The US Department of Interior has selected Verizon to participate in a US$10bn, ten-year contract to provide cloud and hosting services.

Verizon said it is potentially one of its largest federal cloud contracts to date.

Verizon is one of ten companies that will compete to offer cloud-based storage, secure file transfer, virtual machine, and database, Web, and development and test environment hosting services.

The company said it is also one of four selected to offer SAP application hosting services.

Each of the ten agreements awarded under the Foundation Cloud Hosting Services contract has a potential maximum value of $1bn.

A key component of the department’s IT Transformation initiative, the Foundation Cloud Hosting Services contract has an initial three-year term that can be extended through April 2023.

The contract is an essential pillar of the department’s multiyear transformative initiative, which is expected to produce savings of $100m a year from 2016 through 2020.

The contract will enable the Department of the Interior to modernize the way it manages applications and stores data, and control costs through a reduction of its data center footprint.

The services covered by the contract will be available to all nine of the department’s technical bureaus and seven administrative offices covering more than 2,400 locations and 70,000 employees.

The department also expects that other federal departments and agencies will use the contract to purchase cloud services.

The Department of the Interior provides stewardship for 20% of the US land mass and manages national public lands, minerals, parks and wildlife refuges.

It is also responsible for wildlife and endangered species conservation, historic preservation, land protection and restoration, mapping and geological, hydrological and biological science initiatives, as well as Indian and Alaska Native programs.