The contract, announced Thursday, aims to make it easier and cheaper to purchase software licenses by consolidating those orders into one enormous agreement.
Oracle will provide software across the Defense Department under a sweeping contract that could lock in the information technology giant’s services for up to $7 billion over 10 years.
The contract, announced Thursday, aims to make it easier and cheaper to purchase software licenses and other services by consolidating those orders into one enormous contract, rather than pay the redundant costs of separate agreements overseen by various agencies. The DoD-wide deal also covers procurement for intelligence agencies and the Coast Guard.
The enterprise software agreement allows for $3.3 billion in orders over the first five years, with an option to extend the partnership for another five years and $3.6 billion. DoD said in a release the deal is expected to save U.S. taxpayers at least $441 million when compared to the cost of buying Oracle products separately.
The Department of the Navy negotiated the agreement on the Defense Department’s behalf. The contract will “strengthen interoperability, reduce cybersecurity risk, and help us focus resources on resilient capabilities that can scale, integrate, and endure in contested conditions,” said Barry Tanner, who is performing the duties of the Navy’s chief information officer.
Oracle provides commercial cloud infrastructure that lets military employees access applications and share data at each classification level without needing to be connected to a local network. For instance, DoD tapped Oracle to migrate the Defense Manpower Data Center’s older systems to the cloud to more easily manage personnel records, benefits eligibility, ID cards and other HR functions, instead of trapping that data on a hardwired network.
“The challenge is not just finding the right technology, it’s doing so quickly, compliantly, and at scale, without getting bogged down by complex procurement processes,” Kim Lynch, Oracle’s executive vice president for government, defense and intelligence, said in a release.
It’s the latest win for the Texas-based company that is also entrusted with building a single, centralized human resources system to manage workforces across the entire federal government. Oracle is also partnering with the Pentagon to deploy its artificial intelligence tools on the military’s classified networks.
DoD plans to issue huge enterprise software agreements more often as it looks to adopt private-sector best practices that can save money on products used by millions of employees and modernize its vast ecosystem of isolated IT programs.
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