US Navy buys $2.5 billion worth of Microsoft software

In early June 2021, the US Department of Defense entered into a $2.5 billion procurement agreement with Dell in order to provide the US Navy with licenses for corporate software. Under the terms of the five-year agreement, the technology company will provide the Navy with user licenses by subscription to a number of software products, including Microsoft 365 and Microsoft Azure.

The contract was concluded in connection with the transition of the Department of Defense to DOD365, which is a version of Office 365 with a higher level of security, acquired as part of the contract for Defense Enterprise Office Solutions (DEOS) solutions worth $4.4 billion.

US Navy buys $2.5 billion worth of Microsoft software

Dell's obtained enterprise software licenses will be used by the Department of Defense and the US Coast Guard from June 1, 2021. Licenses will be paid under separate orders using US Department of Defense funds for the operation and maintenance of equipment, although the agreement does not oblige the US Navy to immediately pay the funds.

It is worth noting that the purchase of software has long been a serious problem for the US Department of Defense, since its contracting methods were developed for the purchase of basic weapons systems, and not code-based systems that require constant updating. The Department of Defense conducted a special software acquisition policy (SWAP) study to understand the problems of this sector and suggest possible solutions. As a result, the US Department of Defense identified four priority areas: refactoring the rules and procedures for acquiring software, creating and maintaining an inter-program/inter-service digital infrastructure, creating new opportunities for talented specialists working directly in the armed forces, and changing the practice of acquiring and developing software.^[1]

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