BAE Systems has been awarded a three-year contract from the US Navy worth up to $600 million to support deliveries of its Advanced Precision Kill Weapon System (APKWS).

This is the first indefinite delivery, indefinite quantity (IDIQ) contract for the precision-guided weapon system, and will support a ramp-up of deliveries from 1,500-2,000 units at the current rate to 5,000 in the first year of the new arrangement.

APKWS is a laser-guidance kit that converts 2.75in-diameter (70mm) rockets into precision-guided weapons. Some 7,000 units have been delivered to date, the company says, and rounds will be provided to all US services through the new deal with the USN.

Following the IDIQ contract announcement, at which point no funding was allocated, BAE was awarded $133 million to cover the delivery of 5,000 units in the first year, David Harrold, its director of precision guidance solutions, tells FlightGlobal. The first units under the award will be shipped later this year.

Harrold notes that the previous delivery rate did not reflect the capacity BAE had to deliver APKWS: rather the demand at the time from the US Department of Defense.

“We’ve been planning for this day for some time. The capacity we’re building to is well ahead of demand,” Harrold says.

When the ramp-up is complete at a new facility in New Hampshire and the supply chain is fully established, BAE could sustain the production of 20,000 APKWS units per year for US and Foreign Military Sales orders, Harrold says.

The delivery ceiling in the second and third years of the new contract is higher than the first, and Harrold says that the demand could increase over this time.

APKWS and A-10 - BAE Systems

BAE Systems

The US Air Force is using APKWS on its Lockheed Martin F-16s, which Harrold notes could be of interest to other international users of the fighter.

“The $600 million does not include any assumptions on international F-16 demand,” he says, but adds: “the deal is in place to deal with any further demand”.

“We have had tremendous success across the US government, and also across the international community," Harrold says. "That is only going to grow.”

While there is interest from nations which operate other common aircraft with US forces – such as the Bell Helicopter AH-1 and UH-1 – Harrold says this also has been seen from current and future operators of light attack aircraft, including Embraer's Super Tucano and Textron AirLand's Scorpion.