Microsoft Holds On To $10B JEDI Cloud Contract After Pentagon Review

The Department of Defense has completed its re-evaluation of the contentious JEDI cloud solicitation process and re-affirmed award of the potentially $10 billion contract to Microsoft over Amazon Web Services.

“The Department has completed its comprehensive re-evaluation of the JEDI Cloud proposals and determined that Microsoft‘s proposal continues to represent the best value to the Government,” a DOD spokesperson said Friday.

Implementation will still have to wait for an injunction imposed by a federal court in February to be lifted, the statement noted. But “DOD is eager to begin delivering this capability to our men and women in uniform.”

[Related: Oracle Loses Final $10B JEDI Cloud Contract Appeal]

AWS has repeatedly argued President Donald Trump’s political interference in the contract stemming from his antipathy toward Amazon founder and CEO Jeff Bezos has corrupted the selection process. Trump has repeatedly criticized Bezos for his ownership of The Washington Post, a newspaper the president believes is hostile to his administration, and before the award came down said he would “look closely” at the contract.

AWS and Microsoft both told CRN they would soon issue statements on the decision.

The military initiated its 120-day review period in March after a federal judge identified at least one shortcoming in the vendor evaluation process that delivered the prestigious and lucrative Joint Enterprise Defense Infrastructure contract to Microsoft over its larger rival. That process was delayed another 30 days last month.

Microsoft and AWS both were allowed to make their respective arguments to military officials as part of the review, but not modify their initial proposals.

In February, Judge Patricia E Campbell-Smith, who sits on the United States Court of Federal Claims, granted Amazon’s request for a temporary restraining order preventing Microsoft from moving forward with task orders and substantial implementation work on the JEDI contract.

After that ruling, based only on one flaw she identified in the assessment process, Judge Campbell-Smith allowed the military a period of remand to “reconsider certain aspects” of how it evaluated vendor bids.

The judge halted her analysis after identifying that single flaw involving the ability to deliver nearline storage capabilities.

Military officials suggested factors not addressed by the judge were outside the range of their review and resisted looking again at any other of the eight criteria in the RFP that JEDI bidders were required to meet—even as AWS argued six were improperly evaluated in the initial process.

AWS argued in subsequent legal filings that the military’s re-evaluation terms constituted an attempt to “gerrymander” the criteria in order to “preserve the illusion that Microsoft offered the lowest price while simultaneously perpetuating competitive impediments for AWS.”

The Pentagon is not fairly reassessing JEDI bids, AWS argued, but instead narrowly amending the one deficiency in its source-selection process specifically called out by Judge Campbell-Smith.

“In plain terms, DoD’s proposed corrective action focuses on allowing Microsoft to fix its fatally deficient proposal, while paralyzing AWS’s proposed pricing in the face of planned changes to the RFP’s requirements,” read the Amazon motion opposing the re-evaluation plan. “And it does not promise to address the other procurement flaws in any meaningful way.”

Microsoft, for its part, publicly argued AWS was looking for a second chance to salvage a failed bid, and the delay it was causing harmed the armed forces.

In May, Frank Shaw, Microsoft’s corporate vice president for communications, urged Amazon to “stand down on its litigation” opposing the award, arguing the ongoing legal and administrative challenges were keeping the best tools out of the hands of U.S. warfighters.

Amazon’s arguments amount to “trying to bog down JEDI in complaints, litigation and other delays designed to force a do-over to rescue its failed bid,” Shaw said.

In asking for the remand, the Defense Department said it wanted to “conduct clarifications with the offerors,” regarding the availability of their online marketplace offerings. It would also reconsider its decision in regard to “other “technical challenges” that wouldn’t need clarifications from the vendors.

Contentious legal battles, first between Oracle and AWS even before the JEDI contract was decided, then between AWS and Microsoft, have drastically delayed the U.S. military’s ambitious and expensive plan to modernize IT resources across all branches of the armed forces.

Like many organizations that have been using outdated computing technology and struggling with disparate environments, the Pentagon recognizes the value of cloud transformation with a leading commercial vendor.

“The Department of Defense (DoD) has entered the modern age of warfighting where the battlefield exists as much in the digital world as it does in the physical,” wrote former Acting Defense Secretary Patrick Shanahan to Congress in explaining the need for the cloud transformation initiative.

“Cloud is a fundamental component of the global infrastructure that will empower the warfighter with data and is critical to maintaining our military‘ s technological advantage.”


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