Defence data centre support deal passes $2bn

American defence and IT services giant Leidos will be paid more than $2.6 million a month over the next two years to continue supporting Defence’s data centre and network infrastructure needs.

The Department of Defence late last year extended its long-running centralised processing arrangement with the company until at least September 2024 at a cost of $258.2 million.

The new contract brings the total cost of the relationship – which initially saw Leidos slim Defence’s data centre footprint from 280 computer rooms down to 14 facilities – to more than $2 billion.

Computer data centre

Leidos has been Defence’s centralised computing provider since it merged with Lockheed Martin in 2016. Lockheed Martin replaced IBM at Defence in 2014, scoring what was then a $800 million deal.

The transformation component of the project reached final operating capability in late 2017, and the company now continues to look after the business-as-usual management of the 14 data centres.

But the deal has continued to climb in the years since, reaching $1.8 billion in March. Contracts worth another $60 million have been entered into since March, in addition to the new $258.2 million deal.

A spokesperson told the new contract would see Leidos continue providing Defence with the same services until September 2024, with the option to extend for another three years.

“The extended contract did not result in scope changes relative to the initial contract, which is to deliver IT infrastructure management and centralised processing services,” the spokesperson said.

“The extended contract seeks to drive further value for money through additional flexibility, improved service delivery models and a shift towards evergreen services.”

According to its most recent ICT strategy, Defence is planning a “single virtual distributed data centre” to form part of the second iteration of its single information environment. The data centre is one branch of a planned hybrid cloud.

Defence went looking for cloud services capable of handling data at the ‘Secret’ security classification, including an infrastructure-as-a-service (IaaS) platform, in mid-2022.

Last year, Leidos also scored $150 million across two contracts from Defence to upgrade legacy platforms and other technologies in its centralised processing environment.

The company also won a $329 million contract to deliver a new eHealth records platform for the 80,000-odd deployed and non-deployed personnel in the Australian Defence Force.

The platform, known as the Health Knowledge Management solution, is the final component in the billion-dollar JP2060 Deploy Health Capability project.

Leidos, as the platform’s prime contractor, is working in partnership with MediRecords, Coviu and Nous Group.

Do you know more? Contact James Riley via Email.

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