The US Navy has awarded BAE Systems a five-year contract to maintain production of the Advanced Precision Kill Weapon System (APKWS) laser-guidance kits for both US and partner militaries.

The deal starts with a $322-million initial order for “tens of thousands” of low-cost precision rockets and carries a potential ceiling of $1.7 billion if additional options are exercised.

BAE has been producing APKWS at full rate for more than a decade, with manufacturing split between its Hudson, New Hampshire, and Austin, Texas sites.

APKWS kits convert unguided 2.75-inch (70-millimeter) rockets into accurate laser-guided munitions capable of engaging lightly armored or soft fixed and mobile targets.

The system is engineered for low maintenance needs and minimal operator training, offering a cost-effective alternative to more expensive precision weapons.

It is compatible with a broad range of rocket components — motors, warheads, and fuzes — and can be deployed from rotorcraft, fixed-wing aircraft, UAVs, ground launchers, and naval vessels.

Recent tests saw APKWS launched from both a multi-rotor drone and a modified F-15E Strike Eagle.

BAE is additionally assessing future integration of the system onto the Eurofighter Typhoon to enhance its counter-drone capability.

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