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In the space of four days, the Ministry of Defence awarded two contracts totalling up to £420 million, covering two distinct areas of modern warfare, battlefield surveillance and hypersonic missile defence. The announcements, made on 22 and 25 July 2026, mark significant steps in the government's broader defence investment programme and reflect the lessons being drawn from the war in Ukraine.
Both contracts involve UK based work and are framed partly in terms of sovereign capability, rebuilding skills and manufacturing that had either lapsed or never fully developed in Britain.
Key Announcements at a Glance
- AR5 drone contract: Up to £400 million over 10 years to replace Watchkeeper drones with the Tekever AR5 surveillance system for the British Army
- Project Bowline contract: £20 million awarded to Lockheed Martin UK to develop a hypersonic target vehicle to support missile defence testing
- Jobs created: The AR5 deal will sustain and create hundreds of jobs at Tekever's UK sites, and Bowline supports around 63 jobs in Bedfordshire
- First deliveries: AR5 drones begin entering service later in 2026, with up to 24 delivered by 2029, Bowline's live flight demonstration is planned for 2027
- AUKUS link: Project Bowline sits within the AUKUS Pillar 2 Hypersonic Flight Test and Experimentation programme, involving the UK, US, and Australia
Watchkeeper, the drone system that has served the British Army since 2014, is reaching the end of its operational life. On 25 July 2026, Defence Secretary Wes Streeting announced it would be replaced by the Tekever AR5, under a contract worth up to £400 million over the next decade.
The AR5 is a medium altitude, long endurance surveillance drone. Key technical and operational details from the GOV.UK announcement include:
- Payload capacity: Can carry up to 50kg of surveillance equipment, including cameras and sensors
- Endurance: Longer flight times than Watchkeeper, giving commanders sustained real time intelligence
- Combat proven: The AR5 has been used by Ukraine's Armed Forces on the battlefield against Russia's invasion
- UK manufacturing: Will be built at Tekever's new Swindon manufacturing facility, currently under construction
- Programme name: The capability has been designated CORVUS by Tekever UK
Three days earlier, on 22 July 2026, the MOD's National Armaments Director (NAD) Group announced a separate £20 million contract with Lockheed Martin UK. This one is less about equipping soldiers today and more about preparing defences against threats that are rapidly becoming real.
Bowline is not a weapon, it is a hypersonic target vehicle, designed to represent the kind of high speed threats that adversaries are developing:
Project Bowline at a Glance
- Purpose: Develop a hypersonic target that mimics the behaviour of advanced threats travelling above Mach 5
- Application: Used to test and qualify next generation missile defence systems, including sensors and interceptors
- Flight demonstration: A live flight test is planned for 2027 at the MOD Hebrides Range
- UK jobs: Supports around 63 jobs at Lockheed Martin UK's advanced manufacturing facility in Bedfordshire, with over a third of £2 million in supply chain spending going to UK SMEs
- Sovereign capability: Marks the MOD's return to hypersonic target development after more than a decade away from the field
Project Bowline is part of a wider international collaboration. It sits within the AUKUS Pillar 2 Hypersonic Flight Test and Experimentation (HyFliTE) Project Arrangement, under which the UK, US, and Australia are working together to accelerate hypersonic and counter hypersonic technologies.
- UK role: Design, manufacture, qualify, and test the hypersonic target vehicle
- US contribution: Flight test expertise and technical peer review
- Australian contribution: Research expertise and technical peer review
- Programme framework: Awarded through the MOD's STORM (Science and Technology Oriented Research and Development in Missile Defence) contract, managed by the UK Missile Defence Centre
- Broader goal: Strengthen the UK's ability to develop and qualify missile defence systems that can engage hypersonic threats
Both contracts sit within a broader acceleration of UK defence investment announced since early 2026. The government has committed to raising defence spending to 2.5% of GDP by 2027, and the Strategic Defence Review earlier this year identified drone capability and advanced missile systems as priorities.
Each contract addresses a gap that defence planners have flagged as increasingly urgent:
Drone Surveillance
- Ukraine lesson: The conflict in Ukraine has demonstrated the decisive role persistent surveillance drones play in modern land warfare
- Watchkeeper gaps: The system has faced well documented reliability and availability issues since entering service in 2014
- Real time intelligence: The AR5's longer endurance gives battlefield commanders a more sustained picture than its predecessor
- UK industry: Manufacturing in Swindon supports the government's reindustrialisation agenda and reduces supply chain risk
Hypersonic Defence
- Growing threat: Russia, China, and others have deployed or are developing hypersonic missiles capable of travelling at speeds exceeding Mach 5, making them harder to intercept with current systems
- Test infrastructure: Without a credible hypersonic target vehicle, missile defence systems cannot be properly tested and qualified
- Decade gap: The MOD had not invested in hypersonic target development for over a decade, Bowline rebuilds that capacity
- Allied benefit: Shared data through HyFliTE means UK investment contributes to allied missile defence across AUKUS partners
Taken together, the AR5 and Bowline contracts reflect a shift in how the UK is thinking about defence investment towards platforms that have been proven in real conflicts and capabilities designed to counter the threats emerging in the 2020s, not the Cold War.
The AR5's combat record in Ukraine gave ministers a level of confidence in the system that a laboratory tested platform could not. Bowline, meanwhile, acknowledges that the threat from hypersonic missiles is no longer theoretical and that the UK needs the infrastructure to develop and test defences against them.
Both contracts are also explicitly tied to UK jobs and industrial capacity, reflecting the government's stated aim of using defence spending as a driver of domestic economic growth.
Key Takeaways
- The MOD awarded two contracts worth up to £420 million in July 2026, covering battlefield surveillance drones and hypersonic missile defence
- The Tekever AR5 will replace the ageing Watchkeeper drone under a deal worth up to £400 million, up to 24 aircraft are to be delivered by 2029
- Project Bowline, a £20 million Lockheed Martin UK contract, will develop a hypersonic target vehicle capable of travelling above Mach 5 to test UK missile defences
- Both contracts support UK manufacturing jobs in Swindon (AR5) and Bedfordshire (Bowline) and rebuild sovereign capability in areas where the UK had fallen behind
- Project Bowline sits within the AUKUS Pillar 2 HyFliTE arrangement, with the US and Australia contributing research and flight test expertise
Sources & Further Reading
- Fleet of spy drones to equip British soldiers and back jobs in South West England and Wales – GOV.UK, 25 July 2026 Archived copy (OGL): archived page
- MOD awards £20 million contract to develop hypersonic capability – GOV.UK, 22 July 2026 Archived copy (OGL): archived page
- DSTL and Porton Down: Inside the UK's Defence Science Investment Plan – UKPoliticsDecoded
- UK PrSM and NATO Deep Precision Strike Investment Explained – UKPoliticsDecoded