U.S. Air Force Approves $145M Dual-Mode APKWS II Air-to-Air Rocket to Counter Drone Swarms.

The U.S. Air Force awarded BAE Systems Inc. a $145 million IDIQ contract to develop and field an air-to-air counter-drone interceptor based on the APKWS II rocket. The effort aims to give fighters a lower-cost, higher-capacity option to defeat unmanned aircraft without expending scarce air-to-air missiles.

Information published by the U.S. Department of War on February 12, 2026, shows that BAE Systems Inc. secured a cost-plus-fixed-fee IDIQ contract (FA8681-26-D-B001) with a $145 million ceiling, alongside an initial $66.67 million delivery order (FA8681-26-F-B012), to develop, manufacture, and deliver Counter Unmanned Aerial Systems weapon systems for the U.S. Air Force. Managed by the Air Force Life Cycle Management Center at Eglin Air Force Base, the award runs through February 12, 2031, with the first tranche due by July 31, 2027. The sole-source justification signals an urgent operational pull and a narrow technical lane where the Air Force believes only one vendor can meet integration, safety, and timeline demands.
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BAE Systems secured a $145 million U.S. Air Force contract to mature a dual-mode APKWS II counter-drone interceptor. The upgrade turns 70 mm Hydra rockets into precision air-to-air weapons using laser and infrared guidance with a proximity-fuzed warhead for higher-capacity fighter loadouts (Picture source: U.S. DoW).

While the contract notice keeps the weapon name generic, subsequent reporting ties the effort to an air-to-air adaptation of BAE’s Advanced Precision Kill Weapon System II (APKWS II), a guidance-and-fuzing upgrade that turns standard 70 mm Hydra rockets into precision interceptors. The engineering logic is straightforward: the Air Force is trying to build magazine depth against drones without spending air-to-air missile money on targets that can cost less than a single seeker section. In the Middle East, U.S. fighters have already leaned on laser-guided rockets for drone defense, reinforcing the push to formalize the capability and expand it to tougher threat sets.

APKWS II is a mid-body guidance section inserted between the rocket motor and the warhead, preserving the Hydra family’s motors and payload options while adding steerable canards and a distributed semi-active laser seeker. Instead of a traditional nose seeker, the guidance system places small laser apertures around the forward control surfaces, generating steering commands without forcing a redesign of every warhead in the inventory. In practical terms, this means a launcher and rocket body that maintain the logistics footprint of unguided 2.75-inch rockets, but with the accuracy and engagement discipline of a precision-guided munition.

The Air Force and industry discussion around this contract highlights a proximity-fuzed configuration intended to defeat small aerial targets where a near miss can be as decisive as a direct hit. Classic APKWS loadouts often pair the kit with the M151 high-explosive fragmentation warhead, the so-called 10-pounder, whose fragment pattern can be lethal well beyond its nominal burst radius, an attribute Eglin testing has long treated as both a strength and a collateral-risk variable. For drone interception, that fragmentation potential becomes an advantage when combined with a fuze that can initiate at the right moment, turning a relatively small rocket into a practical air-defense round against Group 3-class unmanned aircraft.

The most consequential detail emerging from the air-to-air conversion narrative is the move to a dual-mode guidance concept that pairs laser designation with a nose-mounted long-wave infrared seeker. In this architecture, the laser channel can provide initial target assignment and geometry, then hand off to infrared tracking, reducing the time the launching aircraft must maintain continuous illumination. The operational payoff is not mystical fire-and-forget in the classic sense, but a pseudo fire-and-forget behavior that shortens the shooter’s exposure window and accelerates re-targeting in a multi-drone engagement. Against swarms or dense raid packages, that single change can be the difference between a one-shot engagement cycle and a ripple strategy that keeps pace with incoming targets.

Integration is the hidden tax on every cheap interceptor idea, and this contract is explicitly structured to buy down that risk. Reporting on the program describes 300 prototype all-up rounds, with a split between integration and qualification assets and operational test rounds intended for evaluation in real-world environments, and F-16 integration is identified as a near-term test focus. That choice is pragmatic: the Viper’s widespread deployment, mature stores certification pathways, and existing experience firing APKWS make it a logical carrier. Eglin’s earlier test history also shows how rocket-based precision weapons can expand loadout density on fighters compared to heavier air-to-ground missiles, a useful precedent when the mission shifts from strike to airborne base defense.

From an armament perspective, the Air Force is effectively carving out an intermediate layer between gun solutions and high-end missiles. Guns remain limited by geometry, lead computation, and the realities of hitting small, maneuvering aerial objects at standoff ranges, while traditional air-to-air missiles impose a steep cost-per-kill and can be inventory-constrained in prolonged operations. Dual-mode APKWS aims to offer a scalable middle option: a rocket small enough to carry in quantity, lethal enough with proximity initiation, and guided in a way that supports rapid engagements without turning each intercept into a pilot workload event. In a world where Group 3 unmanned systems can weigh more than 55 pounds and still operate below 18,000 feet, the demand signal for that layer will only grow.

Multiple U.S. services are fielding or exploring counter-UAS systems that employ APKWS as the kinetic effector, including containerized or expeditionary solutions intended for base defense and force protection. An air-launched dual-mode variant does not replace maneuver SHORAD, sensors, or electronic warfare, but it extends the defended battlespace upward and outward, particularly for dispersed formations and forward sites that can be threatened by one-way attack drones. In joint operations, a fighter orbit armed with low-cost interceptors becomes an airborne extension of the base defense network, conserving ground-based missiles for leakers and higher-end threats.

Finally, the BAE award sits inside a broader industrial reality: APKWS is no longer a niche kit, but a high-throughput production line the Pentagon is leaning on. BAE has secured large multiyear contracts for continued production of APKWS laser-guidance kits, underscoring both demand and the logic behind sole-source urgency for derivative variants. If the Air Force secures greater technical data rights as reported, it may be positioning the program for future competition in subcomponents, but the near-term priority is clear: field a credible, affordable counter-drone interceptor that turns the Hydra rocket family into a modern air-defense magazine without rewriting the logistics book.