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// DOSSIER — us-army-lockheed-martin-precision-strike-missile-contract

GLOBAL UNITED STATES LAND INDUSTRY POLICY

US Army Awards Lockheed Martin $1.2 Billion Precision Strike Missile Contract

REL_TIME: 24 Sep 2026 10:15Z · LANG: EN

// Disseminate
US Army Awards Lockheed Martin $1.2 Billion Precision Strike Missile Contract
PFC David Dumas (U.S. Army, 1st Cavalry Division, 3rd Armored Brigade Combat Team) · Public domain · source

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

  1. The Army Tactical Missile System (ATACMS) is first fielded by the U.S. Army.

  2. Lockheed Martin scales annual PrSM production capacity to 400 missiles.

  3. PrSM makes its controversial combat debut in the Iran war; analysts allege a missile strike killed civilians in Lamerd, which CENTCOM denies.

  4. 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.

  5. PrSM Increment 2 completes its second flight test, successfully engaging a moving maritime target after launching from a HIMARS.

  6. The U.S. Army awards Lockheed Martin the $1.2 billion IDIQ contract for PrSM Increment 2.

  7. Additional flight tests for the PrSM Increment 2 are scheduled to take place.

  8. Initial operational capability for the PrSM Increment 2 is expected to be achieved.

  9. 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.”

[Dave Griser] — Lockheed Martin vice president for precision fires, commenting on the transition of the PrSM Increment 2 from testing to production.

// Related Briefs