The Army has awarded Lockheed Martin an $8.4 billion contract modification to “increase the ceiling and extend the ordering period” for increased production capacity of the Precision Strike Missile, according to a Defense Department contract notice posted today. 

The award will support increased production of PrSM Increment 1 and procurement of “early operational capability assets, follow-on production, development, and obsolescence management” through fiscal year 2032, according to the notice. 

The total value of the contract with Lockheed increases to $13.3 billion with the modification, which has an estimated completion date of Sept. 30, 2032. 

In the wake of the U.S.-Israeli operation against Iran, DOD announced a framework agreement with Lockheed in March that would accelerate production of PrSM by allowing the company to pour money into facilities and test infrastructure.  

The House version of the FY-27 defense spending bill includes multiyear authorities for a variety of munitions, including PrSM. However, lawmakers have been wary about funding for these types of munitions being split between discretionary and mandatory categories. 

The Army plans to spend close to $2 billion combined between mandatory and discretionary spending on PrSM in FY-27. The discretionary funding would buy 680 missiles, and the mandatory spending would fund a multiyear contract for 454 Increment 1 missiles.  

When questioned by Senate authorizers during a hearing last week about whether the Army had a backup plan in the event the politically divisive reconciliation bill does not pass, Jesse Tolleson Jr., the principal deputy assistant secretary of the Army for acquisition, logistics and technology, said the service may need to either renegotiate munitions contracts with defense firms or consider reprogramming existing funds.