Lockheed Martin (NYSE: LMT) received a $110 million, five-year Phase 1 contract from the U.S. Air Force Research Laboratory (AFRL) to develop and demonstrate a new low-cost cruise missile called Gray Wolf.

The Gray Wolf program seeks to develop low-cost, subsonic cruise missiles that use open architectures and modular design to allow for rapid prototyping and spiral growth capabilities. The AFRL is developing the missiles to feature networked, collaborative behaviors (swarming) to address Integrated Air Defense (IAD) system threats around the world. The Gray Wolf missile design will allow for maximum mission flexibility.

“Lockheed Martin’s concept for the Gray Wolf missile will be an affordable, counter-IAD missile that will operate efficiently in highly contested environments,” said Hady Mourad, Advanced Missiles Program director for Lockheed Martin Missiles and Fire Control. “Using the capabilities envisioned for later spirals, our system is being designed to maximize modularity, allowing our customer to incorporate advanced technologies such as more lethal warheads or more fuel-efficient engines, when those systems become available.”

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The Gray Wolf program consists of four spiral-development phases that allow for rapid technology prototyping and multiple transition opportunities. This first phase, defined by an Indefinite Delivery/Indefinite Quantity (IDIQ) contract, is anticipated to run until late 2019. Initial demonstrations will be from an F-16 aircraft. In addition to the F-16, the system will be designed for compatibility with F-35, F-15, F-18, B-1, B-2 and B-52 aircraft.

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“Our AFRL customer will benefit from decades of Lockheed Martin experience in building high-quality, low-cost systems like GMLRS, while capitalizing on the experience of our team in developing and integrating advanced cruise missiles such as JASSM and LRASM on military aircraft,” Mourad said.