By Mary Prenon
The General Services Administration (GSA) announced on Sept. 2 a deal with Microsoft designed to save the government and taxpayers billions.
The tech giant will offer significant discounts to the GSA across its suite of cloud services, including Microsoft 365, Copilot, Azure Cloud Services, Dynamics 365, plus cybersecurity and monitoring tools.
The new agreement is expected to save about $3.1 billion in just the first year.
Utilizing the new OneGov Strategy, the GSA recently launched a comprehensive plan to change the way the government makes purchases. OneGov will replace hundreds of separate agency contracts and instead leverage the purchasing power of the entire federal government to secure discounts for bulk purchasing.
The IT initiative represents phase one of the OneGov strategy. In addition to significantly lowering costs, the new Microsoft agreement will help to transition the federal workforce to the Artificial Intelligence (AI) era.
“GSA is proud to partner with technology companies, like Microsoft, to advance AI adoption across the federal government, a key priority of the Trump administration,” GSA Deputy Administrator Stephen Ehikian said in a company statement.
“We urge our federal partners to leverage these agreements, providing government workers with transformative AI tools that streamline operations, cut costs, and enhance results.”
“For more than four decades, Microsoft has partnered with the U.S. Government to serve the American people,” Satya Nadella, chairman and CEO of Microsoft, said in the statement.
“With this new agreement, we will help federal agencies use AI and digital technologies to improve citizen services, strengthen security, and save taxpayers more than $3 billion in the first year alone.”
The deal with Microsoft includes blended discounts on a new government-exclusive Microsoft 365 and Copilot Suite, and a cost-free M365 Copilot for the first year for Microsoft G5 customers, and substantial discounts in subsequent years.
Microsoft 365 G3 and G5 are licensing plans that are specific to government operations, offering various levels of security and features.
G5 is specifically designed for environments that require advanced security and includes additional features like real-time intelligence reporting, threat protection, Power BI Pro, and advanced enterprise telephony capabilities.
Under the agreement, federal agencies can opt in to any or all of these offers through September 2026, with discounted pricing available for up to 36 months for certain products.
The GSA indicated that this new arrangement with Microsoft is part of President Donald Trump’s vision for responsible AI advancement, which is outlined in America’s AI Action Plan.
The initiative launched in July outlines the steps necessary for securing America’s dominance in AI.
The action plan includes removing government red tape, providing federal employees with cutting-edge AI tools, and combating security risks from both domestic and foreign entities.
The GSA provides centralized purchasing and shared services for the entire federal government, overseeing in excess of $100 billion in products and services through federal contracts.
