US Army awards $1.3B in laser and precision-kit contracts to AeroVironment and Northrop Grumman

The U.S. Army disclosed two major contract awards on September 4, 2026, aimed at bolstering its counter-drone and precision-fire capabilities. It awarded AeroVironment a $464.8 million contract covering a production order for the LOCUST X3 drone-defeating laser, and Northrop Grumman a contract worth up to $863 million for M1156 precision guidance kits.

These moves come as the Army accelerates its modernization agenda, seeking to integrate directed-energy weapons into field units and improve the accuracy of existing artillery munitions. The Locust X3 system is designed to detect, track, and engage hostile UAVs, providing a kinetic-free response. AeroVironment's award positions the company at the center of a historic laser procurement, while Northrop Grumman's precision kits are intended to upgrade legacy 155mm shells with GPS-guided accuracy.

The combined value of the two awards is roughly $1.33 billion, underscoring the scale of the Army's investment in next-generation firepower, though the Northrop Grumman figure is an indefinite-delivery ceiling rather than committed spend. Both AeroVironment and Northrop Grumman are expected to begin low-rate production soon, with deliveries slated for the next fiscal year. The contracts also reflect a broader Department of Defense emphasis on reducing collateral damage and countering asymmetric threats.

Analysts will watch for the integration timeline of the Locust X3 lasers into combat units and the performance data from early precision-guided kit deployments. Successful fielding could drive further funding for directed-energy programs and encourage additional upgrades to the Army's artillery portfolio.

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