Army Awards Lockheed Martin $1.21 Billion Contract for PrSM Increment 2 Maritime-Strike Missile

The U.S. Army has committed $1.21 billion to transition its next-generation surface-to-surface missile into early production, securing a multi-mode seeker that expands the weapon's target set to moving ships. Awarded to Lockheed Martin on September 14, 2026, the indefinite-delivery/indefinite-quantity contract funds the Early Operational Capability phase of the Precision Strike Missile (PrSM) Increment 2. The agreement establishes the production pathway for the land-based anti-ship variant, with deliveries and individual orders scheduled to run through September 13, 2031.[1][4][5]

The decision shifts the Army's long-range precision fires portfolio from static land bombardment to dynamic maritime denial. While the baseline PrSM Increment 1 relies on GPS and inertial navigation to strike fixed coordinates up to 500 kilometers away, Increment 2 integrates a combined passive radio-frequency and imaging infrared terminal seeker. This hardware allows the missile to actively detect and lock onto the electronic and thermal signatures of relocating targets, specifically naval vessels, during its terminal dive.[4][5]

Lockheed Martin serves as the sole contractor for the Increment 2 system, having developed the seeker technology primarily at its facilities in Huntsville, Alabama, and Grand Prairie, Texas. The $1,211,234,988 ceiling covers both cost-plus-fixed-fee and firm-fixed-price components, allowing the Army to place follow-on orders without renegotiating the baseline unit cost.

"This award marks an important step in delivering PrSM Increment 2 to the warfighter," Dave Griser, vice president of Lockheed's precision fires launchers and missiles program, stated following the announcement. "We're ready to move from flight testing into production and provide the Army with an expanded long-range precision fires capability."[1][2][4][5]

The service has not disclosed the exact number of missiles procured under this initial ceiling, nor whether the Increment 2 variant will eventually incorporate the 650-to-700-kilometer range extension planned for later Increment 1 production blocks. The new missile is believed to retain the existing 91-kilogram payload utilized by the baseline variant.[4]

The production award follows a compressed testing schedule. On March 12, 2026, Lockheed Martin conducted the first flight test of the Increment 2 configuration, launching the missile from an M142 High Mobility Artillery Rocket System (HIMARS). The weapon flew 350 kilometers and successfully demonstrated the new seeker's ability to acquire a moving maritime target, deploying protective covers and collecting validation data during the flight.[2][4][5]

The acceleration reflects acute inventory pressures and shifting operational requirements. The Army reportedly expended a significant portion of its baseline PrSM Increment 1 stockpile during the recent conflict in Iran, where the system made its combat debut. Replenishing those magazines while simultaneously introducing the anti-ship variant allows the service to address immediate shortfalls while fielding a capability designed specifically for contested littoral environments.[4][5]

The introduction of a land-based anti-ship missile fundamentally alters the defensive calculus for adversary naval forces. By enabling mobile HIMARS and M270A2 launcher batteries to hold maritime targets at risk from hundreds of kilometers inland, the Army can establish sea-denial zones without relying entirely on air or naval assets. This cross-domain capability aligns with the Pentagon's broader strategy to distribute anti-ship fires across multiple services and platforms.[2][3]

Lockheed Martin will conduct the manufacturing and integration work primarily at its Grand Prairie facility, with specific funding and locations determined as the Army issues individual delivery orders. The service plans to continue testing the Increment 2 seeker configuration through the end of 2026 to validate its performance across a wider range of target profiles and electronic warfare environments.[2][4]

The Army's long-term procurement strategy envisions further iterations of the PrSM family. Increment 3 will focus on enhanced lethality payloads, including smart submunitions, while Increment 4 aims to extend the weapon's reach beyond 1,000 kilometers. For now, the service's immediate priority remains scaling the production of the Increment 1 and 2 variants to ensure sufficient magazine depth for near-term contingencies.[4]