Not exactly. What they are doing is allowing the CIA and the NSA to search their databases with greater efficiency and maintaining a wiki for the intelligence community.
From The Times Online:
CIA enlists Google's help for spy work
Google has been recruited by US intelligence agencies to help them better process and share information they gather about suspects.
Agencies such as the National Security Agency have bought servers on which Google-supplied search technology is used to process information gathered by networks of spies around the world.
Google is also providing the search features for a Wikipedia-style site, called Intellipedia, on which agents post information about their targets that can be accessed and appended by colleagues, according to the San Francisco Chronicle.
The contracts are just a number that have been entered into by Google's 'federal government sales team', that aims to expand the company's reach beyond its core consumer and enterprise operations.
First I'm going to assume that having such contracts precludes Google from providing similar services to countries like China, Iran, North Korea, and of course France(j/k). Frankly I'm amazed we didn't have these capabilities beforehand given how long they've been around. In fact I'm left wondering how different the course of current events would be has we had these capabilities eight or nine years ago.