expanding long-range precision-fire capabilities and increasing industrial production capacity.

The PrSM program has advanced through a series of flight demonstrations in recent years. The first Increment 2 flight test in March 2026 involved a launch from a HIMARS and a flight of approximately 350 kilometers, with the test designed to collect performance data on the missile’s new guidance capabilities.

The move into production represents a new stage for Increment 2, although testing and system development will continue in parallel. According to Lockheed Martin, additional flight tests are scheduled for 2027 as the Army and the company continue to refine the system.

The program is part of a wider effort by the U.S. Army to modernize its long-range fires capabilities and provide forces with systems capable of responding to both stationary and moving targets. For Lockheed Martin, the contract also reinforces the importance of precision-strike programs within the company’s broader missile portfolio.

The expansion of PrSM production highlights the growing emphasis on long-range strike capabilities in U.S. defence planning, while the continued testing of newer variants indicates that the system is expected to evolve beyond its initial configuration. The latest award therefore combines immediate procurement with longer-term development as the Army moves toward broader deployment of the next-generation missile family.