Pentagon and BAE boost APKWS production with seven-year framework
The framework will also include production for allies.
The US Department of War (DOW) has signed a framework agreement with BAE Systems to increase production of the company’s APKWS guided rocket.
As part of the deal, the DOW is pledging to buy up to 25,000 units every year, for as long as seven years. If approved by the US Congress, those purchases will supply the US Army, Navy, Air Force, and Marine Corps.
The APKWS kit transforms standard 2.75-inch rockets into precision laser-guided munitions and is used as an affordable counter to the growing threat of enemy drone swarms. A single unit costs around $22,000. The value of the multi-year order framework has not been disclosed.
The agreement, jointly announced on 19 October by the Pentagon and BAE , aims to increase production capacity so the US can capitalise on an active line if a short-notice demand increase occurs.
The framework also includes implementable steps for output to increase to 35,000 kits a year for US allies. This will only occur as demand increases through partner nations formalising orders through the Foreign Military Sales programme.
“By securing multi-year demand, this agreement keeps production lines running at capacity, provides our forces with interceptor inventory, and flips the cost calculus in the taxpayer’s favour,” says Michael Duffey, under secretary of war for acquisition and sustainment.
The changing landscape
Demand for APKWS kits, which are manufactured in Hudson, New Hampshire and Austin, Texas, has increased rapidly due to developments in drone warfare in recent modern conflicts.
Russia and Iran have led the deployment of long-range ‘kamikaze’ or ‘suicide’ drones — known more formally as one-way UAS or one-way attack drones — to target urban areas and critical infrastructure.
BAE announced a contract in August 2025 to purchase up to 55,000 Advanced Precision Kill Weapon System (APKWS) II rockets for $1.7 billion. The following month, the USAF conducted flight testing of APKWS-equipped F-15E fighter jets in just nine days in September 2025, compared with the usual 18-month timeline.
APKWS is establishing itself as the anti-drone weapon of choice. Source: BAE Systems
Egypt and the UK have all received approvals for the APKWS II system since 2024, with major deals with Saudi Arabia and the UAE in 2026. This latest framework provides a “lock” on previous production contracts, says the DOW.
BAE notes it has made “sustained investments” in advanced manufacturing capacity, including recent infrastructure investments costing over $100 million. This is in order to meet the demands of the DOW’s acquisition transformation strategy, focused on overhauling traditional defence procurement.
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