Allison Transmission Awarded $67.5 Million Army Contract for Abrams Tank Gears

The Indianapolis manufacturer received a firm-fixed-price deal to build new and upgraded transmissions for the M1 Abrams, with a cumulative value that could reach $345.2 million.

First Published: August 5, 2026, 1:26 PM ET

INDIANAPOLIS, INDIANA — Allison Transmission Inc., the world’s largest maker of commercial-duty automatic transmissions, received a $67.5 million Army contract to build gears for the M1 Abrams tank, the service said.

The firm-fixed-price award covers new and upgraded transmissions, transmission kits, and technical support for the Abrams Main Battle Tank, with a total cumulative face value of $345.2 million, as announced on war.gov. The Army solicited bids over the internet and received one. The contract obligated $90.7 million at the time of the award, drawing on fiscal 2026 Army working capital funds, fiscal 2026 and 2024 procurement appropriations, and fiscal 2010 Foreign Military Sales money for Australia and Taiwan.

The Indianapolis-based company traces its defense work to World War II, when its engineers designed the CD-850 cross-drive steering transmission for tracked military vehicles beginning in 1941, according to wikipedia.org. Allison products now reach more than 150 countries, with plants in Indianapolis, Chennai, India, and Szentgotthárd, Hungary, according to wikipedia.org.

“Our products are specified by more than 300 of the world’s leading vehicle manufacturers and are used in a range of market sectors—from bus, refuse and emergency to construction, distribution and defense,” the company said in a profile according to techpoint.org.

The award ties the Army’s tank-modernization budget to a single supplier that has powered armored vehicles for decades. Allison stands to gain from steady procurement funding, while allied fleets in Australia and Taiwan draw upgraded drivetrains from the same line that supplies U.S. forces. Work will run in Indianapolis with an estimated completion date of Aug. 5, 2026.

The scale of the deal registers within the company’s broader business. Allison reported revenue of $2.40 billion in 2021, net income of $442 million, and roughly 3,400 employees, according to wikipedia.org. Against that base, the $67.5 million award marks a defined slice of a company whose products span buses, refuse trucks, fire apparatus, and armored vehicles.

The average U.S. reader feels this contract through tax dollars that fund armored-vehicle production and the industrial jobs it sustains in Indiana. Payrolls tied to defense manufacturing anchor local economies, and each Abrams upgrade routes federal money into a domestic supply chain.

This has happened before at Allison. The company received the contract to manufacture CD-850 prototypes after finishing the design in 1944, and it kept producing that transmission until 1986, according to wikipedia.org. A licensed version continued in Spain for more than a decade after that.

The next milestone falls to Army Contracting Command at Detroit Arsenal, Michigan, the contracting activity for the award under identifier W912CH-26-F-0040. A date for any follow-on decision has not been announced.

Military propulsion has drawn Allison into national defense before. When World War I began, the Allison Experimental Company machined parts, tools, and masters for the Liberty airplane engine, the main power plant of the U.S. war effort, according to wikipedia.org. By the end of World War II, the company had built 70,000 V1710 aircraft engines and added a second factory with 23,000 new employees, according to wikipedia.org. That wartime surge turned a racing-shop operation into a lasting pillar of American military production.

This contract represents the 1st contract awarded to Allison Transmission Inc., in 2026, bringing the company’s total contract value for the year to $67,480,497. It is also the 2nd Department of Defense contract awarded in Indiana during 2026. Because this is the first award to Allison Transmission Inc. recorded in the database, it establishes the company’s initial benchmark within the Army portfolio. Specifically, it is the largest Army contract awarded in 2026, at $67,480,497, while the year-to-date minimum stands at $16,893,603. Overall, this award was announced among 8 Department of Defense contracts issued nationwide on August 5, 2026.