U.S. Defense Secretary Pete Hegseth looks on during a press briefing at the Pentagon in Arlington, Virginia, on May 5, 2026.
Chip Somodevilla | getty images
The Defense Department on Wednesday announced a five-year deal worth about $9.7 billion. Ditch Providing a suite of software to the US military.
Award, known as Microsoft The Department of War Enterprise Software Agreement II core enterprise technology agreement calls for Dell to provide Microsoft 365, advanced cloud subscriptions, and on-premises licensing capabilities.
Defense Department Chief Information Officer Kirsten Davis and Acting Navy Chief Information Officer Barry Tanner told reporters at a Wednesday briefing at the Pentagon that Dell Federal Systems, a unit of the company dedicated to serving the government, won the contract after a competitive process. This comes after Dell Technologies founder and CEO Michael Dell pledged $6.25 billion last year to fund children’s investment accounts, known as “Trump accounts.”
Dell is a major buyer of Windows PC licenses and has a long-standing partnership with Microsoft.
“All vendors were evaluated based on competition, comparison to GSA schedule pricing, and overall range of value to the department,” Tanner said, referring to the General Services Administration. “Going through the evaluation process, they came out on top.”
The agreement will provide the Pentagon with a location to obtain the licenses needed to run its enterprise Microsoft systems. Officials said the contract would eliminate redundancies in licensing for technology across the Pentagon and affiliated government agencies.
“This second-generation blanket purchase agreement will streamline and consolidate critical Microsoft software and services across the War Department, Intelligence Community, and U.S. Coast Guard,” Davis said.
Davis said the agreement is expected to save the Pentagon approximately $422 million annually by “consolidating the existing IT budgets of all services and agencies into one efficient vehicle.”
The Pentagon is under intense pressure from Capitol Hill to deliver a clean audit, especially as it is asking Congress for a massive $1.5 trillion budget for fiscal year 2027.
President Donald Trump has been particularly complimentary of Dell.
At a Mother’s Day event at the White House earlier this month, after praising the Dell family for donations to Trump accounts, Trump said “go out and buy a Dell”.
And Dell has returned the favor. He congratulated Trump said on his election victory in 2024, “He looks forward to continued progress and opportunity under his leadership and to working together toward a stronger and unified future for all.”
Dell also joined Trump’s Advisory Council on Science and Technology.