Pentagon, Lockheed Martin Strike Deal to Quadruple Precision Strike Missile Output Amid Iran Conflict

New agreements with U.S. Department of Defense partners BAE Systems and Honeywell Aerospace aim to surge munitions production and reinforce wartime industrial capacity

The U.S. Department of Defense has entered into a sweeping set of agreements with leading defense contractors, including Lockheed Martin, BAE Systems, and Honeywell Aerospace, to dramatically expand production of critical munitions as the United States confronts escalating operational demands tied to the ongoing Iran conflict.

At the center of the initiative is the Army’s Precision Strike Missile (PrSM), a next-generation surface-to-surface weapon designed to replace legacy systems and extend the reach of U.S. long-range fires. Under a newly announced framework agreement, Lockheed Martin will invest in advanced tooling, facility upgrades, and testing infrastructure to reduce production timelines and increase output capacity.

Defense officials say the effort could quadruple production capacity for PrSM, complementing a previously awarded $4.9 billion indefinite delivery, indefinite quantity (IDIQ) contract. The move is part of a broader Pentagon push to rebuild munitions stockpiles and sustain operational tempo under Operation Epic Fury, the U.S. campaign targeting Iranian military infrastructure.

“Through this agreement, we are actively building the Arsenal of Freedom with speed and urgency,” said Michael Duffey, undersecretary of defense for acquisition and sustainment. “By empowering industry to invest in the factory floor, we are building a decisive and enduring advantage for our warfighters.”

The Precision Strike Missile has already demonstrated its battlefield relevance. Recently deployed in combat, the system enabled what officials described as the longest field artillery strike in U.S. Army history, underscoring its extended range—exceeding 500 kilometers—and precision targeting capabilities. The missile is expected to replace the aging MGM-140 Army Tactical Missile System (ATACMS) while paving the way for future variants, including anti-ship and extended-range configurations.

Army Taps Carlyle, CyrusOne for Hyperscale Data Centers at Fort Bliss and Dugway in AI-Driven Modernization Push

Enhanced Use Lease program advances commercial-military partnerships as the U.S. Army accelerates AI, cloud, and resilient infrastructure under directive from Donald Trump

In a significant step toward digital modernization, the U.S. Army has selected The Carlyle Group and CyrusOne to develop and operate large-scale commercial data centers at Fort Bliss and Dugway Proving Ground, respectively.

The initiative, announced Thursday, is being executed through the Army’s Enhanced Use Lease (EUL) program—an increasingly strategic mechanism allowing private-sector investment on underutilized military land. The move follows an executive order issued by Donald Trump directing federal agencies to fast-track data infrastructure critical to national security, artificial intelligence, and economic competitiveness.

Under the plan, Carlyle has been conditionally selected to develop a hyperscale data center at Fort Bliss, spanning approximately 1,384 acres, with initial operating capability projected for fiscal year 2027. Meanwhile, CyrusOne will pursue a similar development at Dugway Proving Ground, covering roughly 1,201 acres and targeting operational readiness by fiscal year 2029.

Army leadership framed the effort as central to its evolving warfighting doctrine. “AI is a strategic asset for the Army,” said Secretary of the Army Dan Driscoll, emphasizing its role as a force multiplier and enabler of next-generation capabilities. “These data centers are a critical resource to support that strategic imperative.”

The projects are expected to operate under long-term lease agreements—potentially extending up to 50 years—while placing financial responsibility on the private developers. According to Army officials, the companies will handle the full lifecycle of the facilities, including financing, construction, operations, and eventual decommissioning, with no upfront cost to taxpayers.