The United States Navy awarded Zone 5 Technologies an Other Transaction Agreement worth USD $65 million in late August 2026 to design, build and deliver a maritime-strike variant of the Rusty Dagger cruise missile, under the Coalition Heterogeneous Affordable Offensive Strike (CHAOS) program.
It is the second CHAOS award, following CoAspire’s USD 70 million agreement in July for an extended-range Rapid Affordable Air-launched Cruise Missile.
Captain Sarah Abbott framed the requirement in terms that matter for allied buyers, stating that “CHAOS closes this capability gap, by delivering a highly capable, adaptable, and exportable maritime strike solution”.
Zone 5 is 90% owned by Kongsberg, and its selling point is provenance – the Rusty Dagger, designated AGM-188A, is already in series production for the Ukrainian Air Force.
Both CHAOS missiles trace back to the Air Force’s Extended Range Attack Munition effort, and the program is built around a Modular Open Systems Approach and Weapons Open Systems Architecture to allow partner nations to participate in assembly and integrate their own subsystems.
On 19 August the Department of War staged a live ground launch of its Low-Cost Containerized Missile at White Sands Missile Range, during the Joint Readiness Experimentation 26.3 event in New Mexico.
Under Secretary of War for Research and Engineering Emil Michael attended the demonstration, which the service described as an effort to evaluate affordable precision munitions and assess how the weapons perform against maritime and ground targets in operational scenarios.
The official release names neither the vendor nor the missile. One account of the launch identified it as Anduril’s surface-launched Barracuda-500M, quoting a 100 lb payload and range beyond 500 nautical miles, fired from a standard twenty-foot container holding up to 16 rounds.
That same account lists four competing contractors – Anduril, CoAspire, Leidos and Zone 5 – and states the test phase will inform procurement of roughly 10,000 lower-cost cruise missiles from 2027, at fixed unit prices for deliveries between 2027 and 2029. Ten thousand rounds at a fixed price is a magazine rather than a technology demonstration, and it is the first time the affordable-mass concept has been attached to a number of that size in a procurement context.
The Navy issued Castelion a firm-fixed-price contract of USD 89,997,162 for 50 Blackbeard Early Operational Capability weapons, completing in August 2028, with the scope including Defense Exportability Features design work for allied partners.
Blackbeard is a Mach 5 class weapon with roughly 500 nautical miles of reach, targeted at F/A-18E/F integration at a stated unit cost under USD 500,000 – which places a hypersonic round inside the same cost bracket the subsonic programs are chasing.
Castelion closed roughly USD 800 million in equity plus a USD 250 million revolving credit facility at a USD 13 billion valuation two days before the award, with much of it funding a 1,000-acre manufacturing campus in Sandoval County, New Mexico.
Blackbeard’s contract funds exportability engineering, and the CHAOS open architecture is designed to let partner nations participate in assembly and integrate sovereign subsystems. For countries that have watched precision-strike magazines price themselves out of sustainable quantities, that framing is the part of these contracts with the longest reach.
The Navy expects the first CHAOS capability, an expeditionary ground-launched variant, to be in production by 2028, with surface-launched platforms following afterwards.
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