(Reuters) - Lockheed Martin Corp (NYSE:LMT) said on Monday the U.S. Army has awarded a multiple-year production contract for Joint-Air-to-Ground Missiles (JAGM) and HELLFIRE missiles, in a deal that could go up to $4.5 billion including follow-on awards.
The contract, which will have a total value of $439 million in its first year, has three options over multiple years as the Pentagon looks to build stocks in the hopes of deterring China.
In March, President Joe Biden requested $842 billion for the Pentagon and $44 billion for defense-related programs at the Federal Bureau of Investigation, Department of Energy and other agencies. The 2024 budget proposal is $28 billion more than last year's $858 billion.
Lockheed added the contract also offers three additional follow-on awards which will start in late 2023, allowing for a total contract value of up to $4.5 billion over the next four years.
The JAGM program anticipates a "significant increase" in international demand for the weapon system, Lockheed said.
(This story has been corrected to change 'multi-year' to 'multiple-year' to reflect that the contract includes options in paragraphs 1 and 2)