Production under the PrSM Increment 2 contract is expected to be completed by September 13, 2031. The system establishes a production route for the seeker-equipped missile, which has a listed range of more than 500 kilometers. The PrSM Increment 2 system is also referred to as the Land-Based Anti-Ship Missile seeker.

Lockheed Martin conducted an inaugural 350-kilometer flight test of the PrSM Increment 2 in February. The PrSM Increment 2 missile was launched from a High Mobility Artillery Rocket System (HIMARS) during testing. Dave Griser, Vice President of Lockheed’s Precision Fires Launchers and Missiles Program, said in a statement that the company is prepared to scale up manufacturing. Griser said the company is ready to move from flight testing into production and provide the Army with an expanded long-range precision fires capability.

The U.S. Army statement noted that the award marks an important step in delivering PrSM Increment 2 to the warfighter. The Precision Strike Missile (PrSM) is intended to replace the Army Tactical Missile System (ATACMS). The early variant of the Precision Strike Missile, Increment One, is currently in service with both the United States Army and Australian Army.

The U.S. Army used PrSM Increment 1 for the first time in combat during the early days of the conflict in Iran. The U.S. used virtually all of its PrSM missiles during the Iran war, according to anonymous sources. That usage represented a fall from a planned production rate of 400 units per year to just four available units, a decline in available inventory relative to annual production goals.

Lockheed Martin stated that the framework agreement, along with existing contracts, will quadruple PrSM production capacity. Lockheed Martin stated last year that it aimed to produce 400 PrSMs per year. The company is developing additional PrSM increments, including a system tested earlier this summer that can fly over 1,000 kilometers.

Why It Matters

The contract addresses documented strategic inventory shortfalls following the Iran war, where the U.S. deployed virtually all of its existing PrSM stockpile. The Defense Department’s Inspector General identified industrial base bottlenecks for munitions resupply as a critical vulnerability exposed by the conflict. The new agreement aims to restore production capacity, with Lockheed Martin projecting a quadrupling of output through recent framework agreements.

This award transitions the PrSM program from flight testing to early operational capability for the maritime-strike variant. The multi-mode seeker enables engagement of moving naval targets, expanding the Army's long-range precision fires beyond static land targets. Future increments plan to extend range beyond 1,000 kilometers and integrate with autonomous launch systems, signaling a continued evolution of ground-based ballistic missile capabilities.

What's New

The Army awarded Lockheed Martin a $1.2 billion cost-plus, firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the Precision Strike Missile Increment 2 early operational capability, according to a Pentagon notice issued on September 14, 2026. The U.S. Army awarded Lockheed Martin a contract for Precision Strike Missile (PrSM) Increment 2 Early Operational Capability, establishing the production route for the seeker-equipped PrSM. The Army on Monday evening awarded Lockheed Martin a $1.2 billion Early Operational Capability production contract for Precision Strike Missile (PrSM) Increment 2.

Lockheed Martin has received a contract from the U.S. Army for the Precision Strike Missile Increment 2 Early Operational Capability. The U.S. Army has tapped a Lockheed team and a Raytheon-Northrop Grumman team for PrSM Increment 4, which is designed to fly over 1,000 kilometers. PrSM Increment 3 will seek to add enhanced lethality payloads.

How Sources Differ

Regarding the contract value and details for Lockheed Martin, the Pentagon notice stated that the U.S. Army awarded Lockheed Martin a contract for Precision Strike Missile (PrSM) Increment 2 Early Operational Capability, establishing the production route for the seeker-equipped PrSM. The Department of Defense contract notice stated that the Department of Defense received only one bid for the PrSM Increment 2 contract, which was submitted by Lockheed Martin.

The Department of Defense contract notice described the action as the U.S. Army awarding Lockheed Martin a contract valued at more than $1.2 billion for the Precision Strike Missile (PrSM) Increment 2 platform.

Regarding the Precision Strike Missile, the Pentagon notice focused on the $1.2 billion cost-plus, firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the Precision Strike Missile Increment 2 early operational capability, according to a Pentagon notice issued on September 14, 2026.

The Department of Defense contract notice stated that the U.S. Army awarded Lockheed Martin a contract valued at more than $1.2 billion for the Precision Strike Missile (PrSM) Increment 2 platform.