Microsoft Wins $10 Billion Pentagon ‘JEDI’ Cloud Contract

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Pentagon decides not to give lucrative contract to Jeff Bezos’ AWS, after much scrutinised bidding process

The acrimonious bidding for the US Department of Defence’s (DoD) JEDI cloud contract is over, after the Pentagon officially awarded the $10 billion contract to Microsoft.

Amazon’s AWS cloud division had been regarded as favourite to win the JEDI (Joint Enterprise Defense Infrastructure) contract, but in the end the Pentagon opted to go with its bitter cloud rival, Microsoft Azure.

The awarding of the contract had been a highly politically affair in the United States. In the summer the US Defense Department placed its JEDI contract on hold, until Defense Secretary Mark Esper could ‘review’ the program.

Acrimonious bidding

That decision came after President Donald Trump said in July that he is “looking very seriously” at the Pentagon cloud contract, and that it should be investigated.

This was despite four republican members of the US Congress writing to President Trump, asking him not to delay the JEDI cloud contract.

The bidding process for the contract had already seen the likes of Google pulling out, in part because the deal could go against principles it published in June last year, following staff protests against the company’s involvement in developing artificial intelligence for military drones.

Oracle meanwhile had asked about the role of a former Amazon employee who worked on the project at the Defense Department but who then recused himself. This person then later left the Defense Department and returned to Amazon Web Services.

And Oracle in July lost a lawsuit that challenged the award process. A judge reportedly ruled Oracle did not have standing to claim it was wronged by the decision because it did not meet the contract requirements.

The goal of the JEDI cloud deal, which could last up to 10 years, is ambitious.

Essentially, the Pentagon aims to create a single cloud architecture across all the military branches and combatant commands. The idea is to allow a seamless workflow and information-sharing environment.

But President Trump has previously said he said he would direct aides to investigate the pending military contract, saying he had heard multiple complaints about an allegedly unfair bidding process.

That left Microsoft and Amazon (AWS) as the only two remaining bidders for the contract, with Amazon widely being tipped to win.

But President Trump is no fan of Amazon boss Jeff Bezos and his newspaper the Washington Post, and some opponents of the President may question his influence on the process.

DoD Announcement

But the Pentagon was clear it had decided which firm to award the contract to.

“Over the last two years the Department of Defense has awarded more than $11 billion across 10 separate cloud contracts,” announced the Pentagon. “Today the Department of Defense has taken another step forward in the implementation of our Cloud Strategy with the award of an enterprise general-purpose cloud contract to Microsoft.”

“This continues our strategy of a multi-vendor, multi-cloud environment as the department’s needs are diverse and cannot be met by any single supplier,” it added. “This contract will address critical and urgent unmet warfighter requirements for modern cloud infrastructure at all three classification levels delivered out to the tactical edge.”

The DoD said the acquisition process was conducted in accordance with applicable laws and regulations.

“The process cleared review by the GAO and Court of Federal Claims,” it warned. “All offerors were treated fairly and evaluated consistently with the solicitation’s stated evaluation criteria. Prior to the award, the department conferred with the DOD Inspector General, which informed the decision to proceed.”

“The National Defense Strategy dictates that we must improve the speed and effectiveness with which we develop and deploy modernised technical capabilities to our women and men in uniform,” said DoD Chief Information Officer Dana Deasy. “This award is an important step in execution of the Digital Modernisation Strategy.”

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Author: Tom Jowitt
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