The Department of Defense (DOD) on Thursday announced a nearly $7 billion agreement with Oracle to consolidate all the company’s software and services used across the DOD under a single contract.
The Enterprise Software Agreement (ESA) establishes a central framework to optimize how the department, Coast Guard, and Intelligence Community purchase software licenses from Oracle. The contract was negotiated by the Department of the Navy and includes a five-year base period as well as a five-year option period, according to the Pentagon.
The agreement has a base value of $3.31 billion for the first five years and a total value of $6.99 billion if option years are exercised.
According to officials, consolidating fragmented, one-off IT purchases into a unified, single-award contract is projected to deliver at least $441 million in savings to U.S. taxpayers over the agreement’s lifecycle.
“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, DOD chief information officer (CIO). “This nearly $7 billion agreement with Oracle strengthens our digital ecosystem, supporting our warfighters with secure, scalable technology to dominate current and future missions.”
Through the ESA contract vehicle, DOD organizations can purchase Oracle commercial offerings, including on-premises software and support, Software-as-a-Service applications, and professional services through task and delivery orders tailored to specific mission and operational requirements.
Pricing, deliverables, and performance criteria are defined at the order level, providing organizations flexibility while preserving a streamlined contracting structure.
“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,” said Barry Tanner, performing the duties of the Department of the Navy CIO. “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.”
Under the Trump administration, the DOD has been rebranded as the War Department.