A new contract enables General Dynamics to upgrade M1A1 Abrams vehicles to the newly configured M1A2 System Enhancement Package Version 3. Photo by Sgt. Allison DeVries/U.S. Marine Corps

Dec. 22 (UPI) -- General Dynamics has been awarded a contract from the U.S. Army to upgrade up to 786 M1A1 Abrams tanks.

The terms of the deal were officially made public on Thursday in a press statement from the Department of Defense. The contract is worth more than $2.6 billion, under the terms of a fixed-price-incentive contract, which is a cost-reimbursement contract that provides for an initial negotiated fee at the time of inception that can later be adjusted.


Specifically, the contract enables General Dynamics to upgrade M1A1 Abrams vehicles to the newly configured M1A2 System Enhancement Package Version 3.

"This version is the most modernized configuration of the Abrams tank, having improved force protection and system survivability enhancements and increased lethality over the M1A1 and previous M1A2 variants," Lt. Col. Justin Shell, the Army's product manager for Abrams, said in an October news release.

"The Abrams M1A2 SEPv3 tank will be the foundation for future incremental system upgrades and can host any mature technology the Army deems operationally relevant," Shell said.

Additionally, the contract tasks General Dynamics with upgrading M1A1 vehicles to M1A12S and M1A2-K variant vehicles.

Work on the contract and funding will be determined with each order, according the Pentagon press release, which has an estimated completion date of December 2020.