The U.K. Ministry of Defense has awarded competitive contracts to support its Challenger 2 Main Battle Tank Life Extension Project.

Under the agreement, BAE Systems and Rheinmetall Landsysteme GmbH each received a $28 million contract to develop upgrades for the Main Battle Tank.

Procurement officials say the deal is essential for bolstering defensive capabilities for the country's land forces.

"Modernizing the British Army's Main Battle Tank under the Challenger 2 Life Extension Project involves partnerships across Defense exploring innovative solutions," U.K. Defense Procurement Minister Harriet Baldwin said in a press release.

"Backed by a rising defense budget and a �Pounds 178 billion equipment plan, these tanks, just like the brand new Ajax armored vehicle, are crucial to the British Army."

Under their respective contracts, Rheinmetall and BAE Systems will conduct technical studies with the Challenger 2 to produce digital models to determine appropriate upgrades for the legacy vehicles. The total value of the Challenger 2 Assessment Phase is $65 million.

The Challenger 2 tank has been in service with British forces since 1998, was was used heavily during operations in Iraq.

"Challenger 2 is an excellent Main Battle Tank with an impressive operational track record," Chief of Materiel for Defense Equipment and Support Lt. Gen. Paul Jaques said.

"The Challenger 2 Life Extension Project will upgrade the vehicle with the latest technology to make it available for operations out to 2035."