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// DOSSIER — us-army-lockheed-martin-precision-strike-missile-contract
US Army Awards Lockheed Martin $1.2 Billion Precision Strike Missile Contract
REL_TIME: 24 Sep 2026 10:15Z · LANG: EN
The U.S. Army has awarded Lockheed Martin an indefinite-delivery, indefinite-quantity (IDIQ) contract worth up to $1.2 billion for the production and continued development of the Precision Strike Missile (PrSM) Increment 2. Designed to replace the aging Army Tactical Missile System (ATACMS), the PrSM Increment 2 features an advanced multimode seeker that enables land-based launchers to target moving land and maritime targets at ranges exceeding 400 kilometers. The contract transition follows successful flight tests in March and August 2026, and comes amid a broader push to expand U.S. missile production capacity following heavy expenditure in the Iran conflict.
// Background
The Precision Strike Missile (PrSM) is the U.S. Army's next-generation long-range precision strike weapon, designed to replace the ATACMS fielded in the early 1990s. While Increment 1 targeted stationary land assets, Increment 2 introduces moving land and maritime target engagement. Future variants include Increment 3 (expanded payloads) and Increment 4 (ramjet propulsion extending range past 1,000 km). The $1.2 billion award builds on a prior $4.94 billion contract and a 7-year agreement to scale annual production capacity to 550 missiles to address severe stockpiling shortages.
// Key Developments
- Lockheed Martin secured an IDIQ contract worth up to $1.2 billion for PrSM Increment 2 initial procurement, future orders, and development.
- PrSM Increment 2 features a multimode seeker allowing it to engage moving land and maritime targets, a major upgrade over the land-only baseline version.
- The missile replaces the 1990s-era ATACMS, offering a range of 400-500 km and a narrower design that doubles launcher capacity on HIMARS and M270 systems.
- The contract follows successful flight tests in March and August 2026, with further testing scheduled for 2027 and initial operational capability expected in 2028.
- Lockheed Martin is quadrupling PrSM production capacity, building on a previous 7-year agreement to reach an annual output of 550 missiles.
// Timeline
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The Army Tactical Missile System (ATACMS) is first fielded by the U.S. Army.
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Lockheed Martin scales annual PrSM production capacity to 400 missiles.
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PrSM makes its controversial combat debut in the Iran war; analysts allege a missile strike killed civilians in Lamerd, which CENTCOM denies.
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PrSM Increment 2 completes its first flight test; Lockheed signs a 7-year agreement with the Department of War to scale annual production to 550 missiles.
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PrSM Increment 2 completes its second flight test, successfully engaging a moving maritime target after launching from a HIMARS.
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The U.S. Army awards Lockheed Martin the $1.2 billion IDIQ contract for PrSM Increment 2.
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Additional flight tests for the PrSM Increment 2 are scheduled to take place.
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Initial operational capability for the PrSM Increment 2 is expected to be achieved.
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Work under the current Early Operational Capability (EOC) contract is scheduled to conclude.
// Perspectives
[Lockheed Martin]
Focused on rapidly transitioning the PrSM Increment 2 to production and scaling manufacturing capacity to meet the Army's urgent demand for precision fires.
[U.S. Central Command]
Denied allegations that a PrSM missile caused civilian casualties in Lamerd, Iran, during the opening day of U.S.-Israeli strikes.
[Defense Analysts]
Highlighted the critical shortage of U.S. strike missiles due to the Iran conflict and raised concerns over the weapon's controversial combat debut involving civilian casualties.
// Quotes
“This award marks an important step in delivering PrSM Increment 2 to the warfighter. We’re ready to move from flight testing into production and provide the Army with an expanded long-range precision fires capability.”
