Leidos to automate Pentagon logistics with $95 million AI contract

Modernizing the backbone

The Defense Logistics Agency recently announced a new agreement with Leidos to update the Pentagon’s asset management infrastructure. This contract is worth a total potential value of $95 million and is structured to last for five years, with performance extending until August 2031.

The primary focus of this work is the Enterprise Logistics Management System, or ELMS. This platform serves as a critical tool for more than 50 different agencies. It is responsible for tracking and accounting for government property throughout its entire lifecycle, from acquisition to disposal.

As reported by Unite.AI, the system manages a massive inventory consisting of over 80 million items. The total value of these assets exceeds $140 billion. By improving how these items are tracked, the government aims to ensure that military personnel have the equipment they need to remain ready for operations.

AI and cloud integration

Leidos plans to overhaul the existing system by incorporating AI-driven automation and modern software development practices. The goal is to move away from slower, legacy methods of data management toward a more agile, cloud-based environment. This transition is intended to accelerate how quickly the software can be updated and delivered to users.

The company stated that these updates will help streamline various processes while maintaining secure and reliable operations. By using artificial intelligence—technology that allows computers to perform tasks that typically require human intelligence—the Pentagon hopes to gain a clearer picture of its supplies. This visibility is considered a fundamental part of military readiness.

Jason McCarthy, a senior vice president at Leidos, noted that accurate visibility of assets is a cornerstone of military readiness. He described the new contract as a way to apply modern tools to the digital backbone of defense logistics. This work is part of a broader corporate strategy called NorthStar 2030, which focuses on providing mission-ready technology for critical systems.

A long-term partnership

While the new contract introduces modern AI features, it is built upon a very long history of cooperation. Leidos has provided support for the ELMS and its previous version, the Defense Property Accountability System, for more than 21 years. This new award effectively extends that relationship for another five years.

This move follows other recent efforts by Leidos to integrate AI into military logistics. Earlier in 2026, the company entered a partnership with Rune Technologies to develop predictive sustainment capabilities. That specific project uses AI to help military leaders anticipate what supplies they will need before a shortage actually occurs.

The Rune partnership is designed to help commanders understand logistics demands in difficult environments, such as the Indo-Pacific region. These areas present challenges because of vast distances and complex maritime conditions. By combining predictive logistics with data integration, the goal is to give leaders a clearer picture of what is needed to keep forces moving at high speeds.

Looking ahead to 2031

The upcoming work on the ELMS system represents a significant step in digitizing the physical movement of goods for the Department of War. By automating the tracking of billions of dollars in property, the Pentagon seeks to reduce the time it takes to move resources from warehouses to the front lines.

The success of this contract will likely be measured by how effectively the AI can handle the scale of 80 million items without compromising security. If successful, the transition to a cloud-based, AI-enhanced system could set a standard for how other large government agencies manage their own massive inventories of equipment and supplies.

As the contract moves toward its completion in 2031, the focus will remain on reliability. The Pentagon needs to ensure that as the system becomes more automated, it remains a dependable tool for the logistics enterprise that keeps warfighters equipped and ready for any scenario.