DOD gives Microsoft $1.7B support contract

Not subject to the ongoing partial government shutdown, the Defense Department is proceeding more business-as-usual and on Friday dropped a five-year, $1.7 billion sole-source contract for Microsoft product enterprise services.

But Microsoft is the recipient this time around unlike other similar acquisitions of IT product support work that typically go to third-party resellers or distributors.

The global software giant will offer product engineering services for software development and other technology teams to apply source code, tools, knowledge database, troubleshooting and other changes when applicable.

Defense and intelligence agencies, plus the Coast Guard have access to the contract DOD issued under its Enterprise Software Initiative to streamline and consolidate its IT product and service acquisitions.

This contract comes less than a year after Microsoft received a six-year agreement worth “potentially hundreds of millions of dollars” to provide its products including the entire cloud portfolio to the intelligence community.

Microsoft is also working toward the required certifications for handling U.S. government data at the highest clearance levels -- a key requirement for DODs’s estimated $10 billion “JEDI” cloud computing infrastructure contract.

The company is a confirmed bidder for JEDI and some analysts have cautioned to not be surprised if they win that contract over presumed favorite Amazon Web Services.