U.S. Army Signs $73.5M Deal for Merkava Propulsion Systems

Why It Matters

The deal deepens U.S.–Israel defense cooperation while securing critical sustainment capability for Israel’s armored fleet and preserving U.S. defense‑industrial jobs.

Key Takeaways

• $73.5M FMS contract awarded to Rolls‑Royce Solutions America
• Powers Merkava tanks and Namer IFVs for Israel
• Part of $462.9M broader sustainment agreement
• Work performed in Graniteville, South Carolina through 2032
• Enhances logistics interoperability across Israeli armored fleet

Pulse Analysis

The U.S. Army’s recent $73.5 million Foreign Military Sales award to Rolls‑Royce Solutions America marks a notable expansion of American‑backed sustainment support for Israel’s armored forces. By channeling the contract through the Army Contracting Command, the United States ensures that the procurement process adheres to its rigorous acquisition standards while leveraging domestic industrial capacity. The deal covers full and lite power‑pack kits for the Merkava main battle tank, as well as engineering services that will be executed at the company’s Graniteville, South Carolina facility. This arrangement underscores the role of FMS as a conduit for allied capability upgrades.

At the heart of the agreement is the Merkava power‑pack, a modular propulsion module that combines the engine, transmission and ancillary components into a single, replaceable unit. The same architecture powers the Namer infantry fighting vehicle, allowing Israel to standardize maintenance procedures and spare‑parts inventories across two of its heaviest combat platforms. Because the contract focuses on refurbishment and lifecycle‑maintenance rather than new vehicle production, it extends the service life of existing fleets while minimizing downtime. Such commonality reduces logistical footprints and enhances operational readiness on the ground.

The contract fits within a broader $462.9 million sustainment package that reflects deepening U.S.–Israel defense cooperation. For the American defense sector, the award secures work for Rolls‑Royce’s propulsion expertise and sustains jobs at its Southern‑state plant through 2032. Strategically, it signals continued U.S. commitment to Israel’s qualitative military edge, particularly in the armored domain where regional threats are evolving. As other allies look to similar FMS pathways, the deal may serve as a template for future power‑pack modernization programs that balance cost‑effectiveness with interoperability.

U.S. Army signs $73.5M deal for Merkava propulsion systems

By Colton Jones · Feb 18, 2026

Key Points

• U.S. Army awarded Rolls‑Royce Solutions America a $73.5 million Foreign Military Sales contract to supply Merkava tank power‑pack kits and engineering services for Israel through 2032.

• The propulsion systems support sustainment of Israel’s Merkava tanks and Namer infantry fighting vehicles under a broader agreement valued at $462.9 million.

The United States Army has awarded Rolls‑Royce Solutions America Inc. a $73.5 million contract to procure Merkava tank power‑pack kits and related engineering services under a Foreign Military Sales (FMS) agreement supporting Israel, according to a Feb. 17 2026 contract announcement released by the U.S. Department of War.

The contract covers the delivery of Merkava Power Pack Less Transmission full and lite kits, metal containers, and contractor engineering technical services.

The total cumulative face value of the broader agreement reaches $462,947,478. Work will be carried out in Graniteville, South Carolina, with completion scheduled for Dec. 31 2032. Fiscal Year 2026 Foreign Military Sales funds allocated for Israel, totaling $73,528,916, were obligated at the time of the award, the Department of War said.

The contract was issued by Army Contracting Command at Detroit Arsenal, Michigan, which manages a range of ground‑combat‑vehicle sustainment and modernization programs tied to allied defense‑cooperation initiatives.

The Merkava power pack is a critical propulsion module used in Israel’s Merkava main battle tanks, integrating the engine and associated mobility components required for heavy armored maneuver operations. These systems are central to maintaining operational readiness and long‑term sustainment of Israel’s armored forces.

In addition to the Merkava tank family, the same power‑pack architecture is compatible with Israel’s Namer infantry fighting vehicle, which is based on a modified Merkava chassis. The shared propulsion design allows common maintenance procedures, streamlined logistics, and parts interoperability across multiple armored platforms operated by the Israel Defense Forces.

Power‑pack kits delivered under the contract are expected to support sustainment, refurbishment, and lifecycle‑maintenance requirements rather than the production of entirely new vehicles, ensuring continued operational availability of existing armored formations.

Rolls‑Royce Solutions America will perform contract work at its facilities in Graniteville, South Carolina, where the company supports military propulsion and power‑generation programs. The inclusion of engineering technical services indicates ongoing integration and sustainment support tied to operational use and long‑term fleet maintenance.

Foreign Military Sales contracts administered through the U.S. Army enable allied nations to procure defense equipment and sustainment solutions through U.S. acquisition channels, providing standardized contracting oversight and ensuring compatibility with U.S. logistics and support frameworks.

The announcement did not specify quantities of individual kits to be delivered under the initial obligated funding tranche.