U.S. Secretary of Defense Pete Hegseth looks on during a press briefing at the Pentagon on May 5, 2026 in Arlington, Virginia. Chip Somodevilla | Getty ImagesThe Department of Defense on Wednesday announced a five-year, roughly $9.7 billion deal with Dell to provide a suite of software to the U.S. military. The award, known as the Microsoft Department of War Enterprise Software Agreement II Core Enterprise Technology Agreement, calls for Dell to provide Microsoft 365, advanced cloud subscriptions and on-premises licensing capability.Dell Federal Systems, a unit of the company dedicated to serving government, won the contract after a competitive process, Defense Department Chief Information Officer Kirsten Davies and acting Navy Chief Information Officer Barry Tanner told reporters at a Wednesday briefing at the Pentagon. It comes after Michael Dell, founder and CEO of Dell Technologies, pledged $6.25 billion last year to fund investment accounts for children known as "Trump accounts." Dell is a major buyer of Windows PC licenses, and it has a long-running partnership with Microsoft."The vendors were all evaluated based on competition, comparison to GSA schedule pricing and overall chain of value to the department," Tanner said, referring to the General Services Administration, which oversees government purchasing. "Going through the process of evaluation, they came out on top." The agreement will provide the Pentagon with a single place to acquire the licenses it needs to run its enterprise Microsoft systems. Officials said the contract will eliminate redundancies in licensing for technology throughout at the Pentagon and affiliated government agencies."This second-generation blanket purchase agreement will streamline and consolidate critical Microsoft software and services across the Department of War, the intelligence community and the U.S. Coast Guard," Davies said. Read more CNBC politics coverageJudge tosses Kilmar Abrego Garcia charges, calls prosecution 'vindictive'Trump skipping wedding of son Donald Jr. to Bettina AndersonTulsi Gabbard resigning as Trump's intelligence chiefKevin Warsh sworn in as Fed chair as Trump seeks interest rate cutsNew lawsuits against Trump's DOJ 'lawfare' fundDavies said the agreement is expected to save the Pentagon about $422 million annually by consolidating "existing IT budgets from across the services and the agencies into a single efficient vehicle."The Pentagon has been under immense pressure from Capitol Hill to deliver a clean audit, especially as it asks Congress for a massive $1.5 trillion budget for fiscal year 2027. President Donald Trump has been particularly complimentary of Dell. At a Mother's Day event at the White House earlier this month, Trump said to "go out and buy a Dell," after lauding the Dell family for its donation to the Trump accounts. And Dell has returned the favor. He congratulated Trump on his election victory in 2024, saying he "look[s] forward to continued progress and opportunity under his leadership and working together toward a strong and unified future for all."Dell also joined Trump's Council of Advisors on Science and Technology.