Seething Microsoft? US DoD loses patience and pulls the plug on $10 billion JEDI cloud contract, after legal challenge by Amazon Web Services
There are likely to be some very unhappy faces over at Microsoft this week, after the Pentagon announced that it has cancelled its JEDI cloud contract.
The JEDI (Joint Enterprise Defense Infrastructure) contract from the US Department of Defense was worth up to $10 billion, and sought to create a single cloud architecture across all the military branches and combatant commands. The idea was to allow a seamless workflow and information-sharing environment.
But when the Pentagon in October 2019 decided to award the JEDI contract exclusively to Microsoft, despite Amazon’s AWS cloud division being widely regarded as favourite to win the contract, the trouble really began.
Amazon was very unhappy at what it believed was political bias from former US President Donald Trump, and in November 2019 it quickly filed an official complaint with the US Court of Federal Claims contesting the decision.
AWS boss Andy Jassy (who became Amazon CEO on Monday) even went so far as to publicly state that he believed the decision was not adjudicated fairly and called for the whole JEDI decision process to be reviewed.
But with no signs of movement from the Pentagon, Amazon in January 2020 filed a temporary restraining order with a US court to demand that Microsoft halt work on the DoD cloud contract.
Essentially Amazon argued right from the start that politics got in the way of a fair contracting process, and in December 2019 Amazon officially named President Trump in its court complaint, and accused him of exerting “improper pressure” and bias.
Amazon felt the Pentagon decision was politically motivated by President Trump’s intense dislike of Amazon’s then CEO Jeff Bezos and the Washington Post, which Bezos owns.
After a US judge in 2020 granted Amazon’s injunction on the JEDI project, the Pentagon said it would reconsider parts of its decision to award Microsoft the project.
And two months later in April 2020, the US DoD Office of Inspector General said it was unable to rule out if President Trump’s White House influenced the decision.
But much to the frustration of AWS, in September 2020 the Pentagon concluded that Microsoft had been the best value for money for the contract.
AWS however in April 2021 won a small legal victory when the US Court of Federal Claims denied the motions filed by Microsoft and DoJ, requesting the Court dismiss AWS’s allegations that the Trump Administration interfered in the JEDI award.
And all this legal battle was taking its toll on the Pentagon’s commitment to the project, and in May this year it emerged the US Department of Defense was considering the termination of the JEDI project altogether.
There was also some reported concern among US lawmakers and government-contracting experts who thought JEDI should be scuttled solely because its single-vendor approach was inappropriate and impractical for massive organisations such as the US DoD.
The Department of Defense (DoD) then issued a statement on Tuesday, in which it confirmed it was pulling the plug on the JEDI contract.
“Today, the Department of Defense (DoD) canceled the Joint Enterprise Defense Infrastructure (JEDI) Cloud solicitation and initiated contract termination procedures,” it said. “The Department has determined that, due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs.”
It did not mention the ongoing legal challenge by AWS as a reason for pulling the plug.
However it added that the DoD “continues to have unmet cloud capability gaps for enterprise-wide, commercial cloud services at all three classification levels that work at the tactical edge.”
“JEDI was developed at a time when the Department’s needs were different and both the CSPs technology and our cloud conversancy was less mature,” said John Sherman, acting DoD Chief Information Officer.
“In light of new initiatives like JADC2 and AI and Data Acceleration (ADA), the evolution of the cloud ecosystem within DoD, and changes in user requirements to leverage multiple cloud environments to execute mission, our landscape has advanced and a new way-ahead is warranted to achieve dominance in both traditional and non-traditional warfighting domains,” said Sherman.
The DoD meanwhile also announced that its intent for new cloud efforts. The Joint Warfighter Cloud Capability (JWCC) will be a multi-cloud/multi-vendor Indefinite Delivery-Indefinite Quantity (IDIQ) contract.
Click here to read Amazon’s and Microsoft’s reaction to the cancellation of the JEDI contract.