Google (GOOG, Financial) has reached an agreement with the U.S. General Services Administration to lower the cost of its Workspace suite for federal agencies, placing the tech firm at the center of efforts to reduce government spending.

Under the agreement, Workspace — which includes tools like Gmail, Calendar, Contacts, Chat, and Meet — will be discounted by 71% across all federal departments, regardless of deal size. The pricing cut is in effect through the end of the current federal fiscal year on September 30.

The initiative aligns with the Trump administration's broader push to curb government expenditures. Microsoft (MSFT, Financial) continues to hold a leading position in supplying productivity software to U.S. agencies through its Office suite.

The General Services Administration said the deal is part of a shift toward treating the federal government as a single customer, aiming to streamline IT procurement and generate large-scale savings. Google Public Sector's leadership echoed the strategy's benefits, emphasizing the potential for both cost efficiency and better technological performance.

It's important to note that the stock rose by 1.80% this week, beating the S&P 500's 2.38% decline, but is still down 18.42% year to date. Despite the modest weekly outperformance, its 7.41% monthly dip and continued underperformance versus the sector median highlight ongoing challenges. Investors will likely monitor upcoming catalysts to determine whether this recent momentum can develop into a broader recovery.