The Department of Government Efficiency and leader Elon Musk Friday praised a deal struck between the General Services Administration and Google April 10 that offers Google’s Workspace collaboration and communications platform to governmentwide customers at a 71% discount through Sept. 30.
“Good work by [GSA] for inking its first consolidated deal following the President’s Executive Order: Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement,” DOGE said in a post on X. “This will be the first of many bulk discounts as a result of centralized procurement.”
Billionaire DOGE chief Elon Musk, who owns the X social media platform, reposted DOGE’s post with his own message: “Just ensuring common sense deals for the taxpayer.”
The deal inked Thursday by GSA and Google set off a chain reaction that prompted several competing large tech companies to engage GSA, according to two sources familiar.
The temporary pricing discount allows all agencies, including the Defense Department, to purchase Google Workspace software, which includes applications like Gmail, Google Drive, Google Docs and Meet, as well as AI tools like Gemini and NotebookLM.
Google has its sights set on cracking Microsoft’s dominant hold on productivity software across the federal government. While Google Workspace is used by several hundred thousand government employees — including personnel within GSA, the Energy Department, the Air Force Research Laboratory and others — most government departments run on Microsoft 365.
Let’s make a deal
Prompted by President Trump’s executive order centralizing procurement under GSA, Google Public Sector vice president of federal business Jim Kelly told Nextgov/FCW the company approached the agency with the idea of providing a discounted price for Google Workspace based on the entire government’s userbase. The company said it conservatively estimated a potential savings for federal agencies of $2 billion over three years under the 71% discount.
Kelly said Google had approached previous administrations with similar ideas, but nothing happened from those overtures.
“It wasn’t the right time,” Kelly said on the sidelines of Google Cloud NEXT in Las Vegas. “With the recent momentum inside of GSA to be kind of the clearing house for all IT and software products, this was kind of the perfect time for us to align and put something in place that can help them.”
Though DOGE was involved behind the scenes, Kelly said he found GSA “extremely collaborative and open from the very beginning that they wanted to make this happen.”
Some of GSA’s key appointees, including TTS Director Thomas Shedd and GSA Acting Administrator Stephen Ehikian, have been working with DOGE to modernize federal technology even as the agency cuts government contracts it doesn’t feel are providing value and reduces staff through layoffs and workforce reductions.
“They felt there was an opportunity for a number of agencies to find clear and obvious cost-cutting ties inside organizations,” Kelly said.
A chain reaction?
Per DOGE, “this will be the first of many” such deals, and GSA is already fielding calls from industry looking to rework deals.
“GSA continues to work with industry partners to secure better pricing, terms, and cybersecurity protections for federal agencies across IT categories,” a GSA spokesperson said. “GSA is working across the board to secure the best possible pricing using the purchasing power of the federal government to act as one buyer, reducing costs contract duplication, waste, and inefficiencies of fragmented purchases across many federal agencies.”
In a statement, Microsoft said it is “committed to continuing our partnership with the federal government and are fully aligned with the administration’s priorities of accelerating efficiency, strengthening cybersecurity, and reimagining IT modernization.”
“Microsoft is focused on providing government agencies and its employees with workplace solutions that foster collaboration, enhance efficiency and deliver unparalleled security across their enterprise,” a Microsoft spokesperson said. “There’s a reason why Microsoft’s cloud offering is trusted by 95% of Fortune 500 companies.”
