The Pentagon promises BAE seven years of counter-drone rocket orders. Congress hasn’t paid for them.

By Staff Reporter

WASHINGTON — The Pentagon has promised BAE Systems up to seven years of orders for a laser-guided rocket kit that has become one of the military’s cheapest ways to shoot down drones. The money to pay for them has not been approved.

The Department of War announced Monday a framework agreement with BAE for “up to 25,000” Advanced Precision Kill Weapon System guidance sections a year “for up to seven years, pending congressional authorization and appropriations.” The kits bolt onto unguided 2.75-inch rockets and turn them into precision weapons. Neither the department nor BAE disclosed a price, Defense News reported.

A demand signal, not yet a contract

The agreement is a promise of future business rather than a purchase. BAE said it “will increase production while negotiating a multi‑year contract within the framework,” according to the company’s release. The Pentagon described the deal as “the sustained demand signal BAE Systems needs to procure long-lead items and expand its skilled workforce.”

“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 P. Duffey, the under secretary for acquisition and sustainment, said in the department’s statement. The “cost calculus” is the point. APKWS has become a cheaper alternative to air-to-air missiles for knocking down drones, Defense News noted, at a time when the Pentagon is reorganizing around drone warfare.

The two announcements frame the numbers differently. The Pentagon set a baseline of 25,000 kits a year for U.S. forces, with “an actionable pathway to surge output up to 35,000 units annually for international allies” as partner nations formalize orders through Foreign Military Sales. BAE’s release says the agreement is meant to increase production capacity “up to 35,000 units per year.”

How it fits with existing orders

The framework sits on top of business BAE already has. The Navy’s current five-year APKWS contract, awarded in August 2025, is worth up to $1.74 billion and covers up to 55,000 kits for the Navy, the Army and foreign customers through December 2031, according to Defense News. BAE builds the kits in Hudson, N.H., and Austin, Texas, and said in February that it had delivered its 100,000th.

Foreign demand is the other driver. On July 15 the State Department approved a possible sale to Saudi Arabia of up to 20,000 APKWS-II guidance sections, half of them air-to-air, in a package estimated at $1.96 billion, with BAE as principal contractor. The formal notice appeared in the Federal Register on Aug. 28. Defense News reported that Italy is weighing a purchase of 5,031 kits for counter-drone defense.

The deal is the latest in a series of munitions “framework” agreements this year. Lockheed Martin agreed in January to more than triple production of the PAC-3 MSE Patriot interceptor, and a separate THAAD interceptor framework signed in January led to a June contract worth more than $35 billion, Defense News reported.

What Congress has to do

The phrase “pending congressional authorization and appropriations” is doing a lot of work. Multiyear procurement contracts require specific authority in law under federal statute, and Congress has not finished the fiscal 2027 defense bills. Until lawmakers act, the framework is a statement of intent: BAE says it will add production, and the purchases themselves depend on money Congress has not yet provided.

Photo: A Navy SH-60S Sea Hawk fires an APKWS II rocket during a live-fire exercise off the Virginia coast. MC3 Desmond Parks/U.S. Navy, via Wikimedia Commons, public domain.