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The War Department announced Thursday that it has awarded Oracle a software contract worth nearly $7 billion aimed at cutting costs and modernizing technology across the military.
According to Oracle, the agreement has a base value of $3.31 billion over the first five years and could reach $6.99 billion if the government exercises an additional five-year option.
The department said the contract is expected to save taxpayers at least $441 million by consolidating fragmented Oracle software purchases and licenses into a single department-wide framework.
The deal negotiated by the U.S. Navy represents the department’s “first” direct contract with Oracle to cover on-site use of the software.
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An aerial view of the Pentagon, headquarters of the U.S. War Department, in Arlington, Virginia, May 31, 2026. The War Department announced Thursday that it had awarded Oracle a software contract worth nearly $7 billion. (Daniel Slim/AFP via Getty Images)
“By fundamentally improving the way we source Oracle capabilities locally, we are achieving at least $441 million in tax savings while quickly and effectively supporting our warfighters,” War 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.”
The agreement will support the War Department, Coast Guard and intelligence agencies.
The indefinite-delivery, indefinite-quantity contract will allow War Department organizations to “acquire commercial offerings from Oracle, including software and on-site support, software-as-a-service (SaaS) applications and professional services through contract and delivery orders tailored to specific mission and operational requirements,” Oracle said.
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The contract negotiated by the U.S. Navy represents the department’s first direct contract with Oracle to cover on-site use of the software. (Jakub Porzycki/NurPhoto via Getty Images)
Pricing, delivery and performance criteria are “defined at the order level,” Oracle said.
“For the War Department, the challenge is not just finding the right technology, but also doing so quickly, compliantly and at scale without getting bogged down in complex procurement processes,” Kim Lynch, executive vice president of government, defense and intelligence at Oracle, said in a statement.
Oracle has been supplying technology to the department since the 1990s and said military organizations will begin transitioning to the new contracting framework this summer.
“For the Department of the Navy, this agreement supports faster deployment of secure, scalable software from shore operations to the tactical edge of our Navy and Marine Corps teams,” said Barry Tanner, who carries out the duties of the Navy’s chief information officer.
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A War Department sign is displayed at the Pentagon in Washington, DC on March 31, 2026. (Oliver Contreras/AFP via Getty Images / Getty Images)
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The Oracle agreement comes as the War Department pushes the adoption of AI and other advanced technologies.
In January, the department unveiled an Artificial Intelligence Acceleration Strategy aimed at accelerating military AI deployment, reducing bureaucratic hurdles and “establishing the United States as the world’s undisputed AI-powered fighting force.”
In February, the War Department told FOX Business that it would work with OpenAI to integrate ChatGPT into GenAI.mil, a platform for military personnel.
FOX Business’s Louis Casiano contributed to this report.
https://www.foxbusiness.com/politics/department-war-taps-oracle-software-deal-worth-nearly-7b
