Army awards Microsoft contract worth up to $21.9B for IVAS

By Jaspreet Gill / March 31, 2021 at 5:17 PM

The Army announced today it has awarded Microsoft a fixed-price production agreement potentially worth up to $21.9 billion to build the Integrated Visual Augmentation System, the service's new heads-up display.

IVAS combines augmented reality with night vision, targeting and navigation capabilities for soldiers in combat. Soldiers will also use the system during training.

The production agreement has a "five-year, indefinite delivery/indefinite quantity-like ordering period for production of IVAS systems, associated components, and spares, as well as PMO, engineering and contractor logistics support," an Army spokesman told Inside Defense in a statement.

The award transitions IVAS into production and rapid fielding, according to a March 31 Army press release, and has a total potential period of performance of 10 years. The company in 2018 was initially awarded an other transaction agreement worth $479 million to develop prototypes of IVAS.

The Army plans to equip a unit with IVAS by the fourth quarter of this fiscal year, but Congress has remained concerned about the service's fielding schedule and acquisition strategy. The Army's FY-21 budget requested $906 million in base procurement and $14 million in research, development, test and evaluation funding for the system.

House and Senate lawmakers in the final version of the FY-21 National Defense Authorization Act cut funding for the system by $230 million and put limits on the amount of funds that could be used.

Congressional appropriators, in an explanatory statement accompanying their final version of the FY-21 defense appropriations bill, reduced funding for IVAS by $235.6 million and called on the Army to deliver a briefing on the system after it completed its final user evaluation.