Microsoft's big win: Pentagon signs massive $1.76bn contract

Microsoft wins a five-year services deal with Department of Defense, Coast Guard, and intelligence community.
Written by Liam Tung, Contributing Writer

Microsoft has scored a major win with the US Department of Defense (DoD) to supply services to the value of $1.76bn over five years. 

The Pentagon on Friday announced the deal, which will see Microsoft provide enterprise services to the DoD, Coast Guard, and intelligence community. 

In a statement announcing the deal, the Pentagon explains that support includes, "Microsoft product engineering services for software developers and product teams to leverage a range of proprietary resources and source code, and Microsoft premier support for tools, knowledge database, problem resolution assistance, and custom changes to Microsoft source code when applicable." 

The five-year 'indefinite delivery/indefinite quantity' (IDIQ) contract has a completion date of January 10, 2024. This contract allows Microsoft to provide an indefinite quantity of services during the period. 

The contract allows DoD to pay Microsoft on individual task orders using primarily operations and maintenance funds. 

Microsoft's win comes as the DoD assesses proposals for its $10bn, 10-year cloud contract known as JEDI or Joint Enterprise Defense Infrastructure. The Pentagon is expected to announce a single winner of the JEDI deal in the first quarter. 

SEE: Tech budgets 2019: A CXO's guide (ZDNet special report) | Download the report as a PDF (TechRepublic)

Microsoft in October announced that it was on track to be certified to host Top Secret US classified data (Defense Information Systems Agency Impact Level 6) certification by the first quarter of 2019

Microsoft's cloud rival Amazon Web Services (AWS) is believed to be the frontrunner for the JEDI contract. Google dropped out of the race because it lacked the required government certifications

Oracle filed several protest bids with the Government Accountability Office (GAO) last year, the last of which was knocked back in November. The company has argued that parts of the contract were written in a way that favors AWS and that it was illegal to award it to just one vendor. 

The GAO ruled that the Pentagon was legally entitled to grant the contract to one vendor because the agency reasonably determined it was in its best interests.   

IBM has also been critical of the winner-take-all nature of the JEDI contract.  

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