BAE Systems Signs Multi-Year Deal to Boost APKWS Production
BAE Systems signed a framework agreement with the U.S. Department of Defense to produce up to 35,000 laser-guidance kits annually for seven years.
The U.S. Department of Defense signed a multi-year framework agreement with BAE Systems to scale the production of Advanced Precision Kill Weapon System (APKWS) laser-guidance kits. The agreement establishes a baseline procurement of up to 25,000 kits annually for seven years, with a path to increase capacity to 35,000 units per year to support U.S. forces and international allies through the Foreign Military Sales program.
These kits convert unguided 2.75-inch rockets into low-cost precision-guided munitions used by the U.S. Air Force, Army, Navy, and Marine Corps. The system is increasingly utilized for counter-unmanned aircraft systems missions as a cost-effective alternative to traditional air-to-air missiles. To support this expansion, BAE Systems is investing in manufacturing facilities in Hudson, New Hampshire, and Austin, Texas.
Part of the Arsenal of Freedom program, the framework allows BAE Systems to secure long-lead items and expand its workforce while a final multi-year contract awaits congressional approval and funding. This move follows a $1.7 billion contract awarded by the U.S. Navy in late 2025 and mirrors similar Pentagon efforts to boost interceptor production with Lockheed Martin. Current allied interest includes a potential 5,031-kit purchase by Italy and a $1.96 billion package for Saudi Arabia.
