U.S. Army signs $862.8M deal for 155mm shell guidance kits

The U.S. Army has awarded Northrop Grumman an $862.8 million contract to manufacture and deliver M1156 precision guidance kits, according to a Department of War contract announcement.

The firm-fixed-price, indefinite-delivery/indefinite-quantity contract covers manufacturing, inspection, testing, packaging and delivery of the kits and their variants. Northrop Grumman was the only company to submit a bid after the Army solicited offers online. Work locations and funding will be determined as individual orders are placed under the contract, which has an estimated completion date of September 3, 2031. Army Contracting Command in Newark, New Jersey, is managing the deal.

The M1156, known as the Precision Guidance Kit or PGK, converts standard 155mm high-explosive artillery shells into GPS-guided munitions. The kit installs directly into a shell’s fuze well in place of a conventional fuze, and it retains standard fuze functions such as height-of-burst and point detonation while adding satellite guidance. The Army has said the kit brings shell accuracy to within 10 to 50 meters of a target, a significant improvement over unguided rounds, though less precise than the Raytheon-made M982 Excalibur guided shell, which the Army has said achieves accuracy of about 4 meters.

The cost difference between the two systems is substantial. Trade publication reporting has put the PGK’s unit cost at roughly $15,000, compared with about $68,000 for an Excalibur round, making the PGK a lower-cost option for improving artillery accuracy across existing shell stockpiles.

Northrop Grumman has built the PGK for more than a decade under a series of Army orders. The Army had placed enough orders to bring the program’s total contract value to $1.49 billion as of a $13 million order in September 2025. More than 25,000 kits had been produced by April 2018, according to Army records. The PGK program traces back to Alliant Techsystems, which later merged with Orbital Sciences Corporation to form Orbital ATK before Northrop Grumman acquired that business and folded it into its current Armament Systems segment, based in Plymouth, Minnesota.

Northrop Grumman has also worked to pair the PGK with longer-range artillery projectiles. In 2021, the company signed a 10-year partnership with Rheinmetall’s South African subsidiary, Rheinmetall Denel Munition, to combine the PGK with Rheinmetall’s V-LAP projectile, which the companies said had achieved a maximum range of 76 kilometers (47 miles) in testing, aiming to offer a long-range precision option to militaries outside the United States.

The new $862.8 million ceiling does not guarantee that amount will be spent, since IDIQ contracts authorize the Army to place orders up to that value over the contract’s five-year period rather than committing to it upfront.