WASHINGTON, July 23 (Reuters) – The Pentagon announced on Thursday a nearly $7 billion, up-to-10-year agreement with Oracle to consolidate the department’s on-premises software licenses into a single contract, the latest move by the Pentagon’s technology chief to cut costs by eliminating fragmented purchasing.
The Enterprise Software Agreement, negotiated by the Department of the Navy, is between the Pentagon and Oracle for its on-premises compute usage.Â
The agreement spans five years, with a further five-year option, and covers the entire Pentagon, along with the U.S. Coast Guard and the intelligence community.
“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,” Pentagon Chief Information Officer Kirsten Davies said.
The Oracle agreement builds on a similar effort Davies’ office struck with Microsoft in May. That five-year, $9.69 billion deal consolidated Microsoft and other enterprise software licenses scattered across the military services, the intelligence community and the Coast Guard into a single contract.
The two deals mark a broader push under Davies to rein in years of duplicative software spending across the military by replacing piecemeal, service-by-service contracts with enterprise-wide agreements.
Oracle’s founder, billionaire Larry Ellison, has a close relationship with U.S. President Donald Trump.
(Reporting by Mike Stone in WashingtonEditing by Rod Nickel)
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