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Dell Federal Systems—not Microsoft—won the U.S. Department of War’s five-year Enterprise Software Agreement II Core Enterprise Technology Agreement (ESA II CETA), an agreement covering Microsoft software licenses, cloud subscriptions and related services. The Department’s May 27, 2026 award notice estimates its overall value at $9.69 billion; that figure is not evidence that the full amount has been spent or will become Microsoft revenue.
What was awarded—and to whom?
The Department of War awarded the ESA II CETA to Dell Federal Systems, L.P., of Round Rock, Texas. The May 27, 2026 award notice describes it as a single-award, firm-fixed-price blanket purchase agreement (BPA) with an estimated overall value of $9.69 billion. In a May 28 announcement, the Department of War Chief Information Officer characterized it as a five-year BPA worth approximately $9.7 billion.
The roles matter: Dell is the BPA awardee and government procurement recipient; Microsoft provides the software and cloud products covered by the agreement. Calling it a “Microsoft deal” describes the vendor’s products, not the named awardee.
What does the agreement cover?
The award notice describes a follow-on, second-generation Department of War Enterprise Software Agreement intended to streamline and consolidate software acquisition across the Department of War, the Intelligence Community and the Coast Guard. It covers Microsoft software licenses, cloud subscriptions and Software Assurance. The CIO’s summary specifically names Microsoft 365, advanced cloud subscriptions and on-premises licensing capabilities.
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It is therefore broader than a cloud-only contract: licensing and on-premises software are also part of the described scope. The announcements identify the agreement’s intended customers and product categories, but do not establish how much each organization will purchase.
What does the $9.69 billion figure mean?
The $9.69 billion figure is the award notice’s estimated overall BPA value. The CIO’s summary rounds it to approximately $9.7 billion and gives the term as five years. Neither announcement establishes that $9.69 billion has already been obligated, spent, or paid to Dell or Microsoft. It should not be reported as Microsoft revenue or as a confirmed amount the company will receive.
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The announcements also do not establish actual task-order totals, spending to date or realized savings. The stated value is an estimate for the agreement, not a reported savings figure.
How this differs from Microsoft’s 2019 DoD contract
Microsoft announced a separate five-year, $1.76 billion enterprise services contract in January 2019. That award was an indefinite-delivery, indefinite-quantity (IDIQ) contract awarded by DoD ESI and SPAWAR to Microsoft, covering DoD, Intelligence Community and Coast Guard missions. The 2019 announcement concerns a different award, with a different awardee and contract type; it is not the 2026 Dell BPA.
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Microsoft’s federal procurement guide separately lists Commercial Cloud Enterprise (C2E), an IDIQ vehicle through which eligible federal agencies with intelligence missions and approved Intelligence Community contractors may procure Azure Cloud Services and IT Professional Services. The guide also lists DoD ESI and JWCC. These are distinct procurement vehicles; the guide does not identify the 2026 CETA as an Azure-only cloud contract. See Microsoft Federal Contract Vehicles, updated March 20, 2026.
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