And don't assume that they're not also using other services and providers as well. How would you provide desktop services and solutions to 80,000 people distributed all over the world?
If you have a solution that doesn't cost $1bn, please write the white paper. I'll gladly write the RFP response and we can enjoy our profits. :D
The numbers may seem staggering, but this is how much shit costs in the government. Most of our competitors in my space are offering services with 2%-4% margins because the government is so stingy about how the work is performed. DISA alone is probably at nearly the scale of AWS in terms of compute power and system requirements. And they probably have 5-10x the number of employees. It's not a trivial problem to solve, and I've been working for contractors for 10+ years now.
One UNIX admin at each remote site with standardized tools for the various functions like DNS, email, etc. A centralized solution for communications, workflow, secure sharing, and so on. They just access it over the internet with replication to a few sites (or even all filtered by whose present there) to get availability or extra performance.
I'm not seeing this cost $1 billion even if I did it with VMS clusters. Even that overpriced system that ran whole enterprises was under $100,000/yr licensing per branch with mega-fee for main offices. I can't guess how much support would take but imagine local admins handling a portion of it. If it's just Linux desktops, extra load might be offloaded to vetted consultants or companies that do it on the cheap with anything they do logged. Admins or local developers come up with design improvements or tools for recurring problems.
And right there you lose, because I all but guarantee there is Microsoft-specific code running at all levels of this organization. Everyone has to be retrained, a lot of infrastructure has to be rebuilt. All of that will chew up your 1bn quickly.
This isn't some SV startup, it's the government. Typical "move fast and break things" mindset doesn't fly here. You don't get any "tear it down and start over" moments, you get to make those hairy migrations to ensure everything stays up with smooth, staged cutovers. And that's not even mentioning the red tape...
"because I all but guarantee there is Microsoft-specific code running at all levels of this organization. Everyone has to be retrained, a lot of infrastructure has to be rebuilt. All of that will chew up your 1bn quickly."
...is a valid reason to default on using Microsoft. The difference is that moving what I can to alternatives means I can gradually move from lock-in to more flexible IT with open standards & multiple vendors to choose from. Organizations on Microsoft are often stuck, though. This much is undeniable. IBM, Oracle, and SAP the other huge offenders here.
The best benefits, though, are in flexibility and security rather than cost. I just have so much more available over long term to me with open formats, protocols, API's, and code. Plus, Microsoft has been saying "screw you" to its own customers in product development over past few years leveraging its lockin to keep them. Whereas, open stuff gives opportunity of switching vendors.