The U.S. Army awarded Lockheed Martin a $1.2 billion early operational capability production contract for Precision Strike Missile Increment 2 on September 15, 2026. The contract funds production of the seeker-enabled variant, which adds maritime-strike capability to the weapon system.
What's happening
- Lockheed Martin received a $1.2 billion production contract from the Army for PrSM Increment 2, the seeker-enabled variant of the precision strike missile.
- PrSM Increment 2 integrates a multi-mode seeker that enables the weapon to strike maritime targets and moving threats.
- Work under the contract runs through September 2031, with production conducted at the Grand Prairie, Texas facility.
Why it matters
- The contract transitions PrSM Increment 2 from development to early operational capability production, expanding the missile's targeting envelope beyond ground targets.
- Maritime-strike capability fills a gap in the Army's intermediate-range missile inventory and increases interoperability across service branch targeting requirements.
- Production commitment through 2031 secures sustained demand for Lockheed Martin's precision munitions line and supports the industrial base for advanced seeker technology.
Financial impact
- Revenue recognition on the $1.2 billion contract begins in fiscal 2026 and continues through September 2031, with obligated funds and production rates tied to Army delivery schedules.
- The production contract adds to Lockheed Martin's missiles and fire control backlog, supporting revenue guidance through the period of performance.
The fine print
- The contract value of $1.2 billion is stated as the production award; any option years or additional tranches are not disclosed in the announcement.
- Work location is Grand Prairie, Texas, but supply chain dependencies for the multi-mode seeker and other subsystems are not specified.
Source: Defense Daily · Sep 15, 2026 · Drafted with Claude, reviewed by Industrial Base Alpha.