TheStreet

The Department of Defense announced that the $7.6 billion Defense Enterprise Office Solutions (DEOS) contract, its second biggest cloud contract after the Joint Enterprise Defense Infrastructure (JEDI) deal, will be awarded to General Dynamic's (GD - Get Report) CSRA, Dell (DELL) and privately held Minburn Technology Group. 

CSRA was purchased by General Dynamics (GD - Get Report) for $9.7 billion in 2018.  

The contract will provide cloud-based collaboration and email services to the Department of Defense under a blanket purchase agreement. The Pentagon's even bigger $10 billion JEDI contract to upgrade its legacy systems with cloud software has still not been awarded, with Amazon and Microsoft the only two firms left in the running.  

Shares of General Dynamic were up 2.2%, while shares of Dell rose 3.3% on Thursday following news of the deal. 

While Microsoft (MSFT - Get Report) lost out on the overall contract, it will still be a part of the process as DEOS runs on the Microsoft Office 365 platform. CSRA will provide the Office 365 suite of services, including "productivity tools such as word processing and spreadsheets, email, collaboration file sharing, and storage." Microsoft shares rose $1.89% to $138.12 on Thursday.

"DOD's cloud strategy includes both general purpose and fit-for-purpose clouds. DEOS is a great example of a fit-for-purpose cloud that supports our multi-cloud strategy," said DOD Chief Information Officer Dana Deasy in a press release. "DEOS will streamline our use of cloud email and collaborative tools while enhancing cybersecurity and information sharing based on standardized needs and market offerings."

The contract runs for a five-year base period with two two-year options and one one-year option for a potential total contract length of 10 years. 

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