Microsoft, Army move on $22B headset production contract

Whilst one big defense technology contract remains in some limbo, Microsoft has received a greenlight to move forward on a separate military augmented reality headset program with a much larger ceiling value.

The Army has awarded Microsoft a new contract to move from rapid prototyping to production and quick fielding of headsets designed to help commanders project information directly onto a soldier’s visor.

The new contract is potentially worth up to $21.88 billion over 10 years and covers the production of more than 120,000 customized HoloLens headsets, Microsoft said Wednesday.

Known by the acronym IVAS, the Integrated Visual Augmentation Program aims to further enable information sharing and decision-making in a variety of scenarios. This new production award comes nearly three years after Microsoft received the initial $480 million agreement to supply prototypes.

Alex Kipman, a technical fellow at Microsoft, wrote in a blog post that IVAS is augmented by the company’s Azure cloud infrastructure offering and focused on “soldier centered design to enable rapid prototyping for a product to provide Soldiers with the tools and capabilities necessary to achieve their mission.”

“IVAS aggregates multiple technologies into an architecture that allows the soldier to fight, Rehearse, and train using a single platform,” the Army said in a release.

The Army also touted its partnership with Microsoft as an example of “taking advantage of the middle tier of acquisition and other transaction authorities, and partnering with a non-traditional defense contractor that is an industry leader in developing innovative technology.”

For Microsoft, the IVAS production contract further entrenches the global tech giant as a major supplier to the Defense Department as another large piece of business with DOD remains tied up in a court fight.

DOD awarded the highly-touted and highly-controversial JEDI cloud infrastructure contract to Microsoft in 2019, but that potential $10 billion award is the subject of a protest by industry rival Amazon Web Services.