- The U.S. Navy awarded Rolls-Royce a $36.5 million contract to produce 10 AE 1107C engines for CMV-22B Osprey aircraft.
- The engines will power the Navy’s carrier onboard delivery fleet, replacing the retired C-2A Greyhound aircraft.
- Production will take place in Indianapolis through May 2028 using FY2024 Navy aircraft procurement funding.
- The firm-fixed-price contract places cost responsibility on the contractor while providing predictable acquisition costs for the Navy.
- The procurement supports sustained readiness of the Navy’s tiltrotor logistics fleet operating from aircraft carriers worldwide.
Deep Technical & Strategic Context Analysis
The AE 1107C-Liberty is a 6,000-plus shaft horsepower class turboshaft engine developed by Rolls-Royce specifically for the V-22 Osprey family. Each aircraft is powered by two engines linked through an interconnecting driveshaft, allowing one engine to power both proprotors in the event of an engine failure. This unique architecture is central to the V-22’s ability to combine helicopter-like vertical takeoff with the speed and range of a turboprop aircraft.
For the U.S. Navy, the CMV-22B has become a critical logistics platform following the retirement of the C-2A Greyhound. Unlike its predecessor, the tiltrotor aircraft can land directly on amphibious ships and austere forward operating locations while carrying high-priority cargo, including the F-35C Lightning II’s F135 Power Module, a component too large for many traditional naval aircraft. As carrier strike groups increasingly operate over greater distances in the Indo-Pacific, maintaining reliable propulsion production for the CMV-22 fleet is essential to sustaining distributed maritime operations and rapid logistics support.
The contract is structured as a firm-fixed-price agreement, one of the most common procurement mechanisms for mature production programs. Under this arrangement, Rolls-Royce agrees to deliver the engines at a predetermined price, assuming the financial risk if production costs exceed expectations. For the Navy, this provides predictable budgeting while leveraging an established production line with well-understood manufacturing requirements.
Contract Breakdown & Details
Contract Overview
- Contract Value: $36.5 million
- Contract Type: Firm-fixed-price
- Award Recipient: Rolls-Royce Corp.
- Location: Indianapolis, Indiana
- Contract Number: N0001926C0110
- Contracting Activity: Naval Air Systems Command (NAVAIR), Patuxent River, Maryland
Production Scope
- 10 AE 1107C Lot 28 production engines
- Platform Supported: CMV-22B Osprey
- Customer: U.S. Navy
- Production Completion: May 2028
Funding
- Funding Source: Fiscal Year 2024 Aircraft Procurement (Navy)
- Amount Obligated at Award: $36.5 million
- Competition: Not competed (sole-source procurement)
Workshare
- Indianapolis, Indiana: 100% of production work
Why This Contract Matters
Although relatively modest in dollar value compared with major aircraft procurement programs, engine production contracts such as this are fundamental to maintaining fleet readiness. The propulsion system is one of the highest-value and most maintenance-intensive components of any military aircraft, and continuous engine manufacturing supports both new aircraft deliveries and long-term sustainment planning.
The award also reinforces the Navy’s ongoing investment in the CMV-22B fleet as it expands distributed logistics capabilities for carrier strike groups. With growing operational demands across the Indo-Pacific and other theaters, dependable availability of AE 1107C engines remains essential to ensuring that naval aviation can rapidly transport personnel, mission-critical cargo, and replacement components across vast maritime distances.
