Leidos Wins $95 Million Contract for AI Integration
The company will update a major logistics system that tracks over 80 million government property items.
Updated on Oct. 22, 2026 in Artificial Intelligence
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Leidos has secured a $95 million contract to integrate artificial intelligence and cloud tools into the Defense Logistics Agency's Enterprise Logistics Management System. The agreement, spanning one base year with four optional years, aims to upgrade infrastructure that currently tracks over 80 million government property items.
Why it matters
This contract represents an effort to modernize the backbone of U.S. government supply chains by incorporating AI for improved speed, security, and update delivery. It highlights the military's ongoing push to automate large-scale logistics operations across 50 federal agencies.
The Enterprise Logistics Management System currently tracks property valued at more than $140 billion across 50 government agencies. Leidos has maintained this system for 21 years and will now leverage AI tools to automate its data management and cloud infrastructure.
The players
Leidos
A defense and government services contractor with $17.2 billion in annual revenue that provides systems integration and digital modernization.
Defense Logistics Agency
The combat support agency responsible for managing the supply chains for the U.S. military and dozens of federal partners.
Scale AI
A data platform provider that previously secured a $500 million contract for military decision-making AI.
The details
Leidos will implement cloud-based AI automation to streamline the monitoring of over 80 million property items. The integration aims to optimize the speed and security of logistical updates within a legacy database environment that has been supported by the company for over two decades. By shifting toward cloud-native automation, the agency seeks to reduce latency in supply chain operations that serve dozens of federal departments.
Timeline
July 2026: Leidos partnered with CoreWeave for a classified AI cloud project.
October 2026: Leidos announced the new $95 million contract with the Defense Logistics Agency.
August 2031: The contract performance period is scheduled to conclude.
The Tech Race
The award follows the June 2026 presidential order requiring the military to accelerate AI adoption across its operational infrastructure. It aligns with broader sector efforts, such as the $500 million contract awarded to Scale AI in May, to modernize defense systems through automation.
The integration aims to increase the efficiency of logistics for federal agency personnel who manage over 80 million assets. While users of the Enterprise Logistics Management System will see updated tools, the specific transition timeline for individual agencies has not been provided.
The takeaway
This project underscores the ongoing shift toward cloud-based automation in federal supply chains. Readers should watch for future task orders or sub-contracting announcements as Leidos begins the five-year deployment of these AI tools.
What happens next
The project will proceed through a base year of implementation before four potential one-year extension periods through August 2031.
Further reading
For more on how the federal government is integrating machine learning, see our Artificial Intelligence section.
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