US awards Oracle $7 billion software deal

WASHINGTON — The Pentagon announced a nearly $7 billion, up-to-10-year agreement with Oracle on Thursday to consolidate the department’s on-premises software licenses into a single contract, part of an effort to reduce costs by ending fragmented technology purchases.

The Enterprise Software Agreement, negotiated by the Department of the Navy, covers the Pentagon’s use of Oracle’s on-premises computing capabilities and includes the entire Department of Defense, the U.S. Coast Guard and the intelligence community.

The agreement will run for five years, with an option to extend for another five years. Pentagon Chief Information Officer Kirsten Davies said the deal is expected to generate at least $441 million in taxpayer savings while improving access to software capabilities for military personnel.

“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 agreement follows a similar initiative announced by Davies’ office with Microsoft in May. That five-year, $9.69 billion contract combined Microsoft and other enterprise software licenses previously managed through separate military service agreements into a single enterprise-wide deal.

The two agreements are part of the Pentagon’s broader effort to reduce years of duplicated software spending by replacing individual service contracts with centralized purchasing arrangements.

Oracle founder and billionaire Larry Ellison has maintained a close relationship with U.S. President Donald Trump. -Reporting by Mike Stone in WashingtonEditing by Rod Nickel/Reuters