Pentagon awards $9.7 billion in contracts to Dell, Microsoft to provide software, stop license sprawl, and cut costs across military and intelligence networks

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Dell will act as a single procurement point for Microsoft software and other services

Closeup of DELL Technologies logo sign on the company headquarters office building in Silicon Valley, SF Bay Area.
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  • Dell has won a Pentagon contract worth $9.7 billion
  • The technology services company will act as a single procurement point
  • The Pentagon, intelligence community, and Coast Guard will jointly procure software

The Pentagon is looking to cut costs and stop software license sprawl in its latest contracts with Dell and Microsoft.

A $9.69 billion contract has been awarded to Dell to act as a single procurement point for Microsoft licenses across the US Defense Department, the intelligence community and the Coast Guard. The contract will move the Pentagon and other military departments away from duplicative spending on Microsoft licensing.

Defense Department Chief Information Officer Kirsten Davies said the contract would allow the Pentagon to save $422 million annually by consolidating “existing IT budgets from across the services and the agencies into a single efficient vehicle.”

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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 is not new funding, but a consolidation of budgets from contracts that have come up for renewal 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.

Acting Navy Chief Information Officer Barry Tanner said, “The vendors were all evaluated based on competition, comparison to GSA schedule pricing and overall chain of value to the department. Going through the process of evaluation, they came out on top.”

Michael Dell, the founder and CEO of Dell Technologies, has 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 Department of Defense has been under increasing scrutiny from across the political divide 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 targeting to pass its first audit by 2028.

Via CNBC

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Benedict Collins
Benedict Collins
Senior Writer, Security

Benedict is a Senior Security Writer at TechRadar Pro, where he has specialized in covering the intersection of geopolitics, cyber-warfare, and business security.

Benedict provides detailed analysis on state-sponsored threat actors, APT groups, and the protection of critical national infrastructure, with his reporting bridging the gap between technical threat intelligence and B2B security strategy.

Benedict holds an MA (Distinction) in Security, Intelligence, and Diplomacy from the University of Buckingham Centre for Security and Intelligence Studies (BUCSIS), with his specialization providing him with a robust academic framework for deconstructing complex international conflicts and intelligence operations, and the ability to translate intricate security data into actionable insights.

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