Apache with Arrowhead (M-TADS/PNVS). Photo by Lockheed Martin.

On Feb. 20, Lockheed Martin's (LMT 0.71%) Apache received a $92 million Targeting and Pilotage System Sustainment Contract. Further, Lockheed states:

The firm, fixed-price contract is the foundation for a comprehensive sustainment solution that enables M-TADS/PNVS mission readiness, reduces operation and support costs, and drives reliability and maintainability improvements. This is the second of three one-year options that support the initial $111 million PBL contract awarded in 2012. The total four-year contract value is $375 million.

Here's what else you need to know. 

According to Lockheed, the M-TADS/PNVS is a Modernized Target Acquisition Designation Sight/Pilot night vision sensor system that Apache helicopter pilots use for targeting, as well as piloting during the day, night, and adverse weather. Further, Lockheed says M-TADS/PNVS are an improvement over the Legacy system and increase standoff ranging for U.S. forces, provide aircrews with greater resolution, and enhance situational awareness. Plus, it's designed for two-level field maintenance, which will reduce U.S. Army operation and support costs by 50% over the 40-year system life. 

Arrowhead M-TADS/PNVS. Photo: Lockheed Martin.

Increasing situational awareness while reducing costs by 50% is great news for the Army, and for Lockheed's M-TADS/PNVS sales. Perhaps that's also why Lockheed says it's delivered more than 1,200 systems. Further, the M-TADS/PNVS falls under Lockheed's Aerospace and Defense sector, which in 2013 had net sales of $14.1 billion. 

What to watch
In 2013, Lockheed's total net sales were $45.4 billion, with a total backlog of $82.6 billion, and most of this was driven by defense sales. As such, contracts like the Apache upgrade are important to Lockheed's continued success. However, while contracts like the Apache upgrade are important, the most significant thing to watch when it comes to Lockheed's future is it's $392 billion F-35 -- specifically, F-35 setbacks and sales. Consequently, while Lockheed's $92 million contract is good news for investors and the company, especially during a constrained budget environment, investors should remember to keep even closer tabs on the F-35.