- Lockheed Martin received an $8.4 billion contract modification for Precision Strike Missile Increment 1 production and support.
- The modification raises the total contract value to more than $13.3 billion and extends ordering authority through September 2032.
- Funding supports increased production capacity, early operational capability assets, follow-on production, development, and obsolescence management.
- PrSM is the U.S. Army’s primary next-generation deep strike missile designed to replace the aging ATACMS inventory.
- The award reflects growing demand for long-range precision fires amid evolving Indo-Pacific and European security requirements.
The U.S. Army has awarded Lockheed Martin a major contract modification worth approximately $8.4 billion to expand production and sustainment activities for the Precision Strike Missile (PrSM) Increment 1 program, significantly increasing the Army’s long-range strike inventory over the coming decade.
According to the announcement from Army Contracting Command at Redstone Arsenal, Alabama, the modification (P00007) increases the ceiling of existing contract W31P4Q-25-D-0010 while extending the ordering period through Sept. 30, 2032. The award raises the total cumulative contract value to approximately $13.34 billion.
The funding will support expanded production capacity, procurement of Early Operational Capability assets, follow-on missile production, continued development activities, and long-term obsolescence management efforts.
Lockheed Martin’s Missiles and Fire Control division in Grand Prairie, Texas, remains the prime contractor for the program.
Deep Technical & Strategic Context Analysis
The Precision Strike Missile represents one of the U.S. Army’s highest-priority modernization programs within its Long Range Precision Fires portfolio. Developed as the successor to the MGM-140 Army Tactical Missile System (ATACMS), PrSM delivers substantially greater range, improved accuracy, enhanced survivability, and a more compact design that allows launchers to carry twice as many missiles.
Unlike ATACMS, which carries a single missile per launch pod, PrSM enables the M142 HIMARS and M270A2 Multiple Launch Rocket System to field two missiles per pod, effectively doubling available firepower. Open-source assessments indicate the missile’s operational range exceeds 500 kilometers, providing commanders with the ability to engage high-value targets such as air defense systems, command centers, logistics hubs, missile launchers, and maritime targets deep inside contested areas.
The Army’s decision to dramatically expand production capacity comes amid growing demand for long-range precision strike capabilities across multiple theaters. In Europe, lessons from the war in Ukraine have highlighted the strategic importance of precision fires against logistics networks and command infrastructure. In the Indo-Pacific, PrSM is viewed as a critical component of U.S. efforts to hold adversary forces and naval assets at risk across vast operational distances.
The contract modification’s reference to “obsolescence management” is also noteworthy. In defense acquisition terms, obsolescence management involves maintaining access to critical components, electronics, software, and manufacturing processes throughout a weapon system’s service life. As missile production scales over many years, suppliers often face challenges associated with aging parts, evolving semiconductor technologies, and industrial base constraints. Funding these activities early helps prevent future production disruptions and sustainment risks.
Contract Breakdown & Details
Contract Overview
- Prime Contractor: Lockheed Martin Corporation
- Location: Grand Prairie, Texas
- Contract Modification: P00007
- Contract Number: W31P4Q-25-D-0010
- Modification Value: $8,402,489,648
- Total Contract Value: $13,339,535,048
- Contracting Agency: Army Contracting Command, Redstone Arsenal, Alabama
- Completion Date: Sept. 30, 2032
Scope of Work
The modification covers:
- Increased production capacity for Precision Strike Missile Increment 1
- Procurement of Early Operational Capability assets
- Follow-on missile production
- Continued development activities
- Lifecycle obsolescence management
- Long-term industrial base support
Funding Structure
- Funding: To be determined with individual task and delivery orders
- Work Locations: Assigned on an order-by-order basis
- Contract Vehicle: Indefinite delivery structure with expanded ceiling value through 2032
Why Production Expansion Matters
The Army has transitioned PrSM from development into large-scale procurement at a time when demand for precision-guided munitions is increasing across the U.S. military and allied nations.
Key drivers include:
- Growing requirements for long-range fires in the Indo-Pacific
- Replacement of aging ATACMS inventories
- Increased missile stockpile requirements
- Support for joint force operations against advanced anti-access and area-denial networks
- Future integration of enhanced seeker technologies and maritime strike capabilities
The Future of the PrSM Program
PrSM Increment 1 serves as the baseline variant of a broader missile family expected to evolve significantly during the next decade. Future increments are planned to incorporate multi-mode seekers capable of engaging moving targets, including ships at sea, while improving target discrimination in contested electronic warfare environments.
The missile is also expected to play an increasingly important role within the Pentagon’s Joint All-Domain Command and Control architecture, enabling rapid targeting data exchange between air, land, sea, space, and cyber networks.
As the Army expands its long-range precision strike inventory and prepares for potential high-intensity conflicts against peer competitors, the latest contract modification signals confidence in PrSM as a foundational capability for U.S. ground forces through the 2030s.
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