A Chilean plan for modernizing and upgrading its defense forces is under way with one of the first major contracts going to BAE Systems for the supply and refurbishment of 12 U.S.-made M109A5 howitzers.

The howitzers' modernization required U.S. approval, which was granted earlier this year. The U.S. approval was hailed as a positive development strengthening military and political ties between the Latin American country and the United States.

U.S. President Barack Obama visited Chile in March as part of a short regional tour that signaled a resumption of Washington's pursuit of closer ties with Latin America, largely neglected during previous administrations' preoccupation with the Middle East, North Africa and South Asia.

The U.S. interest in the Middle East is anything but diminished but the Obama administration's recent initiatives in Latin America are seen as an attempt to balance foreign policy objectives and realign diplomacy in areas geographically close to the United States.

Chile is seeking to upgrade its military as it views Latin American neighbors Brazil and Argentina pouring more funds into defense and security infrastructures.

BAE Systems received a $15.8 million contract to refurbish and upgrade the 12 M109A5 howitzers through a foreign military sales contract.

The work on this contract not only supports the Chilean army's modernization program, but it strengthens the cooperative relationship between the U.S. and Chilean armed forces, Joe McCarthy, vice president and general manager of Combat Vehicles at BAE Systems said.

He said the company hoped to continue providing additional military goods and services to Chile.

"The howitzers will provide the Chilean army artillery units with a significant capability increase to deliver precise and effective artillery support to the Chilean army," McCarthy said.

He said: "The M109 family of vehicles has a rich history of providing high performance and reliability. It is a combat-proven system that has played a vital role in providing fire support during various military operations with both the U.S. Army and its allies."

The M109A5 Self-Propelled Howitzer provides what BAE Systems called an "affordable increase" in fire power, either as a new vehicle or as an upgrade to earlier configurations of the M109 howitzer. The howitzers' M284 cannon and M182 mount extend the firing range by 25 percent over previous versions of the M109 howitzers.

The M109A5 can easily be customized to specific mission requirements, including increased ammunition stowage, improved ammunition handling, position and navigation systems, and automated fire control and communication systems. The M109A5 also offers improvements in critical areas such as reliability, maintainability and crew safety, the company said.

The contract means the U.S. government will provide Chile with the howitzers and BAE Systems will perform the refurbishment and upgrade work. The work includes replacing obsolete equipment and restoring the vehicle to a "like new" condition. The company will also incorporate digital data connectivity and gun positioning and navigation systems to provide faster emplacement time, swifter response time to calls for fire and improved survivability.

In addition to the recent M109A5 contract, BAE Systems assisted Chile with a program to refurbish the M113 armored personnel carrier from 2003-05.

Work on the M109A5 contract will be performed by the existing workforce at BAE Systems facilities in York and Fayette, Pa.; and Aiken, S.C. The work is expected to be completed in October 2012.