Business

DEFENSE DEPARTMENT KILLS JEDI CLOUD CONTRACT WITH MICROSOFT

by The Chicago Times Staff

July 6, 2021

WASHINGTON — The Pentagon announced on Tuesday that it had canceled a contentious cloud-computing contract with Microsoft that had the potential to be worth $10 billion.  Instead, it will seek a deal with both Microsoft and Amazon, as well as possibly other cloud service providers.

The Pentagon faced lengthy legal challenges from Amazon over the original $1 million contract awarded to Microsoft.  Amazon claimed that the Microsoft award was tainted by politics, citing then-President Donald Trump’s animosity toward Amazon founder Jeff Bezos, who resigned as the company’s CEO on Monday.  Bezos owns The Washington Post.

JEDI will be replaced by a new program called Joint Warfighter Cloud Capability, according to Sherman, and Amazon and Microsoft will “likely” be awarded parts of the contract, though neither is guaranteed.  According to Sherman, the three other major cloud service providers might include Google, IBM, and Oracle.

“We understand the DoD s rationale, and we support them and every military member who needs the mission-critical 21st century technology JEDI would have provided,” Microsoft said in response to the Pentagon announcement.

Amazon said it understands the Pentagon’s decision and agrees with it.  The company stated in a statement that the 2019 contract award was not based on the merits of competing proposals, but rather on “outside influence that has no place in government procurement.”

The JEDI project began with Microsoft receiving a $1 million contract as the first step in a 10-year deal with a potential value of $10 billion.  The project that will replace it is a five-year program, with Sherman estimating that the contract value will be “in the billions.”

Sherman stated that the government will negotiate the amount Microsoft will be compensated for the cancellation of its 2019 contract.

Amazon Web Services, a market leader in cloud computing, had long been viewed as a strong contender to lead the Pentagon’s Joint Enterprise Defense Infrastructure project, or JEDI.

The project’s goal was to store and process massive amounts of classified data, allowing the US military to improve battlefield communications and use artificial intelligence to improve war planning and fighting capabilities.

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