Back in 2019, Microsoft was awarded the $10 billion JEDI contract. But almost two years later, the Department of Defense decided to cancel the contract. Why? The cloud computing contract found itself in the middle of a legal dispute between Amazon and Microsoft.
According to the Pentagon, the disputed contract no longer met its needs due to:
- Evolving requirements
- Increased cloud conversancy
- Industry advances.
JEDI Contract
As a quick recap, JEDI will modernize the Pentagon’s IT-related operations. Over ten years, this cloud computing contract has an estimate of up to $10 billion. The final contenders lined up to provide the contracts were Amazon and Microsoft, ruling out Oracle and IBM.
In October 2019, Microsoft was awarded the JEDI or Joint Enterprise Defense Infrastructure contract. However, Amazon alleged that the former president, Donald Trump, interfered with the decision-making. According to Amazon, the evaluation process for the bid has an apparent bias, errors, and clear deficiencies.
Amazon Web Services filed a lawsuit against the Department of Defense last November 2019. The company also sought to put a halt to Microsoft’s work on the contract. Amazon protested the final decision to make sure the process was free of “political interference.”
Ending the Legal Dispute
The DOD decided to cancel the JEDI contract and end the litigation that could drag on for years. However, the legal dispute is not the driving force of the decision. According to John Sherman, JEDI was developed when the “departments’ needs were different”. The acting chief information officer further added that “the contract should achieve dominance in non-traditional and traditional war-fighting domains.”
On the other hand, Microsoft understands the Pentagon’s reasoning behind the canceled contract. They further added that one contract could not define its relationship with the Department of Defense.
Toni Townes-Whitley acknowledged that the DOD faced a difficult choice. According to Microsoft’s President of US Regulated Industries, it’s either continuing a “years-long litigation battle or find another path forward.” She added by saying that United State’s security and critical technology updates are more critical than “any single contract.”
Microsoft also noted that the Department of Defense’s inspector general found no evidence of interference in the bidding process.
New Cloud Contract
However, the bidding wars for the Department of Defense’s cloud contract will not end with JEDI because of its cancellation, DOD plans for a new cloud contract. This new contract, Joint Warfighter Cloud Capability, will be awarded to multiple vendors.
At the same time, it will seek proposals from “a limited number of sources,” including Amazon Web Services and Microsoft. Other vendors such as Oracle, Google, and IBM can also meet the new contract terms.
Meanwhile, Amazon says it looks forward to the Department of Defense’s efforts for modernization. However, Amazon still reiterated its stance that politics affected JEDI’s contract awarding.
According to AWS’s spokesperson, the previous contract award was not based on the merits of proposals. Instead, it was a decision resulting from an outside influence that has “no palace in government procurement.”
AWS aims to support the nation’s military. It also helps to ensure that partners have access to the “best technology at the best price stronger than ever.”
Final Thoughts
Although Amazon supports DOD’s intent for improvement, it still stands firm with the previous claim on the JEDI contract. And as the Department of Defense moves on to a new contract, it will start a new bidding saga. The Pentagon expects Joint Warfighter Cloud Capability or JWCC will serve as a new bridge to their longer-term approach.
Meanwhile, let’s stay tuned to how this new multi-vendor will unfold.
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