The U.S. Department of Veterans Affairs (VA) has awarded a five-year contract to HP Enterprise Services to provide a department-wide, cloud computing based email and calendaring infrastructure to the VA’s 600,000 users, using Microsoft Office 365 for Government, HP announced today.

The agreement, valued at $36 million, was awarded under the Veterans Administration Transformation Twenty-One Total Technology (VA T4) program, the department’s information technology modernization contract. The modernization effort will begin with 15,000 people and expand agencywide to 600,000 people when all contract options are executed.

“VA is moving to cloud-based email and collaboration as part of a broader effort to leverage emerging technologies to reduce costs, increase efficiencies and, most importantly, improve service delivery to our nation’s veterans,” said Charles De Sanno, executive director, Enterprise Systems Engineering, U.S. Department of Veterans Affairs.

Under the agreement, HP will lead and manage the implementation of Office 365 for the VA. The initiative is expected to enhance reliability, security, privacy and compliance as well as create geographically diverse disaster recovery. The five-year indefinite delivery/indefinite quantity (IDIQ) contract will enable VA to modernize services, including cyber security, LAN/WAN management, and technical facilities support.

The move also enables the VA to fulfill the Cloud-First federal mandate but is also expected to improve employee productivity and collaboration and reduce overall operating costs.

The VA will use Microsoft Office 365 for Government, which features a separate government community cloud, for email, shared calendars, instant messaging, and web and video conferencing. It also includes industry-leading applications for productivity and collaboration including cloud-based Office, Exchange, Lync and SharePoint.

“Together with the VA and Microsoft, the HP team will modernize the VA’s communications infrastructure while lowering costs and setting the stage for other U.S. government agencies to enter the cloud era,” said Marilyn Crouther senior vice president and general manager, U.S. Public Sector, HP Enterprise Services

“The VA’s decision to implement Office 365 for Government with HP Enterprise Services validates our longstanding partnership and our commitment to helping them move to the cloud on their terms with the most complete productivity and collaboration tools available while keeping their information protected and secure,” said Greg Myers, vice president, Federal, Microsoft.

The VA has worked with HP on some of the agency’s most critical initiatives, including multiple IT solutions with the Veterans Health Administration (VHA) and VA Office of Information and Technology (OIT), according to HP officials.