More self-propelled Howitzers and ammunition carriers are to be produced for the U.S. Army by BAE Systems under exercise of a contract option.

The one-year option is the first of three for a 2013 initial low-rate production contract for M109A7 Paladin system and its M992A3 ammunition carriers.

"BAE Systems is proud to partner with the Army to continue production on this important upgrade program," said Adam Zarfoss, director for Artillery and Recovery Systems at BAE Systems. "The M109A7 is a significant leap forward in technology for the Field Artillery, addressing the current system shortfalls while providing significant margin for growth to help position the service for the long term."

The M109A7 is a significant upgrade of its predecessor. Its features include components common with the Bradley fighting vehicle, such as chassis, engine, transmission, suspension and steering system.

Other systems include state-of-the-art digital electronic systems and a 600 volt system.

BAE Systems said it will produce 18 of the M109A7 howitzers and 18 carrier ammunition vehicles under the contract option, which is worth $142 million.