Pentagon nixes JEDI cloud contract that pitted Amazon against Microsoft
The Department of Defense announced Tuesday that it’s nixing the $10 billion cloud computing contract that it awarded to Microsoft in 2019 and that drew legal complaints from market leader Amazon.
The JEDI, or Joint Enterprise Defense Infrastructure, deal
was meant to modernize the Pentagon’s IT operations over the next 10 years.
But the Pentagon said Tuesday that “due to evolving
requirements, increased cloud conversancy, and industry advances, the JEDI
Cloud contract no longer meets its needs.”
“With the shifting technology environment, it has become
clear that the JEDI Cloud contract, which has long been delayed, no longer
meets the requirements to fill the DoD’s capability gaps,” officials said in a
statement.
The Pentagon added that it will pursue a new multi-vendor
contract called the Joint Warfighter Cloud Capability.
Unlike JEDI, that contract will be an indefinite-delivery,
indefinite-quantity award that could go to multiple vendors.
The agency said it’s still determining a ceiling value for
the contract, but it expects it to be in the multi billions. It expects the
contract to last up to five years, including a three-year performance base
period and two one-year option periods.
The department said it will solicit proposals from both
Amazon and Microsoft for the contract, adding that it believes they are the
only cloud service providers that can meet its needs. But it did leave the door
open to other bidders.
The department originally awarded the controversial contract
to Microsoft in October 2019. A month later, Amazon Web Services protested the
decision in the US Court of Federal Claims.
The company alleged that former President Donald Trump’s
bias against Amazon and its then-CEO, Jeff Bezos, influenced the Pentagon’s
decision on the $10 billion contract.
Last year, though, the Pentagon’s inspector general found
those allegations to be erroneous.
Toni Townes-Whitley, president of US regulated industries at
Microsoft, moaned in a blog post that the past 20 months of delays to the
contract could have been spent updating the Pentagon’s infrastructure and
helping US national security.
“The 20 months since DoD selected Microsoft as its JEDI
partner highlights issues that warrant the attention of policymakers: when one
company can delay, for years, critical technology upgrades for those who defend
our nation, the protest process needs reform,” she wrote.
“It’s clear the DoD trusts Microsoft and our technology, and
we’re confident that we’ll continue to be successful as the DoD selects
partners for new work,” she added. “Their decision today doesn’t change the
fact that not once, but twice, after careful review by professional procurement
staff, the DoD decided that Microsoft and our technology best met their needs.”
AWS did not immediately return The Post’s request for
comment.
Shares of Microsoft were last seen trading down about 0.4
percent, at about $276.60 per share, after touching a new all-time high earlier
Tuesday.
Amazon stock surged about 3.5 percent, to $3,635 per share,
on the news, also reaching a fresh all-time high Tuesday.
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