The U.S. Army has awarded Lockheed Martin Corp (LMT.N) a multi-year production contract for Joint-Air-to-Ground Missiles (JAGM) and HELLFIRE missiles, a deal that could reach $4.5 billion with further awards, the firm said on Monday.
This transaction, with an initial value of $439 million, is one of the first multi-year contracts in this sector, as the Pentagon attempts to stockpile accurate weapons in an effort to deter China.
In March, President Joe Biden requested a total of $842 billion for the Department of Defense, in addition to $44 billion for defense-related programs at the FBI, the Department of Energy, and other federal agencies. The planned budget for 2024 is $940 billion, an increase of $28 billion above the 2020 budget.
According to Lockheed, the agreement includes options for up to three further follow-on awards commencing in late 2023, increasing the potential contract value to $4.5 billion.
Lockheed has said that they anticipate a “significant increase” in global demand for the JAGM weapon system.
