The U.S. Army has awarded Lockheed Martin a contract worth up to $1.21 billion for the Precision Strike Missile Increment 2 system, according to a Department of War posting via Breaking Defense.
The contract supports development and production of an upgraded missile designed to attack moving maritime targets in addition to fixed land-based objectives.
Precision Strike Missile, commonly known as PrSM, is intended to replace the Army Tactical Missile System. The newer weapon provides greater range, precision and payload capacity while remaining compatible with existing launch platforms.
Increment 2 adds a seeker capable of identifying and tracking moving ships. This capability is strategically important because it would allow land-based Army units to participate more directly in maritime operations.
Mobile missile launchers positioned on islands or coastal areas could potentially threaten hostile ships without requiring a nearby U.S. Navy vessel or crewed aircraft. That could complicate an adversary’s planning and create additional options for controlling strategically important waterways.
Lockheed Martin successfully flight-tested the upgraded system earlier in 2026. The new contract provides the company with additional funding to advance the missile toward operational deployment.
The award could reach the full $1.21 billion value as the Army exercises options and orders additional systems. The ultimate amount will depend on testing, program requirements and future appropriations.
The contract expands Lockheed Martin’s already significant position within the Army’s long-range precision-fires portfolio. The company also produces the launchers used to fire PrSM, including the M142 High Mobility Artillery Rocket System and M270 Multiple Launch Rocket System.
Using existing launch platforms can accelerate deployment because military units already operate the vehicles and have established training, maintenance and logistics systems around them.
PrSM has also attracted interest from U.S. allies operating compatible equipment. International adoption could create additional sales opportunities for Lockheed Martin while improving interoperability among allied forces.
The Army has organized the program around a series of increments that add range, guidance and other capabilities over time. This approach allows early versions to enter service while more advanced configurations remain under development.
Increment 2’s maritime capability reflects a broader Pentagon effort to connect sensors and weapons across military branches. Targeting data gathered by aircraft, satellites, ships or drones could be transmitted to an Army launcher capable of striking a vessel from land.
The program still faces the risks associated with complex defense development, including technical challenges, testing delays and budget changes. Moving targets at sea create difficult guidance problems because missiles must continually update their trajectory during flight.
For Lockheed Martin, the award provides a multiyear opportunity tied to one of the Army’s highest-priority modernization efforts. For the military, the upgraded missile could broaden the role of land forces in conflicts where control of coastal areas and maritime routes is critical.
