Oracle inks $7 billion deal to consolidate Pentagon software purchases

WASHINGTON — Oracle has scored a $7 billion agreement to consolidate what the Pentagon called its “fragmented, one-off information technology purchases” from the firm into a single, unified contract, the department announced Thursday.

The Enterprise Software Agreement (ESA), which was negotiated by the Department of the Navy, is projected to save about half-a-billion dollars over its lifecycle, according to the announcement. While Department of Defense entities have been separately purchasing Oracle software for years, this new award will create one giant contract for the entire organization, improving visibility of enterprise usage and spending as a means of optimizing technology budgets, according to the announcement.

“By fundamentally improving how we procure on-premises Oracle capabilities, we are driving at least $441 million in taxpayer savings while rapidly and effectively serving our warfighters,” said Kirsten Davies, chief information officer for DoD. “This nearly $7 billion agreement with Oracle strengthens our digital ecosystem, supporting our warfighters with secure, scalable technology to dominate current and future missions.”

The up to ten-year contract has a five-year base period and a five-year option period, supporting the entirety of the DoD as well as the Coast Guard and Intelligence Community.

The move follows similar efforts within the department to consolidate licenses and agreements for better oversight and budgeting, including most recently the $9.7 billion May award to Dell to consolidate Microsoft 365 licenses into a single contract vehicle.

These efforts are aimed at greater efficiency for users, according to officials.

“For the Department of the Navy, this agreement supports faster delivery of secure, scalable software from the shore enterprise to the tactical edge for our Navy and Marine Corps teams,” Barry Tanner, who is performing the duties of the Department of the Navy chief information officer, said regarding the Oracle announcement.

“Reducing fragmented procurement and advancing enterprise standardization will strengthen interoperability, reduce cybersecurity risk, and help us focus resources on resilient capabilities that can scale, integrate, and endure in contested conditions,” Tanner added.