The U.S. Department of Defense has awarded Dell Technologies a five-year contract worth approximately $9.7 billion to deliver a suite of software to the country’s military.
As per the agreement, officially titled the Microsoft Department of War Enterprise Software Agreement II Core Enterprise Technology Agreement, Dell will provide Microsoft 365, advanced cloud subscriptions and on-premises licensing capability.
According to Defense Department Chief Information Officer Kirsten Davies and acting Navy CIO Barry Tanner during a Pentagon briefing, the contract was secured by Dell Federal Systems, the company’s government-focused division. The company won the contract following a competitive evaluation process. Officials said vendors were assessed on competitive pricing, alignment with General Services Administration benchmarks and overall value delivered to the department, with Dell emerging as the top choice.
The contract comes amid growing ties between Michael Dell, founder and CEO of Dell Technologies and Trump administration. Michael Dell pledged $6.25 billion last year to fund investment accounts for children known as “Trump accounts.”
Dell is a major buyer of Windows PC licenses, and it has a long-running partnership with Microsoft.
“The vendors were all evaluated based on competition, comparison to GSA schedule pricing and overall chain of value to the department,” Tanner said, referring to the General Services Administration, which oversees government purchasing. “Going through the process of evaluation, they came out on top.”
The new agreement is designed to create a centralized procurement framework for Microsoft enterprise licenses across the Pentagon and affiliated agencies, reducing duplication and improving efficiency in software acquisition.
“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.
Davies said the agreement is expected to save the Pentagon about $422 million annually by consolidating “existing IT budgets from across the services and the agencies into a single efficient vehicle.”
The move comes as the Pentagon faces increasing pressure from Capitol Hill to strengthen financial oversight and improve audit performance, particularly as it seeks congressional approval for a proposed $1.5 trillion fiscal 2027 budget.
President Donald Trump has been particularly complimentary of Dell.
At a Mother’s Day event at the White House earlier this month, Trump said to “go out and buy a Dell,” after lauding the Dell family for its donation to the Trump accounts.
And Dell has returned the favour. He congratulated Trump on his election victory in 2024, saying he “look[s] forward to continued progress and opportunity under his leadership and working together toward a strong and unified future for all.”
Dell also joined Trump’s Council of Advisors on Science and Technology.
