The Defense Department announced a multibillion-dollar deal with Oracle on Thursday that will consolidate all of the company’s software, services and licenses used across the Pentagon under a single contracting vehicle.
The Enterprise Software Agreement (ESA), valued at nearly $7 billion, aims to streamline the way the department, the Coast Guard and the Intelligence Community acquire software licenses from Oracle. The contract was negotiated by the US Department of the Navy and, according to the Pentagon, includes a five-year base period and a five-year option period.
Instead of providing new funding to Oracle, ESA is combining multiple contracts for the company’s software and services into a single contractual instrument. According to the Pentagon, the structure will not only streamline the way organizations acquire IT capabilities, but also save the Defense Department millions of dollars.
“By fundamentally improving the way we procure Oracle capabilities locally, we are achieving at least $441 million in tax savings while quickly and effectively supporting our warfighters,” Defense Department Chief Information Officer Kirsten Davies said in a statement. “This nearly $7 billion agreement with Oracle strengthens our digital ecosystem and supports our warfighters with secure, scalable technology to dominate current and future missions.”
According to Barry Tanner, the Navy’s CIO, ESA will also support faster delivery of warfighter software capabilities by eliminating procurement stovepipes that have been used across the department.
“Reducing fragmented procurement and advancing enterprise standardization will strengthen interoperability, reduce cybersecurity risk and help us focus our resources on resilient capabilities that scale, integrate and survive in challenging conditions,” Tanner said in a statement.
The new deal is the second consolidated IT contract agreement concluded in recent months. The department awarded Dell Federal Systems a $9.7 billion Core Enterprise Technology agreement in May, establishing a unified contracting vehicle for Microsoft services – including Microsoft 365, cloud subscriptions and on-premises licensing.
The Oracle agreement is the Defense Department’s latest attempt to rein in spending on software services and licensing under the Trump administration. Since taking office, Defense Secretary Pete Hegseth has spearheaded several efforts to eliminate duplicative and non-essential contracts for the Pentagon’s IT company.
A 2025 memo asked the department to create a plan for how it will “negotiate the most competitive rates for software and cloud services so that the Department of Defense pays no more for IT services than any other company in America.”
Hegseth also directed the CIO to conduct an audit of the Pentagon’s software licensing “to ensure that we only pay for the licenses we actually use, the features we actually need, and on the most favorable terms,” the memo said.
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Written by Mikayla Easley
Mikayla Easley reports on the Pentagon’s acquisition and deployment of new technologies. Before joining DefenseScoop, she covered national security and the defense industry for National Defense Magazine. She received a BA in Russian Language and Literature from the University of Michigan and an MA in Journalism from the University of Missouri. You can follow her on Twitter @MikaylaEasley
https://defensescoop.com/2026/07/23/pentagon-awards-oracle-7b-dollar-software-licenses/
