WASHINGTON — The Defense Department revealed Thursday that it has reached a nearly $7 billion agreement with software giant Oracle, combining the Pentagon’s on-premises software licenses into one unified contract. The deal represents the latest effort by the department’s top technology official to reduce costs by ending the practice of fragmented, service-by-service purchasing.
Known as an Enterprise Software Agreement, the contract was negotiated through the Department of the Navy on behalf of the entire Pentagon. It covers on-premises computing usage and extends across all branches of the military, as well as the U.S. Coast Guard and the intelligence community.
The agreement runs for five years, with an option to extend for an additional five years.
Pentagon Chief Information Officer Kirsten Davies highlighted the financial benefits of the arrangement. “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,” Davies said.
The Oracle deal follows a similar agreement Davies’ office reached with Microsoft back in May. That earlier contract, valued at $9.69 billion over five years, brought together Microsoft and other enterprise software licenses that had been spread across the military branches, the intelligence community, and the Coast Guard into a single, streamlined arrangement.
Together, the two deals reflect a broader strategy under Davies to eliminate years of overlapping and duplicative software spending by moving toward department-wide contracts rather than individual service contracts.
Oracle’s founder, billionaire Larry Ellison, is known to have a close personal relationship with U.S. President Donald Trump.
