WASHINGTON, — The US Department of Defense has signed a framework agreement with BAE Systems to purchase up to 25,000 Advanced Precision Kill Weapon System (APKWS) guidance kits annually for seven years, as the US military increases its focus on affordable precision weapons, particularly for counter-drone operations.
Announced on October 19, 2026, the agreement also provides an option to increase annual production to 35,000 kits to support exports to US allies through the Foreign Military Sales (FMS) program.
The framework requires formal congressional authorization and funding before the planned purchases can take full effect. The total financial value has not been disclosed, and the Pentagon and BAE Systems are expected to negotiate a finalized multiyear procurement contract.
APKWS Supports Counter-Drone Operations
The APKWS converts standard unguided 2.75-inch (70 mm) Hydra rockets into precision laser-guided munitions. The guidance kit is compatible with existing rocket motors, warheads and fuzes, allowing operators to add precision guidance without replacing the entire rocket.
The system is used by all four US military services: the Army, Navy, Air Force and Marine Corps. Its missions include counter-drone operations, air-to-surface, surface-to-surface, surface-to-air and air-to-air engagements.
APKWS provides a lower-cost alternative to larger guided missiles when engaging certain aerial threats, including drones. Using expensive air-to-air missiles such as the AIM-9 Sidewinder and AIM-120 AMRAAM against relatively inexpensive targets can increase the cost of sustained air defence. APKWS offers another option for engaging suitable threats with precision-guided rockets.
Production Expansion and Supply Chain
BAE Systems manufactures APKWS guidance kits at facilities in Hudson, New Hampshire, and Austin, Texas. The company reported delivering its 100,000th APKWS kit in February 2026 and has maintained full-rate production for more than a decade.
Michael P. Duffey, Under Secretary of Defense for Acquisition and Sustainment, said the agreement would help maintain production capacity and provide military forces with a steady supply of interceptors. BAE Systems President and CEO Tom Arseneault described the kits as a proven and affordable precision capability for countering evolving threats.
The long-term arrangement is intended to give the manufacturer greater certainty about future demand. This can support advance purchases of components, workforce expansion and investment in manufacturing facilities and supply chains, while helping the company respond to increases in demand.
Previous Contract and Allied Demand
The new framework builds on an earlier agreement awarded by the US Navy in August 2025, a separate five-year indefinite-delivery/indefinite-quantity contract valued at up to $1.74 billion. That contract covers up to 55,000 APKWS kits for US forces and foreign customers, with work expected to continue through 2031.
Under the new framework, annual production could rise from 25,000 to 35,000 kits to accommodate additional allied demand through formal Foreign Military Sales requests.
The APKWS program provides the US military and partner nations with a precision-guided option for multiple missions while retaining compatibility with existing rocket components and requiring limited additional training and maintenance.
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