- Dell won $9.7 billion Pentagon contract
- Technology services company will act as single point of supply
- Pentagon, intelligence community and Coast Guard to jointly purchase software
The Pentagon seeks to cut costs and end the proliferation of software licenses in its latest contracts with Dell and Microsoft.
A $9.69 billion contract has been awarded to Dell to serve as a single point of supply for Microsoft licenses within the U.S. Department of Defense, Intelligence Community and Coast Guard. The contract will move the Pentagon and other military departments away from redundant spending on Microsoft licensing.
Kirsten Davies, the Defense Department’s chief information officer, said the contract would save the Pentagon $422 million a year by consolidating “the existing IT budgets of all services and agencies into one efficient vehicle.”
Annual savings of $422 million
The contract awarded to Dell – known as the Microsoft Department of War Enterprise Software Agreement II Core Enterprise Technology Agreement – allows Dell to provide Microsoft 365, advanced cloud subscriptions and on-premises licensing. The contract continues the Pentagon’s existing enterprise technology agreement with Dell and Microsoft.
However, the $9.7 billion does not constitute new funding, but a consolidation of the budgets of contracts that must be renewed at the same time.
“This second-generation blanket purchase agreement will streamline and consolidate critical Microsoft software and services across the Department of War, the Intelligence Community and the U.S. Coast Guard,” Davies said.
Barry Tanner, acting Navy chief information officer, said, “The vendors were all evaluated based on competition, comparison to GSA schedule pricing and the department’s overall value chain. Going through the evaluation process, they came out on top.”
Michael Dell, founder and CEO of Dell Technologies, recently courted favor with President Donald Trump by pledging $6.25 billion to fund investment accounts for children, called “Trump accounts” in the president’s honor.
The Defense Department is facing increasing scrutiny from all political parties as it seeks approval for a $1.5 trillion budget for 2027. The Pentagon has failed every audit it has undertaken since they were legally required in 2018, with the Pentagon aiming to pass its first audit by 2028.
Via CNBC
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