Lockheed Martin [LMT] yesterday said it received a $197 million contract option from the Army for Guided Multiple Launch Rocket System (GMLRS) Unitary rocket production, enabling the service to pay less for each rocket than if a separate 2013 production contract was issued.

“By exercising an option on the Fiscal Year 2012 production contract–instead of a standalone procurement–the Army provided more capability to the warfighter, faster and at a significantly better value to the taxpayer,” Dan O’Boyle, an Army spokesman, told Defense Daily.

The government avoided costs of $31 million as the Army procured 1,800 Unitary rockets (FY ’13 base and Overseas Contingency Operations, or OCO) and 2,430 practice rockets with a contract option, O’Boyle said. Additional quantities of Unitary rockets were procured on this option by the Marines and through Foreign Military Sales.

This contract option was attached to the GMLRS Production Lot 7 contract, which now has a total funded value of $550.8 million. The GMLRS Production Lot 7 contract was originally awarded to Lockheed Martin in July 2012.

“Our top priority is to ensure that our warfighters are equipped with the most effective, affordable and dependable weapon system available, and we’re proud that GMLRS meets that standard,” said Scott Arnold, vice president of precision fires at Lockheed Martin Missiles and Fire Control.

The new allotment of rockets will be delivered to the Army and Marine Corps beginning in September 2014. The work will be done at the Lockheed Martin facilities in Camden, Ark., and Dallas.

GMLRS is an all-weather, long-range rocket designed for fast deployment that delivers precision strike beyond the reach of most conventional weapons. GMLRS Unitary rockets greatly exceed the required combat reliability rate and have established a reputation for affordability, a company statement said.

To date, Lockheed Martin has produced more than 20,000 GMLRS rockets. In combat operations, each rocket is packaged in an MLRS launch pod and is fired from the Lockheed Martin HIMARS or M270 family of launchers.