The Department of War announced on Tuesday that Lockheed Martin Corp. (NYSE:LMT) received a contract modification worth $8.4 billion to expand production of Precision Strike Missiles. The amendment raises the overall contract ceiling and extends the ordering period for work tied to the company's Grand Prairie, Texas facility, with intent to increase production capacity for Precision Strike Missiles Increment One.
The modification explicitly covers procurement of Early Operational Capability assets, follow-on production runs, development activities, and obsolescence management through fiscal 2032. As part of the announcement, the government said work locations and the allocation of funding will be specified with each subsequent order placed under the contract.
With this modification, the total cumulative face value of contract W31P4Q-25-D-0010 is now $13.3 billion. The contract modification is listed as P00007 and the Army Contracting Command at Redstone Arsenal, Alabama, is identified as the contracting activity overseeing the award. The estimated completion date for obligations under the modification is Sept. 30, 2032.
Prior to this amendment, the original award for contract W31P4Q-25-D-0010 had a face value of $4.9 billion. The current change increases the contract value by the $8.4 billion modification announced on Tuesday, resulting in the new cumulative face value noted above.
Program details and scope
The modification is intended to expand production capacity at Lockheed Martin's Grand Prairie, Texas facility for Precision Strike Missiles Increment One. The scope includes procurement of assets needed for Early Operational Capability, subsequent production, continued development efforts, and management of obsolescence issues out to fiscal 2032. The contracting activity managing the transaction is the Army Contracting Command at Redstone Arsenal, Alabama.
Timeline and contract administration
The Department of War listed Sept. 30, 2032 as the estimated completion date for the modified contract. The announcement also stated that specific work locations and funding amounts will be determined on an order-by-order basis under the contract vehicle W31P4Q-25-D-0010.
Key takeaways
- Lockheed Martin received an $8.4 billion modification to increase Precision Strike Missile production capacity at its Grand Prairie, Texas facility.
- The amendment covers Early Operational Capability assets, follow-on production, development, and obsolescence management through fiscal 2032.
- The modification raises the cumulative face value of contract W31P4Q-25-D-0010 to $13.3 billion; the original contract was valued at $4.9 billion before modification P00007.
Risks and uncertainties
- Work locations and funding will be specified with each order, creating uncertainty about the timing and distribution of individual task orders and spending.
- The estimated completion date is Sept. 30, 2032, which leaves a multi-year horizon during which program requirements, funding profiles, or technical challenges could influence outcomes.
- Obsolescence management is included in the scope to address future changes in technology, indicating potential technical and lifecycle risks through fiscal 2032.
Sectors affected
- Defense contracting and prime defense manufacturers.
- Defense-related manufacturing and supply chains tied to missile production and sustainment.
- Government procurement and military acquisition programs overseen by Army Contracting Command.
Note: Work locations and funding will be determined with each order. The Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity. The estimated completion date for the modified contract is Sept. 30, 2032.