Defense Department awards Dell five-year software contract worth $9.7 billion

The Department of Defense announced a five-year contract valued at roughly $9.7 billion with Dell Federal Systems on Wednesday. The agreement covers Microsoft 365, advanced cloud subscriptions, and on-premises licensing for military and affiliated agencies.

Defense Department Chief Information Officer Kirsten Davies and acting Navy Chief Information Officer Barry Tanner said the award followed a competitive evaluation that compared pricing and overall value. They stated Dell Federal Systems, a unit of Dell Technologies, submitted the top proposal.

Contract details The agreement creates a single purchasing vehicle for Microsoft enterprise software across the Department of Defense, intelligence community, and U.S. Coast Guard. Officials said the consolidated license structure will remove duplicate purchases that previously occurred across separate services and agencies.

Davies stated the contract is expected to save approximately $422 million each year by merging existing IT budgets into one account. Tanner noted the selection process used General Services Administration schedule pricing as a benchmark. The Pentagon has faced congressional requirements to produce a clean financial audit while requesting a $1.5 trillion budget for fiscal year 2027.