BAE Systems plans to increase annual production of its Advanced Precision Kill Weapon System guidance kits to as many as 35,000 units under a new agreement with the US Department of Defense. The arrangement establishes a procurement framework lasting up to seven years while the company negotiates a separate multiyear contract with the Pentagon. The initial production target is up to 25,000 kits annually for US military requirements, with the possibility of increasing output to 35,000 as allied nations request additional supplies through the foreign military sales programme. The expansion is intended to meet rising demand for precision-guided weapons, including systems used in counter-drone operations. APKWS guidance kits convert unguided 2.75-inch rockets into laser-guided munitions capable of supporting air-to-surface, surface-to-surface, surface-to-air and air-to-air engagements. BAE manufactures the kits at facilities in Hudson, New Hampshire, and Austin, Texas. The new framework follows a US Navy contract awarded in December 2025, valued at up to $1.7 billion over five years. That agreement included an initial $322 million order for guidance kits and supported continued production for American forces and potential international customers. Separately, L3Harris Technologies received a $48.5 million contract to supply mechanical proximity fuzes for APKWS upgrades. These fuzes are designed to detonate a warhead near a target, reducing the need for a direct impact.
