The War Department has signed a framework agreement with BAE Systems that could provide up to 25,000 Advanced Precision Kill Weapon System guidance kits annually. The arrangement could remain in place for as long as seven years, the department announced Monday.

Known as APKWS, the kits transform unguided 2.75 inch rockets into laser guided munitions. All four military services field the system, giving the weapon a broad role across the force.

APKWS has also emerged as a cheaper alternative to air combat missiles when forces need to shoot down drones. The agreement is intended to support the interceptor inventory while keeping production lines operating at capacity.

The framework does not itself complete the purchase. Congress must still approve and fund the buy before the planned annual quantities can move forward, according to the War Department.

BAE said it will increase production while the company and the government negotiate a multiyear contract. Neither BAE nor the War Department disclosed the potential cost of the framework agreement.

The plan also provides a route for production to reach 35,000 kits annually for United States allies. That additional capacity will become available as partner nations formally request kits through the Foreign Military Sales program.

“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 favor,” Michael Duffey, the Pentagon’s undersecretary for acquisition and sustainment, said in the announcement.

BAE builds the guidance kits in Hudson, New Hampshire, and Austin, Texas. The company said in February that it had delivered its 100,000th APKWS kit, marking a substantial production milestone for the program.

The annual figure in the new framework matches production capacity that BAE previously cited. A company official said in 2023 that APKWS was in full rate production and had room to expand output to 25,000 units per year.

“APKWS delivers proven, reliable and affordable precision at scale to counter evolving threats and ensure our warfighters maintain a decisive advantage,” said Tom Arseneault, president and CEO of BAE Systems Inc.

The Navy already has a separate five year APKWS contract with BAE that was awarded in August 2025. That agreement is valued at up to $1.74 billion and covers as many as 55,000 kits.

Those kits are intended for the Navy, the Army and foreign customers. Work under that contract is expected to be completed by December 2031.

Saudi Arabia is among the allied buyers pursuing the system. The State Department approved a possible $1.96 billion package in July that includes up to 20,000 APKWS kits.

The proposed Saudi package divides the kits evenly between air-to-air and air-to-ground versions. Italy is also considering a purchase of 5,031 kits for counter drone defense.

The APKWS framework is the latest in a series of agreements the Pentagon has signed this year to increase munitions production. Those arrangements have involved other major interceptor programs and multiple manufacturers.

In January, Lockheed Martin agreed to more than triple production of the Patriot Advanced Capability-3 Missile Segment Enhancement interceptor, also known as PAC-3 MSE. The agreement targeted a major expansion in output for that system.

BAE and Lockheed reached another framework agreement in March to quadruple production of seekers for the Terminal High Altitude Area Defense interceptor. A separate THAAD framework signed in January led to a June contract worth more than $35 billion for the interceptors themselves.

The latest BAE agreement now puts APKWS into that broader production push. With congressional approval still required, the framework establishes planned annual demand, expanded allied capacity and a path toward a longer contract.